Oakland’s growing pains could stifle future development

Dozens of cranes dot Oakland’s skyline and thousands of new housing units are in the works, making the current cycle one of the most robust in Oakland’s history.

As more people and businesses turn toward Oakland as a cheaper area to live and work, Oakland has struggled to keep up with both office and housing demand. Downtown Oakland is one of the tightest office markets in the country and multifamily rents have risen 51% since the start of the cycle.

Developers and designers are looking for ways to build more efficiently to keep rents down, but growing community activism, overworked city planning staff and tightening financing could stall future growth in Oakland.

Panelists discussed these topics as well as the impact of modular units and designing housing to meet residents’ changing needs during Bisnow’s Oakland Construction and Development Update event Thursday.

With 900 housing units delivering this year and 2,400 next year, the city is undergoing rapid change.

“Instead of the city [staff] focusing on department stores and auto dealerships, they’re making Oakland a very vibrant place to live,” Junction Properties owner Charles Long said during the event.

The increased development has spurred an anti-displacement movement and a backlash over a lack of affordable housing, which could shut down the future fulfillment of housing that Oakland has in its pipeline, he said.

Developers need to be more cognizant of working with the city and other stakeholders to better address the anti-displacement backlash, he said.

 

Read more on Bisnow

 

 

The future of the shopping mall is not about shopping

When Cirque du Soleil announced plans this week for a “family entertainment” concept inside a Toronto mall, it said a lot about the future of shopping centers.

The 24,000 sq.ft. space, called “Creactive”, will be a circus-inspired playground with a range of activities from juggling to high-wire – allowing fans to “peek behind the curtain and imagine themselves stepping into our artists’ shoes”, according to Marie Josée Lamy, producer of Creactive. “Hanging at the mall” will take on an entirely new connotation as shoppers take to the flying trapeze. And that’s the point.

No longer is it good enough for malls to be passive places to buy stuff – they have to be engaging places to do stuff. Otherwise, this particular retail format will be relegated to relic status – “a historical anachronism, a 60-year or so aberration that no longer meets the public’s, the consumer’s or the retailer’s needs”, as developer Rick Caruso mused.

With that point in mind, I draw your attention to Exhibit A: Randall Park Mall in Ohio. When it opened in 1976, Randall Park Mall was briefly the world’s biggest shopping center. It quickly lost relevance however, and by 2000, Randall Park Mall’s vacancy rate was 92%. Fast forward to 2017 when it was revealed that Amazon was constructing a 855,000 shipping center on the same site. Online triumphs over offline, or “software eats retail” as Netscape founder and venture capitalist Marc Andreessen memorably put it. But it doesn’t have to be that way.

 

 

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Modular units make their debut at Oakland housing project

Modular units are being installed at Coliseum Connections in Oakland.

The $53M project, developed by a JV of UrbanCore and Oakland Economic Development Corp., will create 110 mixed-income units on a 1.3-acre Bay Area Rapid Transit-owned parking lot ground-leased to the JV.

The modular units were built by Guerdon Enterprises out of Boise, Idaho. Completion of the modular unit placement is expected on June 29. The project is expected to be completed in January when occupancy also is expected to begin.

Coliseum Connections is one of a handful of modular projects in the works or being planned in Oakland. Panoramic Interests plans to build over 1,000 units in West Oakland next to BART, and RAD Urban is planning two high-rises from steel modular units.

The project at Snell Street and 71st Avenue will have 55 market-rate units with rents ranging from $1,900 to $2,400 for households earning 80% to 120% of the area median income; the other 55 units will be affordable with rents from $1,100 to $1,600 for households earning 50% to 60% of the area median income.

 

Read more on Bisnow

 

 

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

 

 

 

Exclusive: WeWork goes suburban with expansion to Marin County

The company’s lease is one of the largest North Bay deals in the past year.

WeWork has arrived in the North Bay.

The fast-growing co-working giant signed a 35,000-square foot lease at 1 Belvedere Drive in Mill Valley. It’s the company’s first location in Marin County, a suburban market that marks a shift from the company’s focus on urban downtown centers.

“Generally, WeWork locations are located in dense, urban locations in the heart of cities. This Mill Valley location will serve as a complimentary outpost to the many entrepreneurs, executives, and small businesses at WeWork, scaled to meet the needs of the dynamic community north of San Francisco. We’re excited to open a North Bay flagship location and further expand our community of creators into Mill Valley,” said Elton Kwok, WeWork general manager for Northern California, in a statement.

WeWork has signed three Bay Area leases this year, bringing it close to 2 million square feet in the region. The company’s other deals totaled 327,000 square feet at 430 California St. and 353 Sacramento St., both downtown San Francisco office towers.

Read more from San Francisco Business Times

 

 

The only one in the room: How the Bay Area’s real estate industry is grappling with diversity (Video)

Many in the commercial real estate industry often find themselves “the only one in the room” who is different.

White males still dominate in many professional settings in commercial real estate and especially in the executive ranks. While the tech industry has come under intense scrutiny for a lack of diversity in its workforce and investing millions into addressing the problem, commercial real estate has largely received a pass.

How to Move the Needle on Diversity

Industry groups including CREW, NAIOP, the Urban Land Institute and the Building Owners and Managers Association are looking at how to address the lack of diversity.

The San Francisco chapter of BOMA has been working with San Francisco State University, where the study body is more than 70 percent female and/or people of color, on a certificate program in real estate for finance majors and a fellowship program that places students in internships and provides mentorship.

Many commercial real estate executives say diversifying their staffs is a top priority. here are some best practices employees shared:

“Creating a diversity task force or committee to help steer recruiting and operations policies to be more inclusive and sensitive can be effective. Adding a diversity liaison and incorporating diversity goals into company culture and core values is key. The latter takes time and commitment. Supporting groups that help boost women such as CREW and other groups within the industry is also important.”

James Kilpatrick, President
NAI Northern California, a commerical brokerage firm

 

Read more from San Francisco Business Times

 

 

California Senate stalls transit-housing bill

Citing not enough affordable housing, vote against leaves Senator Scott Wiener’s signature bill in limbo

After months of public wrangling and amendment, San Francisco’s State Senator Scott Wiener finally brought his signature transit-housing bill SB 827 before the Senate Transportation and Housing Committee in Sacramento Tuesday, where it stalled on a 6-4 vote that leaves it in limbo.

SB 827 would have radically changed how California cities zone for height and density by making it illegal to place height limits below four to five stories (depending on the locale) along major transit routes.

Thanks to San Francisco’s extensive bus network, this would have applied to virtually every parcel in the city. But even cities with far less skin in the game, like Lafayette and Berkeley, complained that the bill redirected too much control from local municipalities to the state.

Calling local control “important but not biblical,” Wiener again labored on Tuesday to frame the bill as a necessary step given the scope of the crisis.

Read more from Curbed SF

 

 

 

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

 

 

Nine Proven Strategies To Make 2018’s Peak Rental Season Vacancy-Free

In much of the country, the start of peak rental season is just a handful of weeks away, meaning that now is the time to get ready for the rush.

The beauty of peak season is that more people are looking for places to live, which means your pool of potential applicants is bigger — but the flip side is that all of your current tenants are also more likely to move on.

Whether this is your first peak season or your fiftieth, these nine strategies can help minimize the chances that any of your units sit empty, even when turnover is high.

Read more from Forbes