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Twitter Driving Housing Growth in Mid-Market; Shorenstein Signs Fitness Facility at Twitter’s HQ

14 Nov 2013, 1:10 am

By Alex Girda, Associate Editor

 The influence of major tech companies in the San Francisco Bay Area has made the Peninsula, San Francisco and Silicon Valley one of the best markets in the nation. While most people discuss Google, Apple and Facebook as major influences, it was Twitter that made the headlines this week, with the success of its recent IPO and the developments at the office building that serves as its current headquarters.

Twitter’s success has sent apartment prices soaring in the neighborhoods near the company’s Mid-Market headquarters, according to a report in the San Francisco Business Times. The success of the social networking platform’s recent IPO has further driven the area’s housing units to rent rates of $5,000 for two-bedroom apartments in the Upper Market and higher for three-bedroom units. The easy access to public transportation and dining options in the area, combined with the success of Twitter is ballooning interest for the area’s housing.

As its shares soared, Twitter’s headquarters received a new addition as Shorenstein Properties, the landlord at the One 10th Street facility, announced that it had completed an agreement with Fitness SF. The new location will be the operator’s sixth location in the Bay Area, as it has also recently acquired a new location in the Fillmore, the SFBT reported.

The office asset is set to welcome a new tenant as the fitness company is set to open a brand new gym at the site. The new fitness center will occupy 23,000 square feet of the 300,000 available at the building. One 10th is part of the Market Square complex that also includes the building at 1355 Market St. and totals about 750,000 square feet.

Image courtesy of shorenstein.com



Related California Proposes Massive Project as New Core for Santa Clara

30 Oct 2013, 11:19 pm

By Alex Girda, Associate Editor

Santa Clara is set to have a brand new focal point after Related California announced its plan to develop a large city-center-style project. The plan is currently under review by the Santa Clara City Council’s Sports and Open Space Authority, to determine whether the massive initiative will be given the green light. Should Related go ahead with the mixed-use development, the area will add a large number of residential units, office space, retail spots, dining options and jobs, all contributing to the growth of Santa Clara.

According to a press statement issued by Related California, the company’s plan is to develop a new core for Santa Clara, one that would include 1.5 million square feet of retail, 2.4 million square feet of other commercial space, around 530 housing units, as well as a hotel facility. The idea has received quite the backing, with Santa Clara Mayor Jamie Matthews declaring himself a fan of the initiative.

Matthews said that “since the destruction of our historic downtown in the 1960s, our residents have longed for a city center.”

Related consolidated its position in the area in April when the company signed an exclusive negotiating agreement with the city.

The proposed location of the massive development plan would be just north of the new Levi’s Stadium, in the immediate vicinity of the Santa Clara Convention Center and the Great America amusement park. The spot was clearly an important factor for the developers as the President of Related California, Bill Witte, recently expressed.

“Our vision is to create a project that blends the best living, entertainment, shopping, and dining experiences from the surrounding area to what will be a thriving community and economic engine,” Witte says.

Mayor Matthews expressed his support again when discussing location, having said that “this location is ideal because of the transit options,” praising the unique combination of freeway and rail access.

Image courtesy of Related California



Moving Time: Tech Startup Apigee Leases New Space in San Jose to Seal Palo Alto Move, Visa Looking for Space in San Francisco Again

23 Oct 2013, 10:44 pm

By Alex Girda, Associate Editor

The Bay Area’s office market generally benefits from a hot tech market that sees development and leasing that is driven by expanding giants such as Google, Facebook and Twitter, as well as an influx of smaller companies betting on space in the technological epicenter of Silicon Valley. As space changes hands at a good pace in the Silicon Valley office market, downtown San Jose has recently seen its largest leasing deal take place with startup Apigee Inc. agreeing to take over a chunk of space at one of Equity Office’s assets.

Apigee is taking over 41,000 square feet of space at 10 Almaden Boulevard in San Jose. The space will be able to accommodate about 250 employees.

According to The Silicon Valley Business Journal, the company had been looking for space in its current city of residence, namely Palo Alto, but CEO Chet Kapoor felt that no other space matched the startup’s requirements. This marks a big move in real estate terms and a possible indication of a re-emergence of Silicon Valley’s largest city in the tech-driven office sector.

In other office leasing news, a company that just last year packed up and moved out of San Francisco is now reportedly looking for office space in The City.

