San Francisco Office Market Report
High-Profile Commitments and Robust Metro
Pre-Leasing are Positive Signs for a Market Rebound
Large leases reveal companies are beginning to claim more space. At the end of June, Google Cloud signed a lease amounting to nearly 300,000 square feet in South of Market. This was the largest direct lease since the onset of the pandemic, after a 230,000-square-foot sublease inked by Sephora in January and a 200,000-plus-square-foot commitment signed by Roblox in March. While vacancy remains high in Greater San Francisco, the commitment by Google Cloud exhibits a potential trend toward larger leases and company willingness to sign long-term agreements in Downtown South. Space demand is also improving southeast of downtown, from Mission Bay down to Bayview, as availability here compressed 200 basis points on a quarterly basis to 17 percent. Positive net absorption here through midyear exists as a bright spot amid the prevailing uncertainty the pandemic has placed on the San Francisco office sector.