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Oakland’s growing pains could stifle future development

Dozens of cranes dot Oakland’s skyline and thousands of new housing units are in the works, making the current cycle one of the most robust in Oakland’s history.

As more people and businesses turn toward Oakland as a cheaper area to live and work, Oakland has struggled to keep up with both office and housing demand. Downtown Oakland is one of the tightest office markets in the country and multifamily rents have risen 51% since the start of the cycle.

Developers and designers are looking for ways to build more efficiently to keep rents down, but growing community activism, overworked city planning staff and tightening financing could stall future growth in Oakland.

Panelists discussed these topics as well as the impact of modular units and designing housing to meet residents’ changing needs during Bisnow’s Oakland Construction and Development Update event Thursday.

With 900 housing units delivering this year and 2,400 next year, the city is undergoing rapid change.

“Instead of the city [staff] focusing on department stores and auto dealerships, they’re making Oakland a very vibrant place to live,” Junction Properties owner Charles Long said during the event.

The increased development has spurred an anti-displacement movement and a backlash over a lack of affordable housing, which could shut down the future fulfillment of housing that Oakland has in its pipeline, he said.

Developers need to be more cognizant of working with the city and other stakeholders to better address the anti-displacement backlash, he said.

 

Read more on Bisnow

 

 

The future of the shopping mall is not about shopping

When Cirque du Soleil announced plans this week for a “family entertainment” concept inside a Toronto mall, it said a lot about the future of shopping centers.

The 24,000 sq.ft. space, called “Creactive”, will be a circus-inspired playground with a range of activities from juggling to high-wire – allowing fans to “peek behind the curtain and imagine themselves stepping into our artists’ shoes”, according to Marie Josée Lamy, producer of Creactive. “Hanging at the mall” will take on an entirely new connotation as shoppers take to the flying trapeze. And that’s the point.

No longer is it good enough for malls to be passive places to buy stuff – they have to be engaging places to do stuff. Otherwise, this particular retail format will be relegated to relic status – “a historical anachronism, a 60-year or so aberration that no longer meets the public’s, the consumer’s or the retailer’s needs”, as developer Rick Caruso mused.

With that point in mind, I draw your attention to Exhibit A: Randall Park Mall in Ohio. When it opened in 1976, Randall Park Mall was briefly the world’s biggest shopping center. It quickly lost relevance however, and by 2000, Randall Park Mall’s vacancy rate was 92%. Fast forward to 2017 when it was revealed that Amazon was constructing a 855,000 shipping center on the same site. Online triumphs over offline, or “software eats retail” as Netscape founder and venture capitalist Marc Andreessen memorably put it. But it doesn’t have to be that way.

 

 

Read more on Forbes

 

 

Modular units make their debut at Oakland housing project

Modular units are being installed at Coliseum Connections in Oakland.

The $53M project, developed by a JV of UrbanCore and Oakland Economic Development Corp., will create 110 mixed-income units on a 1.3-acre Bay Area Rapid Transit-owned parking lot ground-leased to the JV.

The modular units were built by Guerdon Enterprises out of Boise, Idaho. Completion of the modular unit placement is expected on June 29. The project is expected to be completed in January when occupancy also is expected to begin.

Coliseum Connections is one of a handful of modular projects in the works or being planned in Oakland. Panoramic Interests plans to build over 1,000 units in West Oakland next to BART, and RAD Urban is planning two high-rises from steel modular units.

The project at Snell Street and 71st Avenue will have 55 market-rate units with rents ranging from $1,900 to $2,400 for households earning 80% to 120% of the area median income; the other 55 units will be affordable with rents from $1,100 to $1,600 for households earning 50% to 60% of the area median income.

 

Read more on Bisnow

 

 

After two projects sank, can San Francisco find developers for decaying waterfront?

The new effort is one of the largest but also potentially costliest redevelopment opportunities in the city.

