Executives Want to Hire Workers, Expand Offices in SF

Good news for San Francisco office landlords: more companies plan to expand their workplaces as they hire employees and order remote workers back to their desks.

Three-fourths of the 100 San Francisco-based executives surveyed by KPMG said they aim to widen their commercial footprints over the next 12 to 18 months as they add workers and push for a return to office, the San Francisco Business Times reported.

Some 79 percent of the bosses said they’re coaxing employees back to the office more often, while 66 percent said they plan to hire more workers this year.

Some 96 percent of the business leaders surveyed by KPMG said they believe San Francisco is well positioned to attract new business and talent over the next 12 to 18 months.

At the same time, 91 percent of the executives expressed “high levels of confidence” in the city’s growth prospects. Companies associated with the respondents were not disclosed.

Chris Cimino, managing partner for KPMG in San Francisco, described the city’s business community as “focused on growth, not retreat” — pointing to executives’ plans to make long-term investments in their workforce and offices to accommodate them.

Respondents of the survey, vice presidents or higher at companies with annual revenue of $50 million or more, weren’t asked how much they planned to grow their footprints.

But a 75-percent “aye” for expansion suggests a demand for offices in San Francisco, Colin Yasukochi, executive director of real estate services firm CBRE’s tech insights center, told the Business Times.

An uptick in demand would mark a reversal of the downward trend beginning with the pandemic in 2020, when a shift to remote work has left nearly 37 percent of the city’s offices dark, according to CBRE.

Many companies moved or consolidated operations in smaller workplaces, or renewed only portions of their leases.

Five years after the first pandemic shutdowns, the office downsizing has ebbed, Yasukochi said.

“Most of that is behind us and the vacancy rate reflects that,” he told the newspaper. “Going forward, we are seeing more companies with growth plans ahead.”

Some companies may have cut too many cubicles in the early days of the pandemic and are now finding they need more office capacity to support employees hired during the onset of remote work, he said.

Others might expect they will need more offices to dovetail with new business strategies tied to artificial intelligence.

Still others are themselves AI tenants, one of the only sectors hungry for more offices in San Francisco. AI leases at the end of last year led to the first positive quarter in five years, according to the Business Times.

— Dana Bartholomew