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Powell as Fed Chief—A Win for CRE Investors and Lenders?

As 2017 comes to a close, commercial real estate total transaction volume is over $500 billion according to CoStar. Although, that equates to a 14 percent year over year decline, many forget that those levels are still higher than 2006—a banner year. Regardless, numerous industry observers are holding their collective breath. In fact, Janet Yellen began 2017 indicating a potential bubble in commercial real estate driven in part by today’s extended low interest rate environment.

In response, lenders, investors and regulators remain anxious with the possibilities of cap rates blowing out in the face of rising interest rates. But are these concerns warranted and will the nomination of Jay Powell actually lead to strong levels of commercial real estate price growth?

Read more from National Real Estate Investor

Google Proposes One Million Square Foot Project in Sunnyvale for 4,500 Employees

The second half of 2017 brought some much-desired attention to San Jose, the self-proclaimed capital of Silicon Valley. It all started when Trammell Crow announced that its Diridon Station project was tied to Google, and the subsequent negotiations the Mountain View tech giant started with San Jose’s elders to expand even further in the city. A slew of activity emerged in the city from hotels to office buildings to apartment complexes trading hands and institutional investors really zeroing in on the opportunity this could bring. The 86-acre, 4 million square foot approval Apple received from the city of San Jose in 2016 was not even mentioned in the news—the excitement seemed to be all about Google.

Yet Google’s ambitions are much broader than just one city. In late December, Google initiated plans with the city of Sunnyvale for a roughly 1.042 million square foot office project on approximately 40.5 acres of land it owns in the Moffett Park district. The ten parcels that Google owns are bounded by Caribbean Drive, Mathilda Avenue, Bordeaux Drive and Borregas Avenue. There are thirteen single story buildings on the property today totaling 801,670 square feet, and they include a combination of warehouse, light manufacturing, R&D and office uses, according to a letter submitted to the city by Google’s Senior Director of Design and Construction, Joe Van Belleghem.

Read more from The Registry

Downtown Corporate Campuses are Expanding into the Suburbs

One of the most important development trends in recent years has been the push to redevelop, reenergize and revitalize downtown districts in cities and towns across the country. Aligned with a demographic wave (led by millennials, empty nesters and active seniors) displaying a renewed appreciation for and attraction to the live/work/play dynamism that dense, mixed-use urban centers can provide, developers have become more aggressive and more adept at transforming underutilized urban neighborhoods in vital and energized centers of commercial and social activity.

Read more from National Real Estate Investor

How CRE Investors Could Cash in On the Tax Bill

President Trump signed the new Tax Cuts and Jobs Bill on Dec. 22, effectively putting the final seal of approval on the most substantive tax law changes that the country has seen in 30 years.

It may take some time to crunch the numbers to determine just how much tax savings the new tax bill could generate for commercial real estate investors. The general view is that provisions specific to property owners and developers will deliver a net positive result—although not nearly the windfall that corporations will see with a drop in the tax rate from 35 percent to 21 percent.

Read more from National Real Estate Investor

Malls Spending Big on Renovations, Evolving into Mixed-Use Properties

When architect Victor Gruen designed Southdale Center – the nation’s first fully-enclosed, climate-controlled shopping mall – he envisioned a communal gathering place that eventually would incorporate a medical center, schools, offices, homes and apartments – not just a parade of glitzy stores.

The mall boasted fountains, tropical plants, sculptures and even a large bird cage. It was quite the attraction in the mid-1950s.

Now 61 years after Southdale opened, Gruen’s original vision is becoming a reality. Southdale, a Simon Property Group-owned mall in Edina, Minn., now includes luxury apartments constructed in part of the mall’s parking lot, a Homewood Suites by Hilton that broke ground in June, a Life Time going into a former JC Penney store, and even a government center. Also, a new Restoration Hardware and a proposed Shake Shack will round out Southdale’s last two parking-lot redevelopment sites.

Read more from VTS Blog

 

These 5 Trends Will Impact San Francisco CRE In 2018

While San Francisco is a top market for the tech industry and is fetching some of the nation’s highest office rents, it also has been a region with high housing costs, a lack of available space and a stifling regulatory environment. While San Francisco will remain on the top of many investors’ lists for buying and selling assets, many challenges will remain.

Check out the top five issues that will impact San Francisco CRE in 2018.

Read more from National Real Estate Investor

4 Ways that Driverless Cars Could Impact the CRE Industry

Companies ranging from the big automakers in Detroit to tech firms in Silicon Valley are pouring research dollars into driverless cars, and this development is projected to completely change the future of commercial real estate. This transition creates opportunities for new investment as well as challenges for existing properties.

Read more from NAI Global

Downtown San Jose blighted blocks may get new life

SAN JOSE — A plan to build several dozen residential units in downtown San Jose is part of wide-ranging efforts to transform some blighted blocks, decaying buildings and vacant lots in the city’s urban heart into a vibrant community.

“Ultimately this is going to be a great, brand-new neighborhood in downtown San Jose,” said Bob Staedler, principal executive with Silicon Valley Synergy, a land-use and planning consultancy. “This area north of San Pedro Square has always been the hole in the doughnut of the downtown.”

Read more from East Bay Times

Ground-Floor Retail Remains Empty In San Francisco As Developers Hunt For Ideal Tenants

Activating Market Street through new residential developments has not gone as smoothly as San Francisco city officials would have liked. Over the past five years, 20 new housing developments were completed on or a few blocks off Market Street, but 17 vacant ground-floor retail fronts remain, the San Francisco Chronicle reports.

The city requires residential developments to include ground-floor retail, but that is not always an easy feat for developers in a city that encourages more small retail than large chain stores. Many developers have said not all sites are ideal for retail. Developers prefer higher credit tenants that can provide long-term tenancy instead of the newer mom-and-pop businesses neighbors want. Grocery stores have anchored many developments throughout the Bay Area, but they require more space than some of the projects will allow.

Read more from Bisnow

Downtown South San Francisco To Get Influx Of New Housing

South San Francisco’s downtown will look a lot different in the next few years. Caltrain is moving its South San Francisco station closer to downtown and hundreds of housing units will be built over the next few years, transforming South San Francisco into a transit-oriented community.

The new downtown is part of the city’s El Camino Real/Chestnut area plan, which envisions up to 4,800 housing units in low- to high-rise buildings in a mixed-use walkable community. The additional housing in downtown also will complement the significant life science development projects at Oyster Point, which will add millions of square feet of office/R&D space.

Read more from Bisnow