SAN FRANCISCO, Calif. (KRON) – Prices of office rents in San Francisco are at an all-time low.
This isn’t surprising, considering so many companies are still remote due to the ongoing coronavirus pandemic.
“Rents are relatively sticky despite growing downward pressure. Direct average asking office rents decreased 1.5% in Q1 2021, bringing the market average to $75.32.” according to a report by CBRE.
Compare that to Manhattan, where the asking rent is now $75.99 per square foot.
San Francisco’s office rents passed Manhattan’s back in 2016 when tech companies like Twitter and Uber made their mark in the tech-centric city.
In a research study by CBRE Top 100 Leases in 2020, “leasing by tech companies was down by more than half year-over-year, demonstrating a slowdown by even one of the most resilient industries.”
CBRE also reported that Manhattan and Washington, D.C. accounted for nearly 40% of the top 100’s total square footage last year.
Although office rents are lower than normal in San Francisco, the housing market experienced the opposite impact from the pandemic.
In January, Core Logic reported 36% Bay Area-wide increase in sales of single-family homes in eight Bay Area counties.
“We’re seeing multiple offers on most homes that are priced well. We’re seeing multiple offers. We’re seeing properties selling considerably over asking price,” Santa Clara County Association of Realtors president Doug Goss said.
CBRE says that moving forward, office rental rates are expected to continue declining, just at a slower rate.