I'm curious to see if this change in the urban landscape is going to lead to a modern office loft type situation like NYC saw in the 60-70s with former commercial spaces being available under specific tenant laws to artists.
Office Vacancy Rate in San Francisco Just Hit a New High
11–20 of 67 posts
Re: Office Vacancy Rate in San Francisco Just Hit a New High
#12I'm curious to see what will happen with the bagholders of office real estate. Will they try to reinvent themselves as mixed use residential/commercial? Or is it possible we will see a wave of defaults as vacancy rates continue to climb?
Office to residential conversions are pretty tough. I don't think we'll see a ton of them.
I don't think there is a fundamental reason for that. Office buildings are designed to be reconfigured. I guess you'd need to rip out + replace the plumbing + HVAC (or only put in a few ultra-luxury units per floor).
Re: Office Vacancy Rate in San Francisco Just Hit a New High
#13Not a surprise there. I was talking to a CEO friend of mine whose company had just leased a huge office right before the pandemic for five years. They closed all their small offices around town and moved everyone early during the pandemic, which means most people have never seen the new building. Their stuff is just in boxes on desks. They can't get out of the lease early, so for now the leadership shows up once a week for meetings and that's about it.
But in about three years they will ditch the lease, as will many other companies in similar situations. This is just the beginning.
On the plus side, here in Cupertino there has been an eternal debate what to do with the empty land the old mall used to sit on. They wanted to build 3M square feet of office space, but now they probably won't do that, which is a big win for the community who wants it to be retail or housing and not offices.
Re: Office Vacancy Rate in San Francisco Just Hit a New High
#14I would think this is a lower bound too, since there's a lot of companies with long leases signed before the pandemic either eating crow or subletting until the lease expires.
And then if you count all the companies doing a return to office motion just to justify the real estate, it could go even higher...
I don't think we will know the true impact of the WFH era for another few years.
Re: Office Vacancy Rate in San Francisco Just Hit a New High
#15I'm curious to see what will happen with the bagholders of office real estate. Will they try to reinvent themselves as mixed use residential/commercial? Or is it possible we will see a wave of defaults as vacancy rates continue to climb?
I've noticed how many fluff-filled articles I see lately about 'needing to get back to the office' in many publications that seem to have a large number of advertisers selling office space. I don't have any numbers, but it seems pretty crazy how many of these have been popping up in different 'business journal' types of sites.
It's not crazy at all. Our entire society is built around exploitatively extracting maximum value from each other and that often requires creative marketing to invent want where none existed before.
Re: Office Vacancy Rate in San Francisco Just Hit a New High
#16Will be interesting to see changes taking place in urban planning as the new era of working from home begins to effect the urban center and suburban areas moving forward. I've noticed it in the lunch spots in my suburban town- all way more crowded than they used to be and went through a transition period where they had to get used to the new volume. Feels like a new era of some big changes in relation to city plannin…
Last I heard there was a housing shortage. Obvious solution would be to turn commercial properties into residential ones.
It's obvious but not easy. Oftentimes commercial spaces don't have a lot of plumbing. They usually just have the one bathroom and kitchen space per floor usually in the middle.
A large office space would need walls and a lot of plumbing work to convert to apartments (and probably a lot more electricity to power multiple kitchens full of appliances).
Re: Office Vacancy Rate in San Francisco Just Hit a New High
#17It's only going to get worse. Most companies are in the middle of 5- or 10-year leases, and aren't going to renew.
With this in mind, it still shocks me how the building managers in SF I work with have just gotten worse. They're bitter and mean and have made things so much harder for us (rather than being kinder and doing everything they can to retain us).
My point is that it's not nearly as bad as it's going to be, and there's nothing that makes me think it'll get better.
I really hope they turn a lot of these buildings into housing; we could kill two birds with one stone.
Re: Office Vacancy Rate in San Francisco Just Hit a New High
#18Earlier quoted context omitted.
Office to residential conversions are pretty tough. I don't think we'll see a ton of them.
I don't think there is a fundamental reason for that. Office buildings are designed to be reconfigured. I guess you'd need to rip out + replace the plumbing + HVAC (or only put in a few ultra-luxury units per floor).
No post body was provided.
Re: Office Vacancy Rate in San Francisco Just Hit a New High
#19Earlier quoted context omitted.
Office to residential conversions are pretty tough. I don't think we'll see a ton of them.
I don't think there is a fundamental reason for that. Office buildings are designed to be reconfigured. I guess you'd need to rip out + replace the plumbing + HVAC (or only put in a few ultra-luxury units per floor).
Office buildings tend to have all their plumbing centrally located. Converting to residential means spreading it all around. It's not like just moving partitions around.
Re: Office Vacancy Rate in San Francisco Just Hit a New High
#20I'm curious to see if this change in the urban landscape is going to lead to a modern office loft type situation like NYC saw in the 60-70s with former commercial spaces being available under specific tenant laws to artists.
Right now developers say it’s too expensive. Some data and a potential path forward: https://www.sfchronicle.com/sf/article/empty-offices-housing...