The Port of San Francisco is seeking ideas for new uses at 13 historic waterfront piers, in one of the largest but also potentially one of the costliest redevelopment opportunities in the city.

The agency wants proposals from both large developers and smaller tenants such as nonprofits, arts groups and retailers to revive the piers, which are now vacant or used for parking or storage.

Some previously renovated piers have been financial successes. Waterfront offices at the Ferry Building and Piers 1 1/2, 3 and 5 have signed tenants for rents over $100 per square foot. Control of the Piers later sold for $103 million in 2016, and the Ferry Building is expected to be sold to Hudson Pacific Properties for around $300 million, according to sources tracking the market.

But two recent redevelopment efforts failed because of the high costs of rehabilitating and seismically protecting piers. A study for the Port found that $74 million to $10 million would be required to bring a single pier up to code. Last year TMG Partners and Premier Structures, Inc. exited an office, event and restaurant space proposal at Pier 38 after the cost to repair the pier was expected to be as high as $122 million.

 

 

 

Read more on San Francisco Business Times

 

 

 

Modular construction to be used in high-rise housing in Oakland

Oakland will soon have the tallest prefab modular high-rise apartment complex in the country.

RAD Urban is pushing forward with plans to build two 29-story high-rises with 200 units of housing using steel-framed modular units.

Unlike projects built with wood-framed modular units that top off at mid-rise level, projects built with steel-framed modular units can reach much higher, RAD Urban Senior Vice President, Construction and Operations Jason Laub said.

Modular isn’t new to construction and it has been around for decades, Laub said. Modular construction and other emerging construction technologies will be discussed at Bisnow’s upcoming Oakland Construction and Development Update! June 14.

The increased costs of construction has caused more people to look at modular as a solution and cost savings, Laub said.

“Developers are increasingly not able to make projects pencil,” he said. “We need to … look for creative technologies to advance the industry and lower the cost to build and deliver housing.”

Steel modular construction saves 20% on construction costs and time to completion compared to conventional stick-built construction.

Modular construction is quickly becoming an alternative to traditional construction to save time and money throughout the Bay Area.

 

 

Read more from Bisnow

 

 

Workplace needs a place to chill, Millennials say

What is one thing millennials want in an office that their parents probably never thought of? A place to relax.

That is the conclusion of a survey conducted by U.K. office interior specialist Dale Office Interiors, which found that over a third of 18- to 34-year-olds would favor prospective employers offering “chill-out zones.”

There is no exact definition of a chill-out zone, but presumably most people know it when they experience it. Previous generations understood the concept, but few thought of the workplace as a place for chilling out. Home, certainly. A bar, maybe, for those in a certain mood. But not the office.

“People want to enjoy working, playing, essentially they want to enjoy life!” Allford Hall Monaghan Morris founding partner Simon Allford told The Architects’ Journal. “Buildings need to enable this by offering a range of different working and relaxing spaces on the micro scale of the office and on the macro scale of the building.”

Overall, what millennials want is of high interest to employers. In the U.S., Google searches for “how do millennials want to work and live?” increased from zero in 2015 to 15,900 in 2016 and 13,400 in 2017, according to Fresh Business Thinking.

 

Read more from Bisnow

 

 

Exclusive: $75 million renovation, office conversion proposed at San Francisco’s biggest shopping mall

Westfield San Francisco Centre, the city’s largest shopping center, could see a $75 million makeover and partial office space conversion. 

Mall landlords Westfield Corp. and Forest City Realty Trust Inc. proposed this week a renovation of tenant spaces, a new facade with more glass, and three new outdoor terraces for the 865 Market St. portion of the property. The companies also want to convert existing retail, storage and meeting space into 49,999 square feet of office space on the seventh and eighth floors. The proposal requires approval from the City Planning Commission.

Numerous retail spaces in the Bay Area and elsewhere are seeking to convert to office amid turmoil in the shopping sector.

 

Read more from San Francisco Business Times

 

 

Oakland parking garage next to City Hall could join development wave

More Oakland parking is being studied for new development.

