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Getting downtown ‘right’ in San Jose has been a trial-and-error process

The plan for San Jose’s downtown is years old. What’s new is that Google has bought into that vision.

The critical challenge of getting things right in the next iteration of downtown San Jose has been a hot issue at least since the 1980s, when downtown was torn up and many businesses suffered and died during construction of the Valley Transportation Authority’s light rail system.

Downtown’s future was a central focus of the thousands of people who participated in the four years of work that in 2011 produced the city’s latest general plan, Envision San Jose 2040, that anticipated Diridon’s status as a transit hub amidst 40,000 new jobs.

“This is not a novel idea we just came upon because Google came around last year,” Mayor Sam Liccardo said.

Kim Walesh, San Jose’s deputy city manager and economic development director, said the plan always envisioned “having an anchor developer who would do a cohesive master planned development in that central area.”

That doesn’t mean, however, that latest round of planning efforts and community engagement sparked by Google’s development announcement last year has pleased everyone who will be affected by what happens around Diridon.

 

 

Read more on Silicon Valley Business Journal

 

 

 

Tech tenants continue to compete for limited Silicon Valley office space

The Silicon Valley office market continues to perform well, with tech tenants quickly grabbing up space, particularly larger blocks that are hard to come by in the tight market.

The recent 274K SF lease by Roku at Coleman Highline reflects the strength of the San Jose market. Google’s plans for an 8M SF campus in San Jose have driven a lot of activity in that city’s downtown.

But even beyond a bustling San Jose, the greater Silicon Valley office market has had strong fundamentals for the first half of the year, according to Savills Studley.

In Q2, there was more than 2.6M SF of office leased in Silicon Valley, adding up to 5.8M SF leased in the past 12 months, Savills Studley reports. Availability in the core markets of Menlo Park, Palo Alto and Sunnyvale/Cupertino remains in the single digits, while the region’s overall availability has decreased to 15.8%, down 130 basis points from a year ago.

At the same time, rents are rising, reaching $50.94 overall asking rent for the region in Q2, up 4%. Class-A rents were up 1.7% to $52.51. Tech tenants continue to drive the market.

 

Read more on Bisnow Silicon Valley

 

 

 

As San Jose boosts job growth, the challenge will be where to house new employees

With the potential for Google to add around 15,000 employees at its planned 8M SF Google Transit Village, San Jose is presented with an ongoing challenge: How can a city grow jobs in a largely undersupplied housing market?

In the next 10 years, San Jose will benefit from more development and have a vastly different skyline, but also increase its population.

“We’re just going to have more humans,” Swenson Senior Director Josh Burroughs said during Bisnow’s Silicon Valley State of the Market event Thursday. “I think that’s the biggest change.”

He said in the next 10 years, downtown and the immediate area around Diridon and Midtown from Valley Fair and Santana Row to Downtown will be more crowded with people.

The current pipeline has 6,000 units nearing or waiting for entitlement with 4,000 units under construction.

“There is a demand for those 10,000 units today,” Burroughs said. “If Google builds and adds 15,000 employees where are they going to live? We have a constant need for housing.”

In addition to the impact Google would have on the multifamily market, panelists discussed rising interest in the North San Jose and Milpitas office and mixed-use market and the benefits of investing in those markets. The Bisnow event was held at DivcoWest’s Century Plaza office complex in Foster City.

Swenson is currently working on a 260-unit off-campus student housing project near San Jose State University. Burroughs said what makes the project naturally affordable is that students pay by the bedroom instead of by the unit.

One of the biggest challenges developers and cities face is ongoing opposition to much-needed housing.

 

Read more on Bisnow Silicon Valley

 

 

 

Should California’s Costa-Hawkins rent control act be repealed?

Debating the pros and cons of rent control at the Urban Land Institute

The Urban Land Institute of San Francisco held a public forum at the Google Community Space Tuesday night debating Proposition 10, the November ballot initiative that would repeal the 1995 Costa-Hawkins Act and allow California cities to potentially expand their rent-control ordinances.

Arguing in favor of Proposition 10 and potential rent-control expansion was Amy Schur, the director of the Alliance of Californians for Community Empowerment.

