I’m writing this mid-March, right after the Silicon Valley Bank collapse. What does this mean for commercial real estate? More stringent lending requirements, more equity requested for loans, more strain on the life science and tech sectors…Just when you thought we had enough stress in the commercial real estate industry! Corporations May Want To Pay…Read More→

Unfortunately, not much has changed in the commercial real estate arena as we head into 2023. The increased interest rates have widened the spread between what Sellers want as their return and the cost of money to acquire real estate assets. Buyers are looking for price reductions while most Sellers, unless they have to sell,…Read More→

August 1, 2022                                                                            Issue 253 Office furniture manufacturers are designing entirely new concepts to support layout flexibility, a hybrid return to the office, and multiple work environments within the same space. Real estate facility executives are facing the most challenging times of their careers. Do they extend major leases if 50% of their employees…Read More→

June, 2022 Issue: 252 Wow, what a tumultuous past sixty days since the last issue of this newsletter!  Between the war in Ukraine, the stock market going up and down 1,000 points at a time, the Feds raising the interest rates by the highest amount in decades, and Roe vs Wade, did I miss anything?…Read More→

February 1, 2022 Issue: 250 A few weeks ago on January 19th, I gave a one hour Zoom presentation for RINA Accountants & Advisor discussing where 2022 will be going with respect to the various aspects of commercial real estate and our local and national economy. Click on this link to view the presentation: https://www.rina.com/resource-library/videos/january-2022-real-estate-advice-webinar/…Read More→

The overall office vacancy rate for the I-680 Corridor is around 20%, with Class A Downtown Walnut Creek at 25%, the Pleasant Hill/Walnut Creek Bart region at 30%, while smaller markets like Alamo/Danville are closer to 10%. Cushman Wakefield just reported “The Class A office vacancy rate in Oakland’s core business district reached a historic…Read More→

I stuck my neck out a few weeks ago and predicted that the commercial real estate market, and specifically the office market had finally hit bottom and would slowly work its way back up. This was before the Omicron variant hitting the scene, and this probably won’t be the last scary variant we encounter. Fortunately…Read More→

Issue: 249   This is my 45th year representing corporations in the sale and leasing of Northern California office space. I may be sticking my neck out, but that is the privilege I have in writing this newsletter! I believe that we are finally at the low point in the office leasing cycle, and that while we might…Read More→

  The San Francisco Business Times had a few recent articles that raised excellent issues regarding employees returning to the office. If the employer doesn’t mandate which days the employees should come to work the result might be days when only a handful of folks are back in the office, defeating the synergy and physical…Read More→

  Wired Magazine 11-22-21 referenced a study by Future Forum surveying 10,000 knowledge workers and their bosses across six countries including the United States. “The study showed that executives are more than twice as likely to want to get back to the office fulltime – every single working day, just like in the “before times”…Read More→

Bisnow reporter Matthew Rothstein on November 18, 2021 reported “For months, ads and sponsored content have popped up all over parts of the internet dealing in commercial real estate claiming to provide amenities or design changes that will lure workers back to the office. None have been proven to work so far.To date, American workers…Read More→

  While the national office vacancy rate is 15%, the industrial national vacancy rate is only 4.5%, and in some cub-markets like Sante Fe, New Mexico, as low as 0.1%! Net absorption for nust Q3 2021 was 175 million square feet. Lease rates overall average $6.65/sf, with lower rates in Chicago at $5.50/sf and the…Read More→

  According to the Colliers Third Quarter 2021 report just out,  the national office vacancy rates is 14.9%, with Central Idaho being the lowest at 2.5% vacant and Houston the highest, at 23.2%. Currently there are 126.6 million square feet of new office projects under construction, including 12.3 million square feet in San Francisco. Net…Read More→

Alexandria Real Estate Equities, one of the nation’s largest laboratory developers, just announced it has purchased the JC Penny property at the Tanforan Mall in San Bruno, California. When the existing leases expire it plans to raze the building and build 700,000 square feet of life science space.  Conversion and re-use of big-box has been…Read More→

  One headline yesterday in Bisnow read “Commercial Property Values, Sales Volume Break Records as Recovery Gives Way To Expansion”, while  on the same day in the San Francisco Business Times the headline read “Analysis: High-profile office towers face foreclosure warnings as occupancy slips, debts come due”. What is happening is overall commercial real estate…Read More→

