San Francisco braces for commercial real estate crash • Hacker News Board

Re: San Francisco braces for commercial real estate crash

#81

Post by gibsonf1 » Tue, Sep 06, 2022, 6:06 PM UTC

ethbr0 wrote: post #19

ptmcc wrote: post #8

Earlier quoted context omitted.

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…

Maybe SF should relax the legal requirements of residential space, then? If they choose not to build sufficient housing... they can at least choose to use what they have. A windowless room with a community bathroom doesn't sound appealing, but at a certain price point it's better than nothing.

The requirements for residential units are primarily the International Building Code, which are the expensive ones. The city only manages planning, such as a residential use can go in a certain area. To actually build, you need a building permit which has to conform to City and State building codes [2], which right now is basically the International Building Code [1]. And yes, it would cost a fortune to convert office into residential use. However, if office buildings become truly deserted and can be bought at very low cost, then it can start making financial sense.

The building codes have evolved over time to protect life/safety of the occupants, so not something you would want to have the City bypass.

[1] https://en.wikipedia.org/wiki/International_Building_Code [2] https://sfdbi.org/codes

Re: San Francisco braces for commercial real estate crash

#82

Post by Finnucane » Tue, Sep 06, 2022, 6:07 PM UTC

fshbbdssbbgdd wrote: post #26

ptmcc wrote: post #8

Earlier quoted context omitted.

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…

Can they be converted into huge units with an open floor plan and bathroom/kitchen near the center? If someone can figure out how to make it look cool, office conversions could be the 2020s version of the warehouse loft.

19h century brick and concrete industrial buildings weren't built the same way. Or, obviously, to the same height. It's much easier to just gut them to the shell and then add in your modern amenities.

Re: San Francisco braces for commercial real estate crash

#83

Post by Cupertino95014 » Tue, Sep 06, 2022, 6:07 PM UTC

Trivia note: there are certain words that only appear in headlines. Like "brace" to mean "prepare." (Although I think that one might occasionally show up in normal text.)

What else? "eye" as a verb. ("Supervisors eye relaxing building codes")

Re: San Francisco braces for commercial real estate crash

#84

Post by JumpCrisscross » Tue, Sep 06, 2022, 6:07 PM UTC

jeffbee wrote: post #30

ryandrake wrote: post #6

Residential 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.

OH NO A WHOLE MONTH!! Inventory of listed homes remains extremely low. https://fred.stlouisfed.org/series/ACTLISCOUCA Median days on market still near all-time lows SF: https://fred.stlouisfed.org/series/MEDDAYONMAR41860 Cal: https://fred.stlouisfed.org/series/MEDDAYONMARCA USA: https://fred.stlouisfed.org/series/MEDDAYONMARUS

> inventory of listed homes remains extremely low

Those are statewide statistics. Oakland is seeing a ~20% increase in days on market and 5% decrease in price from last year [1]. Population and income shocks hit poor neighborhoods first [2].

[1] https://www.redfin.com/city/13654/CA/Oakland/housing-market

[2] https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.23...

Re: San Francisco braces for commercial real estate crash

#85

Post by lokar » Tue, Sep 06, 2022, 6:07 PM UTC

FartyMcFarter wrote: post #35

jeffbee wrote: post #12

Earlier quoted context omitted.

Nope. On an area-weighted basis most of SF is wasted on detached single-family homes. https://www.google.com/maps/@37.7470676,-122.4914956,314m/da...

Why "wasted" ? Does everyone need to live with the least amount of space possible?

They don't. But if you want only detached single family homes you don't get to complain about prices.

Re: San Francisco braces for commercial real estate crash

#86

Post by gbasin » Tue, Sep 06, 2022, 6:07 PM UTC

ptmcc wrote: post #8

bragr wrote: post #2

Give 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…

Take a look at Manhattan's Financial District — seems like half of the commercial buildings have already been converted to residential. Some layouts are a bit awkward but it works fine

Re: San Francisco braces for commercial real estate crash

#87

Post by smcl » Tue, Sep 06, 2022, 6:08 PM UTC

jdkee wrote: post #41

jeffbee wrote: post #12

Earlier quoted context omitted.

Nope. On an area-weighted basis most of SF is wasted on detached single-family homes. https://www.google.com/maps/@37.7470676,-122.4914956,314m/da...

Americans overwhelmingly prefer single-family detached homes when given other options. How is choosing a higher-quality of life option “wasted”?

I think if people were given the choice - particularly somewhere like San Francisco - they'd would much prefer to live in an apartment they could reasonably afford vs a detached home they could only afford if they travelled back in time 30+ years.

Re: San Francisco braces for commercial real estate crash

#88

Post by aaaaaaaaaaab » Tue, Sep 06, 2022, 6:08 PM UTC

unethical_ban wrote: post #36

hollywood_court wrote: post #13

Earlier quoted context omitted.

I’m not near a big tech center, but I know of exactly 3 businesses in my town that no longer exist because they would not allow their employees to work remotely. Two of them were owned by former clients of mine. They allowed themselves to fail because they wanted to make their employees’ lives more difficult. It was that simple. There was no need for either business to have a brick and mortar location at all. No need…

We as an industry are still sailing through the air thinking things are fine with WFH, but in reality the engines have stalled and we're gliding. What I mean by that is that the industry has all the benefits of in-person work, having social connections, having gotten jobs through networking, and of knowing the ins and outs of a domain from pre-covid standards. As time goes on, I think the working population will have…

Hi manager! :-)

No, we don’t go back to the office.

Re: San Francisco braces for commercial real estate crash

#89

Post by MiddleEndian » Tue, Sep 06, 2022, 6:08 PM UTC

kelseyfrog wrote: post #43

fshbbdssbbgdd wrote: post #26

Earlier quoted context omitted.

Can they be converted into huge units with an open floor plan and bathroom/kitchen near the center? If someone can figure out how to make it look cool, office conversions could be the 2020s version of the warehouse loft.

Sublime. All of the people who hated working in an open office are screaming at the idea of living in one.

The corporate commune!

Re: San Francisco braces for commercial real estate crash

#90

Post by Apocryphon » Tue, Sep 06, 2022, 6:08 PM UTC

unethical_ban wrote: post #36

hollywood_court wrote: post #13

Earlier quoted context omitted.

I’m not near a big tech center, but I know of exactly 3 businesses in my town that no longer exist because they would not allow their employees to work remotely. Two of them were owned by former clients of mine. They allowed themselves to fail because they wanted to make their employees’ lives more difficult. It was that simple. There was no need for either business to have a brick and mortar location at all. No need…

We as an industry are still sailing through the air thinking things are fine with WFH, but in reality the engines have stalled and we're gliding. What I mean by that is that the industry has all the benefits of in-person work, having social connections, having gotten jobs through networking, and of knowing the ins and outs of a domain from pre-covid standards. As time goes on, I think the working population will have…

Then the pendulum will swing back towards hybrid, people will drift towards in-person-first companies such as Apple, and trends will shift again. Perhaps owners and management will get smart and try to woo workers with personal offices instead of the open office default.

What you're describing won't last forever, either.