Office vacancies continue to rise in San Francisco reaching 17.7%, up from 14.7% a year ago.
County planners are currently considering a controversial proposal to double the amount of office space on the coastside. That project, Big Wave, is currently in the final stages of preparing its environmental impact report.
The financial data provided by the developer and being used in the project’s evaluation is based on pre-recession vacancy rates and rents. No update has been provided by proponents despite the drastically worsening economic situation for new office construction.
Roberta Selna in the San Francisco Chronicle writes
New construction will not compete for tenants with the existing space anytime soon. Yasukochi said that only one office building, located in Mission Bay, is currently under construction. Most real estate experts expect little office development in San Francisco for the next five years.
Yasukochi said that the citywide vacancy percentage needs to drop to single digits before developers would be encouraged to build.
Office building sales are at an “extremely low ebb.” The only potential for growth is with the tech and biotech companies and “those looking to lease space are finding plentiful options and attractive deals.”