In addition to 6.7 million square feet of un-leased office space now spread across San Francisco, which is up from 5.6 million square feet of un-leased space just three months ago, there is now another 7.2 million square feet of office space which has been leased but is sitting vacant and being offered for sublet, which is up from 6.2 million square feet of sublettable space three months ago, according to Cushman & Wakefield. And yes, that’s net of Vir Biotechnology’s sub-lease of 134,000 square feet of space from Dropbox at the Exchange.
As such, there is now 13.9 million square feet of vacant office space spread across San Francisco for a citywide vacancy rate of 16.7 percent, which is up from an office vacancy rate of 14.1 percent three months ago and versus a vacancy rate of 5.7 percent at the end of 2019.
At the same time, leasing activity hit a 30-year (plus) low in the fourth quarter of 2020, with only 295,000 square feet of space leased. That’s versus a post DotCom-era low of 933,000 square feet of space in the second quarter of 2001. And while landlords had held firm through the second quarter of last year, asking rents for office space in San Francisco have since dropped nearly 10 percent to $75.11 per square foot (per year), which is down 8.0 percent on a year-over-year basis and back to mid-2018 pricing (when the vacancy rate was running closer to 6 percent).