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Google says it’s close to owning enough downtown San Jose properties for ‘viable’ development

Google is nearing ownership of enough downtown San Jose properties and parcels to create a “viable” transit-oriented development.

The development will take place near the Diridon train station, a top company executive told a key advisory group this week.

During a meeting of the Station Area Advisory Group, formed to gather and process citizen input about Google’s proposal to develop a massive transit village near Diridon Station, Google executives offered the company’s first major presentation of its development philosophies and plans for downtown San Jose. The search giant also indicated that it is creating a critical mass of properties where it could build a transit-oriented community downtown.

“Just to get the sites together by itself is obviously very complicated, and it’s not completed yet, and it’s taking a while,” Mark Golan, Google’s vice president real estate development, told the advisory group during its Monday night meeting. “But we are getting close to having a site that is viable.”

Mountain View-based Google and its development ally Trammell Crow have spent at least $221.6 million buying an array of properties on the western edges of downtown San Jose, within and near a one-mile stretch that begins north of the SAP Center and reaches south nearly to Interstate 280.

Among the major recent deals: The Google and Trammell Crow venture bought a large site that now is occupied by Orchard Supply Hardware, and the search giant has struck a deal to purchase a huge property from Trammell Crow that is approved for 1 million square feet, hundreds of residences and retail.

Despite the extensive work and investments that have occurred already, construction isn’t going to begin tomorrow, Google executives cautioned.

Read more from Santa Cruz Sentinel

 

 

San Francisco’s largest office landlord to break ground on $265 million Oakland tower

Boston Properties, San Francisco’s largest office landlord, will break ground on May 2 on a 402-unit apartment tower next to Oakland’s MacArthur BART station.

The 260-foot project at 532 39th St. will be the tallest building in North Oakland and the company’s first residential project on the West Coast.

The project in the Temescal district will be among a half-dozen Oakland towers to start construction in the last two years, an unprecedented real estate boom that’s drawing some of the country’s biggest developers to the city. Other developers include Lennar Multifamily Communities, Shorenstein Properties and Carmel Partners.

Read more from San Francisco Business Times

 

 

Facebook to move into big WeWork outpost as co-working company prepares to open largest-ever location

Talks between the two giants about WeWork’s new Mountain View location, its largest sublease to-date, have been ongoing for months. But this week the two finally struck a deal.

When WeWork this year opens its first Mountain View offices — its largest-ever lease — half of that space will be filled by Facebook.

Both companies told the Silicon Valley Business Journal about Facebook’s sublease which totals more than 200,000 square feet in one of two new office buildings at The Village at San Antonio Center. The deal comes after months of discussions between the two companies. The second WeWork office building on the site will be open to any company seeking co-working space.

Initially, the talks between the New York-based co-working company and the Menlo Park-based tech giant had been leading toward Facebook taking over both buildings at 391 and 401 San Antonio Road, which would total about 450,000 square feet, the Business Journal reported in February. But Facebook in recent months has rapidly snapped up huge swaths of office space in Silicon Valley — including about 1 million square feet in Sunnyvale — and its needs evolved quickly, two sources with knowledge of the discussions told the Business Journal.

Facebook will set up shop in the eight-story, approximately 225,000-square-foot office building at 401 San Antonio Rd., which is slated to be ready for move-in by early September, according to WeWork.

Read more from Silicon Valley Business Journal

 

 

WeWork signs biggest lease of Q1 in San Francisco

WeWork just added 251K SF to its San Francisco footprint.

The co-working provider inked the city’s largest lease of the first quarter at the Union Bank Building with landlords Kennedy Wilson and Takenaka Corp., the San Francisco Business Times reports. WeWork signed an 18-year lease for all 20 floors and plans to renovate the building.

The JV bought the building at 400/430 California St. in 2016 for $135M when it was fully leased to MFUB Union Bank, which plans to vacate the building.

The co-working company began occupying it newest location this year at Salesforce Tower, where it leases 75K SF. WeWork has rapidly expanded its Bay Area footprint in recent years and signed leases for over 1M SF in 2017. It also has expanded into Oakland, San Jose and Mountain View within the last two years.

WeWork Managing Director for U.S. and Canada West Jon Slavet told the San Francisco Business Times that the company cannot keep up with demand in the Bay Area, where its community is now over 13,000 members. Its members range from startups to enterprise businesses.

WeWork plans to open its first phase at 430 California during Q1 2019.

Read more from Bisnow

 

 

Facebook In Talks For 1M SF In Sunnyvale

Jay Paul Co.’s Moffett Towers II in Sunnyvale is all leased up, and Facebook could be one of its main tenants.

Facebook is said to have leased about 1M SF in three out of the five buildings within the office complex, the East Bay Times reports. This could allow Facebook to move about 5,000 to 6,000 employees into Sunnyvale.

Facebook would not be a new tenant for Jay Paul Co.; the social media giant leased all of Jay Paul Co.’s 445K SF office space at 181 Fremont last year.

While Facebook did not confirm the leases, one of the site’s brokers, Newmark Knight Frank Vice Chairman Phil Mahoney, confirmed with the East Bay Times that all five buildings have been leased to unspecified tenants.

