No, Dorothy, the San Francisco Office Market is Not Yet Improving!

I’ve had folks tell me the positive news that institutional investors are once again purchasing San Francisco office buildings, which to them is a sign this market is recovering. I remind them that the price might be twenty cents on the dollar, and if you own other office buildings this is a great way to bring your average investment cost down. There are also institutional funds dumping losing portfolios at deep discounts and then turning around tne bgeting back into buying, at similar deep discounts. Today there was an announcement that Google will be vacating 300,000 square feet of Class A office space at One Market Plaza, where they have been since 2018. As I’ve been predicting for several years, although it may seem like we are at the bottom, it may be a bumpy bottom for quite some time. Interest rates need to go down, and tenants need to take, not vacate, space.