Office vacancy rate in San Francisco just hit a new high

[grepLeigh]

I'm in San Francisco and would love to see vacant offices converted into live/work housing.

The Clocktower lofts on Bryant & 2nd Street are a great example of live/work offices and condos for the luxury market. Let's do the mid-market next!

[tinalumfoil]

> The current asking price is $2,395,000. Our experienced agents can help you determine whether that is a fair amount for the property. What's more, we'll help you strategize and submit a smart offer that will get accepted based on current market conditions.

https://www.rubyhome.com/idx/461-2nd-street-san-francisco-ca...

The monthly HOA is $941 lol

[iancmceachern]

My building on SOMA did this. The owners were smart when they built it out and the apartments work well as offices or apartments. During the pandemic they pretty much went all residential. It's so efficient and smarter from the building owner perspective, you double your potential customer base.

[MarkMarine]

What do you think makes live/work housing more desirable than just live? I haven’t seen live work spaces and I’m not sure what the allure would be.

I used to be in the city, in essentially a shoe box that cost 5k a month, but with a fancy gym and common area. I moved to Marin during COVID and while I miss the food and walking distance/public transit activities I could do, I don’t think I can go back to the extremely small for the money living area. I’m hopeful a glut of new housing, hopefully spacious, will change that calculus.

[MontyCarloHall]

Not all office space is amenable to residential conversion, since the floor area to exterior wall ratio is often much too high for an apartment building (windowless offices are fine, windowless living rooms, not so much).

An office/apartment hybrid might work. I could imagine dividing the building, with offices in the inner core and apartments surrounding the core. The core and surrounding apartments would be totally separated, with separate lobbies and elevators. Although the offices would be totally windowless hellscapes, at least the apartments would have lots of light.

[m0llusk]

Clocktower lofts are also very unlike currently vacant offices. Old industrial buildings had large open spaces that turned out to be easy to reconfigure. Most empty buildings now are more like 100 Van Ness which stayed empty for many years until its value dropped to a fraction of what it had been. And that conversion was still expensive enough to be risky and force offerings to the high end to make the math work out. This is going to be a rough ride.

[AdrianB1]

One can only dream, but mid-market price expectations cannot be met. Just read in the article the price for the space, it is huge.

[29athrowaway]

Welcome to the fantastic world of zoning.

The answer is no. Why? because the city collects more taxes from commercial zoned stuff.

[jovial_cavalier]

Your city needs homes for people who work at McDonald's. Not more luxury apartments.

[jeffbee]

None of this office space is suitable for habitation.

[RichardCNormos]

Absolutely. Low-income housing is the perfect use for all this extra office space. San Francisco has a problem where the low-income people who work to serve high-income people can't afford to live in the city that they work in.

Converting office space into affordable housing is a win for everyone, except the landlords, but I won't shed a tear for them ;-)

[tb_technical]

Why would people go work in an office, when you can just work from home? Can't put the genie back in the bottle.

[themitigating]

Socializing with others

A situation at home that is distracting

The need for changing location for mental delimination of work

[rossdavidh]

I've done both, and I have been working from home for the last four years, but I don't think it's that clear cut. Another way to put it: "why use part of your home for work space, and pay for your worktime utilities, when your employer should pay for that?"

[pkulak]

If your commute doesn't suck, it's not bad to go into the office. I feel like offices are getting a bad rap here, when it's not really about them.

[nikanj]

Theoretically: because the office is optimized for productivity, whereas the home is optimized for comfort

Alas, most offices are optimized for 1) cost-per-person 2) modern looks and an open concept

My home is much better for working than my workplace is

[colinmhayes]

Work from home is bad for my mental health and growth.

[iancmceachern]

Anecdotally the city seems the most alive since the pandemic,things are mostly back in full swing.

[alephnerd]

+1 on this. I live around FiDi and I've been bumping into way more people on my morning and evening jogs that I have in the past 1.5 years. Most of the city has appeared to begun to return to a post-Covid normal of around 60% capacity (which also fits in line with RTO).

[mrfox321]

Visited SF recently. Did things always close early?

[Hippocrates]

The idea, and economics, of converting office space to housing is fascinating to me. Once you think about it for more than a moment you realize there are some major difficulties. A modern office high rise, for example, may have windows only on the outer edge of a vast floor plan. There may be one or two large bathrooms per floor, with no plumbing or even walls to contain plumbing anywhere else. The HVAC may be zoned per-floor. Gas and electric is not metered separately.

So depending on the building it could be a huge cost to turn into livable residences, much less desirable ones that would offset the expense.

Not to say it can’t be done but it seems really hard.

[SSJPython]

I don't understand why working in an office isn't optional for certain jobs. If you want to go to the office, go in. If you want to work remote, then work remote. Why should either remote, hybrid, or on-site become a top-down policy imposed on all employees?

