Office vacancies in San Francisco continue to climb, with a slight increase due to Elon Musk’s decision to sublet X’s mid-market headquarters.
“It was a stab in the back, especially from a company that has received so much help from the city,” said Ludovic Racinet in response to Elon Musk’s announcement that X, long based in San Francisco, would move its headquarters to Texas.
Musk made the announcement in July, just a month after Racinet opened “The Function,” a comedy and cocktail bar just steps from the now-vacant building.
“Is Twitter a loss? Yes. It is a loss. They provided a lot of business to the neighborhood, to the restaurants, to the convenience store that’s here,” Racinet said.
X isn’t the only company leaving. PayPal, Block and Slack are just a few other companies that have left or significantly reduced their presence in San Francisco.
Preliminary data from CBRE, a commercial real estate services and investment group, shows San Francisco’s office vacancy rate will rise half a percentage point to 37.3% in the third quarter of 2024.
Investigators believe the number of employees would have remained the same if X had not left. However, according to District 6 Supervisor Matt Dorsey, there were not many people working when the office closed.
“I think by the time Twitter finally left, there were only 100 to 120 people left in the entire complex,” Dorsey said.
Musk 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 company leave his district and that he is working to make the Mid-Market area and the city as a whole more attractive to both large corporations and local businesses.
“We need to do better as a city to create a fully staffed police department and address the challenges at the street level,” Dorsey said.
Racinet says he sees the efforts firsthand. On Friday, he met with the Mid-Market Community Benefit District, an organization focused on promoting economic development and implementing public improvements.
They helped Racinet keep his business in tip-top shape.
“My business has been tagged 3 times in 3 months; the city is on it right away. They already have the paint to match,” Racinet said.
He believes it is a great location and community, which will lead to more customers.
“There are plenty of other people around here who can fulfill our desire for this place,” Racinet said.
