SAN JOSE — The amount of office space available for sublease space has risen in the Bay Area — and has more than tripled in San -Francisco — an indication that work-from-home protocols amid the coronavirus may have prodded companies to rethink space needs.
Santa Clara County, the East Bay, and San Mateo County have all shown significant increases in sublease space, but San Francisco has earned the dubious distinction of suffering the largest increase by far in the Bay Area for the amount of space available for sublease, according to a new report from Cushman & Wakefield, a commercial real estate firm.
Significant increases in available sublease office space are a nationwide phenomenon but the difficulties are especially acute in the Bay Area, the Cushman & Wakefield report shows.
“The increase in sublease vacancy has been widespread, though one region has been hit the hardest: the San Francisco Bay Area,” Cushman & Wakefield stated in its report.
As of the end of June, San Francisco had 3.86 million square feet of sublease office space available to be rented, which was an increase of 2.81 million square feet. That equates to a jaw-dropping jump of 267 percent, or more than triple the 1.05 million square feet in sublease space at the end of 2019.
“All of our major Bay Area markets recorded an increase over the first half of the year including Santa Clara County-Silicon Valley,” said Robert Sammons, senior research director with Cushman & Wakefield.
Santa Clara County had about 5.48 million square feet of sublease office space available at the end of June, an increase of 399,400 square feet or 7.9 percent more than the end of 2019, Cushman & Wakefield reported.
The East Bay, including Oakland, the 880 Corridor, the 680 Corridor, the Tri-Valley, and the Walnut Creek areas, had about 2.97 million square feet of sublease office space available at the end of June. That was a 17 percent increase, or 430,900 square feet more sublease space compared with the end of 2019.
San Mateo County reported that 1.8 million square feet of sublease space was available at the end of June, which was up 24 percent, or an increase of 350,600 square feet of this sort of office space, according to Cushman & Wakefield.
While the coronavirus ran its course and tech companies were able to function with numerous employees working from home, some high-profile tech firms put spaces up for sublease in San Francisco or terminated their leases. Pinterest and Twitter were among these.
It’s possible that companies won’t immediately rush back to reoccupy spaces they had vacated in the wake of state and local government mandates to combat the deadly bug.
And that potential reluctance could keep significant blocks of office space available for sublease while brokers seek ways to chip away at the big blocks of empty space.
“This significant amount of space will take some time to ‘work off’ even when workers return to the office,” Sammons said.