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Can AI save commercial real estate in San Francisco? | CNN Business

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Can AI save commercial real estate in San Francisco? | CNN Business




CNN
 — 

When MosaicML, a generative AI platform company, decided to upgrade its office space, its CEO and co-founder, Naveen Rao, was set on San Francisco, even though he lives in Southern California.

“Everyone is talking about doom and gloom, this and that, but it’s still literally the best place in the world to build a company. There’s nothing like it,” Rao said of San Francisco.

Indeed, the city’s economy was hit particularly hard by the pandemic and three years later, it is still dealing with the fallout after a string of high-profile retailers recently pulled out of the city’s once-vibrant downtown. But despite its economic troubles, San Francisco has quietly benefited from the recent generative AI boom.

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Alexander Quinn, senior director of research at commercial real estate company JLL, said his firm sees bright spots in San Francisco’s commercial real estate market as AI companies drive office leasing demand.

“It’s driving demand specifically here,” Quinn said of the recent artificial intelligence craze.

Rao said his decision to keep his company in San Francisco was helped by the fact that the city had become the epicenter of the recent AI craze, which took off late last year when OpenAI launched its generative AI product, ChatGPT.

“The talent is unparalleled,” he said. “There’s just no other place in the world that’s even close.”

In May, MosaicML signed a lease on an 8,000-square-foot office in San Francisco that was “newer and nicer” than the company’s first office, according to Rao. JLL helped MosaicML close its deal for office space.

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Quinn said his firm knows of 10 AI companies currently on the hunt for office space in San Francisco.

“San Francisco has just been a series of gold rushes,” Quinn noted. “We’ve known ourselves to be an up and down type of economy historically, and that really manifested over the pandemic, and now we’re just starting to see that recovery.”

The city’s tech-heavy workforce embraced remote work with open arms in 2020, resulting in many white-collar workers trickling out of the city in search of more affordable living. As more employees in other major cities like New York and Los Angeles have returned to in-person work, San Francisco’s workforce has been slower to come back. Office vacancy rates in the city are at a 30-year high, and the city’s downtown has seen a spate of high-profile retail store closures as foot traffic declined from a lack of office workers and tourists.

Last month, mall operator Westfield said it would surrender its San Francisco Centre mall in the city’s Union Square back to its lender after over 20 years of operation. The mall operator cited declining sales and foot traffic as reasons for its decision. More than 39 retail stores have shuttered in San Francisco’s Union Square area since 2020, according to data from Coresight.

A shopper exits the Westfield San Francisco Centre shopping mall in San Francisco, California, US, on Tuesday, June 13, 2023. The owners of the mall are giving up the property to lenders, adding to deepening real estate pain in a city struggling to bring back workers and tourists after the pandemic.

The commercial real estate business also has felt the sting of San Francisco’s slowdown. The city, once home to some of the world’s most valuable real estate, has seen a collapse in valuations. In May, the city’s 350 California Street office tower was finally sold for 75% below its asking price in 2020, according to real estate news site The Real Deal.

But key figures in San Francisco have embraced the city’s latest iteration as an AI hub.

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San Francisco’s mayor, London Breed, recently dubbed San Francisco “the AI capital of the world” and suggested that the city consider tearing down shuttered retail space to build new structures and reshape the struggling city.

A commercial space sits vacant on October 27, 2022 in San Francisco, California. According to a report by commercial real estate firm CBRE, the city of San Francisco has a record 27.1 million square feet of office space available as the city struggles to rebound from the Covid-19 pandemic. The US Census Bureau reports an estimated 35% of employees in San Francisco and San Jose continue to work from home.

Brex, which offers corporate credit cards and cash management accounts, is another tech company that signed a lease on new office space in San Francisco this year. The company’s founder and co-CEO, Henrique Dubugras, recently moved back to the city after decamping to Los Angeles during the pandemic.

“Our CEO is pretty vocal about being closer to AI, and what is happening across the ecosystem in San Francisco was a goal for him in moving back,” Michael Tannenbaum, the company’s chief financial officer and chief operating officer, said. Tannenbaum said the company works with many AI-focused startups in the area and having an office in San Francisco is good for business.

