A new report from research and advisory firm Green Street has found that San Francisco could have the worst performing office market in the U.S. in 2021.
The analysis has indicated that rent and occupancy rates will fall 22% this year as technology companies continue adopting remote working policies. New York will follow closely behind, with a 17% drop for similar reasons.
Additionally, Green Street predicts that office space demand in the U.S. will fall by around 15% through 2025.
“San Francisco and New York will likely see a permanent resetting of rents as people and businesses look more towards the middle of the country for expansion,” said Danny Ismail, an analyst at Green Street. “It’s unlikely that rents and occupancy will return to a level pre-Covid over the next few years.”
Companies have been fleeing to secondary markets like Nashville and Austin in lieu of these expensive technology hubs.