There's mixed news from the latest market report on the office sector in San Francisco: in terms of the vacancy rate, a lagging indicator, the struggling 88M SF office market hasn't bottomed out yet.

The office vacancy rate hit 36.6% in San Francisco during the first quarter of 2024, up from 35.6% in the fourth quarter of 2023. Total availability, which includes occupied space, ticked up to 38.7% from the 38.5% recorded at the end of 2023, according to preliminary data from CBRE.

Here's the good news: tenant requirements, a leading indicator of how much space prospective tenants are seeking in the market, are surging.

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