Signs of the Urban Doom Loop — A Link Repo
Articles
[Organized by date with newest first]
Title: San Francisco office vacancy rate hits a new record high
Date: April 11, 2023
Outlet: SF Gate
Description: The vacancy rate in the first quarter of 2023 climbed to 29.4%, up from 27.6% in the fourth quarter of 2022 — and far surpassing the previous pre-pandemic high of 19.1% during the dot-com bust in 2003. But this is unlikely to be a record for long.
Link: https://www.sfgate.com/realestate/article/sf-office-vacancy-rate-hits-record-high-17889017.php
Title: Salesforce lists its remaining space at Salesforce East for sublease
Date: April 11, 2023
Outlet: San Francisco Business Times
Description: Salesforce is ditching the last of its remaining office space at 350 Mission St., listing 104,051 square feet for sublease at the tower known as Salesforce East.
Link: https://www.bizjournals.com/sanfrancisco/news/2023/04/11/s-f-salesforce-office-tower-sublease.html
Title: Downtown San Francisco Whole Foods Closing a Year After Opening
Date: April 10, 2023
Outlet: The San Francisco Standard
Description: One of the largest supermarkets in Downtown San Francisco — the Whole Foods Market at Eighth and Market streets — intends to shut down at the close of business Monday just a little more than a year after the store opened.
Link: https://sfstandard.com/business/downtown-san-francisco-whole-foods-market-closing/
Title: American offices are half-empty. That could be the next big risk for banks.
Date: April 10, 2023
Outlet: CNN
Description: Investors and regulators, on high alert for signs of trouble in the financial system following recent bank failures, are now homing in on the downturn in the $20 trillion US commercial real estate market.
Link: https://www.cnn.com/2023/04/10/business/commercial-real-estate-banks-offices/index.html
Title: A $1.5 Trillion Wall of Debt Is Looming for US Commercial Properties
Date: April 8, 2023
Outlet: Bloomberg
Description: Almost $1.5 trillion of US commercial real estate debt comes due for repayment before the end of 2025. The big question facing those borrowers is who’s going to lend to them?
Title: Blackstone Sells OC Office Towers With a Big Price Cut
Date: April 7, 2023
Outlet: Commercial Observer
Description: Office trades for 36% less than what Blackstone paid to acquire it in 2014.
Link: https://commercialobserver.com/2023/04/california-blackstone-office-loss-sale-price-cut
Title: Adams Orders New Round of Budget Cuts That Could Erode City Services
Date: April 4, 2023
Outlet: NYTimes
Description: The Police Department, schools and CUNY won’t be spared in latest round of New York City budget reductions.
Link: https://www.nytimes.com/2023/04/04/nyregion/nyc-budget-cuts-eric-adams.html
Title: San Francisco could be on the verge of collapse. What should California do about it?
Date: April 1, 2023
Outlet: San Francisco Chronicle
Description: Experts say post-pandemic woes stemming from office workers staying home instead of commuting into the city could send San Francisco into a “doom loop” that would gut its tax base, decimate fare-reliant regional transit systems like BART and trap it in an economic death spiral.
Link: https://www.sfchronicle.com/opinion/editorials/article/downtown-san-francisco-17852552.php
Title: Cities are struggling. San Francisco could be in for the biggest ‘doom loop’ of all
Date: March 30, 2023
Outlet: San Francisco Chronicle
Description: San Francisco could be facing a ‘doom loop’ scenario leading to a fiscal calamity for the city.
Link: https://www.sfchronicle.com/sf/article/city-economy-doom-loop-17846412.php
Title: Cash flow from Blackstone portfolio no longer covers debt payments: Moody’s
Date: March 28, 2023
Outlet: The Real Deal
Description: Ratings agency downgrades debt, citing 11 properties’ “declining performance”.
Title: Commercial Property Debt Creates More Bank Worries
Date: March 21, 2023
Outlet: Wall Street Journal
Description: Large number of office defaults could force banks to mark down value of these and other loans.
Link: https://www.wsj.com/articles/commercial-property-debt-creates-more-bank-worries-b36184ba
Title: More than 800 stores are closing across the US in 2023. Here’s the full list.
Date: March 10, 2023
Outlet: Business Insider
Description: More than a dozen major retailers are expected to close at least 800 US stores in 2023. Amazon, Bath & Body Works, Macy’s, Walmart, and Big Lots are among the chains shutting down stores. Bed Bath & Beyond is planning to close 416 locations — the most of any retailers on the list.
Link: https://www.businessinsider.com/stores-closing-in-2023-list
Title: Empty Office Buildings Squeeze City Budgets as Property Values Fall
Date: March 3, 2023
Outlet: NYTimes
Description: A looming hit to tax revenues puts pressure on Congress to deliver relief.
