Millennial migration favors San Jose despite cost of living, says census

The Bay Area is getting more mixed messages on the seemingly perennial question of if and how quickly residents are fleeing the region and the state.

The finance company Smart Asset released a report Friday claiming that San Jose is one of the most popular destinations for millennials on the move despite its high cost of living.

Smart Asset economist Derek Miller sorted through U.S. Census data to figure out which U.S. cities got the greatest inflow—i.e., the margin of new residents relocating to a city over the number of those moving away—with the ever-topical millennial demographic, here defined as anyone between the ages of 20 and 34 in 2016.

Suffice to say, San Francisco did not acquit itself well with the trend, despite previous census analyses revealing that the city’s median age is gradually getting younger with each passing year. Instead, millennial movers reportedly favored San Jose, which came in seventh place on Miller’s list, the only California city to break the top ten.

 

 

Read more on Curbed SF

 

 

After two projects sank, can San Francisco find developers for decaying waterfront?

The new effort is one of the largest but also potentially costliest redevelopment opportunities in the city.

The Port of San Francisco is seeking ideas for new uses at 13 historic waterfront piers, in one of the largest but also potentially one of the costliest redevelopment opportunities in the city.

The agency wants proposals from both large developers and smaller tenants such as nonprofits, arts groups and retailers to revive the piers, which are now vacant or used for parking or storage.

Some previously renovated piers have been financial successes. Waterfront offices at the Ferry Building and Piers 1 1/2, 3 and 5 have signed tenants for rents over $100 per square foot. Control of the Piers later sold for $103 million in 2016, and the Ferry Building is expected to be sold to Hudson Pacific Properties for around $300 million, according to sources tracking the market.

But two recent redevelopment efforts failed because of the high costs of rehabilitating and seismically protecting piers. A study for the Port found that $74 million to $10 million would be required to bring a single pier up to code. Last year TMG Partners and Premier Structures, Inc. exited an office, event and restaurant space proposal at Pier 38 after the cost to repair the pier was expected to be as high as $122 million.

 

 

 

Read more on San Francisco Business Times

 

 

 

China Trade War Threat May Have Died Down, But CRE Is Still On the Front Lines

Chinese presence in U.S. commercial real estate seems to be waning, trade war or no trade war.

The fate of the off-again, on-again specter of an impending U.S.-China trade war may be uncertain, but regardless of what happens with tariffs and exports, the U.S. commercial real estate industry continues to feel the effect of both China’s cold shoulder and the stricter U.S. regulatory environment surrounding foreign investment.

Chinese companies and financial institutions were active in U.S. commercial real estate in recent years, both on the equity side and the debt side, but their presence seems to be waning, trade war or no trade war.

In New York City alone, Bank of China was involved with originating about $5 billion in loans for prominent commercial properties in 2013 and 2014. Bank of China has been party to loans of more than half a billion dollars each for trophy properties in the Big Apple, including the Sony Building at 550 Madison Ave. (originated in 2013), the One Astor Plaza headquarters of Viacom and its MTV studio (2012) and the 63 Madison Ave. home of tenants such as IBM (2015).

Other big Chinese players in the U.S. real estate market over the past few years have included the Industrial and Commercial Bank of China, which financed New York properties including the Bush Tower at 130 W. 42nd St. (2015), and Anbang Insurance Group, one of China’s largest insurance groups.

 

 

Read more on National Real Estate Investor

 

 

Exclusive: Nordstrom to close Stonestown location, leaving S.F. mall anchor-less

Nordstrom is preparing to close one of its San Francisco locations amid monumental shifts in the retail market that have upended the traditional department store model. 

The Seattle-based retailer is set to vacate its 174,000-square-foot location at Stonestown Galleria, according to Retail West Principal Matthew Holmes and another source with knowledge of the decision, who spoke on the condition of anonymity because of pending lease negotiations at the property.

Holmes said the plan is for Nordstrom to close the location, which it has leased for the past three decades, leaving GGP another opportunity to backfill it with smaller tenants.

“It was never the grand Nordstrom like it is downtown,” Holmes said of the retailer’s 350,000-square-foot Market Street location. “They do so much more business in downtown, because it’s a showcase store for them. They’ve realized they don’t need two stores in San Francisco.

A Nordstrom spokeswoman said in an email that the retailer did not have any store closures to announce. Stonestown Mall operator General Growth Properties’ Darren Iverson, a senior general manager, declined to comment.

 

 

Read more on San Francisco Business Times

 

 

Bitcoin won’t encourage cryptocurrency for real estate, but cryptoeconomics will

As Bitcoin enters the mainstream economy, a number of homebuyers and sellers are starting to use the cryptocurrency to conduct real estate transactions.   

Last year, Southeby’s International Realty sold one of the first single-family homes in Austin, Texas using Bitcoin. The Austin home was sold when Bitcoin prices were $3,429 in September 2017.

In addition to these transactions, other residential real estate properties are being listed for Bitcoin. A recent Forbes article describes how Canter Companies, a full-service investment firm specializing in real estate and asset management projects, recently listed two multi-million dollar homes for sale in Bitcoin. The homes are collectively priced at under $20 million in Bitcoin. And recently, a 27 acre piece of land in Silicon Valley has been listed for sale in Bitcoin, Ether and XRP with a starting price of $16 million.

