Last Hotel in Larkspur-Farallon Capital Portfolio Trades Hands in San Francisco

By Alex Girda, Associate Editor

San Francisco’s hot hospitality market continues to heat up, as another hotel transaction joins an already packed roster of deals. It was recently reported that the last remaining property in the Larkspur portfolio was traded to a group of Canadian investors for a total of approximately $16.6 million. The Larkspur Hotel Union Square, the property in question, will now undergo a re-branding process that will see it return to its original identity—the Cartwright Hotel.

Located in San Francisco’s downtown area at 524 Sutter St., the hotel is a 114-key, upscale boutique property that is the last of 11 properties Larkspur has sold in a short frame of time.

The sale of the hotel marks the end of the portfolio that Larkspur Hotels owned in a joint venture with Farallon Capital Management. The property has had a troubled history, having fallen out of contract a number of times before its acquisition by Canadian investors. The transaction was arranged by Richard Ehmer of The Ehmer Group on behalf of the buyer and Eastdil Secured on the seller’s behalf.

The San Francisco Business Times reports that the buyer was intent on acquiring a downtown hotel for quite some time and mandated The Ehmer Group to that effect. A number of for-sale hospitality properties in the city include the Clift Hotel, Harbor Court, Holiday Inn at Fisherman’s Wharf, Hotel Rex, Hotel Triton and Hotel Kabuki. However, the fact that Larkspur’s property charged a per-room fee of $145,614 in a market that normally charges around $300,00 was too good a deal to be passed up.

Image courtesy of tripadvisor.com

For more market data from San Francisco, click here.

City of San Francisco to Complete 100K-square-foot Lease Agreement with Laurus

By Alex Girda, Associate Editor

The Laurus Coporation is cashing in on one of its earlier San Francisco Bay Area investments. The company has recently announced it is negotiating a leasing agreement for a large chunk of space at its 1155 Market St. property.

The L.A.-based investment company is currently holding talks with the City and County of San Francisco for approximately 75 percent of the available office space at the building. The city’s Board of Supervisors must first sign off on the move before local authorities are able to move in to 103,000 square feet of space, leaving only three floors open out of the available 11.

Bought for $27 million, the Mid-Market office property will now bear a solid occupancy rate, with the agreement signing imminent. City authorities would benefit from a preferential, below-market rent rate of $31.67 per square foot for the first year of contract. The second year’s rate will record a bump that will bring it to $39.14 per square foot, followed by a further increase of 3 percent during the third year of contract. The negotiated agreement would secure the space for the next 10 years, although the city would have the option of leaving the premises after five years.

According to the San Francisco Business Times, city agencies that would be moving into the new Mid-Market facility would include: treasury, tax collecting, assessor-recorder and public works. Those entities are currently located in a Shorenstein-owned office property at 875 Stevenson. However, the owner’s intention is to get extensive renovations underway at the property and has offered the city $3.25 million for early termination on that agreement. Once the facility is vacated and renovated, Shorenstein Properties intends to re-brand it as One 10th Street, SFBT noted.

As previously mentioned, the City of San Francisco will benefit from a hefty rent rate cut, as 2012 has seen rates surge by as much as 9 percent. Data provided by Marcus & Millichap Real Estate Investment Services shows that the end of the year should see median rates reach as much as $43.05 per square foot, meaning that even after the increases mentioned in the contract, local authorities would still lease the facility at a substantial discount.

Chart provided by Marcus & Millichap Real Estate Investment Services at www.marcusmillichap.com

For more news from San Francisco, click here.

Pebblebrook Hotel Trust Continues Bay Area Expansion with Hotel Palomar

By Alex Girda, Associate Editor

At a time when San Francisco hotels are catching everyone’s fancy and room rates are going strong, it is to be expected that a number of hospitality transactions are being thrown around in the excitement. A case in point would be the recent acquisition of the Hotel Palomar San Francisco by Pebblebrook Hotel Trust. The AAA, four-diamond venue is branded by Kimpton Hotels & Restaurants, and it will continue to be managed by them.

