According to the San Francisco Business Tims February 28, 2025, “A majority of San Francisco business leaders said their companies have plans to expand their offices in the city as they both push for more in-person work and grow headcount, according to a survey by KPMG. Three-quarters of the 100 San Francisco-based executives surveyed by…Read More→

  Two years ago at our annual Northern California SIOR Chapter event at the San Francisco Ferry Building, where major industrial developers forecast what they think this industry segment will be doing over the next year…I remember a consistent comments that their pencils were put away and that new Bay Area industrial development for the…Read More→

I have been writing and publishing the OfficeTimes Corporate Office Perspective for the past 45 years, and during this time I have made many industry predictions. Almost every one of them has come true, and this is documented if you want to check. It almost feels like we are at the office building bottom, but…Read More→

San Francisco and Oakland have been experiencing fire-sale pricing of office buildings over the past few years, with office properties that previously sold for $500-1000/rsf selling for $350-300/rsf/ Very recently we are beginning to hear of I-680 Corridor Class A, well-located office buildings and complexes potentially on the way to Trustee sales in the $100-200/rsf…Read More→

  It took DOGE only six days to terminate 22 Federal leases. GSA oversees the federal government’s 360 million square feet of owned and leased properties.  Landlords with GSA as a tenant may be worried as many leases have early termination clauses. As reported in a January 18, 2018 Colliers Insights report, “Investors and lenders…Read More→

It has been suggested to me that I try to put a more positive spin on my blogs regarding the office market…so here goes!  If you ever wanted to purchase a downtown San Francisco high rise office building for 30% of what the price was five years ago, now is your chance!  This week I…Read More→

6001 Shellmond St., Emeryville, a110,000 sf Class A eight-story office building with adjacent shopping and retail was purchased in 2017 for $33 million, and the $21.6 million loan was just purchased for $6.8 million last month. $300/sf before,$62/sf now…

“Roughly 11% of office buildings tied to CMBS loans were delinquent, beating the previous high watermark of 10.7% set during the Great Recession in December 2012, according to Trepp, which began tracking the CMBS sector in 2000. More than $2B in office loans became freshly delinquent in December, causing a 63-basis-point increase in the overall delinquency rate,…Read More→

GSA has 78 million sf of office leases either expiring or can be terminated by end of 2028. While there appears to be a push to get all government employees back in the office five-days a week, The American Federation of Government Employees union just reached a deal with GSA to protect and extend hybrid…Read More→

I was at a recent broker event with specialists from different commercial real estate segments. Here are some interesting insights from this…the housing market has slowed down; less folks are buying homes and that may have dramatically impacted a number of other industries. Our industrial folks say the construction companies are downsizing, giving up warehouse…Read More→

In BizNow 10/23/24 Jarred Schenke’s article warns about the tax exposure that might result from a landlord handing the keys of the property back to the lender. On top of losing whatever equity you may have once had, in addition to all the time and expense purchasing and then managing the property, there may be…Read More→

Jarred Schenke, writing in NationalCapital Markets,  “In total, roughly $3.3B of CMBS loans were transferred to special servicing during the month of September, $1.9B of which were office loans. Now 12.6% of all CMBS office loans are being specially serviced, up from 8.3% at this point last year. The special servicing rate increased for all…Read More→

  Much of the United States office markets are still experiencing vacancy rates in around 20%, and in the San Francisco Bay Area even higher, with Oakland at 29% and San Francisco at 35%. I have mentioned previously that the Amazon announcement mandating five-day a week return to office may have a positive impact on…Read More→

In San Francisco KPMG just announced it was downsizing from 143,000 sf of office space into 96,000 sf. This is a common trend amount financial services firms. “About 1,000 employees will be based out of the office, the same number based out of 555 Second. Chris Cimino, who leads KPMG’s San Francisco office, said the…Read More→

Bisnow National 9/13/24  had a number of article headlines, including “Business Leaders Look to Increase Real Esate Investments”, Brookfield Predicts Robust Office Recover Market Rebound”, Major Investors Return to the Market”, Commercial Real Estate Investors Ready to Get Back in the Market”…not bad for just one day’s headlines!!!  

