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Market Pulse: North Bay, September 2019

Welcome to the 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, under construction, 12-month net absorption, and vacancy rate.

Check out our September 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 40.8 million sq. ft., slightly up from last month but holding flat, with approximately 147,000 sq. ft. under construction. This is way down from last month’s 17.2 million sq. ft. of office space. The 12-month net absorption rate is also down, at 56,000 square feet. The vacancy rate is at 7.8 percent and expected to hold there.

For the industrial market, 106 million sq. ft. of space is in the inventory, with more on the way, and the space under construction is also rising, at 2.1 million sq. ft., over a million more than last month. The 12-month net absorption is at 206,000 sq. ft., and the vacancy rate is at 3.9% and declining.

There are 65.6 million sq. ft. of retail space available, the same as last month, and the sq. ft. under construction also hasn’t changed at 72,000 sq. ft. but on a downward trend. The 12-month net absorption rate is way down at 22,000 square feet. Vacancy rates are down slightly from last month, at 3.5%, but expected to rise.

The multifamily market is up to 60,000 units available in the inventory. Construction is on the downswing here, at 542 units. The 12-month net absorption rate averages just 63 units across the North Bay area and is on the rise, with a rising vacancy rate of 5.2%.

The North Bay market includes Santa Rosa, Napa, Vallejo, Fairfield, San Rafael, Marin, and more; 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 officeindustrialretail, or multifamily properties, we can help.

Data source: CoStar Analytics

Market Pulse: South Bay, September 2019

Welcome to the 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, under construction, 12-month net absorption, and vacancy rate.

Check out our September 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 1 million sq. ft. from last month to 130 million sq. ft. and continues to rise. Approximately 5.6 million sq. ft. are under construction, slightly down from August but trending upward. The 12-month net absorption rate is the same as last month at 2.7 million sq. ft. of office space. The vacancy rate is at 8.4 percent and dropping.

For the industrial market, 197 million sq. ft. of space is in the inventory and rising. The space under construction is also rising, at 771,000 sq. ft. (the same as last month). The 12-month net absorption is way up from August, at 1 million sq. ft., formerly 844,000 square feet. The vacancy rate hasn’t changed, at 5.7%, but is trending downward.

There are 79.8 million sq. ft. of retail space available and dropping. The space under construction is the same as last month, at 1 million sq. ft., but expected to decline. The 12-month net absorption rate last month was 78,000 sq. ft. and has dropped dramatically to -7,000 square feet. Vacancy rates are slightly up from last month, at 3.4%, but trending downward.

The multifamily market is holding strong at 144,000 units available in the inventory, the same as last month. Construction is way up from last month, from 1,000 units to 9,700 units. The 12-month net absorption rate is 2,600 units and rising steadily.  The vacancy rate is at 4.3%, no change from last month, but expected to drop.

The South Bay market stretches from Palo Alto down through Mountain View, San Jose, Morgan Hill, Gilroy, Hollister and southeast through the mountains; 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 officeindustrialretail, or multifamily properties, we can help.

Data source: CoStar Analytics

Market Pulse: East Bay, September 2019

Welcome to the 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, under construction, 12-month net absorption, and vacancy rate.

Check out our September 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 113 million sq. ft., with approximately 1.2 million sq. ft. under construction on an upward trend. The 12-month net absorption rate is at 1 million sq. ft. of office space. The vacancy rate is up slightly from last month but expected to drop, at 8.2 percent.

For the industrial market, 266 million sq. ft. of space is in the inventory and rising. The space under construction is also rising, at 5.7 million square feet. The 12-month net absorption has dropped significantly compared to last month, at -942,000 sq. ft. of industrial space. The vacancy rate is up slightly from last month and rising, at 4.8 percent.

There are 124 million sq. ft. of retail space available, the same as last month but on an upward trend, with 333,000 sq. ft. under construction on a declining path. The 12-month net absorption rate is at -393,000. Vacancy rates continue to rise, at 3.7%.

