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Transit-Oriented Mixed-Use Project in Palo Alto Secures Financing from Canyon Realty

24 Jan 2014, 8:51 pm

By Alex Girda, Associate Editor

A transit-oriented development project is now underway after financing provider Canyon Capital Realty Advisors secured a loan on behalf of the developers. College Terrace Centre LLC is set to begin work on its project, a mixed-use development located near Stanford University and Stanford Research Park in Palo Alto. Handling development duties for the project will be developed by Redwood City-based, Twenty-One Hundred Ventures LLC.

College Terrace Centre will be built on a 1.4-acre site on El Camino Real, and will total around 66,000 square feet of space. The development will offer a neighborhood grocery store, an open-air market, shops, office space and a freestanding residential building that will offer potential residents eight residential units. The property will also offer on-site parking. Set to be developed between this spring and August 2015, College Terrace Centre will be gunning for LEED certification.

According to a recently issued press statement, the transit-oriented mixed-use development will divide its space as follows: 7,000 square feet of retail space, 45,000 square feet of office space, 9,000 square feet of grocery space, 218 subgrade parking spaces and eight below market rate apartments. The development will offer 300 feet of El Camino Real frontage, in an area frequented by approximately 52,000 cars per day. The proximity of Stanford University and Stanford Research Park will also ensure constant exposure to a highly-educated, young demographic.

In terms of jobs, the development’s Palo Alto location offers proximity to major employers such as Apple, Facebook, Google, Cisco, Yahoo!, Hewlett Packard, Tesla Motors, as well as venture capital and law firms. Palo Alto is at the heart of Silicon Valley, the most prominent tech market in the entire county.

Rendering courtesy of www.collegeterracecentre.com



Invesco Buys 388 KSF San Francisco Office Tower from Hines

15 Jan 2014, 7:49 pm

By Scott Baltic, Contributing Editor

SAN FRANInvesco Real Estate has purchased the 24-story, 388,370-square-foot Class A office tower at 101 Second St. in San Francisco’s SoMa district from Hines, the latter’s San Francisco office announced Friday. The closing took place on Jan. 7, a Hines spokesperson told Commercial Property Executive. Financial terms of the sale were not disclosed.

The building is 90 percent leased, and its major tenants include law firms Clyde & Co. and Reed Smith and public accounting firm Moss Adams.

Hines was advised by CBRE on this latest transaction. The seller had previously bought the building from Cousins Properties, of Atlanta, in 2004.

“This was the ideal time from a capital markets perspective to monetize the value created for our investors,” Ken Jett, managing director in Hines’ Core Fund, told CPE.

“The South Financial District has improved significantly over the past 10 years, and I expect that it will continue to improve for the new owners of the building,” George Clever, senior managing director in Hines’ West Region, said in a release.

“101 Second St. is a strong addition to our national portfolio. The property’s location, quality and leasing status are an ideal fit with our long-term investment approach,” Bill Grubbs, managing director of Invesco Real Estate, also said in the release.

Designed by Skidmore, Owings & Merrill, the building was completed in 2000. Its design features a highly articulated steel frame, a façade of Spanish limestone and light-green glass, and a four-story aluminum-and-glass art pavilion. 101 Second St. achieved LEED Gold certification in 2009.

“After a frenzied investment climate during the past couple of years, the market is entering a period with a balanced number of buyers and sellers,” according to a Thirs Quarter San Francisco market overview from Marcus & Millichap.

“Owners who purchased during the downturn are profit-taking after a significant gain in the value of their assets, while others are divesting to reallocate capital into markets with more potential upside,” the report continues. “Plenty of investors are present to purchase assets, though value-add plays will dominate buyer motivation in the coming year.”

 



San Jose’s Santana Row Completes Agreement With Car Charging Group for New EV Charging Stations

13 Jan 2014, 8:14 pm

By Alex Girda, Associate Editor

The San Francisco Bay ended 2013 on an extremely high note for the local office market, offering great prospects for the area’s real estate market in 2014. To open the year, big green energy news emerged as Car Charging Group, Inc. announced a newly sealed agreement with Federal Realty Investment Trust to expand the availability of EV charging services at Santana Row. Car Charging Group operates at a national level and offers electric vehicle charging services to a wide variety of facilities.

