This is just so relentless: “We’re not going back to the way things were.”
By Wolf Richter for WOLF STREET.
This is just so relentless. Salesforce, the largest employer in San Francisco, and an anchor tenant in the 1.4 million square-foot Salesforce Tower, the tallest building west of the Mississippi – owned by Boston Properties, the largest office landlord in San Francisco – announced today in a blogpost, that it would switch to a hybrid “work-from-anywhere” model going forward.
“We’re not going back to the way things were,” president and chief people officer Brent Hyder told the Wall Street Journal. “I don’t believe that we’ll keep every space in every city that we’re in, including San Francisco.”
In the blogpost, he wrote: “An immersive workspace is no longer limited to a desk in our Towers; the 9-to-5 workday is dead; and the employee experience is about more than ping-pong tables and snacks.”
After the Pandemic, employees would fall into three categories. About 65% of the workforce would be “flex”; they’ll be “in the office 1-3 days per week for team collaboration, customer meetings, and presentations.” The rest of the time, they’d work from home. Another group would be “fully remote,” working from anywhere. And the “smallest population of our workforce” would be “office based,” and work 4-5 days per week in an office location “if they’re in roles that require it.”
A lot less office space would be needed to accommodate these people. The layout of the offices that remain will be changed dramatically into “community hubs to accommodate a more hybrid workstyle. Gone are the days of a sea of desks,” Hyder wrote. He already moved out of San Francisco to Southern California last year.
So this was the latest announcement to knock the wind out of the San Francisco office market, and more broadly, out of San Francisco’s economy.
Vacant space on the market has already exploded to an all-time high, blowing by the prior records set during the Financial Crisis and the Dotcom Bust, to 13.9 million square feet, according to Cushman & Wakefield. Sublease space – companies putting their now unneeded office space on the market – accounted for over half of the total vacant office space and has become a pandemic in its own right.
Also today, there’s Uber. The San Francisco Business Times reported, based on two sources familiar with the offering, that Uber has been “softly” marketing up to 300,000 square feet of its new 1 million square foot campus in San Francisco’s Mission Bay. The space has not been officially listed yet.
Yesterday, Old Navy, whose brands account for over half of Gap’s total revenues, announced in an email, reported by the San Francisco Chronicle, that it would shut down its Mission Bay headquarters and move into Gap’s headquarters, spread over two company-owned buildings by the Embarcadero in San Francisco. Gap had planned to spin off Old Navy but scuttled that plan in January last year.
Last week, Yelp said, “With more employees working remotely we’re reducing some of our footprint in San Francisco, but we will still maintain our HQ office there,” after it came out that it has apparently not renewed the lease for its headquarters, 161,900 square feet, covering 14 of the 26 floors at the iconic Art Deco office tower at 140 New Montgomery St. The lease for 13 of the floors expires in October. The lease for the 14th floor expires in May next year. The entire office space has been listed as available, the San Francisco Business Times reported.
A Yelp spokesperson told the Business Times that the company would operate with “a significant portion of our team working remotely on a full-time basis, or for part of the week.”
“This enables us to reduce our real estate footprint and expand our presence in lower cost markets across the United States, Canada and Europe,” the spokesperson said. “We plan to continue to maintain our presence in the locations where we currently have offices, including our headquarters in San Francisco.” So its headquarters, whatever will be left over, will still be in San Francisco.
In January, Oracle put four of the five floors it leases in the 21-story tower at 475 Sansome Street in San Francisco on the sublease market. In December it had announced that it would move its headquarters from Redwood City in Silicon Valley to its campus in Austin, Texas. And it put its 17-story office tower in San Jose up for sale.
In January, Dropbox cut 11% of its workforce, citing the shift to work from anywhere. While it would maintain its headquarters in San Francisco, it put about 472,000 square feet of its new 750,000-square-foot Mission Bay headquarters building on the sublease market in November. Cofounder and CEO Drew Houston purchased a home in Austin, TX, for his full-time residence.
On January 1, Charles Schwab moved its headquarters from San Francisco to its campus in Westlake, a suburb north of Dallas. The shift was announced in late 2019, but the company has been trimming its workforce in San Francisco for years, and continues to trim it.
Twitter has put 104,850 square feet of office space that is attached to its headquarters building on the sublease market last September. Glassdoor put about half of its just leased headquarters of 117,000 square feet on the sublease market. In August, Pinterest paid $89.5 million to abandon a lease for 490,000 square feet of office space that hasn’t been built yet.
Macy’s shut down its entire tech center in San Francisco – the headquarters of macys.com, Product and Digital Revenue, and Technology – and transferred the activities to existing offices in Atlanta and New York City. This was announced just before the Pandemic in early February 2020. The 1,080 employees and contract workers were laid off.
These are just some of the biggest names that are engaging in massive footprint reductions in San Francisco, or have moved their headquarters to other places entirely. Nearly every day, more names are added to the list, many of them smaller companies.
So when all this office space gets dumped on the sublease market, the question arises: lease to who? There will be some churn, with companies upgrading to nicer digs for less money, which pushes the vacancies down the scale.
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Hopefully, all of the holders of CMBS will be bailed out. It’s ridiculous that anyone should have to take a loss on any investment.
Please don’t give the FED any more idea!
The Fed has plenty of ideas of how to enrich their oligarchic friends/banker buddies at the expense of the rest of us.
Their job has never been anything but that.
Over and over and ……
The Federal Government, through Fannie, Freddie and the FHA, are already the second largest holders of CMBS. Commerical banks and insurance companies own over 50% of the more than $3.5 trillion in CMBS.
Believe or not, the amount of CMBS has been growing rapidly in recent years, with multifamily housing accounting for a large percentage of the gain. New apartment buildings seem to be popping up everywhere. With what looks like a lot of overbuilding in the multifamily market, one has to wonder when the GSEs will cut cut off the borrowers. Even a bartender knows when cut off a drunk.
