Will this be Ground Zero for the next 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).