Visa closed up shop in San Francisco in 2012 and moved its 100 employees to a new HQ in Forest City, but according to the San Francisco Business Times, the credit card company is looking for space in the 50-80,000 square-foot range. Visa is looking to move its mobile applications group to the city once it completes a lease in the San Francisco office market.  According to that same source, Visa is moving its division in order to benefit from the hype that the city has with young professionals, therefore trying to attract the necessary workforce.

Image courtesy of equityoffice.com

 

 



Madison Acquires Stake in Two-Property Portfolio in California

16 Oct 2013, 11:09 pm

By Alex Girda, Associate Editor

Two Bay Area properties were the object of a recent stake acquisition by private equity firm, Madison International Realty. The company has moved on the market for a share of a two-building portfolio owned by a closed-end fund sponsored by Deutsche Asset & Wealth Management for an undisclosed fee. According to a press statement released on behalf of the buyer, Madison has acquired a 26 percent stake in the two California assets.

The two-asset portfolio includes the prestigious 111,775-square foot Saks Fifth Avenue Store in San Francisco, as well as a San Jose R&D center totaling 315,450 square feet of space. The retail property is occupied by high-end department store brand Saks Fifth Avenue, and is located at 384 Post Street on Union Square. The location, currently on a long-term lease with the luxury brand, was originally built in 1982 and sustained extensive renovations back in 2001.

The other property that was part of the stake acquisition is located at 3403 Yerba Buena Road in the Silicon Valley city of San Jose. The research and development center is located on a sprawling lot totaling 36 acres. The property offers 600 parking spaces, and is currently leased to Celanese Americas Corporation on a long-term deal.

According to the President of Madison International Realty, Ronald M. Dickerman, the company acquired the stake in the two-building portfolio while also providing “an exit strategy for existing investors while acquiring an interest in two high-quality assets located in major growth areas leased to long-term tenants.”



New Multifamily Division to Focus on Developing Projects in Growing Tech Markets

3 Oct 2013, 5:04 am

By Alex Girda, Associate Editor

As the main tech markets continue their emergence, driven by the growth of big names such as Google, Facebook and Apple and their development of new design-heavy facilities, as well as the growing interest in the San Francisco Peninsula, the market was bound to drive the residential pipeline to a crescendo.

Now companies are solely focused on these priority markets, the most recent example being Thompson | Dorfman Partners LLC, a developer, owner and manager of multifamily real estate that has just announced its new TDP | Bay Area Partners Inc. division. The new entity would focus on getting a substantial amount of new projects off the ground in the largest tech markets in the state of California.

The company tapped industry veteran Bruce Fairty as a partner in the new endeavor due to his three decades of experience in the sector. Fairty has had a hand in the development or acquisition of a total of more than 24,500 multifamily units during that time span, and, should TDP | Bay Area Partners’ goals materialize, it will try to compile a development portfolio worth about $750 million over in the next three-to-five years.

The new division will focus on urban infill projects with investment values ranging between $50 and $250 million, according to a press release.

The company’s current development pipeline in the Bay Area, one of the highest performing regions in the entire U.S. in terms of tech appeal, stands at approximately 1,200 units. Fairty was previously a principal at Castle Group Company, where he handled a 4,400-unit portfolio, and spearheaded the company’s push to use modular construction technology in multifamily projects.



R&D Property Trades Hands in Santa Clara; Last Milpitas Mervyns Completes Portfolio

26 Sep 2013, 6:42 am

By Alex Girda, Associate Editor

Commercial development in Silicon Valley seems to be running rampant with large new projects, but recent deals have shown that existing properties are also drawing investor interest in the area.

Foster Enterprises recently acquired an R&D building in Santa Clara, while Shapell Properties completed the acquisition of the last vacant Mervyns store in Milpitas for a price of $12 million.

Foster Enterprises, the company founded by the developer responsible for Forest City in the 1960s, has acquired the research and development property at 5440 Patrick Henry Drive from Abbott Labs.

The facility offers the new owner 185,000 square feet of R&D space in Silicon Valley, the strongest tech market in the country.

Seller Abbott Labs will stay on as the tenant for a few months as per a leasing agreement completed at the time of the transaction. Abbott will subsequently move to its new facility at 4551 Great America Parkway, recently leased from the Sobrato Organization, according to a report by The Silicon Valley Business Journal.

