San Francisco is now No. 6 in an annual study where we'd perennially ranked No. 1, as we fall from the top five in terms of how much office space the tech industry is leasing here.
The last year’s commercial real estate scene in the city has been marked by tech companies suddenly deciding “Yeah, we don’t actually need that” and desperately scrambling for subletters for their SF office spaces — often in cases where companies made large, splashy office space deals pre-pandemic. This story keeps popping up anecdotally, but now that someone’s collected the data in a structured fashion, the fall from grace is greater than we’d realized.
Forbes reports on a CB Richard Ellis (CBRE) study that shows the SF Bay Area has fallen from No. 1 to No. 6 in terms of overall office space leased to tech companies, and the decline is just in the last in 12 months. (The study classifies us as the SF Bay Area, not just San Francisco.) The SF Bay Area has been No. 1 on this annual report every year since CB Richard Ellis started tracking the data in 2013.
Yes, Elon, Austin passed San Francisco, though this data was collected before Austin went a week without power and electricity during the Texas winter storms. As you see in the chart above, Seattle has taken over the top tech office leasing spot, likely powered by the presence of Amazon. Manhattan took the No. 2 spot thanks to strong growth (growth is in green, renewed leases are in grey), Washington D.C. enjoyed very good renewals, and Atlanta took the No. 4 spot also based on growth in new leases.
A CBRE analyst says that firms aren't necessarily leaving the towns who’ve fallen in the rankings. Instead, companies are purposefully opening more satellite offices in their non-headquarters cities, to attract a wider range of talent and hopefully cheaper labor. This "showed a commitment to move forward with those strategic plans despite the pandemic," CBRE’s Tech Insights Center executive director Colin Yasukochi told Forbes.
Many SFist readers might say ‘Good riddance,’ and after all, you didn’t hear people walking around the Bay Area bragging “We’re No. 1 in office space leased to tech companies!” much since 2013. The drop in people working downtown has likely has a lot to do with the bargain rent prices, so for many of us there is an upside here. But it is scary to wonder what will happen to all those beloved downtown restaurants and retailers forced to close due to the lack of a bustling downtown workweek.
Image: @francistogram via Unsplash