WEBVTT - San Francisco on the Rebound?

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<v Speaker 1>Matt Winkler joins us, the founder of Bloomberg News way

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<v Speaker 1>back in the day. He's got a calm that I've

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<v Speaker 1>been waiting for him to write because I'm a huge

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<v Speaker 1>fan of San Francisco, as I've said many times, and

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<v Speaker 1>I'm sad that it's on some tough times and i

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<v Speaker 1>haven't been there recently. But just kind of what you

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<v Speaker 1>read and see and all that kind of stuff, Matt's

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<v Speaker 1>got some analysis says, maybe it's not that bad. Matt,

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<v Speaker 1>What did you find when you went out to San Francisco.

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<v Speaker 1>What are the numbers tell you about one of my great,

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<v Speaker 1>great favorite cities, San Francisco.

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<v Speaker 2>So I have to thank my wonderful colleague, Sheen Pey

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<v Speaker 2>for this, because we talked about San Francisco and what

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<v Speaker 2>we decided to do and he did specifically is compare

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<v Speaker 2>the ten largest companies publicly traded companies in the ten

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<v Speaker 2>largest cities of America. And of course San Francisco is

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<v Speaker 2>not one of the ten largest cities. It's number seventeen

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<v Speaker 2>with a population of you know, maybe eight hundred and

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<v Speaker 2>fifty thousand. The ten companies that are publicly traded that

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<v Speaker 2>are one to ten in San Francisco literally outperformed by

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<v Speaker 2>employee growth and sales growth over five years, all the

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<v Speaker 2>way through twenty twenty five, the top ten cities of America.

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<v Speaker 2>So if things are bad in San Francisco, the business

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<v Speaker 2>of San Francisco, the business people of San Francisco are thriving.

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<v Speaker 2>And you can't, you know, have two narratives like that

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<v Speaker 2>at the same time. Something has to give.

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<v Speaker 3>What are these companies hiring the people their.

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<v Speaker 2>Employee growth within the city limits in the city life. Yeah, yeah,

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<v Speaker 2>totally outperformed Chicago, New York, Dallas, Houston, every city except,

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<v Speaker 2>by the way, number two close, Number two is Los Angeles.

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<v Speaker 1>Okay, yeah, Well that's your moment, that's your bullish California

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<v Speaker 1>callity and make it right.

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<v Speaker 2>And that's another column.

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<v Speaker 1>Yeah exactly.

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<v Speaker 2>But San Francisco is in fact a twenty first century

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<v Speaker 2>economy as measured by the companies that it keeps. And

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<v Speaker 2>I say keeps, I mean whether it's Visa, which is

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<v Speaker 2>a financial company for Airbnb, or Salesforce to name three.

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<v Speaker 2>Airbnb and Salesforce right now are outperforming their global peers

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<v Speaker 2>in market capitalization, sales growth, employee growth.

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<v Speaker 1>What I know you spoke to the mayor of London.

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<v Speaker 1>I'm sorry, the mayor of San Francisco, London Breed. I mean,

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<v Speaker 1>he's been there since she's been there since twenty eighteen.

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<v Speaker 1>So the good, the bad, and kind of where we're going.

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<v Speaker 2>Now, what does her outlook, Well, it's what you would

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<v Speaker 2>expect it to be. She's bullish, I mean, and listen,

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<v Speaker 2>London Breed is really exceptional in the sense that this

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<v Speaker 2>is somebody who grew up literally in the worst part

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<v Speaker 2>of San Francisco and was raised by her grandmother and is,

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<v Speaker 2>you know, a success story in her own right. And

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<v Speaker 2>when she talks about San Francisco, she's very confident because

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<v Speaker 2>guess who she talks to. She talks to the CEOs,

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<v Speaker 2>and not a one of those ten companies that we're

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<v Speaker 2>talking about have any intention of picking up and leaving.

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<v Speaker 2>And the fact that they're out performing their peers in

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<v Speaker 2>bigger cities coast to coast, north to south, east to

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<v Speaker 2>west in the United States of America tells you something

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<v Speaker 2>about San Francisco, which is probably why you like it

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<v Speaker 2>so much.

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<v Speaker 1>I do, and commercial real estate talk to us about

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<v Speaker 1>the vacancy there versus other cities, because it's it.

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<v Speaker 2>You've got vacancy rates that are maybe not as high

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<v Speaker 2>as San Francisco, but close enough in lots of places,

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<v Speaker 2>whether it's in Texas, whether it's in New York, whether

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<v Speaker 2>it's in Illinois. You know, literally all across America, you've

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<v Speaker 2>got coming out of COVID nineteen vacancy rates. Bloomberg News

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<v Speaker 2>reported not too long ago that that trend actually has

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<v Speaker 2>gone favorable in the sense that the worst is over

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<v Speaker 2>and there's a rebound underway. So you would expect by

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<v Speaker 2>that way that to happen because more people were going

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<v Speaker 2>to come back to work. Even at Bloomberg.

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<v Speaker 3>Yep, we're returned to office the owner.

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<v Speaker 2>The owner has already told us that, you know, it's

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<v Speaker 2>going to be a four day week at least in

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<v Speaker 2>the office.

