San Francisco recorded an office vacancy rate of 27.4% in the third quarter of 2026, marking an improvement from 31.1% a year earlier as local officials and business groups push forward with urban revival strategies.
That economic shift has drawn the attention of Pacific Northwest municipal leaders seeking fresh solutions for downtown recovery. Last month, a delegation of Seattle officials traveled south to examine how San Francisco is tackling street conditions and public safety.
Seattle Officials Review Public Safety and Retail Measures
The visiting group included Downtown Seattle Association President Jon Scholes, Seattle City Attorney Erika Evans, and Seattle Chamber President Joe Nguyen. During the trip, the officials reviewed local measures aimed at restoring commercial confidence.
“We should legalize fun, certainly in Seattle and in the right way,” Jon Scholes said with a chuckle during an interview Friday. “The big takeaway is, the jobs and investments, new retailers follow getting the streets looking and feeling better for everybody, and they’ve made public safety, addressing homelessness, addressing drugs, priority number one. The new retailers, the new office deals, the capital coming into the city then follows.”
Scholes said that lighting serves as a low-cost public safety improvement. Seattle has already tested pilot lighting projects along Third Avenue and in Belltown to deter crime.
Downtown San Francisco Partnership President Robbie Silver pointed to ongoing activation efforts along California Street and the Embarcadero, alongside a new state law enabling entertainment zones with public alcohol sales during street festivals.
“Coming out of the pandemic, San Francisco in North America was dead last in terms of economic recovery and foot traffic. We are now leading the nation and being the first, and other cities are calling us and coming to San Francisco to visit,” Silver said.
San Francisco Records Positive Net Absorption and Retail Returns
Colliers reported that San Francisco’s market recorded 537,000 square feet of positive net absorption in the third quarter of 2026, marking five consecutive quarters of increasing occupied space and 2.6 million square feet year to date. Retail vacancy in Union Square has similarly dropped below 20% for the first time in years.
After closing its downtown locations in 2023 amid concerns over retail theft and crime, Nordstrom returned with a Nordstrom Local store in Pacific Heights and announced plans for a large Nordstrom Rack store near Union Square.
By comparison, Seattle’s office vacancy rate remains above 35%.
Political Shifts Drive Improvements in Safety and Housing
GrowSF co-founders Sachin Agarwal and Steven Bacio attributed the turnaround to years of targeted political shifts centered on public safety, housing, and schools. “Crime is at all-time lows. Businesses are coming back. Tourism is coming back,” Agarwal said. “But this isn’t something that just happened in two years. It was six years of winning elections.”
Bacio outlined evolving approaches to the city’s street crisis, noting that intervention strategies now focus on separate tracks for mental health and drug addiction. “We’re now leaning more toward compelled treatment for people that can’t help themselves, real interventions on fentanyl addiction and other addictions, both for the dealing side and for the using side,” Bacio said.
Office-To-Housing Conversions Test Downtown Resilience
Silver emphasized that residential conversion projects remain a critical test for long-term downtown resilience. One office-to-housing conversion is advancing on Market Street, with roughly a dozen other buildings identified as candidates.
Despite the positive absorption figures, more than one in four square feet of office space in San Francisco remains vacant.
Scholes said Seattle does not need to copy San Francisco wholesale, noting that leaders can test ideas from other cities, coordinate around clear goals, and keep measuring results.
