San Fran’s Struggling Multifamily
Commercial Observer
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San Francisco’s office market has been struggling since the pandemic started. Now it looks like its multifamily market is struggling too. The evidence? The plunging value of even a luxury apartment complex in the city’s Mid-Market neighborhood. Also for today: The changing dynamics in Manhattan’s Midtown South, where once very active technology firms have ceased leasing so much space.
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— Tom Acitelli, Deputy Editor
Valuation of San Francisco Luxury Apartment Building Dips 49% From 2018: Trepp
Ongoing distress within San Francisco’s commercial real estate market amid record-high office vacancies has permeated into the Bay Area city’s multifamily sector. A 754-unit luxury apartment complex owned by Crescent Heights in San Francisco's Mid-Market neighborhood has lost nearly half its value since the deal priced in 2019, according to a Trepp alert issued Wednesday. The developer’s NEMA San Francisco backs a $384 million commercial mortgage-backed securities (CMBS) loan, and the value of the collateral has fallen 48.7 percent to $279 million compared with $543.6 million in 2018, Trepp data shows.
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Midtown South’s Tech-Fueled Office Boom Has Ended. What’s Next?
Midtown South’s office and retail markets have returned to Earth. Not too many years ago, Midtown South was the most happening place in New York City, if not one of the hottest commercial real estate markets nationally. It was the place where the city’s fledgling tech industry wanted to be, a place that helped fuel the ubiquitous property term TAMI — technology, advertising, media and information — to describe its driving office users. A slice of Midtown South became known as “Silicon Alley,” the East Coast’s answer to the California tech hub. For a few years, until 2002, there was even a billboard reading “DoubleClick Welcomes You to Silicon Alley” at 22nd Street and Broadway.
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