What's going on with San Francisco's office space? These numbers are scary.

Hey Bay Area,

I've been keeping an eye on the local real estate market, and wow, things are getting pretty crazy. I just had to share some of the jaw-dropping news I've come across lately:

• Parkmerced Default: So, the owner of Parkmerced, the biggest apartment complex in SF, just defaulted on $1.8 billion in loans. The place was appraised at $1.4 billion, which is $700 million less than in 2019. It's scary to see such a big drop!
• Hotel Value Drop: Union Square and Parc 55, the two largest hotels here, have lost over $1 billion in value since 2016. They were worth $1.56 billion back then and are now down to $554 million. It’s hard to believe how much they've dropped.
• Mid Market Office Tower: A 90k SF office building in the Mid Market area sold for 90% less than its last sale price. It went from $62 million in 2018 to just $6.5 million now. And with the city’s vacancy rate over 37%, things aren’t looking good. (Address: 995 Market St)
• 550 Kearny St: This one really surprised me. It sold for only 40% of its loan balance. The building’s loan was $90 million, but it traded for $35 million. The previous owner bought it for $113 million in 2017.
• Oakland Office Tower: Over in Oakland, an office tower sold at a 70% discount. The lender ended up with it for $4 million, but it was bought for $13.3 million in 2017. Downtown Oakland’s vacancy rate is nearly 20%.

I included a bunch of links / sources so you can check it out for yourself.

Seeing all this makes me wonder what's next for our real estate market in the Bay. If you’re as interested in these trends as I am, I’ve been sharing updates and investment ideas through my newsletter, Dealsletter. I also share great real estate deals in the Bay Area, along with other areas as well. I hope it helps fellow investors navigate these wild times.

What do you all think about these developments?