Apartment rent collections nationwide which were in the 90+% range the past few months appears to have sunk to the 82% level. Retail rent collections reported in the 25% range. At some point this will impact the banking and financial sectors when landlords cannot pay their mortgages without sufficient rents coming in. Will this lead…Read More→

Salesforce, with 9,000 employees in three San Francisco office towers, will have temperature scans on every floor, mandatory masks, six-foot separations, hand sanitizers everywhere and cleaning throughout the day. Work areas and conference rooms will be at half-capacity or less and employees will arrive at staggered times. The Bay Area Council surveyed 123 companies last…Read More→

As this issue is in print, it was prepared well before COVID-19 came on the horizon, but was just recently distributed.  One big headline read “Regardless of where you fit into the commercial real estate system, or what asset class(es) you work with, one thing is for sure: 2020 will be a year to remember!”…Read More→

Twitter just announced to its 1,000 San Francisco office employees that if they wanted to continue working from home, they could on a permanent basis. What will happen to Twitter’s very cool downtown HQ remains to be seen. The San Francisco Business Times also interviewed a number of smaller 2,000-4,000 square foot office users in…Read More→

Miriam Hall of Bisnow reported yesterday that Vornado Realty Trust said two-thirds of delinquent tenants were credit-worthy, ‘but businesses are hurting and the future is uncertain’.” Vornado collated 90% of office rents and 53% of retail rents in April and May looks to be similar. Office occupancy is currently 5%. Vice-Chairman David Greenbaum said “I…Read More→

Bisnow just reported a study by CoreNet, which is the corporate real estate directors organization, that based on a survey conducted between April 22 and April 27, 2020, polling its 11,000 person membership, 69% of corporate real estate professionals said their company would take less real estate after spending time working from home. Another survey…Read More→

According to a recent Savills Research report, over the past several months since the shelter-in-place shutdown of office buildings there has been a 300% increase in office sublease availability, with over 3.7 million square feet of space currently available. “It is likely that sublease space will increase further – placing downward pressure on overall asking…Read More→

First, it is important to keep in mind a win-win collaborative negotiation and at almost all costs to avoid litigation and the court system. Tenant asks for three months’ rent relief; Landlord compromises and accepts 50% rent for three months with no repayment. Tenant asks for three months’ rent relief; Landlord accepts 50% rent for…Read More→

Over the past week I have been on a number of commercial real estate podcasts and webinars, trying to learn what is happening and will happen to our commercial real estate market in the United States. Here are a few nuggets I have picked up. One international real estate company interviewed a number of their…Read More→

According to Bloomberg News April 1, 2020, WeWork is asking landlords to cuts its rent by 30%, in some cases offering revenue-sharing agreements. Early indications are landlords are reluctant. As of June 30, 2019, WeWork is on the hook for $47 billion in lease liabilities.

Greg Kraut, the co-founder and CEO of New York-based KPG Funds, in Commercial Observer April 2, 202, stated ‘The commercial mortgage-backed securities (CMBS) market has essentially collapsed and the broader $20 trillion commercial real estate market is on the verge of collapse as well. We still have time to prevent this catastrophic event, but we need…Read More→

With Twitter telling employees to work from home and Salesforce to tell it’s 50,000 employees to avoid non-essential travel is it too farfetched to think that someday soon there will be a low-cost effective and immediate screening test for the Coronavirus that office employees and visitors will have to pass in order to enter office…Read More→

Some of the ‘WeWork’ business models of collaborative office space are set up for very high density rations, even though it is seldom an issue of everyone showing up at work. However, if the workspaces are shared, and you don’t have a dedicated space as the coronavirus becomes more prevalent will there be issues with…Read More→

40 million square feet of new office construction during just the past 10 years in Silicon Valley. The unemployment rate is currently 2.2%, substantially below the national average. Apple, Google, Amazon and Facebook have accounted for a significant portion of the overall leasing. According to Lena Tutko, senior research director with Colliers, “We are not…Read More→