The company is now set to expand the number of available electric car charging stations at the retail center in San Jose, the heart of the fast growing tech market of Silicon Valley. Santana Row is a 647,000-square foot mixed-use development project, one of the prime destinations for shopping and dining. The venue features 70 shops, 20 restaurants, a boutique hotel and a movie theatre. The mixed-use community of Santana Row also offers 615 luxury rental homes, and 65,000 square feet of Class A office space.

According to a recently issued press release, Car Charging Group will answer a growing demand for charging stations at Santana Row, and will continue to follow data it has been tracking since the initial stations installed at the project. Tracking its initial stations, Car Charging was able to determine that additional facilities would be in order at Santana Row. The new stations are located across from the first charging docks, on Level 1A of the Winchester parking garage.

The new chargers are provided by Level II EV charging stations, providing cars with 240 volts with 32 amps of power, that efficiently replenish an electric vehicle’s battery. Car Charging Group Inc. is based in Miami, and also operates out of offices in San Francisco, New York and Phoenix. The company is pushing for the wider adoption of public EV charging.



Holiday Inn Express Hotel Mountain View – S Palo Alto Opens Following $1M Renovation Project

6 Jan 2014, 7:38 pm

By Adrian Maties, Associate Editor

InterContinentalHotels Group has recently added a new hotel to its portfolio in the Mountain View and Palo Alto areas. The Holiday Inn Express Mountain View – S Palo Alto opened at the end of the year after a more than $1 million renovation project.

The hotel is designed with the Holiday Inn brand family’s $1 billion global brand relaunch in mind, the largest project of its kind in hospitality history. It is located in the heart of Silicon Valley, near U.S. Route 101, Interstate 280 and State Routes 85 and 237. Important attractions and businesses, restaurants, shops and cocktail lounges are just minutes away.

“We are very excited to join the Holiday Inn brand family,” says Roshan Patel, general manager. “Our hotel is in close proximity to the many technology companies in the Mountain View and Palo Alto areas and very convenient for business travelers to the area.”

The Holiday Inn Express Mountain View S Palo Alto is a three-story, 46-room hotel. All rooms feature refrigerators, microwave ovens, flat screen TVs, as well as comfortable queen or king-sized beds. Hotel amenities include a 24-hour fitness center, swimming pool, free internet access, business center and more. The Holiday Inn Express Mountain View – S Palo Alto is owned and managed by RPK Investment.

“Holiday Inn Express hotels are designed to be the smart choice for value-conscious business and leisure travelers,” says Heather Balsley, SVP, Americas Holiday Inn® brand family. “With more than 2,200 properties worldwide and 450 more in the pipeline, the Holiday Inn Express portfolio continues to provide our guests with an enhanced-stay experience at a great value.”

Photo credits: InterContinental Hotels Group

 



New Partnership between LaSalle Investment Management and Harvest Properties Completes First Purchase as Silicon Valley Tech Buzz Continues

28 Dec 2013, 12:19 am

By Alex Girda, Associate Editor

Fueled by the numerous investment opportunities that are currently available in the booming tech market of Silicon Valley, commercial real estate company Harvest Properties has moved on the market for one of the most high-profile office assets in San Jose. The full service investment and development firm recently announced the purchase of 60 South Market St. for a fee that was not released to the public. This is the company’s first acquisition as part of the newly formed partnership that Harvest has created with LaSalle Investment Management.

The asset is located in San Jose, the largest city in the area known as Silicon Valley, at 60 South Market St, in the improving downtown area. The 14-story, Class A office building offers tenants 232,536 square feet of office space. According to a recently issued press statement, the building’s common areas recently underwent an extensive renovation process and the amenity package includes a fitness facility, a conference room and outdoor balconies. Placement-wise, the building offers great proximity to transportation, with both Highway 87 and Interstate 280 nearby, as well as the Caltrain line, the VTA light rail, and the San Pedro Market.

As a result of the acquisition, Harvest Properties will take over property management duties for 60 South Market St. A team of representatives from real estate brokerage Eastdil Secured was involved in completing the deal for the office tower. A CBRE team will be in charge of the listings on behalf of the new owner.

