WeWork takes last vacancy in San Mateo development near Caltrain

The lease marks the co-working company’s first foray into San Mateo and the mid-Peninsula and comes on the heels of plans to open a second location in downtown San Jose.

WeWork is filling in the gaps of its footprint between San Francisco and San Jose, this week announcing it will take over the last of the remaining vacancy at a San Mateo office development recently completed by developer Hines.

The coworking company plans to move into about 96,000 square feet on four floors at 400 Concar Drive, one of two buildings in Hines’ 400/450 Concar creative office complex steps away from the Hayward Park Caltrain Station.

The 305,000-square-foot development has stood 70 percent leased since it was completed in early 2017. The lone tenant in the complex has been software maker Medallia, which in 2016 signed a lease for all 210-115-square-feet at 450 Concar. Now, the veritable co-working giant WeWork has staked a claim to an entire building in the complex, where it will offer 1,650 desks when it opens its doors in December.

“WeWork members all over the Bay Area have been asking for a location in San Mateo,” Elton Kwok, general manager at WeWork, said in a statement to the Business Journal on Wednesday. “We’re thrilled to finally be able to service theMid-Peninsula area with our very first San Mateo location, and to meet the demand in this booming community.”

The news of the lease comes weeks after New York-based WeWork also announced it would open a second location in downtown San Jose, meant to meet overflowing demand from its existing downtown location at 75 E. Santa Clara St. Amazon.com’s secretive Lab126 division leases some of the co-working company’s 75,000 square feet in Santa Clara Street building, and entrepreneurs and small companies have maxed out the rest of the space in the building.

 

 

Read more on Silicon Valley Business Journal

 

 

One of Contra Costa County’s tallest office towers could land at Pleasant Hill BART

Harvest and AvalonBay are in talks to finish the Contra Costa Centre Transit Village.

After over 15 years, the Contra Costa Transit Center could be poised for completion.

Harvest Properties Inc. is in talks with AvalonBay Communities Inc. and local officials to develop the 2.2-acre site on the western side of the Pleasant Hill station, according to sources familiar with the discussions. The land is approved for 290,000 square feet — or 12 stories — of office space.

Arlington, VA-based AvalonBay has a ground lease on the site, called Block D, and the adjacent site to the east of the BART station, where it recently broke ground on 200 apartments. Both properties are in an unincorporated part of Contra Costa County near Walnut Creek.

If selected, Harvest would be assigned the development rights for the remaining parcel, which could become the largest new office development in the area since Harvest and Equity Office’s 255,00-square-foot, six-story property at 3055 Oak Road was completed in Walnut Creek in 2009. Harvest is headquartered in Emeryville.

Maureen Toms, deputy director of Contra Costa’s Department of Conservation and Development, is working with the Pleasant Hill BART Leasing Authority, the group of local officials negotiating for Block D. She confirmed that the authority is in talks with one of three developers that submitted proposals, but declined to confirm Harvest’s involvement. Harvest also declined to comment.

“The end goal is to finish what was proposed back in 2001 and complete the vision,” Toms said.

 

 

Read more on San Francisco Business Time

 

 

 

Seeing Pros and Cons in “Digitization” of Real Estate

A future-focused Urban Leaders Summit discussion in Frankfurt in May on embracing new technology raised just as many questions as it answered.

Many German business leaders have been fretting about what they call Industry 4.0—the sweeping changes created by machine learning, automation, the “internet of things,” and big data—innovations they categorize under the umbrella of “digitization.” The waves of change triggered by this digital shift are going to be felt for generations to come, as more and more jobs are capable of being done by machines. Will we need humans at all? Will we create a superintelligence that finds us an unnecessary burden?

But going back to the present, Sascha Friesike, professor of digital innovation at VU Universität Amsterdam, wondered why urbanization continues to grow even as we increasingly decentralize work. If jobs can be done from anywhere, why do we still largely choose to move to cities?

Klaus Dederichs of Drees & Sommer was wary about the rush to incorporate the internet of things into properties. Tests have shown that the current generation of smart devices, which usually operate over wi-fi, is easy to hack. “They are compromising buildings’ cybersecurity,” he said. “What if terrorists attack smart buildings rather than drive into crowds?”

But Dederichs did also note some potential for buildings to get smarter, optimizing energy use being one of them. Building information modeling (BIM) is another promising field in the world of smart buildings. This digitizing of the planning, construction, and maintenance of buildings increases efficiency and extends the life of a project. Thus far, BIM has not seen huge adoption rates in Germany; the industry is hesitant largely because of the financial investments and the additional training needed for workers.

Blockchain came up in practically every discussion, as did artificial intelligence. It is difficult to find the middle ground between viral anxiety and tech evangelism, said Thomas Metzinger of the Johannes Gutenberg-Universität Mainz. “What do we do when a smart city crashes? And it will crash. We need graceful degradation,” referring a web design term that refers to designing a project to continue to function even if some features fail.

