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46

Back To The Office?

Mar 21, 2024

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→

47

Texas Comes In First…Houston, Dallas and Austin Are The First, Second and Third Most Vacant Office Markets In The U.S.!

Mar 4, 2024

“The self-proclaimed leader of the return-to-work movement is now staring down some of the emptiest office buildings in the country. Houston, Dallas and Austin are the first-, second- and third-most-vacant office markets among the nation’s largest 50 metros, according to Moody’s Analytics.”, according to Bisnow 2/29/24. I still think San Francisco has a higher vacancy, but…Read More→

48

A Return To A Different Kind of Office

Feb 28, 2024

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→

49

Nearly A Trillion Dollars of Commercial Property Loans Coming Due In 2024

Feb 14, 2024

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→

50

A Major Silver Lining-Office To Apartment Conversions Up 400%!

Jan 23, 2024

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→

51

I keep Looking For Positive Office Building Industry News But…

Jan 19, 2024

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→

52

U.S. Office Vacancy Breaks All-Time Record

Jan 9, 2024

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→

53

The 348,000 sf Class A 1320/1390 Willow Pass Road, Concord, California Office Building Sale at $58/rsf May Affect Values for Years to Come

Jan 2, 2024

  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→

54

44% of U.S. Office Loans Underwater

Dec 20, 2023

  Bisnow 12/19/23 reported that according to data from the National Bureau f Economic Research, 44% of bank loans are on property values that are less than the outstanding loan balances. This means that even if the lender is willing to refinance, which most these days aren’t, they will require the borrower to pay down…Read More→

55

San Francisco’s Office Building Market Heading In Two Directions

Dec 18, 2023

  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→

56

San Francisco Office Vacancy Rate of 35% Highest On Record

Dec 6, 2023

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→

57

How To Tell When Commercial Real Estate Crisis Is Over

Nov 28, 2023

  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→

58

The Headlines of the November 3m 2023 SF Business Times read ‘S.F. Offices Are Suddenly Hot’

Nov 14, 2023

  There appears to have been multiple offers on 115 Sansome St. in San Francisco, a 125,000 square foot 14-story office building that in 2016 sold for $83 million. Now the price was $25 million, and the seller received dozens of offers. This compares to another deep-discounted office building that didn’t generate the same multitude…Read More→

59

A Few Very Positive Bay Area Office Announcements!!

Nov 11, 2023

Walmart is subleasing 719,000 of office space in a four-building complex at Crossman Drive at Caribbean Drive in Sunnyvale, and OpenAi will be leasing 40,000 sf t 1455 and 1515 Third Street in San Francisco. Hooray!!

60

The Cost To Build A New Suburban Class A Office Building And Why Prices Are So Low

Nov 10, 2023

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→

61

The Office Downturn Still Heading Down

Nov 8, 2023

  There is simply no way to sugar-coat what is happening in most parts of the United States in regard to office space and the office market. In just the past few days, Block announced it will cut 1,000 jobs, Microsoft placed 130,000 square feet of its 355 Market Street, San Francisco space on the…Read More→

62

90% Of Maturing CMBS (Commercial Mortgage-Backed Securities) Of Office Properties Defaulted At Their Maturity In September

Oct 30, 2023

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→

63

The Signs Keep Pointing To Long-Term Reduction In Office Space Needs

Oct 24, 2023

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→

64

CEO’s Confident Workers Will Return To The Office

Oct 16, 2023

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→

65

Prologis, The Largest Industrial Real Estate Developer and Investor In The World, Is Using AI

Sep 29, 2023

The San Francisco Business Times reported September 28, 2023 that the CEO of Prologis, Hamid Moghadam, who runs the Billiion (yes, Billion!) square foot portfolio of industrial real estate said  “What are the big decisions we make?” he said. “What do we charge for a lease, how long of a lease do we sign ……Read More→

66

SF Business Times Reported an uptick in San Francisco office tours

Sep 27, 2023

Major brokerage companies report San Francisco office vacancy now almost 34%. And including s[ace for space that isn’t vacant over 37%. AI is the big new wonder leasing office space in the City, but for every new AI lease another existing tenant is downsizing. As of this week  national office occupancy is up just a…Read More→