Be aware and investigate just who owns what of those buildings that are being erected on US soil. Presently Indondesia which is the most progressive of the Islamic nations, owns a nice number of regional development projects that are being built especially in the West. As more non-US or minimally owned US conglomerates own MORE and MORE of EVERYTHING on US soil. And, as more and more of US citizens are pushed and consolidated into specific regional residential zones of varying demographic classifiers, just what do you think is going to happen to a grander scale to the US political institutions and society???
At this point, I just want America to collapse soon so I can help rebuild while I’m still young.
This. It’s not gonna happen though. You are young, other people are old and it’s the older guys that hold all the power and money.
The book The Decline and Fall of the Roman Empire was a pretty thick book, if I recall correctly. But we do things digitally now.
Monkey, what makes you think they can keep this going for more than a few more years?
I think they can keep it up for decades, not years.
1. Dumb population.
2. 1984. “The past was alterable. The past never had been altered. Oceania was at war with Eastasia. Oceania had always been at war with Eastasia.”
“What makes U thing they can keep this going for more than a few years”
That’s it .. how long can they keep this going & is there a point of no return & what then ??
We have entered a new era of mans existence on planet earth driven by Technology & Conservation ..
Here I don’t mean climate change & global warming ..
I mean that the earth is poisoned with pesticide’s .. mankind is saturated with toxins .. I can’t eat bread anymore & I have listened to the “its the wheat” explanation & I don’t buy it.
So .. what kind of an existence will tomorrow be ??
I can’t see us in dog pens .. they might try to decrease the worlds population & herd us all into holding pens .. but it aint gunna be easy guys.
RightNYer
So what’s your example of the “new, improved America”?
Why do you think you will be selected to “rebuild”?
Just curious…
There won’t be any “selection.” It’ll be based on who has the skills and drive.
To answer your question, my idea of the rebuilt America would be closer to what America was in the 1910s, but with modern day technology.
RightNYer
OK.
so hugely impoverished blacks and overall life expectancy of 50 years.
YOU DA MAN!
The 1910s weren’t exactly a good time either. Sweatshops were rampant during that time. Heck, the whole exploitation of immigrants and the harsh conditions they lived in inspired Upton Sinclair to write the Jungle.
Also not sure how technology will improve human nature. Skynet will destroy human beings NOT because Skynet is by nature evil, but because most if not all problems are human problems and when told to solve all human problems permanently, it’s logical for Skynet to simply remove all human beings. No humans -> No problems!!
Be careful what you wish for.
The 1910s certainly weren’t perfect for anyone, but you could still speak your mind without “cancel” culture, criminals were punished very harshly, no one made excuses for improvidence and sloth, the mentally ill were forcibly locked up where they couldn’t harm everyone else, people believed in the limits set by the Constitution, and so forth.
RihtNYer
“…cancel culture didn’t exist…”
Guess yo missed the day in school when they taught about the KKK.
Bailed out on the taxpayers’ dime? Why is it ridiculous for anyone to lose an investment? Is there an unwritten law investments must only succeed?? Investments are a gamble… don’t play if you can’t lose.
The use of sarcasm confounds some people. Just say’in.
I think he was joking dude.
I was being sarcastic.
Not the taxpayer’s dime.
On the back of the holders of dollars….for they will print.
and to the other point..
Capitalism without bankruptcy is like Religion without He!!.
And apparently Powell in the new Pope.
I like James Grant’s paraphrased statement. ” Why doesn’t the Fed understand that corrections are supposed to correct?”
Hey, maybe those dispersed PNW CHASians could relocate southways, and CHOP those properties down to size … filling any open spaces with sheet-cardboard gardens, whilst applying some trendy graffiti to enhance their new paradise ..
Fixer downers …
Not on the taxpayer dime, but in the past decades, the Greenspan/Bernanke era an on, most who took a dumb gamble were consistently rewarded. On the back of banker’s profits, I must add.
Collateral winners, you could say.
The math savvy, the prudent, are the dummies. They just couldn’t follow the herd.
And so, here we are, waiting for the balloon to meet the pin.
It’s illegal and immoral for billionaires to lose money.
Thats right, they need this money more than poor people who have ruined this beautiful country!
Like the sarc but seriously, it would be interesting to rough estimate the total loss in value of US commercial real estate, or maybe just office RE. It might exceed the amount of Fed stimulus, meaning there is net deflation.
Those buildings should be converted to housing, that’s the type of real estate capitalism has not been able to properly allocate for decades now, not only due to NIMBYsm.
I was looking for the /sarc…
Bueller? Bueller?
Tall office towers were a phallic display between nations of who could build the tallest, with pools on the 24th floor, decorated in light show to drill home the fact that the owner has the most splendiid wealth in all the world. This aspect of the male human ego is aged and exiting. The nurturing caring for all aspect of the female (fe – of and male) hunan ego is expanding as the Aquarian age of telepathic thpught wave awareness is in the onset. Tower fire risk will be managed by drones with hoses however these tower landscapes will be seen by the wealthy not as a bolt hole real estate investment but as the slums. Conversion from office to apartments will create government controlled and 247 surveillance accommodation for migrants to fulfill the agenda of mixing all races of mankind to interbreed and weaken patriotic gene pools while providing opportunistic access to edit human genes to our most vulnerable of society. There is a possible timeline available where countries amass to overthrow the few corrupted leaders and on this timeline the offices are covered with a vine like plant which changes external tower to a jungle of plants for food due to the angular sun rays increased potential to speed plant growth.
Observation that now we see what the corporate leaders discuss in their global corporate meet ups which are not transparent. They gang up with their wealth in tow to impose agenda on the masses without consensus consultation and honesty. I for one see this small group of people with disdain. May human psyche awaken and have the balls despite all their manipulation to reduce agression in human dna to fight for a world that is harmonic to all
A mommy state…
Bring on the mommy! Where’s my mommy?
Be nice boys and play fair. Be kind!
Your verbal imagery is rather interesting. What is most significant is the fact in the transition to societies that mirror the Islamic construct of social existence, there is the present immediate destruction of US institutions, and especially any rights as a human being. Having non-enforceable rights on paper is meaningless in the real world. Presently, words on paper and words on the internet are becoming more and more meaningless, as power of the social construct of feudalism, and only dictatorial power of a few is re-established faster than a speeding “BIT”.