The 196-room boutique hotel is located in the city’s downtown area at the corner of Fourth and Market Streets in close proximity to one of Pebblebrook’s other recent acquisitions—the Hotel Milano. Also nearby is the Moscone Convention Center, one of the city’s largest attractions, as well as the financial district, Union Square and the now famous SoMa office haven.

San Francisco’s Westfield Shopping Centre—home of Bloomingdale’s most representative branch on the West Coast—is also in the immediate vicinity, as well as the second-largest Nordstrom in the country.

Hotel Palomar was built in 1907 and opened under the name of Palomar San Francisco in 1999. The four-diamond, full-service upscale boutique hotel is a 196-key venue offering visitors high-speed WiFi, an honor bar and 37” flat screen TV’s in all of the rooms, while in-room baths feature Etro amenities and Kimpton signature brand bathrobes. 3,000 square feet of space divided into four rooms are designed for meeting purposes. Fitness facilities, hosted evening wine receptions and valet parking are also part of the hotel’s package.

Pebblebrook moved to acquire a hotel that, in 2011, operated at 81 percent occupancy with an average daily rate of $222 and room revenue per available room of $178. Part of the deal for Hotel Palomar is that the company will have to assume a $27.2 million non-recourse secured loan with a fixed annual interest rate of 5.94 percent.

For a more in-depth take on the acquisition of the Hotel Palomar San Fancisco, click here.

For more market data from San Francisco, click here.

Owners Looking to Charge Premiums for Bay Area Residential Complexes

By Alex Girda, Associate Editor

San Francisco is living its own private residential boom, and investors are looking to cash in on the demand for mid-Market residences. The San Francisco Business Times reports that apartment developer Archstone is currently looking to offload one of its larger Bay Area properties in the hopes of getting a hefty payday. The company has designated Colliers International to handle the sale of its 443-unit Archstone Fox Plaza Apartments, located on the top levels of a Market Street high-rise.

The Fox Plaza listing that Archstone has made available for sale also includes a neighboring development site with approvals in place for a 250-unit residential development and an underground parking facility with 399 spaces. Attached to the mixed-use tower is a two-story retail building currently housing a Starbucks, as well as other shops. That building would be leveled should plans for the additional building go ahead.

According to industry professionals, the listing should fetch the seller around $150 million.

1390 Market Street is a 1960-built concrete construction developed by the Cahill family. The first 13 floors of the building feature office space that Archstone sold out to Broadreach Capital in 2007. The 232,000 square feet of office space then got the company $42.7 million. Archstone initially bought the entire building in 2005 for a total of $147.5 miilion.

In other news, the city of San Jose is set to record a $148 million transaction after Essex Property Trust announced the acquisition of Willow Lake Apartments. The local apartment complex offers up 508 residential units featuring one-, two- and three-bedroom floor plans. The complex is set for a $4.5 million exterior renovation process that will be handled by the new owner, the San Jose Business Journal reports.

According to data supplied by Marcus & Millichap Real Estate Investment Services, the overall sales trend for the city of San Francisco is not as high as it should be, with 2012 set to trail 2011′s figures slightly. However, the nearing sale of Archstone’s 443-unit multifamily property would almost double the average per-unit sales values that the city has seen this year.

Image courtesy of Archstoneapartments.com

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

Warriors Arena Gets Development Team as Architect Unveils New Design

By Alex Girda, Associate Editor

A new hurdle was recently cleared in the process of delivering a new sports arena to the city of San Francisco, as the project finally has a construction deal. The San Francisco Business Times reports that companies Hunt Construction Group and Webcor have been awarded the coveted contract.

The developing team won the construction deal to the detriment of three other competing bids, one of which was submitted by Turner Construction. Set to be developed on a site at Pier 30-32 just next to the Bay Bridge, the arena’s design was only recently unveiled by project architect Snohetta, according to which the oval-shaped arena will stand 135 feet tall.