Two of the five buildings within Moffett Towers II are nearing completion and a third is under construction.

Amazon already leased one 350K SF building at Moffett Towers II and leases about 1M SF throughout Sunnyvale.

Outside of its growth throughout Menlo Park, which includes an expansion of its headquarters as well as a proposed Willow Campus, Facebook has leased space in Fremont and may also sublease 475K SF from WeWork at the Village at San Antonio in Mountain View.

Read more from Bisnow

 

 

Investors are spending big bucks for a piece of Silicon Valley office

It is already proving to be an active year for Silicon Valley office.

In the last few months, investors have spent millions to expand their Silicon Valley office portfolios.

San Jose’s office market, which has been relatively slow in recent years, picked up following Google’s plans to build a massive campus near Diridon Station. The Peninsula, which includes Palo Alto and Menlo Park, also has seen additional activity.

Santa Clara County office vacancies were about 12% in 2017 and the likes of Google, Apple and Facebook continue to buy or lease office space around the county, according to The Mercury News. Adobe Systems bought a parcel at 333 West San Fernando for $68M in January and plans to build a fourth office tower. Google continues its buying spree as it prepares for its Diridon Station campus and early this year bought three North San Jose office buildings at Midpoint@237, a business park developed by Trammell Crow, for over $117M.

Investors are expanding their San Jose office portfolios as well. DivcoWest bought three buildings from Cisco Systems in North San Jose in January, according to the Silicon Valley Business Journal. The $50M sale was for the buildings at 10 and 80 West Tasman Drive and 125 Rio Robles Drive, totaling over 313K SF.

Read more from Bisnow

 

 

 

Small tech companies finding niche in San Francisco office

Large blocks of space are in high demand among Bay Area tech companies expanding into and within San Francisco.

However, startups and small tech companies from outside of the Bay Area are carving a niche within the city as well. Some are taking advantage of leasing smaller office blocks or moving into co-working space as an entry into the city’s office industry.

“San Francisco continues to attract startups that are in hyper-growth mode,” Kilroy Realty Senior Vice President, Asset Management Rick Buziak said in a press release.

Tel Aviv-based AppsFlyer opened an 11K SF U.S. headquarters in mid-February at Kilroy Realty’s 100 First St., where Okta signed a 207K SF lease in December. The South of Market office offers capacity for further growth. The mobile attribution and marketing analytics company recently secured $56M in Series C financing. The office on the 25th floor offers an open-office plan.

Read more from Bisnow

 

 

 

Apartment Renters Continue to Dominate Many of the Nation’s Cities

Renter households now make up the majority in 42 of the 100 largest cities in the U.S., according to RENTCafé.

In close to half of the largest U.S. cities, the majority of households now rent rather than own their primary residence, according to a new report from RENTCafé, a Yardi company.

The share of households that own their homes has now declined to the level last seen in the1980s and early 1990s. That’s been great news for the multifamily sector, as those would-be homeowners have filled up apartments.

The homeownership rate is likely to stay at roughly its current level for the foreseeable future due to recent changes in the tax code that favor renting over buying and the high cost of for-sale homes.

Read more from National Real Estate Investor

San Francisco lays $2.4 million fine on abusive landlord

Anne Kihagi, owner of 50 rent-controlled units, bullied tenants, many of them elderly

A Superior Court Judge leveled a $2.4 million penalty on San Francisco landlord Anne Kihagi today, finding that Kihagi harassed, exploited, and wrongfully evicted tenants in the many rent-controlled buildings she owns.

The city sued Kihagi in 2015. Among many other charges, City Attorney Dennis Herrera said:

Kihagi or her agents interrupted gas, electric, water, and cable service; disrupted mail service; failed to cash rent checks only to later claim them as untimely; backdated correspondence and notices; violated tenants’ privacy by entering their apartments without required notice […] and even retaliated against tenants who cooperated with city inspectors by installing video surveillance cameras aimed at the residents’ front doors.

Kihagi, who began buying up San Francisco properties in 2013, even threatened a tenant’s cat, according to the suit. Herrera noted that many of the tenants were elderly, including a “bedridden 91-year-old great grandmother.”

Read more from Curbed SF

 

Supervisors To Call For Stricter Enforcement Of Commercial Vacancy Laws

A report concluding that ordinances for vacant commercial spaces haven’t produced significant results will be up for discussion at a Board of Supervisors’ Land Use and Transportation committee hearing on Monday.

The study, commissioned by Supervisor Norman Yee (District 7), shows that since the Board adopted a Vacant or Abandoned Building Registration Ordinance in 2009 and a similar measure in 2014 for commercial properties, the number of empty storefronts hasn’t been substantially reduced.

“In my district and across the city, storefronts left vacant for not only months, but years, have a terrible impact on surrounding businesses, the feel and even safety of a neighborhood,” said Supervisor Sandra Lee Fewer in a statement.

The vacant and abandoned building registration program is managed by the Department of Building Inspection (DBI), but many owners don’t comply, and it’s not strictly enforced, according to the report.

Read more from Hoodline