In all the banking turmoil of the past two weeks, the commercial real estate market has come into focus as another at-risk sector stressed by high interest rates. But while banks and investors sweat the potential for losses and loan defaults, there is a silver lining for certain places, including suburban enclaves that have exploded in growth and become more affluent over the past decade. Decaying but not-quite-dead-yet assets like big office complexes have been holding back transformations needed to support expanding populations. Their failure would ultimately be a benefit to their communities, which have been building toward this moment since the fallout from the 2008 recession.
The caveat in this discussion is that every place with a vacant office building won’t necessarily be in a position to redevelop or transform that parcel of land. If there is no population or wealth growth in the area, a vacant building is probably going to just remain vacant. And in urban environments like downtown San Francisco or Midtown Manhattan, where there’s arguably a glut of office space even though the land is valuable, it may take years for landowners and the surrounding communities to figure out how to work through a transition.
Paragonix Technologies — a company that launched in 2010 as a response to the lack of innovation in the donor organ preservation and transport process — closed a Series B funding round on Tuesday. The $24 million round was led by Signet Healthcare Partners.
The Cambridge, Massachusetts-based company provides transplant centers and organ procurement organizations (OPOs) with medical devices designed for the preservation and transportation of donor organs.
The traditional method of preservation requires the organ to be transported in a cooler of crushed ice. Due to unstable temperatures, many facilities that receive organs preserved in this manner report that they arrive frozen and damaged, said Paragonix CEO Lisa Anderson.
“Paragonix determined there was an opportunity for a more scientifically reproducible, measurable and reliable solution to transporting an organ from a donor to recipient,” she said. “We set out to create a new standard for organ preservation and transport that would provide the care and quality of handling commensurate with transporting such a valuable gift and improve patient outcomes worldwide.”
Paragonix’s devices are made from a series of interconnected systems that work together to provide a cool and sterile environment within a consistent range of 4-8° Celsius. The company sells three devices, each designed for a different organ (heart, lung and liver). All have been cleared by the Food and Drug Administration.
Each device works slightly differently based on specific user needs related to the organ type, Anderson said. For example, the heart preservation device has pouches filled with proprietary cooling solutions that keep the organ at optimal temperatures during transport. The heart is contained within a nested canister and is then housed in a wheeled shipper container that works to protect and insulate the inner contents.
All of Paragonix’s devices display the organ’s temperature while it is being transported. They also use bluetooth monitoring and tracking technology to allow surgeons to track the organ’s exact location throughout its journey, even in flight, Anderson pointed out.
Paragonix markets and sells its devices to transplant centers and OPOs across the U.S. and Europe. Last year, over one in five thoracic donor organs transplanted in the U.S. were preserved using a Paragonix device, Anderson declared. She also said that 19 out of the 30 largest U.S. heart transplant programs rely on Paragonix devices to safely preserve, track and transport organs to their intended recipients.
There are a few other companies that make devices to preserve donor organs, such as Organ Recovery Systems and Bridge to Life. But Anderson contended Paragonix’s devices are easier to use.
“Most other organ preservation devices are extremely complicated, labor intensive and require special personal or extensive training, while Paragonix’s devices are lightweight, user friendly, and a user can be trained in less than an hour,” she declared.
Anderson explained that her company’s main competition is the legacy way of transporting organs, as many organizations still receive damaged organs that were transported using the over-ice method. The medical industry needs to move away from this method of organ preservation because devices like the ones that Paragonix sells are clinically proven to improve patient outcomes and reduce the risk of post-surgical complications, she declared.
Picture: Getty Images, ThomasVogel
SAN FRANCISCO – A man suspected in multiple recent commercial burglaries in San Francisco has been arrested, police said.
According to officers, the burglaries began on November 13 and took place in neighborhoods throughout the city, including the Sunset District, South of Market, Fisherman’s Wharf, the Richmond District and Mission District.
Police said the burglaries followed a similar modus operandi, where the suspect forced entry through the front of the business. The suspect would then steal money from a cash register, safe or ATM machine along with property.
