These people play in a different financial scale… "Sixty Spear St. sold to Presidio Bay Ventures for $40.9 million, the company confirmed Thursday — about 66% less than its most recently assessed property value of $121 million. "
These people play in a different financial scale… "Sixty Spear St. sold to Presidio Bay Ventures for $40.9 million, the company confirmed Thursday — about 66% less than its most recently assessed property value of $121 million. "
SF real estate has been ridiculous for a long, long time. I’m guessing these companies selling for a loss will enable them to not pay their fair share of taxes for another decade or two.
I agree about the pricing, but it exists in its own insular world so I just compare apples.
I’m noting that many transactions and sales in that market are aimed at avoiding eventualities that pend in October.
Like not going ahead with building what would have been the 4th tallest builing in Frisco and selling the land because a loan is due in that month.
That’s a juicy morsel to drop merely because of market vagaries.
Then there are all the tech companies holding unbuilt real estate bags, e.g. Alphabet, who are trying to use one as employee housing.
The cost of the bay area real estate has led to many people living 1.5-2hr drive away and commuting in. 3-4 hrs per day commuting, 5 days a week. Most of the people I know that make that commute get up at 4am to avoid the worst of the traffic. All of them are exhausted from lack of sleep.
During covid companies discovered the shocking news that an employee that gets enough sleep and doesn’t have a long commute is more productive. Who would have thought it?
It’s made many companies rethink their office needs. Instead of seeing a high priced offices in an elite area as a benefit to promoting their business, they are seeing the costs to employee productivity.
The current estimate in SF for office buildings is around 31% vacancy and climbing. Before the pandemic it was around 4%. It doesn’t take a genius to see that owning a office building is no longer profitable. It will also remain unprofitable for the foreseeable future.
The new owners plan of remodeling to make nicer offices is hilariously stupid. They really should adjust to the new market by remodeling/rebuilding to residential spaces.
It will be interesting to see how this plays out over the next year since the grapevine believes that a lot of SV venture capital also has a large stake in SV real estate.