REAL ESTATE IN THE NAPA VALLEY
Dreamstime
Tenant debt, big tech and transplants
W
hat’s on my real estate radar these days? Here are a few trends I’m seeing: BACK RENT OWED CONVERTED TO CONSUMER DEBT California legislators just passed another bill allowing a residential tenant who owes unpaid rent from March 1 through Aug. 31 to convert it to consumer debt. Additionally, tenants will continue to receive protection from the inability to pay rent between Sept. 1 and Jan. BURT 31, provided POLSON they pay at least 25 percent of their cumulative rent due. Tenants also have the option of converting the remaining balance to consumer debt. Landlords would need to pursue the balance owed in small-claims court starting March 1, 2021. A moratorium on evictions based on non-payment of rent continues protecting tenants from evictions. The potential number of SEPTEMBER 2020
small claims court action next year resulting from this bill’s passing will be unmanageable. If and when a landlord receives a judgment in small claims court, collecting from a tenant is wrought with points of contention. Furthermore, a tenant may find their credit history and score ruined, resulting in their future inability to qualify for a rental home or any other matter. CANCEL YOUR LEASE AND PAY $89.5 MILLION LIKE PINTEREST Last year, Pinterest signed a lease for 490,000 square feet of space at a San Francisco office building still under construction. In reviewing their need for office space during COVID-19, the big tech company decided they did not need the space and would be better off paying the $89.5 million termination fee and keeping their existing San Francisco offices. Many technology companies, including Twitter, Inc., and Slack Technologies Inc., shut down for the last six months and pivoted to remote work. It has been embraced by
workers and management so much that many workers have migrated living in major cities. In an anonymous survey conducted by Blind, a social networking platform for professionals, found among 4,400 tech workers surveyed in the Bay Area, two-thirds would leave if they could work remotely. Several tech giants instituted permanent work-from-home policies with several such as Coinbase, Square, Google, and Facebook, creating a more semi-permanent policy with a wait-and-see mentality. CALIFORNIA TRANSPLANTS GETTING A REPUTATION Even when taking a pay cut, Bay Area workers in California find their income goes much further for housing outside the Bay Area. Lake Tahoe is seeing an uptick in transplants as well as Truckee, both in California. Sacramento and even Southern California are a hotbed of activity, with homes in the outlying areas still affordable. The Dallas-Fort Worth metro area in Texas is one of the top regions for California transplants.
Homebuilders and designers find that Californians desire outside living, with many going so far as to create expansive backyards and temperature-controlled patios with motorized retractable screens not normally seen by local Texans. Boise, Idaho, is one of the fastest-growing cities in the U.S. and has earned the moniker as the best place for millennials. Since the pandemic, Idaho has seen the largest net gain in population than any other state. Housing is considerably more affordable in Boise with a median-priced home around $350,000—much less than in the Bay Area. With the Boise-Nampa metro area housing prices increasing the most than in any other region in the U.S., many longtime Idaho residents are priced out of the market. Burt M. Polson is the CEO of ACRESinfo.com, a commercial real estate brokerage company and CEO of StoneMarkerInvestments.com, a private equity real estate fund. Call him at (707) 254-8000 or email burt@acresinfo.com and burt@stonemarker investments.com. DISTINCTIVE PROPERTIES | 29
