The Washington Post reports this morning that there is a severe housing shortage in the San Francisco area - resulting in soaring real estate prices. San Francisco now has the most expensive real estate market in the nation - with a MEDIAN home price of $372,700 (compared to $136,000 nationally).
The Washington Post article also notes that to meet housing demand, housing starts must increase by 100,000 or more, and that housing in the Silicon Valley "has become like the new blue-chip stocks."
One wonders why the stock price of Catellus, with its vast California and San Francisco real estate holdings, is not booming as well. Hopefully for Catellus shareholders, it is only a matter of time....
I live in the bay area and yes, it is expensive, especially san francisco. Mission bay gets lots of coverage in the local press. If you want to access it, go to the San Francisco Chronicle home page, click on search, and type catellus as your subject. The press coverage is positive. SF has rent control; and very, very high rents. The City is already built up; effectively, the only new space available is Mission Bay; so there are hopes that new supply of rental units will alleviate the high rents. After harassing Mission Bay for decades, the City now wants it built and is even elbowing catellus to make the build out faster. One thing is certain: the apartments that are built are going to be fully rented at very high rents. I think the mission bay build out "guarantees" catellus's growth rate into the near future. it's a gold mine; the only question being how much of that gold mine is already priced into the stock. Not much in my opinion. Buy it now!
IMHO you two fellows are neglecting the fact that there are so many shares outstanding. San Francisco's (and Los Angeles')CDX properties are maybe equivalent to one leg of an elephant who has huge mass otherwise. Many shares outstanding and a whopping debt load means this ship is tough to steer and tougher to turn around.-- Any building and/or other improvements on CDX's properties are quite likely to exacerbate CDX's debt problems --Does somebody have a rational estimate of the actual per share real estate market value of CDX?-- With the buyback program of CDX and the eagerness of PERS to cut their losses by selling, analysis is necessary to determine if this potential buy/sell offset is net bullish or bearish for the stock.