The multifamily market is holding strong, up to 171,000 units available in the inventory. Construction is up from last month but headed on a downswing, at 9,800 units in the pipeline. The 12-month net absorption rate is 2,000 units, the same as last month, with a rising vacancy rate of 4.6%.

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 officeindustrialretail, or multifamily properties, we can help.

Market Pulse: San Francisco, September 2019

Welcome to the NAI Northern California’s “Market Pulse” feature. We checked the pulse of the San Francisco 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, under construction, 12-month net absorption, and vacancy rate.

Check out our September 2019 San Francisco 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 San Francisco office market’s inventory is still at 176 million sq. ft., with 1.8 million additional sq. ft. under construction and dropping. Twelve-month net absorption stands at 1.8 million sq. ft. of office space and rising, yet the vacancy rate also continues to rise, at 6.3 percent.

For the industrial market, 95 million sq. ft. of space is in the inventory (the same as last month), but the number is expected to rise as the 2.8 million sq. ft. of industrial space under construction begins completion. The amount of space under construction is expected to continue to rise despite this. The 12-month net absorption rate is at 1.8 million sq. ft. and increasing, and the vacancy rate is at 3.6% and also trending upward.

There are 82 million sq. ft. of retail space available in San Francisco, again the same as last month but expected to drop. More is coming, with about 654,000 sq. ft. under construction and a 12-month absorption rate of 232,000 sq. ft. and rising. Vacancy rates are continuing to decline, at 2.4%.

The multifamily market is slowly growing, up to 165,000 units available in the inventory. Construction is on the upswing here, both from last month and in future projections, at 6,500 units. The 12-month net absorption rate is 2,000 units and rising, with vacancy rate of 3.9%, the same as last month but projected to drop.

For more detailed updates or to find out how San Francisco’s submarkets are doing, contact one of our advisors; whether you’re interested in officeindustrialretail, or multifamily properties, we can help.

5 US cities with the highest cost of living

According to a recent report by Move.org, the Bay Area’s major cities continue to rank in the top five for the highest cost of living nationwide. San Francisco holds the top slot, with New York City close behind, followed by San Jose, Oakland, and Boston. The report measured the average monthly cost for rent (a 1-bedroom apartment), food (groceries and some restaurant meals), gas, utilities (electricity, water, etc.), and internet for each city.

Surprising no one, San Francisco, California is the most expensive, with rent among the highest in the nation; rent makes up 80% of the $4,210.60 monthly cost of living in the city. The city also has some of the highest gas prices at $197.88 per month, though residents who commute via bike or public transit can avoid these costs. Food is expensive, around the 80th or 90th percentile, but utilities are comparably cheap at $123.22 per month, about 30% of the national average. Internet costs are pretty middle-of-the-road compared to other cities, averaging about $66.62 per month.

New York, New York is just $250 behind SF, with an average cost of living of $3,956.11. Food is the problem here, costing over twice as much as San Francisco, at $468.60 per month. Rent is also extremely high, at $3,126.35. Gas is more expensive than the national average, around the median value, at $155.55 per month, and internet is just about average at $62.77. Utilities cost a little less than elsewhere, around $142.84 per month.

San Jose, California is the third most expensive city to live in, with lower rents than SF or New York but high gas prices and above-average food costs. The $3,289.07 cost of living includes $2,555.85 for rent, $186.15 for gas, $359.85 for food, $63.36 for internet, and $123.86 for utilities (significantly cheaper than the national average).

Despite Oakland’s reputation for being cheaper than the City, its cost of living is still fourth-highest nationwide, at $3,212.14 per month, only about $1,000 less than San Francisco. Rent and gas are the highest costs compared to the median, at $2,481.65 per month and $175.95 per month. Food is just a little more expensive than the national average, around the 30th percentile, at $347.33 per month. Internet and utility costs are pretty average, at $65.00 and $142.21.

