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→

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→

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→

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→

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→

After hearing from a few of you how doom and gloom some of my blogs and newsletter contact have been, here are a few of the Bisnow April 7, 2023 headlines: Google forges ahead with new office construction; Stonehill closed Q1 with 300M in transactions; Wilson Sonsini signs 119k office lease in midtown Manhattan; Veris…Read More→

SPUR and ULI San Francisco along with Gensler and HR&A Advisors did a study regarding the feasibility of converting office buildings to residential projects. “Because of their physical characteristics, office buildings in San Francisco are stronger candidates for conversion than office buildings in other cities in North America. For projects to be financially feasible, the value…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→

  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→

Two commercial real estate stories caught my eye in the January 12th, 2023 Bisnow daily newsletter. I think they are just warning signs of what might be coming throughout 2023 and beyond.  A few weeks ago I blogged that a number of major banks were unloading at a discount office building loans, and that in…Read More→

Hilco Real Estate Senior Vice President Steve Madura, who specializes in distressed assets, forecasts that $500 billion of commercial mortgage loans coming due over the next few years will lead ‘likely lead to a high demand for’ his services. “The combination of rising interest rates and a basically frozen capital market has created what Madura…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→

Bisnow December 6, 2022: “In an effort to entice employees back into the office, companies have ramped up digestible perks like beverages and food, but a recent survey conducted by proptech firm Essensys indicated that employees don’t care about snacks or other frivolous amenities — they want better technology and flexible workstations. Of the 1,000 U.S. workers the…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→

  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→

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→

  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→

Between 2018 and 2021, 352 Corporate headquarters have left California. The three top relocation destinations were Texas, Tennesee and Nevada. The main reasons given for thir exodus include California’s high taxes, the cost of living, the heavy regulations and the legal environment. Of the 153 that left just last year, 80 dwere from Los Angeles,…Read More→

  “ABI Research forecasts sensor shipments will grow from 18.5 million devices to surpass 300 million by 2030, a CAGR of 35%.  “Traditionally, sensing in the commercial building sensing market has been tied to establish systems, such as heating, ventilation, and air conditioning (HVAC), fire and safety, and access control, but a range of additional environmental sensing technologies,…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→

  According to a just-released Colliers national U.S. Industrial real estate report,  the national average is 3.7% vacant ranging from a low os 0.7% in Reno/Sparks, Nevada to a high of 8.8% in Huntsville, Alabama.  There is 656.0 million square feet of new industrial space currently under development, with the Dallas/Fort Worth area accounting for…Read More→

In the October 21, 2022 San Francisco Business Times article, 20 cities were mentioned that will pay folks to pack up and move to their city. Here are a few examples, and the incentives range from giving you a discount on buying a home there, unlimited golf membership, free use of co-working spaces, free fitness…Read More→

E-Commerce be darned, the Third Quarter 2022 Colliers Retail Market update shows the national retail vacancy rate at 4.3%. Compare this with the national office vacancy rate of 12%!  Malls are posting an 8.7% vacancy rate. There is 61.5 million square feet of new retail space under construction. NNN rental rates on an annual basis…Read More→

  The CIM Group out of Los Angeles had plans for a 1.1 million square foot office tower in downtown Oakland, but is now proposing a 487 foot tower to build 600 residential units. This would be the tallest building in Oakland. According to CoStar News, “While to pivot is a boost of momentum for…Read More→

  According to a recent Colliers Capital Markets report, multi-family and industrial cap rates may be negative as they relate to the currently rising interest rates. Cap rates have yet to increase in transactions. Sellers will likely hold onto their assets unless they need liquidity. My opinion, up until a few months ago it was…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→

In an article by Sougata Mukherjeee, Editor-in-Chief of the Triangle Business Journal in Raleigh-Durham, North Carolina, he wirtes that GICPte  and Workspace Property Trust just spent $1.1 billion on purchasing 53 suburban office buildings  “That’s a bet that reflects institutional investors believe remote work is here to stay, and now office buildings near residential neighborhoods…Read More→

BizNews 9/6/22 had a great quote that to me sums up the dilemma many corporate executives are now facing. “What is the purpose of an office?” said Matthew Saxon, Zoom’s chief people officer. “It’ll be different for different companies, but one of the things I think this huge experience we’ve all been a part of…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→

vv This story encapsulates what is going on these days in the ‘back to the office’ vs hybrid vs remote work discussions on-going in today’s Corporate America.  In Bisnow August 19, 2022, Centene, a large healthcare company in North Carolina, was weeks away from completing it’s 800,000 square foot headquarters facility in Charlotte and stated…Read More→

Colliers just released a bullet list for August of a few  of the very positive news clips out. Blackstone, one of the biggest commercial real estate investment companies in the world, just raised 24.1 billion for its latest real estate fund, ‘the largest fundraise on record’. “July’s job report marks the return of full-pre-pandemic employment…Read More→

I was at a recent commercial real estate brokers meeting where the topic touched on the high cost of converting big and medium retail boxes to accommodate smaller-sized retail tenants. Taking a former CVS or RiteAid building of 35,000 square feet and demising it to fit 2-3 smaller tenants could cost the landlord $100/sf or…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→

  Prologis May Soon Have Over One Billion SF Of Industrial Properties, but there is another story in the pending acquisition of Duke Realty. The San Francisco Business Times put a great spin on another angle to industrial real estate. Prologis has a division called Essentials which sells all kinds of products and services important…Read More→

  The San Francisco Business Times had an article on June 9, 2022 where studies are showing that due to remote work office values could drop by half a trillion dollars in the United States during this decade.  This $500 Billion dollar negative valuation change would affect not just investors but also local governments who…Read More→

Every business day I get several editions of the business news from the San Francisco Business Times. Here are the headlines from this morning’s edition, June 2, 2022: Why shares in this tech titan’s AI company have dropped 17% in 17 months; East Bay migraine patch developer files for bankruptcy; Gene therapy company abandons East…Read More→

There are a number of costs in office leases and the office leasing industry that many might not be aware of.  Most full-service office leases, where the rental rate includes property taxes, property insurance, utilities, sewer, water, garbage, janitorial and building maintenance have an annual adjustment where the prorate increases over the base year are…Read More→

A number of wonderful announcements about our commercial real estate markets. First, here in the San Francisco Bay Area Ripple just leased 130,000 square feet of office space at 600 Battery St. in San Francisco. Applied Materials just subleased 246,000 square feet 1t 3333 Scott Blvd. in Santa Clara,  and on a national level, the…Read More→

The overall office vacancy is at 15%, and this is true for both suburban and CBD markets. There is almost 122 million square feet of new office space under construction, 27 million of this in New York City Metro, 9 million in the San Francisco Bay Area, and 8.5 million in Washington D.C. Class A…Read More→

Amazon has increased its footprint from 97 million square feet at the end of 2016 to over 457 million square feet by the end of this year. This is an increase of 360 million square feet of warehouse and distribution space and in turn has created huge shortages and price increases in a number of…Read More→

“To attract workers back to the office, companies are leaning on the presence of tricked-out offices with leisure areas, modern technology, fitness areas, outdoor spaces and other amenities. Nationally, large companies are hosting parties, pop-up events, free food and even celebrities to paint the workplace as more appealing than home, according to the New York…Read More→