“In the same way that retailers want to be in expensive malls because they want to have a presence in those malls, it’s the same sort of concept for San Francisco,” he said.

However, not everyone in the commercial real estate space believes the recent AI boom is enough to revive the city.

Hans Hansson, the president of Starboard CRE, a San Francisco-based commercial real estate firm, said that while he has seen some companies, including smaller AI firms, take advantage of relatively lower office rents in San Francisco in recent months, he doesn’t believe that an AI boom alone is enough to repair the damage to the city’s economy.

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“AI firms are great if you have 100 or so people coming into the office every day, but if you have an AI firm where three-quarters of the firm is remote and only a third is actually working on-site, that doesn’t support all the other services that would go in and join you, like restaurants, bars and all the other fun stuff you’d have on the ground floor of office buildings,” he said.

“I think the crash is coming, and it hasn’t happened yet,” he added, referring to commercial real estate prices.

Quinn said that despite an uptick in AI companies renting office space, JLL has seen more traditional businesses, like banks and law firms, look to reduce their office spaces or leave the city when their leases come due.

“We were used to being the real estate darling across the United States, so this is a new dynamic that we haven’t experienced before,” he said.

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San Francisco Public Library explores Black horror and its healing powers

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San Francisco Public Library explores Black horror and its healing powers


The San Francisco Public Library kicks off more than a month’s worth of Black History Month programming starting with the Martin Luther King Jr. holiday. For their premier event on Sunday, they will examine the Black horror genre and its role in healing communities. 

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This year, Dr. Martin Luther King Jr. Day coincides with Inauguration Day in the U.S. 

One day before the convergence of the holiday and Donald Trump’s inauguration, The SFPL presents, Shadows and Light: Exploring Black Horror and Black Healing.

Organizers say the timing of the event is aligned with MLK Day, and the overlap with Inauguration Day is purely coincidental.

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Shawna Sherman, manager of SFPL’s African American Center, says the event marks the launch of more than a month’s worth of Black History Month programming at the library and that they always kick off the festivities on MLK Jr. weekend. 

What they’re saying:

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“We partnered with Sistah Scifi on this event because we think it’s a great opportunity for Black horror fans to come together and celebrate their love of the genre,” Sherman says. She adds that the library as a resource provider is a venue for free exchange and deep conversation on a variety of perspectives. 

 In 2019, Isis Asare launched Sistah Scifi, the first Black-owned bookstore focused on science fiction and fantasy. 

Asare says the event will attract as many as 300 people throughout the day. It includes a keynote talk by author and film historian, Tananarive Due, as well as deep dives into the historical context of Black horror and how narratives from this genre can reflect societal fears and injustice. 

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Healing and empowerment

George Romero’s classic zombie apocalypse film, 1968’s ‘Night of the Living Dead’, is explored in a documentary film produced by Due, Horror Noire: A History of Black Horror.

In reality, the late ‘60s was a tumultuous time of societal upheaval rife with assassinations, including those of Dr. King and Malcolm X. Romero’s film is revolutionary in the sense that it’s a Black man, as Due once put it, who is the “rare Black lead” character in the film. Prior to this film, Due and other scholars observed that Black people in horror were only included as comic relief or to elevate white characters to make them appear more dignified. 

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The character, named Ben, is handsome, strong-willed, decisive and dignified whether the audience was ready for him or not. Due has lectured that this type of character may have been nightmarish for racist viewers of that era who were anti-integration. Seeing Ben ordering around the white characters may not have sat well with audience members who didn’t want to change the social structure. 

In the end, Ben, the final survivor of the zombie onslaught is tragically shot by a white mob. 

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“Exploring Black horror in particular allows us to look at those monsters and overcome,” Asare says. “You see that in ‘Night of the Living Dead’. You see that in Parable of the Sower, where the characters deal with a lot of the stuff that we’re dealing with today. A presidential candidate who wins on the [slogan] of Make America Great Again and you see a character overcome that.” 

