It's entirely plausible this is true just one layer up, where major partners at SF VCs are separarely invested in real estate investment firms without actually making that part of the VC strategy.

Or one layer down (= founders), let’s not forget Adam Neumann renting his properties to WeWork

VC's investing in real estate, that a new one. Care to share any data or sources on that?

Any good investor will diversify their investments, so maybe the funds themselves are not investing in real date but the investors of the funds and probably the managers do it.

More likely that their LPs are the ones investing in both.

And GPs would risk their promotes on their investment returns to benefit their LPs unrelated investments? Give your head a shake…

The fund isn't doing the investing in real estate, the individuals controlling the funds are. Anyway, that's why I said it's a conspiracy theory but the incentives line up like I mentioned in another comment.

But it's a conspiracy theory that doesn't even require a explicit coordination, just people acting in their own self interest.

If you argue that WFH improves productivity why would they risk their company investment returns in favour of their real estate returns?

Because that would involve these people caring about their "boots on the ground" or thinking in the long term. Those two things to happen less and less as things scale up and become public respectively.

I think they realize the truth which is that productive people can be productive anywhere. Do they care about the toll a 2-hour commute takes on the workers or how that translates into deliverables and timelines? Ask yourself if this sounds likely.

Also they understand that most of these companies are 100% losses anyway, but real estate investments are much less likely to go to zero. (Plus rent is just cold hard cash.)

David Sachs whinges about his SF real estate portfolio nearly every episode of the all in podcast.

It does seem unlikely the SF VC exists due to SF real estate, interesting theory though, I'm all ears.

I mean, you are adding more to my claim by stating it "exists due to SF real estate".

I never said that's the only reason it exists, but you know what, that might be the only reason it's so hyper localized to one place.

Let's look at the incentives:

Pretend you are a wealthy VC with tens of millions invested in San Francisco real estate.

You have been given billions by LPs to manage.

If I, as the person that has control over how this money can be distributed, only invest those billions in the bay area and bring all these high skilled workers to this one place I can actually impact the price of real estate and triple the tens of millions I already have invested. Once those high skill workers move here they will remain, even after the initial startup goes under because they will move to a different startup.

Now if all the VCs are doing this and they all control large multi billion dollar funds...

Which VCs own real estate that remotely measures up to their portfolio companies such that they would risk their portfolio company productivity for their real estate returns?