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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

#321

Post by paul_f »

mancerayder wrote: post #74
rsynnott wrote: post #72

Earlier quoted context omitted.

... Wait, what would you expect the mayors to do about it? Use their dictatorial mayoral powers to force people to extend leases or the city’s infinite funds for a stimulus or bailout? The federal government and to some extent the states have the money and power; expecting a mayor to wave a magic wand and fix it is, well... optimistic.

Seriously? How about do what mayors have done for centuries: find ways to encourage investment and movement into the city. Business seems to be moving to places like Austin. Why do you think that is?

Business has been moving to places like Austin for years. Las Vegas, Phoenix, Atlanta, Nashville, Orlando. The pace will accelerate now that it is even more acceptable to do so.

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

#322

Post by imperfectcats »

ChuckMcM wrote: post #132
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).

This is a good point. I explained it to my mother with an analogy to a cruise ship heading toward shore at full speed. Everyone knows this means the ship will run aground, but few appreciate that given the mass (and thus momentum) the ship would travel far inland just scraping across the ground. The coming economic response to the pandemic has the potential to be like that, basically 10x the 2009 "great recession" an…

It is already worse than the GFC in 2009. UK GDP dipped 21.7% in Q2, NZ ~13%, and the US ~10%. https://ourworldindata.org/covid-health-economy

Where it ends is anyone's guess, and the worst part will be the second and third order effects it won't be super easy to predict. Things like pension/401K/Superannuation funds with high Commercial real estate exposure leading to reduced retirement income, state pension funds that suffer as big US cities see revenue plummet after the population moves, European cities with vastly worse economies - the UK with London hurts there the most - and the cyclical effect of Italian demand reducing French production, reducing French demand reducing Italian production, ad nauseam.

This will be a multi-speed problem, with some countries, cities, counties, suburbs & streets affected far more than others.

If it wasn't so tragic it would be a truly fascinating thing to watch unfold.

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

#323

Post by hindsightbias »

autotune wrote: post #251
hindsightbias wrote: post #187

Earlier quoted context omitted.

Eras like this are about survivors. Anyone who was here in 2009 would prefer that era to dot-com 1999 or FAANG 2019. So as far as they’re concerned - faster, please. Consider this a test whether you are a Californian or San Franciscan or someone from somewhere else here to rake in the google dollars. If the latter, I’m sorry your demands were not accomodated. Enjoy the farm in upstate NY or the frowns you get in Taho…

>or the frowns you get in Tahoe or Austin Austinite here who moved from New York, and previously from California. People actually talk to you out here in general and have been nothing but pleasant. There's also far less of a homeless issue and you can actually buy a house with a low six figure salary. Austin is great.

Austin was great.

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

#324

Post by anigbrowl »

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'm quite interested in what your relative thinks might be the impact of the looming property tax reform in CA; if the ballot initiative passes next month then commercial real estate will no longer be able to enjoy the prop13 caps by using pass-through entities to own the buildings, and changing the beneficial owner of the real estate holding corporation instead. Plunging rents plus escalating tax liabilities seem like a perfect financial storm.

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

#325

Post by part1of2 »

temp667 wrote: post #207
albacur wrote: post #137

Earlier quoted context omitted.

It might require the added context of living here. San Francisco has one of the highest property crime rates in the United States [1], and Walgreens is a popular target of shoplifters, who regularly clear out entire shelves of merchandise. The company hasn't come out and said it, but some believe that rampant shoplifting is a reason why eight Walgreens locations in the city have been permanently closed [2]. [1] https…

I have a family member who works at walgreens. The theft is incredible. In the bay area and particularly SF this is not one or two candy bars a week theft. In SF, if you stop a shoplifter and they are hurt, if they are in a protected class etc, it's game over for you as an employee and possibly the store. Even if you stop someone, even if police come and arrest, DA is never going to prosecute. If they do prosecute, i…

I bet prices just go up store-wide to cover, and even higher on items where the cost is more asymmetric (prescriptions)

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

#326

Post by Guest42 »

culopatin wrote: post #296
slickrick216 wrote: post #276

Earlier quoted context omitted.

Because after 2008 the fed became one of the largest landowners in the country and by proxy have a vested interest in propping it up.

The Fed as in the Federal Reserve you mean? Do you have a source? I think you may be confusing things.

They purchased I believe a third of the mortgages.

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

#327

Post by dredmorbius »

culopatin wrote: post #296
slickrick216 wrote: post #276

Earlier quoted context omitted.

Because after 2008 the fed became one of the largest landowners in the country and by proxy have a vested interest in propping it up.

The Fed as in the Federal Reserve you mean? Do you have a source? I think you may be confusing things.

The US Federal Reseve holds about 30% of all US mortgages:

https://www.bloomberg.com/news/articles/2020-09-01/fed-s-mor...

Though I'd dispute that the Fed cares particularly about their valuation. The Fed's dual mandates are inflation and unemployment, not balance sheet returns.

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

#328

Post by gumby »

octoberfranklin wrote: post #301
gumby wrote: post #177

This will (proportionately)happen to downtown Palo Alto when Palantir moves out, though that will probably be good for downtown. They had too large a percentage of the available real estate. The city council ought to find a way to stop this kind of monoculture though I’m not sure how it could reasonably be done.

Graduated property tax.

Good idea, but not permitted under california constitution.

Also Palantir is renting so the basis would presumably be set by the landlord’s overall bill. Have to say that that’s not itself bad: a small number of entities own a lot of the commercial real estate in the city.

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

#329

Post by Aeolun »

Texasian wrote: post #102
Aeolun wrote: post #70

Earlier quoted context omitted.

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.

Most? You’ve gotta be earning more than 400k to get into the 1%. Top 10% maybe, since that’s around 125-150k.

That’s a very US centric view.

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

#330

Post by jayd16 »

paul_f wrote: post #310
jayd16 wrote: post #194

Earlier quoted context omitted.

I can't help but think this take is projecting a bit too much. Inundated? How so? What are you seeing? Tax benefits, work-life balance and bigger homes? Really, you can see these changes in the last 6 months of a pandemic? I could be wrong but I don't think the majority of employers are letting employees change states (and state taxes). WFH does not mean work from anywhere, especially tax-wise. This all sounds plausi…

A majority of tech workers in California are from somewhere else, who came to California for the opportunity. They know what it's like back home. And yes, especially the 30-somethings with kids, they're leaving

I'm not saying there isn't some desire among employees but most companies do not want to pay taxes in 50 states. I don't think the vast majority of workers can simply move without changing employers.
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