Cities and states around the country are offering incentives to remote workers to move, with West Virginia offering $12,000 in relocation cash paid over two years, a $2,500 outdoor recreation package and free coworking space.  According to a recent San Francisco Business Times article, 272 people have taken advantage of these incentives. “West Virginia notes…Read More→

I remember back when we had the savings & loan crisis. Back in the 1980’s between 30-50% of the nation’s savings & loans went out of business. Here in the East Bay around 25% of all our Class A office buildings went into foreclosure. I remember several instances where an investor purchased an office building…Read More→

There was an announcement today about a 41,000 square foot office building in San Rafael, California being turned into 41 studio apartments ‘for those formerly unhoused’. The same Bisnow report also mentioned that Tishman Speyer just secured $150 million in financing to turn a Washington D.C. shopping mall into multifamily. They will demolish the 1970’s…Read More→

Mayor London Breed is trying to get this tax reduce, and it appears to be a double-dipping with the tenant paying for their lease and again for their sublease. San Francisco, with a current vacancy rate of 30% and over 8 million square feet of office space for sublease, has an impacted downtown in desperate…Read More→

I was on a conference call this morning with senior SIOR office members from all around the country and while their office markets are not faring well, no where does it appear to be in the deep hole that is prevalent today in San Francisco. With a 30% overall vacancy rate and major users still…Read More→

There area large group of folks, including most office building owners, landlord leasing agents, and older executive heads of thousands of companies, who still hold a belief that at some point in the not-to-distant future office workers will return to the office in force. This will be a combination of executive mandate, the recognition that…Read More→

  Bisnow May 23, 2023 headlined a scary article” ‘Persistent’ Remote Work Could Slash Office Values By 44%” and cites a recent study by New York University and Columbia University. “In an update released this month, the authors now project an average value drop of 43.9% from 2019 to 2029. In just a three-year period…Read More→

Tidewater Capital just received approval for a 420,000 sf Oakland CA office tower, so Hope Springs eternal with office developers despite the current and near-term market. At least one regional bank is requiring employees back to the office. AT&T is mandating managers return to the office, and Blackrock is requiring four-days a week in the…Read More→

Artificial intelligence may allow companies to dramatically reduce their workforce. Bisnow May 8, 2023, “IBM CEO Arvind Krishna told Bloomberg that back-office functions like HR would be paused in many cases because the roles can be undertaken by AI. He said the company employed about 26,000 people in noncustomer-facing roles, and about a third of…Read More→

The latest Colliers national office report shows sublease space at a record high, negative net absorption, and overall office vacancy in the United States now at 6.1%. “The gap between asking and effective rents remains significant. Tenant improvement allowances of $100 per square foot or more, accompanied by up to 10 to 18 months of…Read More→

Artificial intelligence in camera-based security may be dramatically changing crime deterrence.  Surveillance cameras are not just motion-detectors but with integrated AI algorithms they can detect intruders and appropriately set off lights, voice warnings, shrieking sirens, and trigger immediate reporting to guards or managers and allowing engagement directly with the intruder over the camera and speakers….Read More→

Sobering articles recently that describe the huge discounting of older San Francisco office buildings. One example is 350 California St., 22 stories, 300,000 square feet and built in the 1970’s. In 2020 the value was estimated at $250 million, but now may sell for $60 million!  Another example is 550 California, once priced at $160…Read More→

In an article written by John McNellis, one of the top commercial real estate gurus, and published in the SF Business times April 28, 2023, John lays out the case that at least in San Francisco, office buildings may have lost 60% if their value, compared to just a few years ago before Covid taught…Read More→

Lyft recently mandated that all employees must work in the office Mondays, Wednesdays, and Thursdays, with Tuesdays recommended. They will also be allowed to work remotely one month each year, and those living too far from offices are not required to come in. Many call centers have remote workers, and some have begun to make…Read More→

  According to a recent study by The Instant Group and The Urban Land Institute,  82% of office landlords expect a slight to significant reduction in space utilization over the next five years. Bisnow April 24, 2023 “he survey also found a disconnect between landlords and tenants when it comes to office amenities. Landlords said…Read More→

Bisnow April 17, 2023 reported that while March 2022 President Biden said ‘in his State of the Union address that the vast majority of federal workers would soon return to the office…that didn’t happen last year, and the process has not always gone smoothly.” There have been federal agencies who mandated that all employees return…Read More→

