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

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

#241

Post by Daishiman »

sidlls wrote: post #146
sebmellen wrote: post #46

Earlier quoted context omitted.

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.

I think the shift to remote work is temporary. There will almost certainly be a relatively large crash in commercial real estate, but it will recover, probably within a year or maybe two.

A permanent shift of even 5-10% of the workforce to permanent remote (which _will_ happen; far too many people with negotiating power have realized that this is an option now) will drastically alter commercial real estate.

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

#242

Post by sebmellen »

cure wrote: post #215
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.

One year leases on commercial office real estate?!? That's unheard of around here (Boston). You'll be lucky if you find a commercial landlord who will rent to you for 5 years instead of the more usual 7, 10 or 20. Subleases are a different story, of course.

Sorry for my lack of semantic nuance. Most of the leasers rely on payments from their subletters to pay their leases, so the effects will translate over in either case, just with more "buffer time".

There are also a fair amount of 1-year direct commercial leases, depending on the area.

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

#243

Post by OpticalWindows »

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…

Well fucking said but both times the stimulus was enacted we neglected large portions of the economy. If we do so again it wont be fixed and hello deep depression.

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

#244

Post by stefco_ »

scarmig wrote: post #236

As a homeowner in San Francisco... this is great. The cost of living has been too high here for ages, and the prices distort both our society and the economy. It'll be rough for speculators, but in the medium term everyone will come out stronger. After the pandemic, we'll have the chance to see real businesses start here that don't rely on giant checks from VCs for viability; new restaurants will see more opportuniti…

It's funny you mention Boise; that city, and many parts of Idaho/the west, are undergoing their own insane housing price inflation at the moment that's surging through the pandemic; real estate prices are a serious problem in a lot of places that aren't SF/NYC.

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

#245

Post by albacur »

dwild wrote: post #226
albacur wrote: post #91

I'm excited by the idea of permanent remote work and moving somewhere more affordable. I moved to SF relatively late in my career, and only realized afterwards that I have nowhere near enough savings to own a nice home here. But most of my coworkers seem eager to return to the office. They miss the office environment, the perks and catered meals, and the socialization. And the managers, who subsist on meetings and in…

> All this is to say, I'm skeptical that workers won't be called back into the office as soon as leadership gets the chance. That forget the leadership on top of that leadership though! Where I work, before covid they were working on expanding quite a bit the amount of office space but as far as I understands, all theses plans got cancelled and instead we won't have permanent desk and instead we will works remotely 2…

Working from home 2-3 days a week is not what I would consider "remote work," since you'd still need to live close to the office.

From my perspective, this is worst of all possible scenarios. Employees are still shackled to an expensive city, but now they must pay for housing that supports a dedicated "home office" space (e.g., a larger apartment with an extra room, or carving out part of their living room/bedroom). This is just shifting the cost burden of real estate from the company onto the employees.

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

#246

Post by hn_throwaway_99 »

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).

I think the data from the article on subleasing really supports this. The absolute explosion of all this unused office space available for sublease means there are already loads of companies who wish they could escape their rent payments, and very few of them will probably want additional space any time soon.

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

#247

Post by arbuge »

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).

> and she's terrified about what happens in Q2 2021, when leases will start terminating en masse.

I thought the general expectation, or at least the hope, is that that's about when things start to go back to normal.

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

#248

Post by jeffbee »

mancerayder wrote: post #157
momokoko wrote: post #114

Earlier quoted context omitted.

You seriously do not think San Francisco and New York have attracted business development? This is yet another version of the classic “No one goes there anymore, it’s too crowded”

Businesses and residents are leaving both cities are a cadence unlike anything we've seen in decades. My point is singular: are mayorships concerned with progressive issues the best qualified to stem that tide? The numbers speak for themselves in terms of residents (tax revenue) and businesses (tax revenue and jobs). But there's glee in these comments. People are saying things like, who cares about billionnaires and…

> Businesses and residents are leaving both cities are a cadence unlike anything we've seen in decades

There is no data underlying this statement whatsoever.

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

#249

Post by ThenAsNow »

jacobolus wrote: post #112
flurben wrote: post #101

Earlier quoted context omitted.

You seriously think that everywhere in America with reasonable tax rates is just getting fiscal transfers from SF?

Personally I don’t think “low taxes” are “reasonable”. We live in a complicated society and we all benefit when we collectively pay people to do a huge variety of important jobs which are hard to fit into a pure-profit system. Cutting funding for those exposes us to a wide variety of risks and eliminates many future opportunities, in the long term harming us all. The Covid pandemic is a perfect case study in the way…

There are really two axes that everyone seems to conflate into one. There is funding, as in whether or not there is sufficient funding to achieve certain outcomes. Then there is competence, as in managing the resources to achieve certain outcomes. Both are necessary but neither sufficient by themselves, only together.

The U.S. seems to be stuck in a loop wherein the available funds are argued about endlessly, and everybody acts as if that's the only dimension about which to speak and win. Not nearly enough is done to boost competence in the government sector. I think this is plenty true even if we set aside the current U.S. administration in which a number of federal entities are headed by naked toadies (to be fair, it's certainly not true of all federal organizations even now).

I tend to agree with you that the U.S. is probably not taxing enough for consistently high-quality outcomes in areas where the government is responsible. Yet I'm sympathetic to those that point to places where tax rates are high and so is wastefulness. But when the only lever it seems that can be pulled is on the revenue/spending, it's no wonder the correlation between that lever position and good outcomes is low - it ignores the competence with which any of those funds are managed.

I think it's entirely possible to have competent government if that is made a priority and addressed with some flexibility.

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

#250

Post by hn_throwaway_99 »

albacur wrote: post #245
dwild wrote: post #226

Earlier quoted context omitted.

> All this is to say, I'm skeptical that workers won't be called back into the office as soon as leadership gets the chance. That forget the leadership on top of that leadership though! Where I work, before covid they were working on expanding quite a bit the amount of office space but as far as I understands, all theses plans got cancelled and instead we won't have permanent desk and instead we will works remotely 2…

Working from home 2-3 days a week is not what I would consider "remote work," since you'd still need to live close to the office. From my perspective, this is worst of all possible scenarios. Employees are still shackled to an expensive city, but now they must pay for housing that supports a dedicated "home office" space (e.g., a larger apartment with an extra room, or carving out part of their living room/bedroom).…

I disagree. If I only had to come into the office, say, once or twice a week (3x might be pushing it) I'd be willing to live much further out because I'd be willing to tolerate a horrible commute if I only had to do it a small percentage of the time.

For example, in Austin, these days anything located within a half hour of downtown tends to be horribly expensive. But just go a little beyond that and house/real estate prices drop precipitously. You're going to see a boom in these exurbs as these "mostly remote" jobs increase.

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