Image courtesy of cbre.com



MetLife Announces Stake in Joint Venture that Will Develop 42-Story Residential Tower in Rincon Hill

20 Dec 2013, 10:23 pm

By Alex Girda, Associate Editor

As the San Francisco Bay Area’s office market took off just before the end of the year, a major boost was also given to the area’s luxury residential market. MetLife, the provider of insurance, annuities and employee benefits, has announced its commitment in the development of a brand new multifamily high-rise building that would set the bar for luxury apartment units in San Francisco.

The insurance giant has teamed up in a joint venture with development company UDR, Inc. for an investment in the area’s multifamily sector worth over $300 million. According to a recently released press statement, MetLife will own a stake of 49 percent with UDR holding the majority share.

The JV is set to start work on a 42-story residential tower on a development site located at 399 Fremont Street in the Rincon Hill neighborhood of San Francisco. According to data from MetLife, the total investment will have a value of $317 million and has a construction deadline set for 2016. The high-rise will offer a total of 447 residential units, all of which will be made available at market rate. According to Global Head of Real Estate for MetLife, Robert Merck, the company has “a successful relationship with UDR, and this significant deal in the Bay Area further cements our partnership.”

Set to increase the available stock of high-end residential units, the building will offer residents a generous amenity package. A sky lounge with an observation deck will be part of the package, while a pool, a fitness center, pet care center and a retail component of 3,500 square feet, will also be included. The area features a number of nightlife spots, dining venues as well as the city’s bustling financial district. Transportation will be ensured via nearby BART stations and the in-development Transbay Transit Center.



Another Office Tower Trades Hands in San Francisco as Local Market Soars

13 Dec 2013, 9:45 pm

By Alex Girda, Associate Editor

As the San Francisco office market becomes one of the healthiest local markets in the entire country, the rush is on for investors to capitalize on the impressive appeal of the San Francisco Bay Area before 2013 draws to a close. We’ve recently reported on the major deals completed in the city for high-profile office assets, and now KBS Real Estate Investment Trust III is adding to an already impressive tally of major real estate transactions completed just weeks before the end of Q4. The public non-traded REIT recently shelled out $121 million for an office building in the city’s South Financial District.

The deal included 201 Spear Street, a 246,563-square foot, Class A office tower in San Francisco’s SFD. The Spear St. asset stands 18-story tall on the waterfront of the San Francisco Bay and had an occupancy rate of 82 percent at the time of the transaction. The building’s tenant roster includes names such as Verizon Business Solutions, CoreLogic and Moovweb. With the city seeing improving average rates in terms of vacancy and rent rates over the past year, the new owner will most likely also look to benefit from the high tech appeal the local market currently has.

According to Marcus and Millichap Real Estate Investment Services, the city’s office market saw a surge of 33 percent in terms of deals for the last 12 months ending in October of 2013. However, a large chunk of those deals were recorded in December 2012, just before the end of last year’s Q4. It is apparent that the statistics will show a similar hot streak by the end of 2013. In terms of vacancy, the city is outpacing the national average rate, currently at around 16 percent, with its rate currently at around 12 percent, a level the market has not seen since the downturn.

Chart courtesy of Marcus & Millichap Real Estate Investment Services at marcusmillichap.com



Medical Development and Investment Growing Profile in San Francisco Bay Area

5 Dec 2013, 12:16 am

By Alex Girda, Associate Editor

As 2013 draws to a close, developers and investors are scrambling to get their ventures going before the end of Q4, and increased activity is seen in most sectors of the real estate market. The San Francisco Bay Area has seen an escalation in the health care sector with Meridian Property Co. announcing the development of four medical clinics in California, three of which are located near San Francisco. The three facilities are going to be built in Fairfield, Calif., Walnut Creek, Calif. and Modesto, Calif., with the fourth one taking shape in Pomona, Calif. in the L.A. metro area.

The company is constructing health care-oriented properties worth approximately $15.2 million combined, The San Francisco Business Times reports. The facilities will range in size between 8,200 and 12,000 square feet. All four clinics are set to be developed in anticipation of the medical real estate market going up, company officials noted. The properties will have the possibility to be upgraded and are all situated in desirable spots that are set up for growth.

