Will this be Ground Zero for the next financial crisis?

I hate to say it, but my current home town of San Francisco is looking like the trigger for a global financial crisis.

With people continuing to work from home, San Francisco's commercial real estate is struggling to survive - amidst this slump, the Union Bank Building at 350 California Street may well become a symbol of the city's post-pandemic property market woes. As originally reported by SF Standard, the building was valued at around $300 million just two years ago, but as it went on sale in 2020, the price dropped to approximately $250 million. With final offers reportedly coming in at a staggering $60 million, many commercial real estate brokers are left with a sinking feeling about not just the Financial Disctrict's future, but San Francisco's in general.

Locally the tech industry is shrinking as venture capitalists have finally decided that there is a limit to how many years they can fund a start-up.
Nationally, San Francisco is just one of the many major cities dealing with a post-pandemic changes.
This is only the most obvious example, because it goes far beyond that.

The city’s main public transport systems are collapsing under the weight of their own emptiness. The number of riders on the Bart system is around 40% of what it was before the pandemic, and only 30% for riders who exit in downtown San Francisco. Without a $5bn bailout, service cuts to some of the city’s transit lines could start as soon as this summer.

Once home to some of the most expensive and sought-after office space in the world, San Francisco today is suffering from one of the most hollowed-out downtowns in North America.

Along Market Street, the main thoroughfare, “office space available” and “for sale or lease” signs solicit new businesses. Office vacancy in the first quarter of 2023 ranged between 26.4% and 29.4%, depending on the tally. It’s a steep increase from the historic low vacancy rate of 4% in early 2020. Pinterest, Meta, Reddit, Salesforce, Slack, Uber and Twitter have all vacated or reduced their office space as remote or hybrid work has prevailed.

Right-wingers like to point to the rise of crime (which is mostly a fiction), and homelessness (which is a total fact, but not something new).

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3 users have voted.

That building business in Davenport seems suspicious to me. Easy way to unload property that can't justify renovation and have the insurance pay it and the renters off.

That florida collapse redux.

I think we are on the brink of a very serious crisis.

I saw in a thread about the homeless that Clinton and Feinstein were knee deep in reversing the HUD mandate from depression times. Not surprised.

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Her fine mind will come with an acceptable solution to the potential

crisis. /S

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Cassiodorus's picture

-- what happened was that firms were sticking with the illusion of office-work in actual offices as long as such firms were actually paying off leases on the office spaces. Once the leases ran out, everyone was asked to do office-work at home instead. Maybe a few firms still have good reasons to do office-work in actual physical offices, but they're a minority.

I was in San Francisco for a conference for three days in 2019. Clearly there are a few relics of culture still there, eking out a bare existence in places that are either rent-protected or were purchased before the real estate inflation that has been going on since 1981. But mostly San Francisco looked to me like another Hell of capital, and I can't imagine the intervening four years have been good to it.

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" Don't be in such a hurry to condemn a person because he doesn't do what you do, or think what you think. There was a time when you didn't know what you know today." - Malcolm X

The Liberal Moonbat's picture

Anyway, mind telling me WTF I'm looking at here?:
https://www.reddit.com/r/ClownWorld/comments/13w8ed6/san_francisco_ca_2023/

Also, do you agree with Elon Musk's appraisal that "the Woke mind-virus has turned San Francisco into a Zombie-Town"?
Is it really that bad?
Might he be stuck with an exaggerated perspective because all he'd be in contact with are the plutocrats and sycophants who created it as personal weapon/armor anyway?

Silicon Valley is my home...and the idea that it's become a cruel mockery of what it used to be, to the point I'd no longer be welcome there, is just beyond unfair.

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8 users have voted.

In the Land of the Blind, the One-Eyed Man is declared mentally ill for describing colors.

Yes Virginia, there is a Global Banking Conspiracy!

Cassiodorus's picture

@The Liberal Moonbat What happened was that Disney made some high-profile diversity hires (Kathleen Kennedy being the most famous) so that the Disney Corporation's monopoly on "family-friendly entertainment" would have a "woke" flavor to it. I suppose that at some point it appeared important to the super-rich of Disney that their rushed and over-priced corporate content have a flavor (some flavor being better than none at all). It's certainly true that the notions of diversity hiring and of corporate diversity have become common practice throughout the most agglomerated parts of the corporate world -- never mind, y'know, Vice-President Kamala Harris, the woke incarnation of Dan Quayle as the present-day Democratic Party version of Dan Quayle now runs for re-election. I thought I would mention that last part, as long as I was on the topic of complete and total flavorlessness. It all goes back to Cornelius Castoriadis' comment about the "complete atrophy of political imagination" characterizing our era.

At any rate, the resultant Hell in a Cell cultural pseudo-match between wokeness and anti-wokeness appears -- today -- as the newest spectacle of super-rich people who can afford to lose money. Anti-wokeness, for its part, funds the presidential election of the generally execrable Ron DeSantis as well as (as you've mentioned) the bloviating spectacle of Elon Musk. And, as for wokeness, why would anyone really bother with the money-losing products of woke-Lucasfilm when one can watch Critical Drinker to -- possibly -- regain that long lost feeling of being entertained?

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" Don't be in such a hurry to condemn a person because he doesn't do what you do, or think what you think. There was a time when you didn't know what you know today." - Malcolm X

The Liberal Moonbat's picture

@Cassiodorus Can anyone tell me what I'm even supposed to be seeing there???

