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The potential deals would boost the economy and defy predictions that remote work will kill offices.

If signed, they would be among the largest in the Bay Area since the pandemic began, representing a return to the mega-expansions of the decade before the pandemic. Over the summer, Apple also leased around 700,000 square feet in Sunnyvale as it seeks to bring workers back to the office. Facebook, whose parent company was renamed Meta last week, leased space in Fremont just prior to the pandemic and has a major expansion planned in Menlo Park called Willow Village.

Facebook is looking for another 500,000 square feet in Seattle’s South Lake Union neighborhood, where Amazon is headquartered, Thomas said on an earnings call last week.

“We are always evaluating our facilities and real estate needs, but we don’t comment on rumors,” said Chloe Meyere, a Facebook spokesperson.

TikTok previously leased an office in Mountain View, according to CoStar, a real estate data firm. TikTok didn’t respond to repeated inquiries regarding its real estate plans.

Most Bay Area office workers continue to work from home, a drag on the region’s recovery of restaurant and retail spending, transit ridership and office leasing.

Boston Properties owns more than 51 million square feet of real estate across the U.S., including around 8 million square feet in the Bay Area. Only 18% of tenants have returned to Boston Properties’ Bay Area properties, the lowest percentage of any of its regions, Thomas said. New York is the highest at 52%.

“The urban downtown recovery in San Francisco continues to lag our other markets. Very few businesses have commenced their return to work, downtown streets remain quiet, much of the ground … remains closed and the city has had a very restrictive mask mandate,” Doug Linde, president of Boston Properties, said on the call. The city eased its mask mandate on Oct. 15.

Thomas said the combination of tech’s willingness to continue remote work and restrictive health orders have both delayed San Francisco’s recovery.

“COVID has had the biggest impact on San Francisco of all the markets where we operate. And I think a lot of that has been the technology tenants in some ways, leading the way on work from home and second, the very restrictive COVID mandates that have been put in place. And the lifting of those mandates has lagged all of our other cities, and that’s undoubtedly had an impact on the census data that I mentioned earlier,” Thomas said.

“That all being said, San Francisco remains arguably the technology capital of the world. It’s got the largest cluster of computer science workers certainly in the United States. And we believe in the long-term recovery of the San Francisco market, but I do think it will lag our other markets.”

Thomas said the company would also consider starting construction in 2022 or 2023 at its Fourth and Harrison development site in Central South of Market, which is on pause.

Linde said the company is still signing leases in San Francisco at top dollar.

“This quarter, we’ve completed over 100,000 square feet of leases, including (four) full-floor transactions in Embarcadero (Center). The average starting rent was just over $100 a square foot on those full-floor deals, a 21% increase over expiring rents,” he said. That’s a premium over the city’s average rents of $73 per square foot annually and among the highest rents in the country.

Another major landlord, Kilroy Realty, said the easing of San Francisco’s mask mandate will bring more workers back to offices.

“With relation to office occupancy, Austin is probably the leader in the country with almost 50% occupancy. San Francisco and San Jose are trailing other metro areas at roughly 20%. But those two markets are increasing fairly quickly, primarily because San Francisco relapsed its mask mandate on Oct. 15,” Robert Paratte, Kilroy executive vice president of leasing and business development, said on an earnings call last week. “San Francisco was more shut down, as I’ve said before, than any city in the country. It’s starting to open up.”

But Zillow’s collapse, and the almost-certain collapse of iBuying in general, came as no surprise to me. I sold my house to Redfin several months ago — and watched the company get clobbered trying to flip it.

It all went down in the spring when I was trying to sell my house in Los Angeles in preparation for a move to the Bay Area. At the time, my partner and I weren’t yet vaccinated against COVID, and we were not thrilled with the idea of showing the house prospective buyers and having them breathe all over our stuff.

That was when I saw an ad on Redfin that promised to “buy my home” sight unseen. Curious, I filled out a form on the site that asked me for photos and some basic details about my place. The very next day I got a call with an offer. And it had me ready to pop Champagne bottles. The number was significantly higher than a neighbor received for selling her place months before. And her place, if I’m being honest, was way nicer.

Redfin was going to take a 3% commission instead of the 5% I would have to pay to a normal agent. And I wouldn’t need to keep the place spotless for open houses or fix every little chip in paint.

“We aren’t emotional, like a typical buyer,” a Redfin agent assured me.

All I had to do was sign on the electronic dotted line.

It seemed too good be true — and despite my initial impulse to pop bottles, I woke up many a night over the next several weeks in a cold sweat over fears that I was being scammed. But I hired a real estate lawyer to coach me through the process and the sale went off smoothly.

Ever since, I’ve been fascinated to see what would happen. Would Redfin sell my old place for a fortune and make me look like a chump? Or would the convenience of the transaction prove to be worth it as Redfin made a marginal gain?

Never in my wildest dreams did I think I’d be the one to make a big tech company look like a sucker.

Redfin listed the place a few weeks after purchasing it from me for roughly the same price they bought it. And I watched and waited for a sale. And waited. And waited. And waited.