I’m also going to add a bit about futuristic thinking. The Chinese plan for the long-term, not the short-term. There are a whole lot of relatively historically new apartment buildings that have been built in China with different themes of different European peoples. Ever wonder why?
Someone said Americans print money and China prints apartment buildings which is worse. Time will tell. If you build any thing with negative cash flow it’s a bad thing.
To Serve Man.
lisa2020
“…There are a whole lot of relatively historically new apartment buildings that have been built in China with different themes of different European peoples. Ever wonder why?…”
Yea; Chinese wet dreams.
Besides the pre-existing ones, China is also building new concentration camps…ever wonder why? Ever speak out against it?
Substitute Bolshevik for Islamic, and we’re almost there.
This, this right here, is why I read the comments at WolfStreet.com.
All of these loony comments…they forgot about the part where you find out….SOYLENT GREEN IZ PEEPLE!! AHHHHHH!!!!!
Dystopia indeed. Future won’t be that bad but it won’t be unicorns and rainbows either.
Reminds me of the homespun sage who said: “As you go through life brother, whatever be your goal– keep your eye upon the doughnut and not upon the hole.”
Good one H, and I appreciate your comments on WS, thank you.
Fact is that a lot of the ”old wives tales” and similar such hard earned wit and wisdom at all levels of communications from old and otherwise of WE the PEEDONs folks trying to help their and other young folks,, go nowhere these days, as the young folks know SO much better how the world IS and more importantly, how the world SHOULD BE…
May the Great Spirits bless each and every one who is ready, willing, and able to help with the ”GREAT RE-SET” coming soon to a theatre near you.
Meanwhile, some of us on here might really and truly want to support the possibility of someone ”like” Wolf, at least with regard to integrity, and willing and able to tell the truth in every post, and dig dig dig for that truth to be at least SecTreas,,, if not both that and leader of Fed until it is gone, as it should have been many many moons ago.
Unfortunately, it appears the Fed will only be gone when we have a really and truly complete reset, no something any less,,, and equally, not something any rational person wants,,, but most will accept, IF done right for we peons.
The result of all those decades of “Upward Only Rent Reviews”, now unravelling back to base. On the plus side, all those out of office employees will see themselves as free to “do their own thing when the dust settles”, setting into motion the next upwave.
No H-1B visas needed to outsource remote workers tasks to remote workers in Mumbai. Salesforce didn’t spend the past 9 months just figuring out how to accomodate the demands of folks working in Nevada. Remote firing is painless.
Bingo, shrewd observation.
That apparently is end-game WFA plan for many companies with an international footprint.
The morning your login no longer works is the morning that HR decided you are not needed.
Good news: SF will soon become irrelevant.
Bad news: people who leave SF keep voting the same way that makes SF irrelevant.
You sure are obsessed w/this very irrelevant city, San Francisco, and the irrelevant people who live there.
I love it when people go on the web to talk about how irrelevant something is. If it’s so “irrelevant” to you….why are you posting comments about it on the internet?? Apparently it’s relevant to you!
This all could have started 20+ years ago – video not really being the indispensable component, but rather simple internet connectivity.
It is interesting that some of the most Covid defying, high tech, high PE stocks are joining in Calexit. You would think that of all stocks, they would be the best positioned to continue to luxuriate in cost irrelevance.
Perhaps even these PE high flyers feel high pressure to get their net-of-expense earnings up, so their PEs look more justified/less absurd in future quarters.
Yup. In fact it could have started 40 years ago when long-distance phone service became cheap. It was always possible to transmit pictures and data over telegraph and telephone lines. Expense was a big barrier in 1960, but not in 1980.
I don’t think so.
I remember sending data over 1980 phone lines…high-speed was 12 minutes/MB
This will empty out the downtowns of great cities, leaving those who worked in the servicing of those stores, restaurants, office buildings out of work. All those TIF projects funded by forward taxations will collapse.
Pensions owning those large buildings will be hung out to dry.
The ramifications of this are enormous.
San Francisco needs to review the history of Detroit to see how it will go.
There is no “magic dirt.”
Two related thoughts:
Peter Lynch was famous for visiting companies and talking to management before investing in the company. One thing he was always on the lookout for was money wasted on fancy head quarters buildings.
Warren Buffets Berkshires head quarters is basically in a modest building in Omaha with about 30 people to mainly prepare taxes. He stated his Headquarters cost in one annual report and it was an insignificant number. You send a message to your employees in operations from headquarters. Don’t expect your operations to be frugal unless you are frugal at the top.
I’ve seen both extremes. I’ve been to officers where the conference table must have cost $50,000, but I’ve also been to officers where the management likes to keep overhead down, so the rugs would be tattered and dirty. I like to think something in the middle is ideal.
I take it you don’t approve of inlaid marble floors and columns and dark wood paneling and multi-thousand dollar swivel chairs? Oh, wait – that’s the US Capital building.
The poors who work in those expensive cities should never have been working there in the first place. The wages don’t support the cost of living. Hopefully they find a better life.
Biden solved this problem months ago: he’s promised them hi-paid Green New Jobs or coding jobs.
It does seem to me that Americans are far more able to face reality than we stubborn and conformist Brits.
In a display of almost staggering mental dissonance the English Cities Fund have been granted planning consent to build a new office block in Salford – part of Greater Manchester. This after outline planning permission had been approved for an apartment building on the same site!
Phil Marsden, project director of ECF explains all –
“Despite the unprecedented times we find ourselves in, we’re still seeing a demand for high-quality office space that not only provides an agile environment in which to work from and promotes colleague wellbeing, but also spaces that are climate-resilient and adaptable to our changing world.”
“ the 9-to-5 workday is dead”
Way to bury the lede!
MSM is still pushing the “return to normal soon” narrative.
The West is clearly imploding and is beyond salvation.
Fiat money will soon return to it’s inherent worth.
Zero.
Powell says they are not even thinking about raising rates….
as commodity prices soar and service costs soar….
Dictator. Serving some, and not serving / hurting many.
I said it before and was moderated. Not sure why. But Powell and his band of cronies should be facing the same fate as Louis XV1. Same situation.
