San Francisco office buildings have 53% less foot traffic than four years ago

Office buildings in San Francisco ended 2023 with a whimper, seeing 53.1% less foot traffic in December than four years ago, according to’s latest nationwide office index.

San Francisco’s office visits ranked well below the national rate, which was 36.5% below levels from four years ago, even though many employers have been mandating more days of in-person work, according to data due for release on Wednesday.

See: San Francisco office-space market is thriving. As long as it’s on an upper floor with a view.

A bright spot, however, has been New York City, where office buildings were experiencing only 19.2% less foot traffic than in December 2019, roughly three months before nationwide pandemic lockdowns took hold and marking the start of more flexible work arrangements.

New York City office buildings were seeing far more foot traffic from office workers at the end of 2023 than the rest of the nation.

The Real Estate Board of New York for months has been relying on’s cellphone data, which suggests a much stronger rebound for New York’s office market, especially at high-end buildings, than Kastle System’s back-to-work barometer that reflects through card-key swipes.

Still, office buildings have been on the front lines of the reeling U.S. commercial real-estate industry, with vacancies at 19.6% in major cities in the fourth quarter, according to Moody’s Analytics, the highest in at least four decades.

Borrowers with maturing loans recently have seen a reprieve from surging financing costs as the benchmark 10-year Treasury yield
has fallen below 4%, largely on expectations for the Federal Reserve to cut rates in 2024.

But property values in big cities also have taken a hit, with office buildings in central business districts leading the way lower with an estimated 26% drop in November from a year prior.

See: Big-city office buildings log 26% price drop from a year ago, report shows

Owners of office and multifamily properties often benefited from some of the industry’s lowest borrowing costs in the past decade, which could make refinancing maturing loans difficult.

Maturing office loans this year that were packaged into bond deals had a 4.73% weighted average coupon, versus almost 5% for hotel loans, according to BofA Global data.

“How far a given asset readjusts (if at all) will of course be somewhat dependent on idiosyncratic factors, including when the property was last
renovated, whether it sits in a desirable and safe location, and whether the loan on an asset has a near-term maturity date,” said Alan Todd’s CMBS research team at BofA Global, in a Friday note to clients.

Read: ‘No one is throwing good money after bad.’ Why 2024 looks like trouble for commercial real estate.

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