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At the Leavey School of Business Real Estate Institute’s 8th Annual Real Estate Symposium on Tuesday, April 22, 2025, some of the industry's sharpest minds outlined a clear theme: uncertainty dominates the current market, but within that disruption lies immense opportunity—especially for the Bay Area.

The event was moderated by Byron Carlock, partner at CEO Coaching International and former partner at PwC Real Estate, and featured Ron Sturzenegger, former global head of real estate at Bank of America; Alexander Quinn, senior director of research (Northern California) for JLL; Lauren Alders, principle investor at BGO; Carly Winger, corporate advisory & M& A director at Eastdil Secured; Mike Kelly, president of Tralee Affordable Housing LLC; and Matt DiNapoli, president/CEO at DiNapoli Capital Partners.

Despite widespread headlines about vacancy, layoffs, and outbound migration, the Bay Area remains a magnet for capital, talent, and innovation. Together, the experts discussed how this region is navigating real estate volatility, where new value can be unlocked, and what that means for the next generation of developers, investors, and city builders.

“This is my fourth cycle…and it's fascinating this time that we are in this cycle with such positive demand characteristics in almost every asset class except office, which is going through a remaking of itself,” said Carlock as he opened the event.

Venture Capital Keeps Flowing as Office Space Narrative Shifts

In setting the stage by outlining recent trends, Quinn noted that in 2023, the Bay Area captured 46% of national venture capital—well above the projected 40%—and AI-related companies alone helped push this to 63% in early 2024. OpenAI’s $40 billion valuation and real estate expansion are just one of many high-profile examples.

“San Francisco and San Jose are advantaged. We’ve already had 30 AI leases this year… we’re forecasting 12 million square feet in AI by 2030,” said Quinn. “OpenAI’s latest lease was larger than the combined investment totals for China and India this past quarter. That shows the scale we’re dealing with.” 

Quinn pointed out that despite market volatility, Bay Area IPO activity surpassed $60 billion last year, led by innovative firms in biotech, clean energy, and AI. While 2025 may see some hesitation, the long-term fundamentals remain strong.

According to Quinn, the Bay Area office market, particularly San Francisco, remains a headline issue with high vacancy rates hovering near 24%. But the narrative is shifting. Employers are increasingly mandating a return to the office, and physical occupancy is rising while sublease inventory is starting to come off the market. 

“In 2022, 30% of companies said that they wanted to be fully remote. Now it's less than 1%, so we're definitely seeing a shift back to the office and recognizing the underlying value therein.” Quinn points to a bump in patent filings and innovation metrics as evidence that companies are recognizing that in-person work has tangible outcomes.

Putting Interest Rates in Perspective 

In his keynote address, Ron Sturzenegger delivered a thorough overview of current financial trends and opportunities in real estate. He emphasized both the systemic strength of the U.S. banking system and the shifting economic landscape shaping real estate today.

He explained the mechanisms behind recent bank failures, such as those of Silicon Valley Bank and First Republic. Sturzenegger noted these failures weren’t driven by insolvency but by eroded confidence. “Every bank is illiquid and bankrupt every single day—if every depositor takes their money out at the same time, that’s a fact,” 

Turning to interest rates, Sturzenegger warned of the implications of rising borrowing costs. “There is nothing more expensive than free money,” he said, explaining how banks like Silicon Valley Bank were caught holding long-term assets with low yields while depositors chased higher returns elsewhere.

Despite this, he expressed confidence in large U.S. banks, citing stress tests and capital requirements that make them more resilient than during the Great Financial Crisis. Regional banks, however, are more exposed—especially due to their heavy real estate loan portfolios—creating potential opportunities for savvy investors.

On interest rates, he cautioned, “I think we’re going to be in a higher interest rate environment for longer.” He linked long-term rate increases to the ballooning federal deficit and increasing Treasury issuance, stating, “The U.S. is the largest borrower in the world. Econ 101 tells you if supply increases and demand stays the same, rates have to go up.”

Discrepancies and Opportunities in the Real Estate Market

Building on Quinn’s statistics and Sturzenegger’s observations, the larger panel tackled the challenges and opportunities of today’s real estate market, starting with the nationwide discrepancies in the housing market. Nowhere is the mismatch between supply and demand more extreme than housing in the Bay Area. construction costs continue to rise due to tariffs, supply chain disruptions, and labor shortages.

“Everyone's saying that there's a massive shortage of housing. From 10,000 feet, that's correct, but if you go to every city, what was built was not what the demand was,” said Kelly. “In general, it just didn't exist. There’s demand, but what’s being built doesn’t match affordability. Too much luxury, not enough middle market.” 

According to Kelly, prices are going to have to drop because mortgage rates aren’t going down any time soon. “It’s going to take awhile for the market to adjust,” said Kelly. “You’re gonna have some pain.”

Adding to the challenges, construction costs continue to rise due to tariffs, and supply chain disruptions and labor shortages continue. Kelly pointed out that virtually every component of new construction—lumber, paint, electrical—comes from China or Mexico. “Tariffs are kneecapping supply,” he said.

Still, the long-term opportunity in affordable and workforce housing remains vast, especially if incentive-based solutions emerge.

“We're going to need to find a way to get affordable housing into our system and solve that problem so that we can then release the developers to go out and build and maybe even incentivize them,” said DiNapoli.

On the commercial side, recent uncertainty over tariffs is causing many investors and developers to pause activity and delay decisions in some cases.

“We felt some positive momentum at the end of 2024 as we were going into this year,” said Winger. “But then tariffs just put this big question mark on everything.”

“All of the deals we’re working on now, we’re just kicking the can,” agreed Alders. “It feels like whiplash…Companies have not had enough time to digest everything that’s happening.”

Yet, this disruption is also fueling opportunity. Distressed debt, short sales, and repositioning plays are entering the market.

“We're seeing every sale in San Francisco has been a lender-directed sale,” said Sturzenegger. “The lender says, ‘I'll take the kind of like a short sale on the residence side, but sell the asset. I'll take whatever I can get right, and we'll close it.’ So I think we're going to see a lot more of those. Everybody amended and extended and pretended as long as they possibly could, but eventually you're out of money, and you just got to sell it at whatever price it clears for.”  

San Francisco on Sale: From Doom Loop to Boom Loop?

Despite negative press and pandemic-era narratives, the panel pointed out that San Francisco may be entering its renaissance. Crime is at a 23-year low, AI and tech growth are concentrated downtown, and retail activity is showing signs of life.

“We [call] it the ‘boom loop’… we’re seeing a real growth occur in sf right now, massive swing  in terms of VC investment and new startups…and more than double the number of AI leases (in 2024 versus 2023),” said Quinn. “And the trend is accelerating.” 

DiNapoli noted that hotel operators also see value in markets like San Francisco that have been disproportionately discounted. “Where are we bullish? Believe it or not, San Francisco.”

Talent and Timing: A Message to the Next Generation

For students and early-career professionals, the message from the panel was simple: this is a generational moment to enter real estate.

Sturzenegger pointed out that when some of the panel members entered the industry back in the late 1980’s, they also entered at a time of great change and uncertainty. “We got put in charge of things we should have never been put in charge of,” he said. “That’s how you learn. That’s how you build trust.” 

The Bay Area remains a launchpad for ambitious professionals, particularly those willing to collaborate, show up in person, and think long-term.

“You want to learn this business? Be in the room. Listen to how deals are made. You miss that working from home,” said Sturzenegger.

“This is actually a really good time to get into the business,” he said. “All business—but really, real estate—is a relationship and trust-driven business.”