Real-estate tycoon looks to buy $900MILLION worth of San Francisco office space as companies and residents flee downtown amid homelessness, crime and work-from-home

• Ian Jacobs, 47, has decided to purchase an estimated $900million worth of office space in San Francisco 
• The heir of the Reichmann real-estate dynasty has set up $75million in commitments for the new business venture
• The Bay Area has experienced a drastic jump in office vacancy

A real-estate tycoon has set out to buy an estimated $900million worth of San Francisco’s office spaces that have been left vacant due to homelessness, crime and work-from-home culture.

Ian Jacobs, 47, an heir of the Reichmann real-estate dynasty, has decided to extend his family business to California.

Jacobs has worked with his real-estate company- known for their fortune after creating well-known skyscrapers in New York City, London and Toronto- and other wealthy family and investors to take on the deteriorating city.

He has set up $75million in commitments for the new business venture that has been dubbed ‘Project Uris.’ According to his marketing materials, Jacobs has told investors that the project in the Bay Area could take ten years.

‘His whole professional career has been around value investing in public markets. This is the first time he can do value investing in real estate,’ Max Raskin, an advisor to Jacobs on the project told the Wall Street Journal.

A vacant retail space is seen in San Francisco as the city has been battered with homelessness, drug use and major tech companies fleeing to work-from-home after the pandemic. Ian Jacobs, 47, an heir of the Reichmann real-estate dynasty, is now looking to buy empty office buildings in the California city.

An empty office building is seen in San Francisco as the Bay Area reached a record 34 percent in vacancy rates. Jacobs’ plans to purchase vacant buildings such as this in his new plan dubbed ‘Project Uris’

Jacobs’ goal is to purchase 3million square feet of office space for approximately 70 percent below what it would cost to build the properties, according to his marketing materials.

Recent building sales in San Francisco have been between $200 and $300 a square foot, meaning Jacobs’ plan is to spend about $900million, according to the Journal.

He spent most of last year raising commitments from his family, other Toronto-based real-estate groups and received further funding from Latin America and US family offices.

The tycoon has stressed  the opportunity to purchase the empty buildings in the Golden State might close soon if the Federal Reserve chooses to cut interest rates in the new year.

This effect could lead other investors and fund managers to want to return to the city, his co-investors said.

Jacobs has places bids on a number of properties but no deals have been completed, sources said.

The Reichman family honed their craft as entrepreneurial businessmen as Jacobs great uncles Paul and Albert went on to develop the World Financial Center in the Big Apple and the Canary Wharf in London.

Today Canary Wharf’s cluster of skyscrapers is instantly recognizable and home to some of the world’s biggest banks, such as Citigroup, Barclays, Credit Suisse and HSBC.

In 1977, the family empire decided to take on NYC and bought eight buildings in Manhattan at a time when crime was rampant in the city.

Jacobs’ goal is to purchase 3million square feet of office space in San Francisco for approximately 70 percent below what it would cost to build the properties

Jacobs great uncles Paul and Albert went on to develop the World Financial Center in the Big Apple and the Canary Wharf in London. Pictured: the building under construction

Five years after the purchase, the local economy boomed, and the buildings they purchased were valued at ten times what they originally paid.

San Francisco has seen an uptick in vacant office buildings and storefronts across the city in recent times.

In October, Microsoft joined the Bay Area’s ‘tech-xodus’ – advertising up to 49,000 square feet of their offices for sublet as the city continues to spiral into a ‘doom loop.’

Meta and LinkedIn also sublet their office spaces in the city as vacancy rates hit a record high of 34 percent in September as shops were driven out of the downtown area by heightened crime.

San Francisco – which has long been popular with tech companies – was also hit hard by the pandemic with its high density of office space.

Chris Roeder, executive managing director at Jones Lang LeSalle in San Francisco told Al Jazeera: ‘Nearly 80 percent of the space in downtown San Francisco is office space, unlike New York or most other cities, which have more homes.’

At the same time, the city has also struggled with rampant fentanyl use and fatal overdoses. In the first five months of 2023, there were close to 346 overdose deaths in the city – an increase of more than 40 percent from the same period in 2022.

The homeless population has also taken over the city and as a result, has driven companies and even residents out.

The Microsoft office at 555 California Street where offices of up to 49,000 square foot are up for rent after they joined the city’s ‘tech-xodus’ in October

Sleeping people, discarded clothes and used needles are seen in San Francisco that have impacted the dramatic surge in office vacancies

Another business mogul, Dan Gilbert, the founder of Quicken Loans, took on a task similar to Jacobs’ when he moved his companies to downtown Detroit in 2010.

At the time, the city was struggling economically and was close to declaring bankruptcy, until Gilbert swooped in and bought properties.

He started to buy and develop properties through his real-estate company Bedrock. Today, the company has around 100 properties that have managed to raise $5.6billion and boosted the residential population to 98 percent occupancy.

A staggering 19.6 percent of US office spaces is unoccupied- the emptiest they’ve been in the last 40 years.

Office spaces in major US cities weren’t leased at the end of the fourth quarter and the amount of vacant spaces has gone up 18.8 percent compared to last year, according to Moody’s Analytics.

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