Depth Charge,
Not sure what you’re referring to, so here are some clues:
I don’t allow commenters to call for violence against anyone, no matter who. Expressions like “hang the banksters” or similar expressions with names inserted are not appropriate here. This is a violence-free zone :-]
Other delete triggers include calling the Pandemic a “scam.” And there was a series of comments where you got into a name-calling duel with another commenter. I deleted the entire duel, both sides.
Mish has reinvented himself as political commentator. Must be getting paid by the click.
I think it’s important to remember the French Revolution and what it ultimately took to affect change, because I’m starting to believe that nothing short of such drastic measures will alter the course we’re on.
I don’t like it and wish things weren’t as they are, but Powell and his cronies are stealing the fruits of the labor of almost all of the country for the benefit of a few. And they smile about it and tell us there’s plenty more in store. It’s got me seeing red because it’s so overt.
Wolf, you are a sterling example of why a benevolent despot beats a democracy every time. Thanks again!
This happened with Carter. Inflation was running rampant and the Fed Chief Miller, golf cart manager, started raising rates behind the inflation rate. Interest rates kept going up until it froze out the housing financing. I got caught up in this mess when I bought my first home.
“This is just so relentless”
Great prose, Wolf!
I think that this is a temporary change, although it appears long-lasting and a deep systemic shift at first glance. For some companies, having employees work from home will be fine, but I think that most employees need supervision. In time, the model will flip back and those empty towers will refill.
Just a thought.
this is a long lasting change. we’re never going back until 2025 for a break.
I think it’s going to be an important shift. In the end corporations will probably win by squeezing wages down as migration goes to less expensive more tax friendly places. High expense areas will have to figure it out. High speed internet must cover 98% of population by now.
> High speed internet must cover 98% of population by now.
I’ve been a remote worker for 3 years, before it was cool.
What old people dont’ get here is that broadband made remote work truly possible starting in 2016. Americans aren’t good at understanding how behind the US is in terms of internet and phone services, ranks 119 in internet. A complete disgrace that Elon Musk through his Starlink is finally solving.
The real solution for affordable housing imho is remote work and Starlink that allows us to move back to rural areas. Cities weren’t delivering high quality of life anyway.
MiTurn,
The arguments are valid on both sides: on one side, the real estate industry desperately wants this to be temporary; and on the other side the companies themselves that have solved the issues of hybrid remote work and see a more efficient and less costly way forward, opening up the talent pool around the world at lower costs, while giving people an opportunity a few times a week or a month to meet at these new meeting places that replaced the offices, but making it optional.
The fact that this has been working for companies for 10 months now, and that this is an expansion of what they already had been doing for years – Salesforce already had 40% of its people on “flex” before the pandemic – tells me that these companies know what they’re doing.
There will always be need for some office space. The hybrid model requires some office space. And many companies, particularly smaller companies with old-fashioned business models, don’t even have the resources and tech know-how to switch to a hybrid model. But there will be less need for office space. That’s what we’re seeing.
Changes make these companies more international, probably. Not sure what percent of sales for some big retailers is outside the US, companies with a worldview will do better. Using Zoom you can bring the world to the your corporate boardroom. Is your company ready to go there?
Wolf wrote “The fact that this has been working for companies for 10 months now, and that this is an expansion of what they already had been doing for years”
Boots on the ground here. To transition for some has been extremely challenging and not operationally but emotionally. Universities a case in point.
Servers holding and protecting data and Intellectual Property (IP) were held on premises before lockdown. Through brute force of a pandemic, IP access has been given up to just 5 main providers (let that sink in for a second) Amazon, Microsoft, Google, Alibaba, IBM. Add the runners up Dell, HP and VMware. Knowledge is now in very few hands. We are on the edge of a precipice. A few people have forced the hands of many, or so they think.
What has changed? Competitive strategy, Value Chain, 5 forces barriers to entry, Michael Porter with his many models and frameworks defunct. IBM’s Hofstede’s cultural dimensions – worldwide is home (or so they want you to believe).
Even the humble SWOT and PESTLE is being controlled in a few hands. UK government organisations are bankrupt and inactive. Not long now until the public become aware and stop believing the rubbish in the MSM news. Local councils are aware but are peddling on reserves with blind hope. Check on the official companies house website in the UK for GOVERNMENT UK LIMITED
Company number 05522373. Incorporated in 2005. Voluntary strike off action has been suspended by those in the UK that live by the law of the land, common law, not maritime (distorted by throne bums on seats) law.
Game theory is gone – no game if only a few players, just sit around a poker table and chew on a fat cigar waiting for your turn to win. Price elasticity of demand – only a few players – dictate the price based NOT on cost of resource extraction from the Earth but according to the few’s agenda to incentivise whatever futures they decide.
TQM – if people work from home they are limited by their own facilities. Instead of providing a customer service they will instead ask the caller to hold a moment while they stop their puppy from attacking their cat as their priority is home and not business.
As for marketing, that died long ago with the Microsofts and Googles intentionally breaking rules, pegging the cost of the risk into the overheads and simply paying a fine but why they kept teaching the defunct models in MBA school I do not know.
The MBA itself is a program to normalise, standardise and stifle curved ball thinking while also being a funnel for small club investors to incentivise their agenda through private investment start up funding. They sit back, watch the new stars rise, then simply walk in and do a buy out. With the free money created out of nothing their buddies in the Government gave them. BCG, McKinsey – this WHOLE era is moving into the past.
And to come back to your quote Wolf, global companies have been global companies for some 60 years (Hofstede IBM study was 67 to 73) and for them, the change was small.
The reality of the business community however is that it is made up of many small businesses that provide jobs, community and keep the lights on for so many people. This community is being intentionally marginalised by conglomerates – temporarily. This is a small business massacre by big business. Any health concerns are dwarfed by the economic destruction, suffering, fear mongering and insanity. My lights are flashing on and off, power cuts today. More on the way.
What’s wrong with me that I feel a small bit of satisfaction hearing San Francisco is going to take it in the shorts financially, as is California as a whole Calexit continues? Why does someone else’s misfortune cause me this small bit of glee? I am saddened by my reaction. I must ponder this.
