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San Francisco’s homeless crisis is driving tourists away

San Francisco’s hotels are facing a serious problem.

The city’s idyllic image of the Golden Gate bridge and grandiose views of the bay are being replaced by concerns about needles and feces littering the streets, homeless citizens sleeping on sidewalks or in Bay Area Rapid Transit stations and aggression toward visitors by people with untreated mental illness. Visitors are noticing and rethinking booking events and vacations at hotels around the city.

San Francisco’s homeless population was down by 0.5% in 2017 compared to 2015, but is about 17% higher compared to 2013, according to SFist. While homelessness is nothing new for the city, hoteliers and local business say street conditions have worsened.

Within 153 blocks in downtown, there were over 300 piles of feces, 100 drug needles and trash on every block, a recent report by NBCBayArea revealed. Complaints of poor street conditions to 311 have skyrocketed in recent years. In 2016, 311, a city agency where visitors and residents can report issues or seek information about the city, received 44,000 complaints of encampments, human waste and needles, up from 6,300 complaints in 2011, according to the San Francisco Chronicle.

“[Visitors] are noticing it and hearing about it and saying, ‘well, why would I bring my conference here?’” Hotel Council of San Francisco Executive Director Kevin Carroll said.

Visitors often have rave reviews for the local restaurants and hotel service, but say they will not come back or will not bring their families here, he said.

San Francisco is not the only major West Coast city dealing with issues of homelessness and street conditions impacting tourism and hospitality. Anaheim, home to Disneyland with its spotless, litter-free Main Street, U.S.A., has the stark contrast of homeless people who live just outside the park. The city has been looking into ways to help its homeless population, such as providing emergency shelter and employment opportunities. Honolulu also took action in recent years on cleaning up the streets, including around its popular Waikiki area.

Read more from Bisnow

 

 

 

Exclusive: FivePoint suspends work on 635,000-square-foot shopping mall at the former Candlestick Park

The mall was meant to be the centerpiece of the 280-acre project, one of San Francisco’s largest.

The shopping centerpiece of San Francisco’s 280-acre Candlestick Point development has been suspended amid turmoil in the retail industry, placing one of the city’s largest projects in jeopardy.

Developer FivePoint Holdings LLC and its retail partner Macerich Co. paused work on the 635,000-square-foot mall, according to a Thursday email to the project team obtained by the San Francisco Business Times.

FivePoint said in recent SEC filings that “in light of the rapidly evolving retail landscape,” it was “evaluating the viability of a mall” and “exploring potential alternative configurations of the site.” FivePoint said future plans were uncertain.

The mall was to span over a dozen buildings, bounded by Harney Way, Arelious Walker Way and Ingerson Avenue. It was approved along with 7,200 housing units, a 200-room hotel, and an additional 300,000 square feet commercial space. Infrastructure construction is underway at Candlestick, but no new buildings have started construction and design work is ongoing.

The mall was meant to revitalize the former home of the San Francisco 49ers and Giants, who played at Candlestick Park for four decades. The stadium was demolished in 2014, the same year that the mall project was unveiled and originally set to open in late 2017.

Read more from San Francisco Business Times

 

 

San Francisco may ease up on allowing retail space to be converted to offices

As San Francisco landlords struggle to fill vacant retail space, city officials may allow conversions to office space.

San Francisco’s Planning Commission will discuss a plan tomorrow to ease up on retail-to-office conversions in downtown San Francisco. The idea is for the city to become more flexible as the national retail market grapples with huge shifts.

The move would help fill empty space and address the city’s huge office crunch, which has sent commercial rents skyrocketing, disproportionately hurting small businesses and nonprofits. The planning department currently has four applications on file — including the huge, vacant 6×6 retail center in Mid-Market — to shift existing upper-level retail space to office use.

The proposal came after planners rejected a proposal to convert the third floor of the former Loehmann’s department store at 222 Sutter St. to office space. Planners wanted to avoid losing sales tax that retailers generate for the city, but critics pointed out that vacant space doesn’t generate sales tax.

The importance of retailers for the city’s budget is clear: Union Square merchants generate more than 37 percent of the sales tax that the city gets from consumer goods. Those same retailers generate more than 15 percent of the city’s total sales tax funds, according to a new retail report from the Office of Economic and Workforce Development.

As part of a revised downtown plan, planning commissioners are considering loosening restrictions on retail-to-office conversions above a property’s third floor. Changes the planning department is recommending would still prohibit non-retail sales from occupying a building’s first through third floors. Above the third floor, however, offices would be allowed if the leases encompass 5,000 square feet or less. For offices that want to lease more than 5,000 square feet, the deal would require a conditional use permit.

Read more from San Francisco Business Times

WeShop? WeWork preps a retail push

WeWork has built a billion-dollar business by convincing professionals to pay for decked out coworking spaces and a sense of community.

Entrepreneurs Ali Kriegsman and Alana Branston want to do the same for retail.

The pair are cofounders of Bulletin, a young startup that charges female-focused lifestyle brands a monthly membership fee for placement in its retail spaces and on its online marketplace. It raised more than $2 million last year and plans to open a flagship store in New York this spring.

But the founders are acutely aware that a behemoth is waiting in the wings: WeWork.

“In total transparency, we know that they’re going to penetrate retail, but we don’t know exactly what that means,” Kriegsman told CNN. “We’re eager to see.”

Two new job postings seen by CNN suggest Kriegsman is right to assume retail will play a bigger part in WeWork’s growing empire.

WeWork is looking to hire at least two senior employees to spearhead a push deeper into retail and e-commerce, according to the job listings posted to the company’s website this month.

