This week the San Francisco Board of Supervisors will vote on whether to require owners of vacant storefronts unoccupied for more than 30 days to register their properties and pay an annual fee. This is one of the proposals they are considering to get a better idea of and start to remedy the glut of unused storefront space around the city.
WeWork is leasing a new downtown San Jose location, a clear indication of an ongoing expansion by the co-working titan in the core area of the Bay Area’s largest city.
The newest WeWork location is at 152 N. Third St., a downtown San Jose office building owned by a group led by Gary Dillabough, a realty investor who is partnering with WeWork on the Bank of Italy office tower project a few blocks away.
The interest from WeWork in the North Third Street building appears to point to a rising focus on downtown San Jose, spurred by potential major developments in the area by tech titans such as Google and Adobe Systems.
WeWork agreed to lease 75,000 square feet at 152 N. Third St., according to commercial realty experts and information from sources with knowledge about the WeWork plans at that office building. The WeWork operation on North Third Street also shows up on the company’s website as a “just announced” location.
“It’s very encouraging that WeWork is getting more interested in downtown San Jose,” said Mark Ritchie, president of Ritchie Commercial, a realty firm.
In addition, WeWork has taken space in one of the Riverpark Towers office high-rises at 333 W. San Carlos St. and the tower at 75 E. Santa Clara St.
“WeWork is now into four buildings in downtown San Jose,” Ritchie said. “152 N. Third St. should function very well as a co-working building.”
Restaurants, one of the supposed saviors of regional malls, have been hurt in the past 12 months by too much expansion and a slowdown in consumer spending.
Stephen Wall’s restaurant chain Pho is the kind of tenant that mall landlords would love to attract. The Vietnamese menu is right on trend, the business is expanding and, even better, it has a track record of success in shopping centers.
Yet he thinks that even restaurants like his won’t be the savior of malls suffering from the rise of internet retailing and mobile phone addiction.
As competition from the likes of Amazon.com Inc. and Asos Plc intensified, British mall owners looked to food as a way to stay relevant. People would come to the restaurants to eat, buy some clothes in the shops while there, and the extra spending would allow the landlord to boost the rents. A simple, virtuous circle.
Instead, food and beverage operators have been hurt over the past 12 months by a combination of rapid expansion and a consumer-spending slowdown. An influx of private-equity investment into restaurants led some chains to open too many outlets that aren’t breaking even. Popular names like Gourmet Burger Kitchen, pasta place Carluccio’s and the Jamie Oliver chain — often found at big malls like Westfield and Bluewater around London or Manchester’s Trafford Centre — have been among those suffering. Nationwide, the number of restaurants going insolvent rose 24 percent last year, compared with 2017.
Uptown Station, once meant to be Uber’s Oakland HQ, nets a new tech tenant.
Not too long ago, the circa 1929 Beaux-Arts building in Oakland now known as Uptown Station was meant to be the East Bay home of Uber, which had ambitious plans for the historic and recently refurbished locale.
But Uber sold the building almost exactly a year ago, netting $175 million from Oakland-based investment firm CIM Group but leaving the future of the sometimes neglected unofficial landmark up in the air.
On Thursday, CIM and Square announced that the SF-based payment app company owned by Twitter CEO (and Benioff antagonist) Jack Dorsey will lease much of the building, completing the locale’s long transition into an East Bay tech hub.
“Square has signed a lease for the entire office space in the iconic Uptown Station building,” according to a Thursday press release from both companies, a deal covering more than 350,000 square feet.
The building at 1955 Broadway first opened as an HC Capwell department store in the ‘20s, at the time apparently a very big ticket for Oakland as thousands showed up to see the mayor overturn the first shovelful of dirt on the future shopping hub.
Eventually, the building transitioned into being a Sears store instead, and for many years now has laid mostly dormant.
Developer Lane Partners spearheaded efforts to turn the disused retail Mecca into a new mixed-use office building before selling to Uber in 2016.
Square won’t actually move in until the end of 2019, possibly because CIM Group is still overseeing work that’s being done on the nearly century-old building.
“Oakland is committed to attracting businesses whose values align with our community. […] I believe Square can be that company,” Oakland Mayor Libby Schaaf said Thursday.
Landlords in San Jose would no longer be able to advertise that they don’t take rental vouchers.
San Jose took a step toward making it harder for landlords to turn away would-be tenants who use vouchers to help pay the rent.
This week, the San Jose City Council directed the city attorney’s office to draft an ordinance aimed at giving renters with subsidies, commonly known as Section 8 vouchers, a fair chance on the private rental market. The so-called source of income ordinance would not force landlords to take the vouchers, but it would ban them from judging potential tenants who use subsidies differently from those who don’t and from explicitly advertising “No Section 8” on apartment listings.
If everything goes according to plan, the council will vote on the ordinance in the spring.
