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→

Google has come out and told their employees who haven’t received approval to work from hom that they will have to spend at last three days a week in the office. The Verge posted part of the Google internal memo which read, “We know that a number of people moved to fully remote work for many…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→

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→

  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→

  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→

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!!

  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→

  The Bay Area News Group reported that 26% of residents work remotely, down from 36% in 2021. However, ‘despite the drop-off, there were still more than four times as many people working from home in 2022 as in ears leading up the pandemic, when just 6% of workers were mostly remote.’ Public transit ridership…Read More→

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→

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→

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→

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 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→

  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→

  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→

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→

It is hard to believe that during the past twelve months at one point the price of a share of First Republic Bank stock was $171!  Today it is $13/share!  Before the pandemic San Francisco office buildings were selling for $800-1,200/rsf and considered among the best investments in the world. From the SF Business Times…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→

  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→

  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.  

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!

  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→

  According to the latest Colliers U.S. Research Report, office vacancy went up in the third quarter 2022 with San Francisco and Seattle posting the largest increases and Dallas and Houston seeing their vacancy rate come down. San Francisco is now above 20% as compared with Manhattan which is at 11%. “Class A asking rates…Read More→

  As reported in the San Francisco Business Times October 18, 2022, “Layoffs and economic uncertainty notwithstanding, the Bay Area is expected to enjoy economic growth of 4.8% this year, fueled by what remains strong performance from the tech sector, according to new research from the Kenan Institute of Private Enterprise. The report, 2022’s Fastest-Growing…Read More→

San Francisco office vacancy, according to a number of reports, is in the22% range, but when you include occupied space that is available this figure increases to almost 30%. With two million square feet of office sublease space in leases that expire by the end of 2023, this space may go back to the landlords….Read More→

Editor: Jeffrey S. Weil, MCR.h, CCIM, SIOR Executive Vice President 1850 Mt. Diablo Blvd. Suite 200 Walnut Creek, CA 94596 Phone: +1 925 279 5590 Fax: +1 925 279 0450 Email: jeff.weil@colliers.com Blog: www.OfficeTimes.com   October 1, 2022 Issue: 254   If you know someone who would like to receive this newsletter, please send their…Read More→

  “Is San Francisco’s CRE Market On the Verge Of Collapse?   MyEListing.com, a Texas-based commercial real estate marketplace, has published a report based on San Francisco data, and it paints a picture of a seriously struggling office market. The pandemic-driven “work-from-home” model appears to be taking permanent hold in The City by the Bay. With…Read More→

  The SF Business Times August 28, 2022 reported “The owners of nine San Francisco properties assessed at more than $100 million are scheduled to appear before a city board to reduce their assessments be cut in half”. They claim that the pandemic impact in 2021 dramatically affected their property values. I added up the…Read More→

  The San Francisco Business Times on August 26, 2022 reported “that of the 25 startups on Forbes ‘Net Billion Dollar Startups 2022’ list 12 of them are Bay Area companies. So go ahead and move to less-costly areas like Boise or Oklahoma and try to raise millions or hundreds of millions for your next…Read More→

  A recent Colliers Workplace Advisory survey of over 200 major corporate office occupiers found that 69% have set a number of days to be in the office, with the majority requiring three or more days in the office. Trip.com, with 35,000 employees, did a study on hybrid vs full-time office work and found that…Read More→

On a national level, the Colliers Q2  2022 U.S. Research Report reported that net absorption was positive for the third time in the past four quarters. Asking rents are holding firm but ‘generous concessions are on offer’. Sublease space is at record levels, now totaling 218 million square feet. Locally there is good news and…Read More→

Today: Bulk of genetic testing company’s 1,000 layoffs will be in S. F.; Metromile’s new owner slashes dozens of San Francisco jobs; yesterday headlines, Twitter set to close parts of it’s SF1.7 SF Footprint. There have been a few bright spots but overall during the past six or more months folks may have left their…Read More→

  I haven’t blogged in a few weeks as my family was on a ten-day cruise to Alaska!  Here are a few of the more notable office announcements over the past few weeks. Chevron announced it was putting it’s 1.6 million square foot office campus in San Ramon’s Bishop Ranch on the market and relocating…Read More→

  San Francisco’s office vacancy rate went from4% in early 2020 to 24% in April 2022, with leasing coming almost to a standstill combines with a number of companies giving back space. Not surprisingly, this has placed millions of feet of planned office projects on hold. Right now there are about 17 million feet of…Read More→

Who Is Kidding Whom?   Jim Gardner, Managing Editor of the San Francisco Business Times summed up the controversy over whether employees will be working in the office or working remotely. In his editorial titled “Back to the Office: Who’s Kidding Who?” Jim cited several surveys, and the bottom line appears to be, employers overwhelmingly…Read More→

Austin is leading the pack, with 53% of its workers back in the office. Los Angeles checks in at 40% and New York at 36%, but San Francisco is still at the bottom with only 31% of workers coming back to the office. This is having a negative impact on the City of San Francisco’s…Read More→

This is the highest it has been in 20 years. Even though net absorption is down, rental rates have only dropped 10-15% since the beginning of the pandemic. Landlords are holding firm on their asking rents, although there are still concessions in the form of free rent and tenant improvement allowances. John Bryant, CEO of…Read More→