In March 2022, San Francisco Mayor London Breed got a smattering of big tech companies—Uber, Salesforce, Meta and Microsoft among them—to commit to bringing workers back into the office. The pledges from the companies themselves were vague, but it was a hopeful sign for the city’s long-suffering business district.
In the 18 months since, progress on that return has happened in fits and starts, with employees reluctant to sacrifice the benefits of a remote working life.
At first blush, the push to bring people back to the office seems like good news for Downtown, which has been beleaguered with record office vacancy rates, corporate exits and a litany of retail closures.
But the staggered nature of this return raises the question: Has Downtown San Francisco felt the benefits of the remote-work rubber band?
“It's obviously a very important question for the city and Downtown,” said Ted Egan, San Francisco’s chief economist. “It's interesting to see employees and employers still seem to be somewhat on different pages.”
Many employers have firmly planted a flag in the pro-office camp. Data from the anonymous tech industry job forum Blind revealed that around 400 tech companies have returned to a hybrid workforce from a fully remote structure.
Lyft reversed course on flexible work under new CEO David Risher and required a three-day-a-week in-office presence starting Labor Day. Zoom’s CEO Eric Yuan, in perhaps the most infamous recent example of a tech giant switching gears on its remote work, required employees within a 50-mile radius of an office to visit at least twice per week.
“We cannot have a great conversation. We cannot debate each other well because everyone tends to be very friendly when you join a Zoom call,” Yuan told employees, according to Insider.
Meanwhile, the likes of Meta (which also pegged its company-wide, three-day-a-week return-to-office to Labor Day) and Salesforce are embarking on charm offensives to incentivize attendance, providing in-office perks and charitable rewards to workers who come in. Other tech companies, like Uber and Apple, ripped the bandage off and required in-office work as early as August 2022, much to workers’ chagrin.
“It's taking time for people to get used to coming into the office again,” said Wade Rose, president of business advocacy group Advance SF. “There's such a huge change from working in the office to working from home … and now having to get into a new set of habits.”
Blind data indicates that just over 200 tech companies are continuing their embrace of full-time remote work and research from Linkedin shows that the number of remote jobs available on the platform has declined significantly from its peak in March 2022.
What Comes After WFH?
San Francisco resident Tiffany Taimoorazy reversed an industry trend made popular in the thick of the pandemic. She left behind a remote-first tech stalwart with offices in Downtown in pursuit of a faster-paced startup—and to reenter the in-person workforce.
Three days a week, she takes a Muni train, getting off at the Montgomery Street station to go to the Downtown offices of Pave, the startup where Taimoorazy works as a product designer.
Taimoorazy knows she’s a rare case—a worker who gave up the creature comforts of remote work to have some structure in her day-to-day work life.
“Maybe you have a little bit more self-control or will to do things than I do,” she said, “but it was really hard for me to get the motivation to even just take my first few calls not in my bed.”
Most other tech workers have been forced to give up full remote work by their bosses in favor of a hybridized work structure.
The average office attendance rate in the San Francisco metropolitan area rose from 40% to 42.6% after the Labor Day holiday, according to badge swipe data from Kastle Systems.
The slight tick upward corresponds with trends from recent years, according to Kastle, but this year’s data could be an indication that return to office nationwide will reach a “new, higher base level as more workers return to the office.” Mobile data from Placer.ai also shows that Downtown San Francisco has seen a 21% rise in foot traffic year-over-year, more than double the nationwide average.
Recent big-ticket office space purchases are also helping move the needle on Downtown, Egan said. The Wall Street Journal reported earlier this month that five major towers in the city have been snatched up by buyers, a sign that San Francisco’s real estate transaction freeze is starting to thaw.
“It's also likely that changes that we see in the office market related to sales of buildings and new ownership is likely going to lead to greater office occupancy,” Egan said.
Properties trading at lower values mean greater flexibility for landlords to charge lower rents, making in-office work a less expensive proposition for prospective tenants.
It’s not all good news, though. San Francisco’s office occupancy rates still rank among the lowest in the nation, according to Kastle data, with only the Philadelphia and San Jose metros posting data points that are comparable to the city’s. (Both New York and Los Angeles, for example, are currently hovering around 50% in-office occupancy, around 7 percentage points higher.)
Additionally, some of the real estate numbers are striking. According to preliminary data from CBRE, the vacancy rate for the third quarter reached a record 33.9%, reflecting nearly 30 million square feet of empty space.
However, there are also signs that the market is starting to rebound. The vacancy metric tends to lags the market itself—offices sit empty months after tenants depart.
Some green shoots poke through the vacancies. Some experts expect vacancy rates to peak in 2024 as early indicators like tenant tours and demand growth point to healing.
Liza Mash Levin, CEO of office space management startup Gable, told The Standard that San Francisco still remains behind the curve compared with most cities in terms of ending remote work, at least for emerging companies with workers in Downtown.
“We don't see an uptick in return to office at all in terms of utilization from companies that we partner with,” Levin said. Most of her company’s clients are small to midsize businesses—not enterprise firms—but these smaller firms tend to follow the trends that influential tech giants set.
As for whether the push to bring people back into offices has benefitted Downtown in any measurable way, the jury’s still very much out.
Egan pointed to some anecdotal evidence: Downtown businesses he’s spoken to are a lot busier now than they were about a year ago, he said, and trains are generally more full now, too. However, he cautioned hard data showing commercial activity in Downtown is still not available.
For Taimoorazy, her metric to gauge Downtown recovery is a fair bit simpler: whether she can secure a seat on a Muni train during her commute. In the Before Times, it was a struggle to find a spot to stand, let alone sit, on her train commute to the office.
“The trains would literally be packed person-to-person, I remember, any time I was trying to leave work,” Taimoorazy said. “It's definitely not anywhere near where that used to be.”
She can still finagle a seat most days on her commute to Pave’s offices—even when out-of-towners descend on San Francisco for something like Dreamforce.
There’s also the larger question of whether requiring in-office appearances will backfire for tech companies—and, consequently, for Downtown San Francisco.
After all, multiple surveys have indicated that workers are generally willing to take pay cuts to work fully remotely. Some tech workers in Taimoorazy’s network have felt burned by employers who abandoned their support for fully remote work. Those employees, she said, feel their only recourse is quitting their jobs entirely.
Levin acknowledged that tech workers returning to Downtown will likely be part of its recovery—but cautioned that companies shouldn’t rush to get workers back in person, lest they lose some top performers.
“What I believe is that every company should decide what strategy works for them, for their employees, what makes the employees happy, the most productive,” she said.
For its part, San Francisco officials seem acutely aware that Downtown’s recovery can’t be done with an office revival alone. Moves like the “Vacant to Vibrant” campaign or, perhaps, the recent popularity of the Sunset Night Market, could be guideposts to where Downtown is headed.
“We hear about all this office space that's left vacant in Downtown, too, and I just feel, like, ‘OK, you know that people probably aren't going to come back in droves the way they did,’” Taimoorazy, the tech worker, said. “We should probably be looking at other solutions as to, ‘How can we revitalize this area?’"
But for now, San Francisco’s in-person office recovery continues apace—slowly, if not so surely.