San Francisco braces for commercial real estate crash
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San Francisco braces for commercial real estate crash
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Re: San Francisco braces for commercial real estate crash
#2Give the corresponding housing crisis in the Bay Area, one wonders if the solution is to "simply" start converting office space to living space until the corresponding demand for office space recovers from a combination of increased demand and decreased supply. Now I'm sure there are all kinds of challenges to doing that, engineering, zoning, other practicalities, but it seems overall reasonable to me, though perhaps someone with a better understanding of the situation might enlighten me.
Re: San Francisco braces for commercial real estate crash
#3Not just SF
I see For Lease signs on commercial real estate at all price points everywhere I go. WFH has been a paradigm shift and commercial real estate hasn't caught up to the reality yet. Companies that embrace WFH will have access to an entire nations' worth of talent and will end up with a competitive advantage. Requiring RTO means employees must be within thirty miles or so of campus, and lots of talent won't go for that anymore. I don't recommend anyone relocate for a job unless they are very young and its just a matter of renting. I'm not selling my house for any employer at this point.
Many tech companies also overbuilt. I predict Google will pull the plug (or massively downscale) on their San Jose "transit" campus...there's no way that Google needs another 25k desks in addition to their existing real estate building/buying binge, particularly with recent talk over headcount. Fortunately for Google, simply by virtue of announcing the San Jose campus, they've raised the value for the undeveloped real estate and will be able to sell it at a profit.
WFH is going to be a defining trend...I predict it will be a survive/die issue for companies.
Re: San Francisco braces for commercial real estate crash
#4Give the corresponding housing crisis in the Bay Area, one wonders if the solution is to "simply" start converting office space to living space until the corresponding demand for office space recovers from a combination of increased demand and decreased supply. Now I'm sure there are all kinds of challenges to doing that, engineering, zoning, other practicalities, but it seems overall reasonable to me, though perhaps…
The only way SF will be fixed is if there is massive earthquake to take care of all the nimby concerns. Can't be concerned and stop construction if you don't have a back yard anymore.
Re: San Francisco braces for commercial real estate crash
#5Give the corresponding housing crisis in the Bay Area, one wonders if the solution is to "simply" start converting office space to living space until the corresponding demand for office space recovers from a combination of increased demand and decreased supply. Now I'm sure there are all kinds of challenges to doing that, engineering, zoning, other practicalities, but it seems overall reasonable to me, though perhaps…
Those commercial spaces make it incredibly easy to build them however you like. The access to plumbing and electrical would make it simple to convert them into small dwellings.
Re: San Francisco braces for commercial real estate crash
#6Residential crash is potentially already upon us, at least in the outskirts (East Bay for me). We've had our house on the market for over a month now, and nobody else in the neighborhood is selling either. Big changes from only 3 months ago, when sellers were closing in days.
Re: San Francisco braces for commercial real estate crash
#7Give the corresponding housing crisis in the Bay Area, one wonders if the solution is to "simply" start converting office space to living space until the corresponding demand for office space recovers from a combination of increased demand and decreased supply. Now I'm sure there are all kinds of challenges to doing that, engineering, zoning, other practicalities, but it seems overall reasonable to me, though perhaps…
The only way SF will be fixed is if there is massive earthquake to take care of all the nimby concerns. Can't be concerned and stop construction if you don't have a back yard anymore.
Blockbusting is a "thing" as well
Re: San Francisco braces for commercial real estate crash
#8Give the corresponding housing crisis in the Bay Area, one wonders if the solution is to "simply" start converting office space to living space until the corresponding demand for office space recovers from a combination of increased demand and decreased supply. Now I'm sure there are all kinds of challenges to doing that, engineering, zoning, other practicalities, but it seems overall reasonable to me, though perhaps…
Most offices have physical layouts that make conversion to residential difficult to impossible. Big things like lots of interior square footage without windows and plumbing only to a few central locations.
And while some or even most of this is fixable, major renovations are a ton of cost and effort to convert them to something that will still be expensive and weird, if even possible to meet the legal requirements of residential space.
https://sfstandard.com/housing-development/turning-downtown-...
Re: San Francisco braces for commercial real estate crash
#9Give the corresponding housing crisis in the Bay Area, one wonders if the solution is to "simply" start converting office space to living space until the corresponding demand for office space recovers from a combination of increased demand and decreased supply. Now I'm sure there are all kinds of challenges to doing that, engineering, zoning, other practicalities, but it seems overall reasonable to me, though perhaps…
The only way SF will be fixed is if there is massive earthquake to take care of all the nimby concerns. Can't be concerned and stop construction if you don't have a back yard anymore.
People in SF have backyards? I can see NIMBY as a concern in the rest of the bay area, but SF, it's already stacked housing.
Re: San Francisco braces for commercial real estate crash
#10Give the corresponding housing crisis in the Bay Area, one wonders if the solution is to "simply" start converting office space to living space until the corresponding demand for office space recovers from a combination of increased demand and decreased supply. Now I'm sure there are all kinds of challenges to doing that, engineering, zoning, other practicalities, but it seems overall reasonable to me, though perhaps…
From my understanding, it’s just like a legacy code base. It is just easier/cheaper to start from scratch than converting the entire thing a piece at a time.