In most of the robberies, police said the suspect was seen leaving in a black sedan. According to police, three of the robberies took place on the same day.
List of Commercial Burglaries Linked To Suspect:
• November 13: 2200 block of Taraval Street
• November 16: 800 block of Ulloa Street
• November 16: 1800 block of Irving Street
• November 16: 1800 block of Taraval Street
• November 16: 2300 block of Irving Sreet
• November 17: 500 block of Beach Street
• November 20: 300 block of 11th Street
• December 2: 1000 block of Folsom Street
• December 4: 1000 block of Folsom Street
• December 18: 2500 block of Mission Street
Police said Thursday that burglary investigators were able to identify the suspect. An officer spotted the suspect and the black sedan on the 200 block of Berry Street and he was arrested without incident.
Jail records show the suspect, identified as 41-year-old Matt Lake, was booked into San Francisco County Jail on New Year’s Day. He faces nine counts of second degree burglary, arson of a structure, arson of property, possession of burglary tools and receiving stolen property.
Lake is being held without bail and is scheduled to appear in court Friday, according to jail records.
Anyone with additional information is asked to call the San Francisco Police Department tip line at 415-575-4444 or text TIP411, beginning the message with “SFPD”.
Thanks for reading CBS NEWS.
Create your free account or log in
for more features.
It’s getting to be a cliché, but 2023 could be a pivotal year for commercial real estate — basically because of what happened last year.
The market entered 2022 with high hopes. There were readily available vaccines against the worst of the novel coronaviruses, and restrictions on public gatherings were dropping one by one. The housing market was chugging along, with apartment rents in particular on a steep rise. A mass return to office — and to normalcy — seemed imminent.
Then, in March, the Federal Reserve Board raised its benchmark interest rate sharply and announced further such increases were coming. Why? Rising inflation. Inflation, in fact, would hit a 40-year high in June, and remain high through the end of the year.
The situation — higher borrowing costs, historic inflation and general economic uncertainty — has commercial real estate pros reaching way back to explain what might happen in 2023.
“If you think about the 1970s, which is the last time we really saw this economic situation, most of the people in the real estate business, they either weren’t alive or they or they weren’t investing,” said Ronald Dickerman, founder and president of Madison International Realty, one of New York City’s largest retail landlords.
Dickerman says he thinks Federal Reserve Chairman Jerome Powell is taking a lesson from his predecessor Paul Volcker, who led the central bank in the late 1970s and 1980s. Dickerman remembers that period — and that it took Volcker and company time to ease inflation through rate hikes. That means the market should settle in for the duration in 2023.
“This new rate environment is going to persist for a long period of time,” Dickerman said.
Even positives might work against the market, or not be as uniformly felt.
“As compared to previous downturns, mainly the Great Financial Crisis, borrowers are going into a potential recession this time in better shape from a loan-to-value basis given that the use of excess leverage has been restrained over the past 10-plus years,” said Raphael Fishbach, a principal at lender Mesa West Capital. “However, the challenge is that this time around we are in a rising-rate environment. This has a negative impact on carrying costs and ultimately values.”
Fishbach, then, says he thinks higher rates could pose a very challenging situation for those owners without access to liquidity. Those with access should be OK in 2023, though.
“When we think about comparisons between where we are today and the Great Financial Crisis, one of the key differences here is that the financial associations today, while under real pressure, are able to bring capital to well-structured projects,” said Sam Chandan, director of New York University’s Chen Institute for Global Real Estate Finance.
Then there’s the contrarian view for the new year, one that has rates trending downward and therefore resolving a lot of the uncertainty.
“There’s definitely a feeling in the market that long-term rates are going to come down and stabilize a bit,” said Morris Betesh, a senior managing director at Meridian Capital. “I definitely think that rates are trending down.”
Betesh noted that a big challenge in the market, however, is that bid-ask spreads have increased.
“The bid-ask spread between buyers and sellers is wide right now and that is constraining investment activity,” said Chandan.