The Golden State Warriors confirmed they are crossing the Bay back to San Francisco after four decades of residency in neighboring Oakland. The currently struggling franchise is set to move out of the Oracle Arena, with the new project reportedly offering around 2,000 seats less than the 19,500-seat Oakland facility.

The $500 million development should be completed by the beginning of the 2017-2018 season in order to match the expiration date on the lease the Warriors have in place with the Oracle Arena.

Additionally, Webcor has partnered up with Hunt Construction Group—a company known across the country as one of the prominent stadium and arena developers—to develop the project. The Scottsdale-based contractor has wide experience in sports-centric projects, and its current completion record boasts dozens of such constructions. Brooklyn’s $485 million Barclays Center, the New York Mets’ $600 million Citi Field, San Francisco’s very own AT&T Park, Nationals Park in Washington and the brand new home of the St. Louis Cardinals—Busch Stadium—are all part of Hunt’s impressive portfolio.

Rendering courtesy of snoarc.no

Sunnyvale Set to Steal Tenants from Neighboring Submarkets; Legacy Pounces on Development Opportunity

By Alex Girda, Associate Editor

The improving office market in Silicon Valley is making its effects known, as landlords and developers scramble to get as much space as possible while the spike lasts. Yet while the area is set to continue to generate interest due to the presence of giants such as Facebook and Google, there is a sense of urgency in the actions of companies like Legacy Partners.

Legacy just recently announced that it is set to expand one of its Sunnyvale properties by 107,000 square feet. The company intends to develop a brand new office/research and development venue at the Sunnyvale Business Park, a property that already includes nine buildings.

Set to be built at 600 W. California Ave., the new building will most likely be a single-tenant property, built over three stories and offering Class A office and R&D space. The entire complex currently totals 516,760 square feet and is located in Sunnyvale’s Peery Park, a submarket that has seen growing interest from businesses that can’t or prefer not to pay the Mountain View and Palo Alto premiums. The tenth building of the Sunnyvale Business Park is being marketed by Colliers International and has a completion date set for Q3 2013.

According to data from CBRE, Silicon Valley’s vacancy numbers are just above the 10 percent mark, while net absorption is currently at about -150,000 square feet. In terms of rent rates, Sunnyvale has mid-range prices, trailing the Valley’s average rate for Class B offices, while only Cupertino, Palo Alto and Mountain View/Los Altos exceed the city’s Class A office rates.

Chart courtesy of CBRE Commercial Real Estate Services at cbre.com 

Virtú Investments Picks Up SoMa Luxury Apartment Complex

By Alex Girda, Associate Editor

Virtú Investments, a locally based real estate investment management firm, recently announced the purchase of a small apartment community in San Francisco’s SoMa neighborhood. The Station House Apartment Community is part of Mint Plaza, a mixed-use promenade area located in one of the most coveted spots of the city. Virtú paid $16.6 million for the condominium property, a per-unit rate of $664,000.

Built in 1900 to serve as a local fire station, the structure entered into an adaptive re-use process that turned it into a high-end residential building. Built with concrete and steel, the luxury redevelopment was completed in 2007, catering to upscale renters. According to a statement issued by the new owner of Station House, the building’s units are designed as condominium units, and although currently leased out, can be resold on an individual basis.

The units feature great finishes, including 10.5’ ceilings, over-sized industrial metal windows, gourmet kitchens, wooden cabinets, granite countertops, glass bar-tops and stainless steel appliances. The building offers a two-level restaurant/lounge space, as well as a stacked parking facility. Resident amenities include a gym, spa and outdoor barbecue area.

The luxury condominium property is located in immediate proximity to the Bay Area Rapid Transit (BART) station and a San Francisco Municipal train station, providing easy access to all residents. The Mint Plaza promenade in which Station House is located is a theme-based complex in which buildings have been redesigned in order to conform to a certain design pattern. The site offers nearby residents coffee shops, restaurants, office space and entertainment venues.