However, while there are a handful of homes currently listed for sale in Bitcoin, some believe that using Bitcoin for real estate transactions will not result in widespread adoption — At least not until the real estate industry starts to utilize blockchain technology, which in turn will drive the adoption of cryptocurrency transactions.

While Bitcoin is stepping into society’s massive adoption as a decentralized cryptocurrency, the next-generation blockchain technology  brings a lot more to the real estate world than just a payment alternative. For example, Propy is based on the Ethereum blockchain, an enormously powerful shared global infrastructure that can move value around, while also representing the ownership of property. Ultimately, this enables title deed transfers to take place entirely online. Imagine a world where you can buy or sell your property while sitting on your couch – now this is a reality with blockchain technology, Natalia Karayaneva, CEO of Propy, told me.

According to Karayaneva, the only way to encourage homebuyers and sellers to take advantage of cryptocurrency for real estate transactions is to take a “cryptoeconomics” approach, which goes much further than simply putting homes up for sale in Bitcoin.

Cryptoeconomics lays out the framework for the way in which cryptocurrency ecosystems thrive and function across a decentralized network, known as the blockchain. These ecosystems are able to allow a number of entities who do not know one another to reliably reach consensus across an anonymous, trustworthy network through the use of cryptocurrencies. This is achieved by using a combination of economic incentives and basic cryptographic tools.

 

 

Read more from Forbes

 

 

 

San Jose mixed-use apartments eyed west of Google village

Plans for a mixed-use apartment and retail complex have sprouted west of downtown San Jose, a development that would bring more than 100 residences to an area known as the Midtown district.

The proposed development at 259 Meridian Ave. near West San Carlos Street would consist of 110 to 120 residential units and 2,300 square feet of retail, according to documents on file with San Jose city planners.

“The city has been encouraging development within an urban village planning process for this area,” said Jerry Strangis, a principal executive with Strangis Properties, a realty firm that is the project consultant for the development. Strangis wouldn’t identify the principal developer of the property.

 

Read more from The Mercury News

 

 

Oakland’s exclusive deal to sell city-owned land to charter school draws opposition

The City of Oakland is poised to sell a large plot of land it owns in the Fruitvale neighborhood to a private developer for the purpose of building a new charter school campus.

But the project — and the city’s years-long involvement in it — is suddenly drawing criticism from education and affordable housing activists who say it reflects Oakland’s lack of transparency when deciding how to use public property.

Under the proposed terms of the deal, the city will sell a 9,000-square-foot parcel on Derby Avenue between International Boulevard and E. 15th Street for $450,000. The buyer, an Idaho-based company called Pacific West Communities, Inc. plans to construct a new school campus on the site for the Aspire charter organization’s ERES Academy, a K-8th grade school. The campus was approved by the city planning commission last month.

ERES Academy’s staff say the new facility is critical because the building they’re currently in — located one mile away on Courtland Avenue and leased from a church — is too small.

“The physical nature of the classrooms is super-constrained,” Aspire’s Dean of Students Jesse Johnson told the city planning commission last month. “The children are bumping into each other. It’s crammed.”

ERES Academy currently has 217 students, according to state records, but Aspire, which operates 40 charter schools in California and Tennessee, hopes to grow. The proposed new school campus could accommodate more than 600 students.

City staff say the land deal will put the property, which used to be part of an auto dealership, back into productive use, and that new charter school is in the public’s interest. They also say the city is coming out financially ahead by selling the land.

 

Read more from East Bay Express

 

 

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

 

 

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 

 

 

NAI Northern California Represents Seller in $9.4 Sale of North Beach Office Building

SAN FRANCISCO, CA – NAI Northern California, the Bay Area presence for NAI Global, the largest commercial real estate brokerage network in the world, is proud to announce the $9,435,000 sale of a three-story office building in the North Beach neighborhood of San Francisco.

NAI Northern California’s Senior Investment Advisor Alex Barker and Investment Advisor Thomas Loretz represented the sellers in this transaction. “Our team at NAI Northern California was able to overcome several obstacles to successfully advise our clients on the sale of their highly visible property,” states Mr. Barker.

“We professionally guided our clients through the sales process, with our hands-on approach and our extensive knowledge of the local market.”

Located at 665 Chestnut Street in San Francisco, the three-story, 16,900 square foot office building stands on the historic streets of the North Beach district with easy access to restaurants, cafes, public transportation and well as the nearby Embarcadero waterfront, and Financial District.

This North Beach office is in a prime location for public transportation systems including the Powell-Mason cable car line and multiple MUNI locations for easy access to all parts of the San Francisco Bay Area.

665 Chestnut Street was 100% occupied at the time of sale enabling Alex and Thomas of NAI Northern California to deliver an ideal investment income opportunity in the San Francisco office market.

 

About NAI Northern California

NAI Northern California is at the leading edge of technology, collaborative culture, and training, giving our local professionals a competitive advantage and creating better outcomes for our clients. We are consistently a top Commercial Brokerage in the Bay Area, and continue to grow our team and revenues.

NAI Global is the largest commercial real estate brokerage network. Founded in 1978, today NAI Global has more than 400 offices worldwide and over 7,000 professionals, managing over 425 million square feet of property. Global offices deliver market-leading services locally and combine their in-market strengths to form a powerful bond of insights and execution for clients with multi-market challenges.

To learn more, visit www.nainorcal.com
Explore career opportunities with our winning team at www.nainorcal.com/careers
Download Article PDF here