Editor,
Articles appear almost daily in the San Mateo Daily Journal about new office buildings being discussed for construction on the Peninsula. The latest is over 3 million square feet on Bridge Parkway in Redwood City. Meanwhile, Google is attempting to sublet 1.4 million square foot of its office space in San Jose and San Francisco’s commercial vacancy rate exceeds 30%.
The real estate firm CoStar reports a 20% office space vacancy rate in Menlo Park and Mountain View. There are multiple for lease signs on office buildings in Burlingame, San Mateo and Redwood Shores.
Both Jamie Dimon, CEO of JP Morgan Chase, and Warren Buffet are forecasting a glut in office space and negative consequences to the banks that are lending the money. Economist Kiran Raichura states the market ahead for office space owners is “set to be an arduous one.” Why is more office space being built? Who is going to occupy it? Where are these people going to live?
It is time for city officials to stop encouraging and approving these developments. We will soon look like Detroit of the ’70s, and current day San Francisco with large empty office buildings. We will face another banking crisis when all these loans default. The saying “If some is good, more must be better” is false for commercial office space on the Peninsula as well. It is time to stop.
Michael Grubb
San Mateo
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(4) comments
Thanks for your letter, Mr. Grubb. One has to wonder why developers continue building office space. And why city officials continue approving them. Developers must be making money, somehow.
Mr. Grubb - Excellent, important points.
1978's prop 13 is the reason for so much commercial space. In summary, commercial property tends to kick off more tax revenue than residential space does. We can counteract that with higher local property taxes, I believe. Prop 13, however, must be undone.
Yes, just blame Prop 13 for everything that ails us. Our problem is that we keep on electing politicians who never say no to a new tax. Are you living under a rock? Who wants or needs higher property taxes? All is wasted anyway on pet projects. The market will take care of the vacancy in commercial properties, taxation is never the answer.
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