Real Estate in Silicon Valley During Covid

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Silicon Valley Real Estate During Covid – Written by Donna Coquilla

The Bay Area retail real estate market is suffering from a jolt that is leading to high vacancies in several markets, according to a report by Colliers International. Vacancies in retail properties are up from their rise this spring, but vacancies in Santa Clara County are shrinking and rental prices have remained stable, according to the report. Retail broker Collier’s reported that demand for retail space has increased and rents have fallen in both San Francisco and the East Bay. The full-service rent is $57 per square foot, “the report from the Santa Clara County office of Colliers International said. In San Francisco, rents average $27 to $36 per square foot per year, according to Collier’s, while they drop from $35 to about $40 per square foot.

Hassan said lenders were prepared to help renters and landlords make ends meet, at least for the next few months. Encourage landlords and tenants to work together to restructure leases and develop payment plans that prevent foreclosure. Create an existing government affordable housing program for low-income owners that helps them work with lower rental income and incentivizes lenders to be lenient on affordable housing. Similar to a moratorium on rents, utilities have a similar tolerance, so utilities are shut down – shutdowns are protected. Silicon Valley Strong supports residents, businesses and nonprofits affected by COVID 19, and this site is available in several languages. Under the direction of Hello Alice, the company provides financial support to tenants, landlords, tenant families and businesses in the area. We offer leniency, which means a delay in foreclosure, where customers earn their wages as hourly workers and offset them in the form of a monthly payment of up to $1,000 in rent.

The moratorium encourages landlords and tenants to discuss and negotiate a reasonable plan to pay the rent. There is no eviction protection for apartment tenants if COVID-19 leads to financial hardship. The moratorium applies only to commercial properties in the San Francisco Bay Area, not residential properties. Commercial property sellers are encouraged to inform potential buyers that a tenant or employee has been diagnosed with COID-19 and that the area around the building could be affected. Michael Lirtzman, head of leasing, said the developer’s goal was for tenants to move out by the end of the year. The Judicial Council ruling does not prevent landlords from filing eviction lawsuits, but says court proceedings can only be initiated if the governor rescinds the statewide emergency declaration, which currently expires on September 30. The Palo Alto ordinance should be cited by all tenants, not just those with COID-19 and their landlords, and the district ordinance is cited in the case of a Palo Altos tenant who is struggling to pay rent due to significant medical expenses. The pandemic has also slowed office admissions and forced landlords to adjust the types of tenants they are trying to attract. While a whole category of retail has been hit hard because the coronavirus continues to scare off customers, the industry is facing a reckoning.

The loss of so many sources of capital will jeopardise a huge segment of retail. With tens of thousands of low-paid workers facing massive layoffs, we know that many of them will be forced to pay bills, including rent. The storm clouds are already gathering, and skeptics worry that what we are seeing in Silicon Valley is a temporary upswing before the bad times arrive. Many people who have had enough when they are not in their own homes will lose their jobs.

With tenants moving into downtown Miami and Brickell, there is a new market for companies looking to plant a flag in Wynwood, according to developers and brokers. This pandemic will ultimately bring opportunities for tenants and investors, “said David Karpeles, president of the Miami-Dade County Chamber of Commerce. Microsoft declined to comment for this story, but it lists nearly 300,000 jobs worldwide, according to LinkedIn, which is owned by the Seattle-based software giant. A spokesman for VMware said the Palo Alto-based software company has a “significant impact” on its workforce in Miami, Dade and Broward counties. Vacancy rates in East Bay retail sales were 8.4 percent in February, up from 7.8 percent a year ago, according to the U.S. Bureau of Labor Statistics. This is a marked increase on the February rate, but still below the peak of 10.5% in the summer of 2009. Despite the uncertainty surrounding the Covid 19 outbreak, Garcia and others believe Wynwood will be well positioned to attract new office tenants to the neighborhood. Several new tenants, including a new Whole Foods Market and Whole Food Market, as well as several other retailers have taken over part of the space cleared by Sears, and the mall’s occupancy rate will soon reach 98%. Mr Brown added: “There is no point in drawing a line under the technology issue until 2020. If the economy as a whole slides into recession, Silicon Valley’s current winners may not be able to stay afloat for long. It feels like everyone in Silicon Valley is up to the challenge, even if they don’t have as deep pockets as Amazon or Google.

Donna Jean Coquilla
by Donna Coquilla September 2020

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