Salesforce CEO Warns San Francisco's Collapsing Downtown "Never Going Back To The Way It Was"

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by Tyler Durden
Wednesday, Jul 19, 2023 - 03:45 PM

San Francisco is a 'hellhole' that epitomizes everything wrong with how progressives govern cities. That's because Democrats in City Hall believe that most criminals are victims -- don't arrest them -- which allows for open-air drug markets, homelessness, and violent crime to thrive. 

Due to failed social justice reform policies, the business conditions in downtown San Francisco have become challenging. Furthermore, the ongoing structural decline in demand for office space has thwarted any potential economic recovery in the area. 

Marc Benioff, chief executive officer of Salesforce, the city's largest employer and anchor tenant in its tallest skyscraper, understands the metro area is in trouble. According to AP News, Benioff offered this grim outlook for the metro area: The downtown area is "never going back to the way it was" in pre-Covid times when workers commuted to offices daily. 

"We need to rebalance downtown," Benioff said, adding Mayor London Breed needs to initiate a program to convert dormant office space into housing and hire additional law enforcement to restore law and order. 

San Francisco's demise is much more than just the remote or hybrid work narrative, and a record 30% of office space is vacant. Remember, without office workers, local shops can't thrive.

But it's also due to failed progressive policies that have resulted in a city descending into a state of chaos, similar to what's being observed in Baltimore and Chicago. 

The result of all of this has been a panic exit of residents. What's worse, companies are also leaving in droves: 

In the past several months, retailers, including Whole Foods, T-Mobile, and many other stores, have closed up shop after progressive city leadership fails to enforce law and order. San Francisco's CRE meltdown is only accelerating, and the latest property foreclosures of major hotels and malls might be the start and could stymie any economic recovery. -ZH 

And an increasing number of owners of major properties, from hotels to malls, are halting loan payments because their belief in an economic recovery in the near term has dropped to zero. 

Even Elon Musk has signaled he might not keep Twitter's headquarters in the downtown area because of the crime-ridden streets. He refuses to pay rent which has caused pain for Goldman Sachs, Financial Times noted. 

Mayor Breed understands the city's demise and recently made a U-turn to refund the police and announced a plan to revitalize the downtown area. But is it too late?