SF Business Times: "Venture capital deal-making signals the party's over"

So I just read that the party is over.  Venture-backed firms are experiencing down rounds, layoffs, acquisitions, and more.  Well, don't tell that to all the venture-backed tech firms that I am currently working with who seem to be doing just fine and in need of space.

The article states that "Rory O'Driscoll, a partner at Scale Venture Partners in Foster City, likened the mood in the Bay Area's startup community to the moment the Titanic hit an iceberg.

"No one wanted to jump into lifeboats right away," O'Driscoll told the Wall Street Journal."

That sounds pretty foreboding!  Personally, I too have experienced the collapse on a small scale where two of my venture-backed firms who signed leases last year have already shut down locally or are about to do so.  There are grumblings that others may not be adding headcount as previously forecasted.  But the comparison to a sinking Titanic isn't a reality in my current circle, yet.

I suspect the slow down will continue but there are too many cutting edge companies being created each and every day that are going to succeed tremendously and reshape entire industries such as Airbnb, Square, and Uber.  As long as their growth and path to profitability are realistic, we should see a healthy commercial real estate market.

Now is the time for tenants to contact me to extend their leases or find new office space as securitizing a deal as things worsen will only get more costly.  Sure, there is the argument that rates may go down but unless there is a flood of office space in the 2-10,000 square foot range, pricing may not drop dramatically in the coming quarters.

Please ping me with questions about an early renewal, early relocation, or to discuss subleasing surplus space.

Ken Rosen: The Bay Area CRE Market Will Remain "Rosy" in 2016

Ken knows what he's doing so please read here.

Personally, I agree with his sentiments but am already seeing some shakeouts.  Two tech firms I represented last year may be giving back their space due to financial issues.

I don't expect a major bubble burst, just some companies who aren't profitable getting the axe while the others who show promise continuing to grow.

Enjoy!

Here's information on under water commercial properties. However, it's not what you think from the traditional, financial sense. Read on!

I look forward to completing a transaction in one of these properties!  It seems a bit unnerving and I wonder what the impacts to the environment are, nevertheless, it seems like this will happen somewhere  on the planet in my lifetime.

Enjoy the article here.

RESIDENTIAL REAL ESTATE DISRUPTION UNFOLDING!!! Airbnb's latest discussions: the good, the bad, and the ugly for residential tenants and buyers

It's reported that Airbnb is in discussions with some of the country's largest residential landlords and is considering partnering with them.

This could add a ton of inventory to the Airbnb platform which is great for people looking for a short term place to stay.  That's good news!

But what if you're in need of a long term rental apartment or house and the amount of inventory decreases and what's left is really expensive?  What if you're a current residential renter?  Will your options decrease?  Will renewing from year to year increase?  The answer is most likely, "Yes!"  This is a double dose of  bad news for residential renters.

Now for the ugly.  If residential tenants decide it's more advantageous to buy versus rent, then we will see more demand for available residential properties.  This is great news for sellers, lenders, mortgage brokers, and agents but horrible for buyers.

In a space-constrained region like the Bay Area, technology stands to disrupt the residential real estate market with huge implications on those who don't currently own their own place or aren't in a rent controlled property. 

Stay tuned!

Landlord Dealing with Tenant Bankruptcy?

This is a great article highlighting some of the items a landlord must keep abreast of should his or her commercial tenant file for bankruptcy.

We always recommend keeping close to a commercial real estate attorney so if anyone needs a list of referrals, please let me know.

Time to Zell - but what does this really mean?

San Zell has reportedly sold billions of dollars of real estate recently.

Does this mean he thinks we're at the top of the market?  He seems to have a solid track record.

But, if he's selling, this means someone is BUYING his assets - are they crazy?

Please ping me to get the answer!

The state of startups - how will commercial real estate be affected?

First Round Capital published an interesting report showing the future of many things under the sun in regards to startups.

It will be interesting to see how many tech firms begin subleasing surplus office space as their growth plans change.  Will San Francisco become too expensive?  Will decision making shift more to investors?

Only time will tell.  Please ping me if you wish to discuss further.