The Milpitas Mervyns site traded hands from Macerich Co. to Shapell Properties for a total of $12 million.

The new owner had already owned most of the Milpitas Town Center, and with the acquisition of the former department store, Shapell has rounded out its property with the 75,000-square-foot facility located at 749 E. Calaveras Boulevard.

The site has had various development initiatives fall through in recent years, with the latest being a project for a Jewel of India Mall, a plan that fell through last year, according to a SVBJ report.

 



Eight-Building Campus in San Jose Acquired by TMG Partners-Fortress Investment Group Joint Venture

19 Sep 2013, 9:51 pm

By Alex Girda, Associate Editor

San Francisco-based TMG Partners and Fortress Investment Group LLC have announced the acquisition of an eight-building office campus site in North San Jose as a result of a joint venture between the two companies.

The West Tasman Drive location totals 810,600 square feet of space and was sold to the JV by networking solutions company, Cisco, which has already agreed to lease back the space once the deal is closed.

According to a press statement issued by TMG, Cisco will start to incrementally vacate the property to allow a complete renovation of the premises to take place. The new owners see an opportunity to add to the property’s value, and the renovation process is slated to begin in January 2014.

TMG Partners’ chairman and CEO, Michael Covarrubias has expressed the company’s faith in the newly acquired asset by mentioning the fact that TMG Partners believes that “there is an ongoing demand for large, contiguous blocks of well-located high quality space in Silicon Valley,” according to a report in the San Francisco Business Times.

Covarrubias also said for the press that new tenants would be greeted by an improved property, with significantly upgraded street presence.

The renovations will include extensive landscaping, modifications to the property’s façade, new signage, parking lot and improved common areas. Interior common areas will also be upgraded, along with the building system. Prospective tenants will likely be companies looking for two or three buildings, with expansion options made available to them.



Sprawling Office Development Plan Submitted for San Jose by Local Real Estate Gurus

11 Sep 2013, 10:06 pm

By Alex Girda, Associate Editor

San Jose, the largest city in the booming Silicon Valley region, is set to receive an ambitious office project after local development team Peery Arillaga submitted plans for a massive development initiative. The large amount of appeal brought to the area by the rapidly growing tech market could help in backing the company’s new proposal.

As Apple continues work on its spaceship-like HQ in Cupertino, and Google continues its shopping spree for both office space and housing in Mountain View, and other major Silicon Valley tech names such as Facebook and LinkedIn continue their respective expansions, Peery Arillaga looks to be poised for success with the new project.

The developer submitted plans for a sprawling 2 million square-foot office project to be built in North San Jose. The development would occupy a 20-acre site at First Street and Brokaw Road, the San Francisco Business Times writes.

With the Kenneth Rodrigues & Partners-designed project set to be able to accommodate about 9,000 employees, according to industry estimates, it is as of yet unclear whether Peery Arillaga is keeping a major anchor tenant a secret or not. However, with cost estimates at around $400 million for the project, according to The Herald Online, the developer will look to make the investment pay off in the most dynamic tech market of the U.S.

As coverage of the project goes on and the necessary permits are secured, the project will most likely be one of the most high-profile ventures in the area. Considering the vast experience of developers Richard Peery and John Arillaga, the project will also be intensely scrutinized by other developers, also looking to cash in on the area’s seemingly unstoppable appeal.



Netflix and Google Continue to Drive Silicon Valley with Plans for Expanded Facilities

9 Sep 2013, 4:57 am

By Alex Girda, Associate Editor

Following its massive emergence as the number one film and TV show streaming service in the U.S., Netflix has had to expand in order to manage that growth. Now, according to The Silicon Valley Business Journal, the company has its eye on Los Gatos where it has leased a large amount of space. The expanded Netflix operation will be located in a yet-to-be-built campus in the Silicon Valley area.

The two buildings that the company has leased in the planned campus will expand Netflix operations by 242,500 square feet. Located just off Albright Way in Los Gatos, the campus will feature a total of four office buildings, only one of which was supposed to be leased by the company, SVBJ writes. Planning issues for the campus are finally over, after a time when local opposition managed to delay the development schedule for quite some time. The project has been slightly scaled down and construction should begin immediately.

In other leasing news for the Silicon Valley area, one of the driving forces behind online giant Google has completed a leasing agreement for another planned office building the San Jose Mercury News writes. The company is set to take over a total of 168,000 square feet near its current Mountain View headquarters. According to Mercury, the space Google has leased could accommodate up to 900 employees, bringing many new jobs to the area.  



Silicon Valley Residential Market Sees Activity From Investors and Developers Alike

31 Aug 2013, 6:59 pm

By Alex Girda, Associate Editor

As the area’s office sector is set to greatly benefit from the fact that Silicon Valley is currently regarded as the most tech-friendly real estate market in the entire country, investors are taking time to focus on an impending housing rise. Transactions and new development projects should pour in over the following timeframe as the area looks to fulfill its obvious potential. 

A San Jose apartment community recently traded hands for a total of $22.9 million, as seller VirtúInvestments gave up the Los Gatos Creek Apartments to an affiliate of Mayfield companies from Palo Alto. CBRE represented both parties in the transaction. Located at 1029 Meridian Avenue, the 84-unit residential community was snapped up for a per-unit price of around $272,700, The Silicon Valley Business Journal reports. According to that same source, the new owner is ready to start  a renovation project at the property. The last such operation to have taken place at the property was carried out in the 90s.

In other real estate news from the city of San Jose, it was recently revealed that a former used-car lot will be the site of a new residential project. Developer SiliconSage Builders is set to construct a 100-unit property at 180 Balbach Street. The forthcoming development will feature immediate proximity to the McEnery Convention Center and Craftsman-style architecture compatible with the area. The for-sale community would cement the Santa Clara-based developer’s position in this local. SiliconSage currently boasts a residential development pipeline of around 650 units, SVBJ writes. The fact that the project is a for-sale community indicates the strength of the area’s residential market, and the faith that developers currently have in the Silicon Valley.



San Francisco Bay Area Submarkets Lead Nation in Terms of Tech Appeal, JLL Study Shows

25 Aug 2013, 6:23 pm

By Alex Girda, Associate Editor

Most of the coverage that the San Francisco Bay Area receives real estate-wise is tightly knit to the area’s office real estate market. According to real estate company Jones Lang LaSalle, the San Francisco Bay Area’s three markets: San Francisco, Silicon Valley and San Francisco Peninsula have ranked first, second and third as the top three tech markets of the country as per JLL’s U.S. High-Technology Office Outlook for 2013.

The study, using factors such as job growth in the sector, venture capital funding, education and innovation, has determined the best 26 markets in the eyes of the tech sector. Based on those variables, each market achieved a total score, and was then ranked in relation to the other markets. San Francisco achieved a score of 81.2, while Silicon Valley and SF Peninsula had 78.7 and 77.0 respectively. To put things into perspective, the fourth best tech market according to the Jones Lang LaSalle study, is Puget Sound, with a score of 66.8.

Out of the 26 markets, the lowest score was attributed to Las Vegas, with a score of 15.7, with the U.S. overall scoring 33.3. Clearly, the tech clusters in San Francisco, along with the Silicon Valley culture created by Facebook, Google and Apple and a number of other companies, but also by schools such as UC Berkeley and Stanford, have elevated the entire area. The office market is being bolstered by the effect and the love the area is getting from tech companies, and with that, an improved multifamily market



Yet Another Milpitas Multifamily Project Set to Take Shape as Silicon Valley Ramps up Housing

15 Aug 2013, 7:20 pm

By Alex Girda, Associate Editor

The rise of Silicon Valley has been a long process, and now the incentive is there for housing to fulfill the expectations of hordes of young professionals looking to relocate to the area as Google, Apple and a myriad of other tech companies continue their expansion. One of the cities in the Silicon Valley area is Milpitas, home of companies such as Maxtor, Adaptec, Cisco Systems and SanDisk.

And now, the city has seen an uptick in multifamily development, with two major projects in development, from real estate company Integral Communities, as the company recently announced its Centre Point community in the immediate vicinity of its The District at Milpitas mixed-use development.

Integral Communities is set to add 604 units of housing, and 56,000 square feet of retail space to the rapidly growing area mainly due to the appeal the forthcoming BART station will bring to the Great Mall. Center Point will be a redevelopment project as the mixed-use community is set to take shape on a site that currently houses a number of former R&D facilities, which according to The Silicon Valley Business Journal, Integral is in contract to acquire.  

