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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, CA

Breed picks ex-Bloomberg staffer for Board of Supervisors seat

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Breed picks ex-Bloomberg staffer for Board of Supervisors seat


Sherrill registered with the Democratic Party in 2023 after identifying as “no party preference” since first registering in San Francisco in 2016.

He has longstanding connections to former New York City Mayor Michael Bloomberg, an ally and supporter of Breed. After college, Sherrill worked as an assistant for the New York deputy mayor for operations and later was promoted to senior policy advisor during Bloomberg’s tenure.

Bloomberg contributed more than $1 million to an independent expenditure committee supporting Breed’s failed reelection bid this year; likewise, she endorsed Bloomberg during his unsuccessful presidential run in 2020. The San Francisco mayor’s office of innovation is funded by Bloomberg Philanthropies, his charity.

Sherrill denied that political ties between Bloomberg and Breed were a factor in his appointment, saying both care deeply about building cities and hiring great talent.

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Not all District 2 community leaders were convinced. Jason Pellegrini, a former human rights commissioner and District 2 resident, said he will support Sherrill’s success in office, for the sake of the district. However, he said, Breed’s choice carries the whiff of a political favor, and Sherrill wasn’t the most experienced pick on the short list of possibilities.

“I’m extremely disappointed in Mayor Breed, the daughter of San Francisco, as she’s leaving office,” Pellegrini said. “I feel this is a slap in the face not only to District 2 but to San Francisco.”

Patricia Vaughey, president of the Marina-Cow Hollow Neighbors & Merchants Association, was skeptical of Sherrill’s appointment and said she had not seen him at community meetings.

“Here we go again with someone who doesn’t know what the fuck they’re doing,” Vaughey said. Still, she said she will do her best to support him: “I have to work with whoever I have to work with.”

Through a spokesperson, Breed’s office said, “The mayor made the appointment based on her belief in Stephen’s qualifications and abilities, nothing else.”

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IEEE Trips To Singapore, Japan, New Jersey, San Francisco, Bologna And Milan

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IEEE Trips To Singapore, Japan, New Jersey, San Francisco, Bologna And Milan


This is the last month of my IEEE Presidency and still a few things to do. I estimate I have been away from home over 250 days this year, flown on 17 different airlines and given over 100 talks either in person, remotely or via recordings at various IEEE and other events. It has been quite a year!

We had a virtual board of directors meeting this month to approve the winner of the 2025 IEEE Medal of Honor, who will be awarded a $2M prize in April of 2025 in Tokyo. This month I visited and spoke at IEEE Tencon, a Region 10 conference in Singapore, attended and spoke at a YP/student-oriented event and visited a milestone in Kyoto, Japan as well as the Nintendo Museum with other IEEE volunteers and staff. I then flew to San Francisco, CA to give out some IEEE field awards at the IEDM and then to Italy to give some talks in Bologna and another IEEE field award in Milan, Italy.

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At Tencon, I spoke about IEEE AI Ethics activities in a keynote talk as well as giving a talk on recent IEEE board activities and encouraging our younger members to stay with us and make IEEE their professional home. I also visited the local Schneider Electronics Office, a startup called Black Sesame, the IEEE Singapore office and A-Star, a Singapore government funded research organization. The image below is me during my keynote talk. The shirt was a gift from the Singapore IEEE office, a batik print shirt, which are common wear in this part of the world.

Below is an image of me at the Schneider Electric visitors center in Singapore. We were shown their various electric power and facilities management products and services and spoke with them about stronger engagement between industry and the IEEE. We had a similar conversation with Black Sesame, who have offices in the same building as the Singapore IEEE office and make chips for electric vehicles. At A-star we talked about various IEEE activities include those related to sustainability efforts, including port electrification for ships to connect to the electric grid when in port and for charging electric boats.

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In Kyoto, Japan I gave a talk at a virtual and physical event for students and young professionals about recent activities approved at the IEEE November board of directors meeting, about stronger engagement with industry and how IEEE can the professional home for our younger members and support their careers. I also visited two milestones in Kyoto.

The first was to Shimadzu Corporation, a biomedical company in Kyoto. There I joined Nobel laureate Koichi Tanaka, shown with me below next to the milestone plaque at Shimadzu, who invented the matrix-assisted laser desorption/ionization technique, which allowed ionization of large organic molecules so they could be detected by a mass spectrometer. This allows detection of useful large organic molecules for various medical and biological research applications. This milestone was installed in November 2024.

The image below is from my visit to the Keage Hydro Power Station in Kyoto, which used water from the lake Biwa Canal to create electricity for the city starting in 1897. The first power plant was DC powered and later converted to AC. In 1936 a new facility near to the original building was completed which used water from a second canal to increase the AC power output. This facility is still working to provide low-carbon power to Kyoto. The image below shows me next to one of three copies of the milestone plaque near the hydro-power generators.