Image courtesy of  mintcollectionsf.com

Massive Office Development Could Spur Palo Alto Downtown Re-branding Frenzy

By Alex Girda, Associate Editor

The City of Palo Alto is set to see a massive office development take shape in one of its prime downtown areas. Local authorities have teamed up with philanthropist John Arillaga in order to get a four-tower office complex at 27 University Avenue that, if done right, could also result in a new theater for the city. According to Palo Alto Online, city officials are debating whether to submit the issue to the public through a voting measure that could take place as soon as spring of 2013.

Set to be located near the downtown Caltrain station in Palo Alto, the development would take shape on the site where the MacArthur Park restaurant currently sits, meaning that the dining spot would have to be relocated in order to make way for the ambitious development proposal.

Palo Alto Online noted that the office project has already gained traction with local officials, an observation confirmed by the glowing report provided by the city’s planning staff. The proposal was praised there as “an unprecedented opportunity to transform the centrally located, transitional area between downtown Palo Alto and Stanford University.”

Local officials are inclined to encourage the project, as it will facilitate a number of other projects and ideas going for the city of Palo Alto. The list includes improving the Intermodal Transit Center, the Stanford Shopping Center, Stanford Hospital and Stanford University.

Such a comprehensive reworking of Palo Alto’s downtown could also get other plans off the ground, most notably a new performing arts center, providing a new home for TheaterWorks. There is also a broader plan to transform the area between the Caltrain station and El Camino Real into an “Arts and Innovation District.”

Silicon Valley suffered in 2011 in terms of the amount of office space developers completed in the area, but 2012′s figures seem to have stopped that downward trend. The need for office space in the tech-driven area is on the rise again, and the aforementioned Palo Alto office development seems likely to improve the area’s tally.

Chart courtesy of CBRE Commercial Real Estate Services at cbre.com

For more market data from the San Francisco Bay Area, click here.

50 Beale Street Trades Hands as Rockefeller JV Acquires Office Tower

By Alex Girda, Associate Editor

The Rockefeller Group recently announced the acquisition of a class A office property in San Francisco’s South Financial District. A joint venture that the company created with Mitsubishi Estate New York has closed a deal securing the 50 Beale Street tower as the third acquisition the partnership has completed since its creation. The financial terms of the deal were not disclosed.

The 23-story office tower was built to serve as the Bechtel Corporation’s headquarters. Designed by Skidmore Owings & Merrill LLP, 50 Beale St. stands at the intersection of Beale Street and Mission Street just two blocks from the massive upcoming Transbay Transit Center. When completed, the Transbay development will cost $4.2 billion in the hope of producing the “Grand Central Station of the West”.

50 Beale is a 662,060-square-foot complex that just completed extensive renovations. The building now holds LEED-EB certification by the U.S. Green Building Council. The facility boasts an occupation rate of around 90 percent and a tenant roster featuring big names such as Bechtel and Blue Shield of California. According to the Rockefeller Group’s president and chief executive officer, Kevin R. Hackett, the company is “very pleased to partner with Mitsubishi and to expand our holdings to San Francisco.”

The Rockefeller Group is a company dealing with developing and owning real estate assets while also acting as an investment manager and operator with an extensive history in the field. The company goes as far back as the development of the Rockefeller Center in New York City. Mitsubishi Estate New York is the investment arm of Mitsubishi Estate Co. Ltd, an entity dealing with comprehensive real estate development and investment.

According to projections made by industry analyst Marcus & Millichap Real Estate Investment Services, San Francisco’s vacancy rates are considerably lower than the national average. On the backdrop of a general downward trend, the city is set to see its vacancy rates go even lower by the end of 2012, something that is illustrated by the development of 50 Beale Street.