“We aren’t going to build houses that aren’t future-proof anymore,” said Martin Rodeck of EDGE Technologies, owned by OVG Real Estate. You cannot risk a new building being outdated within five years. And you should not jump on a trend like blockchain or virtual reality just because everyone else is doing it—you need to focus on how to solve the problem at hand.

Read more on Urban Land Institute

 

Young couples and retirees ditch the city for a new kind of suburb

The term “surban” describes a suburban community that offers the conveniences of urban life.

John Burns Real Estate Consulting trademarked the word in 2016. Urban planners have long described a marriage of residential and commercial as “mixed-use” communities. This surban concept, while not novel, has been gaining popularity over the past few years.

Chris Porter, chief demographer at John Burns, said it’s a no-brainer option for many Americans, especially younger couples without kids and empty nesters. Surban communities are often near transit hubs and also have amenities like boutique fitness options, high-quality grocery stores and popular restaurants.

“It’s about lifestyle. There’s this idea that urban environments traditionally don’t have great public schools and the suburban environments do. That’s why you actually see a lot of families, once they start to have kids, moving to the suburbs for school quality. You’ve got lower crime in suburban areas than you would have in urban areas. In urban areas you have walkability and public transportation… bringing some of those things to the suburbs in small downtown areas is really the concept that we see — the concept of surban,” he said in a new podcast.

Projects like Irvine Spectrum, a mega outdoor shopping mall with a residential village adjacent to it, and San Jose’s Santana Row, which brands itself as a “small town feel inside the big city,” are cropping up across California.

City Place in Edgewater, New Jersey, which has luxury apartments sitting above stores like Anthropologie, is right next to a multiplex cinema. Developers are even investing in teacher’s villages that offer the best of both urban and suburban worlds.

Read more on Yahoo Finance

 

 

San Francisco delays decision on retail-to-office conversions

The owners of 220 Post St. spent $75 million to buy the Union Square property in 2016. The goal: to attract a luxury tenant to the five-story building. Too bad few of those exist.

City Center Realty Partners shelled out nearly $75 million for Union Square’s 220 Post St., the former Saks Fifth Avenue Men’s Store, with the goal of attracting a luxury tenant to the five-story space. That goal has been more difficult than expected.

Nearly as difficult for the owners has been convincing city planners that retailers are no longer interested in space above the ground floor.

Seven proposals to convert upper-level retail into office space have been filed with the San Francisco Planning Department, including 220 Post’s. Most of those properties are in Union Square. Earlier this year, the city decided to freeze those applications for 18 months. That meant that 220 Post, which was supposed to be heard by the planning commission this month, is waiting indefinitely for a decision pending the creation of permanent rules.

What’s at stake is the future of the city’s retail heart. City officials are hesitant to give up the sales tax revenue and jobs that retail generates, but landlords say empty space accomplishes nothing. Instead, landlords argue that adding more office space would not only help them fill buildings, but alleviate the extreme shortage of office space that is sending small businesses and nonprofits to Oakland.

San Francisco’s Board of Supervisors unanimously approved a resolution by District 3 Supervisor Aaron Peskin in May that imposed temporary rules banning conversions for an 18-month period. Planning Department spokesperson Gina Simi said the department has postponed hearings for properties located within the city’s downtown retail area.

The controls don’t apply to properties located south of Market Street or for applications that have already been approved, such as the former Macy’s Men’s store.

 

 

Read more on San Francisco Business Times

 

 

Facebook creates three huge Bay Area job hubs for expansion

Facebook has created three Bay Area work hubs that each total at least one million square feet, following big leases with two legendary developers that widen its Silicon Valley footprint.

The tech titan could employ as many as 19,000 in the expansion sites, located in Fremont, Sunnyvale, and Menlo Park.

The social networking giant is already expanding in its hometown of Menlo Park and has signed a mammoth lease in Sunnyvale. Now, it has signed major leases with Sobrato Organization and Peery Arrillaga totaling 18 buildings in a part of Fremont near the Dumbarton Bridge’s east end.

The most recent set of leases in Fremont total 1.04 million square feet, according to Facebook.

 

 

Read more on The Mercury News

 

 

 

Oakland housing developers turn to new ways of building to reduce costs

Rising construction costs are pushing Oakland developers to rethink traditional construction methods to make sure much-needed housing continues to get built.

“It is an issue right now that we are all facing increased construction costs,” UrbanCore Development CEO Michael Johnson said during Bisnow’s recent Oakland Construction & Development Update event. “What will happen is some projects will not move forward as a result of that.”

Double-digit increases in the cost of new construction projects are not driven solely by increases in material costs, but also by higher profit margins and greater labor costs as contractors struggle to find a qualified workforce, he said.

Several developers have turned toward using modular units, designing more efficient floor plans and creating new building technologies.

