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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

#311

Post by fred_is_fred »

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).

Oh relax. They're not going to implode the buildings and nobody is going too die. Rents will fall, some bond holders will default, but at some cost point that real estate has value to someone. Rents are not going to zero.

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

#312

Post by LegitShady »

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).

we'll just have google/apple/etc buy out the whole city because they have the cash and nothing to do with it.

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

#313

Post by hn_throwaway_99 »

julianlam wrote: post #307
hn_throwaway_99 wrote: post #238

Earlier quoted context omitted.

I mean, Terminus House was essentially turned into a large project where people were dumped, an approach that has shown similarly disastrous results in the US for decades. That's quite different from turning office space into desirable apartments.

In what way? In Harlow, government took a hands off approach on zoning and oversight and let the free market figure out housing for the country's poorest. It all seems very similar to me. I'm sure at the start they also thought they were turning defunct office space into desirable apartments too.

The article linked by the comment I replied to stated this:

> Smith is one of hundreds of residents placed at Terminus House in Harlow by councils in and around London, often many miles from everything and everybody they once knew.

I'm not familiar with the specifics of UK subsidized housing, but it sure sounds like the residents were placed in this building by government.

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

#314

Post by [deleted] »

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).

[deleted]

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

#315

Post by greesil »

scarmig wrote: post #264
SilasX wrote: post #260

Earlier quoted context omitted.

At risk of extreme naivety, why do failed real estate investments merit Fed support and attention? I thought they were just for maintaining a sound dollar and liquidity and the financial system, not charity for real estate kings.

The central component of the American Dream is that, once you're rich, the government will do everything in its power to make sure you remain rich.

The best government money can buy.

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

#316

Post by culturestate »

kristopolous wrote: post #158
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).

The other week I was on real estate sites and I saw a bunch of "apartments" in SOMA that just looked like offices with some hastily slapped on anemities, as if there was some "wink wink nudge nudge" going on and they had to call the place an "apartment" for some city ordinance but everyone knew it was an office. However, I realized it was exactly the opposite. These people were taking their office spaces and desperat…

There's a category of mixed-use development popular in South Korea called officetels[1] that started more or less exactly this way. Newer ones can be pretty nice because there's a lot more care put into the design of the residential spaces, but the older ones that you can tell are converted offices are...not great, unless you're just a big fan of foamcore dropped ceilings.

1. https://en.wikipedia.org/wiki/Officetel

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

#317

Post by geerlingguy »

lostlogin wrote: post #272
octoberfranklin wrote: post #227

Earlier quoted context omitted.

Not for low frequencies. You simply need mass for that, no way around it.

Is mass the only way? The building I worked in had problems due to us transmitting a lot of noise up concrete columns, and it was solved by isolating the source from the columns. Rubber feet were used to separate the noisey equipment from the floor. So couldn’t you isolate the noise with false ceilings and walls that are constructed to minimise transmissions?

Both is best, but typically a 6" deep wall with offset 2x4 studs, insulation in the wall, resilient channel, 5/8" drywall (which is also fire resistant usually, with fiberglass in the core) and the right caulk and electrical install will stop all but very loud low rumbles.

The key is the installation and design of the system, though. Miss one vent, electrical cutout, or gap (or even using the wrong length of screws) makes all that material useless.

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

#318

Post by dredmorbius »

SilasX wrote: post #260
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).

At risk of extreme naivety, why do failed real estate investments merit Fed support and attention? I thought they were just for maintaining a sound dollar and liquidity and the financial system, not charity for real estate kings.

The Federal Reserve manages both the money supply and unemployment, generally against GDP growth targets.

Real estate --- residential, commercial, and industrial --- is among the largest asset classes in the financial system, and it acts as collateral and backing of loans and other financial instruments. Those in turn affect banks and their own ability to generate loans, themselves much of the total money supply.

When market value of these assets falls dramatically, it has ramifications across the financial system. The 2007--2008 global financial crisis was the result of a prior crash in real estate valuations. Japan's Lost Decade (1991--2001) was the result of its own real estate-inflated asset bubble collapse. (https://en.wikipedia.org/wiki/Lost_Decade_(Japan)). Money available for business investment (already constraind) will further contract.

Additionally, for many people, lacking a defined benefit pension, real estate is a major component of household asset portfolios.

Whilst real estate asset inflation is highly problematic, and is not a contributor to economic growth, sudden collapse is tremendously disruptive. And very much a concern of the Fed.

Of course, special interest intervention may be another factor in decisionmaking, though there's ample reason for interest without any such.

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

#319

Post by franciscop »

danpeddle wrote: post #10

Is this a worldwide trend? Wonder what it means for city tax incomes.

Purely incidental, but: I check housing prices in Tokyo every once in a while and I've found a lot more of what I'd consider "a good deal" in the last couple of months. Not buying a place anytime soon, just find it interesting to see.

I also took a short trip to Okinawa (the beach islands of Japan) and the Airbnb prices were anomalously low, in fact it was more expensive renting a car for the time I was there than my stay. Not surprising, considering that last year ~31 million tourists visited Japan but this year that number must be very low.

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

#320

Post by mancerayder »

arkis22 wrote: post #285
jeffbee wrote: post #279

Earlier quoted context omitted.

So, you don't have any data? Just checking that we're in total agreement here. This is exactly why I've long said that the only course that should be required of every college major (or ideally every high school graduate) is basic accounting. The number of things in a system is the cumulative result of all inflows and outflows. The population of a city can fall without any kind of change in the outflow process. By th…

easy. I googled the population increase during a normal workday. During regular Monday - Friday business hours, the city's population surges by at least 20 percent -- or more than 160,000 people. https://www.kqed.org/lowdown/11327/interactive-how-san-franc... that number could be wrong. but that 20% beats your 4% by a comfy margin. and that 20% has special impact on the city center that employs many service workers.…

Not enough. Where are our degrees, he asks. And are your sources matching his political inclinations? Careful, now.
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