The Centre Point development will be located near another Integral project, the nearby District at Milpitas. That 955-unit transit-oriented community includes 80,000 square feet of retail space and a large chunk of luxury apartments. Located at the corner of Great Mall Parkway and McCandless Drive in Milpitas, The District is located one mile from San Jose’s “Golden Triangle,” known as the hottest tech spot in the world.

Image courtesy of integralcommunities.com

 



Drawbridge Realty Trust Continues Heightened Activity with Office Purchase in Santa Rosa

12 Aug 2013, 2:14 pm

By Alex Girda, Associate Editor

Drawbridge Realty Trust has made a move into the Santa Rosa submarket with a recently completed double acquisition. The real estate company has paid a purchase fee of $18 million for the two office buildings, an indication that Drawbridge has begun to put its $150 million revolving credit facility to good use. A series of new investments introduced by the REIT are bound to follow as the company will look to expand and improve its current property portfolio. Seller Basin Street Properties was represented in the transaction by Cushman & Wakefield’s San Francisco office.

The two newly acquired assets are located at 3850 and 3880 Brickway Boulevard in Santa Rosa. Both facilities are two-story office buildings, offering a total of 126,585 square feet of space. Constructed in 2001, the buildings are located on a 7.8-acre site at the corner of Airport Boulevard and Brickway Boulevard. The two structures are currently fully leased to Medtronic Vascular, a wholly owned subsidiary of Medtronic, Inc. The tenant has already manifested its commitment to the property, having already invested more than $4 million for a series of improvements at 3880 Brickway.

Drawbridge Realty Trust Vice Chairman, Mark Pearson, mentioned that the move illustrates the company’s current strategy which is “acquiring this premier property with a solid national tenant that perfectly fits our acquisition profile.” According to a press statement released recently, Drawbridge has already closed two quarters reporting sustained acquisitions, with its investment over Q1 and Q2 totaling around $130 million, having already amassed a portfolio of over two million square feet.  

Image courtesy of basin-street.com



Ritz-Carlton San Francisco Acquired as Building is Once Again Part of MetLife

5 Aug 2013, 8:46 pm

By Alex Girda, Associate Editor

As the city’s hospitality market soars to new heights, there might be space for passion plays as MetLife Inc. recently acquired its former headquarters, now a thriving San Francisco hotel. The insurance giant entered a joint venture with Thayer Lodging Group to purchase The Ritz-Carlton San Francisco for a grand total of $161 million. The building housed the corporation between 1909 and 1973. After a number of modifications and a four-year renovation process, the building finally received new life with the 1991 opening of the Ritz-Carlton San Francisco.

The 336-key hotel offers a great downtown location and 14 event venues that could accommodate various types of gatherings. The Ritz-Carlton’s 60 spacious suites, including the 600-700 square-foot Junior Suites and the 800-900 square-foot One Bedroom Suites, offer 32-inch HD LCD-TVs, DVD-CD players, and the full Deluxe Room amenity package. The hotel’s club level features a number of extra amenities including complimentary internet, garment pressing, coffee service and wake-up calls. Guests here also benefit from access to a 24-hour business lounge and the signature Club Concierge service. The Club Level’s top rooms are the Ritz-Carlton Suite 919, a 1,980-square-foot suite offering views of San Francisco Bay, Colt Tower and Alcatraz, and the Presidential Suite, a 1,960-square-foot space offering a 1,200 square-foot outdoor balcony with views of the Financial District.

Thayer Lodging Group and MetLife Real Estate Investors are set to undergo their own set of renovations and improvements at the property in order to further raise the profile of the venue. The building’s iconic architecture featuring 18 Ionic columns and 185 lion’s heads located across the building’s courtyards offer an opulent image that will most likely be maintained by the new owners.

Image courtesy of ritzcarlton.com



New Multifamily Development in The Mission Trades Hands Only Days After Opening

25 Jul 2013, 3:56 pm

By Alex Girda, Associate Editor

Avant Housing’s newly opened apartment community was sold just days after its official opening. The company’s new Vara development was purchased by global commercial real estate investor, Behringer Harvard. Avant Housing was represented during the sale by Moran Co. representatives Brett Betzler and Mary Ann King. The buyer managed to snap up the property after outpacing a number of other offers for the property.

