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Office vacancies in San Francisco jump to a record 33%
- deleted 4y ago[deleted]
- idoh 4y agoI’m surprised to see it that low. Downtown SF is pretty dead. As an introvert looking for some quiet time I head into the office with an open floor plan to not see people while I work.
- vkou 4y agoA 100-person office that has one introvert coming into it every day because they are looking for some quiet time is not considered 'vacant' by this statistic.
- Covzire 4y agoSo the per-desk vacancy, if such a thing were tracked, might be much higher than 33%?
- nemomarx 4y agoThe proper way to track it would be traffic in the commute hours and spending on lunches and so on during the work day, I suppose? Isn't that what cities are measuring and looking at with this return to office stuff?
- jacobr1 4y agoCorrect. Those lower-desk-utilization offices still have current leases.
- alchemist1e9 4y agohttps://www.kastle.com/safety-wellness/getting-america-back-to-work/ https://www.kastle.com/safety-wellness/getting-america-back-... Those statistics are probably closer to what you want.
- Animats 4y agoRight. 49% pre-pandemic occupancy, measured by the systems that check people in when they enter the building.
- alchemist1e9 4y ago43.2% specifically for San Francisco metro last week. I find the reports interesting and they change through time and for example the breakdown by day of the week.
- DeRock 4y agoI don't even think it would track it if 0 people were coming in, as long as the lease is still active. Commercial office leases tend to be on the longer end compared to residential (eg. 10-year is not uncommon).
- InCityDreams 4y ago>As an introvert looking for some quiet time I head into the office with an open floor plan to not see people ...maybe they see you coming?
- gumby 4y agoHow thoughtful of then to clear out for him!
- TMWNN 4y ago>I’m surprised to see it that low. Downtown SF is pretty dead. And yet there are people in denial. This /r/sanfrancisco post is unintentionally hilarious. <https://np.reddit.com/r/sanfrancisco/comments/11z2cz5/americas_most_abandoned_downtown/ https://np.reddit.com/r/sanfrancisco/comments/11z2cz5/americ...> I think they think that "People leaving SF" = "Trump wins", or something.
- Someone1234 4y ago- Too few homes/high costs: WFH improves it (both allowing people to live elsewhere AND improving supply). - ICE vehicles are contributing to poor air quality/climate change: WFH improves it (less commuting, lower traffic, etc) - Rural areas are losing population, suffering from poverty: WFH improves it (relatively affluent families can move there) - Suburban areas have poor walkability/local shopping/facilities: WFH improves it since people will spend more time there. The people who seem to be fighting this are corporations that hold commercial real-estate (and the media companies they run). Really just goes to show that most of their statements about the environment are just nonsense (looking at Apple in particular).
- SpaceManNabs 4y ago> this are corporations that hold commercial real-estate While the executives enjoy all the benefits of being remote :)
- bluefirebrand 4y agoYou wouldn't want them to have to actually be accountable for the things they say, would you?
- 0xfaded 4y agoTotal (not anecdotal individual's) productity: WFH does ??? I agree that WFH is positive in all the ways you mentioned. If all companies really believed it improved overall productivity we'd be there already.
- Someone1234 4y agoWe cannot reliably measure medium to long-term productivity with or without WFH. I find it a little galling though that the "Pro WFH" side needs to prove it, but the "Nay WFH" side doesn't simply because we've arbitrarily pinned that as normalcy. I've read studies that support both modalities, and based on comparing their methodology it seems very easy to construct them to show any conclusion you set out to show. I'd argue given the benefits I set out above (and others), a higher burden of proof should be asked for in-office, rather than just accept it as the De facto standard and setting the bar high to challenge it. If they both started on even footing WFH would win because the benefits are quantifiable, whereas in-office are anecdotal. PS - In the above I even forgot all the family benefits of WFH.
- jeffbee 4y agoAustin has similar all-time-high office vacancy rates but oddly there is not the constant drumbeat of doom regarding that city.
- paulddraper 4y agoI think Austin has 19% vacancy? https://therealdeal.com/texas/2023/04/10/austins-office-market-hit-record-vacancy/ https://therealdeal.com/texas/2023/04/10/austins-office-mark... In any case, Austin'w population is growing 2% annually. SF growth rate is essentially 0. Excess capacity is a problem if it stays excess capacity.
- jeffbee 4y agoThat's comparing various sources with undisclosed methods. I suggest apples-to-apples comparisons of the Cushman & Wakefield reports for the two cities. In their reports using comparable methodology SF is 24.8% and Austin is 23.1%.
- calr 4y agoI find commuting from the 24th and Mission to downtown via the BART very pleasant these days. Before COVID I would fight my way and barely squeeze in. Now I get a seat just about every time. I get off at Montgomery, so I am able to skip over the sketchier stops on Market (Civic center and Powell to some extent). There are still plenty of great cafes, coffeeshops, and bars open within walking distance of my office. Overall no complaints; I enjoy going into the office much more than before COVID.
- Aaronstotle 4y agoI'm in the same boat, I commute from East Bay and BART now has plenty of space in the morning and evening. Not empty, but not as full as it used to be, I also enjoy commuting because its the perfect place to read.
