What doom loop? Downtown San Francisco showing signs of economic rebound, experts say

ByTim Johns KGO logo

Friday, April 5, 2024

Downtown SF showing signs of economic rebound, experts say

Shuttered storefronts and office vacancy rates are hitting over 35%. However, there are signs things may finally have bottomed out.

SAN FRANCISCO (KGO) -- Downtown San Francisco in 2024 is not what it was prior to the pandemic.

Shuttered storefronts, empty streets and an office vacancy rate are hitting an all-time high of over 35%.

However in the midst of all that, are signs things may finally have bottomed out.

"I think we may be beginning to reach an inflection. We're seeing, for example, an increase in tenant demand, which is the starting point for leases being signed," said Ted Egan.

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Egan is the chief economist for the city.

He says in the past few months, several large companies have expanded their footprint downtown.

Cyrpto company Ripple recently moved its headquarters to a new space on Battery Street.

And on Wednesday, tech company Rippling also signed a new 123,000-square-foot lease down the road on California Street.

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Local leaders say, despite the challenges San Francisco has faced in the past, the city also has unique qualities that make its success difficult to copy.

Rodney Fong is the president of the SF Chamber of Commerce.

"It's largely the intellectual capacity that is here in San Francisco. A lot of smart people able to do this great, innovative work. So San Francisco, yet again, is on the cutting edge of so many things that affect the world," Fong said.

Downtown does still have problems though.

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Robert Sammons is a commercial real estate expert with Cushman Wakefield, who says the pandemic altered the market with hybrid work.

He predicts the city's core will eventually bounce back from this downturn, even if it takes some time.

"After the dot com downturn, it took almost 10 years to get back to where we were previous," Sammons said.

Because with so much venture capital and new industries like artificial intelligence popping expanding in the city, Egan says San Francisco is still the place of the future.

"We're hearing venture capitalists wanting to be in San Francisco. Saying you have to be in San Francisco to be a part of this action. We're starting to see the talent saying, 'I need to be in the office more, and I need to move back to the Bay Area,' because it's starting to happen again," Egan said.