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San Francisco’s office leasing activity fell to 875,000 square feet in the third quarter as big deals were scarce and tenants were more cautious.
It was the lowest third-quarter activity since 2001, and a dip from the 1.3 million square feet of leasing in the second quarter and 1.1 million square feet in the first quarter, according to brokerage Cushman & Wakefield.
“Right now we’re in a cooler period,” said Robert Sammons, regional research director at Cushman & Wakefield. “Tenants are much more careful than they were in the past five or six years.”
The only major lease over 100,000 square feet was Amazon.com Inc. (NASDAQ: AMZN)’s video game streaming site Twitch taking 185,000 square feet at 350 Bush St. WeWork also took 78,000 square feet at 2 Embarcadero Center, Irythm leased 60,864 square feet at 650 Townsend St. and BNY Mellon took 60,000 square feet at 50 Fremont St., according to data from brokerage JLL.
The deals were dwarfed by activity in the past year, when tech firms like Stripe,Fitbit and Pinterest gobbled up hundreds of thousands of square feet.
“There’s definitely been a slowdown in leasing activity,” said Amber Schiada, director of Northern California research at brokerage JLL, but the last two years were “pretty overheated.” She expects rents to stay flat for the next year, but no major downturn. “My view is people shouldn’t be worried,” she said.