Blog

One of my colleagues gave me an article,’ Meet the People Who Refused to Go Back to the Office and Lost Their Jobs’. It references Amazon, UPS, Morgan Chase and Boeing mandating that their employees return to the office five days a week. The article quotes workers who were mandated to return, who didn’t and…Read More→

GSA has 78 million sf of office leases either expiring or can be terminated by end of 2028. While there appears to be a push to get all government employees back in the office five-days a week, The American Federation of Government Employees union just reached a deal with GSA to protect and extend hybrid…Read More→

Bisnow reported on Dec. 4, 2024 that Brookfield Properties 8 million square foot office portfolio is now being  powered by nuclear energy.  “It not only sets a new standard for how owners can purchase clean energy, but it’s also a very scalable model that other property owners can follow,” Brookfield Properties Senior Vice President of…Read More→

Snowflake just sublet from Meta 773,000 square feet of office space, and this is significant for several reasons. First, for the San Francisco Bay Area this is a huge office deal, but as importantly, Snowflake previously relocated its headquarters to Bozman, Montana. Like many companies seeking a less expensive place to do business than our…Read More→

Cisco just listed 663,000 square feet of its Silicon Valley office and R & D space for sale. Situated on 32 acreas in North San Jose at Tasman and Zanker Roads, it is only a portion of its much larger facility there. Up in Folsom up near Sacramento, IntelC orporation is planning on selling its…Read More→

I was at a recent broker event with specialists from different commercial real estate segments. Here are some interesting insights from this…the housing market has slowed down; less folks are buying homes and that may have dramatically impacted a number of other industries. Our industrial folks say the construction companies are downsizing, giving up warehouse…Read More→

A double-default is when a real estate borrower has trouble with their loan, either it is due and they are unable o refinance, or they can’t make the payments, and they do a work-out with the lender. The terms are adjusted, or the loan is extended, or other loan modifications so the lender doesn’t have…Read More→

I attended our Fall SIOR National Conference in Los Angeles, and one of the sessions discussed how and why our country will experience increased energy shortfalls. One speaker said that a Chatgpt search uses 17 times more energy than a Google search, and we are seeing huge demand increases for data centers across the Country….Read More→

In BizNow 10/23/24 Jarred Schenke’s article warns about the tax exposure that might result from a landlord handing the keys of the property back to the lender. On top of losing whatever equity you may have once had, in addition to all the time and expense purchasing and then managing the property, there may be…Read More→

Jarred Schenke, writing in NationalCapital Markets,  “In total, roughly $3.3B of CMBS loans were transferred to special servicing during the month of September, $1.9B of which were office loans. Now 12.6% of all CMBS office loans are being specially serviced, up from 8.3% at this point last year. The special servicing rate increased for all…Read More→

  Much of the United States office markets are still experiencing vacancy rates in around 20%, and in the San Francisco Bay Area even higher, with Oakland at 29% and San Francisco at 35%. I have mentioned previously that the Amazon announcement mandating five-day a week return to office may have a positive impact on…Read More→

  This was the 9/24/24 headline in Bisnow, based on a survey of 1,300 global CFO’s conducted by KPRG….83% said they expect their companies will shift back to requiring five days of office attendance sometime in the next three years. “Older CEOs are much more likely to predict a return to pre-pandemic work models, with…Read More→

According to a recent report by JLL, nationwide lab space availability is now 30% and this is expected to rise further. “The report predicts rents will continue dropping and that it could take years before the local markets work through their supply backlogs.”  This is sobering as this segment of the industry was previously a…Read More→

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→

Bisnow National 9/13/24  had a number of article headlines, including “Business Leaders Look to Increase Real Esate Investments”, Brookfield Predicts Robust Office Recover Market Rebound”, Major Investors Return to the Market”, Commercial Real Estate Investors Ready to Get Back in the Market”…not bad for just one day’s headlines!!!  

Bisnow August 29, 2024, reported that 1 in 6 .S. office buildings are strong residential conversion candidates. On the one hand, it could be viewed as only 1 in 6, while a more optimistic slant would be 17% of U.S. office buildings may be residential conversion candidates.” Manhattan led U.S. markets with more than 53%…Read More→

There have been a number of estimates of the job displacement, current and future, due to AI (Artificial Intelligence) and yes, there will be some offset due to new job opportunities in Ai. “300 million jobs could be lost to AI…44% of companies using or planning on using AI believe it will result in layoffs…Read More→

In a August 22,, 2024 Bisnow article quality office space is now table stakes and to win landlords are shooting for ‘flight to experience.” “It’s really about that experience you feel as you walk in,” Harvest Properties Senior Director of Development Danielle Friend said at the Grand Hyatt San Francisco during Bisnow’s State of the Bay Area…Read More→

Recently I wanted to find out first-hand what tenants were doing with and in their office space, so I picked up a clipboard and personally visited a number of office tenants in suburban Class A office buildings. One complex had a huge, 80% empty, parking lot, Class A, and well maintained. I went door-to-door, not…Read More→

  TMG Partners and Goldman Sachs gave back the office complex at 350-380 Ellis Street, Mountain View,  to the ender, KKR, and TMG will be staying on to help position the property for the next—generation workplace.  

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→

Bisnow July 19, 2024, had a string of very positive commercial real estate headlines. At the top was “Goldman Sacs Reports Gains in Real Estate Investments’ and when I dug into the article, it turns out they got ahead of the curve last year and wrote off a ton of poor investments, and now they…Read More→

Google just renewed its lease at 215 Fremont Street in downtown San Franciso, downsizing from 140,000 sf to 64,000 sf. It could have been worse, they could have vacated entirely!  In the same Bisnow release, The Royal Bank of Canada appears to be taking back 82 San Francisco apartment buildings owned by Goldman Sachs and…Read More→

A recent article in Bisnow July 8, 2024 cited San Francisco Class-A office vacancy increasing for the 10th consecutive quarter, “as more than a third of the city’s office buildings remain empty.  The vacancies, brought on by layoffs and hybrid work, are expected to remain elevated through the end of the year. Placer.ai’s monthly data…Read More→

  A perfect storm of plunging property values for aging buildings, weak tenant demand coming out of the pandemic and high interest rates for new loans and refinancing has left the $2.4 trillion office building sector wobbling. In New York 1740 Broadway which Blackstone had paid $600 million for ten years earlier just sold for…Read More→

Christopher Thornberg, founding partner and economist wit Beacon Economics, said at a recent presentation fo San Jose State ““How do you make housing more affordable? You build more housing… “You need to start taking down these office buildings and putting up apartments, However, Thornberg said he prefers “adaptive reuse” of existing office buildings rather than…Read More→

There are a number of reports around the country that price discounts on office buildings are a boon to non-profits who have access to cash to acquire these office facilities for their own long-term use. Bisnow June 3, 2024 “With overall U.S. commercial real estate pricing down 21% from its March 2022 peak, according to Green Street,…Read More→

  ”Artificial intelligence is expected to replace 85 million jobs by 2025, according to a report from the World Economic Forum. That has implications for real estate, CBRE Investment Management Chief Investment Officer for Americas Direct Real Estate Strategies Julie Ingersoll said. “If we lose 25% of our jobs in the United States — think coding jobs, secretarial, even sales-related…Read More→

“For the first time since the financial crisis, investors in top-rated bonds backed by commercial real estate debt are getting hit with losses. Buyers of the AAA portion of a $308 million note backed by the mortgage on a building in midtown Manhattan got back less than three-quarters of their original investment after the loan was sold…Read More→

Not sure if it was bound to happen, and also not sure if just because there are mandates the office world will return to pre-Covid occupancy levels, but Bisnow May 24, 2024 reported that “Citigroup, HSBC and Barclays are among the financial institutions planning to tell workers that a return to five days a week…Read More→

Bisnow May 8, 2024, It is not easy or inexpensive, but many office projects have ample parking and are located near residential and commercial areas. “Leopardo Vice President of Healthcare David Rutledge said when developers are looking to build a new healthcare facility from the ground up, they often find that ideal sites like Knightly…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→

I was in a recent meeting and was made aware of multiple suburban office buildings where the tenants had been on month-to-month and were all finally given notice to vacate.  I met with a major office park investor who is planning on demolishing a number of very nice Class A office buildings, relocating the tenants…Read More→

The Standard, April 24, 2024: “By the end of 2019, the 20 biggest tech employers had leased more than 16 million square feet of space, nearly a quarter of the city’s total office stock. Now, those same companies are holding onto only 8.3 million square feet, according to data from real estate firm CBRE. “We’ve just…Read More→

Christopher Aquilina, SIOR with tenant rep firm Spring 4 n the United Kingdom, , said “Tenants are increasingly understanding that if they want to woo their staff back from WFH (work from home), they need to offer best-in-class office space in a convenient location.” He goes on to say  “Developers need to be part of…Read More→

  HubbleHQ has more than 1,000 offices in 250 buildings in London where companies can just pay and use the office space two or three days a week if their employees aren’t coming in more than that.  There are lockers for the employees to secure their belongings on the days they aren’t there,  and even…Read More→

The european office market, with a current vacancy rate of around 8.7%, appears healthier than our U.S. rate of 20%. There are varying reports of what the occupancy levels are, with one report stating that 70-90% of European office workers are back in the office, while another report had this sfigure closer to 57%, getting…Read More→

This may be a new record for the most office space, both direct as well as for sublease, in the United States, according to Avison Young. This is 23.7% of the office inventory in the country. Some positive trends that may improve office Landlord’s assets in this Bisnow April 8, 2024 article, “Swaths of layoffs…Read More→

Amazon Slashing office space, will save $1.3 Billion in Costs. Will let leases expire and negotiate early lease terminations.  Starwood Capital paid almost $500 million in 2019 for three Downtown Oakland office buildings, and after just defaulting on a 364.5-million-dollar loan has given up ownership of 2100 Franklin, 2101 Webster and 1901 Harrison. San Francisco’s…Read More→

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→

“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→

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→

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→

  “Office buildings across the country are starting to trade at significant markdowns, in many cases selling for less than the value of their loan. Those types of transactions, executed in concert with the buildings’ lenders, are known as short sales. Economists at the National Bureau of Economic Research estimate that about 44% of all office properties are underwater on…Read More→

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→

Blackstone, the world’s largest owner of commercial real estate, owned 1740 Broadway, New York, an office building that was appraised in 2015 at $605 million, with a $308 million-dollar CMBS loan and the loan is now on the market for $150 million. As reported in Bisnow January 17, 2024, “Blackstone’s handling of 1740 Broadway is one of several…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→

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→

  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→

  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→

  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→

  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→

  This was the headline of a November 14, 2023, BisNow report. “Revenue at companies with flexible work-from-home policies grew four times faster than those with in-person requirements,  according to a new study by Scoop Technologies and Boston Consulting Group.”

