S
an Francisco's dark offices may see a decline for the first time since the pandemic, but this trend is expected to reverse early next year as tenants vacate their spaces. The city's office vacancy rate could drop to 34.3% by the end of the year, down from 34.5% in the third quarter, according to JLL figures cited by the San Francisco Business Times.

    Recent large lease deals have contributed to this decrease, with notable signees including Adyen, Scale AI, and Visa. However, a surge in vacancies is predicted for early next year due to planned departures from major tenants like Google, JPMorgan Chase, and X.

    The office market has been bolstered by artificial intelligence firms, which signed 72 leases for over 1 million square feet of offices in the past year. Scale and OpenAI alone leased nearly 500,000 square feet. If some startups behind smaller leases grow and require additional space, it could further benefit the market.

    "The narrative around San Francisco has changed," said Alexander Quinn, senior director of Northern California research for JLL. "The expectation of an AI economic revolution has led to other tenants wanting to establish a presence in the city."