Tuesday, May 27, 2014

SF Bay Area News - May 27, 2014

I hope everyone had a great Memorial Day weekend. This week CREW SF is having a membership drive event on Wednesday at 5.30PM, see crewsf.org. This Thursday is SPUR’s Dine and Discover event, see spur.org as well as Belden Cub’s Thirsty Thursday.

ACQUISITION NEWS

225 Bush St. has changed hands. In an update to that story, we learned that Kylli Inc., a Chinese development firm backed by Genzon Group and its principal, is now the majority joint venture partner in the sale transaction. Flynn Properties and GEM Realty Capital were the JV sellers. Flynn Properties will remain an investor in the new joint venture as well as the property manager and leasing agent for 225 Bush Street.
globest.com

DEVELOPMENT NEWS

CIM Group and SKS Partners are each looking to build SoMa highrise office towers that could add 1 million square feet in total to San Francisco’s hot office development pipeline. Both projects fall under the Western SoMa Plan, a set of development guidelines adopted in late 2012 that allow for taller buildings in the neighborhood. These are the proposals: San Francisco-based SKS Partners submitted an early plan to the city’s planning department for a 160-foot tall, 688,000 SF office building at 610 and 620 Brannan St. Los Angeles-based CIM Group plans to demolish an existing, 60,000 SF building at 330 Townsend St. and replace it with a 21-story tower that would consist of 383,000 SF.
bizjournals.com

Development could start on Treasure Island sooner than expected. Even as the Navy gears up to conduct radiation contamination tests under all the homes on the island, developer Lennar, along with Wilson Meany, is hopeful that the eastern end of the island, along with all of Yerba Buena Island, could be transferred to the city by the end of the year. That would set the stage for the land to be handed over to the developer team and for work to begin. Lennar was in court this week facing off against the group Citizens for a Sustainable Treasure Island, which sued the city and developer, arguing that the environmental review did not fully describe the scope of the project or its impact on Bay Bridge traffic. Lennar and the city won the first round in court in late 2012. The citizens group, led by former San Francisco Supervisor Aaron Peskin, appealed. A decision will be announced within 60 days.
sfgate.com

ECONOMIC NEWS

CRE technology companies are changing the commercial real estate industry. That was the collective viewpoint of a CRE//Tech Intersect gathering of industry professionals last week in San Francisco. “Most of the companies exhibiting at the event tonight haven’t been around for more than two years, but over the last 12 months, they have collectively raised $87 million.”
globest.com

Mayor Edwin Lee and the San Francisco Board of Supervisors has introduced a proposed $500-million general obligation bond for the November ballot that would go toward infrastructure projects aimed at significantly improving San Francisco’s transportation network, without raising property taxes. The bond would increase MUNI reliability and travel speed, upgrade transit stops and stations, improve pedestrian and bicycle safety and prepare for growth on the city’s busiest travel corridors. Key investments planned for the bond include: MUNI Forward Rapid Network capital projects and other transit-improvement projects: $230 million; MUNI maintenance facility upgrades: $70 million; Pedestrian safety enhancements: $68 million; “Complete Streets” projects, including new or enhanced bikeways: $52 million; Transit-stop accessibility improvements: $30 million; Traffic-signal replacement: $22 million.
globest.com

Builder DPR Construction, which specializes in highly technical and sustainable projects, has opened a new, 24,000 SF San Francisco Bay Area regional office at 945 Front St. here. The building is San Francisco’s first official net-zero energy building.
globest.com

Monday, May 19, 2014

SF Bay Area News - May 19, 2014

ACQUISITION NEWS

Columbia Pacific Advisors, a Seattle-based alternative investment firm, acquired 939 Ellis Street, an office building that has approximately 116,000 total square feet. The property is located in downtown San Francisco’s notable Van Ness Corridor, an area that has experienced explosive growth in recent years.
theregistrysf.com

1001 Van Ness Avenue in San Francisco to a partnership between South Beach Partners and Oryx Partners. The 106,777-square-foot commercial property has served as the broadcast and office base of KRON Channel 4 television since 1967. The station will be relocating to a new facility in the North Waterfront later this year, paving the way for the new ownership to redevelop the property.
theregistrysf.com

