Nearly 12M Square Feet of Vacant Office Space in S.F • Hacker News Board

Re: Nearly 12M Square Feet of Vacant Office Space in S.F

#31

Post by waheoo » Sun, Oct 25, 2020, 10:06 PM UTC

sebmellen wrote: post #22

OpticalWindows wrote: post #18

Earlier quoted context omitted.

We should be reciving our 3rd and onto our 4th right now.

Really, it's an infrastructure problem. We don't have direct payment rails set up for something like UBI, and the political will to build this infrastructure is next to zero. Most of the companies receiving relief were badly managed before the pandemic, and they should be allowed to fail. But it's very hard to structure relief in a fair and effective way.

In WW2 we transformed every industry overnight to be geared for war.

I think we can handle setting up a payment system...

Like what kind of weak ass excuse is that? You can't figure out how to pay everyone?

Please. Give me a break.

Ubi is the effective and fair way to stimulate the economy btw.

All this stimulus aimed at businesses is absolutely moronic.

If people know they have secure pay coming in they will spend the money. Its the uncertainty that causes people to hard cash.

Businesses don't need the cash, if they can't stay afloat during this they shouldn't be allowed to make it through.

I do believe they deserve some help,aybe tax breaks, maybe short term allowance to make people redundant / reduce so they can equalise the books but there is no fair way to give them money and not the people.

Re: Nearly 12M Square Feet of Vacant Office Space in S.F

#32

Post by sebmellen » Sun, Oct 25, 2020, 10:07 PM UTC

gruez wrote: post #25

sebmellen wrote: post #16

Earlier quoted context omitted.

This is mainly a concern for one year leases that were renewed this March/April/May, which won't be renewed in 2021. There are many companies which budgeted for a few weeks or months of work from home, now they're transitioning permanently and the office space they were using is no longer needed.

>This is mainly a concern for one year leases that were renewed this March/April/May, which won't be renewed in 2021 Do leases tend to get renewed in Q2?

It depends on when the lease was signed. AFAIK there's a pretty even distribution between quarters. Here's an article from this year (2020) about notable leases signed in Q2: https://www.bizjournals.com/sanjose/news/2020/07/10/six-nota....

Re: Nearly 12M Square Feet of Vacant Office Space in S.F

#33

Post by freehunter » Sun, Oct 25, 2020, 10:07 PM UTC

gruez wrote: post #25

sebmellen wrote: post #16

Earlier quoted context omitted.

This is mainly a concern for one year leases that were renewed this March/April/May, which won't be renewed in 2021. There are many companies which budgeted for a few weeks or months of work from home, now they're transitioning permanently and the office space they were using is no longer needed.

>This is mainly a concern for one year leases that were renewed this March/April/May, which won't be renewed in 2021 Do leases tend to get renewed in Q2?

If they signed a 12 month lease in Q2, then yes.

Re: Nearly 12M Square Feet of Vacant Office Space in S.F

#34

Post by 908B64B197 » Sun, Oct 25, 2020, 10:07 PM UTC

diebeforei485 wrote: post #7

andrewxdiamond wrote: post #3

If this trend continues, I wonder if these office spaces can be converted to apartments. SF is in desperate need of living space

Many of them can't because they don't have sufficient plumbing everywhere (apartments would have far more bathrooms and kitchens) and most buildings can't be retrofitted. Plus, land-use laws would have to change, which is also extremely difficult.

I guess they could make bigger apartments if they are bottlenecked on plumbing.

But I wonder what people could do with commercial office space so cheap? For startups that can't really go 100% remote (mostly hardware) that's a dream come true!

Re: Nearly 12M Square Feet of Vacant Office Space in S.F

#35

Post by enigmo » Sun, Oct 25, 2020, 10:08 PM UTC

gruez wrote: post #25

sebmellen wrote: post #16

Earlier quoted context omitted.

This is mainly a concern for one year leases that were renewed this March/April/May, which won't be renewed in 2021. There are many companies which budgeted for a few weeks or months of work from home, now they're transitioning permanently and the office space they were using is no longer needed.

>This is mainly a concern for one year leases that were renewed this March/April/May, which won't be renewed in 2021 Do leases tend to get renewed in Q2?

the scope of the pandemic wasn't yet clear in Q1

Re: Nearly 12M Square Feet of Vacant Office Space in S.F

#36

Post by OpticalWindows » Sun, Oct 25, 2020, 10:08 PM UTC

sebmellen wrote: post #22

OpticalWindows wrote: post #18

Earlier quoted context omitted.

