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Office vacancies down in SF, ‘gold rush’ for commercial real estate
August 12, 2025 • Source: KTVU Fox 2 • Posted in: Market News
SAN FRANCISCO - Real estate experts and data collectors claim San Francisco is seeing a revival as office space vacancies are lower than they’ve been in years.
Office space vacancies in the city have dropped below 35%, and activity in San Francisco is back to pre-pandemic levels.
Data shows people are coming back to the city and businesses are opening and expanding in San Francisco.
Commercial real estate brokers at Blatteis Realty are calling it the gold rush for business, saying they’re making more deals now than they have since before the pandemic.
"It’s been exceptionally busy with leasing stores and selling business," said Jeremy Blatteis of Blatteis Realty.
Although Union Square is still crippled with vacant storefront spaces, Blatteis said new deals are coming, including on bigger spaces like the former flagship Banana Republic on Sutter.
"People see what Union Square was and they see what it could be again," Blatteis said.
Blatteis recently signed a deal with Just for Fun, a toy store opening its fourth location in Union Square come September.
"If you have been here and you walk these streets everyday, you’ve seen a real difference and that has really put a charge in our battery in moving forward and expanding," said the store's general manager Jacob Henson.
Henson credited Mayor Lurie for cleaning up the streets and helping the city blossom.
"You can just see the city returning to just a vibrant space to be in," said Henson.
"We talk to all sorts of prospects and tenants and that is the general consensus, that people are feeling safer," said Blatteis.
A realtor from Avision Young said it's not just the cleaner streets, but also a spillover effect from Jackson Square and the Mission Bay, where AI companies have flocked. They said half their deals in Union Square have been tech companies.
This all comes after Nintendo opened a store on Powell Street, choosing San Francisco over hundreds of other locations.
"What we’re seeing is retail on the upswing, it’s improving," said Blatteis.
According to researchers at JLL, citywide office leasing is back up to pre-pandemic levels, with more than 9.2 million square feet of office space leased.
JLL reports that in 2023, there were nearly 50 leases in the city with AI companies. In 2025, over 200 AI companies are leasing San Francisco property.
JLL also said using cell phone data, it's been able to quantify a 28% increase in the number of people in downtown SF on weekdays as of June 2025, compared with January 2024.
The city’s entertainment zones and large-scale events like Outside Lands and the recent Dead and Co concerts are also bringing more people to the city, which Mayor Lurie has said is a focus of his.
"It brings a lot of musicians and people out here and they’re seeing these stores they haven’t seen before and it gets them out here," said Blatteis.
Executive Director of San Francisco’s Office of Economic and Workforce Development Anne Taupier said in a statement, "We are on a new trajectory," adding that Mayor Lurie's focus on improving city streets, hosting live events, "combined with San Francisco’s status as the unrivaled epicenter of the AI revolution, are fueling our comeback."
External Link: https://www.ktvu.com/news/office-vacancies-down-sf-gold-rush-commercial-real-estate