| Take a bow, Bay Area. Bisnow’s State of the Market last week focused on LA, but the panels spent almost as much time talking about San Francisco. And no wonder, with investors targeting their activities on tech-oriented growth areas. They also lauded the large space takedowns that are much more prevalent here. |
| Tishman Speyer’s John Miller notes his company has two fully zoned, permit-ready development sites in the San Francisco CBD and on LA’s Westside, and the former has a realistic likelihood of enough rent growth over the next few years to start spec. PCCP’s Bill Lindsay says the firm sold 795 Folsom St, which was Twitter’s HQ. Now the City is building Twitter a new HQ and PCCP sold the building to a foreign investor. He opines it’s a little bubble-ish when a foreign investor is buying a building that will be 50% vacant in two years. But PCCP recently got control of 100 California St, buying mezz loans and making a deal with the borrowers to convert them into equity. It’s simple math: PCCP will bring the asset—which is 70% leased in a CBD that’s 90% occupied—back to the market, where it hadn’t been playing due to its upside-down capital structure. |
| All the talk about the tech companies prompted Hudson Pacific Properties Alex Vouvalides to note that Zynga gets people to pay real money for fake goods. “There are people online spending $10 on fake farm products for their online farm, and you just wonder how long that’s going to last.” (Our corn stalks are already starting to wilt. Better buy more.) Meanwhile, folks are talking about Facebook having a $100B IPO. The number of users they have and the amount of time people spend on the site “has to be worth something to somebody.” Compared to the last tech bubble, people now are taking space they actually need. |
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Bill Lindsay, John Miller