Located in the increasingly popular Mission District of San Francisco, the multifamily development offers 202 apartment units and is the largest Class A institutional apartment building in the area. The 230,000-square foot mixed-use construction offers floorplans of one-, two- and three-bedroom units, and 7,502 square feet of street-level retail space. Parking at the facility is ensured through 155 underground parking spaces. 20 percent of the available units are designated as below market rate housing, and are targeting potential renters making 55 percent, or less, of the median income. The new owner has acquired the property with 40 percent of available units pre-leased.

Avant Housing specializes in the development of urban infill multifamily properties and Vara perfectly exemplifies Avant’s strategy. Before the developer took over the 1886 Mission St. site, the lot had been occupied by a post-earthquake construction, built back in 1906, which was once the home of the Louis Roesch Printing Company. The property was then acquired by Avant in Nov 2010, making it the third developer to take on the property, but the first to complete a project on this site. The Mission’s appeal includes access to the city’s best cultural activities, restaurants, shopping, parks and transportation.



Fairmont Sonoma Mission Inn & Spa Stake Acquired by Carey Watermark in $100 Million JV Deal

18 Jul 2013, 2:09 pm

By Alex Girda, Associate Editor

San Francisco has elevated its hospitality market over the past few years to a point where rates and occupancy have been rising and the city is a top market contender. Note the recent big money move by Carey Watermark Investors Incorporated to acquire a joint venture interest in the Fairmont Sonoma Mission Inn & Spa from owner Fairmont Hotels & Resorts. The former owner received a total of $97.1 million and will go on to manage the luxury resort under a long-term management agreement.

CWI holds 75 percent of the joint venture, which acquired the 226-key Fairmont Sonoma, bringing the company’s investment to a total of around $73.3 million. The hotel is in the midst of phase one of a ten-million-dollar renovation. By the end of the operation, the hotel will have updated all of its Heritage Rooms, its lobby and fine dining room. Follow-up improvements are planned for the facility’s spa as well as a number of other areas.

The AAA Four-Diamond hotel also underwent a 16-year long renovation process between 1984 and 2000. The facility’s Sonoma Valley setting along with its 1927 exterior is one of the Fairmont’s top assets in terms of attracting visitors. And 12,000 square feet of space are also part of the package at the location which includes a business center, fitness center, tennis courts, concierge services, gift shop, laundry service and valet parking.

CWI is sourcing $44 million of the necessary funds for the deal through debt financing. CWI’s Chief Executive Officer, Michael Medzigian, mentioned that the company is “delighted to join Fairmont on the acquisition of this world-renowned luxury resort.” The official also went on to say that once the improvements are done, the property’s value would go even higher as one of the prime Sonoma/Napa luxury properties.

Image courtesy of  fairmont.com



Office Building Acquisition Confirms Interest in Silicon Valley Still High

12 Jul 2013, 1:41 pm

By Alex Girda, Associate Editor

Silicon Valley has been going from strength to strength over the past year as its office market has seen sustained growth. It doesn’t hurt that Apple is planning a massive spaceship-shaped HQ in Cupertino while the Googleplex in Mountain View is already a staple of the region. Now a new deal is set to catch the attention of investors as Grosvenor Americas becomes the new owner of a San Jose office building. Century Plaza II was bought from German company Deka Immobilien, represented in the transaction by Savills LLC, for an undisclosed amount.

Century Plaza II is a six-story, 99,126 square-foot office property located at 560 S. Winchester in San Jose, the largest city in Silicon Valley. The facility was completed in 2001, and has since been fully occupied. The building features LEED Gold Certification from the U.S. Green Building Council. The current tenant roster includes names such as Rockefeller Group Business Centers, Cushman & Wakefield, and Merrill Lynch Wealth Management. The facility offers direct access to I-280, and easy access to I-880 and Highway 17.

The building’s immediate proximity to one of the best-known luxury residential complexes in the area, Santana Row, is also considered an important selling point. The neighboring retail area offers high-end shopping options such as Gucci, Ferragamo and a Tesla dealership.

According to Grosvenor Americas’ Investment Manager Sommer Johnson, the newly acquired property provides the company with “strong cash flow, long-term upside, and good diversification for our portfolio of West Coast properties.” The company is reaffirming its position on the coveted office markets of the Western U.S. with a view for further investment in L.A., Orange County, Seattle and the Bay Area.