Wall Street, Hollywood and Silicon Valley. You may think the first doesn’t belong, but it moved to Sand Hill Road some time ago. Not much to like about any of them.
I too must ponder it John as I’m having the same experience. If there ever was a city for which I have ZERO sympathy, it is SF. That is a once-great metro that has been trashed. Literally and figuratively.
Once one of the very cool cities to walk….
Neat little eateries and bars…great scenery and topographic interest.
The German word for this is “Schadenfreude.”
Wish I’d thought of this; saw it here months ago.
“Schaden Freudcisco”
CA an NY have been mismanaged for decades and both businesses and residents have had enough. I had enough back in the 1990’s when I left NY. The quality of life was terrible back then, still don’t miss it.
Living or working in NYC will now carry a 14.5% combined local and state income tax.
Sales tax is just a shade below 9%.
Between Fed, state, city, RE, sales, and utility taxes, they were taking half my paycheck.
Yes, it seems everywhere you look stagflate, tax, and lie (about the first two– thank you Jason) are the bywords for what our brave leaders have in store for commoners.
What always got my dander up was when a Hollywood or NY celeb (or any celeb) told/tells me what to do or what I should think. For some reason it just rubs me the wrong way. Mind you, where I live is a case study in ‘bloody mindedness’. (definition: deliberately uncooperative.)
It’s not just economic, this retreat. Sometimes people have just had enough, want to think for themselves, and not mindlessly follow the crowd. Perhaps this is a real turning point, spurred on by WFH? At least for some with the freedom to move and tailor make their employment change is possible.
Re celebrities and their special positions – How about Springstreen’s DUI arrest on Nov 14 ?
We serfs didn’t even get to know about it until Jeep first got to run their “Boss” commercial at the Super Bowl …..
Winning
I beat you. Left in 1975 when Ford said to NYC “Drop Dead”
Was recently in Austin, TX. The downtown area is full of cranes and lots of building going on around the downtown, but also saw a lot of homelessness and police sirens going nonstop. Downtown Austin looks very much like downtown LA.
The excitement there is all about Tesla coming to town. Saw more Tesla cars there than anywhere else, more than I saw in Florida where the cars are popular.
Americans’ blind trust in what EV can do to help the environment is totally out of proportion, their energy should be placed in making buildings including housing smaller and more efficient. They produce multiple times the pollution that cars generate.
As an interesting side note, Germany is in the news now about how their vaunted, virtue-signaling green energy regime is failing that country badly this winter.
It seems the solar panels are not producing due to snow and cloudy skies, and the wind turbines haven’t been turning due to slack winds.
Were it not for the coal-burning power plants still left Germany and Berlin would be facing blackouts. In the dead of winter.
Find me a company building those and I’ll buy it.
True that. Plant a tree for co2 good use. We breath in what trees offer and they take care of our waste.
“Tree…he watching you. You look at tree, he listens to you. He got no finger, he can’t speak. But that leaf…he pumping growing in the night. While you sleeping, you dream something. trees and grass same thing”
Bill Neidjie
As Chris Wallace questioned in the first debate, why does a liberal city like Austin have a lower murder rate than the same sized cities Fort Worth and Tulsa?
I think you know the answer to this, but you don’t like it.
Harrold,
Beyond NYer’s correct “answer that dare not speak its name,” there are other factors.
1) On a percentage basis, Austin (as state capital) has a huge proportion of government workers…who while inclined to legalized fraud and waste, are less likely to commit outright murder.
(Yet…I think.)
2) Same argument for college student population. UT Austin has 50,000 students.
3) Austin has long had a strong second tier IT economy, making it wealthier than junior metros like Ft Worth or Tulsa.
Correct answer is the conservatives are unable to govern.
Ha ha really? Try comparing Baltimore, St Louis, Detroit, Cleveland, and New Orleans to your aforementioned Tulsa and Fort Worth. Cherry pick much?
And Tulsa is about 1/10th the size of Austin FYI.
Simple. Austin does not yet have enough liberals spending money they don’t have. They will catch up.
The Germans have a term for your condition. It is called schadenfreude, which translates into reveling in the misfortune of others.
Anon1970, the misfortunes apply to the employees and workers, not to the owners and politicians – they create the misfortunes. That is why it is not immoral to feel glee for those miscreants.
Yep, not misfortunes…*plans* (gone awry or not).
The word has entered English, a language which although 50 % Latin based, is a patchwork quilt of borrowed words. I tried to answer the original comment but forgot the ‘e’ on the end so it failed spellcheck.
It will be in any large dictionary.
I felt the same way after the destructive riots in NYC, Portland and other liberal cities this summer.
I guess I feel a sense of schadenfreude when liberalism sows what it reaps.
“Why”
Because CA and NY have long been the overwhelmingly dominant legacy media sources, whose primary goals were to
1) lecture/hector the other 48 states about CA/NY’s “self evident” liberal moral superiority and
2) lie/manipulate in order to support #1.
(shrug)
i also have glee and i LIVE here.
x
Two comments:
1. To MiTurn’s observation that most employees need supervision: Certainly not in any skilled profession where results are what counts not whether you punch in on time.
2. If there is any silver lining in the economic collapse, it is that politicians cannot bail out their rich friends in “big business” without suffering the wrath of the millions unemployed and bankrupted in the small business sector.
Doesn’t mean they won’t try.
San Fran may have vacant office space, but the City of St Paul does too.
Since I have a Peddler’s Permit to sell sporting event tickets in St Paul, I get emails from their Department of Safety & Inspections. This came yesterday:
“Arctic air temperatures predicted through much of this week raise the potential for serious problems in commercial and other buildings.
Saint Paul’s DSI reminds business and commercial property owners to keep their temperatures at 40 degrees or above, even when the building is not occupied.
Cold temperatures raise the likelihood that pipes may freeze and crack or burst, causing serious water damage. Plumbing and fire suppression systems are at risk in these weather conditions.”
