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Occupancy loss from a high volume of smaller-sized tenants downsizing or dissolving continued to plague
the San Francisco office market during third quarter, albeit at a lesser degree than during the first and second
quarters of 2009. During the last three months, the City tallied 136,702 square feet of negative absorption,
which brought the year to date total to 1.44 million square feet of negative net absorption. As a result of the
City’s decreasing occupancy, along with an addition of new supply, the vacancy rate increased 30 basis points
to 14.4 percent.
Downsizing companies had a profound effect on the City’s unemployment rate. According to the California
Department of Employment, San Francisco’s unemployment rate reached 10.1 percent in August, the highest
rate in 25 years. In the past 12 months, nearly 19,000 people have lost their jobs with the biggest cuts made in
industries such as finance, insurance, real estate, and law
Contact Tove Nilsen at 415.288.7827 for more information.
  Q3_2009 The Knowledge Report_for email.pdf
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