John Eudy, co-chair of the “no” campaign Californians for Responsible Housing (and also a vice president at Essex Property Trust) argued against repeal.

David Garcia, a policy director at UC Berkeley’s Terner Center For Housing Innovation, appeared as a third-way party; however, since Garcia appeared to nominally oppose Costa-Hawkins repeal, he often functioned as a second anti-Proposition 10 voice.

All three parties agreed that the state’s goal should be more housing production. They also agreed that Costa-Hawkins as it exists now is ineffectual at protecting renters and that the status quo won’t do in the future.

 

 

Read more on Curbed SF

 

 

City may scrap downtown cap on commercial growth

Planning commission to review council’s proposal to eliminate 350,000-square-foot limit on downtown non-residential growth.

The simmering community debate over how much office space Palo Alto should accommodate is set to flare up again Wednesday night, when the city’s Planning and Transportation Commission will consider abolishing a policy that limits new non-residential development in downtown.

The proposal to scrap the cap was prompted by the City Council’s 5-4 vote in January 2017 to amend the city’s policies for office growth as part of the city’s Comprehensive Plan update, which was completed in November of that year. At the time, the five council members who are more amenable to growth — Liz Kniss, Greg Scharff, Adrian Fine, Greg Tanaka and Cory Wolbach — all voted to abolish the 350,000-square-foot limit on downtown non-residential development, arguing that the policy is no longer necessary given the other restrictions on commercial growth that are already in place.

Palo Alto already has a citywide limit of 1.7 million new square feet of office and research-and-development growth. A citizen initiative to reduce that limit to 850,000 square feet will be on the November ballot.

The council has also recently adopted the annual 50,000-square-foot cap on office development in downtown, around California Avenue and along El Camino Real, which intends to meter the pace of growth.

Even so, the proposal to remove the downtown cap proved deeply polarizing at the January 2017 meeting. Wolbach and Scharff led the charge on removing the policy, with each arguing that downtown’s transit options make it more suitable for commercial growth than other parts of the city.

 

 

Read more on Palo Alto Online

 

 

 

WeWork takes last vacancy in San Mateo development near Caltrain

The lease marks the co-working company’s first foray into San Mateo and the mid-Peninsula and comes on the heels of plans to open a second location in downtown San Jose.

WeWork is filling in the gaps of its footprint between San Francisco and San Jose, this week announcing it will take over the last of the remaining vacancy at a San Mateo office development recently completed by developer Hines.

The coworking company plans to move into about 96,000 square feet on four floors at 400 Concar Drive, one of two buildings in Hines’ 400/450 Concar creative office complex steps away from the Hayward Park Caltrain Station.

The 305,000-square-foot development has stood 70 percent leased since it was completed in early 2017. The lone tenant in the complex has been software maker Medallia, which in 2016 signed a lease for all 210-115-square-feet at 450 Concar. Now, the veritable co-working giant WeWork has staked a claim to an entire building in the complex, where it will offer 1,650 desks when it opens its doors in December.

“WeWork members all over the Bay Area have been asking for a location in San Mateo,” Elton Kwok, general manager at WeWork, said in a statement to the Business Journal on Wednesday. “We’re thrilled to finally be able to service theMid-Peninsula area with our very first San Mateo location, and to meet the demand in this booming community.”

The news of the lease comes weeks after New York-based WeWork also announced it would open a second location in downtown San Jose, meant to meet overflowing demand from its existing downtown location at 75 E. Santa Clara St. Amazon.com’s secretive Lab126 division leases some of the co-working company’s 75,000 square feet in Santa Clara Street building, and entrepreneurs and small companies have maxed out the rest of the space in the building.

 

 

Read more on Silicon Valley Business Journal

 

 

Young couples and retirees ditch the city for a new kind of suburb

The term “surban” describes a suburban community that offers the conveniences of urban life.

John Burns Real Estate Consulting trademarked the word in 2016. Urban planners have long described a marriage of residential and commercial as “mixed-use” communities. This surban concept, while not novel, has been gaining popularity over the past few years.

Chris Porter, chief demographer at John Burns, said it’s a no-brainer option for many Americans, especially younger couples without kids and empty nesters. Surban communities are often near transit hubs and also have amenities like boutique fitness options, high-quality grocery stores and popular restaurants.

“It’s about lifestyle. There’s this idea that urban environments traditionally don’t have great public schools and the suburban environments do. That’s why you actually see a lot of families, once they start to have kids, moving to the suburbs for school quality. You’ve got lower crime in suburban areas than you would have in urban areas. In urban areas you have walkability and public transportation… bringing some of those things to the suburbs in small downtown areas is really the concept that we see — the concept of surban,” he said in a new podcast.

Projects like Irvine Spectrum, a mega outdoor shopping mall with a residential village adjacent to it, and San Jose’s Santana Row, which brands itself as a “small town feel inside the big city,” are cropping up across California.

City Place in Edgewater, New Jersey, which has luxury apartments sitting above stores like Anthropologie, is right next to a multiplex cinema. Developers are even investing in teacher’s villages that offer the best of both urban and suburban worlds.

Read more on Yahoo Finance

 

 

Facebook creates three huge Bay Area job hubs for expansion

Facebook has created three Bay Area work hubs that each total at least one million square feet, following big leases with two legendary developers that widen its Silicon Valley footprint.

The tech titan could employ as many as 19,000 in the expansion sites, located in Fremont, Sunnyvale, and Menlo Park.

The social networking giant is already expanding in its hometown of Menlo Park and has signed a mammoth lease in Sunnyvale. Now, it has signed major leases with Sobrato Organization and Peery Arrillaga totaling 18 buildings in a part of Fremont near the Dumbarton Bridge’s east end.

The most recent set of leases in Fremont total 1.04 million square feet, according to Facebook.

 

 

Read more on The Mercury News

 

 

 

Big downtown San Jose office, retail Museum Place complex pushes ahead

A new vision has emerged for a crucial downtown San Jose development known as Museum Place that would add offices and retail next to The Tech Museum of Innovation, according to city documents being reviewed this week.

Some details about the new Museum Place approach were contained in San Jose city staff reports regarding an agreement to bring aboard a group led by realty entrepreneur Gary Dillabough. The Dillabough group will provide fresh capital and investments to get the project moving forward. This news organization had reported previously about Dillabough’s planned involvement in the Museum Place development on Park Avenue.

“The developer has a formidable vision for San Jose’s future,” according to a memo prepared by Kim Walesh, San Jose’s economic development director. “Mr. Dillabough has indicated a strong desire to make the Museum Place project a standout location that the City of San Jose can look to with pride.”

 

 

Read more on The Mercury News

 

 

Cupertino’s ‘Apple employee tax’ put off for one year

Cupertino elected officials have scrapped a controversial plan — for now — to impose an employee tax on Apple and other businesses in the city, saying they don’t want to move forward in haste and will instead ask voters to weigh in during a special election in 2019.

Though the city council intended only to discuss the plan Tuesday night, after impassioned public comment during which several people spoke out against the proposal as either too vague or unfair to businesses, the council voted 3-1 to put off placing a measure on the November 2018 ballot. Vice Mayor Rod Sinks recused himself because his wife is an Apple employee.

Councilman Barry Chang dissented, saying that waiting even another year would prolong the city’s transportation problems. While the council had not yet come up with specific plans to use revenue generated by the so-called head tax, it had broadly earmarked transit and housing improvements.

“I think not only here, the big corporations in the entire nation, the corporations need to take up their fair share to help solve the problems we are facing now,” Chang said. “So that’s why this issue needs to be done and needs to be done now instead of waiting.”

Chang said he proposed a more ambitious plan two years ago — which would have charged businesses $1,000 per employee — but that that proposal was shot down by other council members.

“Two years ago, no council member supported it, so nothing happened,” he said. “Two years passed. If we don’t do anything this time now, another two years will pass, nothing will happen, I guarantee you.”

While Councilman Steven Scharf appeared to be in agreement with Chang about the urgency of addressing the region’s transportation problems, he explained, “We can’t do this justice in two weeks.”

The council would have had to agree by July 3 on the details of the proposed tax in order to get it on the November ballot. Instead, the council now plans to discuss on July 3 whether it should propose a general or special tax on businesses to put before voters in 2019.

 

 

Read more on The Mercury News