Ah yes, water will freeze when it’s cold. No shit, eh? In other words, keep the furnace turned on. In Frisco, at least you can save a few bucks by turning it off. So, Boston Properties has that going for it; which is nice.
Hell, it’s already up to -3 F already in Minneapolis. Gonna be fast ice on the speed skating oval in Roseville today with a high of 8 F!
Damn, I am not good at proofreading …
Good for you.
Glad to see you’re doing OK at MINUS 3 degrees Dan,,, especially because I was just complaining about the HEAT in FL, it being well over 80 degrees here in tpa bay area yesterday afternoon, already!!!
In fact, one of the things the SF bay area has going for it is the temperature seldom goes below 40, and equally seldom over 80, though apparently a bit more frequently now as we approach the end of the global warming/ heating cycle.
Don’t think that is going to change much, and thus SF and the greater bay area will climb back out of this current business/political/crime malaise once again, as it has done several times for each of those social metrics since the gold rush days.
Remembering the great ”studio” apt I had in Berzerkeley ( with two bridge view) I rented for $50 per month in the late ’60s, while friends had much larger places in SF for the same amount, I just wish I could be there to purchase some of the properties that will doubtless go right back to those rent levels now that THE CITY is falling apart,,, HAH.
Close to minus 40 in Calgary. Minus 40 C is also minus 40 F, at that number the scales meet.
Interesting, and dam cold!
Interviewed for a good corporate job in Minneapolis once…in January.
Interesting job…but MN in winter is Pluto.
The flight there was like overflying ice planet Hoth, picked up at airport by tauntaun.
OK fed……next step……all real estate owners who wish to tender ownership to the fed for 2018 valuation step up.
The next step of madness.
Sounds like insanity, but depressingly possible.
Identical logic/mechanism as used for other asset props.
In fact, the Fed may literally be modeling actions after Weimar.
The “fix” for Weimar inflation was to declare “new” “backing” of “new” “currency” was all of German real estate.
Population, worn out/wrung out/ruined by preceding inflation finally went along with phony baloney expedients and things calmed down.
If SFH starts cratering bad enough, in enough places, the Fed might very well start buying/lending against SFH in order to provide price prop.
The Fed could just flip the Weimar script…pledging inflation to prop up RE.
After all, the Fed has already turned itself into a pretzel to do the identical thing indirectly, via interest rates.
This work from home is all great stuff, but you wonder what people are doing, and even if it is necessary. It certainly is not manufacturing, construction, or serious scientific research. Maybe some software development or CAD. Seems the at-homers are mainly process focused types and not production focused.
Seems to me they have one foot at home and one foot on a AI banana peel. On a cost center basis, it looks like a ripe opportunity to test, prototype, and integrate new automation.
If I’m wrong let me know. It’s been a while since I had to care about it. When I did, I made sure I was a profit center.
Manufacturing and construction are not candidates for
work- from- home instead of office because they weren’t done at the office.
joe2-
This is why SF will get hit harder by this economic downturn than any other city in the entire world..
For twenty-five years, San Francisco has been gutting its manufacturing/PDR buildings in favor of “creative” office space designed specifically for software coders to ride their unicycles around in while designing the latest interface for yet another disruptive pizza delivery app. SF went for the shiny brass ring and put all its economic eggs in one basket.
Now, it turns out most of that new/remodeled office space is obsolete, and there are few light industrial buildings left for production, distribution, and repair businesses – the kind of businesses that can’t be WFH.
SF real estate :disrupted” itself right into the crapper.
SF’s business tax base is now going to crater precisely as a consequence of the twenty-five year class war waged on people without college degrees.
Gentrification is racism.
Class war never sleeps.
Not only automation, but direct international outsourcing.
How many people overseas are chomping at the bit to do your job remotely, and can easily afford to do it at 1/3 the salary?
What’s preventing businesses from taking these offers?
“not production focused.”
Hmmm…well, the whole US economy has ceased to be “production focused” anyway…
My brother works from home for a county school system. He likes it as he does not have to commute to work. He said he gets more work done by working at home. Parents will want their children in school anyway as daycare is expensive.
I suppose company management teams may monitor computer activity to determine if work is being done. They might monitor desk time by camera, else people might soon switch from work from home to work at the beach; that they like even more.
My HOA is using Zoom for homeowner meetings. Not everyone can fit in the community center anyway. I downloaded a free Zoom app.
Let’s talk about the reconing and violence once govt quits giving stimulus aka welfare there are no decent paying jobs how does balloon continue to inflate no money for houses stocks food then the people will rule but will military stand by people or constitan worldwide people are rioting against dictatorship and democracy fed up with elites and corruption stop arcyic tax system flat taxes everyone on even playing field elected officials need to be held accountable as well as Wall Street or no future for this country why do we keep electing 70 -80 year olds as president fix the problems evict congress take back out counTry
Flat tax, progressive tax, wealth tax, bring it on, Bill, Warren, Mark, Elon, Jeff, Chamath, and the Google boys whose names I can’t remember are more than ready with their army of lawyers, accountants and corporate tax structures to prove that they are poor and haven’t earned a dime in years.
So, go ahead and tax away on the suckers who can’t afford the same armies… LOLZ
?
Warren Buffet has been pointing out low his taxes are for years, once noting that his secretary paid at a higher rate than he did. None of the above names make the rules. The last big tax cut for the rich was courtesy of mister ‘drain the swamp’ DJT.
The rules for the big boys was in place long before Trump got into the office. Buffet’s complaint was from back when Obama was in office. And no, they don’t make the rules, they are rich enough to have sufficient number of lawyers and accounts to help them get around the rules.
This is the thing that Buffet left unsaid, and my assumption is that the posters here are unlikely to be able to afford those same lawyers, it’s one of the reasons why the middle class gets squeezed out. not rich enough and not poor enough.
nick kelly
1) Warren Buffet has been pointing out low his taxes are for years (Buffet pays himself $100k/yr; his admin asst probably makes $200k+)
2) Warren Buffet has had the ability to “overpay” his taxes for years
3) In so far as anybody knows, Warren Buffet HAS NOT overpaid his taxes for any years
Red Don? Is that you?
