Are San Francisco’s Places of work Completed?
A direct impact on Office REITs
Many large office real estate mutual funds (REITs) are deeply invested in the San Francisco market. Alexandria Real Estate Equities (NYSE: ARE) is the company behind the terminated Pinterest lease at 88 Bluxome Street. It owns Stripe’s headquarters at 510 Townsend Street. Another marquee tech company, Stripe, recently announced plans to sublet this space.
Boston Properties (NYSE: BXP) is another REIT that could lose value due to an office move in San Francisco. The company currently generates around 22% of its net operating income in the Bay Area.
The outlook for residential real estate
The housing market in San Francisco has also been hit hard, particularly in terms of rentals. The latest information from Zumper shows that the average rental price for a studio apartment in town is down 21% year over year to a still staggering $ 2,050 per month. Similarly, Realtor.com reported that the monthly rate for a studio in town fell 31% in September.
The latest statistics from the California Association of Realtors show that the market is still going strong. The average price for an existing single-family home in San Francisco Bay was $ 1,068,000 in August, up 18.7% year over year. While sales increased by 10.8% compared to the same period last year, they decreased by 6.3% compared to the previous month, which could indicate an imminent market weakness. The high price of residential real estate in the San Francisco market is one of the reasons many workers enjoy remote working. They hope they can move to a market where residential real estate is more affordable.
Chris Lim, Head of Brand Growth at @properties, says:
