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Office Vacancy Rate in San Francisco Just Hit a New High

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Re: Office Vacancy Rate in San Francisco Just Hit a New High

#41

Post by makestuff »

julianeon wrote: post #31
mortenjorck wrote: post #27

Much as I would like the opposite to be true, it's good to see the reality check at the bottom: > And once again, while tempting to see or promote an opportunity to convert all the vacant office space into housing in a response to San Francisco’s housing woes, the conversion of existing office space to residential use currently makes no economic sense for the vast majority of downtown San Francisco buildings, due to…

People said that before and it was true before - office space truly was more profitable - but now things have changed. Drastically. So things that would've been conventional wisdom for 100 years, that were true for each generation, have suddenly stopped being true. When people say 'no residential' I would say: what's your alternative? Office space - obviously failing, why we're having this discussion. Restaurant/coff…

Well there is a fourth option. Extensive lobbying by corporations who own a ton of realestate to force people back into the office by giving tax incentives to corporations who have in office workers.

Re: Office Vacancy Rate in San Francisco Just Hit a New High

#42

Post by [deleted] »

ghaff wrote: post #21
randycupertino wrote: post #2

Will 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…

On the other hand, the few times I've gone into Boston or Cambridge during the week, rush hour traffic is as bad as it's ever been as far as I can tell. It's really hard for me to square the evidence of my eyes with narratives about city offices emptying out. Perhaps it's a rather uneven phenomenon.

[deleted]

Re: Office Vacancy Rate in San Francisco Just Hit a New High

#43

Post by celestialcheese »

The contrast to lab rents and the bay area life sciences market is striking. [1]

Near 0 vacancies, rising rents[2] and a huge boom in construction.

It'll be a painful shakeup, but eventually the market will normalize to a price where renovating office space for labs and new hybrid work environments makes sense. Anecdotally, family and friends in structural and architectural fields in the bay are busier than ever with these types of retrofits.

1 - https://kidder.com/market-reports/san-francisco-life-science... 2 - https://www.bizjournals.com/sanfrancisco/news/2021/11/12/bay...

Re: Office Vacancy Rate in San Francisco Just Hit a New High

#44

Post by parkingrift »

ghaff wrote: post #21
randycupertino wrote: post #2

Will 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…

On the other hand, the few times I've gone into Boston or Cambridge during the week, rush hour traffic is as bad as it's ever been as far as I can tell. It's really hard for me to square the evidence of my eyes with narratives about city offices emptying out. Perhaps it's a rather uneven phenomenon.

In NYC the explanation is pretty simple. Weekday subway, bus, and train ridership is about 60% of pre pandemic levels. Most of those people are no longer commuting at all, but some percentage have switched to driving.

The percentage numbers don’t quite tell the whole story, either. There are two million daily riders missing.

https://new.mta.info/coronavirus/ridership

Re: Office Vacancy Rate in San Francisco Just Hit a New High

#45

Post by jonathankoren »

vinyl7 wrote: post #29
randycupertino wrote: post #2

Will 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…

I don't believe WFH will last as long as people think it will

Companies that own their empty offices (e.g. the FAANGs) are definitely going want them full because of sunk costs, and then hope all the other smaller companies cargo cult them.

It probably will work.

A better world is possible, and it's actively sabotaged by entrenched interests.

Re: Office Vacancy Rate in San Francisco Just Hit a New High

#46

Post by nimbius »

gkoberger wrote: post #17

It'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,…

curious to know if this will snowball into a market trigger effect in 2023...something like "well if you cant make it here you cant make it anywhere." .

for what its worth one of this epochs Rockefellers, Mike Bloomberg, gave it his best shot this year turning almost every article in his newspaper into a full-throated commandment to return to office spaces immediately, embrace your daily commute, and eschew the perils of pouring coffee from your kitchen only to watch the effort fall upon deaf ears. WeWork and slumlords turned most startups against renting office space entirely, while gas prices and covid basically outed the VPN as the executive bathroom nobody at the company got to use but the C levels until now.

Re: Office Vacancy Rate in San Francisco Just Hit a New High

#47

Post by b112 »

mortenjorck wrote: post #32
jedberg wrote: post #13

Not 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 we…

> 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. This is the real point of opportunity. Rather than the well-meaning but economically unviable push to convert office buildings into housing, the most attainable goal right now is to prevent new offices from being built and build housing…

This is the real point of opportunity.

Is it though? If you take away the offices, and offices close, why do people need to live there?

Where will they work?

And if it is 100% remote, why not live where the cost of living, and housing, is 1/2 the cost already?

Re: Office Vacancy Rate in San Francisco Just Hit a New High

#48

Post by tomtheelder »

mathverse wrote: post #26

WFH is going to have a huge impact on urban planning. But then again when did the urban planners really did work for the benefit of all the people? If you have a huge house with a garden and can work from home I think you just won the lottery. All the good urban planning in European cities I think comes at the expense of comfort of how people live. If you live in a 85sqm in a city you are lucky but probably pay too m…

> All the good urban planning in European cities I think comes at the expense of comfort of how people live.

I think it's just a question of which comforts you prioritize. European cities are maximize healthy transportation and access to services/urban leisure. Suburbs maximize personal space and privacy, and in some cases outdoor access. To describe one as uncomfortable is to project your own personal preferences.

Re: Office Vacancy Rate in San Francisco Just Hit a New High

#49

Post by wwweston »

mortenjorck wrote: post #27

Much as I would like the opposite to be true, it's good to see the reality check at the bottom: > And once again, while tempting to see or promote an opportunity to convert all the vacant office space into housing in a response to San Francisco’s housing woes, the conversion of existing office space to residential use currently makes no economic sense for the vast majority of downtown San Francisco buildings, due to…

> due to the relative value of each use and the cost of conversion

Presumably, the relative value will change at some point if demand for office space falls off a cliff.

I also suspect there are public policy factors that could be brought to bear. Vacancy taxes (perhaps even scaling with vacancy volume) are underused. Put them into place, use the revenue to fund pilot conversion projects, prizes for innovation on that front, and eventually perhaps subsidies.

As always, incentives matter. But often overlooked is that incentives are malleable.

Re: Office Vacancy Rate in San Francisco Just Hit a New High

#50

Post by jedberg »

kridsdale2 wrote: post #35
jedberg wrote: post #13

Not 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 we…

Did they finally close the AMC in that zombie hellscape?

Oh many years ago sadly. It was my favorite theater because it was walkable.

The mall is gone now, it's a literal hole in the ground while they fight multiple legal battles with the city about what to do with it.

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