San Francisco’s Appeal Slightly Wanes as Market Seeks Stability Over Continued Growth

3 Jul 2013, 7:57 pm

By Alex Girda, Associate Editor

As the massive appeal of San Francisco’s office market seems to dwindle, there still are some noteworthy deals that keep the city’s spirits raised, such as the recent move completed by Terracotta. The company, owned by software developer Software AG, has completed a lease for 25,000 square feet of office space with Stockbridge Capital Group and Wilson Meany, the San Francisco Business Times reports. The company will be taking up the space at the former Pacific Telephone & Telegraph Co. building, when it reopens this fall.

Software AG will join a tenant roster already boasting well-known names such as Knoll and Lumosity at the 26-story tower. The company will move a workforce of around 100 to the 14th and 15th floors of the buildings once the facility officially opens.The 140 New Montgomery office tower has now hit an occupancy rate of around 85 percent, which considering the city’s current market, puts it just above the area’s recorded vacancy rates.

After months and months of positive activity in San Francisco’s office market, leasing has now slowed down with only 131,000 square feet of space being absorbed during 2013’s Q2. SFBT also pointed out that with half of 2013 already gone, no 100,000+ square-foot lease has been completed in the city. It seems that the growth spurt that the office market saw due to the rise of the tech sector is now stabilizing as companies take their time easing into their new office space and headquarter locations.

Data provided by Marcus & Millichap Real Estate Investment Services indicates that while rent and sales trends are definitely up, vacancy rates are now finding a safe spot around the 10-11 percent mark. With no major leases completed and no major office projects set for immediate completion, 2013 looks to become a year of calm in what has been a very dramatic decade for real estate in the area.

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



San Francisco Single Family Housing Inventory Constrained; Santa Clara University Pens Expansion Deal

19 Jun 2013, 1:07 pm

By Alex Girda, Associate Editor

After months of growth in terms of price and number of sales, San Francisco’s housing market reached an important milestone earlier in the year when the median value of a single family home in the area exceeded the $1 million mark. The improving market has clearly taken its toll on the city’s housing stock as The San Francisco Business Times recently reported that there are 30 percent fewer houses on the market now than the same time last year.

According to data provided by listing aggregator Zillow.com, the number of available homes for sale in the San Francisco area dropped to 4,528 from last year’s 6,496. The reduced number of homes available for sale might have further effects on the median transaction value as homebuyers try to find the right property in a market that offers fewer single family houses.

In other news, Santa Clara University is set to begin an expansion operation of its El Camino Real campus starting with January 2014, as it recently signed a new lease at the property. The institution will now occupy the entire 26,000 square foot building at 475 El Camino Real, having previously occupied one of the two stories. The Silicon Valley Business Journal reports that the facility is part of University Station, a Bixby Land Company-owned research and development and retail campus.

Image courtesy of drhorton.com



San Francisco Bay Area Properties Put Up for Sale as California Looks to Pay Off Wall of Debt

12 Jun 2013, 9:06 pm

By Alex Girda, Associate Editor

The Department of General Services is planning the sale of a large section of surplus land in its administration, and marketing has commenced for the property. According to a press statement, the DGS has already listed the property and opened talks with interested buyers until October 3. The 81 acres of land that are being offered up for sale by the state of California once belonged to the former Agnews Developmental Center.

According to DGS Director, Fred Klass, California Gov. Jerry Brown is looking to sell the land located in Silicon Valley’s Golden Triangle area in order to pay off some of the “wall of debt” that the state currently owes. “This sale will allow us to meet that goal while providing a tremendous development opportunity for the San Jose community,” said Klass.

Also making headlines is a very different kind of real estate property as Kimpton Hotels has put up for grabs one of its San Francisco Bay Area venues. The Serrano Hotel is now available for an asking price of around $65 million, or a per-room rate of around $275,000. The 236-key hotel recently underwent a $7 million renovation process for not only its façade but also the windows.

The 16-story hotel also offers a dining option in the form of Jasper’s Corner Tap & Kitchen, as well as 2,500 square feet of meeting space at the venue. Considering the rising profile of the Bay Area’s hospitality market, the Serrano Hotel is set to see investors flock to the property.







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