  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!!

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→

  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→

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→

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→

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→

Office workers mandated to return to the office, at least a few times a month, are finding a productive way to work the system to get noticed, socialize, meet with their colleagues, and not face horrendous commutes. They work from home in the morning, then zip in when the commute traffic has died down, spend…Read More→

The SF Business Times  Oct. 2, 203 reported on a recent survey of 2,000 full0time employees by Owl Labs, The Hybrid Work Survey, which found “…69% of employees believe their company is requiring in-office work due simply to traditional work expectations. That disconnect is one of many factors that have limited enthusiasm for returning to…Read More→

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→

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→

  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→

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→

If California were a country, it would be the 5th largest economy in the world, more productive than Inda and the United Kingdom. In the annual Business Facilities Rankings Report (July/August 2023),for our fifty states California ranked #1 in  MedTech Devices, Healthcare Jobs, Food Processing, EV Charging infrastructure,  and Agribusiness, #2 in Aerospace/Defense, and Life…Read More→

“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→

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→

  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→

The San Francisco Business Times August 29, 2023 reported that the latest Survey of Business Uncertainty (what a name!) from the Atlanta Federal Reserve Bank, University of Chicago and Stanford University, which surveys 500 business executives each month, ‘Executives predicted that about 72.6% of their employees would be working full-time onsite in 2028, down slightly…Read More→

According to an article just published August 17, 2023 n Bisnow, “…conversions had been largely characterized as a drop in the empty-office bucket. It may seem like an extreme step, but as expectations for full Class-B and C offices crumble and renovation costs climb, demolishing buildings to free up the land under them for a…Read More→

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→

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→

  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→

  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→

  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→

  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→

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→

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→

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→

ResumeBuillder surveyed 1,500 full-time corporate workers in June, 2023 and found that: 85% of workers go to the office at least once a week 63% said going to the office improves productivity, top reason being more efficient teamwork 13% said productivity goes down in the office, and 25% of these say it’s a result of…Read More→

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→

Several of my friends and associates sent me the press release on July 6, 2023 about Apple purchasing a 161,000 square foot office building in Cupertino for $435/rsf. This is very positive news! Their ‘spaceship’ Apple Park in Cupertino can house 12,000 employees. Back in August, 2022 there was a corporate mandate that employees had…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→

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→

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→

Bisnow June 16,, 2023 reported that Brookfield “Dealing With Debt Issues At 8 Shopping Malls’,  and as one example, their Woodbridge Center mall in north Jersey lost one of it’s anchors, Sears, in 2020. The occupancy is at 63% and isn’t covering the debt. In 2014 the mall was worth $366 million but is now…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 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→

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→

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→

  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→

FacilityExecutive Magazine April 2023 had a sobering prescription for corporate real estate executives faced with excess office space, employees not expected to return to the office, a looming recession and in general no expectations that the vacant space will be occupied anytime soon. “To begin with everything must be on the table: Restack office space,…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→

  We are hearing about more office buildings rumored to be having financial issues. In some cases, there is a mortgage loan coming due and the owner is having trouble refinancing as recently many insurance lenders and banks have made office loans ‘off limits’. It may be that the vacancy of the building has increased…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→

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→

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→

David Amsterdam, President of Colliers U.S. Capital Markets put out his latest report.   Year Over Year, Office is down 66%; Industrial is down 52%; Multifamily is down 76%; Retail is up 36%; and Hospitality is down 53%. Unless you have a totally leased office building, credit tenants with terms longer than the loan it…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→

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→

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→

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→

Nicole Goodkind of CNN wrote in an article headlined “Commercial real Estate Is In trouble. Why you should be paying attention”, that office and retail property valuations have been falling sine the pandemic brought about lower occupancy rates and changes where people work and how they shop. The Fed’s efforts to fight inflation by raising…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→

  SFGATE had an interesting comparison of the retail activity in Downtown Oakland as compared with Downtown San Francisco. Oakland wins hands-down with packed restaurants, crowds of people heading to clubs and concert venues, versus San Francisco’s downtown which is a ghost town. Oakland’s unemployment rate is 3.4%  at the end of 2022, ‘down from…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→

Salesforce Just Put 125,000 sf of excess office space on the San Francisco market. According to one report I read, this puts the total of Salesforce San Francisco downsizing to one million square feet. Meanwhile its profits are going through the roof, with sales up 14% year-over-year and net profit at $23 Billion!  Guidewire just…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→

  Slack just announced it is giving up 230,000 sf of headquarters office space at 500 Howard St. in San Francisco and moving into Salesforce Tower. Salesforce owns Slack. Down in Los Angeles, Brookfield defaulted on $784 million in loans on two downtown Los Angeles office towers, 555 West Fifth Street and the other at…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→

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→

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→

  “The Bay Area was ranked first on a list of 10 markets that lenders are most concerned about in terms of performance in 2023, according to a report released by real estate firm CBRE this month.  Phoenix and Portland rank No. 2 and 3, respectively, with Western markets Las Vegas, Los Angeles and Portland…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→

In a January 5, 2023 report by Aaron Jodka, Head of Research for Colliers U.S. Capital Markets, investment sales volume was down in November 2022 72% as compared with November 2021. Strong early-2022 numbers will still make last year a terrific success, but industrial volume is now down 80% and multi-family down 74%. Central Business…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→

According to the Census Bureau data, for the year ending July 1, 2022, 343,000 California residents left the state. However, 106,000 births and 125,700 net international immigration  resulting in a net loss of 113,000. Meanwhile, Texas grew by 470,00, Florida by 416,000 and North Carolina by 133,000.  Of course, with our limited water supply and…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→

Bisnow Dec. 16, 2022 “Hybrid work plans are starting to become set in stone across more of corporate America, and as more companies finalize their policies, how much office space they are going to cut from their footprints is becoming clearer. More than 71% of corporate real estate professionals say they expect hybrid work to result in…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→

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→

Twitter may have set the bar for many things not to do, especially in regard to enticing workers back to the office. Staying away from the other Twitter-changes, when Elon Musk told workers they had to come into the office at least 40 hours a week, after the past almost-three years of being able to…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→

  Barclays Capital, Morgan Chase, Deutsche Bank and possibly other major lenders are reportedly looking to sell office building loans in major cities like New York to reduce their exposure. Bisnow on November 11, 2022 said “Lenders are reportedly focused on unloading office loans in their portfolio because they have been hit hardest by the pandemic and…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→

  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→

Published in the Fall 2022 SIOR Report,  was an article reported that GSA has established a goal to restrict new lease agreements to net-zero buildings by the year 2030. One big problem with this, according to John Robbins, CEO of Carpenter Robbins Commercial Real Estate in San Ramon (and a great friend of mine!) is…Read More→

Reported in the San Francisco Business Times 9/29/22,  the CEO of JPMorgan Chase & Co. Jamie Dimon suggested that those who come to the office every day will be getting the better assignments versus those who work remotely or only come in occasionally. But, “The Survey job site Monster found most workers would quit their…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→

Issue 254 I’m not totally sure if it is wise to admit this or not, but this month on October 11th which is the day I first stated in commercial real estate marks the beginning my 46th year. I started one week after receiving my MBA from Cal and have never looked back since. I…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→

Manufacturing has been well aware of cybersecurity risks for years, and remember last year when one of the largest meat processors was shut down due to getting hacked, costing them millions in downtown and ransom? With so much of major office building technology going into the cloud and The Internet of Things (IoT) now connecting…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→

  It is probably something most of us don’t even want to think about now. However, many corporate leaders already have emergency contingency plans for what to do in case of a fire, earthquake, flood, power outage, or other natural disaster and unfortunately Covid has now been added to the list. Buildings magazine July 2022…Read More→

TheRegistry published on Spt. 6. 2022 where in 2015 Northwestern Mutual paid $37.8 million for the 100 unit Arroyo Residences apartment complex in downtown Walnut Creek at 1250 Arroyo Way, and now Rockwood Capital just purchased this property for $66 million, $440,000 per unit. The property is a half-mile walk from Bart, walking distance to…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→

Recent surveys have supported allowing pets in the office will increase workers returning to the office. about 71% of employees said their employer made changes to its workplace pet policies within the last year. Those sorts of changes can help employee retention and satisfaction, with about 86% of employees surveyed saying they would look forward…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→

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→

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→

A recent Bisnow headline said it perfectly. “Traffic or Table Tennis?”   The article cited amenities like golf simulators, food trucks and coffee carts as ways to incentivize workers returning to the office. The statistics have improved, with a national average of 44.7% for office occupancy, but the time and hassle in getting to and from…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→

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→

One side of the coin is, Big Brother May Be Watching, while the other side of the coin touts the benefits to improving the workspace by tracking how employees use their office spaces and amenity areas. From an SIOR Article published June 16, 2022, “How Sensor Technology Is Helping Design the Workspace”, ‘temperature sensors from…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→