For a more in-depth look at San Francisco market trends, click here.

Chart courtesy of marcusmillichap.com 

Hines Global REIT Acquires Gap’s San Francisco Headquarters for $180 Million

By Alex Girda, Associate Editor

International real estate giant Hines recently announced the purchase of one of the city’s best known office properties. The company’s subsidiary, Hines Global REIT, has completed the acquisition of 550 Terry Francois, the building that is currently fully under contract with Gap Inc. The real estate investment trust paid $180 million for the Mission Bay district office building. The seller was a wholly owned subsidiary of GLL Real Estate Partners Inc.

550 Terry Francois is a six-story Class A office building offering a total of 282,773 leasable square feet of space. Completed in 2002 after a design by Studios Architecture, the building is divided into two wings connected by a central open core. The resulting J-shaped floor plate is one of the buildings most notable features. The building is LEED Gold certified and features under-floor HVAC and 12-foot ceiling heights for a loft-like ambiance.

Amenities at the building include a coffee shop and company-operated cafeteria that ensures employee dining. Parking at the building is ensured by a six-story parking structure offering 308 stalls for the property’s use. Hines Global REIT CEO and president, Charles Hazen, praised the addition of 550 Terry Francois to the company portfolio because of the building’s “premier location, its state-of-the-art design and strong credit tenancy.”

Gap Inc. owns the full lease for the building through 2017, and it is currently using the facility as the headquarters of its successful Old Navy brand. The buyer was represented in the acquisition deal by Hines, who will also stay on as the property manager. The seller was advised throughout the transaction by real estate company Eastdil Secured. Hines Global REIT is a Houston-based, public, non-traded real estate investment trust that currently owns 20 commercial investments worldwide.

For more San Francisco Bay Area market data, click here.

Photo courtesy of studios.com

Treat Towers in Walnut Creek Trade Hands

By Alex Girda, Associate Editor

MetLife recently acquired Treat Towers in one of the largest office deals in the East Bay this year, trading for around $120 million. The property was bought from Chicago-based Equity Office Properties Trust, who co-owned the Treat Towers with a TIAA-CREF retirement fund.

The twin 10-story office buildings offer around 374,000 square feet of space, easily accessible via nearby I-680 and the Pleasant Hill BART Station. The two towers are connected at their base by a plaza featuring reflective water fixtures and tree-lined walkways. The outdoor patio area of the onsite café offers additional seating at the plaza.

Additionally, keycard parking is available for all customers, with ticketed parking facilities available for all visitors in the six-level, 1,100-seat covered parking structure; additional parking is easily accessible at the nearby BART station. Treat Towers also offers a fitness center, a conference center, a professional board room and banking facilities.

The 1999-built Class A office complex was recently awarded a LEED Gold certification from the US Green Building Council, a feature the new owner will most likely advertise as it attempts to fully lease the property. At the time of the transaction, the Treat Towers were 85 percent leased.

MetLife currently owns a portfolio worth around $60 billion and is a subsidiary of MetLife Inc., a company dealing with insurance, annuities and employee benefit programs. MetLife represented itself during the acquisition process, while the seller was represented by a team of brokers from Holiday Fenoglio Fowler.

The per-square foot rate MetLife paid for the Treat Towers sits at around $315, which fits in with predictions made by Marcus & Millichap for the San Francisco area’s office market. The premium indicates a return to form for the market, with 2012’s values now nearing levels the market hit back in 2008.

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

Image courtesy of Commercial Property Executive.

For a more in-depth take on the sale of the Treat Towers, click here.

Alta Bates Summit Medical Center’s New Parking Structure Unveiled

By Alex Girda, Associate Editor

The Alta Bates Summit Medical Center in Oakland has an ongoing expansion project that is apparently starting to get serious attention as one of the early phases of development was recently opened to the public. The Summit Campus’ new parking structure was opened recently and is a reminder of the $350 million expansion and seismic rebuild project that the health care facility is currently undergoing.

