Connect with us

Published

on

San Francisco is facing its highest office vacancy rate since 1993. Commercial real estate firm CBRE said in a recent report that 27.1 million square feet of a total of 90 million square feet is currently vacant.

“The issue started with the pandemic,” said Colin Yasukochi, CBRE’s executive director at its Tech Insights Center. “Prior to the pandemic, in the city of San Francisco, our office vacancy rate was about 4%. Which meant that 4% of all the space, the millions and millions of square feet of space that we had in the city, were vacant. Today, that number is more like 26%.”

With remote work gaining popularity, the problem is only expected to worsen. San Francisco has been referred to as the work-from-home capital of the United States, with the American Community Survey finding that 46% of employees in San Francisco worked from home in 2021, up from 7% in 2019. 

To combat the rising number of office vacancies, one local legislator is pushing to convert empty office buildings into residential buildings. Matt Haney, a Democratic state Assembly member, says tackling the empty office problem could help the city take the much-needed steps it needs to address the housing crisis. 

“What we can’t do is just leave these buildings empty. That would be bad for our city’s downtown. It would be a total waste,” Haney said. “There are some obvious things that we can look at, where we can meet some of the other needs that we have and actually solve another problem that we have, and that’s our housing crisis.” 

Under the Housing Element, the state of California is mandating that San Francisco build 82,000 new units of housing, including affordable units meant for low-income residents, by 2031. In order to meet that goal, the city needs to build 10,000 units of housing per year starting next year. However, San Francisco Mayor London Breed believes that task is easier said than done due to the lack of support from local legislators. 

“It’s going to require that we make some major changes that I know our legislative body is not going to be open to,” Breed said. “But if they don’t, what’s going to happen? State support for affordable housing is going to be taken away. Tax credits and all the things that we enjoy to support the ability for us to build housing in the first place in San Francisco is going to be taken away.”

The latest CBRE report published in early December said that office vacancies reached a nearly 30-year high in the third quarter with a vacancy rate of 25.5%. And those rising vacancy rates are having a major impact on the city’s economy.

“We are facing an over $700 million budget deficit, mostly as a result to the challenges around our empty office spaces, as well as we’re seeing businesses closed in the financial district,” Breed said. 

CBRE data revealed that so far in 2022 there have been 42 office conversion completions in the U.S., but only 17% of those have been into multifamily homes, while 46% has been office-to-lab conversions. 

“The rents that you can get for a life sciences lab space are much higher than office space. So it makes that conversion financially viable,” said Yasukochi. “We have high demand for residential still, but not at the price that would be required for a developer to be able to do that from a financial perspective.” 

Under current market conditions, many developers lack incentives to build housing, and strict housing policies often mean developers go through lengthy processes that can turn a profitable project into one that loses money and time. 

However, in many cases developers are already at a point where they are investing in costly upgrades. Office conversion typically takes place in older, Class C buildings in need of major repair and remodeling and often in unfavorable locations. While an office-to-residential conversion may require the stripping of a building, in most cases it’s still much cheaper than building from the ground up.

“The most important thing from a developer standpoint is what makes the most financial sense,” said Marc Babsin, president of Emerald Fund, a real estate development company that completed one of the largest office-to-residential conversions in the city at 100 Van Ness Ave. 

“There’s a lot of things that are standing in the way of converting office to residential. The biggest one being that the numbers aren’t working today because construction costs are so high. There are things that the government could do to make it easier,” Babsin said. 

The San Francisco mayor said the problem is that it takes a long time to build housing, especially given all the requirements.

“We have so many laws on the books already in terms of height limitations, in terms of open space, in terms of number of units, in terms of everything that you have to do to build,” Breed said. “And then on top of that, we make people go through an insane process which takes an extremely long time.”

While office-to-residential conversion is seen as a step in the right direction to address San Francisco’s housing crisis, it is years away from being a solution. Breed says the city needs to build more housing in any manner. 

“We just need all housing,” she said. “You know affordable housing sounds good, but when you go through the process to try and get access to affordable housing in this city, it is hard and it is really, really challenging. And the system that we have tried to repair under state and federal law has been very, very difficult to work under. And so as far as I’m concerned, we need to be as aggressive as we can to get more housing built.”

Continue Reading

Technology

Google agrees to pay Texas $1.4 billion data privacy settlement

Published

on

By

Google agrees to pay Texas .4 billion data privacy settlement

A Google corporate logo hangs above the entrance to the company’s office at St. John’s Terminal in New York City on March 11, 2025.

Gary Hershorn | Corbis News | Getty Images

Google agreed to pay nearly $1.4 billion to the state of Texas to settle allegations of violating the data privacy rights of state residents, Texas Attorney General Ken Paxton said Friday.

Paxton sued Google in 2022 for allegedly unlawfully tracking and collecting the private data of users.

The attorney general said the settlement, which covers allegations in two separate lawsuits against the search engine and app giant, dwarfed all past settlements by other states with Google for similar data privacy violations.

Google’s settlement comes nearly 10 months after Paxton obtained a $1.4 billion settlement for Texas from Meta, the parent company of Facebook and Instagram, to resolve claims of unauthorized use of biometric data by users of those popular social media platforms.

“In Texas, Big Tech is not above the law,” Paxton said in a statement on Friday.

“For years, Google secretly tracked people’s movements, private searches, and even their voiceprints and facial geometry through their products and services. I fought back and won,” said Paxton.

