California Capital & Investment Group (CCIG) recently acquired the One Concord Center, a Concord tower located in the Bay Area, for an undisclosed amount, marking yet another instance of the frailty currently characterizing the region's real estate market, especially considering the office tower was bought for 40% below its prior value. With inventory growth for the Greater San Francisco area in a continuous slump in recent years, the deal further underscores the ongoing challenges faced by potential homebuyers and investors alike via the Mercury News.

As reported by The Real Deal, the San Francisco Bay Area has experienced a significant drop in home inventory growth, with San Francisco and East Bay seeing a roughly 25% drop. In contrast, winter 2022 saw the peak of inventory growth in San Francisco with a year-over-year increase of 57% in active listings, with the South Bay area witnessing an 80% spike.

The East Bay city's office vacancy rate stood at 17.4% during the first quarter of 2023, with little demand for office leases in the area. Consequently, property owners like Atlanta-based Jamestown, which owns an empty 300,000-square-foot building at 2000 Clayton Street, are exploring options such as conversion of offices into vertical farms.

Len Epstein, CFO of CCIG, told the SF Business Times the company's optimism lies in the belief that the office market's downturn has reached its lowest point and will rebound within the next two to three years. Recent reports suggest that inventory in the Bay Area is steadily decreasing, impacting housing supply and demand, and driving housing prices upward.

A considerable element contributing to the low inventory and soaring home prices in the South Bay region is the increasing number of residents looking for a residence outside the area. Data from Realtor.com indicates that an overwhelming 90.8% of San Jose metro residents have been browsing homes beyond their current location in the first quarter of 2023.

One Concord Center, a 369,000-square-foot office tower situated at 2300 Clayton Road, was purchased by CCIG for approximately $110 per square foot, marking a significant decrease from its pre-pandemic value. The Utah-based seller, Bridge Investment Group, had paid $70.45 million or $190 per square foot when they acquired the property from San Francisco investor Swift Real Estate Partners in 2017. This underlines the tumultuous state of the real estate market in the region.