Salesforce Cancels Lease For New Tower

By John : thesfnews – excerpt

SAN FRANCISCO—Salesforce canceled their lease on its 325,000-square-foot at the Parcel F Tower that was planned to be built in the San Francisco’s Transbay District. In February, Salesforce adopted a permanent remote work policy due to the pandemic, allowing employees to work from home one to three days a week. Salesforce stated last month that the new policy would shape their real estate plans.

The news was first reported by the San Francisco Business Times on Monday, March 8 real estate developer Hines stated during a city hearing, the Salesforce lease for Parcel F, “…is no longer in hand.” The new tower was planned to be 61-stories of office space for Salesforce that is no longer needed under its new policies…(more)

Evidence Mounting of Market Solution to Housing

By Thomas D. Elias : californiafocus – excerpt

New evidence arrives almost every day backing the concept of a market-based solution to California’s housing shortage, one that does not have to involve politicians at all.

Of course, that offends politicos like San Francisco’s Democratic state Sen. Scott Wiener, who persists in the notion that high-density, high-rise apartments and condominiums are the answer.

In a sense, he’s right. For the market-based solution that’s fast taking shape does involve high rises and high density – just not in new buildings. Rather, housing will almost certainly occupy space now leased by insurance companies, law firms, venture capitalists, bank headquarters – almost every kind of white collar business… (more)

This what people have been been saying for a while. Re-purpose the existing properties.

Advocates say canceling rent, mortgage payments during pandemic more helpful than delay of payment

By Lisa Deaderick : sandiegouniontribune – excerpt

San Diego Rent Strike 2020 is one local organization advocating for the cancellation of rent and mortgage payments during the COVID-19 pandemic

While the moratoriums on evictions and foreclosures during the COVID-19 pandemic provided initial relief, the question of how to pay that back rent continues to hover. If the work environment we were once familiar with remains unsafe, and people can’t rely on the one-time stimulus check or unemployment benefits to cover all of their necessities, the likelihood that most people can afford to pay even one month of these delayed payments is pretty low.

One part of the response to the looming accumulation of this kind of debt has been to protest for the cancellation of rent and mortgage payments during the pandemic. Not a hold or suspension that requires the missed payments to be made later, but an outright cancellation of having to make those payments at all…(more)

J.P. Morgan Provides $600M CMBS Refi on San Fran Towers Leased to Uber

By Mack Burke : commercialobserver – excerpt

The two towers are leased to Uber and are part of a larger mixed-use site around the $1.4 billion Chase Center, the new arena of the NBA’s Golden State Warriors

A sponsorship group led by Uber and the NBA’s Golden State Warriors has secured $600 million in commercial mortgage-backed securities (CMBS) debt that was originated by J.P. Morgan Chase in order to refinance the new Chase Center Towers in San Francisco’s Mission Bay neighborhood, according to ratings agency analysis of the transaction…

The Golden State Warriors — under the ownership entity GSW Sports, led by the team’s majority owner, chairman and CEO Joe Lacob — and Uber Technologies each have 45 percent interests in the joint venture, while Pasadena, Calif.-based real estate investment trust Alexandria Real Estate Equities owns a tenth of the partnership. The group was formed in March 2018…. (more)

Looks like we were right about the business plans of tech companies. They were gathering cash to invest in real estate, planning to lay off workers as soon as they were no longer needed.

JPMorgan Chase, American Homes 4 Rent plan to build thousands of single-family rental homes

By Ben Lane : housingwire – excerpt

Joint venture will develop SFR properties in West and Southeast

One of the largest operators of single-family rental homes is partnering with one of the nation’s largest banks to build thousands of new rental homes.

J.P. Morgan Asset Management, the asset management arm of JPMorgan Chase and American Homes 4 Rent announced Thursday that they are establishing a joint venture that will seek to build approximately 2,500 single-family rentals in “multiple high-growth markets in the West and Southeast.”…

As for why the companies are partnering together now, amid a recession that’s crippled many homebuilders, the companies say the timing is actually ideal given the recent shifts in behavior and an increase in people’s desire to move away from more densely populated areas..

“This partnership provides us with the opportunity to capitalize on an increasing trend amongst city dwellers to seek additional space and the appeal of high-quality suburban living in a newly constructed community,” said Mike Kelly, Head of Real Estate Americas at J.P. Morgan Asset Management.

“We see this shift as particularly prevalent among the Millennial generation, the largest U.S. age cohort, who are looking to transition away from apartment living,” Kelly continued. “The move towards more spread-out living is also expected to accelerate in the wake of the COVID-19 pandemic, and we anticipate strong occupancy and rental growth rates across properties.”… (more)

A Backlash Against Cities Would Be Dangerous

By Scott Wiener, Anthony Iron : theatlantic – excerpt

Undue fears of urban density warp public policy—and make Americans more vulnerable.

Cities are a boon for public health—even now. As public-health experts have known for decades, people who live in a city are likely to walk and bike more often, and they live closer to community services such as grocery stores. Urban density also supports faster emergency-response times, better hospital staffing, and a greater concentration of intensive-care beds and other health-care resources.