  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→

  Elon Musk asked all his Tesla employees “to spend a minimum of 40 hours in the office per week’ and those that didn’t do so would be fired.  Then yesterday Apple leased 382,484 square feet of office space at Mathilda Commons, 625/655 North Mathilda Avenue in Sunnyvale. Pure Storage today sublet 330,000 sf of plug…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→

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→

Bisnow reported on May 25, 2022 “the demand for office space across the country fell 1.5% in April compared to March….Almost half of office visits in 2022 to date were just once a week, Bloomberg reported, citing workplace occupancy data company Basking.io, which aggregates WiFi data from 100 offices of seven organizations across a variety…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→

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→

Where is the office market headed, especially in the San Francisco Bay Area? Yahoo just put i’s entire new 657,934 sf San Jose office campus on the sublease market. PayPal just announced it was vacating Downtown San Francisco, as have a number of other high-profile corporations. Is this due in part to the onerous San…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→

For years I have subscribed to Business Facilities, in which many of our country’s states tout how wonderful their economic climate is, their economic development departments incentive programs, and where major real estate deals have taken place around the United States. In the past I have felt a smugness about California’s place in our country,…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→

Yesterday I attended a commercial real estate major investor and developer panel put on by my Northern California SIOR chapter at San Francisco’s Ferry Building  Overall everyone was very optimistic about 2022 and 2023. Paul Single with City National Bank told us our economy was unbelievably strong and interest rates were already up 175 basis…Read More→

April 1, 2022 Issue: 251 Across the United States in many regions’ office occupancy is slowly returning as workers come back to the office. In several sub-regions my fellow brokers reported no decline in leasing throughout much of the pandemic, in part due to the exodus from California of office workers seeking lower-cost environments.  There…Read More→

  I am not sure if this is a harbinger of what might be coming down the road, but Blackstone, one of the world’s largest owners of real estate just gave the keys of 1740 Broadway, New York, to a special servicer on its $308 million dollar loan.  It paid $605 million for the building…Read More→

On March 21, 2022 Bisnow published report that “Half of all companies plan to require full-time in-person work within a year.  There seems to be a major disconnect between what employees want and what employers want…perhaps there will be two types of companies with two types of workers, those that require workers to be in…Read More→

  This has huge implications not just as a major office deal, but one that was signed while we are still struggling to get workers back into the office. Additionally this is a major signal to the world that despite high income taxes, high energy costs, high housing costs, a homeless problem the San Francisco…Read More→

Around the United States office occupancy levels are in the 40-60% range, but out in San Francisco it is in the 22-35% arena. San Francisco leaders are attempting to jump-start the return to the office, which has impacted the many restaurants and retailers who miss the foot traffic as well as major employers paying for…Read More→

Bisnow Jan. 23, 2022 reported national office occupancy rates, which had risen to 39% in November, 2022, is slowly back on the rise and now averages 36%.  However, the demand for office space has stalled and is at 58% of pre-pandemic levels. It had hit 87% in August 2021 when we thought we were out…Read More→

GlobeSt.com 1/22/22 reported that new office building construction was getting a 65% rent premium over average Class A rents, according to a study just out by Cushman & Wakefield. Peter Curry, real estate partner with Farrell Fritz, told GlobeSt that “front and center will be state-of-the-art air filtration systems, energy savings infrastructure, and a retreat…Read More→

I don’t see this as a new national trend to take care of two problems at once but in San Pablo, a city in Northern California a small two-story office building is being converted to 54 small apartments, In this region office vacancies went up fro almost 10% to 18%. “There’s  just a ton of…Read More→

According to a report just out by Colliers, the U.S. office vacancy leveled off in Q4 2021, net absorption increased and was positive for the second successive quarter, sales volumes are approaching pre-pandemic levels, and ‘California and Florida are projected to lead the economic recovery’. Yeah!  Sublease space levels declined but are still way up…Read More→

  There appears to be a number of apps out that can allow employees to upload their e vaccination status, employment information that then allows a touchless building access through the lobby without having to check in with security. These apps allow you to control the elevator to get you to your specific floor, and…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→

Wells Fargo just announced that March 14, 2022 is now the magic day when employees can return to the office under a ‘hybrid flexible work model’ and that if they want they can come back earlier, starting this Wednesday. They reminded workers that almost 100,000 workers never left the workplace or have already returned, out…Read More→

Carter Kennedy, one of Colliers top Occupier Services gurus in our San Francisco office, sent me a report on their market. On the one hand, Multi-tenant Class A Trophy office buildings are doing quite well with a vacancy rate of only 4.4%. Many are net leased to strong credit companies. On the other hand, Multi-tenant…Read More→

An article in the San Francisco Business Times today listed the three main factors impacting the return to the office. #1, Covid uncertainty…companies have announced, tehn cancelled, then announced again only to cancel again plans to bring employees back to the office. “Experts say they fully expect additional variants to follow Omicron, which is keeping…Read More→

  Yesterday Slack’s CEO called ‘Return to Work a Doomed Approach’ and put 208,000 square feet of space on the San Francisco sublet market. The SF Registry reported on Slack, “Communication software firm Slack has decided that the future of work is not necessarily in the office and has placed 208,460 square feet of space…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→

There have been recent reports out that the national office sublease vacancy has decreased over the past several months. Cushman Wakefueld put a positive spin on this, which is welcome considering all the negative press the office market has had since Covid first struck, with the office availability going down from 146.3 million square feet…Read More→

If the San Francisco Bay Area were it’s own country, it would be ranked #19 in the world in terms of largest economy.  Recent major corporate expansions in this region have bolstered this well-deserved reputation. LinkedIn just expanded its Sunnyvale headquarters by committing to a number of new office buildings to be developed. Meta, formerly…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→

  39% of Small Business Owners Said They Would Fire Employees Who Refuse to Come Back to the Office, and in the same survey 39% said they would not. In an article in the San Francisco Business Times July 8, 2021, Digital.com surveyed 1,500 small business owners. ‘But about 47% of business owners who say…Read More→

Around the United States I have been hearing concern from landlord broker reps that with inflation rates rising, in many areas the standard annual rental increase of 3% might not be enough to keep up. The Federal Reserve Board seems to think that inflation is temporary. This reminds me, as a tenant representative broker, how…Read More→

#SIORDeloitte just came out with a CEO Survey that found CEOs expect one-third of their workforce to continue working from him in January 2022 and anticipate needed 26% less office space in 2022, compared to 2019 levels. In pre-Covid for the most part most employees were expected to come into the office every day, but…Read More→

  Ron Miller wrote a recent article comparing the major tech giants and how they planned to have their employees work moving forward. For the most part, Google, Apple, Salesforce, Microsoft and Amazon appear to be offering their employees a variety of hybrid work models, depending on the specific tasks the employee is handling. Most…Read More→

Updater is a relocation app that helps Americans with various tasks that come up with a relocation, such as hooking up to Internet, getting your mail forwarded, updating your various records, etc. They track who is going where in the U.S.  From migration analysis of 300,000 moves, less folks are leaving San Francisco than in…Read More→

At a recent commercial brokers meeting filled with industry experts…apartment house cap rates in the Bay Area are averaging 4.3%, even though apartment vacancy rates have almost doubled since the pre-pandemic, going from 4% two years ago to 7.6% currently. The eviction moratorium is about to expire in many regions and this might cause a…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→

Bisnow reported today on a Stanford and Hoover Institution working paper titled ‘Why Working From Home Will Stick’ ‘that the amount of work undertaken from home in the U.S. will rise from about 5% before the pandemic to about 20% after the pandemic. They surveyed 30,000 U.S. workers multiple times and asked them to report…Read More→

A report just out from Colliers has the I.S. office vacancy rate at 14.2%, with 45 million square feet of negative absorption during the first quarter of 2021, and a record 200,000,000 square feet of available sublease space. Ouch! “Recovery in the office market is set to lag, record levels of sublease space and negative…Read More→

There is a report out today from the University of Chicago’s Becker Friedman Institute for Economics that predicts due to the post-pandemic work-from-home shift there will be a potential impact on downtowns and retail that formerly relied on office workers as their customers. Just think, even if employees were allowed to work from home just…Read More→

On the one hand we are hearing about major tech companies announcing a phased return-to-the-office,  with announcements by most of the big boys like Facebook, Salesforce and Google. On the other hand, Airbnb just announced today it was expanding its sublease inventory to 438,000 square feet,  which adds 287,000 square feet to its previous space…Read More→

The San Francisco Business Times May 13, 2021 reported on a survey taking by Blind, an anonymous professional network, who asked over 3,000 employees if they would rather work from home permanently or get a $30,000 raise and 64% said they would rather work from home.  Employees of two companies  would take the cash over…Read More→

  Bisnow 5/12/21, I was surprised  by the following quote: “Real estate attorneys surveyed by Bloomberg Law are almost all predicting defaults in retail and hospitality properties in 2021, but they also predict that office properties will see a large share of defaults this year. Ninety-four percent of the respondents picked retail as one of…Read More→

  Bisnow May 2, 2021 reported that around the country office space tours were up 28% from February to March, and although this increase in interest has not yet turned into actual leasing industry experts believe companies are getting ready to return to the office. Google just announced today that most workers will have to…Read More→

The Bay Area Council surveyed 1,000 voters and 47% said they might leave the bay Area over the next few years. Of that group, 88% said they would leave California, The respondents citing high taxes, the high cost of living and housing costs doubled over the past few years. Texas, Arizona and New Mexico were…Read More→

According to the San Francisco Business Times April 30, 2021, Austin, Texas averaged a 30.8% office occupancy rate while San Francisco had a 12.2% office occupancy rate during the pandemic. There may be several reasons for this, including Texas’s much looser restrictions during the pandemic and in Austin many employees drive to work. In San…Read More→

One of the country’s largest owner of office buildings is Boston Properties, and today they announced that this Labor Day, September 6, 2021 will mark the official day when the office market will  turn around. Boston Properties has 195 properties with more than 51 million square feet, and it is ready to take advantage of…Read More→