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<v Speaker 1>And our San Francisco office is awesome, by the way,

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<v Speaker 1>it's built on one of those piers out into the

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<v Speaker 1>San Francisco Bay.

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<v Speaker 2>So again kudos Toorrow.

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<v Speaker 3>Well, you know, to that end. So I actually was

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<v Speaker 3>there for a reporting trip I think twenty seventeen, twenty eighteen.

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<v Speaker 3>I had gone as a child, and then I would

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<v Speaker 3>turn in early twenty twenty one, April twenty twenty one,

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<v Speaker 3>I believe, and it was pretty sorry twenty twenty two.

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<v Speaker 3>April twenty twenty two, it's pretty grim. You know, saw crime,

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<v Speaker 3>saw overdose, you know, the whole nine yards. How you've

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<v Speaker 3>spoken with London Breed. How does what's the path forward

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<v Speaker 3>from here? And does this really stand the potential? I mean,

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<v Speaker 3>you see all these companies hiring and whatnot, But you know,

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<v Speaker 3>what do the executives say about how they're you know,

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<v Speaker 3>making people want to live in Francis.

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<v Speaker 2>Well, the executives are very confident about their businesses because

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<v Speaker 2>they talk about them from quarter to quarter to analysts

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<v Speaker 2>and their shareholders. But I think what's more meaningful? And

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<v Speaker 2>London Breed did reference this is not too long ago.

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<v Speaker 2>Last month, in fact, the what used to be called

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<v Speaker 2>the Grateful Dead had a concert in San Francisco. It

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<v Speaker 2>was sold out, or was sold out one hundred and

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<v Speaker 2>twenty thousand people over three days into downtown San Francisco,

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<v Speaker 2>and everybody had a great time and it poured more

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<v Speaker 2>than thirty million dollars into the San Francisco economy.

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<v Speaker 3>That's not a dystopia, right, Well, I mean, but do

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<v Speaker 3>you see the change coming? I think there's specifically some

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<v Speaker 3>rules about theft and burglaries resulting in misdemeanors rather than felonies,

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<v Speaker 3>and this sort of encourages you.

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<v Speaker 2>Yeah, that's a California law law, and there are some

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<v Speaker 2>moves to change the law. There's a California law that

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<v Speaker 2>actually makes it too often you could say, a misdemeanor

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<v Speaker 2>for breaking and entering or for burglary and theft, whereas

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<v Speaker 2>in other cities it's easily a felony. Now that happens

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<v Speaker 2>to be, if you like, an idiosyncrasy of California, and

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<v Speaker 2>it's particularly a cue in San Francisco, but that can

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<v Speaker 2>be changed. Actually, the crime rate in San Francisco violent

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<v Speaker 2>crime rate is way below most major cities. It's near

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<v Speaker 2>the bottom actually among major cities. So that's a better

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<v Speaker 2>indicator of really quality of life in San Francisco.

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<v Speaker 1>I think one of the challenges for the San Francisco

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<v Speaker 1>and the Bay Area in general historically was the cost

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<v Speaker 1>of housing, the cost of living. Is that where we

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<v Speaker 1>in that regard now? Has there been an adjustment or

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<v Speaker 1>is that just California.

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<v Speaker 2>Everybody, especially London Breed will be the ones to say

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<v Speaker 2>they've hired more people over the years than they had

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<v Speaker 2>housing for and that it needs to be that inequality

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<v Speaker 2>needs to be rectified, and it's actually being led at

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<v Speaker 2>the state level by the governor himself to create housing,

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<v Speaker 2>particularly public housing, in lots of places that his historically

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<v Speaker 2>have resisted it for local reasons, and the state is

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<v Speaker 2>likely to circumvent those local restrictions once and for all

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<v Speaker 2>so that you can have a big increase in housing.

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<v Speaker 1>Well, lately, one of the stories I saw MATTT just

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<v Speaker 1>corporate conferences. San Francisco has historically been a great conference

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<v Speaker 1>down because it's such a great town. Even that's taken

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<v Speaker 1>a knock over that.

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<v Speaker 2>Well, there's going to be an Asia Pacific Summit in

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<v Speaker 2>San Francis. That's right, it's going to be a pretty

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<v Speaker 2>big deal, and all the CEOs in San Francisco are

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<v Speaker 2>going to be part of that Asia Pacific summit because

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<v Speaker 2>those companies are very much part of the global and

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<v Speaker 2>dare I say Asia Pacific economy.

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<v Speaker 3>Yeah, there's a stickiness to this and then maybe negativity

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<v Speaker 3>around San Francis. I just got to feel like, you

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<v Speaker 3>see this data coming back, you see some of this data,

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<v Speaker 3>How long does it take to sink in?

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<v Speaker 1>Yeah, exactly. Well, all I know is there's a ton

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<v Speaker 1>of engineers there and you always need engineers. Thanks so

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<v Speaker 1>much for joining.

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<v Speaker 2>STT.

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<v Speaker 1>Winkler is the editor in chief emeritus and the founder

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<v Speaker 1>of Bloomberg News. Greg Collums Shinpei his man there with

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<v Speaker 1>all the data, and they bring it