In the last spot of the top five is Boston, Massachusetts, with New York’s high rent and food costs. An average cost of living of $3,211.51 includes $2,420.26 for rent, $435.78 for food, $145.35 for gas, $62.97 for internet, and $147.15 for utilities.

Source: Move.org

NAI Northern California Presents: Redwood City Industrial Building Sold for $16M, Occupied by Facebook

Industrial building occupied by Facebook sold with long-term NNN lease

REDWOOD CITY, CA –  August 19, 2019 –  NAI Northern California is pleased to announce the sale of 860 Charter Street in Redwood City, an industrial/office building occupied by Facebook, for $16 million. Armand Anicete represented the buyer of the property. The single-story building has a long-term lease with Facebook and will be extensively remodeled and renovated by the tenant. It is a true triple-net lease with no owner obligations, and has 4% annual increases in rent.

860 Charter Street comprises 24,431 square feet on a 48,648 square foot lot in an excellent location near Stanford Medical, 24 Hour Fitness, Broadway Plaza Development, Stanford Development, and other well-known amenities and credit tenants.

The buyer representative, Armand Anicete, has leased and sold over $200M in his professional career. He is actively working with a wide variety of investors, exchange buyers, and owner/users looking to acquire properties. He also has multiple off-market properties for sale in the San Francisco Bay Area.

 

About NAI Northern California

NAI Northern California is a full service commercial real estate firm serving the San Francisco Bay Area and beyond. 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 375 offices worldwide and over 6,000 professionals completing in excess of $20 billion in commercial real estate transactions globally.

Recently on the San Francisco Business Times Book of Lists, NAI Northern California hit the top 5 and 6 spots in San Francisco and the East Bay and top 15 Bay Area wide. NAI Northern California is part of the NAI Global network, recently recognized by Lipsey as the number 4 most recognizable commercial real estate brand.

Bay Area cities rank in top 10 for most LEED units

California has more LEED-certified multifamily properties than any other state, over 57,000 units worth, and the Bay Area has over 12,000 of these green apartments and condos, with three cities ranking in the top ten statewide. Just behind Los Angeles, San Francisco ranks #2 for the most LEED units, at 8,090, and San Jose is just two spots behind at #4 and 2,545 units. While Oakland hasn’t quite caught up to these levels, it still ranks in the top ten, at #8 with 1,648 units. 

According to Multi-Housing News, “While LEED certification positively impacts the health and well-being of people, as well as the planet, it’s a valuable feature for investors, as it translates to faster lease-up rates and higher resale value.” Owners of LEED multifamily buildings are primarily real estate investment trusts; AvalonBay Communities, owner of the various Avalon, AVA, and eaves complexes in the Bay Area, and the Essex Property Trust, owner of over 80 Bay Area buildings, hold over 9,000 units between them.

The green housing trend really took off in 2008, jumping from 315 LEED-certified apartments and condos statewide in 2007 to 1,947 the next year. The numbers continued to grow through 2017, with a slight dip last year from 7,378 in 2017 to 6,185 in 2018. The developments still are mostly an urban trend, clustered in and around California’s major population centers, though the report only included communities with at least 50 residential units.

Source: Multi-Housing News

NAI Northern California volunteers with Project Open Hand in San Francisco

On Tuesday, August 13th, NAI Northern California and Piedmont Financing volunteered with Project Open Hand in San Francisco. Six brokers, staff, and advisors from the companies’ San Francisco office worked at the Grocery Center peeling and chopping sweet potatoes for sick and vulnerable people in the Bay Area. Project Open Hand’s volunteer coordinator, Kelly Wong, described the nonprofit’s origin during the AIDS crisis and their mission of providing healthy, nutritious meals to people with critical illnesses.

