Silicon Valley growth spurs huge office, R&D building boom

A huge wave of commercial property construction is underway in the Bay Area, and Silicon Valley’s economic boom is fueling the growth, according to a report released Wednesday.

Construction of new buildings for offices, research and development and industrial uses is galloping ahead at a “feverish” pace, a report stated.

“This is a construction boom like no other,” said Russell Hancock, president of San Jose-based Joint Venture Silicon Valley, a private-public organization. “There is a lot of confidence in the Silicon Valley economy. People who are developing buildings are quite sure that they are going to get leased up. And they are getting leased up.”

Read more from The Mercury News

 

 

Exclusive: Chinese developer brings on local development muscle as it digs into Santa Clara megaproject

A Chinese company has brought on local development help as it studies the feasibility of building a 10.5 million-square-foot mixed-use development in Santa Clara — a project that local insiders say could get even bigger.

The Chinese developer working on getting approvals for a 10.5 million-square-foot-development on a former Yahoo site in Santa Clara appears to have forged a formal relationship with a local developer to help with the process.

Harmonie Park Development last week announced in a tweet it was “excited to be named development advisor to Kylli.”

Kylli Inc., an American subsidiary of Shenzhen, China-based pharmaceuticals and real estate company Genzon, earlier this year got unanimous approval from Santa Clara City Council members to study amending the city’s general plan to grow the allowed development for the 48.6-acre site roughly at 3005 Democracy Way more than three-fold.

One local land use consultant now says the project could get even bigger, according to conversations he’s had with people purporting to be involved with the project.

Read more from Silicon Valley Business Journal

 

 

San Francisco evictions in decline, less than two-thirds of state average

Only half of eviction notices lead to actual ouster, according to Princeton database

San Francisco landlords evict tenants at less than two-thirds the rate of the average California city.

That’s the conclusion from Princeton University’s recently launched Eviction Lab, which compiles data from 48 states and Washington DC to get a bird’s-eye view of what eviction in the U.S. looks like. In 2016, Princeton recorded roughly 2.3 million evictions coast to coast, around one per every 140 citizens.

Compared to that, California’s rate of one eviction per 933 residents—41,178 evictions total in 2016—looks almost rosy; however, it’s not wise to use those kinds of terms when talking about tens of thousands of people losing their homes.

And in San Francisco the news is even more potentially comforting for renters. A few takeaways from the data:

  • Eviction Lab reports 593 SF evictions the same year, one per every 1,417 people (Eviction Lab uses an estimated SF population of 841,000 for 2016, which is actually on the low side), a rate of about 63.5 percent of the state average.
  • The database also records some 1,176 eviction filings the same year, meaning that the success rate of attempted evictions in SF was just over 50 percent. In the rest of the state it was more than 87 percent.
  • Overall, California had 112.51 evictions per day in 2016. SF had just 1.62, or just less than 1.44 percent of the state eviction rate.
  • Although Eviction Lab records a median rent in SF more than $300 pricier than the state average, the city’s median income also outstripped California average by over $19,000.

Before uncorking the champagne, note that there are some discrepancies between Princeton’s and San Francisco’s data sets.

Read more from Curbed SF

 

 

 

Huge investors chase San Francisco’s $300 million Ferry Building

The 1889 building is drawing interest from some of the country’s biggest landlords.

Some of the country’s biggest real estate investors want to buy control of San Francisco’s iconic Ferry Building in a deal that could exceed $300 million.

Kilroy Realty Corp, Hudson Pacific Properties In.c, Invesco Plc, and Thor Equities, are all competing to acquire the building, according to five, sources. A buyer could be selected within a month, said the sources.

The pending deal is another sign of San Francisco’s enduring appeal for major office investors as rents have jumped and little supply is being added.