Brokers like Betesh say they are hoping more market participants will come back in 2023 and add a jolt of liquidity to the market, which will help compress spreads. But when will that happen, and what will it take to coax nervous financiers and investors from the sidelines?
“I personally believe that the current situation in real estate is not sustainable,” Dickerman said. “This is going to continue through the spring. The Federal Reserve is still going to raise interest rates. So borrowing costs are going to rise, but cap rates have been slow to adjust. There will be continued pressure on prices.” Dickerman says it will be summer before the market could start to see some semblance of equilibrium.
As for investment opportunities in the new year in the meantime, they run the gamut.
“We’re very invested in tech-enabled, growth-oriented sectors that were involved in the multifamily, single-family home for rent, seniors housing, logistics, cold storage, life science and data centers,” Dickerman said. “So, where we’ve been de-emphasizing office and retail, we’re very active in those other sectors.”
Market observers do expect the office sector to continue its labored struggle as work from home continues. Older office stock will just not fare as well as the newer, more amenitized construction.
“A number of buildings are really going to struggle in the coming year and years. To be honest, some may only be worth land value,” said Ric Clark, co-founder and managing partner of WatermanClark. The company is currently redeveloping Lever House, a 307-foot-tall office building at 390 Park Avenue.
Clark echoes others in believing 2023 could bring a wave of office conversions. “Although there’s work to be done in order to make conversions feasible and economical,” Clark said. (Case in point, as 2022 drew to a close, GFP Real Estate Partners, Metro Loft Management and Rockwood Capital closed a $536 million acquisition and redevelopment loan for the office-to-residential conversion of the 1.1- million-square-foot 25 Water Street.)
On the financing side, look at the collateralized loan obligation market, according to Meridian Capital’s Betesh. “You’re going to start to see the CLO market come back to life next year. That was a big driver of liquidity for the last three years, and it really dried up in the second half of 2022. I think issuances will pick up in 2023.”
Finally, the economic uncertainty ahead in 2023 will impact cities at large, market participants say.
“One of the most significant things that will come into greater prominence in 2023 is the health of our cities,” Chandan said. Factors including the evolution of space use patterns to the high inflation environment are affecting everything from tax revenues to the fiscal stability and operating performance of the public transportation infrastructure in a city like New York, never mind crime and residents’ sense of security
“In 2023, some cities around the country are going to have to make some very difficult choices,” Chandan said. “This is not limited to New York and San Francisco, Chicago and Boston.”
– Wilson Sonsini’s partner-elect class includes six women and 12 men from the firm’s corporate, litigation, intellectual property, technology transactions, and regulatory departments –
+1 732.239.9710 (Mobile)
PALO ALTO, CA (December 5, 2022) –
Wilson Sonsini Goodrich & Rosati, the premier provider of legal services to technology, life sciences, and growth enterprises worldwide, today announced that the firm has elected 18 new partners from its attorney ranks. The promotions will be effective February 1, 2023.
“Our 2023 class of partners is remarkable in how closely it reflects our values and the strength of our business,” said Doug Clark, Wilson Sonsini’s managing partner. “These attorneys have accomplished much in their careers and showcase not only the deep expertise within our firm, but also our diversity—both of which help define us. We are excited to welcome this group as our newest class of partners and look forward to continuing to work with them to provide clients with the sophisticated legal services we are known for.”
The 2023 partners-elect are:
Lester Ang, Corporate. Based in Palo Alto, Ang represents start-up and late-stage private companies in matters ranging from incorporation and initial capitalization to venture capital, debt financing, and initial public offerings. He also represents public companies in securities offerings, M&A transactions, SEC reporting, and corporate governance matters. In addition, Ang advises investment banks, venture capital firms, and private equity firms. He received his J.D. from UC Davis School of Law.
Haley Bavasi, Privacy and Cybersecurity. Based in Seattle, Bavasi focuses primarily on advising digital health companies across a range of privacy, transactional, research, and healthcare regulatory issues. In particular, she leverages her expertise in the Health Insurance Portability and Accountability Act (HIPAA) to provide early-stage companies with practical day-to-day counseling, as well as to advise in the context of complex commercial transactions, M&A, and go-to-market strategy. She received her J.D. from UC Berkeley School of Law.