Construction of the Providence Parking Garage lasted for almost two years, according to company officials quoted by the San Francisco Business Times. The facility will offer seven levels of parking, six of which are above ground. Alta Bates Summit Medical Center’s brand new garage offers 397,800 square feet of space, most of which is divided between the 1,067 available parking spaces.

The building was designed by Watry Design Inc., an architecture firm that is also responsible for the new Entry Pavilion parking structure at the Community Hospital of the Monterrey Peninsula, four of Standford University’s parking facilities and a number of BART-related parking structures across the Bay Area. General contracting duties on the project were carried out by Overaa Construction.

The building is surrounded by trellis walls and vines, as well as planted areas, and entry is ensured via secured access. As previously stated, the Providence Parking Garage is just an early phase in the massive expansion project that is the Summit Campus. Alta Bates’ new Patient Care Pavilion will be a 238-bed medical structure, with an early 2014 deadline. The $300 million hospital’s exterior is almost ready, and Devenney Group Ltd.’s design for the building is already visible.

Photo courtesy of altabatessummit.org

For more market data from the San Francisco Bay Area, click here.

Fortinet Acquires Facility Potentially Groomed for New HQ

By Alex Girda, Associate Editor

A company dealing with national and international network security is set to expand after a recent property purchase in Sunnyvale. Fortinet Inc. is the new owner of 164,099 square feet of space at 895 Kifer Rd. on a 10-acre lot. The California-based tech company acquired the facility for a total of $14.5 million at a per-square-foot rate of $88.36.

The facility is located on the same street as the company’s current headquarters, located at 1090 Kifer Rd. Fortinet owns 107,000 square feet at that address and, according to the Silicon Valley Business Journal, it is currently unclear whether the company will cease to inhabit this facility. While such has yet to be decided, it is clear that the new owner will look to renovate the space in order to be able to use it properly.

The deal was brokered on behalf of both the buyer, Fortinet Inc., and the seller, Electra LLC, by Cassidy Turley. According to the agent handling the seller’s end, the building has been awaiting a transaction for some time now, having been put up for sale as a result of the economic downturn. However, given that the property is located in close proximity to Highway 101 and Highway 237, the fact that the property is close to the company’s current headquarters made it a logical purchase for the expanding company.

Fortinet is currently a publicly traded company with a market cap of $3.78 billion. Renovations at the building will commence as soon as possible, with a potential move reportedly set for the next couple of years.

For more market data from the San Francisco Bay Area, click here.

Green Energy Researchers Look to LEED Gold Building to Serve As New Facility

By Alex Girda, Associate Editor

The Energy Biosciences Institute has announced that it’s moving into its new home—five years into its initiative to come up with energy alternatives. The building at 2151 Berkeley Way building will be shared with researchers from the University of California’s Department of Bioengineering, and approximately 300 researchers will be moving from facilities like the Calvin Laboratory operations center in order to reunite all staff under the same roof.

The facility is located at the northwest corner of the University of California campus at Oxford Street and Hearst Avenue. The five-story state-of-the-art structure will offer 113,000 square feet of space. Construction on the property began after the demolition of an abandoned state health building in 2010 and carried on to eventually being completed ahead of schedule.

The total budget available for the development of the property was $130 million, $40 million of which was obtained through state lease-revenue bonds. The rest of the financing was provided through external financing and gifts.

The development team was headed by UC Berkeley Capital Projects and contractor Rudolph & Sletten, with architectural duties handled by The Smith Group. The building’s design and features mimic the highly technological nature of the tenants’ work with automated outside window shades, a lighting control system with building sensors and an auto-adjusting air exchange system.

The building’s green sensibilities have earned it a LEED Gold certification, as well as an Overall Sustainable Design Award by the Higher Education Energy Partnership Program of California. It is in this eco-friendly environment that the Energy Biosciences Institute will go on researching non-food-sourced, renewable cellulosic biofuels and test their applicability to existing technologies.