Forget the Transbay district and Rincon Hill. These days the real development buzz - and big investment bucks - is swirling around the four windy corners of Van Ness and Market. Last week the Boas family confirmed that a deal is in place to sell the Honda of San Francisco parcel at 10 South Van Ness Ave. to developer Crescent Heights, a $50 million transaction that could bring 700 homes to the neighborhood. The same day, another national developer, Related California, said it was in contract to buy the site across the street, the Goodwill Industries' 2.3-acre campus that sits just behind One Van Ness on the 1500 block of Mission Street. Related could build 600 units there.
sfgate.com

DEVELOPMENT NEWS

A new ballot measure could go before voters in November to raise height limits for waterfront development at Pier 70, allowing a major development at the pier to move ahead. The new measure, pushed by Pier 70 developer Forest City, comes as height limits along San Francisco’s waterfront have become a hot political topic. Proposition B, which qualified for the June ballot, would give voters the power to limit tall projects along the city’s edge.
bizjournals.com

The UCSF has chosen SKS Partners LLC and Prado Group for the redevelopment of its 10.3-acre Laurel Heights campus and has begun exclusive negotiations with the duo aimed at agreeing a long-term ground lease. The site sits across from the Jewish Community Center and could remain as an office property though it is zoned for residential development at a density that would allow about 550 units on the site, or as many as 700 with certain planning approvals.
bizjournals.com

The fight over a proposed 350-unit housing development above the 16th Street BART station is heating up. The Plaza 16 Coalition, which opposes any market rate housing above the BART station on the east side of Mission Street, is holding a community forum Thursday night on the proposed project.
sfgate.com

ECONOMIC NEWS

Real estate: Where are the women? The email set off a flurry of reactions: “shameful,” “antiquated,” “shocking.” It was all in response to an announcement about a panel discussing commercial real estate. Presented by a national organization, the forum boasted CEOs, financiers, chairmen – and not one woman among them.
bizjournals.com

Technology start-ups swallowed up most of the available large blocks of office space in downtown San Francisco in the first quarter of this year, pushing up rents at class-A buildings and leaving little space for other firms, even with about three million sq. ft. of new construction now in the pipeline. Office leasing activity in San Francisco shot up by 25 percent in the first quarter, with six leases signed for more than 100,000 sq. ft.
nreionline.com

Monday, May 12, 2014

SF Bay Area News - May 12, 2014

ACQUISITION NEWS

Another two units at 490 Post Street sold to separate buyers last week. We now have only one 600 SF space available in the entire 129,000 SF building.

1884-1886 Market Street, San Francisco sold last week for $1,500,000 ($476 PSF). This 3,150 SF retail and residential building sold to an investor at a 4% cap. rate (5% proforma cap).

36 Monterey Blvd, San Francisco sold for its asking price of $875,000 ($355 PSF). This 2,465 SF, 3 story, office building was built in 1995.

DEVELOPMENT NEWS

Crescent Heights to buy site for second Mid-Market high-rise project. Developer Crescent Heights is expanding its Mid-Market presence with a deal to buy the Honda site at 10 South Van Ness Ave., which could hold up to 700 units of housing.
bizjournals.com

A surge of new condominium projects in San Francisco may indicate an easing of the city’s inventory crunch, according to The Mark Company, a leading urban residential marketing and sales firm, handling multiple developments scheduled to come online this year, including The San Francisco Shipyard, Arden, Amero, 8 Octavia, 870 Harrison and 35 Dolores.
theregistrysf.com

Below-Market Mid-Rise Housing Project Opens in Transbay Neighborhood. Featuring a matrix-like, turquoise-mottled fa├žade and highly environmentally sustainable elements, the Rene Cazenave Apartments at the corner of Essex and Folsom streets should fit right in with the ultramodern, forward-thinking design and vision for the Transbay area.
theregistrysf.com

ECONOMIC NEWS

White-Hot Tech Sector, Highest Construction Pace in Years Push San Francisco’s Strong Rental Market.
cpexecutive.com

Bay Area ranks as the best commercial real estate market in the country, again.
bizjournals.com

