Value of one of S.F.'s biggest buildings plunges by 80% after Uber, Block leave

You are stuck making trade offs wherever you base your office, the market remains sort of efficient like that. If you have the network to hire the right talent in say Atlanta, go for it. But many will still do better in SF.

> SF is a gorgeous amazing city with a rich history and jaw dropping views and weather (bring a jacket)

sounds like you want to convert those warehouses into hotels and start a tourism-focused industry

Why do hedge funds pick Manhattan? Why are all the watchmakers in Jura? Why are biotech firms in Boston and New Jersey? Why are all the US car companies in Detroit? The answer is thick hiring markets and agglomerative efficiencies. Top people don't sell equities in Dallas.

Restaurants, clubs, drug dealers, ordering your coffee at Starbucks in English not Dutch- all the things you want as a high rising young urban professional is in the city. So if you actually want to attract this talent you cough up the ridiculous amount of money for the privilege of the city.

Well they kinda are. And most of them want to stay in the Bay Area, so you don't end up randomly losing a bunch of your potential "excellent match" candidates because of geographical preference. There are only two other schools in that tier; a lot of MIT grads want to stay on the East Coast.

Carnegie Mellon grads are the recruitment secret superpower though: they all want to get the hell out of yinzburgh as quickly as possible -- anywhere on earth is an improvement. Crazy smart too, especially the ones who do programming languages and compilers.

Whenever I visit my parents, the high street of their local town feels dead compared to when I was a kid. 100 years ago this town was the trade capital of the region.

Half the shops are boarded up, and whatever is left feels like it's running on limited time. Banks make up a good chunk of units, and they still only exist as my parents' generation don't do online banking.

When I was a kid it would be common to see vans (food trucks) selling locally produced meats, pastries, cheese, bread, etc. Last time I visited there was only one, selling vapes.

In bigger cities it's not uncommon for areas near high streets to be redeveloped into mixed used, with commercial on the ground floor and apartments above. I'm guessing in 20 or 30 years the concept of a 'high street' I knew as a kid will only exist as a tourist destination.

This has an issue in itself though, as a lot of these are are historic buildings. You are restricted to what changes can be done, and as-is they wouldn't make very good apartments (low ceilings, weird layouts, poor insulation/sound proofing, questionable fire safety, no parking).

That's not how it works. You don't get to write off foregone rent as a loss, only the actual cost of running/maintaining the building.

The guy you replied to had it right; accepting a cheaper rent would cause the building's value to plummet (buildings are valued as a multiple of rents), which would plunge the owners into bankruptcy as they would now owe more than the building is worth. But you can survive a temporary market downturn by never accepting a lower rent so long as it comes back up in time.

The whole thing is silly, and the market is rife for a saner way to valuate properties. Personally I would use a decay factor on top of the last paid rent for vacant properties. E.g. the imputed rent for a vacant lease would decrease by 2% every month (this figure is open to fine-tuning), so that the property is worth less and less with every month that it cannot find a new tenant at its previous rent. Then, when a new actual rent is established and is being paid, you use that figure.

Partly because only investors care about rental returns (people buying houses to live in won't be getting rent.) And partly because residential rent demand remains strong, even as commercial rent is weaker.

Where there might be cross-over is less with houses and more with large apartment blocks with a single owner. In that specific case it's probably better to keep rent high, especially if the building wants to maintain an aura of exclusivity.

For housing generally there's no need to refinance every 5 years so the need to revalue doesn't come up. And unless a revalue happened soon after a purchase the house is unlikely to be underwater anyway. Residential prices (excluding large scale external events like 2008) are not volatile and trend steadily upwards.

Ultimately the root fundamentals of commercial and residential real estate are quite different.

They have to be or they would be forced to report huge losses from marking down loans. Can’t have that screwing up the exec bonuses. Best to let the next guy deal with it, or heck, maybe they will get lucky and the market will turn around!

“Extend and pretend”

This is not at all unusual for a company where the top line is growing. As a point of comparison, Amazon was founded in 1994 and not profitable until 2003.

I would have thought something like a steel mill would be capital intensive, Uber less so.