Oct 6, 2022 - Business

San Francisco's office occupancy slowly rises

Office occupancy in San Francisco
Data: Kastle; Chart: Erin Davis/Axios Visuals

Despite lagging behind most major U.S. metro areas, San Francisco's office occupancy has climbed slowly, but steadily, since the beginning of the year — and could rise even more with major companies recently calling employees back to work in person.

What's happening: Office buildings in San Francisco, Oakland and Berkeley reached 39% occupancy during the week of Sept. 21, according to the security firm Kastle.

  • That's up from nearly 20% in late January (during the Omicron surge) and almost 32% at the start of June.
  • Meanwhile, Austin (61%), New York (46%) and Los Angeles (45%) all had higher occupancy rates during the week of Sept. 21, according to Kastle.

Why it matters: San Francisco's city center has been a shell of its former self since the start of the pandemic.

  • To boost economic activity for small businesses in the area and make downtown a desirable place for residents and tourists alike to visit, office workers will need to return in higher numbers.

Driving the news: This week, Uber — the city's fourth largest private employerannounced that it was calling its staff back to the office on Tuesdays and Thursdays starting Nov. 1.

  • Uber's hybrid approach allows employees to work anywhere they want for up to four weeks a year.

The announcement follows similar policies from tech giants Google and Apple, which required employees to return to Cupertino three days a week starting in early September.

  • Smaller San Francisco companies, like the email startup Front, are preaching the importance of in-office collaboration, and are implementing return mandates as well.

What they're saying: "Our business … exists in the real world, on the streets of thousands of cities, and it's important we stay connected to the places we serve," Uber's chief people officer Nikki Krishnamurthy said in a press release Tuesday.

Yes, but: San Francisco's largest private employer, Salesforce — which is also the anchor tenant for the city's tallest tower — doesn't seem to be in a rush to return employees to downtown.

  • The company is operating under what it calls "flex team agreements," which allows teams to decide how many days a week they'd like to work in the office.
  • "Office mandates are never going to work," co-CEO Marc Benioff said at a company event earlier this summer.

The intrigue: During last month's Dreamforce conference, Benioff said that if the city wants its downtown "to feel alive" again, it needs to rely less on office space and offer "a lot more housing."

  • "If you go to a city like Philadelphia, it looks like it's a lot more open," Benioff said. "Why is that? Because you have office, residential, university, arts, all these things mixed in the downtown."
  • Philadelphia's office occupancy the week of September 21, according to Kastle, was 41% — slightly higher than San Francisco.

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