40% of PG&E's Total Workforce Is Eligible, Today, For Retirement

The SF Business Times has a great article on the impending crush of retirees which will be exiting the labor market in the upcoming years.

I represent tech and non-tech clients and am beginning to worry that the workforce will forever be changed as it becomes very difficult to replace these workers.

Let's face it, today's youth are lured to the perks and financial gain of working in tech.  Who doesn't like catered lunches, beer on tap at the office, ski trips, and stock options?  Even if the company flames out, you still had a blast and got to work with a youthful and in many cases, attractive group of people!

In CRE, we are seeing very few college grads entering the business.  Part of me is glad for in the next decade or two, there will be less competition for assignments and requirements.  However, many CRE firms will face extinction as they cannot maintain a stable of agents and support staff.

For lease: creative suite in the Dogpatch

I have a new space for lease.  Please see link here.

Here are a couple images too.

Thank you!

Struggling first time home buyers turn to fraud to buy property

Some first time home buyers with little credit history seem to be buying property as an investment rather than as a primary residence which constitutes fraud.

Can we blame them?  If they simply want a piece of the American Dream then arguably no.

The article here shows the new trend.  This will affect the statistics of homeownership (which I blogged about recently) too.

Very interesting!

UBS goes open plan, and beyond

The open plan concept is not new but seeing UBS adopt this is cutting edge.  They take the concept a couple steps beyond via "thin desks," dedicated computers, and dedicated phones.

As a member of the open plan corporate culture, this is great for UBS' collaboration and I welcome them.

But let's face it, there are other things the article does not mention.  My open plan commercial real estate clients have told me that one major reason they prefer open plans is that they can see what each and every employee is working on.  The impulse to spend hours surfing the net is reduced when a manager is within eye-shot of your monitor.

Another item the article fails to mention is the need for privacy, phone rooms, nursing rooms, and nap rooms.  My clients have spent thousands of dollars utilizing these in their office layouts which employees clamor for.

A carefully designed office needs enclosed rooms if sensitive information needs to be discussed along with open, collaborative space.

My biggest issue with the open plan is the difficulty to concentrate and focus on the task at hand.  The disruption of conversations is a daily challenge.  I was just offered a private office but turned it down as much of my time is spent out of the office and I felt the next person in line would use it more than me.  I still want a private office but maybe if TRI moves to a more office-intensive space once our lease it up.  Right now the solution to my challenges is NOISE CANCELING HEADPHONES!

UPS tests electric bikes in Portland

I am glad to read that UPS is now testing electric bikes as part of their delivery fleet which you can read more about here.

The article shows how forward-thinking UPS is but forgets to mention one thing - cost savings via fewer parking tickets!

As a worker in Downtown San Francisco, I see stacks of tickets under wiper blades of all sorts of vehicles illegally parked which must cost UPS and others a ton of money.

The article also fails to explain how UPS will stock and re-stock the bikes as most delivery companies do not have warehouses in the downtown cores of San Francisco or other major cities?

I await their deployment in San Francisco!

California has the lowest homeownership rates since the 1940's and is now home to 22% of the nation's homeless population

The state of California still has a way to go as seen through recent research here.

5 Reasons to Suspect that the Tech Boom may be Ending and what it means to Commercial Real Estate

From Alexander Hamilton of Versant Law Group: A lot of the growth in real estate over the past few years has been fueled by the ongoing tech boom in both in the Bay Area and other parts of the country. According to one recent estimate, tech companies continue to drive the most leasing activity across the country—nearly 25% of all leases over 20,000 square feet in the past two years. Yet I get asked on a regular basis as to whether I think the tech boom is ending. Even though I continue to see a lot of tech leases, there are 5 reasons I think the tech boom may be ending. 1. National tech employment growth may be falling off. One estimate shows that growth in hiring in the tech sector has dropped by 50% from 2015. While growth in the tech sector continues to grow at twice the average of other private sector industries, the steep drop off from last year is troubling. 2. Increased Focus on Fundamentals. As tech grows up and investment homeruns fade from popular memory, investors are focusing more and more on business fundamentals, favoring companies with profitable track records, firm business plans and solid customer bases. As a result, fewer tech investments are occurring and the ones that do occur are smaller. 3. Venture capital activity in tech firms is slowing. Overall the number of investments made by VCs in tech companies has fallen by 40% from Q2 of 2015 and the total capital invested has dropped by 33% from $12B to $8B. According to PWC, investment in unicorns (companies valued $1B or more) during that same period dropped by only 8%, which means that more capital is flowing to large companies while start-ups struggle for financing. 4. Tech Moving to Less Expensive Markets. With the slowdown in investment in the tech industry, seed and early-stage companies are becoming more sensitive to the cost of real estate. The result is that they are moving into less expensive markets or submarkets. Within San Francisco alone, tech companies are foregoing Soma and instead moving more and more into the Union Square, Jackson Square, North Waterfront, mid-Market and Van Ness Corridor submarkets. Even well-funded, late-stage startups while continuing to grow their real estate footprints, are doing so at a less aggressive rate. 5. Growth in Co-Working Environments. Also as a result of tightening investment markets and uncertain futures, more and more seed and early state companies are foregoing for the time being permanent office space in favor of co-working environments. This not only reflects the fluid work environments and schedules of tech workers but the lack of confidence in investors and management regarding the short and long term futures of early stage start-ups. What does this mean for commercial real estate? A down turning tech market may be the impetus for a number of changes in the commercial real estate market. 1. Fewer leases to start ups. As investors and landlords become more concerned about the future of tech, we are seeing less leases being entered into with start-up tech companies. In addition, those leases that are being entered into with tech start-ups are on more aggressive terms and with larger security deposits. 2. More leases to Unicorns. With a slow-down in leases to early stage tech companies, more landlords are looking to lease to large tech companies with established credit. These tenants are correspondingly able to negotiate more favorable lease terms. 3. Credit concerns. With the tightening tech market, landlords are having credit concerns not only with early stage tech companies but also with maturing tech companies who may be experiencing limits on their ability to grow their business and may also be seeing increased competition from other maturing tech companies. As a result, landlords are taking a more critical eye to the future prospects for strength in tech performance. As a result, they are seeking greater credit enhancement both at the commencement of tech leases and as tech companies look to extend their leases. 4. Expansion of co-working companies. Finally, the decrease in leasing to start ups and early stage tech companies as well as the hedging of bets by investors, is resulting in a large number of start ups and early stage companies moving into co-working environments such as WeWork, Covo and Next Space. The result is that more companies are moving into the arena of establishing co-working environments as a way of meeting the growing demand for co-working space.

What To Do Next:

Given my background as a CPA with a national accounting firm, I always commence any representation with a strategy session in which I work with my client to identify and clarify their business goals. Once those are clearly understood, legal services can be focused to help them reach the most favorable outcome efficiently and in the lease amount of time. As the author of Miller & Starr California Real Estate Forms, the most often consulted real estate practice guide in the country, I make it a point to stay up to speed with the latest changes in the law, as well as make sure that my client's contracts clearly represent the intention of the parties. This saves time and thus money which I then pass on to my clients. If our firm is not the best resource for the client given the facts at hand, we maintain an extensive trusted network of other professionals to whom we make referrals. Our goal is always to look outside the box to provide the greatest value to our clients. Contact our office at 415.627.9145 orahamilton@versantlaw.com to schedule a strategy session.