I have to disagree about the "mind-virus"; I'd actually been using similar terminology to describe what I'd been seeing around me in some quarters BEFORE Post-2014 NewTruth. "Wokeism" may just be a preexisting mind-virus finally finding a hard-to-counter rationalization for its irrational urge to propagate, assimilate, scour, debase, and defile. Consider They Thought They Were Free (https://www.goodreads.com/book/show/978689.They_Thought_They_Were_Free) and the chapter therein, "We Think With Our Blood", which explains that Nazi ideology emerged after Nazi behavior and action.

Finally: What is "Critical Drinker"?

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In the Land of the Blind, the One-Eyed Man is declared mentally ill for describing colors.

Yes Virginia, there is a Global Banking Conspiracy!

Cassiodorus's picture

@The Liberal Moonbat of a YouTuber. Look up "Critical Drinker" on YouTube. I guess if you wanted to watch the same content without any of the humor you could watch any one of a zillion Mike Zeroh videos or of half a dozen other former fans.

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" Don't be in such a hurry to condemn a person because he doesn't do what you do, or think what you think. There was a time when you didn't know what you know today." - Malcolm X

@The Liberal Moonbat

Elon Musk's appraisal that "the Woke mind-virus has turned San Francisco into a Zombie-Town"?
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The Liberal Moonbat's picture

@gjohnsit Any idea what's happening in that clip???

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4 users have voted.

In the Land of the Blind, the One-Eyed Man is declared mentally ill for describing colors.

Yes Virginia, there is a Global Banking Conspiracy!

usefewersyllables's picture

@The Liberal Moonbat

the "Fentanyl frozen". There have been a number of videos here lately showing the usual street druggies in various curious stages of undress, often bent over at the waist, and completely passed out while somehow still semi-standing, after sampling some of the latest street hoohaw... I guess some of them have figured out that having your pants down around your knees keeps you from collapsing like a lawn chair, or something like that.

It's a fashion thing. Or something like it.

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Twice bitten, permanently shy.

The Liberal Moonbat's picture

@usefewersyllables
Wow, geez - and here I was hoping "Penguin-Pants" (as my mother called them) were one bad '000s idea we'd actually managed to slough off!

EDIT: *watches video* OH, how INCREDIBLY convenient! We finally turn a corner in ending the War On Drugs, a Hippie dream is finally realized (pyrrhic victory though it may be) and marijuana is legal, people are almost too comfortable with drug use, "head-shops" are freaking everywhere, then SUDDENLY a Doomsday-drug shows up out of nowhere and is polluting ALL the drugs...!

EDIT+: I kind of love how this almost makes the Mexican drug-cartels - the Mexican drug-cartels!!! - come off as good-guys...especially if you'll recall how El Chapo and his daughter nearly supplanted their government by actually stepping in to help people with their basic needs....

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4 users have voted.

In the Land of the Blind, the One-Eyed Man is declared mentally ill for describing colors.

Yes Virginia, there is a Global Banking Conspiracy!

so I cannot get past Moonbat's "plutocrats and sycophants" and Musk's "WOKE mind-virus" though I call it/them pseudo liberal class bigots. But to give my perspective:
When I started (in 1982) the taxi service had better response times than SFPD. There were 711 taxi permits and enough customers to support 711 taxis. Then in 1984 Diane Feinstein (who was angling for the vice presidency) and Paul Kirk (who supposedly had clout) had to wait 10 minutes for a taxi. Someone else, I don't even remember his name, was given the opportunity to be humiliated by Reagan. Thus began a war between "Feinswine" and SF's taxi drivers. By the time it was over SF had 1500 taxis, 500 customers (on a good day) and some very unhappy permit holders. Taxi drivers - even permit holders - were abandoning their cabs on the street. (a slight exaggeration, they legally parked before walking away)
This story was considered "common knowledge" in the early 80s (the city's newspapers told it as if it was the score of last night's game) BofA wanted to turn its office building into a cash cow by taking advantage of a loophole in Prop 13. The building was assessed at about 1/2 its market value, but if BofA sold the building for say, $300k the purchaser could petition for a reassessment, and the Feinstein administration was extremely generous. BofA would then rent their office space for less than their expenses had been, while the purchaser would make money from the lower taxes and rents of the excess offices. The sale was made for $600k. The purchaser asked the tax assessor for a reduction to $300k, She countered - $180k.
I think greed and corruption has finally come home, and SF deserves it.(but I'm biased)

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On to Biden since 1973

in the SF Bay Area, worked in the downtown SF financial district and south of Market, North Beach, and other parts of the city over the years, and my perspective is mainly about how the Bay Area has become a transition from working class to rich vs poor economy, especially with respect to housing costs.

The most jarring part of your essay for me is this:

Locally the tech industry is shrinking as venture capitalists have finally decided that there is a limit to how many years they can fund a start-up.

If venture capitalists are still funding start-ups, and if start-ups and their banks are still being bailed out when they fail, it confirms my longterm suspicion that the public is underwriting a joy ride that benefits no one but the riders.

The quality of life in the city, and in the Bay Area around it, has declined drastically while rich tech and rich commercial real estate interests keep lauding their wealth as if it were something based on ingenuity and risk-taking. But we cover for their risks.

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this disruption doesn't seem to have an upside for the capitalists. So, yeah a capitalist last resort, a bailout by the little people. Like the always rising stock market was a given for those 30 something traders, SF real estate prices would always be rising. The city always counting on revenue to keep growing.

This class war we're in, and capitalism weaponized against us, leaves us little to fight back with. Everything has been monetized. All I could think of was to stop, or buy as little of their shit as possible, buy used, do without. This real estate thing, if we could keep finding ways to disrupt the upward cash flow, we might have a chance.

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