Dear Mr. Richter,
Your reporting continues to be excellent, but we in the media who monitors online content suggest that you concentrate more on the positive and less on the old negative news.
For example, vacancies sound so negative, we prefer that you call it more accommodations becoming available for our indigenous population that will solve the homeless crisis. And opportunities for burgeoning new industries such as cannabis and entertainment.
The term Techsodous that you coined, suggest that be switched to the local people winning their valiant fight against evil and outdated corporations bent on exploitation. It has a more positive feel to it.
See, we can help you with your audience, just adjust your language a bit here and there, nothing big, certainly nothing that detracts from your bold social statements. Then in no time flat, traffic through your media empir… uhhh… media collective will skyrocket in ways you won’t believe.
Sincerely, your online media monitors
P.S. joe, hurry up, you been in office for almost a month now, reinstate SALT deductions and legalize cannabis already… do it by executive order if your minions on the hill don’t fall in line. Move along… nothing to see, no entrenched interests here.
?
He’s in a studio in Hollywood, not the big white house.
Quiet… you… the masses doesn’t need to know
MCH – that fits right in with my new start-up: Growing psychedelic mushrooms in vacant high-rises. They don’t require that high power lighting and they like cooler temps. Overhead much cheaper. Gotta be legal any day now.
‘In August, Pinterest paid $89.5 million to abandon a lease for 490,000 square feet of office space that hasn’t been built yet.’
I had to read that several times. Wow. Whoever wrote that contract was good…
The frenzy in commercial real estate in San Francisco was a sight to behold at the time. “Office shortage” was the big term. Grab what you can get no matter the price…. It spawned all kinds of crazy stuff, as we can now see.
Bravo Mr. Richter, a masterful example of the excesses of capitalism and the greed of corporations. Fits right into the current narrative.
Your media watch dogs approve.
?
Dang, where is the blue check mark when you need it.
What PEs of 95 (or infinity) hath wrought.
Govt isn’t the only place where God’s Own Platinum Card results in monstrous stupidity.
In another note the US Government again paid millions to farmers to not put seed in the ground and not apply fertilizer. Fortunately the non-fertilized non-crops didn’t need fuel for harvesting and processing either.
San Francisco is in one of the most geographically perfect places in the world, in terms of being a transportation hub. Along with Hong Kong, Istanbul, and Cairo it will always be a center of commerce and population long after places like Phoenix and Austin have become desert ghost towns. One day (maybe soon) air travel will be over and the movement of goods will be by sea, river and train. At that point the age of finance as an economic driver will be gone. The towers full of financial and internet skimmers will be gone, but the wharfs will return along with the web of business’s that support real commerce. At that point it might have new owners ( the chinese?) or be its own city-state. But San Francisco will be a great city forever, with a few short term collapses along the way.
Good point Seneca’s cliff. I would add Panama and Singapore to that list.
San Francisco is becoming a beautiful Baltimore by the Bay. Like Detroit, Saint Louis and other big cities, soon what’s left of the productive population will have left and moved to greener pastures in Marin, Sonoma and Contra Costa Counties, leaving only balkanized minority “communities” and somewhat recently arrived people amazed by our natural beauty behind.
The recent blatant highway robberies, attacks on Asians, “We need a commission to investigate these! And reparationista carpetbagger criminal rights D.A., plus the traditional exponentially doubling street crime are a grim harbinger of the SFuture.
The only salvation is if voters finally have enough and finally elect a conservative local government that reverses the civic suicide of the last 40 years, by reinvigorating the police, getting serious about incarcerating convicted criminals, eliminating the cancer of district elections, defunding homeless subsidies and promoting rather than regulating to death small businesses.
Signed, a native San Franciscan.
Class of 1976
This lockdown and employees working from home has been an eye opener for employers.
They have learned that they can reduce their fixed costs with no rent, commercial tax and all the other related cost,such as cleaners and waste disposal.
The employees are also enjoying it with savings of time and cost commuting and nobody watching. I even have a couple of clients that have software that makes the remote PC seem that data is being keyed in and the mouse is being used.
The next stage for the employers is to reduce employees wages on the basis that the employee is saving that money on commuting and maybe that the employee works extra time for the same money as they do not spend time commuting.
Of course the next stage (especially if the US$15 dollar minimum wage comes in) is to realise they can employ Indians and Philippiners for 20% of that cost.
The American Dream. The best is yet to come!!!
Re celebrities and their special positions – How about Springstreen’s DUI arrest on Nov 14 ?
We serfs didn’t even get to know about it until Jeep first got to run their “Boss” commercial at the Super Bowl …..
Winning
I’ll get you a subscription to “People”.
“The American Dream” said George Carlin,
“Because you have to be asleep to believe it”
I love Carlin and he lived the American Dream.
He went from being a nobody to a superstar on sheer talent/brains.
I met him once and he was simply wonderful!
Just so long as we can deduct use of home as a business expense…
One more reminder: REINSTATE SALT DEDUCTIONS NOW!!!!! Give us our fair share, Joe.
Cas127,
You see, there is a benefit to being honest with yourself.
One might hate the candidate because of what he stands for. But if his views can bring you temporary benefit, then vote for him, or her, or it. (Not judging… just saying)
Because the truth is, the only thing that matters is how you benefit now, if someone is idiotic enough to wait for future satisfaction, it’s not my place to tell him/her/it that he/she/it is wrong. Since I live in CA, I may as well get on the “right side” and argue for what’s in my own interest. If and when the politics of this place changes, then great, will adapt and survive that too.
“if someone is idiotic enough to wait for future satisfaction”
History of US since 1960.
Okay, Boomers…but it is a good bet that your grandkids will not only *not* visit you…but they are going to sell you to the Soylent corporation.
(Karma’s a bitch).
Companies have been outsourcing to Asia for 20+ years now.
I’m puzzled why people think its something new.
It isn’t new Harrold, most people, especially Kumar knows the wonders of outsourcing. Cause minimum wage in the US is like a fortune in some parts of India.
