San Francisco Office Investors Brace for Big Write-Offs As Loan Refinancings Loom

The sharp decline in the performance of office buildings in downtown San Francisco has reached the point where some investors are facing the prospect of losing most, if not all, of the equity value of their properties. Increasing vacancy levels and declining rents are eating away at net income, and with capitalization rates also increasing, any property that is marked to market in the current environment will likely face a substantial decrease in value.