Leasing activity increases amidst generative A.I. demand but availability stays elevated

In Q3 2024, the total availability rate in the San Francisco office market increased 40 basis points (bps) from 36.3% reported last quarter to 36.7%. While there has been cautious optimism in 2024 that the office market might have bottomed out, with A.I. companies sustaining demand, corporate occupiers have continued to consolidate their office space such as X Corp. announcing their intention to vacate both Market Square North and Market Square South this quarter. With office-related employment growth turning negative over the past year, the San Francisco office market still faces significant challenges before it can be seen as being in recovery.

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