The house sat. Meanwhile, the price kept dropping.

It finally sold four months later. And Redfin ate a big loss. All told, the company bought the place from me for roughly 9% more than they were able to get on the open market. They also carried all the costs of fixing the place up and maintaining it while it sat.

I’m someone deeply skeptical of big tech players like Zillow and Redfin and their intentions. And I am certainly thrilled that I was able to get such a good deal for my house. And yet I feel no sense of schadenfreude over Zillow’s collapse.

The truth is that the traditional real estate industry is highly problematic. From blockbusting in the 1950s and ’60s, to helping to write racial segregation into California’s Constitution in 1964, to continued racial bias in the appraisal process, this is an industry that has always been and remains plagued by racism. Just this January, a Black couple in Marin City had their home lowballed by a white appraiser to the tune of nearly $500,000. These stories happen with such frequency that they feel less like outliers and more like standard operating procedure.

Race-blind algorithmic purchasing like Zillow was doing, in theory at least, could have helped eliminate some of the bias in the system. At the very least, Black homeowners might have stopped having to worry about hiding the art on their walls for fear of revealing their race and not getting a fair price for their homes.

There’s also the undeniable fact that iBuying offers an incredibly convenient service. Sometimes we need to move when we need to move. And we don’t have months to wait for a buyer with a preapproved bank loan to come along.

Then there’s the hefty 5-6% fee that traditional real estate agents charge for each sale. Cutting those fees, as happened in my case, has the potential to lower housing prices for everyone.

That’s not to say there weren’t dangers if iBuying had taken off. Instead of easing the excesses of an extractive and often racist industry, the rise of Zillow could just have easily created a big tech monopoly on real estate, further fueling the nationwide housing crises.

Instead, the tech industry’s adventures in iBuying were closer to the ill-fated attempts of MoviePass to let us watch all the movies we wanted in 2019 — a rare and fleeting handover of tech investor wealth directly into the waiting public’s hands.

Article source: https://www.sfchronicle.com/projects/2021/homeless-project-oakland/

If eventually approved and built, it would be one of the largest multi-family housing projects the Peninsula city has seen in decades, according to city planners. The district envisions five buildings ranging from four to 14 stories, plus retail, restaurants, parks and trails on the 22-acre Serramonte Del Rey campus, less than a mile away from the Serramonte shopping center. The campus currently holds the district’s offices, an adult and charter school, an apartment complex, a medical office and a garden.

The rental apartments — which would be built out over 10-15 years — would have 10% of units designated as affordable and the rest offered at market rates.

The project is meant to not only help the school district’s finances but to create housing in a region where it’s in desperately short supply. While several Bay Area districts, including San Francisco’s, have turned to their own land to build subsidized teacher housing, it’s less common for districts to leverage their real estate to work with outside developers on market-rate housing. Plans by the San Mateo Union High School District to sell 40 acres at the Crestmoor High School campus in San Bruno to a housing developer fell apart this year, although the district said it’s negotiating with another builder.

But while the Daly City project has widespread support among staff and families, not everyone is on board. A group of gardeners who grow fruits, vegetables and flowers on a two-acre plot that would be bulldozed and moved to make room for the housing are fighting the project. One Sierra Club chapter is pushing back against it, citing the garden and what it says is not enough affordable housing in the project.

Jefferson Union has turned to its real estate before to bring in needed revenue. Officials said they developed an apartment complex and a medical office building 30 years ago on an underused part of the same campus where they’re now looking to build more housing, which they described as “a sustainable source of income.”

The district, which has 4,236 students and 514 staff, has also been part of a growing movement among California school districts to provide affordable housing for teachers and other school employees. In 2018, it became one of the first in the U.S. to pass a bond measure to build teacher and staff housing. Construction on the 122-unit project — also at Serramonte Del Rey campus at 699 Serramonte Blvd. — is expected to be complete in the spring.

Jefferson Union officials say they receive less per pupil — about $15,600 in the 2019-2020 school year — than the county’s two other high school districts. Van Raaphorst said the new project would bring in money that would pay for student programs and help retain and recruit teachers.

“Our salaries are much lower than surrounding districts and we lose about 25% of our staff because of this each year,” she said in a statement.

School officials have not publicly provided an estimate of how much money the development is projected to generate, saying it would weaken their negotiating position with potential developers, who’d pay the district for a ground lease to use the site. However, Van Raaphorst said it would likely be “in the millions of dollars annually.”

Last month, the City Council was scheduled to discuss the project, but pushed back the item so district officials and a council sub-committee would have time talk to through potentially adding more affordable units and keeping the garden after several people shared their concerns during public comment.

During that meeting, many teachers and staff members called in, urging council members to pass the proposal.

Kristen Ashford, a district instructional coach, said at the meeting she sees staff leave every year because they can’t afford to live in the area, and turnover costs the district, which must hire and train new teachers.

“The most heartbreaking loss is that we lose staff trained in far more progressive and effective teacher training programs than even I was in 15 years ago.”

The local union that represents about 500 staff within the district also supports the project, said AFT 1481 President Monica Casey.

