Warren Buffett protégé makes a risky real estate gamble | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Few cities were as decimated by the pandemic as San Francisco. And its road to recovery has been slower than most, especially in its downtown core.

Union Square, once a thriving retail and tourism center, has seen store closures, rising vacancies, and sharp declines in foot traffic. Flagship stores like Nordstrom and dozens of other major retailers have shut their doors or downsized.

Concerns about public safety, homelessness, and office vacancies have only made recovery harder.

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Even though city leaders have launched revitalization programs like “Vacant to Vibrant” to support popups, cultural zones, and community events, the rebound has been slow. Many office buildings remain half-empty, and retail activity is nowhere near pre-2020 levels.

San Francisco is a city that’s experienced more than its share of boom and bust cycles. In the recent past, there was the dot.com bubble of the 1990s and early 2000s, the great recession beginning in 2007, and then the pandemic.

Other cities, including New York and Los Angeles, have weathered similar ups and downs, but the effects seem more dramatic and volatile in San Francisco.

But while San Francisco is a city that can be down, if history is any indication, it is never really out.

Now, for opportunistic investors, the current downturn in the City by the Bay is starting to look like a buying opportunity.

San Francisco has had a slower recovery from the pandemic than some other cities.

Image source&colon; Bezikus/Shutterstock

Warren Buffett trained this investor to buy when everyone is afraid to

Investor Ian Jacobs, a longtime protégé of Warren Buffett and a former Berkshire Hathaway executive, is doubling down on Union Square in downtown San Francisco, according to a July 1 report in the San Francisco Standard.

Jacobs, who leads the investment firm 402 Capital, has gone into escrow to buy 111 Ellis Street, an office building at the corner of Powell and Ellis streets. The building was once home to Blondie’s Pizza and sits near several still-vacant retail spaces.

This is Jacobs’ second purchase in the neighborhood this year. In May, he acquired 200–216 Powell Street, an Art Deco building just steps away, for $7.4 million. Both deals are part of a broader investment effort Jacobs calls “Project Uris” — a long-term plan to buy millions of square feet of discounted downtown real estate.

Sources told The Standard that the latest sale is happening at a “significant haircut” compared to pre-pandemic values, indicating just how steep the discounts have become.

But Jacobs doesn’t seem concerned with short-term volatility; he’s betting on a 10-year comeback.

Warren Buffett’s protégé has roots in real estate

Jacobs isn’t just another real estate speculator. Legend has it that he once offered to work for Buffett for free just to get his foot in the door. That risk paid off: Buffett hired him, and Jacobs became known for his value-first approach to investing, according to The Standard.

He’s also part of the Reichmann family, which made a fortune in real estate by buying up undervalued New York properties in the 1970s under the Uris Buildings Corporation. Project Uris is named in homage to that legacy.

The strategy: Scoop up prime real estate in a distressed market, hold long-term, and cash in when the city inevitably rebounds. “Buy when others are fearful” is a move straight from the Warren Buffett playbook.

While many investors are still hesitant to touch San Francisco commercial real estate, Jacobs is moving fast and seems to be making a bet on the city’s long-term resilience. With retailers like Nintendo, Zara, and Shoe Palace opening popups, reopening permanent locations, or even expanding nearby, there are signs that Union Square could already be turning a corner.

If Jacobs is right, he could be among the first to profit from a long-awaited downtown revival.