[kaycebasques]

If anyone has a 5- or 10-year forecast on SF (i.e. general state of SF in 5 or 10 years) I would love to hear it

[xnx]

Location, location, location. Being a dysfunctional city is a small factor compared to the climate and nearby natural beauty. There is no shortage of people who would live there if they could afford it.

[foolfoolz]

i think big cities will always attract people. companies will do more to bring people back over time. the bay area will not be a leader in this space.

i don’t think anyone doubts that when the commute is reasonable and office perks good it’s better to be in an office. mostly for social reasons. sf had some of the longer commutes in the country

some other better connected metro area will grow bigger and more successful and then things will have a forcing function to make it less painful to go into the office

[nostromo]

Several US cities are in for a world of hurt now that there are no more trillion dollar COVID stimulus bills on the horizon and the cost of servicing debt has gone up very quickly. And yet they seem blissfully unaware.

[mbgerring]

It would be great if all the giant warehouse spaces that got converted to “creative office space” could be put back to work as PDR space. You don’t need 20ft ceilings and 3-phase power to make CRUD apps for HR management or whatever

[ciguy]

The city seems to be at it's most lively since covid, but the offices are still empty. Before covid SF actively did it's best to antagonize the companies who's tax revenue it relied on. Now that they've taken their ball to play elsewhere, I don't see what the city is going to do for revenue.

I work in the financial district and the number of empty spaces that used to house cafes and restaurants is shocking. Unless they manage to pivot that office space to housing (Very difficult for multiple structural reasons), the downtown of SF is going to continue to look like Zombieland.

[abeppu]

> Before covid SF actively did it's best to antagonize the companies who's tax revenue it relied on.

I think that's a misleading characterization. The city notoriously gave tax breaks to large tech companies, accompanied by some weak rhetoric about supporting local communities, but with weak or no oversight confirming any real local benefits.

I also think it's important to distinguish between _office space_ and _retail space_. Retail and restaurant spaces will also struggle to get filled if neighborhood office workers are getting catered in-office lunch, getting delivery from ghost kitchens, and buying goods from amazon etc. I.e. the way we live and work increasingly supports the Zombieland street-level experience.

[scotuswroteus]

What if I told you the manhattanization of downtown was never the dream of local San Franciscans and only a fleeting goal of elite-funded politicians who used job growth during their tenures as pols here to argue that they should be elected or appointed to state-level leadership? What if San Francisco got that Zombieland back, because to many San Franciscans, even a bustling business sector full of people wearing tech fleeces WAS a Zombieland?

[yrgulation]

Wish this was happening in london uk, and ideally that space converted into housing. The less people having to commute to on site farms the better for the environment.

[dicomdan]

Elect a socialist anti-business mayor and your wish will be granted.

[shaburn]

San Francisco wants keep its completely asinine regulatory cake and eat its wishful thinking cost of living too. Reality will win on one side or the other.

[dukeofdoom]

Being around other people in offices is becoming less and less appealing to many, respiratory viruses is a major downside.

[alfor]

How is it in Austin? Is it possible that the exodus from California explain more than the pandemic and WFH

[kjkjadksj]

The exodus is overstated. Research has shown its actually a brain drain from texas while texas receives low skilled labor.

https://www.latimes.com/opinion/story/2022-10-17/california-...

[rossdavidh]

Lots of messed up things with Austin real estate, but office spaces are not this empty. In fact I have heard that it is one of the less empty metro areas right now, in terms of office space. There also seems to be a lot of traffic downtown, which is annoying but means someone must be working/living there.

But again, lots of messed up things in the real estate market of Austin generally; the residential market has essentially frozen up, with sellers unwilling to admit how much things have dropped, and the buyers unwilling to pay for houses they know aren't going to be worth that much in a year's time or less.

[_fat_santa]

Just took a cursory look at SF rents and looks like they have come down quite a bit since 2019. Seeing a ton of studios for around 1700 with 1bd's at 2300, that's a-lot don't get me wrong but IIRC a studio was 2300 in 2019.

[yojo]

My 1 bedroom in Cole Valley was $3,500 when I left it in 2019. It was big (800sq ft) and had parking, but should give you a comp point.

[SCUSKU]

I had a friend in North Beach who rented a 1BR for 1900 and was 2700 before the pandemic

[laweijfmvo]

Although the article seems to suggest that while office vacancies are double the historical average, prices have only fallen 10% from the highs in 2020. Seems like the market hasn't accepted the shift yet.

[hirundo]

Which means that around 4.8 million square feet are now available for modification into desperately needed residential space, if only the city would permit it.

[turtlebits]

I wish it was a solution to housing, but it's going to be very expensive to try to retrofit the additional plumbing, HVAC and electricity load for residential space. It's also expensive to keep a building open, so I can imagine you'll need a high occupancy percentage to also make it work.

[cycrutchfield]

Who pays for that?

[gumby]

Come on SF, embrace commercial to residential conversion already!

[friedman23]

This will be a disaster for city tax revenues.

[dicomdan]

Dems will keep Congress and bail them out again, at the expense of hitting lower and middle income Americans with higher inflation.