San Francisco Office Rebound Splits Market
San Francisco Office Recovery Is Real but Uneven Recovery has begun to register in San Francisco’s office market, but the improvement remains narrow and unstable. Vacancy slipped from 34.4% to 34.2% in Q4 2024, the first quarterly decline in five years. By Q1 2026, vacancy improved to 28.0%, yet earlier readings near 36.9% in Q3 2025 showed how fragile conditions remained. In Q1 2025, total vacancy still climbed to 36.6%, underscoring the market’s uneven recovery . Recovery Concentrates in Select Districts Positive absorption appeared in Q4 2024 and strengthened to roughly 800,000 square feet in Q1 2026. Similar to San Diego multifamily, stable rental demand can coexist with weak transaction volume, highlighting how occupier strength does not always translate into broad investor confidence. Still, gains were concentrated in Showplace Square/Potrero Hill, Mid-Market, South of Market, and parts of the South Financial District. That pattern reflects neighborhood bifurcation and tenant po...