67

5.2 Million Square Feet of San Francisco Office Space May Be Suited For Housing Conversion!

Sep 13, 2023

If true this could be great news! A recent working report from New York University and Columbia University identified older office buildings that were physically suited for conversion from office to residential. “The papers authors…identified 140 office buildings across San Francisco for which residential conversion could make financial sense. San Francisco, the paper’s authors write,…Read More→

68

Renovated, but Vacant New York Office Building Will House 1,000 Migrants

Sep 8, 2023

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→

69

Artificial Intelligence Will Make Many Of Our Lives Better, and Lead to Unemployment For Others

Sep 5, 2023

“Back in April, Dropbox announced it was cutting 500 employees. In May, outplacement firm Challenger, Gray & Christmas let go of almost 4,000 people. And in July, the founder of an e-commerce startup said he laid off 90% of his support team. The common reason cited? You guessed it: artificial intelligence. Goldman Sachs economists have estimated that 300 million full-time…Read More→

70

The Return-To-Office Transition Is All Over The Board

Aug 31, 2023

Bisnow 8/23/23 Goldman Sachs is cracking down on making sure everyone comes back to the office full-time “though revenue-producing employees have for the most part returned full time, the publication reports that senior managers are frustrated by the reluctance of other staff, “constituting a significant chunk of its workforce,” to come back.   Google is…Read More→

71

We Are At Or Near The Office Market Bottom But Will Bounce Along On The Bottom For Several More Years

Aug 30, 2023

  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→

72

A Chilling Bit Of Good News

Aug 17, 2023

There was a recent announcement of the largest office deal done in the past 12 months in the Oakland area. Delta Dental leased the third floor of 1333 Broadway (where 40 years ago I had my offices at Grubb & Ellis), and while it was great that this ‘largest’ deal was done, the size of…Read More→

73

San Francisco Office Update, Good and Not So Good

Aug 14, 2023

According to the SF Business Times, ’San Francisco Sees Significant Jump in Return-To-Office Study’, with a 38% year-over-year increase in visits to office buildings in San Francisco. San Francisco foot traffic downtown remains down 56% from 2019. Ok, that was the good news.  On August 13, 2023   the U. S. Department of Health and Human…Read More→

74

Bargain-Hunting New Flock of REITS

Aug 10, 2023

  There are a new host of nontraded REITs being formed raising money to look for bargain commercial properties and swoop in when they think the price has dropped low enough to make sense. In a BisNow August , 2023 article “Nontraded REITs in aggregate have produced a total return over the last five years…Read More→

75

Office Building Full Recovery By 2026?

Aug 9, 2023

  On average, wrote Jerry Nickelsburg, an adjunct professor of economics at UCLA who helped run the survey, participants in both Northern and Southern California “expect both rental rates and occupancy rates to weaken in the coming year” and do not expect the sector to make a full recovery by 2026. San Francisco Business Times August…Read More→

76

More Sobering Office Market News

Aug 8, 2023

  The San Francisco Business Times August 7, 2023 referred to a recent CoStar analysis that found 55% of office leases signed before the pandemic have yet to expire, which could spell a lot more office vacancy grief as corporations downsize on renewal or relocate to smaller spaces. ‘”All of the pain we’ve been seeing…Read More→

77

Several Positive Signs About The Office Market, But…

Jul 27, 2023

  Today Google reduced the amount of funds budgeted for closing offices which might be a sign that perhaps the layoffs and worker reductions were coming to an end.  They spent $69 million in cutting space this last quarter, down from$565 million it spent the first quarter of 2023.  There was also a report out…Read More→

78

Headlines From Just One Bisnow News Release

Jul 21, 2023

Lender Sues to Foreclose on WeWork’s San Francisco Tower ($240 mil loan on a 359,000 sf 20-story Class A office building): Blackstone Reports Income from eal Estate Sales Down 96% in Q2; Commercial Property Distress Hits $71B in Q2, Led By Office; Marketing Of Distressed Loop Building (1.4M sf in Chicago) Will Test Waters For…Read More→