In other medical real estate news, The Silicon Valley Business Journal has announced a medical clinic transaction completed by Dutra Enterprises. The company has acquired a fully-leased facility from PAR Fremont LLC for a fee of $4.55 million, at a rate of $359 per square foot. The clinic in Fremont, Calif. is currently occupied by a single tenant, namely the Veterans Administration.

The news of Meridian’s development pipeline and the recently completed acquisition by Dutra Enterprises marks the rise of the medical clinic sector as one of the underdogs of the industry. A growing amount of health care-oriented properties are now attracting interest from developers and investors, marking a new growth niche in a rebounding industry.

 

 



$180 M Office Transaction Announces Hong-Kong Investor Great Eagle Holdings’ Arrival to Bay Area Market

2 Dec 2013, 9:27 pm

By Alex Girda, Associate Editor

It’s been a fruitful few weeks for the San Francisco office market, and it recently got even better with the completion of a major off-market office deal. Foreign capital has elevated its presence in the area’s investment market recently and with the acquisition of the 123 Mission St. asset, Hong Kong-based investor, Great Eagle Holdings has made quite the splash. The price tag for the asset stood at around $179 million, and it represents a great foothold for the company in the city’s tech-driven office market.

According to The San Francisco Business Times, the investor worked on the transaction through one of its subsidiaries, Pacific Eagle Holdings out of San Ramon, Calif. The 29-story office building at 123 Mission St. offers tenants 345,000 square feet of office space, making it one of the largest buildings of its kind in the area. The property’s anchor tenant is Salesforce, which leases around 115,000 square feet of space, but will begin freeing up space as it completes its transition to new facilities at 50 Fremont St. and 350 Mission St. The property, also known as the Pacific Gas & Electric Building, currently has a vacancy rate of 12 percent. The facility is LEED Gold certified by the U.S. Green Building Council.

The per square foot rate paid by the Chinese investment company stood at about $516, making it one of the blockbuster deals of the year for the San Francisco office market. While best-in-class properties in the Bay Area usually trade for more than $500/square foot, overall rates have seen a drop this year. According to data processed by Marcus & Millichap Real Estate Investment Services, by the end of 2013, the city will see sales rates decrease when compared to 2012, reaching a median value of around $325/square foot. This marks a drop of around $50 for 2013 when compared to the previous year.

Char courtesy of Marcus & Millichap Real Estate Investment Services at marcusmillichap.com

Image courtesy of 123mission.axisportal.com



Two Landmark Buildings are Acquired as CIM Group Expands and Credit Suisse Enters Local Market

21 Nov 2013, 12:28 am

By Alex Girda, Associate Editor

As the final weeks of 2013 come to a close, the San Francisco office market seems to be heating up with investors eager to tie up their big money deals before the end of the fourth quarter. Two of the largest deals of the year in the local office market were recently completed as Credit Suisse and CIM Group moved on the market to acquire assets. Credit Suisse dished out $105 million for the Adam Grant Building while Los Angeles-based CIM Group paid approximately $48.3 million for the San Francisco Call Building.

The Adam Grant Building is located at 114 Sansome Street and offers 186,785 square feet of office space. The asset’s current vacancy rate stands at around 14 percent, and rent rates at the property are around 20 percent lower than the average value for the market, the San Francisco Business Times writes.

The 14-story historic property is 105 years old, and its last major renovation process started in 2000 with a focus on renewing major building systems and the facility’s common areas. The building has held LEED Gold certification for existing buildings since 2012 and has an Energy Star score of 93, both major selling points for a property of its kind. Credit Suisse has chosen the Adam Grant Building as its first San Francisco purchase, with the company already owning assets in major markets such as New York, Boston, Chicago and Washington D.C.

The other recent major acquisition was completed by CIM Group, when the company acquired the Call Building asset at 703 Market Street. The buyer paid a per square-foot rate of around $350 for the 93,000-square-foot property that is also known as Central Tower, with a 45,000 square-foot annex also part of the deal. The building has been around for more than a century and has been under the ownership of the same family for the past seven decades, SFBT writes. The property is 87 percent occupied and has a tenant roster of about 100 names that fill its 21 stories. The building has received tons of praise throughout its existence, not only for its architecture, but also for its build quality, having resisted the San Francisco earthquake of 1906.







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