San Francisco office occupancy rises but trails national trend
When COVID gets bad, people stop returning to their cubicles
Slow and steady wins the race — at least, according to people in the business of urging employees to return to the financial district.
Data from Kastle Systems, a nationwide managed security company, shows the San Francisco metropolitan area reached 26.7% office occupancy this week, up 0.9% percentage points from the previous week. The data is collected by tracking keycard, fob and KastlePresence app access to buildings at 41,000 businesses across the United States. According to their data, San Francisco occupancy rates are still behind most other major metropolitan areas in the country. Nationwide, Kastle estimates offices are 39% occupied.
Despite the lag, San Francisco also shows some of the most consistent, dependable occupancy growth amongst cities Kastle Systems tracks. Whereas top-ranking cities like Austin and Houston currently have the highest number of workers in the office — at 55.3% and 52.3% occupancy, respectively — each saw sudden dips of approximately 5, 10, and 20% between November 2020 and early March. San Francisco office occupancy, on the other hand, has increased at a near constant rate since falling in March 2020, with only small 1-3% fluctuations.
Kastle Systems data on occupancy rates shows large dips in the three Texas metro areas between November 2020 and March. San Francisco’s rate has been increasing at a near constant rate. (Examiner screenshot)
Ali Elyassi, vice president of marketing at the collaborative workspace company Werqwise, says he notices rates reflect how people feel about the coronavirus. The biggest surge in leasing interest, he says, came after June 15, when the city announced it would be fully reopening businesses and activities except in cases of extremely large events. “When the news gets bad, we see a big drop in people trying to look for offices. When everything is good, it’s back to normal, or we even get a big surge,” he says.
Werqwise, like all office leasing companies, lost a lot of business at the start of the pandemic shutdown, though it attracted much more interest in its offices in recent months. Regus, another office leasing company, says it has seen a 10% increase in occupancy between the second and third quarters of this year, while Wework saw 52% occupancy in the second quarter and 60% in the third.
Werqwise has implemented several features to make customers feel comfortable returning despite the pandemic, including temperature checks, self-cleaning surfaces, sanitized mail delivery protocols and dedicated emergency quarantine rooms. Furniture in their lounges is more spread out than before, and hand sanitizer stations are dispersed throughout the building. Those precautions are in addition to what The City and state government requires, like posting signs which encourage employees to get vaccinated and designing a safety plan in line with recommendations from Cal/OSHA.
Elyassi says Werqwise’s flexible leasing model may also give it an advantage over traditional office spaces. Werqwise has both ready-to-use, fully furnished office spaces and empty, customizable office spaces available, as well as small event rooms and meeting rooms for both day use and long-term use.
“We have companies here that are fully using the space, and we have companies here that basically have a remote office for collaborating with the rest of the team,” he says.
On the other hand, companies with long-term, less-flexible leases continue to stumble. For example, the S.F. Business Times reported this week Citigroup will be leaving its six-floor office space on Sansome Street for half as much real estate at One Market St. in early 2023. Earlier this year, the company announced flexible work policies, as have many other large companies with offices in the Financial District. Other companies, such as Salesforce, currently plan to transition to hybrid work models where employees can spend a certain number of days at home.
Werqwise, for its part, expects to be back to full occupancy by mid 2022. But if the trends shown in Kastle’s data stay consistent, it’ll take a bit longer for the rest of downtown to spring back to life.
SF Examiner Link: https://www.sfexaminer.com/news/san-francisco-office-occupancy-rises-but-trails-national-trend/