The 1889 Ferry Building at the eastern terminus of Market Street includes 175,000 square feet of office space and 65, 000 square feet of retail in a popular ground-floor marketplace. The building and its weekly farmer’s markets draw tens of thousands of visitors a week. Its office space with waterfront views also commands some of the highest rents in the city, up to $100 per square feet.

Read more from San Francisco Business Times 

 

 

Google says it’s close to owning enough downtown San Jose properties for ‘viable’ development

Google is nearing ownership of enough downtown San Jose properties and parcels to create a “viable” transit-oriented development.

The development will take place near the Diridon train station, a top company executive told a key advisory group this week.

During a meeting of the Station Area Advisory Group, formed to gather and process citizen input about Google’s proposal to develop a massive transit village near Diridon Station, Google executives offered the company’s first major presentation of its development philosophies and plans for downtown San Jose. The search giant also indicated that it is creating a critical mass of properties where it could build a transit-oriented community downtown.

“Just to get the sites together by itself is obviously very complicated, and it’s not completed yet, and it’s taking a while,” Mark Golan, Google’s vice president real estate development, told the advisory group during its Monday night meeting. “But we are getting close to having a site that is viable.”

Mountain View-based Google and its development ally Trammell Crow have spent at least $221.6 million buying an array of properties on the western edges of downtown San Jose, within and near a one-mile stretch that begins north of the SAP Center and reaches south nearly to Interstate 280.

Among the major recent deals: The Google and Trammell Crow venture bought a large site that now is occupied by Orchard Supply Hardware, and the search giant has struck a deal to purchase a huge property from Trammell Crow that is approved for 1 million square feet, hundreds of residences and retail.

Despite the extensive work and investments that have occurred already, construction isn’t going to begin tomorrow, Google executives cautioned.

Read more from Santa Cruz Sentinel

 

 

San Francisco’s largest office landlord to break ground on $265 million Oakland tower

Boston Properties, San Francisco’s largest office landlord, will break ground on May 2 on a 402-unit apartment tower next to Oakland’s MacArthur BART station.

The 260-foot project at 532 39th St. will be the tallest building in North Oakland and the company’s first residential project on the West Coast.

The project in the Temescal district will be among a half-dozen Oakland towers to start construction in the last two years, an unprecedented real estate boom that’s drawing some of the country’s biggest developers to the city. Other developers include Lennar Multifamily Communities, Shorenstein Properties and Carmel Partners.

Read more from San Francisco Business Times

 

 

Facebook to move into big WeWork outpost as co-working company prepares to open largest-ever location

Talks between the two giants about WeWork’s new Mountain View location, its largest sublease to-date, have been ongoing for months. But this week the two finally struck a deal.

When WeWork this year opens its first Mountain View offices — its largest-ever lease — half of that space will be filled by Facebook.

Both companies told the Silicon Valley Business Journal about Facebook’s sublease which totals more than 200,000 square feet in one of two new office buildings at The Village at San Antonio Center. The deal comes after months of discussions between the two companies. The second WeWork office building on the site will be open to any company seeking co-working space.

Initially, the talks between the New York-based co-working company and the Menlo Park-based tech giant had been leading toward Facebook taking over both buildings at 391 and 401 San Antonio Road, which would total about 450,000 square feet, the Business Journal reported in February. But Facebook in recent months has rapidly snapped up huge swaths of office space in Silicon Valley — including about 1 million square feet in Sunnyvale — and its needs evolved quickly, two sources with knowledge of the discussions told the Business Journal.

Facebook will set up shop in the eight-story, approximately 225,000-square-foot office building at 401 San Antonio Rd., which is slated to be ready for move-in by early September, according to WeWork.

Read more from Silicon Valley Business Journal

 

 

Wiener scales back bill that would allow taller housing near public transit

State Sen. Scott Wiener scales back a controversial housing proposal.

The proposed bill would strip local governments of their ability to block construction of taller and denser apartment and condominium buildings near public transit stops, and conceded the bill might not make it through the Legislature this year.