79

National Office Statistics Update

Jul 20, 2023

Credits to Stephen Newbold, National Director of Office Research for Colliers. The national vacancy rate just went up to 16.4%, which is a record high. The suburban rate is 16.0% and CBD rate is 17.3%. There are 88 million square feet of new office buildings under construction, with 12 mil in New York City, 8.1…Read More→

80

Empty Office Buildings Are Being Turned Into Vertical Farms

Jul 13, 2023

Clara O’Brien, writing in Modern Farmer July 11, 2023 wrote a thought-provoking article about using vacant office space to grow fruits and vegetables. “In Calgary, Alberta (Canada) AgriPlay Ventures transformed part of underutilized office space in Calgary Tower Center into one of Canada’s largest indoor urban farms earlier this year…Currently, AgriPlay Farms is negotiating offers…Read More→

81

How Will We Know When We Are At The Bottom of the Office Market?

Jul 3, 2023

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→

82

Damaging Results Of Mandated Return To Office

Jun 27, 2023

Gleb Tipursky in Entrepreneur referenced three recent reports, The Greenhouse Candidate Experience Report, The Federal Reserve’s Survey of Household Economics, and Inspace’s Returning For Good report. “Unispace finds that nearly half (42%) of companies that mandated office returns witnessed a higher level of employee attrition than they had anticipated. And almost a third (29%) of…Read More→

83

Office Building Owners Pay Down Mortgage In Exchange For Loan Extensions

Jun 26, 2023

There have been reports of office building owners paying down their building mortgages so their lender would give them a loan extension. There were several examples in a recent Bisnow article, all with loans that were sent to special servicers which usually means the loan is in default. In the examples mentioned it appears the…Read More→

84

Conversions From Office, Retail Mall, To Residential Picking Up

Jun 20, 2023

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→

85

San Francisco Charges a 3.5% Tax on Commercial Leases As Well As Subleases

Jun 19, 2023

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→

86

San Francisco Gets Ahead of Curve, Eases zoning, Approval Process For Building Conversion

Jun 15, 2023

I like what San Francisco just did to make it easier to convert existing commercial buildings to housing. It also opened up the type of businesses allowed in Unio Square and the larger downtown area. In the San Francisco Business Times  June 13, 2023, “The city currently has an office vacancy rate of close to…Read More→

87

The Largest Shopping Center in San Francisco Is Going Back to The Lender

Jun 13, 2023

  We reported recently that the 312,000 square foot anchor tenant, Nordstrom’s, was shutting down after 35 years, and if you have ever walked on Market Street where the center is located you would experience the huge homeless and drug problems that scare shoppers away. Office occupancy in San Francisco is the lowest in the…Read More→

88

My Long-Term Prediction of The Office Market

Jun 2, 2023

I’ve been making predictions of the office market in my newsletter, now in its 43rd year of publication. My predictions have almost always come true, and these can be substantiated through my published back issues. There will be several varying factors that will be part of how our office space market stabilizes, and unfortunately with…Read More→

89

For Those Still Believing Workers Will Come Back In Droves, Forget it!

May 30, 2023

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→

90

Bit and Pieces Of Major Office Leasing/Subleasing/Development News

May 22, 2023

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→

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Jeffrey Weil, CCIM, MCR.h, SIOR

Executive Vice President
San Francisco Bay Area
1850 Mt. Diablo Blvd., Suite 200
Walnut Creek, Ca 94507
CA Lic. 00786195
Phone: +1 925 279 5590
License #: CA-00786195
Email: jeff.weil@colliers.com

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  • Jeffrey Weil
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Contact Information

  • Jeffrey Weil
  • Colliers International
  • 1850 Mount Diablo Blvd., suite 200
  • CA Lic. 00786195
  • +1 (925) 279 5590
  • jeff.weil@colliers.com
  • www.officetimes.com

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