A few more workers have filled the hollow offices of San Francisco, with occupancy hitting a pandemic high.
The city reported a 38.1 percent occupancy rate for the week-long period ending July 13, the San Francisco Business Times reported. The return to work lags behind other major cities.
Kastle Systems, which monitors keycard activity in 2,600 office buildings across the country, found occupancy in San Francisco offices jumped by 8 percentage points between July 6 and July 13.
Meanwhile, office occupancy climbed 4 percent to 44.1 percent across the nation, with New York at 40.7 percent and Los Angeles at 41.8 percent, and Austin reaching 58.1 percent.
It’s not clear why workers in San Francisco headed back to their offices in greater numbers last week, or whether the spike may indicate a trend.
Office occupancy rates in San Francisco have been among the lowest reported by Kastle’s 10-city tracker, a sign its dominant tech industry has embraced remote work. The sector has struggled since early this year, with the tech-weighted Nasdaq falling by more than 25 percent.
While investors say they will slash funding to once-fast-growing startups, the Business Times reports rounds of layoffs at Tesla and other Bay Area firms.
The looming threat of layoffs could also propel remote workers back to the office, calculating that more face time with superiors makes their job safer, Cushman & Wakefield Robert Sammons told the newspaper.
While it’s not clear how long the economic downturn might last, he said, it could affect the labor market and the return to offices.
In March, San Francisco Mayor London Breed announced the city would work with more than a dozen of its largest employers to coax workers back to its sluggish downtown. But that may be difficult with employers’ hybrid work policies.
Downtown San Francisco has seen gains in employee foot traffic since January, according to Robbie Silver, executive director of the San Francisco Downtown Community Benefits District. Year to date, worker foot traffic Downtown is up 85 percent, he said, though it remains 68 percent under 2019 levels.
Last month, the city’s chief economist predicted office vacancies in Downtown could climb to between 35 percent and 50 percent in the next two years, assuming that current market conditions continue and office tenants decline to renew existing leases or sign new ones.
– Dana Bartholomew
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