Real Estate Newsletter 5.28.24
Weekly News Roundup
- SF Troubles & Bright Spot
- How Homeowners Detract Value
- Macy’s Reimagines Retail Properties
San Francisco Troubles & Bright Spot
The city’s downtown core remains in recovery as office vacancy sits at all time highs due to remote work and tech layoffs, while deteriorating conditions and concerns about crime have taken some luster from San Francisco’s soaring glass skyline. Meanwhile, the city’s Jackson Square neighborhood, a small, historic office district on the doorstep of the pyramid building that is known for its vintage buildings and as the place where affluence meets creativity, is thriving.
Real estate prices are at their highest mark in 10 years, with recent activity in the roughly 14-acre neighborhood including a handful of buildings selling well above their market values. Meanwhile, the area is collecting a growing number of new office leases at a time when many companies in San Francisco continue to give up their downtown office space. “Jackson Square has always been an attractive neighborhood, but the pandemic really boosted its profile, because a lot of tenants are now gravitating towards the neighborhood energy and amenities, the cleanliness, the safety,” said real estate broker, Dan Johnson. “There’s a lot more green space in the neighborhood, and buildings with a little bit more character.”
“The blocks aren’t quite as long, they’re more tree lined, and Jackson Square and the Northern Waterfront almost feel like an extension of a residential neighborhood,” real estate broker Michael Gschwend said. “People have become accustomed to working from home and want to maintain that neighborhood feel.” The neighborhood’s most recent evolution from art and antique shops into a luxury shopping and fine dining district, with boutique offices that have drawn venture capital firms as tech flourished in downtown. Source: SF Chronicle
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How Homeowners Detract Value
“While most homeowners aim to increase the value of their homes, there are several actions that can have a detrimental effect, causing your home’s value to decline in less than one year,” said Josh Dotoli of the Dotoli Group in a recent interview. “Failing to address necessary repairs and maintenance issues can quickly erode your home’s value. This includes ignoring leaks, damaged roofing, plumbing problems, or electrical issues. Neglecting maintenance can lead to more significant and costly problems over time.”
“Highly personalized renovations or design choices, such as unique paint colors, unconventional layouts, or overly niche features, can limit the appeal of your home to potential buyers,” Dotoli added. “Neglecting the exterior of your home can discourage potential buyers. This includes failing to maintain the lawn, letting landscaping become overgrown, or allowing the exterior to deteriorate. A poor first impression can deter buyers from even entering your home.”
“While DIY projects can save money, poorly executed renovations can decrease your home’s value. Subpar workmanship or cutting corners can lead to issues that require expensive repairs down the line,” he also stated. “Constructing additions or structures without the necessary permits can lead to legal and financial troubles. Unpermitted work can reduce your home’s value and make selling challenging.” Source: Yahoo Finance
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Macy’s Reimagines Retail Properties
Macy’s has raised its sales and earnings expectations for the year as it reported initial progress in its turnaround plan of investing in promising namesake stores and closing low-performing locations. The New York City-based retailer said the first quarter of fiscal 2024 showed its turnaround strategy is gaining traction with customers. Macy’s launched the strategy in February after it decided to close a handful of stores as part of a broader plan to shut 150 locations in the next three years to cut costs and generate up to $750 million from property sales.
The company plans to invest in the 350 Macy’s stores it plans to keep open with sales at the first 50 stores where the investment was made performing better than other locations. For the Macy’s stores being kept open, the company is investing in products, presentation and so-called customer experience, but it didn’t reveal further details. The move comes amid what Spring called “early innings” of turning around its namesake stores.
Macy’s plans to open a Bloomingdale store as well as 15 new Bloomie’s and Bloomingdale’s outlet locations through fiscal 2026, including three locations that will be up and running by the end of this year. The retailer is also looking to add Bluemercury stores with at least 30 new locations expected and a remodel of about 30 other stores already underway. The retailer also is planning to add to its real estate portfolio 24 new small-format Macy’s stores by year’s end. Source: Costar
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