Crane Watch update: More than 22,000 residential units have flooded into San Jose’s development pipeline

More than 22,000 new residential units have been proposed in the city of San Jose — the largest city in the housing-starved Bay Area — according to city records and Business Journal reporting over the past year.

Those number have been gathered over the past year and a half and detailed in the Silicon Valley Business Journal’s Crane Watch map, which is a compilation of every large development project that has arrived at the San Jose city hall.

When the Silicon Valley Business Journal’s Crane Watch map launched in 2017, it detailed 30 of the biggest projects in San Jose. But a little more than a year later, the number of projects we’re tracking has ballooned to 107 proposals. These include developments that are anywhere in the city’s development pipeline, from an early vision submitted to the city for feedback all the way to a recently completed structure.

Crane Watch shows industrial, office, residential, hotel, health care, education, retail and mixed-use proposals, and active projects that are 90,000 square feet in size or larger throughout the city of San Jose.

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More density and time for Brooklyn Basin development as proposed

With only 241 of the fully-entitled project’s 3,100 units of housing to rise on the Brooklyn Basin site along Oakland’s waterfront currently under construction, the Signature Development Group is now seeking approval to add another 600 apartments to the project’s total.

As proposed, the additional units could be “accommodated” within the building envelopes for the development as already approved, without any changes to heights, massings or setbacks. But if approved, the overall timeline to complete the Brooklyn Basin development, which was expected to be completed by 2029, would be extended to 2038.

In addition to the increased density, Signature’s proposed changes also include an additional 158 boat slips around the future Shoreline Park, a new water taxi loading dock, and the potential flexibility to shift the approved locations of the development’s five towers which are currently entitled to rise up to 240 feet apiece.

 

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San Francisco startup to build 270-unit ground up development in SoMa as part of co-living push

Starcity, a co-living development startup that is known for building “dorm living for adults,” is planning to erect a 270-unit building dubbed “Minna” in SoMa as part of its latest development push.

It also is eyeing a downtown San Jose property three blocks from Caltrain for more than 750 units.

Starcity’s model of private rooms paired with shared spaces can boost the number of units or rooms in an apartment project threefold, the company said in a statement Wednesday morning. Along with ground-up developments, the company converts and renovates defunct or underused commercial spaces into communal living spaces geared toward a middle-income demographic squeezed by high housing prices.

The San Francisco-based housing developer said Wednesday that 50 percent of the units will be affordable in the project at Minna & 5th Streets. Starcity currently has four San Francisco properties it owns and operates, with nine more in the pipeline.

Read more on San Francisco Business Times

Apartment rentals make up a larger share of new housing units in the U.S. than they have in decades

New preferences, low affordability of new homes drive greater demand for apartment rentals.

Apartment rentals have been luring residents away from other kinds of housing since the housing crash—and that is not likely to change in the foreseeable future.

“Apartments should continue to play a role in the total housing market that goes beyond the historical norm,” says Greg Willett, chief economist for Real Page Inc., a property management software and services provider based in Richardson, Texas.

In the years after the Great Recession, millions of people lost homes to foreclosure and had to move, often into apartments. The extra demand for units was not expected to last more than a few years. However, today—more than a decade after the collapse of Lehman Brothers—the percentage of American households that own their own home is still near its low point. New households are still much more likely to chose to live in rental housing than in the years before the crash.

 

 

Read more on National Real Estate Investor

 

 

 

Why Hudson Pacific’s development plans near San Jose airport could be a big deal

The nine-story development would add to the developer’s already extensive portfolio in North San Jose, an area of the city that’s experiencing a flurry of commercial real estate activity.

Hudson Pacific Properties Inc. is looking to expand on a slew of existing office campuses it owns near Mineta San Jose International Airport by building a nine-story office building paired with a big parking garage.

The Los Angeles-based developer submitted a proposal to the city of San Jose last month that lays out a plan to build a new 350,000-square-foot office building and a 1,052-spot, five-story parking garage on 5.29 acres along Technology Drive that are vacant. A single-story office building appears to be attached to the proposed garage in a rough rendering that was submitted to city planners in September.

Hudson Pacific is calling the project “Cloud 10.” The site at 1601 Technology Drive is already entitled for either a 350,000-square-foot office or a 400-room hotel, per a city-approved general development plan for the land. It appears Hudson Pacific has opted to go with office space over the hotel.

 

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Is Richmond the new Oakland? New ferry terminal attracts SF homebuyers, stokes gentrification fears

During his 16 years selling homes in Richmond, realtor Mark Lederer has always seen buyers from San Francisco looking in the East Bay city.

But he says those numbers have gone up recently, thanks to both skyrocketing prices in SF and the soon-to-open Richmond-SF ferry service. In fact, he estimates that 30 to 40 percent of buyers in Point Richmond and Marina Bay, the two areas closest to the ferry, are moving from San Francisco.

“Most SF buyers see tremendous value in the different neighborhoods in Richmond,” he says. “This is because the price per square foot is less than half that of homes in San Francisco’s most desirable districts.”

He says high-end condos in Point Richmond have been going for up to $950,000, with prices starting as low as $500,000. In Marina Bay, the price point is a bit lower, with condos and townhomes starting at $300,000 and going up to the mid-$700,000 range.

Those looking for a single-family home are attracted to North and East Richmond, which is a five-minute drive or 15-minute bike ride to the new ferry terminal. “This neighborhood is full of 1920s homes that mimic those found in El Cerrito, Albany and Berkeley,” he says. “Prices range from $325,000 to $731,000 for a home. This area has seen tremendous growth over the last couple of years and a spike once the ferry terminal was announced.”

