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Return-to-Office Trends Aid Demand;
Focused Deliveries Present Opportunities
Corporate policies extend post-pandemic multifamily recovery. San Francisco’s employment base will expand this year on net for the first time since 2022. In-person work policies, such as Salesforce’s four-day mandate, and tech firm developments, like OpenAI’s 315,000-square-foot office expansion, are contributing to headcounts and aiding migration back into the metro. This dynamic bodes well for apartment fundamentals citywide in the near future. Downward vacancy momentum should continue, following declines across nearly all submarkets last year. The stretch from Visitacion Valley to Downtown is likely to again be a focal point for renters, after accounting for over 50 percent of the city’s net absorption last year. As household formation returns to pre-pandemic levels — exceeding 1 percent in 2025 — suburbs from the city of South San Francisco to San Mateo are seeing similar positive trends. These areas, with flexible access to both San Francisco and Palo Alto, saw vacancy fall last year and over 70 percent of San Mateo County’s net absorption. Under a lighter 2025 delivery slate, vacancy compression may continue over the near term.