Link: https://www.nytimes.com/2021/03/03/business/pandemic-city-budgets.html
Title: Return To Office Plans For Every Fortune 100 [March 2023]
Date: March 1, 2023
Outlet: Build Remote
Description: In early 2020, the office was turned off like a light switch. Anyone who could work from home was instructed or recommended to do just that. This was a temporary measure to fight a pandemic. But the temporary shift from in-office work to remote work turned into a massive, unintentional experiment to test where and how work could be done.
Link: https://buildremote.co/companies/return-to-office/
Title: Amazon Pausing Construction of Washington, D.C.-Area Second Headquarters
Date: March 3, 2023
Outlet: Wall Street Journal
Description: The company will hold off on breaking ground on the project’s second phase
Title: Blackstone Defaults on Nordic CMBS as Property Values Wobble
Date: March 2, 2023
Outlet: Bloomberg
Description: Blackstone Inc. defaulted on a €531 million ($562 million) bond backed by a portfolio of Finnish offices and stores as rising interest rates hit European property values.
Title: PIMCO’s Columbia Property Trust defaults on $1.7B of office loans
Date: February 22, 2023
Outlet: The Real Deal
Description: PIMCO-controlled Columbia Property Trust has defaulted on $1.7 billion of loans tied to seven office buildings across the country.
Title: Office Landlord Defaults Are Escalating as Lenders Brace for More Distress
Date: February 21, 2023
Outlet: Wall Street Journal
Description: Delinquency rate for office loans that back commercial-mortgage-backed securities remains low, but it is heading higher
Title: One of the biggest landlords in Los Angeles just defaulted on $755 million in loans for two skyscrapers as remote work keeps offices vacant
Date: February 14, 2023
Outlet: Fortune
Description: Office vacancies have increased across the country since the pandemic made working remotely more routine.
Link: https://fortune.com/2023/02/14/remote-work-los-angeles-office-building-default-brookfield/amp/
Title: What Would It Take to Turn More Offices Into Housing?
Date: December 27, 2022
Outlet: NYTimes
Description: Vast amounts of empty real estate are a crisis for building owners. But some politicians and business leaders hope they can be converted into something new — and transform downtown neighborhoods.
Link:
Title: Millions at stake as downtown S.F. properties appeal tax bills
Date: December 23, 2022
Outlet: San Francisco Examiner
Description: A growing number of San Francisco’s commercial property owners are appealing the assessed value, including some high-profile companies looking for tens of millions of dollars in tax breaks. If all of the current appeals were granted, the difference would be more than $300 million in reduced property taxes.
Title: How a ‘Golden Era for Large Cities’ Might Be Turning Into an ‘Urban Doom Loop’
Date: November 30, 2022
Outlet: NYTimes
Description: What seemed like a transitory step to avoid infection has become a major force driving the future direction of urban America.
Link: https://www.nytimes.com/2022/11/30/opinion/covid-pandemic-cities-future.html
Title: These Young Workers Are ‘Romanticizing’ the Return to Office
Date: November 27, 2022
Outlet: NYTimes
Description: As many others chafe against employer mandates, creators on TikTok — some new to the workforce — are trying to show that the office can be fun.
Link: https://www.nytimes.com/2022/11/27/business/tiktok-office-influencers.html
Title: In New Forecast, New York City Projects $2.9 Billion Deficit
Date: November 16, 2022
Outlet: NYTimes
Description: The stock market’s weak performance is projected to cost the city billions of dollars in pension fund obligations in the coming years.
Link: https://www.nytimes.com/2022/11/16/nyregion/budget-deficit-nyc.html
Title: How do Rising Interest Rates Affect the Housing and Rental Markets?
Date: November 2, 2022
Outlet: ManageCasa
Description: We know interest rates affect home prices. Property managers, landlords, property investors and renters are all wondering what effect if any, rising interest rates will have on rent prices. If it represents the biggest cost to landlords and tenants going forward, then we must discover ways to keep rent prices from rocketing upward further, for the sake of tenants, and for landlords who could see rising churn rates, vacancy losses and backlash from renters.
Link: https://managecasa.com/articles/rising-rates-and-the-rental-market/
Title: The New World: Envisioning Life After Climate Change
Date: October 26, 202
Outlet: NYTimes
Description: Scientists increasingly agree on how much warming the planet will experience. This is what it might look like.
Link: https://www.nytimes.com/interactive/2022/10/26/magazine/visualization-climate-change-future.html
Title: The Return of the American Downtown
Date: October 26, 2022
Outlet: NYTimes
Description: Reporters and photographers from The New York Times visited 10 cities across the country to examine how the pandemic and its aftershocks have tested and reshaped America’s downtowns.
