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San Francisco

SF perks up on return-to-office trend: Kastle

Now leads San Jose, New York with one-third of office workers back, survey finds

Office worker
(iStock/Illustration by The Real Deal)

Office workers in San Francisco are heading back to their cubicles – with desk occupancy levels now leading San Jose and New York.

After four months of increases, 33.4 percent of San Francisco workers have returned to the office. That compares with 32.9 percent in New York and 31 percent in San Jose, the San Francisco Chronicle reported, citing a recent study by Washington, D.C-baed security firm Kastle and its Back to Work Barometer.

Average occupancy in the 10 large cities measured by the survey was 40.5 percent last week, down from 42.8 percent the prior week, a dip that Kastle attributed to the Easter and Passover holidays. Kastle’s occupancy figure is a measure of workers physically present at their desks.

New York’s occupancy fell over 4 percentage points from 37.1 percent in the previous week, while San Francisco saw a smaller decline from 34.6 percent. During the peak of the omicron surge at the end of last year, occupancy in both cities was around 10 percent.

The city of Austin has consistently had the highest office occupancy tracked by Kastle and was at 58 percent last week, followed by fellow Texas cities Houston and Dallas.

San Francisco officials are seeing other signs of a spring recovery. The city’s unemployment rate fell to 2.5 percent in March, the lowest level since February 2020, though around 20,000 fewer residents are employed compared to before the pandemic. New York City’s unemployment rate was 6.5 percent, while the national rate was 3.6 percent.

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“Many local economic indicators reached pandemic-era highs in March, as the city continues its slow recovery,” the city’s Office of the Controller said in a report.

While many measures in San Francisco have improved, activity remains far below the 2019 period before the coronavirus pandemic. Downtown San Francisco BART exits were up in the first three months of the year, but still only around a quarter of pre-pandemic levels.

More than a quarter of San Francisco office space was vacant in the first quarter – with no lease signed for the space or the tenant trying to sublet it – while rents have been flat.

Kastle operates in 2,600 buildings with 41,000 tenants across 47 states.

[San Francisco Chronicle] – Dana Bartholomew

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Commercial Real EstateOffice MarketPandemicSan FranciscoSan JoseUnemployment