San Francisco Office Market Shows Signs Of Recovery
USA – The office property sector of San Francisco is showing some signs of a ‘rebound’, with businesses increasingly looking for workspaces in the city, while office property sellers are now willing to suffer huge losses to close a sale, according to a recent report from The Wall Street Journal that was picked up by S&P Global Market Intelligence.
Sales in the office property market are slowly materializing as owners are finally accepting significantly discounted prices for office buildings.
As a result, the lower valuations have dragged down office rents. Consequently, companies that had to relocate outside of San Francisco because of very expensive office rents pre-pandemic are now returning.
In fact, businesses searching for office space in the city have jumped by 40 percent so far this year compared to 2022, driven by robust demand from the artificial intelligence (AI) sector, reported The Wall Street Journal, citing data company VTS.
However, San Francisco’s office market is still facing headwinds, as the city’s office vacancy level has now surpassed 25 percent. And the office vacancy rate will likely rise further as businesses continue to embrace hybrid work arrangements.
Meanwhile, there is a notable office deal in the US. Compass Datacenters purchased the former office campus measuring 197 acres (nearly 80 hectares) of retailer Sears in Hoffman Estates in Illinois for US$194 million.