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San Francisco sees small signs of market return from shutdown, eventually leading to conditions prime for tenant opportunity
A year into the COVID-19 pandemic, San Francisco remains one of the markets most impacted by disruption stemming from business restrictions and local shelter-in-placeorders. Leasing has been limited and current market pricing is difficult to establish without demand to support. First-quarter leasing volume totaled 380,394 square feet (sf), and while this is well below pre-COVID levels, it is the first positive quarterly increase since Q3 2019 and marks a 56.6% increase quarter over quarter. Current activity stems mainly from lease expirations forcing tenants to sign new leases or renewals, however organizations do appear to be more active in re-engaging in space discussions as vaccination becomes more widespread. Sublease inventory remains at historic highs with an additional 200,000 sf listed on the market this quarter, bringing the city’s total up to 8.9 million square feet (msf). Current conditions will present an unprecedented opportunity for occupiers to secure space in a once incredibly tight leasing environment as owners will soon need to compete with the tsunami of sublease space.