San Francisco Falls Further into the Abyss as Office Values Plunge 75 Percent

[1srelluc]

The former Union Bank building in the heart of San Francisco's financial district, located at 350 California Street, was auctioned off last week. The winning bid was $65 million, roughly 75 percent less on a per-square-foot basis than comparable building sales from just before the pandemic. This is devastating news for San Francisco, because it provides a new market-rate benchmark for pricing other downtown commercial building listings, and such a low price indicates that investors have an extremely negative outlook for the future of San Francisco's downtown area.

Just four years ago, you would be hard-pressed to find a major tech firm that either didn't have a presence in San Francisco or wasn't trying to create such a presence. Today, tech and other firms are abandoning the city. San Francisco's downtown vacancy rate has increased from only about 4 percent in 2019 to nearly 30 percent today.

The glut of downtown office space, combined with San Francisco's high housing costs, has led many to envision converting downtown commercial spaces into residential buildings, but not one residential development firm bid on this property. One residential development group that considered a bid was Emerald Fund, which converted a downtown office tower to apartments about ten years ago.

Emerald Fund ultimately viewed the prospect of a residential conversion as too risky due to the city's high fees and its low-income housing requirement. Presently, the city requires 23 percent of the units in a large development be set aside for low-to-moderate-income tenants, but this means that developers would need to charge a substantial premium on the market-rate units for the project to pencil out.

Tony Crossley, a San Francisco commercial broker, estimated a residential conversion cost per unit of nearly $1,000 per square foot for this property. "It doesn't make any economic sense," he said. "The math is completely upside down."

San Francisco Falls Further Into The Abyss As Office Values Plunge 75 Percent

The former Union Bank building in the heart of San Francisco’s financial district, located at 350 California Street, was auctioned off last week. The winning bid was $65 million, roughly 75 percent less on a per-square-foot basis than comparable building sales from just before the pandemic.

www.hoover.org

SF is just the canary in the coal mine, exacerbated by the looney leftists in city government.

Coming soon to all major cities.

New York is going to be a fuckin' blood bath.

If you have any investment exposure in commercial office space in a blue city you best be divesting yourself of it, and soon.

 

[Hang on Sloopy]

this is so so hilarious

 

[Winston]

The former Union Bank building in the heart of San Francisco's financial district, located at 350 California Street, was auctioned off last week. The winning bid was $65 million, roughly 75 percent less on a per-square-foot basis than comparable building sales from just before the pandemic. This is devastating news for San Francisco, because it provides a new market-rate benchmark for pricing other downtown commercial building listings, and such a low price indicates that investors have an extremely negative outlook for the future of San Francisco's downtown area.

Just four years ago, you would be hard-pressed to find a major tech firm that either didn't have a presence in San Francisco or wasn't trying to create such a presence. Today, tech and other firms are abandoning the city. San Francisco's downtown vacancy rate has increased from only about 4 percent in 2019 to nearly 30 percent today.

The glut of downtown office space, combined with San Francisco's high housing costs, has led many to envision converting downtown commercial spaces into residential buildings, but not one residential development firm bid on this property. One residential development group that considered a bid was Emerald Fund, which converted a downtown office tower to apartments about ten years ago.

Emerald Fund ultimately viewed the prospect of a residential conversion as too risky due to the city's high fees and its low-income housing requirement. Presently, the city requires 23 percent of the units in a large development be set aside for low-to-moderate-income tenants, but this means that developers would need to charge a substantial premium on the market-rate units for the project to pencil out.

Tony Crossley, a San Francisco commercial broker, estimated a residential conversion cost per unit of nearly $1,000 per square foot for this property. "It doesn't make any economic sense," he said. "The math is completely upside down."

San Francisco Falls Further Into The Abyss As Office Values Plunge 75 Percent

The former Union Bank building in the heart of San Francisco’s financial district, located at 350 California Street, was auctioned off last week. The winning bid was $65 million, roughly 75 percent less on a per-square-foot basis than comparable building sales from just before the pandemic.

www.hoover.org

SF is just the canary in the coal mine, exacerbated by the looney leftists in city government.

Coming soon to all major cities.

New York is going to be a fuckin' blood bath.

If you have any investment exposure in commercial office space in a blue city you best be divesting yourself of it, and soon.

Damn but you morons are desperate. The declining value of office space has nothing at all to do with "blue state, red state" and everything to do with working remotely. Who needs a damn office space? It is really that simple and to suggest otherwise is just the ultimate in gullibility and ignorance.

 

[Fueri]

Sounds like pefect digs for the illegals poring over the border.

 

[shockedcanadian]

The former Union Bank building in the heart of San Francisco's financial district, located at 350 California Street, was auctioned off last week. The winning bid was $65 million, roughly 75 percent less on a per-square-foot basis than comparable building sales from just before the pandemic. This is devastating news for San Francisco, because it provides a new market-rate benchmark for pricing other downtown commercial building listings, and such a low price indicates that investors have an extremely negative outlook for the future of San Francisco's downtown area.