We should be reciving our 3rd and onto our 4th right now.

Really, it's an infrastructure problem. We don't have direct payment rails set up for something like UBI, and the political will to build this infrastructure is next to zero. Most of the companies receiving relief were badly managed before the pandemic, and they should be allowed to fail. But it's very hard to structure relief in a fair and effective way.

I agree its very difficult and in making decisions like this we will incidentally help pick winners and losers.

I dont think temporary relief will make or break a business model effected by the pandemic. On some of those edge cases we will need to decide whether the government will get their money back or accept losses.

Re: Nearly 12M Square Feet of Vacant Office Space in S.F

#37

Post by hogFeast » Sun, Oct 25, 2020, 10:09 PM UTC

sebmellen wrote: post #2

A close relative of mine is a top real estate appraiser based in San Francisco, and she's terrified about what happens in Q2 2021, when leases will start terminating en masse. She's had a call with the St. Louis Fed, as they're trying to get an idea of what this will look like. She thinks it will be a bloodbath, and deal a death blow to corporate real estate (and other capital markets by extension).

This has happened every few years in corporate real estate for the past half century (Sam Zell's biography is a good take).

Every. Single. Time. Valuations too high. Debt too high. Equity too low.

I am pretty cynical because I have read a bit too much history and seen this so many times working in investment management but...so what? Some rich people lose a ton of money...okay? Capitalism has losers. You lose.

Also, in the last crisis, a ton of people (particularly Blackstone) made a ton of money buying huge deals at the very top of the market. None of this excess came out of the market. Lots of people who borrowed tons of money were just able to take their paper to the Fed, and keep playing.

Re: Nearly 12M Square Feet of Vacant Office Space in S.F

#38

Post by sebmellen » Sun, Oct 25, 2020, 10:09 PM UTC

nostromo wrote: post #26

sebmellen wrote: post #12

Earlier quoted context omitted.

The lack of continued large-scale stimulus is tragic. We need a strong stimulus package with direct monetary relief (one $1200 check is not enough), and a program of structured financial relief / rent forgiveness. Unfortunately, I don't see it happening.

Yes, we need at least another 6 trillion. Maybe 20 trillion. Why stop there? We should quadruple the money supply maybe, we need to protect commercial real estate investors, after all. ... and then in 2021 we can all scratch our heads and wonder why income inequality is worse than ever, and despite all this spending, we didn't even make an appreciable dent in the impact of Covid-19 on public health.

I think a quote from Bernie Sanders encapsulates the problem: "in the US, we have socialism for the rich, and rugged individualism for the poor".

Corporate lobbyists know the government is a cash cow, and they take advantage of this. They will always get relief if they ask for it.

Direct payments are the opposite of this.

Re: Nearly 12M Square Feet of Vacant Office Space in S.F

#39

Post by drxzcl » Sun, Oct 25, 2020, 10:09 PM UTC

meerita wrote: post #23

sebmellen wrote: post #12

Earlier quoted context omitted.

The lack of continued large-scale stimulus is tragic. We need a strong stimulus package with direct monetary relief (one $1200 check is not enough), and a program of structured financial relief / rent forgiveness. Unfortunately, I don't see it happening.

Keynesian economy never worked. Redistributing money will just make it worthless.

I love your certainty. I'm not sure it's warranted though.

Re: Nearly 12M Square Feet of Vacant Office Space in S.F

#40

Post by aeternum » Sun, Oct 25, 2020, 10:09 PM UTC

CommanderData wrote: post #19

andrewxdiamond wrote: post #3

If this trend continues, I wonder if these office spaces can be converted to apartments. SF is in desperate need of living space

Is this the answer though? I don't think the current is the norm. Wfh for many is unsuitable. It's a temporary shift and things will balance out in a few years.

It's likely only partially temporary. Many companies were already decreasing hiring in the bay area pre-pandemic. That will only continue as other places are much cheaper.

Between the high tax corporate rates of SF & California along with increased salary due to cost of living, an SF-based engineer must produce 2x as much output as an engineer based elsewhere and 3x as one based on Canada.