While a number of landlords blasted the proposal, saying it would force property owners to navigate convoluted regulations and paperwork, the city’s Housing Department said an ordinance is necessary to make sure families are able to find affordable housing.
Right now, there’s no law that prevents landlords from turning away voucher holders, and a city survey found most do, leaving low-income families scrambling to find homes in one of the nation’s tightest housing markets. Several national studies suggest that when cities and states have such ordinances in place, the percentage of landlords turning away voucher holders goes down and more people with vouchers are able to find places to rent.
“Voucher discrimination is happening in San Jose,” said Jacky Morales-Ferrand, the city’s housing director.
Several landlords told horror stories about Section 8 voucher holders who left rental units in bad shape. But tenants and tenant advocates countered that there’s no evidence voucher users are any better or worse than people who don’t use subsidies.
“We can’t judge the actions of a few and put it on the majority of the people,” said Robert Aguirre, who has used vouchers. “Not all Section 8 holders destroy property or disrespect the people around them.”
“We see clients all the time who are not able to rent housing, have to move away from San Jose, have to live in cars. … it’s absolutely heartbreaking to see that and this ordinance would help,” said Nadia Aziz, an attorney with the Law Foundation of Silicon Valley.
Developer Simon Snellgrove has an idea: A new 65-room boutique hotel just south of the Ferry Building.
The problem: Hotels are illegal on Port of San Francisco land unless voters authorize them.
Snellgrove’s concept is one of 52 responses received by the port to revitalize 13 historic waterfront piers that dot the city’s scenic Embarcadero.
For the past three years, the port has sought public uses to bring new life for the piers, some of which were built over a century ago. The projects have big financial hurdles, requiring millions of dollars in renovations to withstand future earthquakes and sea level rise. But previous projects like the renovated Ferry Building and AT&T Park are a testament to the public’s love — and the lucrative business — of waterfront development.
The port received a diverse mix of ideas, including basketball and tennis courts, art galleries, an Italian Innovation Hub, and an International House of Prayer of Children. Boston Properties, the city’s biggest office owner and majority owner of Salesforce Tower, said it was open to operating nonprofit, maker and research space.
San Francisco-based fintech Square Inc. has eyed Oakland for a big lease, according to the San Francisco Chronicle.
The payments processing company reportedly looked at Uptown Station, a 356,000-square-foot refurbished, mixed-use building that is one of the largest blocks of office space available in Oakland.
“There are large tech tenants looking at Uptown, but none have landed yet,” Edward Del Beccaro, a managing director of Transwestern, told the Chronicle.
Landlord CIM Group has been chasing tenants for the space since it bought the building in December 2017 for $180 million. The approximately $40 million renovation of Uptown Station by Truebeck Construction is expected to finish early next year.
CIM picked up the property at 1955 Broadway from Uber Technologies, which had planned to move up to 2,000 employees into the space, but decided to consolidate in San Francisco instead.
Square has been on a growth tear as of late. Over the summer, it added 104,100 square feet to its San Francisco headquarters at 1455 Market St. for a total of 469,000 square feet there. It is also growing outside the Bay Area and internationally.
In addition to Uptown Station, Oakland has a handful of similar historic rehabs, including projects from TMG Partners and Harvest Properties.
The concept of the food hall has taken deep root in U.S. retail properties, with scores up and running and hundreds in the pipeline.
Though a popular addition for struggling retail properties, celebrity chef Todd English said that without the right approach, food halls are not always the solution for owners. English spoke at the recent Second Annual International Council of Shopping Centers-Baruch College Real Estate Conference, as reported by Real Estate Weekly.
He warned that some food halls are merely “glorified food courts with better options.” He further called food halls a WeWork model, a kind of coworking space that “has to be about more than just food.”
Food halls are a draw because of their perceived authenticity, as local eateries, healthier options and craft breweries edge out standard food court fare (fast food, that is).
While not every food hall is going to feature chef-curated or otherwise expensive options, they have to be creative in some way, English said during the ICSC conference. “It’s not just another great turkey sandwich or croissant, or whatever the latest trend is, it’s something that brings people in.”
For retailers, a successful food hall is thus not a matter of simply setting up a food hall. With the increasing number of food halls, they too need to stand out to be competitive.
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.
As San Francisco rents continue to soar, retailers have become hesitant about committing long-term to brick-and-mortar space. One solution: popping in temporarily.
Landlords once scoffed at the deals shorter than the typical 10-year term. But as tenants become increasingly wary of San Francisco’s rising rents and shifting retail climate, many are realizing the benefits of shorter leases may outweigh the drawbacks.
The Bay Area has been a landing pad for tenants looking to test the market, but hesitant to commit to long-term deals.
Union Square in particular has been home to temporary deals with online luxury consignor the RealReal, the Kylie Jenner cosmetics pop-up and the Museum of Ice Cream, which recently decided to make its temporary installation a permanent San Francisco fixture.