The San Francisco Democrat introduced amendments to his SB827 late Monday that would lower the maximum height of buildings that could go up as a result of the bill to five stories from eight. Also, the bill would take effect in 2021 instead of 2019.

Wiener made the amendments ahead of the bill’s first hearing April 17 in the Senate Transportation and Housing Committee. If passed, the bill will then head to the Senate Governance and Finance Committee.

“The bill is not guaranteed to survive either committee,” Wiener said Tuesday. “It’s a hard bill. Hopefully, we pass through these committees and live to fight another day, but if not, then we will try again next year. It’s very common in the Legislature that for hard bills, sometimes you have to try multiple times.”

The measure would override local height limits on proposed four- and five-story apartment and condo buildings in residential areas if they are within a half mile of major transit hubs, such as a BART or Caltrain station. It also would limit cities’ ability to block denser buildings within a quarter-mile of highly used bus and light-rail stops, but amendments eliminated new height requirements.

Read more from San Francisco Chronicle

 

 

Oakland parking garage next to City Hall could join development wave

More Oakland parking is being studied for new development.

A closed garage next to Oakland City hall could join the development wave that’s transformed over a thousand parking spaces into new buildings.

Oakland city staff are studying the demolition of the 335-space public parking structure at 1414 Clay St. and construction of either a new hotel or office building. The garage closed in December 2016 due to seismic safety concerns.

A city report recommends that Oakland seek an office project on the site because it’s more financially viable than a hotel. It also recommends requiring 51 parking spaces rather than 273 spaces, which would replace some of the previously used parking but could threaten the financial viability of a new project.

The stance is consistent with Oakland’s efforts to cut parking in new downtown projects and promote the use of public transit, “rather than continuing to subsidize the cost of private vehicle ownership and use,” according to the report.

Patrick Lane, the city’s manager of public/private development, said there isn’t a schedule for seeking developers for the site and it would likely happen after the city updates its public lands policy. The City Council may require higher fees and on-site affordable housing in new projects on public land, as activists push for more funding for low-income residents.

The city is also seeking development of two other public sites at 1911 Telegraph Ave. and 1800 San Pablo Ave, which could also be subject to the public lands policy.

Read more from San Francisco Business Times

 

 

Silicon Valley grapples with security risks after YouTube shooting

Tech offices are modeled after college campuses.

Will they rethink their layouts? A shooting outside the offices of YouTube on Tuesday prompted an outpouring of support from fellow technology workers, as well as a sense of dread over whether other corporate headquarters in Silicon Valley were vulnerable to similar attacks.

YouTube’s campus in San Bruno, California, where three people were injured by gunfire, is laid out much like other tech offices nearby. It consists of a group of buildings within close proximity, spread across a suburban area. There’s outdoor seating and grassy pastures inviting colleagues to congregate. Visitors and employees can wander freely together in the vicinity, and security guards typically stay at desks inside the buildings.

“Companies invest in security but purposefully keep physical security measures discreet because the vibe is casual and relaxed,” said Joe Sullivan, the former chief security officer at Uber Technologies Inc. and Facebook Inc. who’s now an independent consultant. “Leaders want to stay connected with their teams, generally choosing less visible security than you would see in traditional finance or media companies.”

A woman — identified by police as Nasim Aghdam — shot and injured at least three people before killing herself. She was found at the scene and appeared to be dead of “a self-inflicted” gunshot wound, San Bruno Police Chief Ed Barberini said at a press conference Tuesday. No motive was given for the shooting.

In an American age where shooting rampages have become increasingly common, openness can work against companies, said Jeff Harp, a retired agent at the U.S. Federal Bureau of Investigation in San Francisco who consults for technology companies. While employees are required to badge into buildings, access to many outdoor areas is generally accessible to all.

The episode could prompt executives to tighten security, Harp said. “Companies are going to be asking themselves, ‘Maybe our guard services need to be where they pull into the parking lot.’”

Read more from Bloomberg