Press Releases

Vacancy Levels Driven to Record High of 23.7%

January 12, 2023

SAN FRANCISCO – The San Francisco office market closed 2022 with 829,948 square feet of fourth quarter leasing activity and at a record high vacancy of 23.7%, due in part to the triple impact of hybrid work models, tech layoffs and increasing interest rates, according to research from Transwestern Real Estate Services (TRS).

The new record high vacancy rate is an increase from 22.4% in the third quarter, with both Class A and Class B rates on the rise. The market posted negative 1.1 million square feet of absorption for the fourth quarter, down further from negative 1.7 million square feet in the third quarter and totaling negative 4.7 million square feet for 2022.

“While the San Francisco office market continues to struggle, we see a number of opportunities for both tenants and building owners,” said George Entis, Senior Research Manager, Transwestern. “As employers adjust to new working patterns and eliminate unused space, many tenants will be able to find higher-quality space that aligns with their cost targets. For building owners, as hybrid work models solidify, the clarity will encourage action from tenants who had been staying on the sidelines.”

Additional notable results from the report include:

  • The quarterly leasing total is up from last quarter’s 678,561 square feet, though significantly down compared to the five-year average of 2.3 million square feet.
  • Leasing activity totaled 5.1 million square feet for the year, down from 6.6 million square feet in 2021.
  • Overall rents closed the quarter at $54.24 per square foot, down 2.0% from the third quarter of 2022 and continuing a decline from a pre-pandemic peak of $73.63 per square foot.
  • Available sublet space totaled 8.6 million square feet, representing 9.5% of total office stock.
  • Since the start of 2020, total net absorption is negative 13.5 million square feet.
  • Office construction totaled 1.2 million square feet in the fourth quarter, unchanged from the prior quarter but continuing a downward trend that began in 2017.

Download the Q4 2022 San Francisco office report at

About Transwestern Real Estate Services
Transwestern Real Estate Services (TRS) adds value for investors, owners and occupiers of all commercial property types through a comprehensive perspective and by providing solutions grounded in sound market intelligence. Part of the Transwestern companies, the firm applies a consultative approach to Agency Leasing, Asset Services, Tenant Advisory + Workplace Solutions, Capital Markets, and Research & Investment Analytics.

The privately held Transwestern companies have been delivering a higher level of personalized service and innovative real estate solutions since 1978. Through an integrated, customized approach that begins with good ideas, the firm drives value for clients across commercial real estate services, development, investment management, and opportunistic endeavors for high-net-worth investors. Operating from 33 U.S. offices, Transwestern extends its platform capabilities globally through strategic alliance partners whose unique geographic, cultural, and business expertise fuels creative solutions. Learn more at and @Transwestern.

Media Contact:
Dan Foley