Rising rent costs are pricing the city’s smallest businesses out of the market, the measure’s sponsor says.

The average retirement saver with a seven-figure balance is 59 years old.

A wild debut for the Vietnamese electric-vehicle maker has put it ahead of most established automakers in terms of market value.

The only time the crowd paid full attention, was when Dennis Williams took the stage, his wife, Kelli, by his side, dabbing her tears away, and spoke emotionally about their son Isaac, who was diagnosed with Stage 4 neuroblastoma in 2017 when he was just 17 months old.

The plot thickens. 

House impeachment managers detailed new accusations of an improper relationship between Texas Attorney General Ken Paxton and Austin real estate investor Nate Paul, the Texas Tribune reported. 

Paxton and Paul allegedly created an Uber account under a fake name so they could meet and so Paxton could visit the woman with whom he was having an affair. Paul already stands accused of hiring Paxton’s mistress, despite her having no real estate experience. 

As Paxton and Paul’s relationship deepened, his aides grew concerned. They told the attorney general that Paul was a “crook” and that his claims of unfair treatment by law enforcement were bogus, House impeachment managers wrote in filings with the Texas Senate’s court of impeachment.

“Senior Staff urged Paxton to stay away. But when it came to Paul, Paxton was immune to reason,” the managers said.

After whistleblowers from Paxton’s inner circle reported the relationship to the FBI, Paxton allegedly worked to conceal his connection to Paul. Actions include wiring a payment to a company affiliated with Paul to hide renovations he had done on the attorney general’s home for free. 

Paxton and Paul met at least 20 times in the spring and summer of 2020, sometimes to discuss the FBI’s investigation into Paul’s real estate firm, World Class Holdings, impeachment managers said.

Paxton’s defense has tried to downplay his relationship with Paul, calling it “a personal relationship with a constituent” and arguing that even if any actions were inappropriate, they happened before Paxton’s current term in office began — as they see it, he can’t be impeached for things he did before his most recent election. 

Paul was arrested in June and indicted on eight counts of making false statements to lenders. When Paxton was impeached by the Texas House of Representatives in May, he was charged with bribery and abuse of power on behalf of Paul, among other misdeeds.

Paxton’s trial in the Senate begins in September, while Paul’s trial has been delayed a year due to the “enormous volume” of seized data both sides will need to comb through. 

—Joe Lovinger

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Crime could be correlated to commercial real estate distress in San Francisco, according to a first-of-its-kind report from Trepp, previewed exclusively by TRD and available on the commercial real estate analysis and data company’s website on Thursday. 

By combining San Francisco Police Department data on both violent and property crimes with business registration data and Trepp data and analysis on troubled loans and properties, the report narrows in on “crime shadow” locations, according to its authors, Trepp analysts Stephen Buschbom and Jiabin Wei. 

The goal is to provide insight into the risks associated with loans and properties in those areas. 

It is the first-ever such report from Trepp, though the company may extend the analysis to other metro markets, according to Buschbom. It was inspired by the numerous stories about retailers leaving the city this year, he said via email.

“We wanted to go beyond the headlines and dig into the data to see what story the crime data tells,” he said. 

Business-crime correlation

One big surprise was that, despite the headlines, the report found that over the last five years there has actually been a significant decrease in crime rates around the downtown area. Union Square, Chinatown, Russian Hill and the Financial District all saw more than 25 percent declines in crime between 2018 and 2022, which “could present an intriguing longer-term opportunity for businesses to experience a resurgence in these areas,” according to the report.

Yet those numbers can be misleading, Buschbom cautioned.

(Trepp)

“The analysis indicates that a high starting level of crime likely put pressure on business profits and, as foot traffic decreased, in part due to COVID but also because of crime, retailers started closing their doors in San Francisco in increasing numbers,” he said. “Fewer businesses and lower foot traffic ultimately means fewer crime targets. Fewer businesses and consumers can also mean that there will be fewer reported crimes if citizens and businesses that remain in the neighborhood have grown to accept a certain level of crime rather than bother with reporting it to the police.”

When breaking down these areas more minutely, the report found there is often a correlation between “high crime clusters” — largely downtown — and business decline. 

“Out of all the identified high-crime locations, more than 65.1 percent experience stagnating business growth or even losses, while the remaining 34.9 percent saw relatively high growth in both businesses and crimes,” according to the report. “This finding indicates that the majority of locations with declining businesses are surrounded by high crime areas, emphasizing the detrimental effects of persistent crime on business vitality.”

(Trepp)

The fact that some locations are experiencing growth even amidst the same high crime levels “suggests that within the diverse urban landscape of San Francisco, the interplay between crime dynamics and business vitality is nuanced and can differ significantly from one micro-community to another,” according to the report. 

The expected return to office this fall by employees at many big tech companies, even just on a hybrid schedule, “will be a good thing for San Francisco” and may put a new focus on these high-crime, high-business neighborhoods, Buschbom said.

“If office utilization does increase, it will be interesting to see if economic activity consolidates to some of the areas identified in our report as having economic resilience in the face of high crime,” he added.

(Trepp)

Crime and distress

SFPD data show that the highest density of property crime is in Union Square, followed by the area of South of Market closest to Union Square, Fisherman’s Wharf, and Japantown, with the property crime in Japantown attributed to the “deteriorating blocks” in the Western Addition just south of the “charming” shopping district. The Stonestown Galleria was also a notable source of property theft on the city’s west side. 