  Even though some of you think California is losing all our major corporations and tons of our residents, and yes, we are letting a few out of this paradise of high taxes, high utilities,  and sometimes challenging politics, but the San Francisco Business Times reported on today’s Time Magazine 100 Most Influential Company list…Read More→

Bisnow April 20, 2021  Survey by Savills reports “Seventy-three percent of the respondent companies said that their employees will be in centralized offices at least three days a week, while very few (4%) expect all their workers to be required to show up in person five days a week. A vast majority of companies (79%) are…Read More→

There are currently 9.5 million square feet of office sublease space available in San Francisco today, with an overall vacancy rate above 19%. Landlord reps are still optimistic that the market will come back as more people get vaccinated, while the tenant-biased reps remind us that this it the time to snatch up bargain sublease…Read More→

The highways in the Bay Area seemed to be back to grid-lock during commute periods, and part of this can be attributed to workers avoiding public transportation and driving to work. As of April 21, 2021 Bart ridership was down 86% from its baseline. Out in the suburbs the majority of office building parking lots…Read More→

Last week I wason a national Zoom call with 60 fellow SIOR members. While the office market in most areas has been hit by heavy amounts of office sublease space put on the market and corporate indecision on where and how much office space will be taken down long-term, the industrial market has been off…Read More→

In today’s East Bay Times a recent poll of Bay Area residents concluded that 20% of those surveyed felt working in the office was ‘very unsafe’ and 33% felt it was ‘somewhat unsafe’ in a poll of 1,000 registered voters for the Bay Area Council.  This means more than half polled  did not feel safe…Read More→

Remember after a major earthquake we stock up on bottled water, battery-operated radios, freeze-dried food, and other necessities if we were shut off from civilization until the highways and bridges were fixed? Now we have major Covid-19 sanitization, consultants advising office building owners to invest in self-opening doors, touchless elevator controls, and temperature checking stations…Read More→

Gensler, the largest architectural firm in the United States with a roster of some of the world’s largest corporate clients, has been studying the future of office space design. Outdoor spaces will be utilized for meeting areas, on rooftops, courtyards and nearby public areas. Safety for the employee will be forefront as the pandemic winds…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→

In the SF Business Times April 1, 2021, John McNellis, who is one of the top Retail industry gurus, reflected on what retail types thrived during the past years pandemic, and which didn’t. Home Depot and others in that category had a great year as those stuck at home worked on remodeling projects. Netflix did…Read More→

Wells Fargo just told its employees that employees would be coming back to the office after Labor Day. “We believe most of us benefit by being physically together”, Wells told employees. They currently have 200,000 employees working from home. Google said some of its U.S. employees could return t the offices this month in a…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→

Great webinar yesterday with a panel of some of the largest San Francisco office landlords.  Here are a few of the highlights; There is a flight to quality, which does not necessarily mean Class A space. Sublease space is growing exponentially. How healthy buildings are during this Pandemic is imperative. Activity is coming back. Ground…Read More→

The Colliers Capital Markets recent report on where national CMBS delinquencies stand had overall improvement for the eighth straight month, with Industrial (0.9%), office (2%) and multifamily (2.3%)  having the lowest delinquency rates. Hotel delinquencies are the highest (16.4%), , with retail second (11.8%). “The Mortgage Bankers Association notes that 5.2% of commercial and multifamily…Read More→

According to George Avalos, business reporter for the East Bay Times, “California’s job market should outpace the nation’s employment performance during 2021 – but remain two years away from climbing  back to the record job totals the state reached in early 2020” according to the UCLA Anderson Forecast just out. Also, the report cast doubt…Read More→

On the one hand you have Salesforce just announcing it was putting 225,000 sf of San Francisco office space on the sublease market (on top of the 8+ million square feet already on that market) as well as cancelling a 325,000 sf office lease near its Salesforce Tower that had yet to be built. Bad…Read More→

Yesterday I was on a very enlightening Zoom call with my San Francisco Colliers associates. The office market is seeing landlords hold firm on their asking rents, and there are still Class A office leases happening in the $100/rsf annual price range, per square foot. The top ten buildings have less than 10% vacancy so…Read More→

There have been a number of major tech and finance companies over the past nine months who have announced long-term stay-at-home policies, prompting thousands of employees to uproot their families, relocate to a much less expensive region, purchase a new home, and begin to enjoy life with less financial stress. Many companies have had detailed…Read More→

Retail deals are happening in a number of regions. Restaurants might be getting extensive up-front free rent from the landlords to get them through the pandemic months, and in turn landlords may be going to their lenders to try to get loan restructures commensurate with these concessions. I’ve seen national retail reports stating both that…Read More→

According to a recent article from Walker & Dunlop published in Bisnow, “From beer kegs to nap rooms to cold-plunge pools, the 2010s saw a parade of trendy office “perks”. For the companies that called the offices home, these add-ons were meant to bolster a bespoke brand of company culture, whether relaxed, luxurious or hyper-productive….Read More→

Colliers just sent out a brief report on the current state of the national retail market. The good news is Q4 showed signs of recovery, with positive absorption and retail rent collections up to 86%, a huge uptick since the heart of the pandemic. The bad news, 27.6 million square feet of negative absorption in…Read More→

Here in the San Francisco Bay Area a number of tech companies have recently announced that large portions or in some cases, all of their office facilities are on the sublease market. Work-from-home is here to stay for many reasons and this does not bode well for the overall health of the office market. However,…Read More→

Salesforce, the largest employer in San Francisco with over 2,000,000 square feet of office space, just announced that 65% of its employees can come into the office one to three days a week, and for employees that don’t live near an office or have roles that don’t require an office, can work remotely full-time. “The…Read More→

  The Society of Industrial and Office Realtors sent out a great short video that you can access at www.SIOR.com/snapshot. Here are the highlights: Industrial real estate confidence is high at 6.9 (out of 10), while office confidence is low at 4.7. “The pandemic continues to negatively affect almost all market sectors…and is expected to…Read More→

While this may not be the norm everywhere in the United States, here in San Francisco one day’s news release was another blow to not just the office market but much more significant in many ways. First, there was a SF Business Times article that Uber may be quietly shopping 300,000 square feet of its…Read More→

According to a recent report by CBRE, Silicon Valley will be one of the hottest markets, nationwide, for future office development. “The San Jose metro area, defined as Santa Clara County, is touted as the No. 1 market for future development of office space and is also seen as an excellent market for retail and…Read More→

I’ve been reading report after report documenting and predicting the dire budget strife due to the impact of the Pandemic on business closures, tax revenues severely decreased, and costs relating to vaccination, testing, school readiness during the Pandemic and other costly issues which have stressed government entities across the U.S. San Francisco, 400 million shortfall,…Read More→

In Bill Gladstone’s excellent Real Estate Review (he is a top commercial SIOR broker in Harrisburg, Pennsylvania), author Jesse Harlan discusses potential exposure of commercial property owners if their building is vacant, and even if it is partially or fully leased but due to the pandemic not fully occupied…there still might be exposure to the…Read More→

AtlantaRetail just reported in Bisnow that the 560,000 square foot Town Center at Cobb mall was foreclosed by Deutsche Bank Feb. 2, 2021, receiving no bids at the foreclosure auction. The mall was valued at $322 million in 2012, but dropped to only $120 million at time of foreclosure. The Cobb Country Commissioner, JoAnn Birrell…Read More→

Diana Olick wrote an article Feb. 4, 2021 citing the affordable housing stock now 96-99% occupied, while in some communities many hotels are sitting empty due to the pandemic, with 18% behind on their mortgages as of December 2020 as compared with only 2% the prior year. Developers are taking advantage of this, purchasing distressed…Read More→

In 2020 Austin, Texas saw a 5.8% year-over-year job growth, Boise Idaho enjoyed a 2.9% growth, Dallas 2.8%; Seattle 2.35; Denver 1.7% and Nashville 1.2%, which on the other side of this equation San Francisco and San Jose each lost 2.6% of their jobs in the finance, information and professional services catagories…I’ve heard stories of…Read More→

  Even though in many regions in the United States there is a flood of office sublease space and there are reports that Corporate America may be giving up 25% of all their office space, long-term, due to partial or total remote working, there are still tens of millions of feet of new office projects…Read More→

Yelp just placed 14 stories at 140 new Montgomery St., San Francisco, totally 161,876 square feet, and plans to retain a HQ in San Francisco. “With more employees working remotely we’re reducing some of our footprint in San Francisco, but we will still maintain our HQ office there,” the Yelp spokesperson said, adding that the…Read More→

According to the East Bay Times reporter George Avalos, California lost 1.41 million jobs last year. Ouch! Michael Bernick, employment attorney with Duane Morris and former EDD Director, said “We are looking at a much more gradual recovery than first hoped, and a lot of jobs that were lost are going to be lost permanently,…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→

David Amsterdam, President of Colliers Capital Markets, just sent out a bulletin with the following bullet points: Q4 negative absorption of 40.9 million sf is second-highest on record…ten metros posted negative absorption of at least one million (New York, Los Angeles, San Francisco, Chicago)…Sublease space now a record 188 million sf. I have been doing…Read More→

But the real story is a number of reports predicting that Corporate America will be downsizing by 25% of its total office space. This means we may have 1,561,273,198 square feet of vacant office space as companies trend towards partial or total long-term work-from-home strategies, which means we have another 773 million square feet of…Read More→

Last week Oracle placed three of their Peninsula office buildings on the for-sale market, after announcing a few weeks ago they were moving their headquarters to Texas. Now NetApp just announced they will sell their 702,200 square foot Sunnyvale office campus. They have not announced leaving California…yet.  I started researching all the links to states…Read More→

At a recent webinar where I forecast what was going to happen in the various commercial real estate segments over the next few years we had several surveys. One was asking our audience, which included CPA’s, bankers, realtors and lawyers, when they thought the office market was going to return, and the overwhelming consensus was…Read More→