  This is my 45th year representing corporations in the sale and leasing of Northern California office space. I may be sticking my neck out, but that is the privilege I have in writing this blog. I believe that we are finally at the low point in the office leasing cycle, and that while we…Read More→

On the one hand the current richest person in America ($220 billion as of today) Elon Musk announced he is relocating Tesla’s corporate headquarters to Austin, Texas, and on the same day Tesla announced it has leased 325,000 square feet of office space at 1501 Page Mill Road in Palo Alto. This Stanford Research Park…Read More→

As reported in the San Francisco Business Times yesterday, “The announcement that consulting giant PricewaterhouseCoopers will allow tens of thousands of its employees to work from home sent shockwaves through the business world. But it could be the start of an even larger wave…it will allow 40,000 of its 55,000 workers to work remotely anywhere…Read More→

Every year the Business Facilities magazine publishes It’s National Rankings of States  for 27 different categories including Health Care Jobs,, Tech Talent Pipeline,  Aerospace/Defense and while California did terrible in the Best Business Tax Climate category, of the 27 categories California ranked #1 9 times and was in the top 10  17 times. Very impressive,…Read More→

The relative good news is the vacancy increases in the office sector is slowing. The U.S. office vacancy rate rose for the sixth consecutive quarter in Q2 2021.  Asking rates for the most part are holding firm but concessions have increased, meaning effective rents have dropped. According to a recently released Colliers report, “Combined net…Read More→

I mentioned in a recent blog that Boston Properties is planning for downtown San Jose, California, will feature 1.4 million square feet of office space. Kilroy Realty is in the approval process for 676,801 square feet of new office space at the SoMa Flower Mart project in San Francisco. Amazon just purchased 304 acres in…Read More→

As time goes on and the Pandemic light at the end of the tunnel continues to be most distant, companies may be more open to embracing hybrid and even total remote working and not expecting a return to the office. “Digital.com’s survey found the increasing embrace of remote work is one of the top factors…Read More→

In an article titled “Abandoning Office Space Creates Lease Accounting Headaches” published in Bloomberg Tax, “In some cases, companies that shrink their office space have to book one-time impairment charges, or hits to earnings, to convey how the value of their leased real estate declined.. Mobile game developer Zynga, which makes Farmville and Words With…Read More→

  WeWork lost $3.2 billion dollars In 2020 due to rapid expansion hitting the Covid-19 shutdown. It lost $2.1 billion and more than one in four of its customers during the first quarter 2021, according the Financial Times. However, there have been a number of positive press releases in recent months. GSA, the largest office…Read More→

California Economic Forecast September 1, 2021 by Mark Schniepp Most hybrid work plans call for employees to be in the office two to three days a week, yet this is unlikely to be practical for those who moved more than 50 miles away. Employers with headquarters and offices in major cities will need to decide…Read More→

It was great for almost all corporations for the announcement that companies employing 100 or more must either have their employees fully vaccinated or take weekly tests. This may accelerate the return to the office, which most companies who had hoped to have most employees back by September 2021 have pushed reentry back to early…Read More→

A Colliers report just out compares what the ‘normal’ office sublease prior to the Covid crisis was averaging 110 million square feet and now is almost double that at 208 millions square feet. Sublease asking rents are an average of 26.7% below direct space. San Francisco currently has 8.8% of its office market for sublease….Read More→

How to solve two problems at the same time…too much vacant office space, and not enough industrial inventory so tear down suburban office buildings to create space for new, high-demand industrial product!  In Bisnow August 12, 2021, ‘Developers, including some of the industry’s biggest players, have started buying under-performing, underutilized office and flex buildings to…Read More→

  CoStar, one of the leading commercial real estate property resources has a daily news feed and today one of its headlines read ‘San Francisco Apartment Rents Plateau as COVID surge Upends Rebound.”  The San Francisco Business Times today had as one of its headlines “S.F. Is A Hot Rental Market Again.”  Probably both are…Read More→

“According to a new survey of more than 500 Chicagoland brokers, investors, corporate real estate executives and others by the Real Estate Center at DePaul University, 56% said they think office users should be fully vaccinated before returning.”  Bisnow August 10, 2021.  Because the survey was taking in June, well before the Delta Variant began…Read More→