Property crime in these four areas account for more than 90 percent of the total crime in San Francisco classified as “serious crimes” by the federal government, according to the report. Crime in the Financial District is less dense, but the data show a 29 percent increase from 2021 to 2022. 

In terms of violent crime, the Tenderloin had the highest density of “more severe incidents,” followed by the Mission and SoMa. Together, these three neighborhoods account for one-third of the city’s violent crime. 

The report then overlaid the city’s biggest commercial distressed properties, as determined by Trepp, with these violent and property crime statistics. It found that many distress examples, including the Westfield and Hilton defaults, substantial Visa downsizing at 1 Market Plaza and Charles Schwab’s downsizing at 211 Main Street all took place in areas with high or rising crime. It also pointed out that more than 17 percent of the apartment buildings in this year’s Veritas loan default are in the Tenderloin and nearby lower Nob Hill, which “underscores the potential challenges and risks associated with multifamily properties within high crime neighborhoods.”

(Trepp)

The authors went on to identify loans that could be at increased risk of default, at least in part because they are backed by properties in crime-affected areas, with a focus on loans maturing in the next two years with a debt service coverage ratio less than 1.2. In the office sector, the most concerning loans that fit those parameters were 450 Pacific Avenue, 315 Pacific Avenue and 900 Kearny Street, as well as the aforementioned 1 Market Plaza. 

In the lodging sector, six out of seven maturing loans have a DSCR below 1.2 and all six are located in or near a “crime shadow” location. In addition to the two Hilton properties already in default, there is a third Hilton in the Financial District, plus The Ritz-Carlton, Petite Auberge and Park Central. 

Crime rates are particularly important for hotel performance, according to the report.

“A small decline in crime may be accompanied by a huge improvement in lodging properties’ financial performance,” it reads. 

In the multifamily sector, the report saw reasons to be concerned about both Parkmerced and the Mosser-Swig portfolio. In the latter’s case, all five properties have DSCR levels below 1.2 and all but one are in or near the Tenderloin neighborhood, “which is identified as the epicenter of crime-affected business areas.”

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Cash-strapped collectors are capitalizing on robust demand for collectibles.

SteelWave wants to build a 300,000-square-foot industrial and office campus east of Pleasanton on 20 acres it sold to Amazon.com.

The San Mateo-based developer has filed plans to build the campus at El Charro Road and the Arroyo Mocho, east of Chocolate Street, the San Francisco Business Times reported.

In 2021, SteelWave and Houston-based LionStone Investment Group sold the land and six other lots to Amazon, where it planned to build a distribution warehouse. Amazon has since shed real estate, though it’s not clear if it aims to keep its Pleasanton property. 

Plans by SteelWave include two industrial buildings, including one with 131,000 square feet and another with 156,600 square feet. It also plans to build a two-story, 12,000-square-foot office or retail building.

The proposed building site on unincorporated land east of town is zoned for agricultural use. 

To build the complex, SteelWave would have to have the land rezoned for light industrial and other uses, Community Development Director Ellen Clark told the Business Times. It would also require approval from the city’s planning commission, city council and Alameda County.

The area east of town in unincorporated Alameda County was once considered for annexation by the city, according to the Business Times, and a target for more than 1,000 homes. But the city backed off after community opposition.

SteelWave has invested more than $17.5 billion in life sciences, office, industrial and apartment buildings across the West, according to its website. It’s also behind three life sciences projects in Berkeley, Emeryville and Foster City under theLAB name.

In May of last year, the 25-year-old firm once known as Legacy Partners Commercial bought a parking lot in South San Francisco for $85 million, not long after it bought a defunct strip mall for $98 million with plans to build a 722,000-square-foot office-retail village.

— Dana Bartholomew

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Cosmetics mogul Joni Rogers-Kante has sold a 13,000-square-foot mansion in Irvine for $25 million, a local record. She initially sought $50 million.

The founder of SeneGence traded her Mediterranean-style manse at 76 Golden Eagle in Shady Canyon, a gated golf course community in the hills five miles from the coast, the Orange County Register and Los Angeles Times reported. The buyer was not disclosed.

Rogers-Kante bought the seven-bedroom, 12-bathroom house from sports radio jock Jim Rome in 2017 for $12.7 million, which also set a local record.

“(The house) has shattered city records for a reason,” Ariana Gaffoglio of Official, who handled both sides of the deal, told the Register.

“The home exceeds buyer expectations in every category: architecture that feels rich in history, modern amenities you’d expect to only find at a five-star European resort and an indoor-outdoor living experience in one of Orange Country’s most sought-after neighborhoods.” 

Shady Canyon, with 300 homes on nearly 1,100 acres, has drawn celebrities such as baseball stars Albert Pujols and Mark McGwire, plus best-selling author Dean Koontz and Alteryx Executive Chairman Dean Stoecker.

The holder of the previous Irvine record, which sold in January at 60 Golden Eagle for $17 million, is down the street from the new record breaker.

Rogers-Kante, who had revamped the nearly 1-acre estate, first listed it in 2021 for $50 million, then dropped it to $40 million, then ratcheted it down to $30 million before settling for the $25 million sale price.

The three-story villa, built in 2004, has coffered ceilings, hand-painted murals and a theater, gym, spa, wine cellar, game room, elevator and a six-car garage.

Arched doorways open out back, where an infinity pool overlooks the golf course.

Rogers-Kante is the founder and CEO of the multilevel marketing skin care company SeneGence International, based in Lake Forest.  

— Dana Bartholomew

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The popular chicken fingers chain also filed plans recently for a restaurant in Seattle’s University District.