San Francisco’s unemployment rate declined to 7.4 percent in May after hovering near the 8 percent national average at the start of the year. Job growth, primarily driven by the technology sector, is helping to fuel the current period of strong leasing activity. Across the city vacancy rates are down an average of 3.6 percent from a year ago, and nearly 1 percent lower than last quarter. Vacancy rates have steadily declined in the last two and a half years with the past few quarters taking on steeper decreases. In highly competitive neighborhoods like SOMA, Class A buildings have a mere 2.6 percent vacancy rate, and a notable average asking rent of $57.50 per square foot (psf) full service.
theregistrysf.com.com

The Left Coast Strikes Back: San Francisco fights to keep George Lucas Museum here, not in Chicago.
bizjournals.com

Monday, May 5, 2014

SF Bay Area News - May 5, 2014

ACQUISITION NEWS

660 Broadway Street, San Francisco, a 12,946 SF commercial building in Chinatown sold for an unknown price recently.

There is a small boutique Union Square building approximately 1,800 square foot single-tenant retail building located on Maiden Lane that has just come on the market for sale. I am not the Listing Broker but if you are not familiar with it and would like more information please let me know.

DEVELOPMENT NEWS

California Pacific Medical Center, which faced a decade-long struggle to start construction on a new campus at Geary and Van Ness in San Francisco, has completed a big milestone on the $2.1 billion project: Completing demolition of the decrepit Cathedral Hill Hotel. The Sutter Health affiliate said Wednesday that demolition, which started last September, is complete.
bizjournals.com

San Francisco is close to finalizing a deal to rehabilitate a collection of battered buildings on the waterfront (Pier 70), transforming them into new space for offices, manufacturers and artists. The San Francisco Port Commission, as soon as May 13, will be asked to approve a $100 million lease and development agreement with Orton Development Inc. to convert six buildings along 20th Street south of Mission Bay. The area is considered the most historically important cluster of buildings in the oldest working civilian shipyard in the United States.
bizjournals.com

Controversy surrounding proposed San Francisco waterfront developments helped push the Golden State Warriors to scrap plans for a new stadium at Piers 30-32 in favor of purchasing land for the arena in the city’s Mission Bay area. The move comes on the heels of city election officials certifying a June ballot measure that, if approved, would require voter consent to increase existing height limits on waterfront projects.
theregistrysf.com

ECONOMIC NEWS

San Francisco Mayor Ed Lee wants to find a site for "Star Wars" filmmaker George Lucas' planned art museum, three months after the Presidio Trust rejected a proposal for the project. Lee has directed his staff to come up with a list of possible sites, public and private, for the museum.
sanfrancisco.cbslocal.com

Are San Francisco office tenants leasing up too much space? Tech companies are the main driver of office leasing, and while many of them do generate revenue — unlike during the last tech boom — landlords still take on significant risks on growing or startup tenants, said Ken Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California Berkeley.
bizjournals.com

Monday, April 28, 2014

SF Bay Area News - April 28, 2014

There are a number of Cinco de Mayo events this coming Friday. I’m thinking of attending the one at Sedgewick’s law office.

ACQUISITION NEWS

Alexandria Real Estate Equities, Inc. says that an affiliate has acquired a 1.23 acre site at 500 Townsend Street. This AAA location at the intersection of Alexandria's Mission Bay science and technology campus and the South of Market ("SoMa") technology district provides Alexandria with a unique opportunity to strategically expand its Mission Bay cluster and capture strong demand for this submarket from prospective client tenants looking for a collaborative, 24/7, live/work/play environment.
globest.com

Yet another office condominium sold at 490 Post Street, Union Square. For those businesses looking to own rather than rent their office space, may not be in luck for much longer.

Atlanta-based Columbia Property Trust has paid $228.8 million or $589 PSF to acquire the 387,943 SF office building at 221 Main Street in San Francisco. “I would say that this investment is a core plus to value-added kind of real estate investment. This is mainly due to the occupancy and where the rents are in the complex now compared to market rents,” says Tripp Sullivan, a company spokesperson for Columbia.
theregistrysf.com

The Warriors bought the land from Salesforce.com for an undisclosed price. The cloud computing company reportedly purchased 14 acres in Mission Bay for about $278 million in 2010 to be used for its new corporate headquarters. However, the company instead is moving into what will be known as Salesforce Tower, under construction at 415 Mission Street.
theregistrysf.com

