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San Francisco office owners are finally seeing the light—or at least a glimmer in the distance. In the second quarter, office leasing activity totaled 1.1 million square feet, more than twice the previous quarter’s leasing activity, according to a market report from Savills. More than half—59%—of the leasing activity was for new locations, and 61.5% of the leases were signed by tech companies.

The return of tenant demand is an indicator that a recovery is underway, however, the report is quick to note that demand is still significantly below pre-pandemic levels, and Savills called the market fundamentals “shaky at best.” The office vacancy rate was 26.3%, up from 13.5% in the second quarter 2020 and up 270 basis points from the previous quarter. Class-A vacancy has climbed 330 basis points to 24%. By comparison, the vacancy rate pre-pandemic was 9.5% overall and class-A vacancy rate was only 8.8%.

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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