Rendering courtesy of berkeley.edu

For more market data from the San Francisco Bay Area, click here.

Micro Apartment Complex Attempts to Take Bay Area Residents by Surprise

By Alex Girda, Associate Editor

It’s all about one-bite appetizers and shot-size cocktails these days, and now it looks like less is more in the living department as well. 300-square-foot apartments offer a frugal living space, but student housing developer Patrick Kennedy seems confident that those who crave city life above everything else will embrace the micro-apartment concept he is proposing.

His company, Panoramic Interests, has 13 mixed-use infill projects in the Berkeley area, and for the last 10 years it has been one of the largest landlords for UC Berkeley students. The company has partnered up with Zeta Communities for this particular project.

Getting ready to be opened in San Francisco’s South of Market district, the prefabricated building will consist of 23 compact units built on a 3,750-square-foot lot at 38 Harriet Street. The idea is to get the Zeta Communities-designed units assembled as soon as possible from the company’s Sacramento factory. The apartment building will be unveiled in October.

Zeta Communities provides developers with construction technologies that minimize design and construction costs, in this case contributing the prefabricated components of the upcoming SoMa micro apartment building. As previously mentioned, Zeta will ship out its Sacramento-built units and assemble them at the 38 Harriet Street site in time for the breakthrough complex’s October opening. The potential success of developer Patrick Kennedy’s gamble on smaller units for city-centric residents could usher in a new era not only for the crowded Bay Area, but space-deficient cities across the United States.

Photo courtesy of panoramicinterests.com.

Brookfield Puts 333 Bush Up for Sale; USPS Markets 8 Assets

By Alex Girda, Associate Editor

A second tech boom is ratcheting up demand for office space in the San Francisco Bay Area .This has prompted a number of owners to buy or unload assets, among them  Brookfield Asset Management, the global alternative asset manager that manages a $150 billion portfolio.

Brookfield is hoping to ride the wave to a big payday for 333 Bush Street, a 543,000-square-foot office condominium building in San Francisco. Local professionals speculate that the property could command $500 per square foot, or $272 million. The  firm secured ownership of 333 Bush in 2009, when a Brookfield-controlled fund foreclosed on a $224 million note that the previous ownership had defaulted on. The property is 82 percent occupied.

Also expected to hit the market shortly are seven Bay Area properties and a vacant parcel designated for disposal by the U.S. Postal Service. The initiative is part of a nationwide strategy that calls for selling Postal Service assets. As reported by the San Francisco Business Times, the assets headed for the auction block include:

• 2200 Powell Street, San Francisco – 9,983 square feet
• 910 D Street, San Rafael – 18,950 square feet
• 380 Hamilton Avenue, Palo Alto – 20,920 square feet
• 3875 Bohannon Drive, Menlo Park – 26,185 square feet
• 500 Stone Pine Road, Half Moon Bay – 14,325 square feet
• 150 Harbor Drive, Sausalito – 14,210 square feet
• 220 Park Road, Burlingame – 14,225 square feet
• 1150 Eighth Street, Berkeley – 2.2 acre vacant parcel

Photo courtesy  brookfieldofficeproperties.com

California Fast-Tracks Apple’s HQ “Spaceship” in Cupertino

By Alex Girda, Associate Editor

Apple’s plans to build a cutting-edge headquarters in Cupertino have been placed on the fast track by Gov. Jerry Brown. The state’s decision will help ensure that Apple will make its announced 2015 deadline for completing the project.

Sustainable features anchored the argument  for shepherding the project through the California’s rigorous environmental review. Brown commented that the project “brings at least $100 million in investment to California,” a potential that combined with planned net-zero emissions to earn a streamlined review. Furthermore, Apple qualified for  fast-track status in part because of its use of envionmentally friendly technologies. Fuel cells and 650,000 square feet of photovoltaic panels will provide sustainable energy to more than 12,000 employees.

