Something’s in the air in San Francisco.
I visited recently and felt a new energy pulsing through the city. It reminded me of tech’s heyday, with bustling streets, busy restaurants on every corner, and a lot of traffic.
I had dinner with a few friends who live there (one of whom has been in SF for over 12 years), I got confirmation: the AI boom has COMPLETELY revived the city. OpenAI planting its flag in Silicon Valley has reignited the city, while competitors follow suit. Capital flows in VC have already surpassed past 2 years combined, just midway through the year.
Obviously theres still seedy pockets and visible homelessness, but it’s noticeably improved since post-COVID, and I think the new mayor Daniel Lurie deserves credit for that.
We toured some multifamily deals while in town and found units were getting pre-leased at asking rents without tenants, even stepping foot inside. I haven’t seen that kind of demand since the ZIRP era.
From a development standpoint, new construction just doesn’t pencil right now. That’s true nationally, but in SF it’s even tougher, with union labor mandates, seismic requirements, and layers of local ordinances make it very hard to build.
People love to write off California. But I don’t know… SF feels different right now. There’s something in the air, and for those willing to look past the headlines, I think there’s real opportunity.