# Just how badly is downtown San Francisco doing?

**URL:** <https://boards.straightdope.com/t/just-how-badly-is-downtown-san-francisco-doing/984775>\
**Category:** In My Humble Opinion\
**Created:** [May 30, 2023, 3:40pm UTC](https://boards.straightdope.com/t/just-how-badly-is-downtown-san-francisco-doing/984775 "2023-05-30T15:40:24Z")\
**Posts on this page:** 1\
**Showing post:** 105

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**Author:** ![Mighty\_Mouse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mighty_mouse/32/7776_2.png) [@Mighty\_Mouse](https://boards.straightdope.com/u/Mighty_Mouse)\
**Post date:** [September 25, 2023, 1:48pm UTC](https://boards.straightdope.com/t/just-how-badly-is-downtown-san-francisco-doing/984775/105 "2023-09-25T13:48:22Z")

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I’m the one who started the thread.

There were many reasons posited, some that I remember that made sense (I work in finance, but not real estate finance)

- accounting rules that only approximate reality. e.g. you can carry a building in the books at $10M if you believe you can rent it for $1M a year. But if you rent it for $500k/year, you’ve got to write it down to $5M and take a $5M loss right away. The fact that you actually rented it for $500k destroys your presumption that the fair market rent is $1M.

- it costs a significant amount to “fit up” the property. In the example above it may take $1M in customization to rent it for twenty years. You’d rather wait a year or two hoping the rent will recover to $1M per year, rather than locking in the lower $500k per year for twenty years.

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