Distressed property wave could be beginning amidst record-high office availability 

In Q1 2023, the total availability rate in the San Francisco office market increased by another 60 basis points (bps) from 32.1% reported last quarter to a new all-time high of 32.7%. Since bottoming at just 7.1% in Q3 2019, office availability have surged as many occupiers have been slow to return to the office while remote and hybrid working styles persist. Available sublease space has increased yet again to 8.9 million square feet (msf), up from 8.2 msf reported last quarter, as well as up from 7.7 msf reported a year ago. With office space demand remaining lower than pre-pandemic levels, expect office availability to continue to increase in 2023 as the slowdown in the technology sector persists.

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