  It is bad enough that San Francisco Bay Area corporations are putting leased space on the sublease market, packing up and moving part of their operations to Texas or elsewhere, but when major companies begin putting their office campuses on the ‘for sale’ market this is a much more serious sign of what might…Read More→

  In case you weren’t aware I have been writing and publishing a newsletter, Corporate Office Perspectives, for the past 43 years and it goes out to tens of thousands of subscribers every other month. If you would like a free subscription just go to www.officetimes.com to sign up. In my February 2020 was the…Read More→

In a survey of 150 C-suite executives conducted by the firm West Monroe, 29% are considering relocating their operations out of state or out of the country due to the high cost of living and high tax burdens. The top relocation is Texas, and the largest region of where these companies will be relocated from…Read More→

A number of the major fast food restaurants are coming out with new store designs, emphasizing drive-through and take out, and in some cases eliminating the dining option entirely. Burger King has two new concepts, one with three drive-through lanes, one dedicated to delivery drivers, and a parking lot where customers can order through their…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→

  Colliers just completed a study Implications of COVID-19 on the Workplace with data from more than 5,000 global respondents.  76% reported same or improved levels of productivity. 74% felt connected to their team even though not physically with them  67% experienced improvement in work-life balance, and 83% wanted to work from home at least…Read More→

  Cynthia Milota of Ware Malcomb and Sally Augustin, Design With Science, wrote an article for Corenet Global discussing working from home vs returning to the office. “Organizations are re-imagining their mobility profiles. W1ill they be remote first with come in-office presence, or will the model largely be in-office first while allowing for remote work?…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→

  This was  the headline of a Bisnow report from a few days ago, citing 42 million square feet of new subleases hitting the market with 73 U.S. markets reporting negative absorption. Then the next day the Colliers ‘Disruption 2020: Office Sublease Continues To Rise, reporting that sublease space is 30 million higher than it…Read More→

One idea is, using your exclusive tenant rep broker, to go after office subleases that might be much larger than your initial requirement but can accommodate your growth longer-term, and then make aggressive offers (yes, I know this will irritate some listing  agents) 50% or even 25% of asking…in today’s market there may be Sub-landlords…Read More→

I’ve been researching just how safe elevators are during a pandemic, and while the risk factor might be low, you are still better off not having to ride in one. Is the cab small, limited to just one or two people, or  is it a larger elevator cab that can hold 4 standing 6 feet…Read More→

Maya Donnon, Sven Schroeter of KSS Architects (among other co-authors) in a Corenet Global article titled ‘Why Workplace’ discuss the paradox corporate America is going through. They cite Facebook who has committed remote work as a permanent option for its employees while at the same time committing to millions of feet of new office space….Read More→

BISNOW Oct. 30, 2020 reports that real estate companies think they’ll need less office space. “More than any other industry, real estate has a vested interest in making sure office occupiers don’t cut their real estate footprint. Office is the largest of the real estate asset classes, and a reduction in demand would lead to…Read More→

According to the East Bay Times, “At least 1 in 5 residents in high-priced cities say they have already moved or expect to – a possible harbinger of significant change in the Bay Area. This is the biggest, fastest transformation of how we work since World War II” said Adam Ozemik, chief economist at Upwork….Read More→

At a recent SIOR National Conference I heard of Amazon 3-5 story 70’ clear warehouses, 3-story warehouses for high-valued land, last mile, using steel supports and costing three times the normal cost of a warehouse, and one of the largest warehouse developers in the world said we had a demand for 400 million square feet…Read More→

At a recent SIOR National Conference a few tidbits on the future of office usage in the United States. There appears to be long-term significant compression of how much office space a number of major corporations are planning for. An overall 25% reduction in office usage due to long-term partial remote workers not needing to…Read More→

  Stephen Newbold, National Director of Office Research for Colliers International reported that in Q3 of 2020 the United States experienced 33.5 million sf of negative absorption and office subleases in the US hit a record at 168.8 million sf. This is more distressing than we experienced during the Great Recession. The bad news was…Read More→

  A number of large office users have delayed the return to their offices until mid-2021, while others have told their employees they can work remotely permanently. Facebook and other major players have allowed their employees to relocate to lower-cost regions, some taking a pay cut but still saving substantially over their previous San Francisco…Read More→

The downtown San Jose Google 79-acre development currently in planning stages will have 5,900 residential ‘dwelling units’, 500,000 square feet of retail stores, restaurants and cultural buildings, and 7.3 million square feet of office space. In the old days this might translate to 35-45,000 employees, and after Covid is gone may again be at this…Read More→

  Office subleases are hitting the markets bigtime, from New York to San Francisco, Boston, Houston and many other major markets. Millions of square feet of excess space, with millions more expected to follow. Companies are finding that they can not only survive with working from home, many are thriving, despite the absence of corporate…Read More→

Bloomberg News reported September 25, 2020 that Deutsche Bank AG is considering a hybrid model of allowing staff to split work between office and home, although a Morgan Chase spokesperson warned that staff productivity might slip if they work remotely too long, and a UBS Group spokesperson commented that working from home makes it harder…Read More→

According to SocketSite, which tracks the San Francisco rental market, year-over-year apartment rents were down 20S%. The Bay Area regional planning agency, The Metropolitan Transportation Commission, is considering a mandate that large Bay Area employers have 6-% of their work force permanently work from home. Reported in today’s  East Bay Times, ‘Significant increases in available…Read More→

Issue 242 The corporate consensus that I am hearing and reading is that by mid-2022 business and humanity will begin towards a new normal, while tens and hundreds of millions of folks will be taking their first and second rounds of vaccination. Most of us will still be wearing masks and socially distancing. There will…Read More→

  A report just out by the California Economic Forecast predicts more doom and gloom than I would have liked to have read. “The economy however is not back to the pre-crisis status. During most of Calendar 2020 and in much of the first half of 2021, ongoing economic restrictions will have resulted in millions…Read More→

A report just released by Colliers International on the top 25 US Metro Office Markets, show Atlanta on top with 2,055,717 sf of YTD positive net absorption, while New York (Manhattan) had a negative net absorption of 3,375248 sf and San Francisco had a negative net absorption of 3,004,410 sf. Other notables was Seattle with…Read More→

  Something for employers to caution employees who are thinking of moving to a lower-cost state but continuing to work remotely. In an article in the New York Times, there are some states that will tax your income based on where you did the work, and others based on your residence, and it is possible…Read More→

Rich Commercial Realty in Raleigh, North Carolina recently had a survey of thousands of their clients, vendors and contacts asking about the current usage of office space. 69% reported currently occupying their space, and those who hadn’t and asked when, 25% said the next three months, 13% said the next six months, and 62% weren’t…Read More→

On the day Pinterest announced paying $89.5 million dollars to cancel a 490,000 square foot office lease they had previously signed for a project that was going to be built in San Francisco’s South of Market, due to a change of where employees would be located, developer Jay Paul announced it is going ahead with…Read More→

San Francisco now has an estimated 6.5 million square feet of office sublease space. Direct Class A rents are still among the highest in the country, averaging $84 an annual square foot, but Class B rates are now in the $50-60/rsf range. In the Bay Area several companies have announced they will relocate their headquarters…Read More→

A number of regions are reporting an avalanche of new office sublease space. I was on an SIOR national broker call and my associate in Dallas, Texas said they had 4.6 million square feet of new office sublease space come on the market in just the past three months. She reported that in one day…Read More→

I have been reading more and more about folks paying astronomical rents (ie $5-6,000 for a two-bedroom in SF) or crazy-high home prices (median home price in San Francisco $1.3 million) packing up and heading to Lake Tahoe, to Austin Texas, and other regions. I have associates who moved to remote areas of California where…Read More→

The WELL Building Standard “is the first rating system to focus exclusively on how Buildings impact human health.” It is now in the process of preparing aWellv2 which will incorporate guidelines needed due to the coronavirus. “The prevention of infectious diseases hadn’t been given nearly as much weight as providing occupants with light, fresh air…Read More→

Issue 241 I’ve been on many, many networking events, broker panels, institutional investor groups, meetings with architects & with engineers, Zoom programs, etc. over the past 90 days.  This has given me a fairly good feeling of what is going on nationally as well as locally with corporate America, office space, office buildings, commercial real…Read More→

It was expected by many in the office industry that with the pandemic now in its 6th month occupancy levels would be in the 25-50% range, but a number of national landlords report occupancy much lower. “Oxford Properties U.S. Head Office Chris Mundy said his firm had initially expected buildings would reach around 25% occupancy…Read More→

There has been a lot of hype on the world getting a vaccine in late 2020, or early 2021, after which life will hopefully return to normal. However the announcement by one of the smartest and largest corporations in the world, Google, that they will let employees work from home until at least July 2021…Read More→

In a report just out July 27, 2020 by Green Streeet Advisors, the prediction is that as a result of the successes in corporations working from home office demand in developed economies will drop 10% to 15%. “There is increasing evidence that companies will allow, indeed encourage, employees to work from home more regularly than…Read More→

www.bisnow.com reported today that New York City brokers do not feel very confident in the current and future state of the real estate market, and in a Real Estate Board of New York Broker Confidence report released yesterday averaged 1.94 out of 10 this quarter. “In their general written comments about the market, brokers cited…Read More→

I attended a webinar this week with office specialists from JLL, C&W, Cresa and Newmark Knight Frank, representing San Francisco, the Peninsula, the East Bay and Silicon Valley. In San Francisco for the most part when March hit, the world just stopped.  Nothing was happening, and tenants only did what they had to do. Along…Read More→

First off, I am in no way an expert in this but just an office broker who has spent many decades representing office tenants in their space needs. However, I have been doing a lot of reading and researching. If your building has openable windows, great, let the outside fresh air in. Most newer buildings…Read More→