A closed garage next to Oakland City hall could join the development wave that’s transformed over a thousand parking spaces into new buildings.

Oakland city staff are studying the demolition of the 335-space public parking structure at 1414 Clay St. and construction of either a new hotel or office building. The garage closed in December 2016 due to seismic safety concerns.

A city report recommends that Oakland seek an office project on the site because it’s more financially viable than a hotel. It also recommends requiring 51 parking spaces rather than 273 spaces, which would replace some of the previously used parking but could threaten the financial viability of a new project.

The stance is consistent with Oakland’s efforts to cut parking in new downtown projects and promote the use of public transit, “rather than continuing to subsidize the cost of private vehicle ownership and use,” according to the report.

Patrick Lane, the city’s manager of public/private development, said there isn’t a schedule for seeking developers for the site and it would likely happen after the city updates its public lands policy. The City Council may require higher fees and on-site affordable housing in new projects on public land, as activists push for more funding for low-income residents.

The city is also seeking development of two other public sites at 1911 Telegraph Ave. and 1800 San Pablo Ave, which could also be subject to the public lands policy.

Read more from San Francisco Business Times

 

 

MIPIM Day One: Driverless Cars Are Far Off, but Here’s How to Prep

Real estate professionals are eager to discuss the subject of driverless cars.

As self-driving cars slowly transition from fantasy to reality, real estate professionals eagerly crammed into a panel devoted to the subject on the first day of the Marché International des Professionnels de L’immobilier conference in Cannes, France.

But panelists didn’t make bold predictions of massive changes needed for buildings and roads. In fact, the experts were stumped about what would exactly happen as an effect of driverless cars—and when they would take over the streets.

“The key question of will we see more cars or less cars [on the road]—let me tell you we don’t know,” said Carlo Ratti, the director of innovation and design firm Carlo Ratti Associati, which has offices in New York City and Italy.

Speaking hypothetically he added: “According to most estimates if you’ve got self-driving cars moving around, then the cost per mile can decrease significantly. Today an Uber is $2.20 [or] $2.50 per mile in the United States. Well, that number could go down to something like 20 to 60 cents per mile [if the cars were driverless] according to some studies. Well, if that happens then it’s going to be hell, because nobody would want to take the subway anymore. The subway will be more expensive than a car… There will be jams everywhere.”

And when will self-driverless cars be the norm?

Read more from Commercial Observer

Exclusive: A 102-year-old East Oakland warehouse has been reborn as offices and artist studios

The project is one of East Oakland’s biggest in years.

The property at 2744 E. 11th St. opened in 1916 as a cannery for H.G. Prince, a company that invented a method to remove pits from fruits – a fitting use in a neighborhood once known for its orchards. Decades later, Lucasey Manufacturing Corp., a maker of television mounts, bought the building and stored products there, part of the blue-collar industry of Oakland.

Another transformation will happen next month, when the building reopens as more than 100,000 square feet of offices, industrial and artist space called Artthaus Studios.

The project will be one of the largest new developments in East Oakland. It is the largest source of modern, renovated artist and maker space in the area, said Riaz Taplin, CEO of Riaz Capital, the project’s developer, general contractor and designer.

“Oakland has really taken this new role within the Bay Area as the home of the creative community. So creating a building to accelerate the innovation of those types of businesses and people and creators and artists was the goal in creating Artthaus Studios,” said Taplin.

Taplin believes the project provides three benefits for smaller businesses and creative companies: It creates collaboration by concentrating various businesses in the same building, it provides a new facility near a BART station and it’s relatively affordable for new space.

“We wanted to tailor the spaces to be for small, young businesses — entrepreneurial, small businesses, ideally in the creative industries,” said Taplin. “We wanted to create an environment, which made them competitive. We want to make it easy to collaborate. We wanted to make it easy for them to seek out customers.”

Read more from San Francisco Business Times