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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.

 

Read more on Silicon Valley Business Journal

 

 

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

 

 

 

How will S.F.’s tallest buildings fare in the next big earthquake? Report expresses concerns

San Francisco’s tall buildings may be at risk of damage during the next big earthquake, a study released by research nonprofit Applied Technology Council (ATC) last week warns.

The 36-page report outlines vulnerability concerns over outdated building standards and provides a strategy for proactive safety checks.

The study’s release comes just days after cracks were found in two steel beams of San Francisco’s newly minted $2.2 billion Transbay Transit Center, and as Millennium Tower next door continues to sink and tilt. Last year, the late Mayor Ed Lee commissioned the report, which was prepared by a group of engineers.

The report probed the city’s 156 tallest buildings — either constructed or permitted for construction — that are at least 240 feet high, primarily located in San Francisco’s Financial District. About 60 percent of these buildings house business and office space, while the rest are zoned residential.

 

Read more on San Francisco Business Times

 

 

The 10 top emerging trends that will shape real estate in 2019

The Urban Land Institute’s annual look at the year ahead focuses on technology and transformation at an uncertain moment.

It’s complicated. In the course of compiling its annual Emerging Trends report, the Urban Land Institute found that the only certainty in its outlook for 2019 was uncertainty. Expert analysis points to a more complex, multi-layered series of overlapping trends, with unpredictable results, as opposed to a few strong narratives.

Will technology offer more opportunity and enhance competition and efficiency, or help consolidate the industry and drive out smaller players? How will shifts in demographics and shopping patterns challenge current investment practices? Will the U.S. ever get a grip on its housing affordability issues?

The report, a joint project of ULI and PricewaterhouseCoopers researchers unveiled during its fall meeting in Boston this afternoon, considered the responses of more than 750 real estate professionals in creating an high-level overview of the trends it believes will impact the real estate world. While the report expects an overall economic slowdown next year, emerging trends and markets in flux that could provide new opportunities.

 

 

Read more on Curbed

 

 

 

Milpitas’ Great Mall unveils major revamp as Silicon Valley shopping centers up the ante

As retail sputters in some places around the country, Silicon Valley retailers and property owners are facing a different challenge: How to compete in a market where investment is still hot in the retail sector.

The Great Mall in Milpitas is one of those looking for a competitive edge in a region where the traditional malls are either going by the wayside or upping the ante to create a space that offers not just shops, but experiences.

Indianapolis-based Simon, an international shopping center and mixed-use property owner, last month wrapped up an extensive, two-year renovation project for the massive shopping center, which has more than 200 stores. (For fun facts about the revamp, click through the slideshow above.)

The revamp added or expanded some of its stores, but also redesigned what it is calling a “dining pavilion” that has 10 restaurants.

“Our goal is to provide the best shopping and entertainment experience for our guests and this transformative renovation makes that possible,” Angela Pyszczynski, general manager at the Great Mall, said in a statement.

Read more on Silicon Valley Business Journal

 

 

 

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

 

 

 

Walnut Creek housing project near BART beats back appeal

The developer is a frequent face at Walnut Creek’s Planning Department, and will responsible for constructing more than 900 new housing units around the downtown BART station.

A Walnut Creek housing proposal cemented approval last night after the City Council voted to quash an appeal.

Danville-based developer Blake Griggs’ now has a clear line of sight for its 1910 Noma project, which includes 135 units of housing and 10,000-square-feet of retail about a block away from the Walnut Creek BART station.

Lauren Seaver, Blake Griggs’ vice president of development, said it expects to break ground sometime within the next six to twelve months. Fuddruckers restaurant now occupies the site, but would temporarily leave and then move back into 4,000 square feet of retail space once the site is rebuilt. Seaver said tenants for the remaining 6,000 square feet have not yet been chosen.

A local union, the Laborers International Union of North America, was behind the appeal and cited inadequate environmental reviews. Unions have frequently appealed East Bay housing projects on environmental grounds when they’ve had disagreements with developers over the use of union labor.

The Laborers International Union of North America did not respond to requests for comment.

Walnut Creek Senior Planner Gregg Kapovich said the union could still sue, but as of now, no more appeals are possible.

 

Read more on San Francisco Business Times

 

 

 

Powell sees bright moment for economy with more hikes ahead

Ten years after the peak of the financial crisis, Jerome Powell’s Federal Reserve sees a U.S. economy capable of humming along without support from monetary policy.

Unemployment is low. Inflation is stable and anchored. Financial conditions merit watching, but don’t look overly worrisome. And against that backdrop, policy makers are raising interest rates gradually despite renewed criticism from President Donald Trump.

They made an expected rate increase on Wednesday, their third in 2018, while telegraphing another before year-end. In an optimistic press conference, the chairman also indicated that the path is clear for future hiking well into 2019.

“It’s a particularly bright moment,” Powell said of the economy. He praised the value of gradual rate increases, which have allowed the Fed to watch their policy moves play out.

“What we’re going to be doing, as we go through time, is asking at every meeting whether monetary policy is set to achieve our goals,” Powell said.

 

 

Read more on Bloomberg

 

 

BART to build 519 new homes at Lake Merritt

Last week, the BART Board of Directors voted to advance a plan to develop hundreds of new homes near the Lake Merritt BART station, a proposal that’s been in the works for years and continues the agency’s foray into transit-adjacent housing on potentially choice plots of land it owns throughout the Bay Area.

Technically, the motion at the board’s September 13 meeting (which passed unanimously) only authorizes negotiations with potential developers, a process that could take up to two years.

A press statement from BART provides some additional details:

The Board voted to authorize BART staff to enter into an exclusive negotiating agreement with a joint venture of East Bay Asian Local Development Corporation (EBALDC) and Strada Investment Group with a goal of creating a transit-oriented development (TOD) above the BART station.

The plan proposed by the EBALDC/Strada joint venture calls for four new buildings on BART-owned lots above the station. The proposal features 519 units of housing, 44 percent of which would be affordable, and 517,000 square feet of commercial space for offices and shops.

BART staff singled out EBALDC as the developer of choice but retains the option to negotiate with SF-based Strada if those talks fall through.

 

 

 

Read more on Curbed SF