The staff turnover rate “is devastating to the needs of our students, especially those who are underserved, special education, foster youth, students learning English, low income and BIPOC,” Casey said in a statement.

The full City Council is expected to vote on the district’s preliminary plan at its Jan. 10 meeting. A final plan and environmental reviews would also need city council approval, but it’s not clear when that would happen.

The gardeners opposing the project hope they still have time to stop it. They argue that the two-acre site is a rare treasure to be preserved in a city with an urban canopy covering less than 5% of the land area.

Saving the garden “is more important than anything,” said Erick Campbell, who volunteers at the site that’s home to redwood and avocado trees and an assortment of fruit and vegetable plants. Signs on the fence read “Let’s stop the concrete jungle!” and “Save the garden.”

District officials argue that their plan would double the green space at the campus and relocate the garden, as well as improve access and infrastructure. The district says its plan will transform the garden with ADA-accessible pathways and sustainable water infrastructure. Renderings of the proposed development show a smaller garden with raised beds surrounded by some trees, a lawn and a children’s playground.

For Daly City resident Debbie Santiago, the garden has given her and her family a sense of peace. For the past 17 years, Santiago said, she and her mother have held small ceremonies at the garden when they’re unable to make it to Nevada where their Washoe tribe is from.

“It sits right in the middle of noisy streets and the buildings that are around there and people who live nearby, but once you step [into] this garden, all that noise goes away,” she said.

Santiago and other community members are circulating a petition on change.org urging district officials to leave the garden at its current location, as well as add more affordable housing to its proposed development.

One school board trustee, Nick Occhipinti, opposes the development and has criticized the district for wanting to lease public land to private developers.

Occhipinti told the City Council last month that the proposed development “not only does nothing to serve the low-income community in need of shelter and housing here in Daly City,” he said, “it only further impacts and reduces the limited space and opportunity for affordable housing in a community that desperately needs it.”

But for the majority of the district’s board, the plan still makes sense as a way to help students and teachers and fill a need for more housing.

“We know there’s no plan that’s going to make everybody happy,” said district Trustee Kalimah Salahuddin during a recent presentation to the City Council. “But at the same time we’ve tried to accommodate as many things as possible.”

The giant office landlord in San Francisco revealed on an earnings call last week that the parent company of Facebook and TikTok are looking for huge Bay Area office expansions.

Salesforce Tower and Embarcadero Center-owner Boston Properties’ CEO Owen Thomas said “Facebook is looking for 700,000 additional square feet. And ByteDance is searching for approximately 250,000 to 300,000 square feet” in Silicon Valley, as reported by San Francisco Chronicle. “These examples support our repeatedly stated position that tenants are committed to the office as their location of choice to collaborate, innovate and train, all critical for their long term success.”

The possible arrangements will help in the improvement of the economy and contradict the forecasts that the offices will die down due to remote work. The two companies will be the largest in the Bay Area since the COVID-19 outbreak if a deal will be reached.

Apple, as it anticipates the return of its employees to physical offices, has also leased around 700, 000 square feet in Sunnyvale over the summer. Meanwhile, Facebook’s parent company now named Meta has also leased some space in Fremont before the virus outbreak. It also plans a huge expansion named Willow Village in Menlo Park.

Thomas said Facebook is seeking the addition of 500,000 square feet in the South Lake Union neighborhood in Seattle.

“We are always evaluating our facilities and real estate needs but we don’t comment on rumors,” Facebook spokesperson Chloe Meyere said.

A real estate data group CoStar said that TikTok has recently secured a leasing space in Mountain View, but has not responded to questions related to real estate when asked.

A work-from-home arrangement is still adopted by most offices in the Bay Area, which impacted the economic growth of office leasing, as well as restaurant and retail spending in the region.

Around 8 million square feet of real estate in the Bay Area is owned by Boston Properties, as part of its more than 51 million square feet of property nationwide. Thomas said that 18 percent of tenants have reoccupied its properties in the Bay Area, far from the 52 percent recorded in New York.

“The urban downtown recovery in San Francisco continues to lag our other markets. Very few businesses have commenced their return to work, downtown streets remain quiet, much of the ground … remains closed and the city has had a very restrictive mask mandate,” Boston Properties president Doug Linde said in a phone conversation.

The delay of San Francisco’s recovery is blamed on the health restrictions and the eagerness of tech companies to retain its remote work.

“COVID has had the biggest impact on San Francisco of all the markets where we operate. And I think a lot of that has been the technology tenants in some ways, leading the way on work from home and second, the very restrictive COVID mandates that have been put in place. And the lifting of those mandates has lagged all of our other cities and that’s undoubtedly had an impact on the census data that I mentioned earlier,” Thomas said.

“That all being said, San Francisco remains arguably the technology capital of the world. It’s got the largest cluster of computer science workers certainly in the United States. And we believe in the long term recovery of the San Francisco market, but I do think it will lag our other markets.”

Article source: https://sftimes.com/wanted-huge-bay-area-office-expansions-for-facebook-tiktok/