Connect with us

San Francisco, CA

San Francisco's AI boom can't stop real estate slide, as office vacancies reach new record

Published

on

San Francisco's AI boom can't stop real estate slide, as office vacancies reach new record


Artificial intelligence has been a big boon for San Francisco real estate. But not enough of one to make up for the broader struggle across the market.

The vacancy rate for San Francisco office space reached a fresh record of 34.5% in the second quarter, according to a report Monday from commercial real estate firm Cushman & Wakefield. That’s up from 33.9% in the first quarter, 28.1% in the same period a year ago and 5% before the pandemic.

Meanwhile, the average asking rent dropped to $68.27 per square foot in the quarter, the lowest since late 2015, down from $72.90 a year earlier and a peak of $84.70 in 2020.

San Francisco is reeling from the twin challenges of bringing people back to the office after the Covid pandemic and a slowdown in the tech market that’s led to mass job cuts across the industry. Tech companies have laid off more than 530,000 employees since the start of 2022, according to the website Layoffs.fyi, with major downsizing at Alphabet, Meta, Amazon, Tesla, Microsoft and Salesforce.

Advertisement

Softening the blow of late has been the soaring popularity of generative AI and the decision by fast-growing startups to open large offices in San Francisco.

OpenAI, the market leader with a private valuation that’s topped $80 billion, announced in October that it was leasing about 500,000 square feet of space in the Mission Bay neighborhood, the biggest office lease in the city since 2018. Robert Sammons, senior research director at Cushman & Wakefield, said OpenAI is continuing to look for more space in the city.

Also last year, OpenAI rival Anthropic subleased 230,000 square feet at Slack’s headquarters. And in May of this year, Scale AI signed a lease for a reported 170,000 to 180,000 square feet of space in Airbnb’s office building.

“San Francisco is certainly the center of AI, but AI is not going to save the San Francisco commercial real estate market,” Sammons said. “It will help.”

While richly capitalized AI startups are signing large leases for new space, the bigger trend is that tech companies, law offices and consulting firms are looking to reduce their footprint when existing leases come up, Sammons said, reflecting the widespread move to hybrid work.

Advertisement

In many cases, companies are looking to relocate to higher quality space in more desirable parts of the city, because prices have come down and employers need to be near restaurants and shops to get staffers to come back, Sammons added.

“The best quality trophy space continues to perform well, because tenants want to be in the best locations with the best amenities around them,” Sammons said.

Some of the city’s top employers, including Salesforce, Uber, Visa and Wells Fargo, have brought employees back to offices for part of the week. That’s helped in the financial district, where the vacancy rate is still 34.2% on the north side and 32.7% on the south side at the end of the quarter. In SoMa, which historically was a popular area for venture-backed startups, the vacancy rate is almost 50%.

SoMa is further away from mass transit options and has also been hurt by large retail departures. Vacant office space across San Francisco for the quarter totaled 29.6 million square feet, Cushman & Wakefield said.

The firm said in its report that there are positive signs in the market, with absorption poised to improve in the second half and office job numbers stabilizing following a steep drop-off. But Sammons said it looks like there’s more room for rents to fall and for vacancies to rise. Uncertainty surrounding the upcoming presidential election may be a factor delaying new leases, he said.

Advertisement

“Sometimes tenants postpone making decisions when there are major elections,” he said.

WATCH: Commercial real estate vacancies in San Francisco are at an all-time high



Source link

San Francisco, CA

Vigil held for 2-year-old girl killed in SF Mission Bay crash

Published

on

Vigil held for 2-year-old girl killed in SF Mission Bay crash


Walk SF and Families for Safe Streets held a vigil Monday evening to honor a 2-year-old girl who was struck and killed by a driver Friday night in San Francisco’s Mission Bay neighborhood.

The crash happened just before 9 p.m. at Fourth and Channel streets near Oracle Park. Police said the child’s mother was also injured and taken to a hospital with non-life-threatening injuries. The driver remained at the scene, and authorities said drugs or alcohol are not believed to be factors.