In an article today in GlobeSt.com, a recent survey by Gensler found that only 12% of workers want to work full-time from home and 70% said they want to spend most of their week in the office. “Meetings, socializing and impromptu face-to-face interactions with colleagues were ranked as the top reasons people wanted to head…Read More→

In my morning paper the headline read “249 experts agree: Virus lingers in the air indoors”. This got me to thinking how safe are office spaces in today’s pandemic environment? Asia has been repopulating many of its corporate offices months before the U.S. and I couldn’t find any reports one way or the other. There…Read More→

Reported in TechCrunch this past week: 63% of the startups surveyed by Founders Forum with Tech Crunch said they would re-open in 1-3 or 3-6 months, regardless of when the government told them it was safe to do so. A small number have re-opened their offices, 10% have closed their offices permanently and many said…Read More→

The Society of Office and Industrial Realtors (SIOR), of which I have been a proud member for over thirty years, interviews top brokers on a variety of issues and publishes these interviews. Neil Dailey, SIOR, office broker with McGraw Commercial Properties in Tulsa, Oklahoma, stated this about the new view of office buildings: “I also…Read More→

Nikkei Asian Review just reported that Fujitsu will cut their office space in Japan in half over the next three years. Teleworking will be made a standard practice, and Fujitsu has introduced a policy that will limit the number of employees in the office at any one time to just a quarter to its total….Read More→

Triple-net real estate investment owners often take a lower rate of return, sometimes in the 5-7% annual range, with increases every five years, long 20-30 year leases, credit tenants or strong franchises just to protect their investment. Many of these investments are absolute triple-net, which covers the owner.  If a hurricane tears down the building…Read More→

Real Capital Analytics, which tracks national commercial real estate sales, reported on June 25, 2020 that May sales volume was down 79% year over year.  Industrial was the best performer category (only down 70%), office volumes were down 82% and apartments were down 81%. Retail dropped 83%, and all of the above looked comparatively strong…Read More→

There have been a number of reports, both regionally as well as nationally, that predict corporations will begin leasing suburban office space to accomplish several goals. First, they need to increase employee separation during the pandemic, and it is much cheaper to lease space in the suburbs to accomplish this. Secondly, companies that are above…Read More→

San Francisco has over 4.5 million square feet of available office space for sublease, and some brokers are predicting that this may cause direct office space rents to drop by as much as 10-20%. The Covid-19 is not the only reason for this spike in available space. There were a number of new office projects…Read More→

In National Real Estate Investor June 2020 Elaine Misonzhnik writes on page 3, “The virus might be with us indefinitely. (The World Health Organization has predicted it might take up to five years to get it under control.) And to declare the end of cities, decide that everyone should work and learn from home permanently…Read More→

The U.S. Economy had trillions of dollars in stimulus money pumped in,  but unemployment continues to rise and with PPP loans beginning to run dry, businesses are increasingly challenged to survive this pandemic. Local governments are laying off staff as budgets turn inside down, and with projected tax revenues for below what governments had planned…Read More→

“By 2021, a new blended workforce will emerge with 20-30% of people working remotely 2-3 days a week.”  Employees and clients must feel confident that management is making safety a priority.  Buildings will be increasing automated and touchless, with physical distancing, space utilization apps and health and safety protocols. Remote working will be part of…Read More→

Reported in Fox News, June 22, 2020, real estate entrepreneur Don Pebbles predicted New York based companies are likely to reduce their brick-and-mortar office space in favor of remote working. ”What happened with COVID-19 is, it accelerated nationally…because it compelled most Americans, certainly office workers, to work remotely. What business owners, entrepreneurs, and CEO’s found…Read More→

To quote Michael Tannenbaum, CFO of BREX, “Think of the office as a perk what you offer…when you start to think of it has a perk, you can start to say, are we getting the value out of this office relative to other things we can be offering?”.  I have to totally disagree with this…Read More→

Julie Taylor, Executive Vice President with Colliers International, was interviewed in a podcast on June 24, 2020 by THEREGISTRY about the current situation and future prognosis for San Francisco Bat Area retail. Here are a few highlights from this. Retailers are reexamining their supply chains and may look for multiple routes, and more domestic vendors…Read More→

The Society of Industrial and Office Brokers (SIOR), the elite national organization of the top office and industrial brokers in the country, just surveyed their membership. One SIOR commented he has seen rent discounts of between 10 and 13 percent due to the COVID-19 pandemic, and that during the last three down cycles rents ended…Read More→

Apartment rent collections nationwide which were in the 90+% range the past few months appears to have sunk to the 82% level. Retail rent collections reported in the 25% range. At some point this will impact the banking and financial sectors when landlords cannot pay their mortgages without sufficient rents coming in. Will this lead…Read More→

June 1, 2020                                                                               Issue: 240  This Issue #240 marks the 40th year of publication, every other month without an issue missed, and thank you so much for taking the time to read this! I’ve been contacting scores of corporate decision-makers, managing partners of CPA, law and financial planning firms, and watching or participating in dozens…Read More→

Salesforce, with 9,000 employees in three San Francisco office towers, will have temperature scans on every floor, mandatory masks, six-foot separations, hand sanitizers everywhere and cleaning throughout the day. Work areas and conference rooms will be at half-capacity or less and employees will arrive at staggered times. The Bay Area Council surveyed 123 companies last…Read More→

As this issue is in print, it was prepared well before COVID-19 came on the horizon, but was just recently distributed.  One big headline read “Regardless of where you fit into the commercial real estate system, or what asset class(es) you work with, one thing is for sure: 2020 will be a year to remember!”…Read More→

Twitter just announced to its 1,000 San Francisco office employees that if they wanted to continue working from home, they could on a permanent basis. What will happen to Twitter’s very cool downtown HQ remains to be seen. The San Francisco Business Times also interviewed a number of smaller 2,000-4,000 square foot office users in…Read More→

Miriam Hall of Bisnow reported yesterday that Vornado Realty Trust said two-thirds of delinquent tenants were credit-worthy, ‘but businesses are hurting and the future is uncertain’.” Vornado collated 90% of office rents and 53% of retail rents in April and May looks to be similar. Office occupancy is currently 5%. Vice-Chairman David Greenbaum said “I…Read More→

Bisnow just reported a study by CoreNet, which is the corporate real estate directors organization, that based on a survey conducted between April 22 and April 27, 2020, polling its 11,000 person membership, 69% of corporate real estate professionals said their company would take less real estate after spending time working from home. Another survey…Read More→

Nationwide Insurance said it will permanently exit most buildings outside its four main campuses and move those associates to permanent remote-working status. I wonder what will happen to those employees who live with small children, roommates, or don’t have adequate quiet working space…I’m also wondering how many other major office users are considering this same…Read More→

According to a recent Savills Research report, over the past several months since the shelter-in-place shutdown of office buildings there has been a 300% increase in office sublease availability, with over 3.7 million square feet of space currently available. “It is likely that sublease space will increase further – placing downward pressure on overall asking…Read More→

On April 24, 2020 CoStar News had projections by Abby Corbett, their senior economist. In a moderate downside forecast, 50 million square feet of retail space will shut down and it will take seven quarters to return. A less-optimistic forecast sees 128 million square feet of retail in the U.S going dark, taking four years…Read More→

Interesting survey results that 75% of office workers have occasionally worked from home but now with shelter in place almost everyone working full-time from home. 54% report no change in productivity, while 24% reported an increase in productivity. The home environments least effective are those with children and those with roommates. The kitchen is one…Read More→

the remainder plan to bring them back all at once. Staggered work hours, alternating shifts and other strategies to ensure social distancing. High risk employees may still be asked to work from home. Regarding estimated timing, 35% believe offices will open in May, 30% June or later, and 33% were not sure of the timing….Read More→

The other day I attended an excellent Zoom meeting and here are the highlights. A number of California counties are using e-recording while their offices are closed to the public. The original documents must be in the escrow officer hands while the documents for recording are transmitted electronically. Submissions are routinely kicked back if the…Read More→

Colliers just published a report where they believe there will be minimal impact on the office tenants and the office market. CBRE came out with another report that said it may take a year after the economy rebounds for the commercial real estate market to get back to normal. Globest.com had an interesting article where most…Read More→

According to a new McKinesey & Co report, the pandemic will force commercial real estate to make significant structural changes. Open office layout and densification trends may reverse, and there may be changes in building codes and regulations relating to how many square feet each employee is allotted. CRE companies may intensify a move toward…Read More→

Yesterday I was on a webinar with Larry Heard, CEO, and Chip Clarke, President and here are the highlights…the office industry will come out of this COVID-19 fine, but there will be a period of transition and adjustment. It won’t be business as usual. Working from home seemed to turn out fine for many of us, but…Read More→

Bisnow April 8, 2020 reports that 22.7 million of the 45.8 million total rental units are owned by mom-and-pop individual investors and many of these use their tenants rent to pay their property taxes and mortgages. If they don’t’ have Freddie or Fannie loans, without Federal assistance in mandating the lenders give owners some type…Read More→

First, it is important to keep in mind a win-win collaborative negotiation and at almost all costs to avoid litigation and the court system. Tenant asks for three months’ rent relief; Landlord compromises and accepts 50% rent for three months with no repayment. Tenant asks for three months’ rent relief; Landlord accepts 50% rent for…Read More→

Over the past week I have been on a number of commercial real estate podcasts and webinars, trying to learn what is happening and will happen to our commercial real estate market in the United States. Here are a few nuggets I have picked up. One international real estate company interviewed a number of their…Read More→

According to Bloomberg News April 1, 2020, WeWork is asking landlords to cuts its rent by 30%, in some cases offering revenue-sharing agreements. Early indications are landlords are reluctant. As of June 30, 2019, WeWork is on the hook for $47 billion in lease liabilities.

