Article By: Jim Porter – January 19, 2024
While the Bay Area suburban home values rise, and the housing inventory remains at record lows, the commercial office vacancy rate in the financial district of the city just topped 35% with 30 million square feet available for lease today.
My kid brother has been a Local-39 stationary engineer in the city for 30 years and my best friend since first grade, Steve Bauer, just retired this week from Otis Elevator after 40 years working in downtown San Francisco. These two guys have given me some insight from the inside of some of these buildings and what it’s like to work downtown today in the City by the Bay.
Steve told me about 45 Fremont St., a 600,000-square-foot, 34-story Shorenstein building in a prime downtown location. Shorenstein is a family-owned commercial real estate company with buildings all over the country, and Steve tells me they are a class act landlord.
I suggest you look at the 45 Fremont St. website to see this beautiful building and the recently remodeled lobby. This building has 170,000 square feet of vacant space available, which is better than the 35% citywide number, but according to Steve, the 430,000 square feet of leased space is pretty darn empty.
Steve says the building is practically a ghost town every day and the Proper Foods restaurant on the ground floor is only open from 8 a.m. to 2:30 p.m. Monday to Thursday and closed on Fridays because nobody goes to the office on Friday. The current tenants are paying the rent, but many cannot get their employees to come back to the office.
A common little joke at Otis and other union elevator shops is about how their business is “up and down,” which is what we say about residential and commercial real estate but, geez, the question New York and San Francisco brokers are asking lately is, “will downtown commercial office buildings ever come back UP?”
The good news for us up here in Solano and Yolo counties is that our home values continue to rise and unlike the rapidly growing commercial loan defaults, we have almost no home foreclosures pending and many of our neighbors that used to commute to the financial district in San Francisco are now working in their converted kitchen nook here in Fairfield and saving money on global warming fossil fuel.
Jim Porter, NMLS No. 276412, is the branch manager of Solano Mortgage, NMLS No. 1515497, a division of American Pacific Mortgage Corporation, NMLS No. 1850, licensed in California by the Department of Financial Protection and Innovation under the CRMLA / Equal Housing Opportunity. Jim can be reached at 707-449-4777.
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