A San Francisco real estate investor has few qualms about the future of the office, even as vacancies hit a two-decade high in its home town.
Drawbridge Realty, which manages $1.7 billion of Class A office properties across 12 U.S. markets, plans to invest $500 million a year in the assets, doubling the size of its portfolio in three years, the San Francisco Business Times reported, citing CEO Mark Whiting. The firm says 95 percent of its 5.4 million square-foot office portfolio ws leased as of mid-February.
“There’s been a lot of reticence around office and how it’s going to perform,” Whiting said. “The types of assets we are investing in are assets where companies want to attract talent, do research and collaborate and innovate.”
Office vacancies in downtown San Francisco reached 22.4 percent at the end of the fourth quarter as employers tried to figure out how to get their employees back from a pandemic-induced remote work model. Google and Apple are among the local tech companies that have set what they say are firm dates for workers to return on at least a part-time basis.
Across the nation, the future of offices remains a bit of a mystery. While Chicago’s vacancy rate fell for the first time during the Covid era in the fourth quarter, it still stands at 19.7 percent. In Manhattan, it’s hovering just below that, at 17.3 percent.
About 10 to 15 percent of Drawbridge’s office portfolio is in the Bay Area, Whiting said, and the company plans to expand that with more properties in Silicon Valley.
The firm owns a Google-leased building at 2637 Marine Way in Mountain View as well as properties in San Jose and North Bay. It will continue to look at “classic” two- to three-story suburban office buildings that are accessible by car or public transit.
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San Francisco
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