Robert Broderick, Corporate. Based in New York, Broderick practices corporate and securities law and focuses on start-ups and venture capital. He regularly works with high-profile technology companies, with an emphasis on capital raising through complex financings. He also provides advice with respect to corporate governance, strategic transactions, and day-to-day corporate matters. Broderick received his J.D. from Columbia Law School.
Jose Campos, Corporate. Based in London, Campos advises U.S. and European technology start-ups and scale-ups through all stages of their life cycles, including incorporation, venture capital financings, mergers and acquisitions, and other strategic transactions. Campos also supports investors that invest in technology companies. He is well-versed in assisting non-U.S. technology companies with their U.S. expansion plans and “flipping” them into U.S. holding companies. He received his J.D. from UC Hastings College of the Law.
Jonathan Chan, Corporate. Based in San Francisco and Palo Alto, Chan works in the emerging companies practice, and represents private technology companies and investors in formation, venture capital financings, and mergers and acquisitions. He focuses on representing companies and investors in the fintech, blockchain, and gaming sectors. Before joining the firm, Chan was a co-founder and COO of a venture-backed investment platform and previously served as a senior director of business development at Electronic Arts. He received his J.D. from Harvard Law School.
Andy Cordo, Litigation. Based in Wilmington, Cordo focuses on corporate governance litigation in the Delaware Court of Chancery. His experience includes representing stockholders, officers, and directors of Delaware corporations and alternative entities in appeals, disputes over corporate and alternative entity control, fiduciary duties and management, corporate appraisal actions, and contract and other commercial disputes. Cordo received his J.D. from the Pennsylvania State University Dickinson School of Law.
Elina Coss, Energy and Climate Solutions. Based in Seattle, Coss represents borrowers and sponsors in project and structured finance, acquisitions, and project development transactions, with a focus on financing cash flow streams from the renewable energy technology sector. Coss advises clients on complex asset-based financings at all levels of the capital stack, including joint ventures, construction, back-leverage and mezzanine financings, tax and cash equity financings, capital market securitizations, and forward flow financings. She also advises lenders, tax equity investors, private equity funds, and other investors in the renewable energy space. She received her J.D. from New York University School of Law.
Jake Gatof, Corporate. Based in Boston, Gatof represents life sciences and technology companies, as well as their sponsors, through all stages of growth and investment. He represents companies with respect to venture capital financings, corporate governance, mergers and acquisitions, and other complex strategic transactions. He also advises leading growth equity, venture capital, and other institutional sponsors. Gatof received his J.D. from the University of Michigan Law School.
Broderick Henry, Corporate. Based in Palo Alto, Henry focuses on mergers and acquisitions, divestitures, equity investments, and other strategic matters involving public and private companies. He primarily represents clients in the technology industry, but he has represented clients in a wide range of sectors, including aviation, financial services, consumer products, energy and infrastructure, security, and manufacturing. Henry received his J.D. from New York University School of Law.
Jocqui Kaup, Corporate. Working virtually in Washington, Kaup focuses on corporate and securities matters for emerging growth companies and venture capital and private equity firms in both equity and debt financing transactions and mergers and acquisitions. She also advises on strategic alliances, spinouts, recapitalizations, and other corporate reorganizations. Kaup represents private technology growth companies ranging from start-ups to late-stage enterprises, with an emphasis on larger private companies. She received her J.D. from the Benjamin N. Cardozo School of Law.
Megan Kayo, Privacy and Cybersecurity. Based in San Francisco, Kayo advises clients on information security and privacy issues under various laws and regulations, specializing in data breach response and mitigation. She has worked on hundreds of security incidents and acted as the lead counsel, directing the investigation, notifications, and responses to regulators and consumers in connection with global data breaches. Kayo received her J.D. from the University of Virginia School of Law.