San Franciscans are certainly attracted to the prices in Richmond, but they also have their concerns, including what Lederer calls Richmond’s “tough crime-ridden image.” But he says this perception doesn’t do justice to all that Richmond has to offer. “The roughest parts of Richmond are an isolated area that is very small as compared to the entirety of Richmond,” he says. “Most of Richmond is full of beautiful housing, water access, beaches, trail and hillside access, great restaurants, fun pubs and great entertainment.”

Richmond realtor Cherie Carson compares Richmond to another East Bay city that has gotten a lot of attention from San Francisco buyers in recent years: Oakland. “Richmond is like Oakland in that there are many different neighborhoods to choose from,” she says.

Just like in Oakland, there are fears of gentrification from this new onslaught of buyers potentially driving up home values and rents. Richmond Vice Mayor Melvin Willis told the Chronicle that he’s concerned long-time residents could be priced out—not just in the tony neighborhoods closest to the ferry, but throughout the city. “If rents go up in certain areas around the ferry, that would cause rents to go up in other parts of Richmond,” Willis said.

 

 

 

Read more on SFGate

 

 

 

Tenants start grabbing space in one of the East Bay’s only new office towers

One of the Bay Area’s largest life science landlords, Wareham Development, is now more than a third leased up in its latest project, the 265,000-square-foot EmeryStation West in Emeryville.

The San Rafael-based developer recently completed the building after starting construction back in 2016 with no tenants in hand and now has commitments for 93,000 square feet with Profusa Inc. taking 18,000 square feet and Dynavax Technologies Inc. taking 75,000 square feet.

“We have built the project to the highest-quality research and office building standards and are pleased the market recognizes that,” said Geoffrey Sears, a partner at Wareham, in a statement.

The building, designed by Perkins + Will, contains seven stories of office and lab space above two levels for transit and parking. DPR Construction served as the general contractor.

The building is part of Wareham’s 2 million-square-foot EmeryStation research and technology campus and is the latest addition to the company’s broader 4.5 million-square-foot portfolio in the Bay Area.

Wareham, led by CEO Rich Robbins, has specialized in developing biotech and life science buildings in Emeryville, Berkeley, Richmond and Palo Alto. Before EmeryStation West, the last new office building in Emeryville was Wareham’s 99,000-square-foot EmeryStation Greenway in 2012. That property was leased up by Stanford Health Care.

Read more on San Francisco Business Times

Making heads or tails of the U.S. multifamily sector

If you were to focus solely on the slowing pace of rent gains, burgeoning supply and the rise in interest rates, you might assume that the real estate market isn’t in a strong place right now.

But despite all of the above, the multifamily market is in a healthy position. Demand is being driven by encouraging demographic shifts and a strong economy. Despite moderating elements, because the economy is healthy, the apartment market is similarly healthy, even if the boom from earlier in this economic cycle has tapered off.

GDP growth came in at 2.3% for the year in 2017, and a whopping 4.2% in Q2 2018. Consumers are buying confidently provided that tax cuts will improve yearly income even despite stagnant wage growth. Our multifamily clients are anticipating that U.S. rent growth should maintain its current pace, largely thanks to cities in the South and West, where supply hasn’t outpaced demand.

According to the Spring 2018 Yardi Matrix U. S. Multifamily Outlook report, given the state of supply and demand in most metro areas and the steady economy, rents are projected to increase by 2.9% nationwide this year, with heavy concentration in late-stage southern and western U.S. markets. However, concerns about affordability are keeping prices from rising at an exceptionally fast rate, and new supply is also helping to keep those costs level. As for the supply, completions are expected to maintain the same steady pace they have over the past few years. Absorption rates are anticipated to remain strong for the remainder of the year, and 290,000 additional units are expected to finish construction by 2018, resulting in a 2.2% increase of stock. Another big factor that’s supporting the real estate market is the steady flow of capital pouring into the industry.

 

 

Read more on Forbes

 

 

 

Jay Paul Co. plans to redevelop San Jose’s massive CityView Plaza

Mere months after Jay Paul Co. paid $283.5 million for CityView Plaza, a block-sized mixed-use campus in downtown San Jose, the management team overseeing the complex has confirmed that it will be redeveloped.

“As many of you are aware, CityView Plaza will be redeveloped,” a Wednesday email from CityView management to the plaza’s tenants, which include the Silicon Valley Business Journal, state. “Effective October 1, 2018, both the fitness center and conference center will be closing. There are many reasons that go into a decision like this and we understand that this may impact some companies more than others.”

The email from the management company confirms months of rumors and chatter among current tenants, local real estate insiders and brokers that Jay Paul Co. is plotting big changes for the property, even as new renovations of lobbies and the fitness center started by the former owner, Equus Capital Partners, have barely come online.

Jay Paul Co. earlier this month neither confirmed nor denied that redevelopment could be in store for CityView, which is roughly bounded by South Market Street, West San Fernando Street, Almaden Boulevard, and Park Avenue. But the company did acknowledge that it was studying its options.

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Business fees to fund housing will be studied in San Jose

The concern, even for some council members who voted for the study, is that despite its housing shortage, San Jose still has many more residents than jobs, which is the opposite of the situation in many surrounding cities.

The imposition of commercial linkage fees to fund below market-rate housing is still alive in San Jose after Tuesday’s 9-2 City Council vote to add a discussion of them to next week’s agenda.

The vote came on an item of how the city should respond to a Santa Clara civil jury report issued in June that included among its findings that the fees are overdue and would increase housing.

Five council members, including Mayor Sam Liccardo, wrote memos changing the staff-authored response of disagreement with the finding to say the city would consider a study to confirm the causal relationship between job creation and an increased need for housing and a second study of the feasibility of enacting fees.

 

 

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