Sacks @ 00:39:57Inconclusive
economymarkets
San Francisco’s downtown office vacancy rate, which is already above 30% in April 2023, will likely rise further and may reach around 40% as existing leases roll off and tenants shed additional space over the subsequent few years.
So they're at 30% plus. And like I said, it could get worse before it gets better because as Lisa's role people are going to shed more space that they might not already be subleasing. So the real number might be like 40%.View on YouTube
Explanation
Available data show that S.F.’s office vacancy did rise significantly above 30% after April 2023, peaking in the high‑30s, but has not (so far) clearly reached 40% on standard vacancy measures, and the “few years” window from April 2023 has not fully elapsed.
Key points:
- Around the time of the podcast, CBRE data put San Francisco’s office vacancy roughly in the low‑30% range; for example, by July 2023 the San Francisco Standard, citing CBRE, reported a record 31.6% vacancy rate and said it was expected to keep rising. (sfstandard.com)
- By late 2023, vacancy had already climbed much higher: ABC7, again citing CBRE, reported “a little over 35%” vacancy in downtown San Francisco as of December 1, 2023, the highest ever recorded at that time. (abc7news.com)
- Through 2024, CBRE’s figures show vacancy continuing to worsen into the high‑30s. Axios reported 36.7% in Q1 2024 and 36.8% in Q2 2024, both new records. (axios.com) The Real Deal, citing CBRE, reported that vacancy was projected to hit 37.0% in Q2 2024 and then “rose past 37%” to about 37.3% in Q3 2024, again setting a record. (therealdeal.com)
- Those same CBRE-based reports note that availability (vacant plus actively marketed space) reached roughly 39–39.4% in mid‑2024, i.e., near but still below 40%. (therealdeal.com)
- By 2025, multiple CBRE summaries indicate the market has started to improve rather than continue rising toward 40%: vacancy edged down to about 36.6% in Q1 2025 and then to 35.1% in Q2 2025, with three consecutive quarters of positive absorption driven largely by AI tenants. (sfchronicle.com)
Interpretation:
- Directionally, Sacks’s claim that vacancy would “get worse before it gets better” was correct: it rose from low‑30s to about 37% before beginning to decline.
- However, the more specific part of the prediction – that the real downtown vacancy could reach around 40% as leases rolled off – has not yet clearly materialized in the aggregate vacancy statistics. Vacancy peaked in the 37–38% range; availability briefly approached but did not obviously exceed 40%.
- Because he framed 40% as a plausible level “as” leases roll off over the subsequent few years, and that few‑years window from April 2023 (roughly through at least April 2026) has not yet finished, we cannot definitively say the 40% threshold will not be hit in a later downturn.
Given that (a) vacancy so far has risen substantially but only to the high‑30s, and (b) the forecast horizon has not fully run its course, the fairest assessment as of November 30, 2025 is that the prediction’s 40% figure is not yet confirmed or refuted. Hence: inconclusive (too early).