San Francisco office visits are up 21.6% from last year
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San Francisco appears to be on the cusp of a major office revival, a new analysis suggests.
Why it matters: Office visits are rebounding at a steady pace, following five years of vacant space and downtown doomloop concerns.
By the numbers: San Francisco leads in year-over-year office recovery among the major business hubs studied in Placer.ai's latest report, which tracks foot traffic at 1,000 commercial office buildings with ground-floor retail nationwide.
- San Francisco outpaced all others with a "remarkable" 21.6% year-over-year growth in office visits in July, according to the location intelligence and foot traffic software company.
- The city also moved up two spots in Placer.ai's rankings of cities with the largest gap between pre- and post-pandemic office visits, beating out both Denver and Los Angeles.
What they're saying: The AI boom is playing a big role in San Francisco's surge in office visits, Placer.ai head of analytical research R.J. Hottovy told Axios via email.
- The startup culture at a lot of these emerging companies means employees are more likely to work longer hours and stay later in the office.
- Return-to-office mandates have also helped, with large employers driving the push to increase attendance and add more in-office days, according to the Bay Area Council Economic Institute.
- A "surge in leases from burgeoning AI innovators, stabilizing office rent rates, improving public sentiment, and a wave of new restaurant, retail, and small business openings" have also helped fuel the revival, Hottovy said.
Yes, but: San Francisco's office visits are still down 34.2% compared with pre-pandemic levels, per Placer.ai.
- Recovery could be "hindered by its reliance on the volatile tech and AI sectors, as well as a high cost of living that makes it difficult to attract and retain the necessary in-person workforce," Hottovy said.
Zoom in: Worker visits to offices in Mission Bay, Jackson Square and the Financial District have all increased since January 2024, real estate company JLL's cellphone tracking data shows.
- These areas feature tech- and venture-capital-heavy offices.
- Most indicators of downtown activity are also trending up, the SF Office of Economic Analysis found in its May report.
What we're watching: Mayor Daniel Lurie's return-to-office directive for city workers took effect last Monday, meaning roughly 8,000 additional people will be back in the office four days a week.
- Local businesses are hopeful the foot traffic will provide an economic boost.