Greg Kraut, the co-founder and CEO of New York-based KPG Funds, in Commercial Observer April 2, 202, stated ‘The commercial mortgage-backed securities (CMBS) market has essentially collapsed and the broader $20 trillion commercial real estate market is on the verge of collapse as well. We still have time to prevent this catastrophic event, but we need…Read More→

The International WELL Building Institute is about to publish an updated health and wellness standards report on March 13, 2020, when the Coronavirus turned our world upside down. They are now working on a new set of standards including combating future pandemics in the workplace. The Well Building Standard addressed the health and wellness of…Read More→

Issue 239 Preface:   The world in just the past few weeks feels like it has turned upside down. I usually write this newsletter two to four weeks in advance so most of the material while still relevant seems a bit distant. The near total shutdown of California last week and hopefully by now the…Read More→

UCLA economists suggest that the uncertainty of the pandemic may lead to 10-20% reductions overall in the value of commercial real estate. My opinion is triple net investments with high credit tenants might escape this but retail strip centers, multi-tenant office buildings, free standing retail with less than stellar credit, and even the sought after…Read More→

California’s statewide “Shelter in Place” orders could shutdown 28 percent of the job market. It’s an astounding situation that has virtually no comparable precedent. We’re talking about 5 million jobs across 400,000 firms, a scenario that dwarfs the 2008-2009 recession when the state lost 1.1 million jobs over the course of 18 months. The corona…Read More→

Most of the county recording offices throughout California and perhaps the entire country are closed to the public. Some are working through digital sites, others have drop boxes where documents left are supposedly picked up daily but the overall impact on commercial property sale ABA financing has been severe. With city offices closed in many…Read More→

The world in just the past few weeks feels like it has turned upside down. The near total shutdown of California last week and hopefully by now the rest of the United States will have a staggering economic impact. With so many small businesses closed a number may never reopen. With brick and mortar retail…Read More→

With Twitter telling employees to work from home and Salesforce to tell it’s 50,000 employees to avoid non-essential travel is it too farfetched to think that someday soon there will be a low-cost effective and immediate screening test for the Coronavirus that office employees and visitors will have to pass in order to enter office…Read More→

Some of the ‘WeWork’ business models of collaborative office space are set up for very high density rations, even though it is seldom an issue of everyone showing up at work. However, if the workspaces are shared, and you don’t have a dedicated space as the coronavirus becomes more prevalent will there be issues with…Read More→

40 million square feet of new office construction during just the past 10 years in Silicon Valley. The unemployment rate is currently 2.2%, substantially below the national average. Apple, Google, Amazon and Facebook have accounted for a significant portion of the overall leasing. According to Lena Tutko, senior research director with Colliers, “We are not…Read More→

I was reading in Business Facilities Magazine January/February 2020 about Uber leasing 168,000 square feet in Dallas and expand into 450,000 square feet in three years when the second office tower is completed. I thought, darn, we lost another expansion that went to a lower cost area,  but then on the same day Google announced…Read More→

Unbelievable office market in Silicon Valley with over 10 million square feet of new office projects under construction with over 75% already preleased! Google is partially responsible for this leasing frenzy, taking millions of square feet of office product. In a sad comparison, over in the East Bay with the Tri-Valley and I-680 Corridor we…Read More→

Our office recently sold two commercial buildings in the city of Concord, California, located about 30 miles to the East of San Francisco out in the suburbs. One was a 180,000 square foot Class A office building with six stories of subterranean parking, and full-service rental rates in the $2.65/rsf range. Walking distance to Bart,…Read More→

Netflix’s new 13 story Los Angeles office building will have solar panels integrated into the building’s envelope to generate renewable energy. It will also feature 25,000 square feeet of communal outdoor space, a landing pad and mailroom for drones, and electric car charging stations.

Fifteen Fifty, a 40 story aparment house just being completed in San Francisco at the intersection of Van Ness and Mission, with 550-units and amenities including a dog washing station and 5,600 square foot dog park on the fifth floor, saw construction prices go up 45% since its conception six years ago. As a result,…Read More→

Published in the National Real Estate Investor January/February 2020, Jim Costello, SVP of Real Capital predicts industrial will continue growing at double digit rates, many investors and lenders will continue to hate retail, and suggests caution when taking on debt. ”There’s an ugliness of politics entering the investment process in the year ahead. We will…Read More→

75 percent of people also note that working in a more collaborative environment would make them happier

Penumbra, a global healthcare company, signed a 126,700 square foot 15-year lease at 1310 Harbor Bay Parkway in Alameda, and Exelixis did a deal for a 220,000 square foot expansion of its Alameda headquarters at 1951 Harbor bay Parkway.

California commercial real estate is expected to expand in 2022, according to the UCLA Anderson Forecast survey. The developers surveyed felt that 2020 would see a slight slowdown. The panelists were optimistic about industrial and multi-family, and in general pessimistic about retail. The only impediment to multi-family was the lack of qualified labor and resulting…Read More→

“declining oil prices hurting the Russian and Middle-Eastern zillionaires”

Concord Weapons Station Reuse Project City of Walnut Creek New Developments City of San Ramon Current Project List Colliers Retail Report Fall/Winter 2019 Colliers Oakland Office Report Q3 2019 Colliers Oakland Industrial Report Q3 2019 Colliers San Francisco – Peninsula Report Q3 2019 Colliers Pleasanton – Tri-Valley Industrial Report Q3 2019 Colliers Pleasanton – Tri-Valley…Read More→

“We’ve been debating for a couple of years about what impact the new FASB rules would have on our business,” says Adam Kaduce, SIOR, senior vice president at R&R Specialty Group n West Des Moines., Iowa. “Frankly, we’ve seen very little FASB-related influence on how people are looking at real estate. It’s more about talent-retention….Read More→

Bloomberg News Banks around the world are unveiling the biggest round of job cuts in four years as they slash costs to weather a slowing economy and adapt to digital technology. The 2019 cuts bring the total for the last six years to more than 425,000. In fact, the actual amount is probably higher because…Read More→

The verdict may still be out regarding open space plans and whether GenZ and Millennials truly value this concept, but there are other office aspects that do seem to find consensus. While an Inc.com writer recently called open-plan offices “the dumbest management fad of all time” (SUIR Report  Fall 2019), they welcome transparency and connectedness…Read More→

Major companies continue their expansion in the Bay Area, and for every firm that relocates out of the area there are plenty of companies ready to fill their space. Today AirBnB just announced it leased 301,000 square feet of office space 4301 and 4401 Great America Parkway in Santa Clara, as one recent example

Over 9,800 retail stores closed in 2019

There are office landlords out in the suburbs who are beginning to resist spending the humungous amounts of office tenant improvements some tenants are demanding, especially for five year lease terms, Tenant improvements that just five years ago may have come in at $25-35/rsf are now pricing at $50-60/rsf. With some of the suburban submarket…Read More→

Buildings Magazine November 2019 had an article on what amenities tenants should be investing in. Sodexo surveyed 3,593 employees around the world, and here are some of the results: For ‘Experience Enhancers’, Café or restaurant 71%; medical services/clinic: 66%; Car sharing or shuttle services: 62%; vending services: 61%. For ‘Experience Essentials’, Cleaning of the workplace:…Read More→

Just a few days ago I toured the almost-complete 30,000 square foot Industrious co-working facility under construction in Walnut Creek. It’s novel location is on the second floor of Broadway Plaza, one of the premier shopping centers in California, with offices looking out over the plaza and shops. With 112 private offices ranging from one…Read More→

“A search conducted in the US and UK shows the presence of surveillance cameras in urban settings caused a significant decrease in property crimes on the streets and in subway stations, and a decrease of 50 percent in parking lots.” Wired November 2019

December 1, 2019                                                                     Issue: 237 I am writing this at a Black Bear Diner in Vacaville, waiting for my daughter Madison to complete a refresher driver’s training course before she takes her driving test next week.  The place is packed, and in the Bay Area, many of the restaurants I’ve frequented have been similarly…Read More→

By 2040, the entire Bay Area is expected to add an additional 2.1 million people to the region, but building additional housing remains a tough sell.

CNBC today announced that WeWork lost $1.25 Billion in the third quarter on revenue of $934 million. Its occupancy decreased to 79% as the company added 115,000 desks. If there is just the slightest downturn in the US economy, companies that have flexible rental agreements in WeWork facilities may exacerbate their predicament.

Will the last one to leave please turn the lights off? Oh, I forgot, that is what PG&E has been doing…The San Francisco Business Times 11/8/2019 edition reported that we had 691,000 folks leave California last year and only 501,000 new people migrating into California. Folks coming in are from Washington, Texas, New York, Arizona…Read More→

Having been through a number of economic booms and then downturns I like to be alert to early warning signs of an impending office slow-down in one of the hottest office markets in the US, San Francisco. We don’t have to worry about a suburban slow-down as Contra Costa and the Tri-Valley never took off…Read More→

A new startup called MainStreet entices employees frustrated by the high costs of the Bay Area by paying them $10,000 to relocate to a less expensive locale like Salt Lake City or Sacramento, they keep their tech jobs and work remotely from A co-working location where 20 people from 7 or 8 different companies may…Read More→

“WeWork may have been pulled back from the edge of insolvency by its biggest investor, but many of its landlords are still preparing for a worst-case scenario…Multiple potential WeWork lease deals in New York City are said to be canceled or halted, and scores of possible deals in London are now in jeopardy as WeWork…Read More→

“We’ve been debating for a couple of years about what impact new FASB rules would have on our business,” says Adam Kaduce, SIOR, a Senior Vice President at R+R Realty Group in West Des Moines (office leasing business). “Frankly, we’ve seen very little FASB related influence on how people are looking at real estate. It’s…Read More→

What, haven’t you heard about the Bay Area’s outrageous cost of housing and California’s crazy high tax structure? You could expand anywhere in the United States, go where the average price of a decent home is $250,000 or less, which might be just the down payment in the Bay Area! Then again, if you were…Read More→

WeWork has 528 locations in 111 cities in 29 countries as of June 2019. Before its valuation collapsed from 48 billion to 20 billion during the past month, it had identified 280 additional cities as targets. In 2018 it lost 1.6 billion and the first six months of 2019 it lost $690 million. “Landlords have…Read More→