- htrp 4y agoYou will continue to enjoy your commute until everyone else is back in the office. Once that happens, you will hate it just as much.
- atleastoptimal 4y agoI'd wager at this point in the history of the West, the full "return to the office" back to pre-pandemic levels will never happen. We will look back at 2019 as the point at which we hit "peak toil", before the WFH movements and AI automation changed the structure of productivity forever.
- atleastoptimal 4y agoThat's the tragic thing about public services. They're much better when providing the same service at a volume far below profitability.
- sine_reality 4y agoi mean isnt this true for pretty much everything from a user's perspective?
- baggy_trough 4y agoRents down a percent. Don't think that's going to get 'er done.
- hnav 4y agoAs I understand there are debt-to-income ratios on commercial loans and those are calculated on the rent, so leasing to someone at a lower rent than you used to can bankrupt you since your lender will require you to come up with the cash to bring your ratio back into compliance. Basically like any other optimized system, real estate is not tolerant of transient conditions and it's not clear what's going to happen to commercial real estate. At least for CA housing, the state will prop it up through the junior loan program.
- rightbyte 4y agoOne of my friends is in real estate is complaining about this. His employer wont let him rent out their vacancies to market price since that would lower the nominal value of the estate. They rather have 0$ than what the market can bear as long as they wont have to lower rents.
- zug_zug 4y agoSounds like deliberate price fixing
- im3w1l 4y agoThis must have huge ramifications for the real estate sector, right? Can they service their loans with such vacancy rates?
- carrja99 4y agoYou know what’s nice? Realizing on Friday you cannot find your keys because you haven’t driven all week
- elforce002 4y agoThat's life right there. Enjoy it.
- jbigelow76 4y agoWon't somebody think of the shareholders!?
- throwbadubadu 4y agoKeys... hah easy, we have actually been searching our car in the 15-30 minute range.. trying to remember when and why we last drove it, and where we parked - and as I write that right now I cannot remember again where it is right now :/
- dgudkov 4y agoDitto. That's why I sold my car after starting WFH. It became annoying to occasionally try to remember if I collected my car from that parking lot 2 weeks ago.
- rufus_foreman 4y agoNot for me. I work from home but I will typically go for a drive after work just to get out of the house and because I love to drive. I mean I don't love to drive in west coast cities that are congested, but in most of the country you can drive at highway speeds on the highway, except for rush hour, which in those places lasts one hour and during which you can drive at highway speeds minus 10 mph.
- guidoism 4y agoHeh. I have experienced several times where my car didn’t start because the battery died due to too little use. Oops
- gumby 4y agoFrom the article rents aren't responding properly. I saw this also in the 2008 crisis: landlords would prefer to have a building empty (not just class A office, but retail space too) then rent for a lower amount. On the other hand, in SV we got a year's free rent, so we took enough space to fit our guess for what we'll need in 18 months. I imagine that will be reported as what rent we'll pay when we finally do start paying, without averaging in that year of no revenue.
- epistasis 4y agoReal estate has very very sticky prices when it comes to down markets, because those who hold real estate have every reason to believe that their speculation on ever-increasing prices will be well rewarded. San Francisco in particular has done everything it can to reward speculation and higher prices by opposing development, thereby greatly enriching those in real estate. Weathering one to two years of missed rent might be very well worth what they can get on the other side. In anti-development areas like San Francisco, the profits from real estate appreciation are one of the most important aspects of the financial side of the property, and rents often take a back seat.
- JumpCrisscross 4y ago> those who hold real estate have every reason to believe that their speculation on ever-increasing prices will be well rewarded They’re also leveraged. Renting at a lower rate threatens insolvency.
- epistasis 4y agoYes, though that's mostly with newer builds that are just starting to rent out. After a few years, rent appreciation in SF makes the initial mortgage requirements for renting moot, for the most part.
- JumpCrisscross 4y ago> rent appreciation in SF makes the initial mortgage requirements for renting moot Assuming they don’t refinance. Which a lot of them did when rates were low.
- mactavish88 4y agoHow hard would it be to transform all this commercial real estate into residential real estate?
- brewdad 4y agoFor modern buildings, it's probably cheaper to tear it down and rebuild. For buildings built before WWII, it sometimes pencils out.
- ghaff 4y agoThere was a recent discussion on HN about this https://www.nytimes.com/interactive/2023/03/11/upshot/office-conversions.html https://www.nytimes.com/interactive/2023/03/11/upshot/office... , but yes. Basically older buildings can work (though the conversions are still expensive and tend to assume luxury apartments) but it's a lot harder with newer skyscrapers.
- electrondood 4y agoI heard someone describe it as a plumbing issue in terms of turds-per-hour. Normally, your CRE is plumbed for 10 TPH. If you convert it into residences, then you're looking at 1000 TPH.
- danny_codes 4y agoPerhaps we can repurpose some of this real estate for housing/retail use. Perhaps having a jobs-to-housing ratio of 3.5 is not sustainable, who would have guessed. The fact is that SF has added way more jobs then housing for decades. IMO this is a great opportunity for SF to re-balance their jobs/housing situation. I have no doubt that SF and surrounding cities will act promptly to turn this into an overall win! \s
- jmartin2683 4y agoEveryone got murdered or tired of tripping over passed out junkies.