London Breed promotes adaptive reuse at NAREIT conference in San Francisco

“San Francisco is coming back,” John Kilroy, the CEO of office giant Kilroy Realty, shouted to a crowd of investors. His statement elicited no response from the audience.

Speaking at the National Association of Real Estate Investment Trust’s annual conference in San Francisco, Kilroy got on stage for a few minutes to introduce Mayor London Breed, who was there to hype the city of San Francisco and encourage real estate investment.

“It’s no secret in this city that we had extreme progressive policies that have not worked,” Kilroy said. “Now we have a city that’s in transition and good things happening politically.”

After thanking Kilroy, Breed took the stage, first noting that hotel occupancy in the city was up. In September, about 73 percent of the city’s hotel rooms were occupied, according to city data, still below the February 2020 average occupancy of about 82 percent.

Breed went on to tease a plan she hopes to unveil in the next few months that would promote adaptive reuse of underutilized properties, like turning offices into housing. She also hinted the city would revisit tax structures that are not favorable to development.

“Property values have declined,” Breed said, adding the city has been negatively impacted by remote work and increased levels of crime. “But this is not unforeign territory.”

Breed cited San Francisco’s economic recovery after the 1989 Loma Prieta earthquake, which caused more than $5 billion in damage, and the dot-com crash in the late 1990s.

“Everyone thought San Francisco was done, and we came back,” she said.

She noted restaurants have roared back, too. “There are restaurants where I can’t even get a reservation now, and I’m the mayor,” she laughed.

Breed criticized the city’s Board of Supervisors, arguing the legislative body is “obstructing business.” For months, the board — considered more progressive than Breed — has fought over new multifamily zoning laws and affordable housing development.

The mayor tried to reassure people in the audience that public safety concerns in San Francisco were improving, citing her own policies to hire more police officers, increase overtime budgets for police officers and implement a program to hire civilians to patrol business areas.

Despite these programs, incidents of vehicle theft, murder, larceny theft, robbery and assault are all up this year compared to last, according to data from the San Francisco Police Department. Incidents of burglary — actually breaking into a property and stealing — are down year over year.

Breed then introduced Prologis CEO Hamid Moghadam, who gave a surprise speech to the audience.

Moghadam said he was propelled to get more involved with the city’s politics after he was robbed at gunpoint in June.

“The city looks a lot cleaner after the election a few weeks ago,” he noted, though he didn’t explain further.

Moghadam praised Breed for her work as mayor, saying she operates in a “governance structure that is virtually impossible” to work with.

He also agreed with Breed’s statements about the Board of Supervisors: “The body has moved further and further away from the interests of the business community,” he said. And the agreement wasn’t rehearsed — Moghadam said he hadn’t spoken to Breed for a couple of weeks.

Moghadam and Breed both ended their respective speeches encouraging members of the audience to keep investing in San Francisco.

“This is where you want to get in, to try and take advantage,” Breed said, referring to lower property values.

Moghadam also said it’s time to invest: “This area is not going away.”

Read more

San Francisco

SF housing development measures too close to call

San Francisco

Business tax measures lead in Bay Area cities

San Francisco

SF sees 15% of office workers WFH permanently, spelling uncertainty for taxes