Bisnow July 19, 2024, had a string of very positive commercial real estate headlines. At the top was “Goldman Sacs Reports Gains in Real Estate Investments’ and when I dug into the article, it turns out they got ahead of the curve last year and wrote off a ton of poor investments, and now they…Read More→

A recent article in Bisnow July 8, 2024 cited San Francisco Class-A office vacancy increasing for the 10th consecutive quarter, “as more than a third of the city’s office buildings remain empty.  The vacancies, brought on by layoffs and hybrid work, are expected to remain elevated through the end of the year. Placer.ai’s monthly data…Read More→

  A perfect storm of plunging property values for aging buildings, weak tenant demand coming out of the pandemic and high interest rates for new loans and refinancing has left the $2.4 trillion office building sector wobbling. In New York 1740 Broadway which Blackstone had paid $600 million for ten years earlier just sold for…Read More→

There are a number of reports around the country that price discounts on office buildings are a boon to non-profits who have access to cash to acquire these office facilities for their own long-term use. Bisnow June 3, 2024 “With overall U.S. commercial real estate pricing down 21% from its March 2022 peak, according to Green Street,…Read More→

“For the first time since the financial crisis, investors in top-rated bonds backed by commercial real estate debt are getting hit with losses. Buyers of the AAA portion of a $308 million note backed by the mortgage on a building in midtown Manhattan got back less than three-quarters of their original investment after the loan was sold…Read More→

Bisnow May 8, 2024, It is not easy or inexpensive, but many office projects have ample parking and are located near residential and commercial areas. “Leopardo Vice President of Healthcare David Rutledge said when developers are looking to build a new healthcare facility from the ground up, they often find that ideal sites like Knightly…Read More→

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…Read More→

I was in a recent meeting and was made aware of multiple suburban office buildings where the tenants had been on month-to-month and were all finally given notice to vacate.  I met with a major office park investor who is planning on demolishing a number of very nice Class A office buildings, relocating the tenants…Read More→

The Standard, April 24, 2024: “By the end of 2019, the 20 biggest tech employers had leased more than 16 million square feet of space, nearly a quarter of the city’s total office stock. Now, those same companies are holding onto only 8.3 million square feet, according to data from real estate firm CBRE. “We’ve just…Read More→

This may be a new record for the most office space, both direct as well as for sublease, in the United States, according to Avison Young. This is 23.7% of the office inventory in the country. Some positive trends that may improve office Landlord’s assets in this Bisnow April 8, 2024 article, “Swaths of layoffs…Read More→

Amazon Slashing office space, will save $1.3 Billion in Costs. Will let leases expire and negotiate early lease terminations.  Starwood Capital paid almost $500 million in 2019 for three Downtown Oakland office buildings, and after just defaulting on a 364.5-million-dollar loan has given up ownership of 2100 Franklin, 2101 Webster and 1901 Harrison. San Francisco’s…Read More→

I have been predicting for some time that office occupancy will go up over the next few years-in my opinion from the roughly 50% where we are now to perhaps 70% once all the corporate mandates become effective. However, we will not get anywhere close to the pre-Covid levels as there has been a transformational…Read More→

In Bisnow February 25, 2024, ”Paul Darrah, who is the chief workplace office for Citadel which has $92.46 billion under management, said he believes that the rest of the corporate world will eventually succeed in getting employees to show up. Citadel is leaning into in-office work as the hedge fund posts double-digit returns. It is planning billion-dollar office towers in Miami and…Read More→

According to Mortgage Bankers Association, it is 929 billion but close enough to the Big T…there were loan extensions from last year that increased this. According to Bisnow Feb. 13, 2024, “Prices on commercial properties have fallen 21% from an early 2022 peak. Office prices have dropped most precipitously, sinking 35%.”  This will make refinancing challenging in…Read More→

  “Office buildings across the country are starting to trade at significant markdowns, in many cases selling for less than the value of their loan. Those types of transactions, executed in concert with the buildings’ lenders, are known as short sales. Economists at the National Bureau of Economic Research estimate that about 44% of all office properties are underwater on…Read More→