Unbelievable office market in Silicon Valley with over 10 million square feet of new office projects under construction with over 75% already preleased! Google is partially responsible for this leasing frenzy, taking millions of square feet of office product. In a sad comparison, over in the East Bay with the Tri-Valley and I-680 Corridor we…Read More→

Our office recently sold two commercial buildings in the city of Concord, California, located about 30 miles to the East of San Francisco out in the suburbs. One was a 180,000 square foot Class A office building with six stories of subterranean parking, and full-service rental rates in the $2.65/rsf range. Walking distance to Bart,…Read More→

Published in the National Real Estate Investor January/February 2020, Jim Costello, SVP of Real Capital predicts industrial will continue growing at double digit rates, many investors and lenders will continue to hate retail, and suggests caution when taking on debt. ”There’s an ugliness of politics entering the investment process in the year ahead. We will…Read More→

75 percent of people also note that working in a more collaborative environment would make them happier

“declining oil prices hurting the Russian and Middle-Eastern zillionaires”

Concord Weapons Station Reuse Project City of Walnut Creek New Developments City of San Ramon Current Project List Colliers Retail Report Fall/Winter 2019 Colliers Oakland Office Report Q3 2019 Colliers Oakland Industrial Report Q3 2019 Colliers San Francisco – Peninsula Report Q3 2019 Colliers Pleasanton – Tri-Valley Industrial Report Q3 2019 Colliers Pleasanton – Tri-Valley…Read More→

“We’ve been debating for a couple of years about what impact the new FASB rules would have on our business,” says Adam Kaduce, SIOR, senior vice president at R&R Specialty Group n West Des Moines., Iowa. “Frankly, we’ve seen very little FASB-related influence on how people are looking at real estate. It’s more about talent-retention….Read More→

Bloomberg News Banks around the world are unveiling the biggest round of job cuts in four years as they slash costs to weather a slowing economy and adapt to digital technology. The 2019 cuts bring the total for the last six years to more than 425,000. In fact, the actual amount is probably higher because…Read More→

The verdict may still be out regarding open space plans and whether GenZ and Millennials truly value this concept, but there are other office aspects that do seem to find consensus. While an Inc.com writer recently called open-plan offices “the dumbest management fad of all time” (SUIR Report  Fall 2019), they welcome transparency and connectedness…Read More→

Major companies continue their expansion in the Bay Area, and for every firm that relocates out of the area there are plenty of companies ready to fill their space. Today AirBnB just announced it leased 301,000 square feet of office space 4301 and 4401 Great America Parkway in Santa Clara, as one recent example

Over 9,800 retail stores closed in 2019

There are office landlords out in the suburbs who are beginning to resist spending the humungous amounts of office tenant improvements some tenants are demanding, especially for five year lease terms, Tenant improvements that just five years ago may have come in at $25-35/rsf are now pricing at $50-60/rsf. With some of the suburban submarket…Read More→

Buildings Magazine November 2019 had an article on what amenities tenants should be investing in. Sodexo surveyed 3,593 employees around the world, and here are some of the results: For ‘Experience Enhancers’, Café or restaurant 71%; medical services/clinic: 66%; Car sharing or shuttle services: 62%; vending services: 61%. For ‘Experience Essentials’, Cleaning of the workplace:…Read More→

Just a few days ago I toured the almost-complete 30,000 square foot Industrious co-working facility under construction in Walnut Creek. It’s novel location is on the second floor of Broadway Plaza, one of the premier shopping centers in California, with offices looking out over the plaza and shops. With 112 private offices ranging from one…Read More→

“A search conducted in the US and UK shows the presence of surveillance cameras in urban settings caused a significant decrease in property crimes on the streets and in subway stations, and a decrease of 50 percent in parking lots.” Wired November 2019

CNBC today announced that WeWork lost $1.25 Billion in the third quarter on revenue of $934 million. Its occupancy decreased to 79% as the company added 115,000 desks. If there is just the slightest downturn in the US economy, companies that have flexible rental agreements in WeWork facilities may exacerbate their predicament.