According to legislation enacted last year, the Cupertino project qualifies as a “leadership project” and therefore would therefore face a streamlined judicial process in the event of court challenges. The Mercury News pointed out that expediting the process  will help ensure that regulators honor the approved timeline.

Apple’s headquarters will showcase a design reminiscent of a spaceship and reflecting Apple’s iconic style. The structure’s clean, circular lines will pay homage to the iPhone, the iPad and the Mac line. It is also among the final projects overseen by the late Steve Jobs, who was intensely involved in the new headquarters’ design development.

Rendering courtesy of cupertino.org

Stockbridge Capital Closes $220M Fund; Targets Value-Add Assets

By Alex Girda, Associate Editor

Stockbridge Capital Group recently announced the final closing of a $220 million fund that will target a wide range of value-added investments including industrial, office, retail and multi-family properties in major domestic markets.

Established in 2011, Stockbridge Value Fund I will focus on distressed and undervalued properties. The entity will then increase value through leasing, recapitalization and renovation. Investment will typically range between $20 million and $50 million.

On that note, the fund recently acquired its fourth property, the 68,000-square-foot Phillips Building in San Francisco’s emerging South Financial District. Located at 246 First Street, the asset was acquired in an off-market transaction. The Phillips Building is situated two blocks from the future site of the Transbay Transit Center. Promising to be the Golden State’s largest transit hub, the $4.2 billion project will  connect eight Bay Area counties to the rest of California via 11 different transit systems. 

San Francisco-based Stockbridge Capital manages a $5 billion portfolio that includes 30 million square feet of office, industrial, retail, residential and hospitality space nationwide.

Photo courtesy of sf-planning.org

Supervisors Clear Way for Talks on Warriors’ Waterfront Plan

By Alex Girda, Associate Editor

The city has taken a giant leap forward toward luring a new major-league sports franchise now that officials have approved  negotiations with the National Basketball Association’s Golden State Warriors. The San Francisco Examiner reports that the city’s Board of Supervisors opted to eliminate the city’s competitive bidding requirement in the case of Piers 30-32, where the Warriors plan to develop a waterfront arena with a signature design.

The decision kick-started negotiations between the NBA franchise and the local Office of Economic and Workforce Development, which will serve as the city’s primary negotiator for the proposed redevelopment. With an agreement on terms expected by September, the plan is on track to go before the city planning commission in late 2013.

 On the multi-family development front, Crescent Heights has snapped up its latest parcel—524 Howard Street, a site near the Transbay Transit Center and one of the few remaining Downtown sites of its kind, the San Francisco Business Times reported. Since upzoning is on the way for the Transbay district, Miami-based Crescent Heights could be able to develop up to 300 units. Other local sites owned by Crescent Heights include 1401 Market Street, 45 Lansing Street and 325 Fremont Street.

Image courtesy of Google Maps.

Kennedy Wilson Takes Upscale Hayward Complex in $87M Deal

By Alex Girda, Associate Editor

Kennedy Wilson has recently completed the $86.5 million acquisition of the Waterford, a 544-unit complex in Hayward. Most of the financing–$68.1 million–was secured through Freddie Mac. Terms are for a 10-year fixed rate of 3.69 percent. 

 The Beverly Hills, Calif.-based firm described the deal as a strategic move into the Bay Area market, near the San Mateo Bridge and Silicon Valley.  Kennedy Wilson Multi-Family Management group president Robert Hart called the Waterford “a very attractive investment.”

The latest pickup brings Kennedy Wilson’s national multifamily portfolio to 14,114 units.

The complex is comprised of 29 two and three-story buildings. Amenities include a fitness center, two swimming pools, spas and a children’s playground. The new owners intend to invest in the property’s curb appeal with planned improvements that include upgrades to landscaping and building exteriors.

For a more in-depth look at Kennedy Wilson’s endeavors click here.