According to an article published January 22,  2024 in Biznow, office conversions to apartments has risen to over 55,000,”four times higher than the 12,100 conversions in 2021. Looking forward, about 147,000 apartments are on the way in future adaptive reuse projects’,  according to the RentCafe report. Washington D.C. is at the top, with 5,820 apartments, followed by New…Read More→

San Francisco Business Times January 19, 2024 Various headlines from just this one issue: First page, ‘The Coming Debt Wave’, Page 6, ‘Another S.F. Property Could Be Headed for Default’  about 140 Second St. in SF, ‘S.F. Trophy Onwers Buy Some Time’ regarding the 1.6 million square foot One Market which had gone into special…Read More→

This was the headline from the January 8, 2024 BisNow newsletter. “Roughly 19.6% of office space in major American metropolitan areas was vacant at the end of the year, according to new data from Moody’s Analytics. That is up from 18.8% at the end of 2022 and higher than the previous record of 19.3% reached in 1986 and 1991.” Texas…Read More→

  I’ve been speaking with commercial real estate appraisers about this recent sale and the impact it will have on future office building financings, refinances and sales. This is an official comp that will be hard to ignore, and will make it mch harder to prove to a buyer or lender that your similar Class…Read More→

  The SF Business Times 12/8/23 summarized the numerous bargain office building sales over the past few months. Presidio Bay Ventures bought 160 Spear St for $260/sf, SKS Partners and Swig bought 350 California for $215/sf, Ridge Capital paid $255/sf for 180 Howard St., and Strada may be buying 201 Sper St. for under $300/rsf….Read More→

San Francisco’s office vacancy rate of 35%, the highest on record, is expected to climb further as corporations continue to give up office space as they ‘rightsized’. Pre-pandemic the vacancy rate was below 5%!  According to the San Francisco Business Times 12/5/23, “Salesforce which announced its plans tp lean out its real estate portfolio at…Read More→

  Almost all of the predictiions I have made over the past 43 years which have been published in one of my 249 newsletters have come true, and since they are all in print you can check me out! Here is my current prediction.  The commercial real estate market in the United States, especially in…Read More→

I have recently interviewed a number of office building experts and for suburban Class A office buildings in the Walnut Creek/Concord, Northern California region the cost to build a brand-new Class A office building is $500-700/square foot. This price includes land, architectural, permits, construction of the base building, parking structure, all the soft costs like…Read More→

89% defaulted ($672 million) and 11.1% ($83.7 million) were paid off during September 2023. None were extended or modified, according to Moody’s Analytics.  A new company, Arthroto, has a plan to make conversion of office to residential easier and cheaper by using factory-manufactured components that can be assembled floor by floor without disrupting other floor…Read More→

Contrary to reports of corporate executives mandating or begging or offering incentives for employees to return to the office, many will and many won’t. Either way we have far too much office space than is needed, even if more folks come into the office three days a week. As a case in point, last week…Read More→

A recent 2023 U.S. CEO Outlook survey by corporate-services firm KPMG poll showed that CEO confidence in having their employees return to the office almost doubled over the past year,, and while 45% believed that workers would continue in hybrid positions last year, in 2023 only 34% believe this. Last year 20% of CEOs thought corporate…Read More→

Austell Place, a 170,000 sf 100-year-old office building and was renovated in 2019 will now have 1,000 migrants living in the building. It had previously been converted from a 100-year old warehouse to a modern office building. It has floor-to-ceiling windows. I tried to find details of how this office-to-residential conversion will work but at…Read More→

  I was recently asked by a business reporter if, with suburban Class A office buildings like 2300 Clayton in Concord, California selling for as low as $110 a square foot, are we at the bottom of the cycle? This particular office building is one of my favorite, and back in 1985 I brought the…Read More→

The San Francisco Business Times August 29, 2023 reported that the latest Survey of Business Uncertainty (what a name!) from the Atlanta Federal Reserve Bank, University of Chicago and Stanford University, which surveys 500 business executives each month, ‘Executives predicted that about 72.6% of their employees would be working full-time onsite in 2028, down slightly…Read More→

According to an article just published August 17, 2023 n Bisnow, “…conversions had been largely characterized as a drop in the empty-office bucket. It may seem like an extreme step, but as expectations for full Class-B and C offices crumble and renovation costs climb, demolishing buildings to free up the land under them for a…Read More→