In fact, no correlation exists between population density and rates of COVID-19 infection, according to recent studies examining the disease in China and Chicago. But if state and local governments still conclude that density itself is a problem, they are more likely to promote suburban sprawl as a matter of law—instead of making the accommodations, in their housing stock and their streetscapes, that allow people to live in cities safely and move about them comfortably…

One difference between New York City and San Francisco? The Bay Area responded to the pandemic earlier and more decisively than New York did, imposing social-distancing measures before major cities on the East Coast.…(more)

There is a difference between opposing cities and opposing unlimited growth in cities. The headline is misleading and the logic is missing. Senator Wiener aligns himself with the administration in Washington if he suggests we should return to business as usual. Most of his constituents disagree.

After being cooped up in tight quarters for weeks people are eager to get out. There was an exit from cities underway before the pandemic. Now the pace is picking up. Many workers have successfully transitioned to working at home and do not plan to return not the office. Employers are re-thinking their need for office space.

Cutting down on commuters does a better job of clearing the air than building dense transit-oriented housing and offices. The new normal will not be dense development. New health standards will require more space between people, throwing the crowding for profit principal  out. This will probably devalue property and reduce local taxes. Downsizing seems inevitable.

RELATED:

Gov. Andrew Cuomo of New York was blunt about the rationale behind this time of quarantine.

“There is a density level in NYC that is destructive,” he tweeted Sunday, after similar comments at one of his daily press briefings. He’d seen New Yorkers out in parks together, behaving as if this were a normal sunny spring weekend, and he was dismayed. Togetherness itself could now be deadly.

“It has to stop and it has to stop now,” he tweeted. “NYC must develop an immediate plan to reduce density.”… (more)

Veritas, San Francisco’s largest landlord with reported $3B in assets, received PPP ‘small business’ loan

By : missionlocal – excerpt

Veritas, the massive real estate company that owns more than 200 San Francisco properties and in recent years reported a value exceeding $3 billion, was the recipient of a Payroll Protection Program loan of the sort ostensibly earmarked for small businesses.

“We applied for and received a Payroll Protection Program loan, which we also communicated to the entire Veritas workforce,” the company said via a statement after Mission Local this morning phoned Veritas CEO Yang-Pat Au. “The PPP loan enables us to save the jobs of our front line employees, and is critical to our business operations and keeping these San Francisco workers employed.”… (more)

Now that Twitter employees can work at home forever, what’s to become of its headquarters?

By Brock Keeling : curbed – excerpt

The tech titan’s move into an Art Deco monolith in Mid-Market was supposed to be a symbol of change.

Jack Dorsey, Twitter CEO, emailed his employees Tuesday to tell them that they can work from home permanently, even after the pandemic’s shelter-in-place order ends.

“If our employees are in a role and situation that enables them to work from home and they want to continue to do so forever, we will make that happen,” a Twitter spokesperson said in a statement…

Under the lure of a tax break granted by the late Mayor Ed Lee, Twitter rented the building from Shorenstein Company. Amenities added inside the renovated digs include yoga rooms, a cafeteria serving artisan fare and microbrews, a rooftop deck for employees to soak in some vitamin D, and a garden.

The move, given much ink at the time, was supposed to kickstart a neighborhood-improvement trickle down effect, which wasn’t entirely successful. Restaurants boasting Michelin-starred pedigree, like Cadence and Alta, came and went in a matter of months. Open-air drug use and visible human suffering remains a problem. At best, Twitter’s presence sparked interest in the blighted area, helping nudge new housing in the neighborhood (see: Nema and Ava). At worst, the company’s Mid-Market takeover only magnified—without solving—the city’s glaring economic gap… (more)

 

Tech Workers Consider Escaping Silicon Valley’s Sky-High Rents

By Sarah Frier : bloomberg – excerpt

After major companies announce their employees won’t need to come in, many are recalculating the cost of living near the office…

Both Facebook and Google have announced that most people won’t need to come in this year, and Twitter Inc. has told some workers that if they wish to work from home permanently, they can. Employees are now considering the thousands of dollars they could save living somewhere else—maybe even permanently. Urban parents of young children suddenly find themselves coveting backyards and playrooms in larger homes that would be affordable on a tech salary pretty much anywhere except the Bay Area..

BOTTOM LINE – The pandemic is leading many tech employees to consider working from home permanently, so they can escape California’s sky-high rents for less expensive digs elsewhere….(more)

Fate of Small Businesses not looking good, Paycheck Protection Program not getting to intended recipients

Linked in editor via email : linkedin

Small businesses that make up the fabric of communities and daily life in every corner the U.S. are closing their doors forever after the pandemic and subsequent closures ground income to a halt. Despite multiple programs launched aimed at helping local firms survive, 100,000 have already shuttered, according to a recent study. The Paycheck Protection Program was supposed to keep micro businesses alive but reports soon emerged that corporations like Shake Shack and the LA Lakers received the loans and many are refusing to return the money. The program can be converted into a grant if certain conditions are met but those benchmarks continue to be altered, saddling owners with loans they can’t repay… (more)

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