The team donned hairnets, gloves, and aprons, except Investment Advisor Kevin Royer; he had read the instructions and worn his own hat. (The rest of the volunteers were a little jealous, as they felt hairnets were not the most flattering look.) As the team got started, another of Project Open Hand’s coordinators gave them a quick lesson in sweet potato peeling techniques before they set to work. When almost all the potatoes were peeled, most of the team switched to chopping the potatoes into cubes; another volunteer at Project Open Hand taught knife safety and dicing skills.

By the time the volunteer shift was over, they had peeled and diced five cases (135 pounds) of sweet potatoes, over twenty pounds per person. Market analyst Cole Byrd said, “Project Open Hand was a fun and eye-opening experience that makes you realize that a little effort can go a long way for the community. It was also a great time to bond with coworkers; I found it a very fulfilling experience.”

Investment advisor Trey Sells, who also volunteered at the Oakland location last month, said, “”I loved seeing how a small donation of our time and teamwork was able to produce such a large amount of prepared food for the community.”

“Learning that this massive operation started with one woman cooking for people after work is living proof that big dreams with powerful impacts really come true,” said Investment Advisor Kevin Royer (with the hat). “Taking a couple of hours out of the day to help feed over 2,500 people in need gave me a great feeling, and it was amazing to see how our small role could have such a great effect on thousands of people throughout San Francisco. Plus it is always nice to connect with colleagues over non-work stuff while still being productive. And I became a professional in the kitchen after only a few hours!”

In a thank-you letter from Project Open Hand, their volunteer coordinator wrote, “The amount of hard work, energy, and enthusiasm your group brought was much appreciated! Thank you for your generous donation of 2.5 hours of service. We look forward to working with you again in the future.”

See all the photos from the event on NAI Northern California’s Facebook page.

ABOUT PROJECT OPEN HAND

Founded in 1985, Project Open Hand is a nonprofit organization that provides meals with love to critically ill neighbors and seniors. Their food is like medicine, helping clients recover from illness, get stronger, and lead healthier lives.

Every day, they prepare 2,500 nutritious meals and provide 200 bags of healthy groceries to help sustain their clients as they battle serious illnesses, isolation, or the health challenges of aging. They serve San Francisco and Oakland, engaging more than 125 volunteers daily to nourish their community.

Learn more or sign up to volunteer at OpenHand.org 

Top investment sales firm NAI Northern California continues expansion in first half of 2019

Leader in Bay Area multifamily, retail, and office investment sales and leasing transactions has aggressive growth plan

SAN FRANCISCO, CA – August 21, 2019 – As the second quarter of 2019 has come to a close, Bay Area commercial real estate brokerage NAI Northern California has continued its expansion with an aggressive growth plan. President James Kilpatrick remarks, “We are well on track to top our total sales volume this year as we expand our team and continue to develop tech-forward strategies to serve our clients.”

NAI Northern California and its brokers were recognized both locally and nationally in the first half of the year. The brokerage was ranked as a Top Sales Firm by CoStar in both the San Francisco and East Bay/Oakland markets, and vice president Tim Warren was named a Top Sales Broker for his work in the East Bay/Oakland market. Investment advisor and rising star CJ Brill was awarded a scholarship for the International Council of Shopping Centers’ RECon conference in Las Vegas. The company’s top-producing agent for Q1 through Q2 was senior investment advisor Rudas Gebregiorgas, followed closely by Mary Alam, Grant Chappell, Alex Barker, Doug Sharpe, Joby Tapia, Tim Warren, Kent Mitchell, Jordan Geller, and Joshua Ballesteros.

The company expanded into the greater Silicon Valley area with the hire of Tod Rudee as Executive Vice President in San Jose. Tod brings nearly 30 years of extensive experience in commercial real estate strategy, transaction services, and brokerage performance management in Silicon Valley. His previous background includes leading the San Jose office as Managing Director for CBRE as well as management roles with Colliers International and Premier Properties. 