I recently attended a presentation on Cybersecurity and Smart Buildings, and I was blown away by the many potential benefits (and one major concern) in this emerging industry. The experts giving the presentation included executive David Colby from Schneider Electric SE (a $29B Fortune 500 multi-national manufacturer of HVAC and IoT hardware); a cybersecurity expert,…Read More→

I just attended the annual SIOR Conference in Portland (Society of Office and Industrial Realtors) an international group of 3,300 commercial brokers who have to take a lot of classes and document they are in the top few percent of the nation’s commercial real estate experts. I’ve been a member for 34 years and it…Read More→

“Facebook CEO Mark Zuckerberg said during a publicly broadcast Q & A with employees that his company is looking elsewhere for growth because of the Bay Area’s housing and traffic issues. The infrastructure here is really tapped. Housing prices are way up. Traffic is bad.” “Facebook’s largest locations outside of the Bay Area are Seattle,…Read More→

I was just mailed a marketing piece from the California Madera County, Economic Development Commission, and a few interesting facts: In 1990 California’s population was only 29,950,000 and now it is 39,927,000, a 10 million growth in less than 30 years! No wonder our housing hasn’t caught up. The average home price in 2018 in…Read More→

What was that old saying regarding killing the golden goose that laid the golden eggs? Sure you get one solid gold geese feast but that is it for a future supply of golden eggs! The San Francisco Planning Commission just okayed a plan to raise office fees by 143%! Fees would go from $69.90 per…Read More→

According to Asia Now: The China Edition, Matthew Asia’s 2019 report, among Chinese millennials 88% shop online more than once a week, there are 1 billion smartphone connections in China, 98.6% of internet users accessed the web via a mobile device, their middle class was 4% urban population in 2000 and in 2018 was up…Read More→

The biggest development in San Jose will be the 60+ acres of downtown properties Google has acquired, proposing 3-5,000 residential units, 5.5 million square feet of office space, 15 acres of open space and 500,000 square feet of retail, cultural, arts, hotel and other uses.

In National Real Estate Investor, July 12019, there was a report on the biggest flex office space markets in the country, with Regus and WeWork dominating.  Manhattan reported 13.5 million square feet with 30% annual growth, Los Angeles, 4.2 million with 15% annual growth, and in 6th place San Francisco with 2.8 million feet and…Read More→

Is the economic downturn on its way?  In the National Real Estate Investor, July, 2019 there were a number of different articles written by different authors but all pointing in the same direction for 2020 – down… Elaine Misonzhnik started it off on page 6, discussing industrial real estate “…while e-commerce growth will continue to…Read More→

In the San Francisco Bay Area, office tenant improvement costs have gone through the roof.  A few years ago, new carpeting and paint was $6-8/sf, now $12-15/sf.  Second generation space could be remodeled for $20-25/rsf just five years ago but now $50-60/rsf is required just to move a few walls, life-safety, Title 24 and minor…Read More→

All around the San Francisco Bay Area office vacancy rates are extremely low, except along the I-680 Corridor and the Tri-Valley, where vacancy rates are still double digits.  Tons of sublease space – do you want 200,000 square foot, Class A long-term leasehold remaining, for $30/rsf per annum with $150/rsf tenant improvements in place?  Call…Read More→

Again and again, companies that can choose to locate to regions where there is plenty of low-cost office and research space, and where the cost of a new house is ridiculously cheap (i.e. under $250,000 for a decent home in a decent neighborhood) companies still choose to locate in the Bay.  Autonomous vehicle firm Aurora…Read More→

Using sensors and the new software analytics are helping companies to cut their office space by 30% or more.  Microsoft used this and “this has meant significant financial savings and it could mean Microsoft can make further consolidations that save it tens of millions of dollars.”  Bisnow.com July 2019

According to a new 2019 National Office Absorption report just out by CoStar, net absorption is down 26% Midwest, 18% South, 9% in the West, but up 2% in the Northeast. No reasons for this given perhaps continued increases in productivity, corporate downsizing and offshoring/outsourcing?  Here in the Bay Area, especially San Francisco, companies are…Read More→

San Francisco may finally begin to run out of office space as there are more than 8.1 million square feet of office space being proposed, but with the office cap on new construction of 2.1 million square feet, there finally may be an exodus to the East Bay!  Along the I-680 and Tri-Valley we have…Read More→

Yes, the Bay Area has a severe housing shortage.  Here is an example of why: “Almost 400 projects in the city (San Francisco) comprising 36,909 units have been approved for over two years but haven’t started construction, according to the planning department.  Of those, 6,095 are affordable.  Developers point fingers directly at local impact fees…Read More→

Governor Gavin Newsom “recently criticized Tennessee, which is an increasingly popular destination for Bay Area businesses and residents.  “I see that we’re CEO magazines ‘worst place in America to do business’ and yet our GDP growth outperforms every one of those other states they highlight,” Newsome said, citing California’s strong economic growth averaging 3.8% in…Read More→

Commercial building rooftops – Meet The Jetsons!  Most of you may be too young to remember the cartoon show back in 1962/1963 where everyone was getting to places in their personal flying cars.  Now Uber Elevate is planning a flying car business to use rooftop skyports to pick up and drop off passengers.  With a…Read More→

If you are an office user evaluating different office buildings and want a quick way to see how the building is maintained, check out the restrooms and stairwells in smaller Class A and all sizes in Class B office buildings as this is where spider webs, dirty floors, and lack of dusting can show up. …Read More→

The first inside page of the May/June 2019 Business Facilities magazine was an ad for Michigan Economic, “The startup culture in Michigan is like no other.”  For sure, if you want very affordable housing, which according to Zillow, the median rent price is $850 and median home sales is $350,000.  Here in the overpriced and…Read More→

“LED’s are one of the fastest ways to reduce energy consumed by buildings…The study notes that adding networked lighting controls to LED installation boosts energy savings by an average of 47% beyond savings from LED’s alone.” Buildings June 2019

A recent article in the May 31, 2019 San Francisco Business Times reports that three years ago 34% of those surveyed said they may leave the Bay Area in a few years, the following year that figure increased to 46% and now 49% feel that way.  However, 74% said the Bay Area is a good…Read More→

Lisa Picard, CEO of EQ Office, describes co-working spaces as “the three F’s…fast, flexible and fun.”  WeWork has introduced WeLive, a co-living concept with existing facilities.  RISE by We, a gym and super-spa concept, and WeGrow, a kindergarten program for children ages two through five at $36,000 annually, per child. (Ouch!)  “New co-working operators tend…Read More→

In an article titled “Wealthy Millennials are leaving these states – and moving to these instead,” I had fully expected to see California at the top of the list of states folks were fleeing from, but was surprised!  Based on data provided by the IRS from the 2015 to 2016 tax year, a June 2019…Read More→

An avalanche of Bay Area IPO’s creating thousands of new millionaires, some now flush with cash seeking to buy homes, while Californians by the tens of thousands are selling their pricey ranchers and condos and fleeing to lower cost areas like Texas, Utah, Tennessee, and other more affordable places.  Even if a million folks left…Read More→

The San Francisco and San Jose office markets last year accounted for more than 22 million square feet of office leasing, which when compared to the East Bay are many times what we have experienced in Oakland, Walnut Creek, and the Tri-Valley regions.  San Francisco rents now average $92/rsf, while up and down the I-680…Read More→

In the last issue, December 2018, I stated that the commercial real estate market in most areas and product types has peaked. I’ve asked a number of commercial real estate brokers from all types of companies (being a SIOR member has value) and everyone has agreed. Yes, San Francisco, the Peninsula and Santa Clara will…Read More→

2019 Housing Market Forecast 18 Commercial Real Estate Trends To Dominate In 2019 Commercial Real Estate Outlook ULI Forecasts Strong Outlook for CRE Through 2020 N I-680 Corridor Office Q3 2018 N I-680 Corridor Industrial Q3 2018 Oakland Office Q3 2018 Oakland Industrial Q3 2018 East Bay Apartment Market Q3 2018 Northern California Retail Report…Read More→

First time since the Great Recession that I’ve heard multiple commercial real estate brokers broach the possibility of an upcoming real estate “crash”. In my opinion, crash is too harsh, but with rising interest rates, cap rates (price divided by net income) will also go up, resulting in property values going down. This won’t happen…Read More→

First time since the Great Recession that I’ve heard multiple commercial real estate brokers broach the possibility of an upcoming real estate “crash”. In my opinion, crash is too harsh, but with rising interest rates, cap rates (price divided by net income) will also go up, resulting in property values going down. A number of…Read More→

Commercial real estate financing experts report today’s 10-year financing at 4.75%, with expectations this will rise to 5.75% by this time next year.

The Internet of Things will become increasingly important in the operations of commercial buildings, keeping operating costs down, increasing building efficiencies, and improving employee satisfaction with their work environment. As one small example, if air conditioning repairs can be made before the unit breaks due to sensors and new technology, this can save money. If…Read More→

Google has plans to build 5,000 homes on its Mountain View property and 9,850 housing units at its future North Bayshore property … “Live, work, play and stay”. Bishop Ranch plans to build 478 apartments within its business park. Facebook plans to build 1,500 housing units at its Willow Campus in Menlo Park. (The Registry,…Read More→

In my opinion, over time there will be a greater rent spread between newer, smarter office buildings as compared with class B and C “dumber” buildings. There will be a number of reasons for this increasingly larger rent differential. Modern Class A office buildings with state of the art building systems can run much more…Read More→

Charles Dickens’ “A Tale of Two Cities” might be a good metaphor for the San Francisco Bay Area. In a crescent-shape going from San Francisco down the Peninsula into San Jose, there are millions and millions of square feet of new office buildings under construction, with San Francisco rents approaching $100/rsf per annum and tenant…Read More→