The Colliers U.S. Capital Markets report just out stated that in 2021 there were 10.9 billion in distressed commercial real estate sales, decreasing to $7.9 billion in 2022, and ‘Since 2016, distress has accounted for 1.4% of volume on average. Distress peaked in 2010 at 18.7% of volume. Absolute distress sales peaked in 2011 at…Read More→

The national office vacancy rate is 15.7%, far better than the just-reported 29% vacancy rate for San Francisco. Nationally there is a record 242.7 million square feet of office sublease space available. Compare this with Q4 2019 when there was only 140 million square feet for sublease. According to a recent Colliers U.S. Office Market…Read More→

In an article in Facility Executives February 2023, many commercial building automation systems (BAS) are integrated and efficient, operating the HVAC,  elevators, building security, parking garages, and all the other building elements   but “these systems typically have subpar cybersecurity controls and a large number of vulnerable IoT (Internet of Things) that make them ‘highly vulnerable…and…Read More→

Laura Waxman, reporter for the SF Business Times, wrote yesterday that investors who purchased office buildings prior to 2020 paid top dollar. I remember prices of $800-1000 per square foot or more announced back in the good old days before the pandemic hit. “Companies paid top dollar for amenity-rich workplaces designed to keep employees both…Read More→

“Research by the Urban Land Institute and The Instant Group showed that almost all office occupies plan to rethink their property needs…the analysis-Bridging the occupier-landlord gap for the future of workspace-suggested office users are still pondering what activity-based workplaces, flexible working and hybrid working patterns mean. The report’s authors spoke to 285 office occupiers, landlords…Read More→

Statistics just out today by the awesome Colliers Research Department shows that the I-680 Corridor (Danville up to Martinez, and Orinda to Walnut Creek) has a direct vacancy of only 16% and when you include sublease office space, 17.6%. This ranges from a low in Danville of 7.7% to a high at the Pleasant Hill…Read More→

Bisnow reportedt that the infection of the recent Silicon Valley Bank failure as also hit the REIT sector, with the U. S. largest REIT, Boston Properties, losing 14% of its value since last Thursday and Alexandria Real Estate Equities, the biggest life scient landlord, losing 12% of its value, according to Bisnow. Several of the…Read More→

    In a recent New York Times article by Emma Goldberg, “Business leaders are in a phase of trial and error that comes with staggering stakes. They are figuring out how many days to call employees back to the office, and on to of that, how strictly to enforce their own rules.”  Office occupancy…Read More→

Headlines in today’s THEREGISTRY, Columbia Property Trust Defaults on $1.7B in Mortgage Notes on Buildings in San Francisco, Across The Country. The portfolio of seven buildings includes 650 California St. and 201 California St., both in San Francisco, as well as buildings in New York City, Boston and New Jersey.  The San Francisco office market,…Read More→

  Between 2029 and 2022, according to the SF Business Times, the share of workers living near its office locations fell, with the largest drop of 70% occurring in San Francisco,  followed by New York, Washington D.C. and Chicago falling by 67%, with the number of Yelp workers living in Florida and Texas going up…Read More→

Twitter Being Sued For Not Paying Almost $7 million in Rent On SF Headquarters. Square sublet 78,000 sf of Downtown Oakland office space to Callisto in 2021 but now Callisto has put their space on the sublease of a sublease market. The total office vacancy in the Oakland office CBD market ranges from 18-25% depending…Read More→

  Meta (Facebook) just put 432,000 square feet of Class A San Francisco office space on the sublease market, with a lease term running until March 2031. This adds office inventory to the current 28% San Francisco office vacancy. Up in Portland, KBS REITS just defaulted on a 224,000 sf LEED Gold-certified office building with…Read More→

  Janet Pogue McLaurin with Gensler, one of the nation’s gurus on predicting the future of corporate office layouts, functionality, and many other nuances of the office environment, wrote an article illustrating the key findings of a recent Gensler survey of CoreNet Global end users. ”Respondents rated the space effectiveness for each of the five…Read More→

  On top of already putting hundreds of thousands of square feet of San Francisco office space on the market, Salesforce just announced it will lay off 10% of it’s employees. The company is taking a $450-650 million dollar write-off due to office space reductions. It currently owns or leases 1.9 million square feet of…Read More→