The majority of the company’s business was multifamily investment sales for Q1 and Q2. Notable sales included Joby Tapia’s $18 million sale of the Central Valley Homes Apartments, a 24-unit complex in Mill Valley; the Mitchell Warren Team’s $14 million sale of 44 units at 888 Vermont Street in Oakland; and the $11.3 million sale of the Terrace at Fair Oaks complex in Carmichael by Rudas Gebregiorgas and Grant Chappell.

For the first two quarters of 2019, single tenant NNN and multi-tenanted retail center sales were a close second. The $25 million in sales completed by the Mary Alam Team included a $6.7 million Walgreensa $3.8 million retail complex in Tracy, and a $3.65 million Regal Cinemas sold by the Mary Alam Team and Ganga Balebail.

Industrial and office properties rounded out NAI Northern California’s sales for the first half of the year. The most notable assets were a $12 million mixed-use development site in South Beach, San Francisco sold by Alex Barker; a $2 million office/warehouse building in West SOMA, San Francisco sold by the Geller Williams team; and a $2.5 million medical office redevelopment deal in San Jose sold by the Mary Alam Team. Vacant land and mixed-use buildings made up the rest of the properties sold by the brokerage. 

Commercial leasing is an increasing part of the company’s business, with leases to boutique and multinational businesses from a range of industries. Spaces leased by NAI Northern California during Q1 and Q2 ranged from 1,100 square feet to 35,000 square feet, for both office and industrial uses. 

Coming into the second half of the year, NAI Northern California has an aggressive growth plan and is currently hiring commercial real estate agents and senior investment sales advisors for all their offices (San Francisco, Oakland, and San Jose) as well as additional leadership roles for both their San Francisco and Oakland offices. Community outreach and volunteering efforts have also been a key component of company life with volunteer days at Project Open Hand in Oakland and San Francisco.

 

About NAI Northern California

NAI Northern California is a full service commercial real estate firm serving the San Francisco Bay Area and beyond. 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 350 offices worldwide and over 6,000 professionals completing in excess of $20 billion in commercial real estate transactions globally.

Recently on the San Francisco Business Times Book of Lists, NAI Northern California hit the top 5 and 6 spots in San Francisco and the East Bay and top 10 Bay Area wide. NAI Northern California is part of the NAI Global network, recently recognized by Lipsey as the number 4 most recognizable commercial real estate brand.

NAI Northern California promotes Trey Sells to Investment Advisor

NAI Northern California, a member of the world’s premier managed network of commercial real estate firms, is pleased to announce the promotion of Trey Sells from Market Analyst to Investment Advisor. Trey specializes in multifamily and mixed-use real estate in the Castro and surrounding areas of San Francisco.

“Trey sets a high standard for exceptional client service and this promotion is well-deserved,” said James Kilpatrick, President of NAI Northern California. “As we look toward the future of NAI, we’d like to acknowledge Trey for his contributions and are confident he will be an asset as we continue to develop and expand.”

Trey has a background in entrepreneurship, education, and personal coaching. He studied neuroscience at Brown University, where he mastered the workings of complex and interconnected systems. After graduating in 2010, he started his own tutoring company and used his extensive and broad education to coach his clients and help them achieve their goals. His career in real estate started with a passion for architecture and beautiful homes; he managed the renovation of a luxury home and, in the process, gained an appreciation for the power of investment to change lives.

Trey is interested in building investment opportunities in real estate leasing. He sees huge potential for the growing advancements in technologies and building materials for real estate to redefine the way we live and invest. His acute attention to detail and extensive network of contacts ensure he can provide the best experience and outcome for his clients.

Trey was born in southern California, where he spent his early childhood, and grew up in northern Nevada near Lake Tahoe. He frequently visits and travels with his family, including his four nieces and nephews. He is very involved in service work for populations in need and values lifelong education and healthy living. He enjoys physical fitness and reading and writing creative fiction. Trey can be found enjoying the outdoors all around the Bay Area or writing in cafes on the streets of the Castro.