DEVELOPMENT NEWS

For the first time in more than a decade, a new office building is coming to the financial district in San Francisco. Lincoln Property Co. just lined up a Chinese investor to start construction on 350 Bush Street and 500 Pine Street, a two-building project that will total 428,000 SF of Class A office space.
bizjournals.com

340 Fremont joins cluster of luxury highrise housing under construction in San Francisco. Equity Residential, a very busy developer of late, recently started construction on a 40-story, 348-unit apartment tower at 340 Fremont Street. The $160 million project joins other residential high rises under construction such as Tishman Speyer’s Lumina, a 665-unit, 42-story tower at 201 Folsom St., and One Rincon Hill II, a 299-unit, 52-story tower from Pacific Global Investors and Urban Pacific Investors.
bizjournals.com

ECONOMIC NEWS

DPR Construction will be changing San Francisco offices for the first time in 18 years, trading a room with a view for a greener one. In fact, it would be the first net zero energy certified office building in the city, meaning it produces the same amount of energy that it uses.
bizjournals.com

Monday, April 21, 2014

SF Bay Area News - April 21, 2014

Two interesting events this week, one on Tuesday evening and the other all day Friday. The BABC St. George's Day Celebration and New Member Drive at Hotel Vitale is this Tuesday. Enjoy spectacular views from the roof-top deck and mix and mingle with fellow BABCers and potential new members of the BABC babc.chambermaster.com. Also, the CREW California Conference this coming Thursday evening through Saturday crewca.org.

ACQUISITION NEWS

New York City-based TIAA-CREF will be getting a four cap rate on its purchase of the 379,330 square foot 55 2nd Street office building in the South Financial District in San Francisco, according to sources familiar with the transaction. This return is based on the current net operating income being produced by the property.
theregistrysf.com

Sale of SoMa McDonald's site across from Giants' ballpark could set records.
bizjournals.com

3140 16th Street, in the heart of the Mission District, San Francisco just sold. Urban Group represented the Seller of this 20,400 SF property. Cornejo stated, "The Mission District is a vibrant neighborhood in high demand and 3140 16th is in the midst of all the excitement." The property received multiple offers, selling at $8.7 Million. This transaction constitutes one of San Francisco neighborhood districts' largest commercial sales in the last year. The Buyer, a private investor, plans to repurpose the building from its current use as an auto body shop.
digitaljournal.com

DEVELOPMENT NEWS

More than a quarter-century in the making through a combination of public and private financing, the city’s Transbay Redevelopment Plan will transform the nearly 40 acres in San Francisco’s SoMA district south of Mission Street by bringing more than 4,400 housing units, 11 acres of new public parks and nearly 1,000 hotel rooms, along with 100,000 SF of retail and six million SF of office space. The crown jewel of the redeveloped area, the 1,070 foot Transbay Tower, should open by 2018. The city’s tallest building, it will sit adjacent to the redeveloped Transbay Transit Center for a combined cost of $4.5 billion. The latter has been designed as a regional transportation hub already dubbed the “Grand Central Station of the West.”.
theregistrysf.com

ECONOMIC NEWS

Salesforce.com’s close to $1 billion investment in the Salesforce Tower is the kind of deal that would normally take at least a year to put together. But when talks between Salesforce and developers Boston Properties and Hines got under way last December, both parties kicked into high gear, the chairmen of both sides were involved on a daily basis, to get the 714,000 SF lease done in about five months.
bizjournals.com

The San Francisco Office market ended the first quarter 2014 with a vacancy rate of 9.2%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 387,772 SF in the first quarter. That compares to positive 613,157 SF in the fourth quarter 2013. Vacant sublease space increased in the quarter, ending the quarter at 1,336,596 SF.
costar.com

New office buildings in San Francisco are filling up years before they’re ready for occupancy. Much of the 5.5 million SF of new Class A office that will be added in the next four years is pre-leased, meaning rental prices could continue increasing significantly.
bizjournals.com

A combination of lack of new supply, the strength of technology and energy tenants and a deep talent pool is responsible for strong absorption in the San Francisco office market, Maria Sicola, head of research for the Americas for Cushman & Wakefield, tells GlobeSt.com. Q1 US office-market absorption increases of 133% year over year, with San Francisco’s occupancy gains coming in at 1.2 million SF for the quarter, behind Midtown South New York (1.7 million SF) and Chicago (1.4 million SF).
globest.com

Tuesday, April 15, 2014

SF Bay Area News - April 15, 2014

This evening, Tuesday April 15 RICS Northern California is having an educational event providing refreshing insight into our 'Rules of Conduct,' their relevance in practice, and overall importance to RICS. This event is generously sponsored by Clark Construction. Open to those curious about the RICS as well as members. All sign-up were meant to occur by 5PM on Monday. If you would like to attend please let me know as soon as possible and I will see if I can add you to the list (building security means that walk-ins are not permitted).

