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San Francisco's commercial real estate industry is crashing due to a record-high vacancy rate of 29.5% and a stagnant sublease market.An office building at 350 California Street, San Francisco, is expected to sell 80% less than its 2019 value of $300M. San Francisco has the largest sublease market among all U.S. metropolitan cities, and the inventory has more than doubled since Q4 of 2019.
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Co-founder and CEO of Apollo Global Management, Marc Rowan, said the financial stress on the commercial real estate market would be concentrated and not systemic. He said it is a bad day to be an office owner in San Francisco and Chicago. According to Rowan, every piece of real estate purchased before the rate hikes are now worth less.
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A Turtle Bay building that belonged to crowdfunding startup Prodigy sold for $13M at a 90% discount. Prodigy, a crowdfunding startup, raised $690M from individual investors for real estate properties in New York and Chicago. Prodigy became bankrupt in 2021, a year after its founder Rodrigo Niño succumbed to cancer. Many of the company's investors were from foreign companies.
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San Jose-based PermitFlow raised a $5.5M Seed round. Initialized Capital led the investment round and saw participation from founders and executives from proptech companies. Launched a year ago, PermitFlow's software helps contractors streamline their construction permit application and management process.
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U.S.-based real estate company Hines is looking for a buyer for its 462-unit apartment building in Calgary.Hines has over $96B in assets under management. The company's head of Canadian operations, Avi Tesciuba, believes the property would sell for around C$200M (~$147M).
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Commercial real estate company Partners Real Estate launched its digital investment platform,Partners Finance.The platform aims to provide direct access to all Partners' investment funds and development projects to investors. The digital platform works with accredited investors, family offices, and registered institutional advisors to invest in funds and projects.
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