Key Takeaways |
Vacancy was up at 18.3 percent and net absorption was significantly in the red at negative 1,508,710 square feet in the first quarter of 2022
The overall sublease availability rate was flat and has remained near 8.0 percent for the past two quarters, below the pandemic peak of 9.2 percent in first quarter of 2021
San Francisco posted approximately 1.7 million square feet of negative absorption.
Asking rents continued to increase slightly due to "flight to quality" and a general shift in the distribution of vacancy from sublease to direct. Asking rent increases were primarily seen in trophy assets while commodity class A and B were relatively flat or down. Net effective rents began to decrease due to landlord concessions
While asking rents were slightly elevated from previous quarters, net effective rents declined due to increases in landlord concessions. This trend is expected to continue while vacancy is at a historically high level
Just over 1.2 million square feet of new construction was delivered, with 126,000 more scheduled for delivery in 2021.
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Key Metrics
Lease Transaction
SALEs Transaction
Derek Daniels
Research Director | San Francisco
derek.daniels@colliers.com
+1 415 788 3100
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Research & Forecast Report - Q1 2022
San Francisco
Office Market Snapshot
The San Francisco office market took a step backward in the first quarter of 2022 after showing signs of improvement in the second half of 2021, likely due to the winter surge in Omicron that delayed many companies’ return-to-office plans until Spring along with some companies rightsizing and occupying less space. Market vacancy increased to 18.3 percent this quarter, up 210 basis points quarter-over-quarter which coincided with negative 1,508,710 square feet of net absorption. That said, there are green shoots of optimism in record high office using jobs, fairly robust tenant touring activity, and recent record levels of venture capital funding in San Francisco, all of which drive office demand.
Q1 2022
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Q1 2022
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Isabella Day
Research Analyst | San Francisco
isabella.day@colliers.com
+1 415 788 3100
Steffen Kammerer
Executive Managing Director | Northern CA | USA
steffen.kammerer@colliers.com
+1 415 788 3100
Q1
2022
Q2 2022
Forecast
Market Indicators
Relative to Prior Period
Vacancy
Net Absorption
Construction
Weighted Rental Rate
Weighted Class A Rental Rate
Sales Volume
Sales Prices
Q1
2022
Q2 2022
Forecast
Sales Prices