ACQUISITION NEWS

During the 1st Qtr this year, Norges Bank, the Norwegian sovereign wealth fund, acquired a 48% interest in 425 Market Street. Asian buyers picked up 1550 Bryant Street and 211 Sutter Street, and 225 Bush Street is in contract with a Chinese buyer. The quarter’s largest investment transaction was Invesco’s purchase of 101 Second Street for $765 psf at a sub-4% cap rate. “With mounting pressure to place money here, potential buyers are lowering their size threshold and are willing to invest in smaller deals,” added Caroline Rooney, managing director for Capital Markets Research at Cushman & Wakefield.
globest.com

Another office condominium was closed by me last week at the asking price. Only three units left available in the approximately 130 unit, Union Square medical office building. Prices are now averaging over $650 PSF.

LaSalle Hotel Properties has acquired Hotel Vitale, a 200-key lodging in San Francisco, for $130 million. The hotel was purchased subject to a ground lease with the City & County of San Francisco, Municipal Transportation Agency, which expires on March 8, 2070. The company funded the acquisition with borrowings from its senior unsecured credit facility.
cpexecutive.com

DEVELOPMENT NEWS

There are now two non-entitled development sites in the South of Market neighborhood in San Francisco up for the sale that will test the investor demand for these projects. The two locations are 701 3rd Street and 500 Townsend.
theregistrysf.com

New residential condo development in Hayes Valley to kick off. San Francisco-based 7×7 Development is planning a new 69-unit condominium development at 388 Fulton Street in the Hayes Valley region of San Francisco. The company recently acquired the .29-acre site for a price in the neighborhood of $11 million, according to sources with direct knowledge of the transaction. Included in the purchase price were the design plans and contracts with consultants who had worked on the project over the past two years from the previous owner.
theregistrysf.com

A new VA Medical Center in San Francisco, the project everyone seems to want to happen, may not happen at all. Or maybe it will. On the eve of a report from the Bay Area Council Economic Institute that clearly outlines how a public-private partnership may help the San Francisco medical center move from near Lands End to Mission Bay, the project's future appears uncertain. But there also seems to be a lot of work, of the "nondisclosure agreement" variety, happening behind the scenes. "I certainly think within the year" there will be movement on the project, Mayor Ed Lee said Friday.
bizjournals.com

Developers plan to add 5.5 million square feet of new Class A office to San Francisco’s hot market in the next four years, but with much of that space pre-leased, rental prices could continue increasing significantly in the next few years.
bizjournals.com

Second Phase Complete at L+M’s Candlestick Heights Community in San Francisco. New York-based L+M Development Partners celebrated the completion of the second phase of construction this month at the company’s first California community, Candlestick Heights, in San Francisco. Temporary certificates of occupancy (TCOs) are expected at any time for the development’s 130 new rental units that will bring a high-quality affordable living option to The City’s Bayview Hunters Point neighborhood.
multihousingnews.com

ECONOMIC NEWS

Health-Care REITs Get Back on Their FeetCompanies that own health-care facilities such as clinics and nursing homes, once viewed as one of the safest and most dependable sources of real-estate income, were spurned last year by investors. This year, though, health-care real-estate investment trusts once again are feeling the love. Since the beginning of 2014, health-care REITs have been among the top performers in the REIT sector.
wsj.com

The recovery of the Bay Area’s real estate markets has muted the public outcry to change Proposition 13’s restrictions on assessed value increases. Passed in 1978, Proposition 13 has come under fire for fostering unequal tax burdens. The reasons that tax-reform fervor is weakening are twofold. First, as the recovery spurs real estate sales, properties will be reassessed at higher market values under Proposition 13’s acquisition value system.
nreionline.com