We keep seeing signs that San Francisco isn’t out of the woods yet. Earlier this week we learned that the biggest remaining tenant in the city’s biggest mall would be closing their doors soon, 11 years before their current lease expires. This is not what recovery looks like.
On top of that, the entire city is facing a massive budget deficit which could exceed $1.4 billion by 2027. Former Mayor London Breed’s budget director said a year ago, “We are in a tough spot.” Why is this happening? Because there is so much vacant space downtown that property rates have been falling.
The pandemic-induced changes to in-person work — with many companies now adopting remote or hybrid policies — have spurred a dramatic decline in the downtown office market, reaching a vacancy rate of more than 30%.
With that drop in demand, downtown office buildings have hemorrhaged…