She’s referring to Afrofuturistic sci-fi author Octavia Butler’s prophetic novel, which has been adapted into a graphic novel by John Jennings, who is featured at this event in a panel discussion on Healing Through Horror. 

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Set in California, 2025, the original book was written more than 30 years ago. 

“You see a California that is engulfed in wildfires and see how characters navigate that,” Asare says. “Black horror in particular is, we’re hoping, a space where our community can face our monsters both the real and imagined and come away with tools to feel powerful and take those tools towards a path of healing.”

Triple marginalized 

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“I really love writing about queer Black girls and horror in general is just one of my favorite genres,” Hayley Dennings said.

Dennings is an author who grew up in the Bay Area. She now lives in Oakland. Her first novel, This Ravenous Fate, is a New York Times bestseller. In her work, she looks to twist around the tropes of the past. 

“I feel like horror in general is like a great genre used to explore real human emotions and especially the tumultuous times that are happening,” says Dennings. “You see it a lot, especially in Gothic horror. Specific monsters were used to portray minorities and to scare people off from having certain connections to those minorities.”

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She explains how this is seen in stories about vampires. “Vampires are seen as these creatures of the night or our shadow selves that represent desire that a lot of people don’t like to admit to.

“I am writing about queer, Black girls who are triple marginalized. I don’t want to write a book that tells girls they can’t be queer, they should be ashamed of their Blackness,” says Dennings. “For me, it’s very empowering to get to use these classically problematic tropes and turn them around into something more powerful and to tap into the darker parts of our psyche and kind of use it as a way to explore our trauma, which a lot of times are left hidden.”

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She sees what some hold against her almost like a superpower. 

“There aren’t that many stories that are honest about this experience,” Dennings says. “I think the publishing industry likes to make things more palatable to a more straight white audience. So it’s cool to get to be really raw about my truth and to actually have people connect with that.”

History still relevant

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Dennings’ current novel is set about 100 years ago during the Harlem Renaissance. 

“There are a lot of issues that the characters are facing 100 years ago in 1926 that are still relevant today,” says Dennings. 

She lists medical racism (Tuskegee experiment) and misogyny towards Black females as examples. Looking back, she says even the intergenerational trauma from the generation that endured slavery was still relevant and had not been processed by the 1920s. 

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“It’s a way to find connections to our ancestors and our pasts. So much of the history, the Black history that I was taught was full of trauma,” says Dennings. “I have a lot of readers who tell me, ‘This feels really familiar even though it is a historical novel.’ Even though there is so much of our history that has been ignored, we still can uncover it and still feel really connected to it.”

Healing from trauma can mean reclaiming the narrative. Dennings looks to present a more nuanced version of what she calls a full human story of Blackness, one that isn’t just about the brutality and monstrosity of the past. 

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She says horror is a way to explore the various emotions. 

Sherman agrees. 

“Horror stories, whether in fiction or graphic novels or film – I think they confirm for us the horrors that we experience, you know? Yes, slavery was that brutal. And yes, science experiments have been conducted on Black people. And yes, the state has even made some of us infertile. You know, I could go on,” says Sherman. “This is not science fiction. It’s real and sometimes it might be easy for us to forget some of these things. But when we have them fictionalized in movies, in fiction, in books, it becomes, I think, easier for us to face.”

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Keeping it accessible

Attendees are encouraged to connect with each other and to check out the event’s Black marketplace. Seven vendors in the realm of health and wellness will be on hand. 

Books by the featured authors will be on sale, but since the event is at the library, guests will have a chance to pick up a library card if they don’t already have one. SFPL has a trove of material on this very topic. 

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As Asare says, this event is catered to people who are excited about the horror genre and who want to dive deeper into Black horror. Maybe you’ve only watched Jordan Peele’s Get Out. That’s fine. You don’t need a PhD in Black literature to engage in these conversations or to simply be curious. 

Andre Torrez is a digital content producer for KTVU. Email Andre at andre.torrez@fox.com or call him at 510-874-0579. 

