{"id":278660,"date":"2026-04-21T15:42:08","date_gmt":"2026-04-21T15:42:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/278660\/"},"modified":"2026-04-21T15:42:08","modified_gmt":"2026-04-21T15:42:08","slug":"sky-high-office-vacancy-levels-haunt-bay-areas-three-major-downtowns","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/278660\/","title":{"rendered":"Sky-high office vacancy levels haunt Bay Area’s three major downtowns"},"content":{"rendered":"

Sky-high office vacancy rates still haunt the downtowns of San Jose, Oakland and San Francisco, despite bursts of tech lease deals in Silicon Valley that have largely bypassed the urban cores of the Bay Area\u2019s three largest cities.<\/p>\n

The vacancy levels for office space remain stuck above 30%<\/a> in San Jose\u2019s, Oakland\u2019s and San Francisco\u2019s central business districts, according to a new report by Cushman & Wakefield, a commercial real estate firm.<\/p>\n

\"ADowntown Oakland, as seen in a drone view on April 7, 2026.\u00a0(Jane Tyska\/Bay Area News Group)<\/p>\n

\u201cOffice vacancies are still high in all three downtowns,\u201d said Robert Sammons, a senior research director with Cushman & Wakefield.<\/p>\n

Of the three urban cores, downtown San Jose has the lowest office vacancy rate but is trending higher, San Francisco has the second-highest but is showing improvement, and downtown Oakland has the highest vacancy and has steadily worsened.<\/p>\n

At the end of the January-through-March first quarter of 2026, the office vacancy rate was 30.8% in downtown San Jose, 31.1% in San Francisco, and 37.8% in downtown Oakland, Cushman & Wakefield reported.<\/p>\n

All three downtowns suffer from vacancy rates that have soared far above the levels they enjoyed just before the outbreak of the coronavirus.<\/p>\n

At the end of 2019, the final full year before the COVID-19 pandemic unleashed brutal economic dislocations \u2014 including empty office buildings \u2014 San Jose, Oakland and San Francisco all reported healthy vacancy levels.<\/p>\n

In the October-through-December fourth quarter of 2019, San Francisco posted a 5.4% vacancy rate, downtown Oakland was at 10.8%, and downtown San Jose reported a 12.8% vacancy level.<\/p>\n

Wide-ranging business shutdowns chased workers away from their offices as government officials sought to keep the deadly virus from spreading.<\/p>\n

Yet even after the COVID-linked restrictions were eased, companies curbed their appetites for office space due to the hybrid work patterns for their employees and an uneven return to the workplace.<\/p>\n

The Bay Area\u2019s three downtowns appear to have been jolted particularly hard by the economic dislocations.<\/p>\n

For downtown San Jose, the major challenge is to find a way to compete with office markets such as the Santana Row neighborhood in west San Jose and the Cityline mixed-use development in downtown Sunnyvale.<\/p>\n

Santana Row and downtown Sunnyvale both offer significant amenities in the form of restaurants and retail stores.<\/p>\n

Downtown San Jose offers primarily top-notch restaurants, nightlife, unique entertainment hubs and live-performance venues, but not nearly as much destination retail as its nearby rivals.<\/p>\n

\u201cDowntown San Jose definitely has more competition from other submarkets than is the case with the San Francisco central business district,\u201d Sammons said.<\/p>\n

Sammons also observed that downtown San Jose doesn\u2019t really have around-the-clock activity that is typically seen in the most vibrant urban cores around the country.<\/p>\n

\u201cSan Jose is not really a 24\/7 downtown,\u201d Sammons said. \u201cIt is more of an 18\/7 downtown.\u201d<\/p>\n

Downtown San Jose\u2019s fortunes could be buoyed by a recent decision to market an eye-catching office tower at 200 Park Ave.<\/a> to tenants willing to take as few as one or two floors in the 19-story building.<\/p>\n

Previously, building owner Jay Paul Co. and its marketing team from commercial real estate firm Newmark had focused on convincing one tenant to lease the entire building, whose office spaces total 971,000 square feet.<\/p>\n

\u201cThis move might cast the net wider,\u201d Sammons said. \u201cThere are usually more small tenants in the market than large tenants. This could spur more activity in downtown San Jose.\u201d<\/p>\n

Cushman & Wakefield\u2019s report notes that the current vacancy levels for San Francisco\u2019s central business district are greatly improved from their recent peak of 33.8% in the July-through-September quarter of 2024.<\/p>\n

\u201cSan Francisco is making some progress, but San Francisco is improving from a very high vacancy level,\u201d Sammons said. \u201cLeasing activity from artificial intelligence companes has helped.\u201d<\/p>\n

A recovery for the San Francisco market might eventually spill over to downtown Oakland, which has occurred in the past.<\/p>\n

\u201cDowntown Oakland is lagging behind, but that happens in every cycle,\u201d Sammons said. \u201cWhen San Francisco improves, Oakland usually follows in about a year or so.\u201d<\/p>\n

Despite the stubbornly high vacancy levels in all three of the Bay Area\u2019s major downtowns, Sammons believes the trio of urban cores will enjoy healthier occupancy levels in the coming few years.<\/p>\n

\u201cI\u2019m very bullish on downtowns and on transit-oriented development,\u201d Sammons said. \u201cIn the long term, all three will perform very well.\u201d<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"Sky-high office vacancy rates still haunt the downtowns of San Jose, Oakland and San Francisco, despite bursts of…\n","protected":false},"author":2,"featured_media":278661,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[29],"tags":[389,184,387,7,8,3010,1335,8520,4978,332,383,4955,1533,181,23,100,143,33494,3012,395,388,1010,101,396,88,90,89,5406,198,94685,200,1970],"class_list":{"0":"post-278660","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-san-jose","8":"tag-alameda-county","9":"tag-bay-area","10":"tag-business","11":"tag-california","12":"tag-california-news","13":"tag-commercial-real-estate","14":"tag-development","15":"tag-downtown-oakland","16":"tag-downtown-san-jose","17":"tag-east-bay","18":"tag-economy","19":"tag-gig-economy","20":"tag-keywee","21":"tag-latest-headlines","22":"tag-local-news","23":"tag-news","24":"tag-oakland","25":"tag-oakland-real-estate","26":"tag-office-buildings","27":"tag-peninsula","28":"tag-real-estate","29":"tag-rent","30":"tag-san-francisco","31":"tag-san-francisco-county","32":"tag-san-jose","33":"tag-san-jose-headlines","34":"tag-san-jose-news","35":"tag-san-jose-real-estate","36":"tag-santa-clara-county","37":"tag-social-alert","38":"tag-south-bay","39":"tag-technology"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/278660","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=278660"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/278660\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/278661"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=278660"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=278660"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=278660"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}