Office values in San Francisco have plunged 75% on a per-square foot basis compared to sales from just before the pandemic, the Hoover Institution said.
The Hoover report was authored by Lee Ohanian a senior fellow at the institution,
The report’s finding noted the former Union Bank building, located in the center of San Francisco financial district was auctioned off last week for $65 million — 75% less on a per-square-foot basis than comparable building sales just prior to the pandemic
Ohanian called it “devastating news” for the city since the auction price provides a new market rate benchmark for setting the price for other downtown commercial buildings.
The report noted San Francisco’s downtown vacancy rate has jumped from about 4% in 2019 to almost 30% now, as companies abandon the city.
“The continuing losses of San Francisco’s economic base are a symptom of a city that has become politically dysfunctional and is perceived by people and businesses to be dangerous and unworkable” the report said.
“And these losses will continue until those who govern San Francisco make different choices regarding the related issues of drug abuse, homelessness, and crime.”
According to the report, retailers in the downtown area have been closing their stores — citing problems of theft and employee and customer safety.
The San Francisco Standard noted last week that thieves have been hitting one Target store at least 10 times a day. The store is located in a mall near San Francisco’s Union Square.
A Target spokesperson said: “Retail crime is an urgent issue that is increasingly impacting the team and guests at Target and other retailers. It’s an issue that affects all of us, limiting product availability, creating a less convenient shopping experience, and, most importantly, putting our team and guests in harm’s way.”
Nordstrom will close both of its stores in the downtown area because of worsening crime, the New York Post reported. A Whole Foods store also is shuttering its doors in the downtown area, the Standard reported.
And the Hoover report noted Walgreens and CVS pharmacies are closing stores in the city, along with Williams-Sonoma, Abercrombie & Fitch, and Crate and Barrel.
The Hoover report said the fact that key policy reforms haven’t been ordered yet by the city is “very troubling.”
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