Just four years ago, you would be hard-pressed to find a major tech firm that either didn't have a presence in San Francisco or wasn't trying to create such a presence. Today, tech and other firms are abandoning the city. San Francisco's downtown vacancy rate has increased from only about 4 percent in 2019 to nearly 30 percent today.

The glut of downtown office space, combined with San Francisco's high housing costs, has led many to envision converting downtown commercial spaces into residential buildings, but not one residential development firm bid on this property. One residential development group that considered a bid was Emerald Fund, which converted a downtown office tower to apartments about ten years ago.

Emerald Fund ultimately viewed the prospect of a residential conversion as too risky due to the city's high fees and its low-income housing requirement. Presently, the city requires 23 percent of the units in a large development be set aside for low-to-moderate-income tenants, but this means that developers would need to charge a substantial premium on the market-rate units for the project to pencil out.

Tony Crossley, a San Francisco commercial broker, estimated a residential conversion cost per unit of nearly $1,000 per square foot for this property. "It doesn't make any economic sense," he said. "The math is completely upside down."

San Francisco Falls Further Into The Abyss As Office Values Plunge 75 Percent

The former Union Bank building in the heart of San Francisco’s financial district, located at 350 California Street, was auctioned off last week. The winning bid was $65 million, roughly 75 percent less on a per-square-foot basis than comparable building sales from just before the pandemic.

www.hoover.org

SF is just the canary in the coal mine, exacerbated by the looney leftists in city government.

Coming soon to all major cities.

New York is going to be a fuckin' blood bath.

If you have any investment exposure in commercial office space in a blue city you best be divesting yourself of it, and soon.

Remote work is going to impact every major cities commercial real estate.

 

[Moonglow]

It was way overpriced like much real estate nowadays.

 

[Polishprince]

Damn but you morons are desperate. The declining value of office space has nothing at all to do with "blue state, red state" and everything to do with working remotely. Who needs a damn office space? It is really that simple and to suggest otherwise is just the ultimate in gullibility and ignorance.

You are partly correct.

But suburban and exurban office parks also make much more sense than the crime-ridden rotten downtown cores of Ultraliberalism. The sky high taxes and crime rate of central cities make the plentiful parking and bum-free experience of less liberal areas more inviting too.

 

[Moonglow]

You are partly correct.

But suburban and exurban office parks also make much more sense than the crime-ridden rotten downtown cores of Ultraliberalism. The sky high taxes and crime rate of central cities make the plentiful parking and bum-free experience of less liberal areas more inviting too.

Bums exist in all cities...All states...

 

[Polishprince]

Bums exist in all cities...All states...

Perhaps.

But a lot of more sophisticated cities don't allow them to hang out in front of office building asking people for spare change, and a lot of less liberal police departments are quick to tell them to "move on".

The nation's bums aren't allowed to shit on the sidewalks of every city, just the liberal ones

 

[Moonglow]

Perhaps.

But a lot of more sophisticated cities don't allow them to hang out in front of office building asking people for spare change, and a lot of less liberal police departments are quick to tell them to "move on".

The nation's bums aren't allowed to shit on the sidewalks of every city, just the liberal ones

Is panhandling a constitutional right?


Does the First Amendment protect panhandling? Yes. As the Willis Court explains, the U.S. Supreme Court has held that the First Amendment covers “charitable appeals for funds.” Because of this, panhandling, solicitation, or begging are protected speech under the First Amendment.

Anti-Panhandling Laws - ACLU of Washington |​

Humans shit all over da place on the Earth....

 

[Polishprince]

Is panhandling a constitutional right?


Does the First Amendment protect panhandling? Yes. As the Willis Court explains, the U.S. Supreme Court has held that the First Amendment covers “charitable appeals for funds.” Because of this, panhandling, solicitation, or begging are protected speech under the First Amendment.

Anti-Panhandling Laws - ACLU of Washington |​

Humans shit all over da place on the Earth....

Is shitting on the sidewalk considered "freedom of expression" in the constitution?

In any event, the great thing is that office parks are on private property, so that isn't a problem. You can ban the bumming of money on your own private property.

 

[Moonglow]

Nationwide home prices saw their steepest annual decline in more than a decade last month —falling by nearly $18,000, according to a report released Monday.

The report from real estate brokerage Redfin found the largest drops in prices were in expensive California markets and in pandemic-era boomtowns, such as Boise, Idaho, and Austin, Texas.

Here’s where home prices fell the most in April: Redfin report

Nationwide home prices saw their steepest annual decline in more than a decade last month —falling by nearly $18,000, according to a report released Monday. The report from real estate brokerage Redfin found the largest drops in prices were in expensive California markets and in pandemic-era...

www.yahoo.com

 

[multivita-man]

Commercial real estate has struggled ever since working from home became a thing. Probably why corporate execs hate work from home and are desperate to force people back into the office again.

Probably one area where Democratic mayors and banking/finance/corporate Republicans are on the same page. Some cities are in danger of imploding because of this new reality.