Advertisement

Community heartbroken

Community members gathered at the intersection Monday to light candles and lay flowers. Among them was the Howard family.

“We’re just heartbroken and sad,” said Hidelisa Howard.

Advertisement

“I was thinking about heartbroken parents, someone who cannot get their daughter back,” said John Howard.

The intersection is designated as part of San Francisco’s 2022 High Injury Network, identifying streets with the highest concentration of severe and fatal traffic crashes. Speed cameras were recently installed in the surrounding neighborhood.

Jodie Medeiros, executive director of Walk SF, called the crash a tragedy, noting a previous fatal collision involving a child at Fourth and King streets several years ago.

Advertisement

Traffic intensifies

Parents in the area said traffic has intensified with nearby events and development.

“We love having people here in the neighborhood, and it’s brought a lot of life to the area,” said Hidelisa Howard, who lives nearby. “But at the same time, we have people coming in from out of the area. They’re not familiar with the streets, they’re running the lights, they’re running the crosswalks.”

Advertisement

District 6 Supervisor Matt Dorsey said the intersection has been problematic.

“Sometimes people go too fast. I don’t know that this was the issue here, but we need to do everything we can to make our neighborhoods and our streets safer,” Dorsey said.

Advertisement

On Monday, crews with the SFMTA repainted crosswalks and re-timed traffic signals at the intersection.

“It just feels like there’s so many young children in this neighborhood that there should be improvements made to the way that the traffic flows around here,” said Aanisha Jain, a San Francisco resident.

 

Advertisement

San FranciscoNews



Source link

Continue Reading

San Francisco, CA

Yes, an $8 Burger Exists in Downtown San Francisco

Published

on

Yes, an  Burger Exists in Downtown San Francisco


Sometimes life requires an easy hang, without the need for reservations and dressing up, and preferably with food that’s easy to rally folks behind. The newish Hamburguesa Bar is just such a place, opening in December 2025 and serving a tight food menu of smash and tavern burgers (made with beef ground in-house), along with hand-cut duck fat fries, poutine, and Caesar salad. The best part? Nothing here costs more than $20. Seriously, this spot has so much going for it, including solid cocktails and boozy shakes. It’s become a homing beacon for post-work hangs, judging by a recent weekday crowd.

Hamburguesa Bar’s drinks are the epitome of unfussy: Cocktail standards, four beers on tap, two choices of wine (red or white), boozy and non-boozy shakes, plus 21 beers by the can or bottle. Standards on the cocktail menu are just that, a list of drinks you’ve heard before — such as an Old Fashioned, daiquiri, gin or vodka martini, or Harvey Wallbanger — with no special tinctures or fat-washed liquors to speak of (that we know of, at least). I’m typically split on whether boozy shakes are ever worth it, but the Fruity Pebbles option ($14) makes a convincing case, mixed with a just-right amount of vodka and some cereal bits. (I’ll leave the more adventurous Cinnamon Toast shake made with Fireball to others with more positive experiences with that liquor.)

Downtown and SoMa has a reputation for restaurants closing early, but Hamburguesa Bar keeps later hours, closing at midnight from Monday through Saturday (closed Sundays). It’s also open for lunch at noon during those days, with the exception of Saturdays when it opens at 5 p.m.



Source link

Advertisement
Continue Reading

San Francisco, CA

Iran conflict disrupts flights out of SFO

Published

on

Iran conflict disrupts flights out of SFO


SAN FRANCISCO (KRON) — Attacks on Iran by U.S. and Israeli forces have disrupted air travel across the Middle East, leading to thousands of flight cancellations and delays worldwide. The instability has reached the Bay Area, where international flights at San Francisco International Airport have been canceled or grounded. The travel disruptions followed retaliatory strikes […]



Source link

Continue Reading

Trending