Having been through a number of economic booms and then downturns I like to be alert to early warning signs of an impending office slow-down in one of the hottest office markets in the US, San Francisco. We don’t have to worry about a suburban slow-down as Contra Costa and the Tri-Valley never took off…Read More→

A new startup called MainStreet entices employees frustrated by the high costs of the Bay Area by paying them $10,000 to relocate to a less expensive locale like Salt Lake City or Sacramento, they keep their tech jobs and work remotely from A co-working location where 20 people from 7 or 8 different companies may…Read More→

“WeWork may have been pulled back from the edge of insolvency by its biggest investor, but many of its landlords are still preparing for a worst-case scenario…Multiple potential WeWork lease deals in New York City are said to be canceled or halted, and scores of possible deals in London are now in jeopardy as WeWork…Read More→

“We’ve been debating for a couple of years about what impact new FASB rules would have on our business,” says Adam Kaduce, SIOR, a Senior Vice President at R+R Realty Group in West Des Moines (office leasing business). “Frankly, we’ve seen very little FASB related influence on how people are looking at real estate. It’s…Read More→

What, haven’t you heard about the Bay Area’s outrageous cost of housing and California’s crazy high tax structure? You could expand anywhere in the United States, go where the average price of a decent home is $250,000 or less, which might be just the down payment in the Bay Area! Then again, if you were…Read More→

WeWork has 528 locations in 111 cities in 29 countries as of June 2019. Before its valuation collapsed from 48 billion to 20 billion during the past month, it had identified 280 additional cities as targets. In 2018 it lost 1.6 billion and the first six months of 2019 it lost $690 million. “Landlords have…Read More→

I recently attended a presentation on Cybersecurity and Smart Buildings, and I was blown away by the many potential benefits (and one major concern) in this emerging industry. The experts giving the presentation included executive David Colby from Schneider Electric SE (a $29B Fortune 500 multi-national manufacturer of HVAC and IoT hardware); a cybersecurity expert,…Read More→

I just attended the annual SIOR Conference in Portland (Society of Office and Industrial Realtors) an international group of 3,300 commercial brokers who have to take a lot of classes and document they are in the top few percent of the nation’s commercial real estate experts. I’ve been a member for 34 years and it…Read More→

In National Real Estate Investor, July 12019, there was a report on the biggest flex office space markets in the country, with Regus and WeWork dominating.  Manhattan reported 13.5 million square feet with 30% annual growth, Los Angeles, 4.2 million with 15% annual growth, and in 6th place San Francisco with 2.8 million feet and…Read More→

Is the economic downturn on its way?  In the National Real Estate Investor, July, 2019 there were a number of different articles written by different authors but all pointing in the same direction for 2020 – down… Elaine Misonzhnik started it off on page 6, discussing industrial real estate “…while e-commerce growth will continue to…Read More→

In the San Francisco Bay Area, office tenant improvement costs have gone through the roof.  A few years ago, new carpeting and paint was $6-8/sf, now $12-15/sf.  Second generation space could be remodeled for $20-25/rsf just five years ago but now $50-60/rsf is required just to move a few walls, life-safety, Title 24 and minor…Read More→

Using sensors and the new software analytics are helping companies to cut their office space by 30% or more.  Microsoft used this and “this has meant significant financial savings and it could mean Microsoft can make further consolidations that save it tens of millions of dollars.”  Bisnow.com July 2019

According to a new 2019 National Office Absorption report just out by CoStar, net absorption is down 26% Midwest, 18% South, 9% in the West, but up 2% in the Northeast. No reasons for this given perhaps continued increases in productivity, corporate downsizing and offshoring/outsourcing?  Here in the Bay Area, especially San Francisco, companies are…Read More→