Today’s 1st quarter GDP report showing only 1.1% growth may be misleading (Ed Yardeni, a good economic forecaster, says it is an inventory-related number). The really ominous news of the day is this story from the Wall Street Journal:
Fire Sale: $300 Million San Francisco Office Tower, Mostly Empty. Open to Offers.
Before the pandemic, San Francisco’s California Street was home to some of the world’s most valuable commercial real estate. The corridor runs through the heart of the city’s financial district and is lined with offices for banks and other companies that help fuel the global tech economy.
One building, a 22-story glass and stone tower at 350 California Street, was worth around $300 million in 2019, according to office broker estimates.
That building now is for sale, with bids due soon. They are expected to come in at about $60 million, commercial real-estate brokers say. That’s an 80% decline in value in just four years.
It is temping to say that this is another sign of San Francisco’s terminal rot, but it may be a more widespread problem on account of this:
COVID has probably changed our office space needs for a long time. How will this affect the balance sheets of banks that have a lot of office tower loans on their books? Stay tuned. . .
Meanwhile, San Francisco’s current “poop map” doesn’t help the “please come back to work downtown” cause very much:
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