The company is seeking a VP to “launch” a “new retail experience,” with a focus on food and beverages, one job posting says. The role will involve a “first location” in New York with plans to “quickly” open new locations in other markets.

Read more from CNN

Trailblazing commercial real estate brokerage NAI Northern California closes 2017 strong with revenue up 60%

Successful sales and leasing transactions across Bay Area multifamily, retail, and office  continue to accelerate growth

SAN FRANCISCO, CA – February 6, 2018 –  From offices in San Francisco, Oakland, and San Jose, the team at NAI Northern California has been working hard closing sales and leasing transactions for clients and assets across the Bay Area and beyond. 2017 was up 60% compared to 2016, and 2016 was up more than 30% from the previous year. Growth was spurred by the team’s successes in the multifamily, retail, and office investment property sectors and driven by a unique technology platform and collaborative culture.

“We have assembled talented teams and enabled them with unique technology tools, which along with our collaborative environment and code of ethics, really results in something special in the Bay Area commercial real estate landscape,” remarks President James Kilpatrick.

He adds, “As we kick off 2018, we have exciting plans to further leverage our competitive advantages: our collaborative Salesforce platform, lead generation, and cross-selling technology applications. Of course, we have more surprises to come.”

One of NAI Northern California’s strong suits, multifamily investment property sales accounted for 42% in 2017, placing the firm in the top two spot in the East Bay market. The firm’s notable multifamily transactions include the $26.5 million sale of an 88-unit apartment building in Fremont. Retail closings included the $27 million sale of South Valley Plaza in Gilroy. Office was also strong, including the $11.9 million sale of 1098 Valencia Street in San Francisco’s Mission District.

David Reed, Managing Director in the San Francisco office, points out, “Our success is all about empowering our team with a great brokerage platform from training workshops to marketing support to awesome events.”

NAI Northern California reflected on the past year of growth at the January Kick-Off Event hosted at the Bently Reserve in San Francisco’s Financial District. James Kilpatrick along with Managing Directors David Reed and Brett Stratton led the team in celebrating not only increased revenue but team growth with the addition of significant talent and launch of strategic initiatives. The highest honors went to 2017 #1 Top Producer Shivu Srinivasan as well as the President’s Club, which includes Shivu and the other highest sales performers — Mary Alam, Tony Alanis, Doug Sharpe, Grant Chappell, and Jordan Geller.

“I am proud of our accomplishments in growing production steadily year over year and am thrilled and grateful to watch our talent base execute,” says James Kilpatrick. “Many of these brokers have dramatically multiplied their production with hard work, backed by our tools and platform.”

 

About NAI Northern California

NAI Northern California is a full service commercial real estate firm serving the Northern California Bay Area. Our team delivers technology-enabled commercial real estate services that create value for our clients, industry, and communities.

NAI Northern California is a partner of NAI Global, the largest commercial real estate brokerage network with more than 400 offices worldwide and over 7,000 professionals completing in excess of $20 billion in commercial real estate transactions globally.

www.nainorcal.com

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

SF Planning To Consider Proposed Mixed-Use Development At Market And Duboce

Developers of a proposed eight-story, mixed-use building at the intersection of Market and Duboce streets are seeking approval today for plans to utilize the state’s density bonus by including on-site affordable housing units.

The project at 1965 Market St., as proposed by Keller Grover Properties, LLC, would utilize the California State Density Bonus Law to exceed the site’s 50-foot height limit.

The project sponsor is the law firm housed in the building currently on site.

Read more from Hoodline

What Do Single-Tenant Net Lease Deals Offer High-Net-Worth Investors?

HNW investors are especially attracted to single-tenant net lease deals in the retail sector.

For more and more high-net-worth (HNW) real estate investors, dollar stores and drugstores make for a winning combination, although these assets can turn into losers if the sole tenant leaves.

Office and hotels still draw a lot of attention—and dollars—from HNW investors. But a rising number of them are betting on single-tenant net lease properties such as dollar stores, drugstores and fast-food restaurants to help round out their portfolios.

By and large, net lease properties are magnets for HNW investors because they’re viewed as safe, recession-proof assets that preserve cash flow and yield.

Read more from National Real Estate Investor

What’s Up With Retail?

Rent, online shopping, regulations, and a higher minimum wage reduce the brick-and-mortar presence.

Omar Mughannam of Beauty Center faced a 30 percent rent increase at one location.

For local retailers, whose inventory costs are high and whose profits depend on foot traffic and fickle consumer demand, even small increases in rent can be difficult to bear. And when rent increases hit double digit percentages, owners are often forced to relocate to a more affordable space, consolidate multiple outlets, or close altogether.

Empty stores are everywhere, in Rockridge where Itsy Bitsy, Cotton Basics, Rockridge Home, and See Jane Run once seemed to thrive; in Elmwood where the corner of College and Ashby looks sparse without Jeremy’s, and in Montclair Village, too, where the local bike shop and Daisy’s are no more.

Uber sells Uptown Station HQ to Oakland firm

Uber announced in August that it was putting Uptown Station—the new mixed-use development right downtown in the onetime Sears building on Broadway that only recently shed the white plastic cocoon that enshrouded it during rehab—up for sale without ever moving a single employee into its planned headquarters.

But it didn’t take long for an interested buyer to start making eyes at the circa 1929 Beaux-Arts building.

Back in October, the San Francisco Business Times reported that the Oakland-base investment firm CIM Group planned to buy the whole 356,000-square-foot building for $175 million.

As Tuesday morning, CIM announced the sale via press release. The announcement doesn’t include the sale price, and spokesperson Karen Diehl tells Curbed SF “CIM never discusses financial arrangements.”

Uber previous paid $123.5 million for the place, putting millions more into the rehab.

Read more from Curbed SF