Those who've been following me on CommonStock know that I'm bullish on office real estate and see SF real estate as a diamond in the rough. Interestingly, TheRealDeal published an article about a real estate investor named Cyrus Sanandaji, who placed a $91 million bet on Downtown San Francisco. While people call it the most empty downtown in America, Sanandaji thinks commercial real estate prices in the city are near the bottom.

What made Sanandaji famous was when he bought a 157,400-square-foot building, which was bought by Clarion Partners at $107 million, for $66 million. While many of Sanandaji's investors got scared about his investment in that office building, Sanandaji has faith that with Sf being the AI Capital of the World, the real estate values will rebound strongly and SF will go back to the good ol' days. As VCs flush AI startups with cash, many of them are scooping up office lease discounts in the city. Even though there's a notion that tech workers will prefer to work remotely, AI startups tend to think believe their best work is done in person. I think that Sanandaji was right in betting immensely on AI startups to fuel the rebound of downtown SF.

Those who've had amnesia over how bad 2008 and the Dotcom bubble burst were for the US economy would have a hard time thinking that SF was a boom bust city. Usually when people hear boom bust city, they think of the Rust Belt or NYC. When 9/11 and the Great Financial Crisis of 2008 happened, office real estate values in downtown SF plunged. Sure, it didn't plunge as severely as what we're seeing today but it did plunge badly overall. Then, when social media, iPhones, and the tech boom first began in 2012, that's when SF started rebounding and was vibrant. These AI startups could bring a similar effect to SF like what $AAPL $META $GOOGL $AMZN $MSFT etc. did after the 2008 financial crisis.

Now let's enjoy an AI-generated image of Taylor Swift in downtown SF in the future.