Essays by John McNellis

Going All-Electric at our Peril

Our electricity went out during that last big storm. The winds had wracked a nearby power pole and a line snapped. PG&E responded well, its crew working through a night of howling rain while we “glamped” at home. Like pioneers, we read by candlelight and went to bed early. Our experience was far from…

Vacant Offices: A Private Solution?

The office market is grim, barreling toward grimmer. According to Newmark, the national vacancy rate in Q3 topped 17.6 percent. Downtown Oakland stands at 21.3 percent, while San Francisco is outpacing the pack at 24.1 percent. With almost no traditional financing available and a bid-ask spread wider…

San Francisco: Falling off the Cable Car?

Like the road to hell, the path to urban decay can be paved with good intentions. San Francisco has plenty of good intentions. Its voters will vote on fourteen separate local ballot measures on November 8th, among them a proposed tax on empty housing. If history is any indicator, two-thirds of these…

Retail on the Rise

The Chicago Cubs went 108 years between World Series victories. It may not be quite that long before retail wins real estate’s World Series, that is, before it becomes the industry’s most desirable asset class. After 16 years in last place, bricks & mortar retail has finally climbed a rung, possibly…

The "Under-demanded" Office Market

The swallows abandoned San Juan Capistrano in the 1990’s. Their home—the historic mission—underwent a renovation, the birds lost their ancestral nests and, despite every effort to lure them back, they have yet to return in meaningful numbers. No less flighty, workers abandoned their office buildings…

Commercial Properties: Time to Hold ‘Em?

Years ago—beset by the Great Recession—one of Tennessee’s finest developers shook his head at his financial statement and drawled, “My net worth’s gone down by half, but my cash flow’s the same.” He wasn’t alone. Commercial real estate nationwide lost around forty percent of its value during those trying…

Real Estate's Early Autumn

The Wall Street Journal reported last week that April’s commercial property sales were down 16 percent compared to April 2021. In detailing the market’s loss of velocity, the newspaper stated that the hotel, senior housing, office buildings and industrial sectors were particularly hard hit, while retail…

Time to Stop Hammering?

"Thus far this year, we’ve dropped three projects because of breathtaking cost estimates.” A big-time San Francisco contractor told me the other night that he half-wished for another recession. Why? Because his subcontractors—the guys who actually do the work—are so inundated with jobs that they’ve…

Inflating Commercial Real Estate?

The Urban Land Institute is arguably real estate’s most prestigious international organization. There to advise, the learned pundits at its spring meeting in San Diego seemingly predicted every possible economic outcome for next year. Some seers contended that we are back to 1981, and that our soaring…

Drug Wars: “Pharmacies in the Crosshairs”

A couple months ago, I called my doctor to renew a prescription at Walgreen’s. She suggested trying NowRx, a Silicon Valley pharmaceutical start-up offering home delivery. It turned out that with no insurance required, NowRx would deliver 90 days’ worth of a generic heartburn medication* for $14.50.…


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