Nintendo recently opened a museum near Kyoto. I visited it with 2020 IEEE President Toshio Fukuda, IEEE Council Office’s Makiko Koto and my Kyoto host, Tomohiro Hase-sensei, from left to right, shown below with some animated Nintendo Toads, Toadstools, at the museum. Nintendo started in the 19th century making card games, expanded into board and other games in the mid-20th century and offered its first electronic game devices in the 1970’s.

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I flew from Kyoto to New Jersey to give out the Charles Proteus Steinmetz award to Gary Hoffman at the IEEE Standards award event and then flew back to San Francisco to attend the IEEE IEDM, International Electron Devices Meeting, to give out three more technical field awards and attend some sessions at the IEDM and the MRAM Forum following the IEDM on Thursday. I also attended an IEEE Magnetics Society standards meeting on Wednesday night.

After half a day at home in San Jose I then headed to Bologna and Milan Italy to give some talks in Bologna, including at the Italian Academy of Science and give out the IEEE Control Systems Society award at the IEEE Conference on Decision and Control, CDC, in Milan Italy before heading home for some time with my family.

The picture below shows me with my gracious hosts Cecilia Metra, left, and Carlo Alberto Nucci, right, at the amazing meeting room where I spoke at the Italian Academy of Science about the IEEE and things that our IEEE board has been working on in 2024. Those are hand painted drawings on the ceiling of this room and there were busts of famous Italian scientists on the walls.

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Cecilia is an IEEE Fellow and a professor in Electrical Engineering at the University of Bologna, the world’s oldest university, founded in 1088. She has been very involved in fault-tolerant design of digital circuits and systems and is a past President of the IEEE Computer Society and will be an IEEE director again in 2025. Carlo Alberto is a member of the Italian Academy of Science and is a professor of Electrical Power Systems at the University of Bologna and the Editor and Chief of the Electric Power Systems Research Journal.

I also gave a talk at the University of Bologna to students and faculty about IEEE and other sustainability efforts for data centers, particularly involving digital storage and memory technologies. I visited the Marconi estate, Sasso Marconi, near Bologna where I had a chance to see where Guglielmo Marconi did his pioneering radio work. The image below shows me with the IEEE Engineering milestones outside of the house in front of the hill where he and his associates were able to demonstrate radio communication beyond line of sight, using a spark gap transmitter.

The next day I traveled to Milan to participate in an awards ceremony to present an IEEE Technical Field Award, TFA, at the IEEE Conference on Decision and Control, CDC, put on by the Control Systems Society. We had social events at the Alfa Romeo Museum and at the National Museum of Science and Technology near and in Milan. On December 19 I flew home to be with my family for the holidays.

This trip was my last as IEEE President. I have been honored to have been part of the 2024 IEEE board and I am very proud of the things we have been able to accomplish this year. I look forward to working with the 2025 IEEE President, Kathleen Kramer, as IEEE Past President in 2025.



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San Francisco, CA

San Francisco Giants Boss Building Franchise in His Image, Insider Says

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San Francisco Giants Boss Building Franchise in His Image, Insider Says


When the San Francisco Giants hired Buster Posey to replace Farhan Zaidi, it was clear that San Francisco would be heading in a new direction, but unclear what direction that was. The new regime has now made their first big signing and the direction and type of player that Posey and company want is becoming clear.

That type of player are ones like Posey himself, as Susan Slusser of the San Francisco Chronicle explained on the show Foul Territory.

“I think Buster Posey really wants gritty guys,” she said. “There was a lot of talk the other day, and this won’t come as a surprise to anyone, during the WIlly Adames press conference. He played in 161 last year, wanted to play 162, he wants those kind of guys, he wants guys that play like he did.”

Chapman played 154 games last year, the first Giants player to appear in 150 or more games since WIlmer Flores in 2022. Chapman’s ability to play everyday and show that type of grit is why San Francisco felt comfortable giving him a huge extension.

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Adames has played in at least 140 games each of the past two years, including that 161 number last season.

Another player who they are currently a “favorite” for is that same type of gritty guy, just from the mound. Corbin Burnes has made at least 32 starts in each of the last three seasons, including at least 190 innings all three years and even a 200 inning season. That is something not seen as often in the game anymore.

One of the big complaints during the Zaidi era was that the Giants didn’t always hav that one player who played everyday. There was a lot of platooning, and it now seems like Posey wants to get away from that and find players who will be there everyday.

“He wants Chapman’s, Adames’ guys who are going to go out and really fight and lift up their teammates and hold them accountable, too, which is exactly what Buster did when he was a player. I think that’s important for him,” Slusser continued.

The president of baseball operations wants to re-work this team and build a new identity in his vision, which is something he has begun to do. However, in order to do that, Posey will need time and patience to turn over a roster like that.

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With the addition of Adames, though, he joins Webb and Chapman as those type of gritty players who will be out there everyday.



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