Callahan Capital Partners - Office Real Estate Digest

Callahan Capital Partners is a real estate private equity firm and operator focused exclusively on the origination, acquisition and management of high quality office assets in select urban markets throughout the United States.

“Class A+ buildings in major markets are exceeding 90% of pre-pandemic use on peak days… That use reaches 94% on Tuesdays, the top day for in-person work. “

According to building security firm, Kastle Systems, modern, well-located and well-amenitized assets are essentially back to peak pre-covid tenant usage. These assets are in high demand with tenants and taking the lion's share of leasing. Read more on CoStar.

“A healthy pipeline of tenants actively seeking office space is a precursor to a 5% rise in leasing volume in 2025”

CBRE’s Office Occupier Survey suggests that occupier sentiment supports continued office space absorption as occupiers shift from a contraction-oriented approach to one of stabilization and expansion. This shift in sentiment, along with a significant slowdown in new office supply, sets the stage for an optimistic office outlook for the right high quality assets, as well as assets that could be repositioned to high quality.

“San Francisco’s 35.4% vacancy rate in the first quarter — among the highest in the nation — is expected to drop one to three percentage points in the third quarter [2025] thanks to AI companies expanding or opening new offices in the city”

VC companies are heavily investing in AI, San Francisco city leadership is business friendly and the tech talent base is strong in the Greater Bay Area. For these reasons, SF has seen leasing velocity pick up as AI and tech tenants expand and/or return to the city. Read more from the LA Times here.

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