I opened my daily Bisnow.com newsletter and the headlines blew me away. At the top was “Bed Bath & Beyond With 950 Stores Nationwide, Facing Bankruptcy”,  and below this was “Salesforce To Exit Office Space, Slash Workforce 10%”, but if this weren’t enough the next headline read ‘Amazon Ups Layoffs To 18,000”

Bisnow Dumber 16, 2022  “More than 71% of corporate real estate professionals say they expect hybrid work to result in space demand reductions of at least 20%, according to a survey from Colliers and CoreNet Global. Almost 19% expect that demand to shrink by 40% or more, while just 7% believe that the move to…Read More→

At the Bisnow December 8, 2022 D.C. Region Finance and Deal-Makers Summit, major commercial real estate lenders discussed how they are dealing with the current turbulent times. “The pullback is happening across all asset classes, given how this year’s sharp rise in interest rates has dramatically altered the math for new deals. But Ekeroth, Regional Director with Northwestern…Read More→

According to a new survey by Clarify Capital and reported by SF Business Times December 12, 2022, “The survey found about 68% of those working remotely would prefer to look for a new job with remote options if forced to return. About 27% would try to negotiate a higher salary instead of searching for a…Read More→

  Meta has placed 114,000 sf off office space in Fremont on the sublease market. It is also rumored to be considering giving up 430,000 sf at 181 Fremont St. in San Francisco. Pinterest giving up a chunk of their San Francisco office space. Salesforce just this week considering giving up more space in San…Read More→

In The SFRegistry December 2, 2022, Marc Benioff, founder and CEO of Salesforce said this: “There’s a lot of things pre-pandemic that we had in our company that are expenses that we don’t need post-pandemic,” Benioff stated. “So before the pandemic, the percentage of remote workers for Salesforce was approximately 20 percent. For other companies…Read More→

In a BisNow article published November 17, 2022, “Fifty-eight percent of those surveyed plan to improve or expand their existing occupancy, Many are also implementing new procedures or technologies to help manage the shifting flor of employees into the office. Although hybrid work schedules are now the norm for 70% of workers, only one-third of…Read More→

The New York Times recently published a lengthy article titled ‘After pandemic, office buildings are still in trouble”. “ The value of office buildings could plunge 39%, or $454 billion, in the comping years, according to a recent study by business professors at Columbia University and New York University…In a sign of how fast the…Read More→

  Texas Instruments just signed a lease for 210,000 square feet at Santa Clara’s Great American Commons, Exelixis signed for 100,000 at The Loop in Alameda’s Harbor Bay, and Convene signed for 65,000 square feet of office space at 100 Stockton St. in San Francisco.  

Credit for this statement goes to Jessica Pernicone, principal at JLL. “There is a certain amount of productivity you can get from being at home when you have heads-down deep work. However, if that’s not what your job requires all the time there are feelings of isolation and people start to feel disconnected from their…Read More→

  Colliers newest report on the future of work had some very interesting thoughts. “30-50% of knowledge management work is anticipated to be automated by 2030. This will result in less real estate and facilities and more reliance on machine learning and predictive analytics to support real estate functions.” …”The office will evolve to be…Read More→

Sara Bloomberg in the SF Business Times Nov. 4, 2022 reported that according to Pitchfork, Stanford University and UC Berkeley are the top producers of startup founders om the world.  Harvard and MIT were next at #3 and #4.  This is reassuring as a future source of new companies requiring Bay Area office space!

Joseph Gordon with Bisnow wrote on November 8, 2022 that according to a number of sources, new office leases showed 18% fewer deals as compared to Q3 2021, and 15% less than Q3 2019. The average size of the deal also went down 16% in 2022 as compared to 2019. Leases are also getting shorter…Read More→

Bisnow October 27, 2022 reported “Dave Welner, chief financial officer of the company that owns Facebook, Instagram, WhatsApp and other platforms, said on its third-quarter earnings call Wednesday that Meta expects to lose roughly $2B from its cutback on office leases this year.”. Then today Meta said it was slashing 11,000 jobs.  Lyft is trying…Read More→

  THEREGISTRY November 4, 2022, Cresa reported that Bay Area leasing activity to date remains 50.2 percent below 2019 levels during the same timeframe and in the last year, 3.6 million square feet of direct space has been added to landlords availability.  There is demand for trophy office space in San Francisco, upper floors with…Read More→