Essays by John McNellis
In Sight: San Francisco’s Recovery
“Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” Winston Churchill The city’s nascent recovery is hard to see from the ground. Union Square’s block-scarring vacancies seem to be proliferating, once overflowing cable cars are...
Death of a Deal
In Rochambeau, paper beats rock. In life, paper sometimes beats deals. We own a shopping center in a Sacramento suburb that we developed 25 years ago. At the beginning of the year, we earmarked this center and a couple other assets for sale. We listed it with a top brokerage...
Sell the Disco While They’re still Dancing
Rite Aid is on life support. Again. The weakest of the three national drug chains behind Walgreen’s and CVS, Rite Aid has once again stopped paying its obligations this month, stiffing one and all just as it did two years ago. In 2023, the company had 2100 stores and four...
An Easter Tale: Countering Expectations
I probably shouldn’t put this in print, but here goes: we counter every offer we get. Even if we’re thrilled with an offer, it doesn’t matter; we counter it, if ever so slightly. If someone offers us full price on a property we’re selling, we’ll counter with, say, the timing...
Bad Settlements beat Good Lawsuits
This is a true story. A well-to-do investor—let’s call him Sam—owns a charming three-story brick office building in a city that was once the envy of America. His building is in an elegant quarter that has suffered less than the forlorn city itself, but a restoration to its former grandeur...
CRE: Waiting for Cheaper Money
In Samuel Beckett’s masterpiece Waiting for Godot, his principal characters Vladimir and Estragon stand around the entire play waiting for Godot, but he never shows up. While it has been hailed as the 20th century’s most significant English language play, most of us (including your correspondent) ignore its intellectual depths, stick to its...
Revive our Downtowns? Recall Government Workers
The old joke goes like this: a visiting dignitary asks a mayor how many people work at city hall. The mayor scratches his head, ponders, then replies, “Oh, about half of them.” Those regularly engaged with government services may be forgiven for thinking that mayor optimistic. In darker moments of...
How Remote Work Reshaped San Francisco’s Apartment Market
Rather than another dreary epistle about San Francisco, this is a tale about the only law of economics worth knowing. But it’s set in the city. In 2006, my wife inherited 190 Hermann Street, a sunny, pleasant five-unit apartment building on Mint Hill. Then, weary of rent control’s slings and...
AI’s White-Collar Road Kill
Journalists may be worse off than polar bears. After all, cold winters may return someday but AI isn’t going anywhere. I chatted with a couple newspaper editors on a recent trip east. The conversation inevitably turned to the algorithm in the room. One editor said it was a firing offense...
Retail Vacancy Taxes: Empty Stores, Empty Logic
Palo Alto’s city council is considering a “vacancy tax” on empty shop space in its downtown, penalizing owners stuck with vacant buildings. Not widely heralded for its common sense, the Council reasons that landlords are behind our beleaguered downtown’s hollowing out. One council member crowed that greedy landlords are intentionally...