“This $1.375 billion settlement is a major win for Texans’ privacy and tells companies that they will pay for abusing our trust.”

Google spokesman Jose Castaneda said the company did not admit any wrongdoing or liability in the settlement, which involves allegations related to the Chrome browser’s incognito setting, disclosures related to location history on the Google Maps app, and biometric claims related to Google Photo.

Castaneda said Google does not have to make any changes to products in connection with the settlement and that all of the policy changes that the company made in connection with the allegations were previously announced or implemented.

“This settles a raft of old claims, many of which have already been resolved elsewhere, concerning product policies we have long since changed,” Castaneda said.

“We are pleased to put them behind us, and we will continue to build robust privacy controls into our services.”

Continue Reading

Technology

Virtual chronic care company Omada Health files for IPO

Published

on

By

Virtual chronic care company Omada Health files for IPO

Omada Health smart devices in use.

Courtesy: Omada Health

Virtual care company Omada Health filed for an IPO on Friday, the latest digital health company that’s signaled its intent to hit the public markets despite a turbulent economy.

Founded in 2012, Omada offers virtual care programs to support patients with chronic conditions like prediabetes, diabetes and hypertension. The company describes its approach as a “between-visit care model” that is complementary to the broader health-care ecosystem, according to its prospectus.

Revenue increased 57% in the first quarter to $55 million, up from $35.1 million during the same period last year, the filing said. The San Francisco-based company generated $169.8 million in revenue during 2024, up 38% from $122.8 million the previous year.

Omada’s net loss narrowed to $9.4 million during its first quarter from $19 million during the same period last year. It reported a net loss of $47.1 million in 2024, compared to a $67.5 million net loss during 2023.

The IPO market has been largely dormant across the tech sector for the past three years, and within digital health, it’s been almost completely dead. After President Donald Trump announced a sweeping tariff policy that plunged U.S. markets into turmoil last month, taking a company public is an even riskier endeavor. Online lender Klarna delayed its long-anticipated IPO, as did ticket marketplace StubHub.

But Omada Health isn’t the first digital health company to file for its public market debut this year. Virtual physical therapy startup Hinge Health filed its prospectus in March, and provided an update with its first-quarter earnings on Monday, a signal to investors that it’s looking to forge ahead.

Omada contracts with employers, and the company said it works with more than 2,000 customers and supports 679,000 members as of March 31. More than 156 million Americans suffer from at least one chronic condition, so there is a significant market opportunity, according to the company’s filing.

In 2022, Omada announced a $192 million funding round that pushed its valuation above $1 billion. U.S. Venture Partners, Andreessen Horowitz and Fidelity’s FMR LLC are the largest outside shareholders in the company, each owning between 9% and 10% of the stock.

“To our prospective shareholders, thank you for learning more about Omada. I invite you join our journey,” Omada co-founder and CEO Sean Duffy said in the filing. “In front of us is a unique chance to build a promising and successful business while truly changing lives.”

WATCH: The IPO market is likely to pick up near Labor Day, says FirstMark’s Rick Heitzmann

The IPO market is likely to pick up near Labor Day, says FirstMark's Rick Heitzmann

Continue Reading

Technology

Google would need to shift up to 2,000 employees for antitrust remedies, search head says

Published

on

By

Google would need to shift up to 2,000 employees for antitrust remedies, search head says

Liz Reid, vice president, search, Google speaks during an event in New Delhi on December 19, 2022.

Sajjad Hussain | AFP | Getty Images

Testimony in Google‘s antitrust search remedies trial that wrapped hearings Friday shows how the company is calculating possible changes proposed by the Department of Justice.

Google head of search Liz Reid testified in court Tuesday that the company would need to divert between 1,000 and 2,000 employees, roughly 20% of Google’s search organization, to carry out some of the proposed remedies, a source with knowledge of the proceedings confirmed.

The testimony comes during the final days of the remedies trial, which will determine what penalties should be taken against Google after a judge last year ruled the company has held an illegal monopoly in its core market of internet search.

The DOJ, which filed the original antitrust suit and proposed remedies, asked the judge to force Google to share its data used for generating search results, such as click data. It also asked for the company to remove the use of “compelled syndication,” which refers to the practice of making certain deals with companies to ensure its search engine remains the default choice in browsers and smartphones. 

Read more CNBC tech news

Google pays Apple billions of dollars per year to be the default search engine on iPhones. It’s lucrative for Apple and a valuable way for Google to get more search volume and users.

Apple’s SVP of Services Eddy Cue testified Wednesday that Apple chooses to feature Google because it’s “the best search engine.”

The DOJ also proposed the company divest its Chrome browser but that was not included in Reid’s initial calculation, the source confirmed.

Reid on Tuesday said Google’s proprietary “Knowledge Graph” database, which it uses to surface search results, contains more than 500 billion facts, according to the source, and that Google has invested more than $20 billion in engineering costs and content acquisition over more than a decade.

“People ask Google questions they wouldn’t ask anyone else,” she said, according to the source.

Reid echoed Google’s argument that sharing its data would create privacy risks, the source confirmed.

Closing arguments for the search remedies trial will take place May 29th and 30th, followed by the judge’s decision expected in August.

The company faces a separate remedies trial for its advertising tech business, which is scheduled to begin Sept. 22.

Continue Reading

Trending