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Can San Francisco Break in to the Top Category of World Cities for CRE Investment?

According to a new system of ranking by JLL and The Business of Cities, an intelligence and strategy firm, San Francisco is the top contender for breaking into the highest level of Established World Cities for commercial real estate investment. At the top are the Big Seven, which “account for nearly one-quarter of all capital invested in commercial real estate globally” and are comprised of London, New York, Paris, Singapore, Tokyo, Seoul, and Hong Kong. San Francisco is number eight on the ranking of 46 indices and 7 categories that cover corporate presence; global flows; scale and market size; infrastructure platform; talent; innovation; and soft power.

“Global cities that adapt to new economic models focusing on quality of life, innovation, sustainability, governance and resilience are becoming new sources of real estate demand and attracting higher cross-border investment,” says an article about the report by Multi-Housing News.

The Contenders, the second-strongest category after the Big Seven and the one San Francisco tops, have shown the fastest growth in real estate investment over the last cycle and the strongest rental office growth since 2000.

Silicon Valley also shows up on the rankings list as a New World City in the Innovator category; this group has seen investment volumes grow by 50 percent since 2006 and ranks just behind the Big Seven for real estate investment intensity. San Francisco’s Contenders category is number four on that list, behind the Lifestyle cities. The remaining categories are Influencers, Megahubs, Enterprisers, Powerhouses, Hybrids, and National Growth Engines.

Sources: Multi-Housing News, Commercial Property Executive

 

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.

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

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: North Bay, July 2019

Welcome to NAI Northern California’s “Market Pulse” feature. We checked the pulse of the South 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 July 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 rising, with 12-month net absorption also up at 325,000 sq. ft. of office space. Approximately 17.2 million sq. ft. are under construction with a downward trend. The vacancy rate is at 6.8 percent and dropping.

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 164,000 sq. ft., and the space under construction is also rising, at 1 million square feet. The vacancy rate is at 4% and trending upward.

There are 65.7 million sq. ft. of retail space available and rising, with a 12-month net absorption rate nearly neutral at -4,600 sq. ft. (a decreasing trend). Less is being built, though, with 61,000  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 24.2 units across the North Bay area, but is rising. Construction is on the upswing here, at 987 units, with a rising vacancy rate of 3.8%.

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, July 2019

Welcome to NAI Northern California’s “Market Pulse” feature. We checked the pulse of the South 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 July 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 1.6 million sq. ft. of office space. Approximately 6.4 million sq. ft. are under construction with an upward trend. The vacancy rate is at 8.6 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 1.1 million sq. ft., and the space under construction is dropping, at 710,000 square feet. The vacancy rate is at 5.6% and trending downward.

There are 80.1 million sq. ft. of retail space available, with a 12-month net absorption rate of 169,000 sq. ft. (a decreasing trend). Less is being built, though, with 1 million sq. ft. under construction. Vacancy rates continue to drop, at 3.4%.

The multifamily market is holding strong, up to 144,000 units available in the inventory. The 12-month net absorption rate is 2,100 units and rising. Construction is on the downswing here, at 10,00 units, with a rising vacancy rate of 4.7%.

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.

How are Tech IPOs affecting Bay Area Housing?

How upcoming tech IPOs could affect the Bay Area housing market.

Last week, San Francisco-based ride-hailing startup Lyft finally filed to go public – the first of what is expected to be a number of area startups (such as Uber, Slack and Pinterest) that could be making the leap from the private market this year. To understand what this means for those living and working in the Bay Area, I talked to a couple of people in the real estate industry to get their thoughts. The short answer: The IPOs will almost certainly impact inventory and pricing.

Read more on NAI Northern California’s Newsletter

Is Bay Area housing still a sizzling hot housing market?

Even cool, Bay Area housing market is still hot.

The San Jose housing market has cooled more than any other in the country — and it’s still the hottest in the nation, according to a recent Zillow survey. The bidding wars and quick cash sales have abated, and home sellers are cutting prices more often and waiting longer to close deals than a year ago. But middle-income families still struggle to afford the median-priced home of $1.2 million in the San Jose metro area. A typical family needs to put about $600,000 down to fit that mortgage comfortably in their budget.

Read more on NAI Northern California’s Newsletter

 

 

Tod Rudee joins top Bay Area commercial real estate brokerage NAI Northern California as Executive Vice President in San Jose

Leader in multifamily, retail, and office investment transactions recruits real estate industry veteran to lead the charge in the South Bay

SAN JOSE, CA –  March 12, 2019 –  NAI Northern California is pleased to announce that Tod Rudee has joined as Executive Vice President in San Jose to focus on leadership and expansion of commercial real estate services throughout the greater Silicon Valley area. Tod brings nearly 30 year 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.

“Silicon Valley has been one of the top tier real estate markets in the United States for a while. As the home of big tech influencers like Apple and Facebook, the South Bay region continues to be major hub for investment. We have had great success working with a multitude of real estate investors on transactions for multifamily, retail, office, industrial, and mixed-use asset types from San Mateo to Palo Alto to downtown San Jose and Gilroy. We have have some major success stories representing corporate clients in meeting their leased space requirements, as well as representing some Silicon Valley landlords. Bringing a great leader like Tod Rudee on board is all about doubling down our efforts in Silicon Valley by building a first-class team of institutional brokerage professionals,” remarks President James Kilpatrick.

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.

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 400 offices worldwide and over 7,000 professionals completing in excess of $20 billion in commercial real estate transactions globally.