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How Balboa Street (seriously?) become SF's unlikely arbiter of cool

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How Balboa Street (seriously?) become SF's unlikely arbiter of cool


The crowd, which skews on the older end of Gen Z, gives natural-wine natty: mustaches and dad caps, ironic T-shirts (Barefoot Contessa), band totes (The National), dogs in striped sweaters, a flutter of butterfly hand tattoos. It could be Bushwick, but it’s Balboa Street, and Rampant owners Charlie O’Leary and Jack Pain, who live in the neighborhood, fit right in themselves.

On top of a carefully curated selection of bottles, the duo offer 16 natural wines (i.e., “clean and not flawed”) by the glass — specifically those they hope will convert the haters. “People say natural wine is funky, cloudy, and tastes like kombucha,” says O’Leary, who admits that “there is an ocean of horrible natural wine out there.”

But this is not the case with the Albariño — nor, they hope, a new orange wine that O’Leary describes as “approachable, delicious, complex” from Kelley Fox, a female producer based in Oregon. Soon they’ll have in SF-based Isabella Morano to do a tasting of her Isa Wines in person. The little food menu has wine-bar go-tos like bresaola and tinned fish, but also hummus made by the woman who owns Al-Masri, the longtime Egyptian and belly dancing restaurant down the street.

Just a couple of blocks up, there’s more natural wine to be had at Slake, a year-old shop that specializes in clean drinking — “frankly, an exhausting conversation, but it’s also an important one,” says owner Daniel Lovett. Lovett did his time working everywhere from Nopa to Saison before starting a family and wanting to ditch the restaurant grind. Natural wine, he says, isn’t just a millennial affectation. “It’s about drinking the way we’ve learned to eat here in the Bay. Keep it clean and small and local.” 

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2 major events in San Francisco are scheduled for February. Is the city ready?

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2 major events in San Francisco are scheduled for February. Is the city ready?


San Francisco law enforcement and city leaders are gearing up for a big month ahead and are warning people to be on alert for scammers as the city prepares to host Lunar New Year celebrations and the NBA All Stars Game.

San Francisco city leaders say the city is preparing for two major events, Lunar New Year and the NBA All Stars Game, both set to take place on the third weekend of February. 

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The city has just hosted the mayoral inauguration, and the J.P. Morgan healthcare conference, both of which city leaders say were safe and secure. 

“We have to have a successful J.P. Morgan Healthcare Conference,” said Mayor Daniel Lurie. “We have to have a successful Lunar New Year celebration, and a successful NBA All Stars Game. We are getting the word out that San Francisco is again open for business.”

Lunar New Year and the All Stars Game are both expected to draw tens of thousands to the city. San Francisco Police Chief Bill Scott said San Francisco is ready to show the world it is ready to host large-scale events. 

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“Having the Lunar New Year, Chinese New Year parade and the NBA All Stars on the same weekend; that’s going to be a big lift for us,” said Scott. “But, we are prepared for it. We’ve been preparing for this for quite some time.”

Lurie also acknowledged that safety for big events like Lunar New Year and the all-stars game isn’t just about keeping the event physically safe, it’s also about making people feel safe. 

He said that means fully staffing law enforcement and making sure those officers are visible, and doing a better job of making the city presentable, everything from cleaning the streets to getting rid of graffiti.

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City leaders are warning that some are already looking to take advantage of the celebrations, and have recently scammed close to $375,000 in cash and valuables from victims in San Francisco. 

Community leaders are warning about a surge in blessing scams, where criminals trick the victims into placing cash or valuables into a bag and then switch the bag leaving the victim with nothing. 

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“I’m actually very angry whenever I hear about these blessing scams because these scammers are really, really targeting the most vulnerable members in our community,” said Anni Chung from Self Help for the Elderly.

San Francisco police said they’re warning the Chinese-speaking community in particular to be on the alert going into the Lunar New Year celebrations and asking anyone approached by scammers to contact the police. 

“If you are walking alone, and you are approached by somebody that’s approaching you offering some fortune or good fortune by way of a prayer or a scam, that’s probably going to be a scam,” said Scott. “Stay away from them. Call us, call the police. Report what you see.”

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