Brendan Mahan, Mergers and Acquisitions. Based in Seattle, Mahan advises public and private companies on mergers and acquisitions, divestitures, minority and controlling investments, and other strategic transactions. His experience includes public and private mergers, tender offers, asset and stock purchases, and spin-off transactions, as well as financings and structured finance transactions, across North America, Asia, and Europe. He received his J.D. from Cornell Law School.
Chris McAndrew, Patents and Innovations. Based in Boston, Dr. McAndrew advises early-stage life sciences companies on intellectual property issues and helps clients develop and build a meaningful IP portfolio from inception through their exits. He specializes in representing companies within the complex life science biologics space, including antibodies and cell therapies. Dr. McAndrew was a patent agent at the firm before becoming an attorney. He received his J.D. from the George Washington University Law School.
Victor Nilsson, Corporate. Based in Seattle, Nilsson practices corporate and securities law with a focus on representing issuers, investment banks, and strategic investors on a broad range of capital markets transactions. These include IPOs and follow-on offerings, ADS offerings, ATMs, PIPEs, private placements, and convertible note offerings, as well as high-yield and investment-grade debt offerings. He also advises public companies on SEC reporting, securities law compliance, and corporate governance matters. Nilsson received his J.D. from the University of Arizona College of Law.
David Pirko, Technology Transactions. Based in Palo Alto, Pirko represents leading life sciences companies and venture capital investors in strategic transactional and corporate matters, including partnering and collaboration agreements, licensing agreements, services agreements, clinical trial agreements, manufacturing and supply agreements, and other complex matters. His practice extends from start-ups to public companies operating in all sectors of the life sciences industry. Pirko received his J.D. from Harvard Law School.
Deborah Smith, Patents and Innovations. Based in San Diego, Dr. Smith advises companies on IP strategy beginning from early platform development through commercialization. This includes venture capital, capital markets, and M&A transactions in the fields of chemistry, pharmaceuticals, and biotechnology. Dr. Smith specializes in advising clients that use platform technologies to bring new therapeutics to market. She received her J.D. from the University of San Diego School of Law.
Stephen Strain, Litigation. Based in Palo Alto, Strain is part of the firm’s complex litigation and investigations group. He focuses on representing clients in government and internal investigations, including matters involving allegations of insider trading, complex financial reporting and accounting fraud, violations of the FCPA, and disclosure violations, among others. Strain also frequently represents companies, as well as their officers and directors, in securities class actions, shareholder derivative suits, and related litigation matters. He received his J.D. from New York University School of Law.
Eva Yin, Regulatory. Based in Seattle, Dr. Yin is part of the firm’s FDA regulatory, healthcare, and consumer products practice. She focuses on conducting FDA and healthcare regulatory due diligence for corporate transactions; providing legal counsel to manufacturers regarding FDA approval/clearance for various products, including medical devices, mobile apps, and drugs; FDA compliance; regulation of promotional materials and labeling; and manufacturer compliance. Dr. Yin received her J.D. from UC Hastings College of the Law.
About Wilson Sonsini Goodrich & Rosati
For more than 60 years, Wilson Sonsini’s services and legal disciplines have focused on serving the principal challenges faced by the management and boards of directors of business enterprises. The firm is nationally recognized as a leading provider to growing and established clients seeking legal counsel to complete sophisticated corporate and technology transactions; manage governance and enterprise-scale matters; assist with intellectual property development, protection, and IP-driven transactions; represent them in contested disputes; and/or advise them on antitrust or other regulatory matters. With deep roots in Silicon Valley, Wilson Sonsini has 19 offices in technology and business hubs worldwide. For more information, please visit www.wsgr.com.
Property Owners Can Remove Graffiti Tags on Storefronts for Free in New Pilot Program – NBC Bay Area
Property owners in San Francisco’s neighborhood commercial districts will soon be able to request graffiti removal free of cost, announced Mayor London Breed on Wednesday.
The two-year pilot graffiti abatement program, put on by San Francisco Public Works, will send out city crews and contractors to remove tags off of storefronts and private properties.
Breed allocated $4 million to the program in the City’s budget adopted this summer, in an effort to lessen the financial burden small business owners can face when trying to remove tags themselves.