Reminds me of the PS2 dongle I designed that plugged in between the keyboard/mouse and computer. Recorded for hours then replayed on command. Of course it was actually used for macros. ;-)
@Wolf, In spite of all the news of permanent office closures, tecxodus, record vacancies etc., I really wonder why neither office, nor Condo, nor SFH prices have fallen. I agree big boys may be bailed out or have deep pockets to weather the storm but a lot of inventory is also owned by small mom and pop types. I would have expected a frenzy to sell all types of RE (while prices are still good) and as a result huge crash in prices but none of that happened. All we have seen is a small bump in inventory compared to last year and minor price softening. This makes me wonder if this is all reality or just data gymnastics.
Kunal,
There has been a “frenzy” to put homes on the market, and inventory for sale ballooned to all-time records, particularly condo inventories. But for now there is no massive forced selling, and if the offered price is too low, sellers don’t sell.
According to the Case-Shiller index for San Francisco, which covers the five-county Bay Area, condo prices started falling last summer. The Case-Shiller lags about 4 months behind. The latest was the “November” data, released at the end of January, which was the three month moving average of Sep, Oct, and Nov, which was down 1.1% in November from October, the sixth month in a row of declines, and was down 4.5% from May, and down 2.1% year-over-year, and below where it had first been in March 2018:
https://wolfstreet.com/2021/01/26/most-splendid-housing-bubbles-in-america-dollar-purchasing-power-swoons-january-update-house-price-inflation/
“down 2.1% year-over-year“
Yes that’s what. It’s just a minor correction .
It seems to me that Govt will not let RE prices fall and will keep inflating currency indefinitely. After all many govt officials also own RE. In some ways they will all be bailed out.
It takes the Case-Shiller index a long time to register movements and changes in direction because it lags 4-5 months behind, and because of the way it is structured. And RE is very sticky on the way down unless there is forced selling. These things take years.
Was it an over represented work force in the first place ??
And if so .. why ??
Were there tax benefits per employee ??
What ??
“If we have 100 employees we can pretend a larger business that really exists to our benefit ??
?
And what has changed about money that the bank will lend to you without substantial real estate to back your loans up ??
It seems money has lost its value .. its Almightiness.
Have the Hippies won after all ??
Conservative Hippies ??Party animals
As a small landlord, these shifts are something to consider.
We pay all utilities when we rent. This is based on people going
to work or school. The cost of utilities is considerably higher
if the tenant is unemployed or works at home. If this is the new
normal lease terms will change.
This is not common. I’ve never lived in an apartment where I didn’t at least pay electricity.
On the brighter side, it’s my opinion after living in various places in the U.S. that the SF Bay Area may in fact have the best overall weather and be the most ideal geographic location on the planet. While I moved from there a few hours east due to traffic, it was after I relocated from Southern Cal that I eventually realized there was no other place in the country that was as centralized and close to all the extremes of the best nature has to offer.
Within hours you could go from the Redwoods to Big Sur, from wine country to Gold Country, from Tahoe resorts to Reno to Yosemite to Death Valley, from Stanford to Berkeley. The list of features and classic old towns in and nearby is endless. If all the tech companies vacate and the high-rises get turned into hotels, it would still be one of the best spots to visit or live near.
I do hope to visit one day but I might need to get into
shape to navigate those hills.
I might be the only American who considers Bay Area’s homelessness beyond depressing. Is living in areas without homeless too much to ask?
You got something against walking in human poo?
YOU’RE A POOIST!
you could always just redefine them as shelter averse. problem solved!
Go to Idaho. A small town. It’s refreshing.
The government is going to have to bring regulated camps for homeless and bring back closed facilities for those truly out of it mentally. Otherwise, life is going to become unbearable everywhere. I’ve see more homeless in the burbs around Sacramento in the better areas.
“Is living in areas without homeless too much to ask?”
Yes, says Jerome Powell.
I’ll add that it is an easy drive from SF to UT, AZ, NM, and CO where some of the best vacation destinations are. Not to mention the PNW. I loved my two years there in the late 80’s….I too have lived and traveled in many parts of the country.
This exodus of people from SF will probably be welcomed but those residents who are not negatively impacted by having less people around.
Totally missed the Mendocino Coast and the 150 mile trip up 101. Best coastal scenery in this country.
Sound nise, I mighte move there. How much free money does thay giv you?
The Bay Area has an amazing number of natural wonders . It’s weather is inferior to that of Southern CA, but is superior to other areas of the country.
The problem is that commuting can be a disaster and it’s cost of living is out of sight. If you do not have to commute ,own a house with real estate taxes capped by Prop 13 and make + 250,000, it is indeed a great place to live
Very true. Beautiful country. But unliveable for the middle class since about 1995
I’m guessing that you have never lived in Italy.
“the 9-to-5 workday is dead” Yes, all hail the new 24/7 workday, where employers also unload all their facilities, utilities, and communications costs onto their employees while adjusting salaries downward to “local market conditions.” We’re all gig workers now.
On point.
+1. Top executives will get special allowances to deduct their homes etc as “business expenses”.
Subchapter-S the whole home.
UK Gov Banrupt. Not long now in the UK until the public become aware and stop believing the rubbish in the MSM news. Local councils are aware but are peddling on reserves with blind hope. Check on the official companies house website in the UK for GOVERNMENT UK LIMITED
Company number 05522373. Incorporated in 2005. Voluntary strike off action has been suspended by those in the UK that live by the law of the land, common law, not maritime (distorted by throne bums on seats) law.
Not only the office space, but also the back office is moving to the Cloud: Amazon AWS, MS Azure, etc…
However, the Cloud premises (which can be huge) are located in faraway locations, away from downtown or office campuses.
I suppose it’s time for some old cow to kick the glue pot over?
Sounds like everything is perfectly normal in SF!
The down side of online shopping:
I watch cooking videos .. I should have owned a restaurant.
I decided what I wanted to make .. I ordered the ingredients.
1 ingredient did not arrive .. ?
I’ll order almost everything online, EXCEPT for food, for this very reason. I like walking around the grocery store and getting ideas based on what I see on the shelf.
Sign seen on the inside of the front door: “Will the last person to leave please turn off the lights. Thank you.”