2 weeks Ago By Amanda Hari
San Francisco's office vacancy challenges continue, with the rate seeing a slight increase due to Elon Musk's decision to sublease X's Mid-Market headquarters. "It was a stab in the back, especially from a company that has got so much help from the city, " said Ludovic Racinet in reaction to Elon Musk's announcement that X's longtime San Francisco headquarters would be moving to Texas. Musk announced in July, just a month after Racinet opened "The Function", a comedy and cocktail lounge just feet from the now vacant building.
"Is Twitter a loss? Yes. It's a loss. They were providing a lot of business to the neighborhood, to the restaurants, to the corner store that is right here," said Racinet.
X isn't the only business to leave, PayPal, Block, and Slack are just a few other companies that have left or greatly reduced their San Francisco footprint. Preliminary data from CBRE, a commercial real estate service and investment group, shows San Francisco's office vacancy rate will rise a half percentage point in the 3rd quarter of 2024 to 37.3%.
Researchers believe it would have remained flat if it wasn't for X's departure, but District 6 supervisor Matt Dorsey says not many people were still working there when it closed. "I think by the time Twitter finally left there were only 100 or 120 people left in the entire complex," said Dorsey. Musk has blamed San Francisco city officials for high taxes, and high crime rates, which he said led to the company's departure.
Dorsey says he never wants to see a business leave his district and he is working on making the Mid-Market area, and the city as a whole, more appealing to large companies as well as local businesses. "We need to do a better job as a city of getting to a fully staffed police department, addressing the street level challenges," said Dorsey. Racinet says that he's observing the efforts firsthand; and on Friday, he met with the Mid-Market Community Benefit District, an organization focused on promoting economic development and implementing public improvements.
They were helping Racinet keep his business in tip-top shape. "My business was tagged 3 times in 3 months; the city is on it right away. They already have the matching paint," said Racinet.
He believes it's a great location and community and that will lead to more customers. "There are plenty of other people around here to fulfill our desire for this place," said Racinet..
