A Tale of Two (or more?) Cities

I’ve been gone for most of the month, taking an amazing vacation in Thailand and Vietnam, but still thinking of all the blogs I would have to write to catch up. There are many positive aspects to the San Francisco Bay Area office market, with Silicon Valley reporting 10 million square feet of office absorption since 2020, primarily AI, office buildings now being priced as high as $640/rsf or more….take 221 Main Street in San Francisco as an example, 389,000 sf and reportedly going on the market for $250,000 million. At the same time 1111 Broadway n Oakland, a 572,000 square foot 24-story Class A may be in default. A 104,000 sf Class A office building in downtown Walnut Creek, 500 Ygnacio, which sold in 2016 for $36 million, just had a deed-in-Lui at $22.5 million, $212/rsf. I have also seen reports of Bay Area office buildings selling at a 84% discount compared to the values back in 2019.