Continuing a downward trend from Q2, San Francisco’s office market experienced a sharper quarter-over-quarter decline in rental rates from previous reporting. A 350-bps rental rate decline and a following vacancy increase by nearly 180 bps puts San Francisco office rates back to mid-2019 levels. With San Francisco re-opening businesses slowly in an effort to contain the coronavirus, coupled with changing regulations and uncertainties, tenants are opting to offload space in large quantities. This offloading is a response to key employers, such as Google, Twitter, Facebook, Salesforce, and others implementing work from home strategies for the long term or permanently. These WFH policies allow tenants to reduce costs by downsizing in space and subleasing excess space at lower asking rates. Continued declines in asking rates from subleases month to month have resulted in downward pressure on direct asking rates. Third quarter begun to show direct asking rates responding to current trends in the sublease market.