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

#61

Post by mancerayder » Sun, Oct 25, 2020, 10:18 PM UTC

Aeolun wrote: post #52

mancerayder wrote: post #42

Are Progressive mayorships in places like SF and New York the right mentality at the right time when it's an economic catastrophe to be averted? The Mayor of NYC said a few days ago, 'Midtown is not the center of the universe' when asked about sudden new squalor and economic catastrophe. Unfortunately it is the center of jobs for the region. Is SF run like this as well?

> sudden new squalor and economic catastrophe Billionaires suddenly losing their tenants is now economic catastrophe? Is this another variant of ‘too big to fail’? Those buildings won’t be going anywhere regardless of anything else.

What do you mean, billionaires? What about all the small businesses who used to get daily business from those office workers who bought coffee, lunch, drinks, and so forth?

The hubris and myopia of the 'eat the rich' mentality is galling and a little depressing.

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

#62

Post by [deleted] » Sun, Oct 25, 2020, 10:18 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.

[deleted]

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

#63

Post by xienze » Sun, Oct 25, 2020, 10:18 PM UTC

pessimizer wrote: post #50

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.

We should have explicitly been paying people to stay home, but somehow the $1200 + the $600 unemployment bump became welfare payments, and morons were giving speeches about how they were incentivizing people to stay home. No shit. Once we had things under control, we could loosen up quarantine, then when it got shitty again, tighten it up again and pay people to stay home. It would have goddamn paid for itself. If pe…

The problem is that one stimulus check cost $2 trillion dollars. Doing that every single month for an indefinite period of time is, quite expensive to put it mildly. And that’s not even taking into consideration that there’s a lot of people with monthly expenses in excess of $1200 per month.

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

#64

Post by bobbyi_settv » Sun, Oct 25, 2020, 10:20 PM UTC

freehunter wrote: post #33

gruez wrote: post #25

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 Do leases tend to get renewed in Q2?

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

A 12 month lease for commercial real estate in SF?

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

#65

Post by InTheArena » Sun, Oct 25, 2020, 10:20 PM UTC

idoh wrote: post #13

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

Good idea but sadly impossible for San Francisco because San Francisco cannot even convert places that are zoned for housing into housing.

Won’t. Not Can’t.

This problem is entirely of the Bay Area’s own making. They have been pursuing exclusionary housing policies while cranking up taxes and spending for a long long time. Now the revenue base for those taxes are collapsing at the exact time they need the revenue to weather the storm.

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

#66

Post by erosenbe0 » Sun, Oct 25, 2020, 10:21 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).

In terms of suffering, I'm more worried about the loss of support workers and supporting businesses over the long-term. Especially in a place like Chicago where the installed base of offices is much much larger than SF, and where portions of the future sales tax revenue has already been securitized and sold to investors.

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

#67

Post by VectorLock » Sun, Oct 25, 2020, 10:21 PM UTC

908B64B197 wrote: post #34

diebeforei485 wrote: post #7

Earlier quoted context omitted.

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!

I wonder what it would be like to live in a 10k SF open-plan office with a single bathroom.

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

#68

Post by hogFeast » Sun, Oct 25, 2020, 10:21 PM UTC

sebmellen wrote: post #46

hogFeast wrote: post #37

Earlier quoted context omitted.

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,…

Point taken, but I don't think you're taking into account the monumental impact of COVID-19. We've never had such a large, immediate, and impactful shift to work culture. Working remote was still a niche idea at the beginning of 2020, now it's ubiquitous. That has never happened before.

Agreed. Very hard to estimate that effect. With corporate real estate, it is inherently local (you cannot export an office) so the question is about the swings in vacancies.

Have some markets seen ~15% vacancies before? Yes, corporate real estate is very cyclical, no-one builds for years, and then the market adds 40-50% in a few years. But when it gets to 30-40% then you are probably looking for examples outside the US...and SF will be the worst-hit market, others should be less.

But...the world will move on, write down the value of property, assign losses, pay off remaining creditors, the world moves on...I don't think anyone could say a fault of the last ten years has been that shareholders/creditors were forced to swallow too many losses. The strength of a capitalist economy is that losses can be assigned quickly, and everyone moves on...in theory.

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

#69

Post by swiley » Sun, Oct 25, 2020, 10:21 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.

SF: shared bathrooms aren't ok, we'd rather have people use the sidewalk.

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

#70

Post by Aeolun » Sun, Oct 25, 2020, 10:21 PM UTC

christiansakai wrote: post #44

How relevant is this to average people? I.e., seems this only affect the rich?

I like how most of HN is probably comfortably within the 1%, but as soon as we start talking about ‘owners of real estate in SF’, we are easily able to call them ‘the rich’, because the wealth is on a completely different level.