We all knew this would start to happen, but nobody say it coming this fast: Downtown office buildings are on the market for a fraction, a tiny fraction, of their previous price.
A 16-story building at Sixth and Market just sold for $6.5 million—one tenth of its previous value. That’s $79 a square foot. An entire office building, 88,000 square feet, for the price of a couple of high-end condos.
Why didn’t the city put in a bid?
For starters, San Francisco spends far more than that every year on office leases for departments that don’t fit in City Hall. SF could cut spending significantly if the bought a few of these bargain office buildings and when the existing leases end, moved city workers in.
Everyone is talking about converting offices to housing, but that’s expensive. It’s a lot less expensive when you get enough space for about 150 apartments for about $40,000 a unit.
Also: Some buildings might not be appropriate for housing, but offices could work very well as visual and performing arts spaces. Turn the building into, say, 150 studios, and the city could rent them for $500 a month and break even over five years.
Mayor Breed wants to attract music, arts, and nightlife to downtown. Ask any artist or musician what they need, and they’ll give the same answer: Cheap space.
In the 1970s and 1980s, artists took over empty warehouses in Soma and creating a thriving scene. The landlords figured, better to rent to some folks for a few hundred a month than get nothing at all.
It wasn’t the safest scene: Those warehouses were not designed for what became live-work lofts, had poor wiring, and were fire hazards. Modern office buildings all have sprinklers, code-compliant electricity, elevators that work … it might be a lot easier to make live-work lofts than traditional housing.
At the very least, it could be daytime studios.
The city would own the building, so there’s no threat of displacement. Artists could bargain for limited equity; again, the city would be able to offer it.
More buildings are coming on the market every day. This is a once-in-an-era opportunity for the city to bank land and property at such low prices it’s a scandal not to take the opportunity.
It’s also a way to revitalize downtown.
Imagine 20 years from now, The New York Times doing a story about how, despite all the claims of a doom loop, San Francisco’s downtown had rebounded as a world-class center for arts, entertainment, and nightlife—and it happened because the city (like Vienna, which everyone is praising for its housing policy) decided to socialize big chunks of property.
Or not.
Mayor Breed?
