Thursday, October 04, 2018

Peak Real Estate?

San Francisco Real Estate Item 1:
Booming SF hits new high for office rent, beating dot-com record
Rents for new offices in the city’s central business district reached $81.25 per square foot in the third quarter, according to brokerage Cushman & Wakefield. The previous record of $80.16 per square foot was recorded in the fourth quarter of 2000, as the previous tech boom was ending.
After the 2000 dot-com crash resulted in unplanned vacancies, and with a raft of new construction coming online, prime ("Class A") SF office space in 2001 could be had for about half today's rate.

San Francisco Real Estate Item 2:
New report finds overlooked earthquake vulnerabilities in some SF high-rises
Between 50 and 65 San Francisco high-rises used specific types of steel welds that were later found to fracture during the 1994 Northridge earthquake in Los Angeles.
I'm always in favor of more knowledge, but in this case I'm grateful that I didn't know that for 20 years I was working in a highrise that was in any danger--it survived the 1989 Loma Prieta quake just fine.

With office rents at all-time highs, with pending fixes that are going to cost beaucoup bucks, and with the Bay Area experiencing a mass exodus, it sure feels like we've reached peak real estate in this cycle.

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