The national average office space vacancy rate increased by a half-point to 14.7%, with Central Idaho at the low end with 2.1% vacancy and Houston at the top with 22.5% vacancy. San Francisco is in the middle at 13.1%.  Suburban office vacancy is about the same, at 14.8%, as compared to Central Business District vacancy…Read More→

Bisnow reported on a recent study in London where they did a series of Covid-19 tests at subway and intercity train stations including high-touch areas like doors and escalator handles and found no trace of Covid-19 in air samples and swabs taken at four big British railway stations. “A similar study of London’s underground trains,…Read More→

  In the past having attractive office space with decent amenities was a recruiting and retention tool. It set the tone for corporate culture. Over the past ten years we heard of suburban office parks with bocce ball, basketball courts, outdoor grill areas, and in both suburban and urban offices buildings rooftop garden and lounge…Read More→

Issue: 247 While there are numerous reports of positive commercial real estate news, with a number of submarkets beginning to recover, in many regions’ office vacancy is still at or near all-time highs. We have hundreds of millions of square feet of office space for sublet, and while companies are starting to commit to sizable…Read More→

In an article published today on Bisnow, Institutional investors have billions looking for real estate investments. Industrial and multi-family have been the favorites, but there is too much competition for these two product types and there has been a shift towards life sciences, medical and data centers.  In the past downtown office investments have been…Read More→

In Wired August 2021, titled The Rise Of The Zoom Town, “A CityLab analysis found that 84% of the people who abandoned the country’s 50 largest cities between March 2020 and February 2021 stayed within the same metro area. Eighteen percent of those who moved out of San Francisco in 2020 landed in Alameda County,…Read More→

  In the first quarter of 2021 California attracted 48% of all venture capital raised in the United States. Compare this with 2% raised in Texas and 2% raised in Florida. To see the entire article please go to https://www.universityofcalifornia.edu/press-room/uc-studies-contrary-popular-belief-residents-are-not-fleeing-california  

  There are many, many recent headlines about major employer commitments to California, in spite of what you have been reading otherwise. Relativity, which designs and 3D prints rockets, just leased a 1 million square foot former Boeing manufacturing plant in Long Beach, California. In San Francisco during this past second quarter of 2021, 11…Read More→

Issue: 246 This issue # 246 marks the 41st year of publication. I must have started writing this in elementary school! Also please check out my regular blog posting at https://officetimes.com/real-estate-blog/ Will some corporations mandate a full return of employees back to the office, some starting later this summer? Yes! Will some companies allow 100% remote…Read More→

In my 43 years of representing corporate office tenants I have never seen the immense variety of how companies plan to use or not use office space. In the old old days there were rows of desks, then we had private offices and workstations, then more open offices other than lawyers and CPA ‘s who…Read More→

Issue: 245 I was once heliskiing in Canada and during the helicopter ride up the mountain we encountered serious turbulence, and the helicopter turned on its side in white out, not knowing up from down (I have it on video). Yes, it was very scary, but I was reminded of this while thinking about our current national office…Read More→

Issue: 244 A few weeks ago, thanks to RINA and Chicago Deferred, I gave an hour-long webinar forecasting where the commercial real estate market was headed. If you would like to see this, we recorded it and also have tons of links to the articles I resourced. Just go to:   https://www.rina.com/resource-library/videos/what-can-we-expect-for-commercial-real-estate-in-2021/   Big picture…most everyone…Read More→

  The Wall Street Journal a few days ago reported that the return for office workers back to office buildings has been significantly impacted due to the surge in Covid 19. “About a quarter of employees had returned to work as of Nov. 18, according to Kastle Systems, a security firm that monitors access-card swipes…Read More→

Issue 243 On the one hand, life has seldom been as bleak as it is now, with thousands dying daily from the virus, Christmas and holiday family gatherings in jeopardy, the prospect of children not going back to in-class learning, not to mention the tens of thousands of restaurants and other businesses forced to curtail…Read More→

In The San Francisco Business Times  Nov. 20, 2020 “Bank of the West Chief Economist Scott Anderson said he anticipates national commercial real estate values will fall 22% from peak to trough. ‘Office and retail are going to be in for tough sledding over the next year and a half to two years,’ Anderson said….Read More→