Historically, this stretch of the summer is quiet, however, we’re truly in a place that we need to be doing everything possible: to find potential tenants, get potential tenants through space, and get said tenants to actually commit to the plans they had even a month prior. San Francisco’s downtown is in serious need of a cultural boost. What I have lamented on Twitter (really doing my part as a taxpayer) is that bands and fun will come back once businesses do. Bands don’t like their equipment stolen from their vans. Groupy(ies)s hate that. PDR and Biotech remain hot. The office market has to find bottom (which may be below building op-ex). 929 Market is advertising $20 psf/year rents!!!!
Merlin Labs raised a $105 mm Series B round to deliver hardware and software for autonomous flight. This reinforces to my point of the aerospace market continuing to be white hot while other venture capital submarkets are tending to lag/struggle right now.
Almost 1 in 3 offices in Santa Clara are vacant right now. However, there are a few notable expansions, this article does a good job of noting where we are: https://therealdeal.com/sanfrancisco/2022/07/11/2022-bay-area-halftime-report-silicon-valley-peninsula-rack-up-1-6m-sf-of-expansions/?utm_source=linkedin&utm_medium=newsletter&utm_campaign=li-newsletter-july-19&utm_content=july-19-22&tpcc=li-newsletter-july19
The majority of the negativity in markets, I believe, is baked in at this point. The Fed should not want to be seen as the party primarily responsible for inflation in the first place and then the group responsible for driving the economy into a recession. We will get more bad news, but there has to be some positivity in the world economy. Why are we only seeing the bad?
Japanese, Singaporean and South Korean tourists, owners of the worlds most powerful passports, are the least likely to travel right now. Currently hovering around 17% of pre-pandemic levels. Americans by contrast, are at 60%. https://qz.com/2190003/the-countries-with-the-most-powerful-passports-in-2022/
Scientists made a major breakthrough in quantum entanglement: https://www.iflscience.com/record-breaking-experiment-quantum-entangles-two-atoms-20-miles-apart-64374?ref=thefuturist
A couple weeks back, the cybersecurity firm Mandiant exposed a Chinese disinformation campaign targeting U.S. and Canadian rare earth ventures. According to the Washington Post, CCP agents posed as environmentalists on social media, where they rallied against toxic waste in hopes of shutting down critical domestic processing operations. The purpose of the propaganda is obvious; China mines around 70% of the world’s rare earth metals, and processes close to 90%. The CCP is highly-incentivized to maintain its monopoly, not only for business, but for geopolitical leverage — leverage the state has already attempted to use against geopolitical contenders. . But much like China’s entire technological infrastructure, this is a strategy its leadership has borrowed.
It almost always seems expensive to act with the long term in mind. Which is why so few people do it. We’re doing what we can right now in this business environment, but I’m confident this market will find its bottom soon and we’ll be on the up and up.
This is still a crazy beautiful and perfect (in my mind) place to live. She just needs to find her footing.
Take care and be well.
