SAN FRANCISCO, Calif. (KRON) – San Francisco is no longer the city with the most office space leased by the tech industry in the U.S.
According to a real estate and investment firm, CBRE, that’s been tracking this data since 2013, San Francisco fell from number one for the first time and now ranks number six.
This is the area where a majority of those big corporations and tech companies are located.
Many of these offices remain closed despite San Francisco now being in the orange tier, which allows these offices to open back up at 25% capacity.
As you can imagine, these closures take a huge toll on the businesses that rely on the workweek foot traffic.
“It’s been extremely slow. We only have one of our 8 restaurants in the Financial District open and even that one restaurant is doing about 20% of our normal sales,” Stever Sarver said.
Steve Sarver owns Ladle and Leaf, formerly known as the San Francisco Soup Company.
Pre-COVID, they had 13 Bay Area locations, now just three are open and many of those waiting to reopen are in San Francisco’s Financial District but due to closed offices and people working from home, Sarver says he lost his main customer base.
It’s a trend that may continue as some tech companies are now leasing less space in the city.
“That is pretty scary news because we’ve always been able to count on the tech workers especially over the last 10 years coming into what we used to call the Financial District, now we might call it downtown San Francisco,” Sarver said.
According to an annual study done by a real estate and investment firm, CBRE, the San Francisco Bay Area is no longer the top region in the U.S. with the most office space leased by tech companies.
This is a first since 2013, when the company began this study.
The San Francisco Bay Area has now fallen to number 6 in 2020 with Seattle rising to number one.
“What it shows is that San Francisco is not the magnet that it used to be and I’m concerned that there could be a permanent shift in the way that workers think about coming to downtown San Francisco to work and the way businesses think about the need or desire to open and operate in downtown San Francisco,” Sarver said.
This news is a serious concern for other restaurant owners like Tony Marcell who’s a partner at Wayfare Tavern.
He says the success for many of the businesses in this downtown corridor is dependent on people coming back to work.
“It truly isn’t enough. In our business model, we rely on corporate businesses and meetings and people gathering and having social events or corporate events so we really do need those hotels and office buildings to fill up for us to really continue to move forward,” Tony Marcell said.
In San Francisco and the Bay Area, we’ve seen this study play out over the last year.
For example, companies like Tesla are leaving for Texas and Dropbox recently sold its building in Mission Bay.
Meanwhile, Twitter will allow employees to permanently work from home.
One of the analysts from that study says that firms aren’t necessarily leaving all of these cities that have fallen in rankings but instead, these companies are putting more emphasis on opening satellite offices in other cities to attract more people and in this case cheaper labor.