“This program is a win for small businesses and property owners facing the expense of removing unwanted graffiti that create an unwelcoming environment,” Breed said. “As San Francisco continues our recovery efforts, it’s critical that we stay focused on keeping our city safe and clean, while also continue to support our small businesses to ensure they thrive. This graffiti abatement program is just one part of that effort but it will really help our neighborhoods and our City.”
The program is also hiring six more staff people to work alongside the Public Works crews dedicated to solely removing graffiti on public property like sign posts and retaining walls.
According to city law, private property owners must remove graffiti or face hefty fines. If property owners do not remove graffiti within 30 days, they can be charged a $362 inspection fee; and if it persists 15 days after that, they can face an additional $400 labor and supplies fee and $1,000 a day in penalties.
Since July 1, Public Works said it has issued 900 violation notices to property owners.
“We do not want to penalize people, but we do want to make sure graffiti is removed quickly because we know from experience that tags attract more tags and degrade the look and feel of our neighborhoods,” said interim Public Works Director Carla Short. “We welcome this opt-in graffiti abatement program, which gives us additional resources so our crews also can tackle tags on private property in our commercial areas and offer some relief for small businesses still recovering from the pandemic.”
The city plans to prioritize businesses that are visible to the public.
Property owners interested in the program can request more information by calling 3-1-1.
House prices fell 0.8% month-on-month for September on a seasonally adjusted basis according to the Case-Shiller house price index. This marks the third straight month of house-price declines as mortgages are up sharply in 2022, reducing the affordability of housing compared to recent years and raising the risk of a housing recession.
However, despite consistent price declines, the regional picture shows considerable variation. San Francisco may be the first major U.S. city to see annual house price declines over the coming months on Case-Shiller data, but in contrast, though not immune from falling prices, Miami and Tampa are still seeing annual price rises of over 20%.
One driver of the recent house price decline is the U.S. Federal Reserve’s sharp increase in interest rates, which have risen from zero to almost 4% in 2022, with another increase expected when the Fed meets in December.
This increase in rates has correspondingly pushed up mortgage costs with a 30-year mortgage now running a little under 7%, up from around 3% earlier in the year. Since many buyers finance their house purchase with a mortgage, this increased cost has reduced housing affordability. It’s unusual, historically speaking, for mortgage costs to effectively double in under a year. Sharp spikes in mortgage rates are often a bad omen for the housing market.
For many the decisive factor when buying a house is not its absolute cost, but the size of the mortgage they can comfortably manage. As mortgage rates rise, so the average buyer is forced to buy a less expensive home with the same mortgage payment in dollar terms.
There are clear regional differences in the data. The south east including Tampa, Charlotte, Atlanta and Miami remains relatively robust with prices up around 20% year-on-year despite recent declines.
In contrast the west coast is more sluggish. San Francisco may be the first market to see a year-on-year drop in prices, if trends continue, with its year-on-year rise now only 2.3%. Additionally, Portland, Seattle and San Diego and Los Angeles are not far behind with year-on-year gains consistently under 10% in each of these west cost markets.
One driver of these regional differences may be housing affordability. The Atlanta Federal Reserve tracks housing availability at the national and regional level. San Francisco, which is the closest major market to seeing absolute falls in value, is also one of the least affordable metro areas on the Atlanta Fed’s analysis. That’s also true of much of the west coast. Here affordability is very low, both compared to other regions of the country and historical data.
In contrast, those metros that are still seeing reasonably strong year-on-year price growth are also score higher on the Fed’s affordability indices. These metros include much of Florida and Charlotte.
These are areas that are still seeing relatively strong year-on-year price increases, even if the recent market has been soft. These areas are still viewed as still somewhat expensive on the Atlanta Fed’s analysis. Nonetheless, affordability here is better than on much of the west coast.
So as the housing market shows signs of weakness, it may be the west coast that may be most impacted. We’re starting to see that in the data, and affordability is particularly low on the west coast. In contrast, other areas of the country, such as the south-east, though not immune from the softer housing market, may fare better if housing affordability is any guide.