Link: https://www.nytimes.com/interactive/2022/10/26/us/us-cities-downtown-chicago-seattle.html
Title: Snap, makers of Snapchat, shutters its 33,000 square-foot downtown San Francisco office
Date: October 24, 2022
Outlet: SFGATE
Description: The company, which has struggled through layoffs, restructuring and an industry wide dip in advertising dollars over 2022, says the closure comes as part of a shift toward remote work.
Link: https://www.sfgate.com/bayarea/article/snapchat-closes-san-francisco-office-17530730.php
Title: Remote Work Is Here to Stay. Lean In, Employers.
Date: October 22, 2022
Outlet: NYTimes
Description: Fully in-office workers are the least satisfied with their working arrangements: they report significantly worse employee experience scores compared to hybrid and full-time remote employees, most notably for work-life balance and work-related stress and anxiety.
Link: https://www.nytimes.com/2022/10/22/opinion/remote-work.html
Title: Airlines Cash In as Flexible Work Changes Travel Patterns
Date: October 21, 2022
Outlet: NYTimes
Description: Remote work and hybrid work have allowed Americans to travel more and combine personal and professional trips. Carriers expect the new habits to endure, despite economic uncertainty.
Link: https://www.nytimes.com/2022/10/21/business/airlines-flex-work-travel.html
Title: Downtown SF faces 1,300 expiring office leases by 2024
Date: October 17, 2022
Outlet: The Real Deal
Description: Tech accounts for “lion’s share” of deals set to lapse.
Title: Yes, S.F. could turn empty downtown offices into housing. Here’s what it would take
Date: October 17, 2023
Outlet: San Francisco Chronicle
Description: If creating housing from office space is such a good idea, then why hasn’t it happened in San Francisco? It also looked too expensive and difficult in Calgary, Alberta, at first.
Link: https://www.sfchronicle.com/sf/article/empty-offices-housing-17510576.php
Title: NYC Office Market Improves But Availability Remains High
Date: October 3, 2022
Outlet: Commercial Observer
Description: Demand for New York City office space is improving, but vacant blocks in older buildings remain a drag on asking rents and availability rates across Manhattan, according to Colliers’ third-quarter market report.
Link: https://commercialobserver.com/2022/10/nyc-office-market-improves-but-availability-remains-high/
Title: How much will downtown S.F.’s struggles hurt the city budget? Supervisors want to know
Date: September 13, 2022
Outlet: San Francisco Chronicle
Description: San Francisco supervisors are trying to determine how tax revenue will be affected by the city’s lagging recovery from the pandemic.
Link: https://www.sfchronicle.com/sf/article/How-much-will-downtown-S-F-s-struggles-hurt-17439862.php
Title: Urban Migration Slows in 2022 for Many Major US Cities
Date: September 3, 2022
Outlet: Bloomberg CityLab
Description: New data suggests that the pandemic-spurred flight from big coastal metros is reversing as employers push workers to return to the office.
Title: NYC Office Leasing Report Q2 2022
Date: July 5, 2022
Outlet: Unclear
Description: NYC Office Leasing Report Q2 2022 discusses local market conditions. Asking rents are $55.11 SF, vacancy is 16.9%.
Link: https://rentnyoffice.com/nyc-office-leasing-report-q2-2022/
Title: Why Americans Are Leaving Downtowns in Droves
Date: April 25, 2022
Outlet: The Atlantic
Description: The rise of remote work has snipped the tether between home and office, allowing many white-collar workers to move out of high-cost cities.
Title: How cities can bounce back
Date: September 7, 2022
Outlet: The Great Refactoring
Description: Digital disruption finally made it to the physical world. The COVID-19 pandemic accelerated the trend to the digitization of public spaces. But it didn’t play out the way we all expected.
Link: https://thegreatrefactoring.com/2020/09/07/how-cities-can-bounce-back/
Graphs
Date: March 8, 2023
Outlet: The Washington Post
Link: https://www.washingtonpost.com/opinions/2023/03/08/economy-recession-consumer-debt-loans/
Saving rate vs. consumer loans, custom graph using FRED data
Savings rate: https://fred.stlouisfed.org/series/PSAVERT
Consumer loans: https://fred.stlouisfed.org/series/CONSUMER/
Papers & Reports
Title: The Remote Work Revolution: Impact on Real Estate Values and the Urban Environment
Author: Stijn Van Nieuwerburgh
Date: November, 2022
Link: https://www.nber.org/system/files/working_papers/w30662/w30662.pdf
Many papers here:
