Is a Community Land Trust the Right Buyer for Your Property?

Our broker Max Rattner recently closed an impossible deal. The property was an eight-unit multifamily in Berkeley, but with a code violation, a majority of the tenants under Section 8, and roughly $500K of deferred maintenance.

Seller, buyers, tenants…everyone’s in a rough spot there.

But like a young George Bailey, Max’s team found a miracle of modern real estate: The Community Land Trust.

Land Trusts have existed since the time of kings as a means of public stewardship of land. Typically they’re public spaces like parks. But in 1968, several activists began what has become a growing trend of housing CLTs in the US.

CLTs are non-profit orgs that will acquire your property at market value and then own it permanently. Yet they’ll then “sell” equity in the property back to tenants, in what’s essentially a long-term lease. In lieu of paying (rising) rents, tenants earn a stake in homeownership. When a tenant then chooses to sell, he/she receives a portion of the property’s appreciation, while the Trust remains owner.

In an era of difficult housing affordability, CLTs are growing as an option for many people. There are SEVEN of them in the Bay Area alone. And for property owners, a CLT might present an opportunity to sell a challenging property at a fair price.

Those transactions still aren’t easy. Nonprofits are traditionally short-handed and bootstrapped. Their resources for navigating transactions are limited. But that’s where our agents fill an extra role in expediting deals. Max Ratter, Kevin Flaherty, Derrick Reedy and Tina Qi architected this sale perfectly, and know this landscape better than anyone.

We’ve made this nuanced option a specialty, and if the situation is right for you, we can open your property to a Community Land Trust.

So if you’re sitting on a property you may have thought was limited, think again. Contact us any time and we can explore this unique option.  

Big Tech Throwing Big Money at Housing Crisis

It seems every week we’re hearing about another BILLION dollars or more coming into the Bay Area housing market.

Most recently it’s Apple with $2.5 billion, one-upping both Facebook and Google’s earlier $1 billion each. Amazon and Microsoft are doing the same in Seattle.

Why is this a “trend” though? Why is there a tech “arms race” on this issue? The answer is one of the simplest Things You Learned in Kindergarten lessons:
 You Break It, You Buy It. 

Imagine the span of about 18 months from late 2007 to early 2009: 1) Apple introduces the iPhone; 2) Google releases the Chrome browser; and 3) Facebook hit critical mass, shifting from a little campus thing into a real social network and brand platform.

That’s when the world changed. Since then 500,000 tech jobs have been created. Every one tech job yields five non-tech jobs. And yet, only 50,000 new homes have been built. A recent McKinsey report estimates that 3.5 million new homes are needed by 2025 to close the gap.

So tech brings in thousands of bodies, throws tons of money at them, and demand+prices skyrocket. Now they’re throwing more money at the problem they helped create.

But money alone isn’t enough, according to experts who say the answer is “a combination of relaxed suburban zoning and permit regulations from local governments, aggressive home building over the next decade, public transportation alternatives, and a wider array of housing options beside single-family homes.”

And this is why we need to talk to you. 

The answer is taller multifamily properties, preferably near transit centers. So what are you sitting on? Ask yourself: 

  • Do you have a property near a BART or CalTrain station? Or major bus line?
  • If you could get zoning changed, could your current property be developed into housing? 
  • If you could get height limits changed, do you have a property that could be a higher-rise multifamily site? 
  • Could you get access to any of the $4.5 billion earmarked by tech to improve housing? 

Governments are ready to adapt, and you might have an ideal situation for a developer able to navigate City Hall. Contact us, and let’s look at all the commercial real estate investment opportunities that you might benefit from as the rush to build housing continues. 

US Neighborhoods with the Best Property ROI

The San Francisco Business Times released this report yesterday after crunching some Zillow numbers, showing the 20 neighborhoods in the US that have delivered the best return on real estate investment in the past 10 years. 

Many of the most lucrative markets lie north of San Jose…right in our wheelhouse. 

Now granted, this list looks at residential real estate. But we’ve all heard that rumor about a rising tide lifting other boats. As the Bay Area and Northern California has grown, it has ALL grown.

Let’s walk through this logically. People want to live in the dynamic City of San Francisco, or near their jackpot job in Silicon Valley. But they don’t want to spend what it costs to live there. So they fan out into the perimeter, raising demand in Richmond, Stockton, Merced.

Well guess what? It’s not just home-buyers in that scenario. It’s renters of multifamily units too. And now those people want shopping centers and auto repair shops and chiropractic offices. 

So if you’re looking for an ideal spot for a commercial investment, you might look at where the people are. Here’s where demand has grown the most.

Want to think about buying or selling in these areas? Consult with one of our advisors. 

Noel Carrillo joins NAI Northern California as Investment Advisor in San Francisco

NAI Northern California is pleased to announce that Noel Carillo has joined as Investment Advisor in San Francisco. Noel specializes in multifamily properties. He has called San Francisco home for nearly a decade, seeing the City evolve over one of its most transformative eras, and now brings that local awareness to his clients in a manner that transcends the transaction and commits to long-standing relationships through open communication and transparency.

Noel is originally from San Diego and is currently attending City College of San Francisco, where he is pursing his degree in Economics. His professional enthusiasm extends into his personal life where, aside from cherished downtime with friends and family, he pursues adventures like saltwater sportfishing–frequently netting yellowfin, bluefin, and yellowtail tuna–and travels to such far-off locales as Japan, Singapore, and Indonesia.

Learn more about Noel Carillo

Transit-oriented development on the rise

Cities across the Bay Area are opening up to transit-oriented development, building high-density housing with ground-floor retail near BART stations, including on BART-owned land. Despite neighbor complaints, cities are revising their zoning restrictions to allow bigger buildings near major transit hubs.

Most of the development is happening in the East Bay, with completed projects near at least eight stations and more under construction including a 402-unit apartment complex at MacArthur Station with 13,000 square feet of commercial space; 94 units at Fruitvale Station; 200 units at Pleasant Hill Station; 410,000 square feet of commercial space at West Dublin/Pleasanton Station; and 596 units at Walnut Creek Station. Planned projects in Millbrae, West Oakland, Lake Merritt, North Concord/Martinez, Balboa Park, and Fruitvale total over 2,300 units and over 2 million square feet of commercial space.

As zoning codes begin to relax near transit, future development opportunities could open up, strengthening the local markets for existing multifamily buildings as well as retail and office assets.

Source: SF Chronicle

How are developers preparing for sea level rise?

The Bay is expected to rise up to 10 feet in the next 80 years; how are local developers protecting their waterfront projects? According to the SF Business Times, “With the right planning, project designs and innovative construction, new developments can not only survive the effects of climate change, but in some cases, can help protect the region from flooding and erosion.”

Depending on what changes the world makes (or doesn’t make) to slow climate change, California estimates that waters will rise 1.1 to 2.7 feet by 2050 and between 2.4 and 10.2 feet by 2100. Most developers and project planners aim to be ready for 2 feet of sea-level rise by 2050 and 6 feet by 2100.

One solution is to truck in dirt to raise the level of the ground before building; Brooklyn Basin, a master-planned community on Oakland’s waterfront, elevated the land 3 feet with this method, and it is also being used on Treasure Island. The Treasure Island development is also using the strategy of siting buildings farther away from the shoreline to allow room for future retaining walls or levies. Terracing is also an option; India Basin and Pier 70 in San Francisco are building homes on sites that already sit well above the water, even if it means they’re a little farther from the waterfront. A more back-to-nature approach is restoring the Bay’s wetlands and marshes, which absorb water and slow flooding.

New developments have many strategies to survive sea level rise, but it remains to be seen how older buildings and infrastructure can be protected. There are currently 48,895 homes in the Bay Area worth a total of $31.8 billion that are at risk of flooding due to sea-level rise, on 48 to 166 square miles of threatened shoreline.

Source: SF Business Times

Cole Byrd joins NAI Northern California as Market Analyst in San Francisco

NAI Northern California is pleased to announce that Cole Byrd has joined as Market Analyst in San Francisco. Cole is training to be an investment advisor, specializing in multifamily properties. Cole was raised in Orlando, FL and Charlotte, NC before making the move to San Francisco. He graduated from the University of San Francisco with a bachelor’s degree in Entrepreneurship and Innovation and began his career in the automotive industry, working for Sonic Automotive and AW Collision Group. NAI Northern California is proud to welcome him to the San Francisco team.

Learn more about Cole Byrd

Market Pulse: North Bay, August 2019

Welcome to NAI Northern California’s “Market Pulse” feature. We checked the pulse of the North Bay commercial real estate market to discover the ups and downs of the office, industrial, retail, and multifamily markets.  Each market has four dimensions: current inventory, 12-month net absorption, under construction, and vacancy rate.

Check out our August 2019 North Bay Market Pulse infographic. If a dimension is on the rise, the pulse goes above the baseline; if it’s on the decline or negative, the pulse will dip below the baseline.

This month the North Bay office market’s inventory is at 40.7 million sq. ft. and holding flat, with 12-month net absorption down at 127,000 sq. ft. of office space. Approximately 17.2 million sq. ft. are under construction with an upward trend. The vacancy rate is at 7.4 percent and expected to drop.

For the industrial market, 105 million sq. ft. of space is in the inventory, with more on the way. The 12-month net absorption is heading up, at 231,000 sq. ft., and the space under construction is also rising, at 1.1 million square feet. The vacancy rate is at 3.4% and holding steady.

There are 65.6 million sq. ft. of retail space available and rising, with a 12-month net absorption rate at 113,000 sq. ft. (a decreasing trend). More is being built, though, with 72,000  sq. ft. under construction. Vacancy rates continue to rise, at 3.7%.

The multifamily market is up to 59,000 units available in the inventory. The 12-month net absorption rate averages just 52 units across the North Bay area and is dropping. Construction is on the upswing here, at 557 units, with a rising vacancy rate of 5.4%.

For more detailed updates or to find out how the North Bay’s submarkets are doing, contact one of our advisors; whether you’re interested in office, industrial, retail, or multifamily properties, we can help.

Market Pulse: South Bay, August 2019

Welcome to NAI Northern California’s “Market Pulse” feature. We checked the pulse of the South Bay commercial real estate market to discover the ups and downs of the office, industrial, retail, and multifamily markets.  Each market has four dimensions: current inventory, 12-month net absorption, under construction, and vacancy rate.

Check out our August 2019 South Bay Market Pulse infographic. If a dimension is on the rise, the pulse goes above the baseline; if it’s on the decline or negative, the pulse will dip below the baseline.

This month the South Bay office market’s inventory is up to 129 million sq. ft., with 12-month net absorption also up at 2.7 million sq. ft. of office space. Approximately 6.2 million sq. ft. are under construction with an upward trend. The vacancy rate is at 8.3 percent and dropping.

For the industrial market, 198 million sq. ft. of space is in the inventory and rising. The 12-month net absorption is on its way up, at 844,000 sq. ft., and the space under construction is also rising, at 771,000 square feet. The vacancy rate is at 5.7% and trending downward.

There are 79.9 million sq. ft. of retail space available and dropping, with a 12-month net absorption rate of 78,000 sq. ft. (a decreasing trend). More is being built, though, with 1 million sq. ft. under construction. Vacancy rates continue to drop, at 3.3%.

The multifamily market is holding strong, up to 144,000 units available in the inventory. The 12-month net absorption rate is 2,500 units and rising. Construction is on the upswing here, at 1,000 units. The vacancy rate is at 4.3% and dropping.

For more detailed updates or to find out how the South Bay’s submarkets are doing, contact one of our advisors; whether you’re interested in office, industrial, retail, or multifamily properties, we can help.

Market Pulse: East Bay, August 2019

Welcome to NAI Northern California’s “Market Pulse” feature. We checked the pulse of the East Bay commercial real estate market to discover the ups and downs of the office, industrial, retail, and multifamily markets.  Each market has four dimensions: current inventory, 12-month net absorption, under construction, and vacancy rate.

Check out our August 2019 East Bay Market Pulse infographic. If a dimension is on the rise, the pulse goes above the baseline; if it’s on the decline or negative, the pulse will dip below the baseline.

This month the East Bay office market’s inventory is up to 112 million sq. ft., with 12-month net absorption down at 819,000 sq. ft. of office space. Approximately 1.4 million sq. ft. are under construction with an upward trend. The vacancy rate is dropping, at 8.2 percent.

For the industrial market, 265 million sq. ft. of space is in the inventory and rising. The 12-month net absorption is almost even, dropping to -1,100 square feet. The space under construction is also dropping, at 6 million square feet, and the vacancy rate is rising to 4.9%.

There are 124 million sq. ft. of retail space available, on an upward trend, with a 12-month net absorption rate of 29,000 sq. ft. (a decreasing trend). Over 340,000 sq. ft. are under construction, with more in the pipeline. Vacancy rates continue to rise, at 3.5%.

The multifamily market is holding strong, up to 170,000 units available in the inventory. The 12-month net absorption rate is 2,000 units. Construction is on the upswing here, at 9,400 units, with a rising vacancy rate of 4.5%.

For more detailed updates or to find out how the East Bay’s submarkets are doing, contact one of our advisors; whether you’re interested in office, industrial, retail, or multifamily properties, we can help.