The pandemic didn’t break the office market — it revealed what was already broken.
Across America, office vacancy rates have climbed to heights unseen in more than four decades. This is not a typical real estate cycle that will correct itself with time. Something fundamental has changed in how we work, driven by forces that were gathering momentum long before anyone had heard of COVID-19.
TALE OF TWO MARKETS
Before the pandemic, the San Francisco Bay Area exemplified the commercial office boom. Downtown San Francisco hummed with energy as tech and life sciences companies competed for premium space, pushing vacancy rates below 5 percent. Asking rents soared above $80 per square foot. Buildings traded hands at values approaching $1,000 per square foot.
Today tells a different story. Vacancy rates across the Bay Area have surged past 30 percent. The East Bay has now experienced negative absorption for more than three consecutive years. M