OWow is developing a type of unit that can adjust the number of bedrooms with a push of a button. Mechanized, acoustically rated walls would raise and lower to create up to four bedrooms, oWow founder Danny Haber said. His company has been building macro-units in Oakland that use efficient design to cut down on construction costs.

Other developers have been pursuing modular construction. UrbanCore Development decided to go modular on its Coliseum Connections project about five years ago, Johnson said. Conventional construction was more expensive, and an analysis estimated about a 10% cost savings on a $40M construction budget, he said.

The modular units are expected to be fully in place by Friday and the 110-unit mixed-income housing project is expected to be completed in January.

 

Read more on Bisnow

 

 

 

The era of big leases is over as San Francisco awaits next crop of towers

The era of massive office leases — including the likes of Salesforce, Dropbox and Facebook — is coming to a halt now that most of San Francisco’s pipeline of new office buildings is spoken for. Robust demand for office space has filled up buildings months or years ahead of completion, but development is drying up.

In May, another company declared it had signed the “biggest office lease ever” in San Francisco. The trend of going bigger and bigger started with Salesforce taking 714,000 square feet in Salesforce Tower at 415 Mission St. in 2014 followed by Dropbox taking 736,000 square feet in 2017 in the Exchange in Mission Bay. Then Facebook topped both with a deal to gobble up the entire, 750,000-square-foot Park Tower.

But, the era of massive office leases is coming to a halt — at least for the next few years — now that most of San Francisco’s pipeline of new office buildings is spoken for. Robust demand for office space has filled up buildings months or years ahead of completion, but development is drying up.

Some industry insiders say more building would be going on if it weren’t for Proposition M, a 1986 voter-approved law that limits how much office space can be approved in a given year. Still, others say that factors such as the lengthy city approval process and availability of development sites has also put the brakes on office development.

 

 

Read more on San Francisco Business Times

 

 

Free time and fun: the new must-haves at apartments

As the luxury multifamily market approaches a peak, apartment owners and managers turning to social amenities to engage residents at their properties.

The new must-have amenity for luxury apartment projects? Time.

During this economic growth cycle apartment developers have engaged in a virtual arms race of amenities. Most were physical goodies they could tout in property tours – features like furnished guest suites for resident’s out-of-town visitors, rooftop pools, and walk-in lobby refrigerators for food deliveries.

Now, say apartment developers and property managers, the trend is towards providing services that save residents time, or experiences that make effective use of it.

Across the country high-end apartments are now offering a host of new services to attract renters: dog-walking, wine tastings, poker nights, errand-runners.

“There’s this feeling that the amenities war has run its course – everyone has the same check list on their website,” said Tom Geyer, vice president of branding at the Bozzuto Group, the Greenbelt, MD.-based developer and apartment manager.

“But I do think the battle of services is a newfound strategy to build value.”

Bozzuto, which owns or manages more than 60,000 units up and down the East Coast, has become a specialist in adding these experience-based and time-saving services, and notes the appeal of service and experience-based amenities goes across all age groups.

For its part, Geyer said Bozzuto doesn’t try to mold their properties to fit a certain age group – for millennials, say.

Rather, the company sees its properties and tenants in terms of “tribes.” Some properties have a preponderance of bike riders, some have dog owners, and others are dominated by retirees looking for urban living experiences.

“Most of our residents are not non-social people,” said Geyer. “Building amenity space is about supporting interaction, looking for a chance meeting of the tribe.”

For example, Geyer said residents aren’t just interested in an onsite gym, they want access to classes.

“Classes are the number one thing, group classes,” he said.

That means not just adding amenities, but re-designing some of the existing amenity spaces. Gyms have to be designed to accommodate the new trends of cross-fit, PX-90 workouts. And equipment has to be placed to accommodate classes.

National Development, a multifamily developer and manager based in Boston, agrees with the new thinking. It hired a full-time marketing and community engagement manager who coordinates events for a dozen National Development properties.

“It’s not an either-or proposition,” said Ted Tye, a managing partner at National Development. “There’s been a real push for physical amenities, and that hasn’t abated. Layered on top of that, as the market gets more competitive, is the social amenity.”

 

 

Read more on CoStar

 

 

 

Big downtown San Jose office, retail Museum Place complex pushes ahead

A new vision has emerged for a crucial downtown San Jose development known as Museum Place that would add offices and retail next to The Tech Museum of Innovation, according to city documents being reviewed this week.

Some details about the new Museum Place approach were contained in San Jose city staff reports regarding an agreement to bring aboard a group led by realty entrepreneur Gary Dillabough. The Dillabough group will provide fresh capital and investments to get the project moving forward. This news organization had reported previously about Dillabough’s planned involvement in the Museum Place development on Park Avenue.

“The developer has a formidable vision for San Jose’s future,” according to a memo prepared by Kim Walesh, San Jose’s economic development director. “Mr. Dillabough has indicated a strong desire to make the Museum Place project a standout location that the City of San Jose can look to with pride.”

 

 

Read more on The Mercury News