Lane Partners buys historic Sears building in Oakland to lure tech tenants

Lane Partners plans to convert the Sears building into a retail and tech hub in the heart of Oakland’s booming Uptown neighborhood.

The real estate investment firm, based in Menlo Park, beat out several bidders and paid $25 million or about $63 per square foot for the historic, 400,000-square-foot building at 1945 Broadway from Sears Holding Co.

The firm plans to renovate the six-story structure to house a space large enough for a major tech tenant and rebrand it as Uptown Station.

“Uptown Station will be embraced by the tech sector due to great architecture, new technology, collaborative space and a great live/work environment,” said Scott Smithers, managing principal of Lane Partners.

The property, built in 1925, features 66,000-square-foot floorplates and currently houses just one tenant, a Sears department store, on the ground floor. Sears plans to vacate the space within 90 days.

Smithers said the spacious floor plans, historic architecture, and expansive windows make the building ideal for “creative space” that many technology tenants want. That type of space has become scarce in both San Francisco and Oakland — especially in the range of 350,000 square feet.

The building also sits right on top of a BART station and is located in the middle of Uptown. The area has become a thriving entertainment district. Over the past several years, dozens of new restaurants and bars have opened, as well as hundreds of new apartments and condos.

“For location, it’s a no-brainer,” said John Dolby, an Oakland broker with Cassidy Turley. “If (Lane Partners) makes the building into creative space, it will be very desirable.”

Some tech companies like Lyft, a maker of an app for car sharing services, looked in Oakland, but couldn’t find a large enough space.

“(The Sears building) will be great for downtown Oakland and is going be able to attract a tech company from San Francisco,” Dolby said.

Now that the deal closed, the rehab is next. Some of the building’s windows were filled in with concrete to make it more seismically sound, so Lane Partners plans to restore the windows to make them operable and install other types of seismic reinforcements.

“The interiors are amazing,” Smithers said, noting that the floors come with 14 foot high ceilings. “We’re returning much of the facade to the original look and feel.”

The new owner expects to finish the renovations by the first quarter of 2016. Lane Partners plans to keep retail on the ground floor to “activate the street” and convert the basement level into parking.

Lane Partners already hired on a team of brokers led by Bill Cumbelich, a San Francisco broker with CBRE, to lease up the building.

The building has significant potential, said Alan Dones, managing partner and CEO of the Strategic Urban Development Alliance LLC, who tried to buy the building earlier this year, but fell out of contract. Another bidder, Strada Investment Group went into contract on the building after that, but they also didn’t close.

“We had been looking in the Oakland market for a while, so when we heard about this building, we inquired about it,” Smither said. “It was a competitive process that required an understanding of the building and for us to act quickly.”

Source: Blanca Torres Reporter-San Francisco Business Times

Huge New Palo Alto Condo Aims for $1,500+ Per Square

02_611cowper.jpg

Construction recently kicked off on a mixed-use four-story residential and office building on Cowper Avenue, near the Palo Alto Caltrain station. Because there is so much demand in the area and new construction there is so rare,developers R & M Properties are aiming for prices of $1,500 per square foot for the residential portion, which will consist of a massive 5,000 square foot condo with private elevator access. That condo alone could bring in a price of$7.5 million. The 30,000 square feet of office space on the first three floors already has a tenant, although there’s no word on who that may be. The new building, designed by architecture firm The Hayes Group, is expected to be complete by the end of 2015.

Source: SF Business Times

Bay Area ranks as the best commercial real estate market in the country, again!

For the second year in a row, the Bay Area ranked as the best market for commercial real estate in the country, according to a report from the Wells Fargo Economics Group.

The report found that the Bay Area’s strong gains in employment, housing inventory and technology sector push the Bay Area far ahead of other markets in terms of increasing value and potential for more growth.

“The San Francisco Bay Area remains the epicenter of many of the most rapidly growing technology sectors, including mobile devices, social media, cloud computing, data analytics and life sciences,” the report states. “Overall job and income growth have significantly outpaced the nation in recent years and the unemployment rate has fallen to its lowest level in nearly six years.”

The report demonstrates the tight relationship between jobs and real estate, pointing to deals like Salesforce.com leasing 714,000 square feet in an office tower under construction. That tower will eventually house thousands of jobs, many of them yet to be created, and Salesforce is just one of numerous tech companies expanding in the Bay Area.

The Wells Fargo report provides detailed analysis of the Bay Area’s submarkets of San Francisco, the Peninsula, Silicon Valley and the East Bay. Here’s a sampling of highlights:

Some industries like financial services are shrinking like in the case of San Francisco-based Charles Schwab & Co. deciding to move 1,000 jobs out of San Francisco to places like Colorado and Texas.

Fortunately, the technology sector is growing much faster than other sectors are retreating.

Tech is booming in San Francisco, but the Bay Area’s true tech capital is still Silicon Valley.

Technology firms have not abandoned the suburbs. Job growth in Silicon Valley remains exceptionally strong. … Technology firms employ about 270,000 workers in the San Jose metropolitan area, which includes Santa Clara and San Benito counties. Total tech employment in the San Jose metropolitan area is 73.4 percent higher than the number employed in the San Francisco metropolitan division.

Still, many tech workers prefer to live elsewhere.

Household employment growth has risen more slowly in South Bay, however, climbing just 3.3 percent over the past year, which implies a significant number of workers are commuting into Silicon Valley from San Francisco, Oakland and other neighboring areas.

Jobs and housing are great here, but transportation connects it all together. You can debate high-speed rail all you want, but turns out strong commuter systems boost the entire region.

A major modernization program is now under way, which will extend service to the Transbay Transit Center being developed in San Francisco’s booming SoMa area and move from diesel-electric locomotives to overhead-electric powered trains by 2019. The growth of the system, which will more firmly connect the major hubs of the Bay’s tech sector, the San Francisco and San Jose airports, and many of the region’s key sports and cultural venues, has become a major driver of residential and commercial development.

Everybody loves a growing economy. Well, not everybody. Growth comes with repercussions.

With employment and population growth exceeding expectations, worries are beginning to surface that the latest boom is showing signs of overheating. Explosive growth in the Bay Area’s creative industries is beginning to crowd out activity in parts of the financial and professional services sector. The boom has also sparked a backlash by some individuals tied to slower growing and lower paying parts of the economy. Home prices, apartment rents and office rents have also increased dramatically, which has significantly increased the cost of living and doing business in the Bay Area. Despite these developments, we still expect the Bay Area to outperform the nation. While costs have increased dramatically over the past year, so has the quality of life.

If any region would be familiar with tech booms and busts, it should be the Bay Area. So when is our bust coming, if at all? Economists expect this cycle to have a smoother landing that the first tech boom.

The dependence on technology has raised concerns about the vulnerability of the Bay Area’s economy to another dot com crash. The prospect has gained increased attention in recent months, which have seen a number of extremely highly valued acquisitions of tech startups and a few disappointing IPOs. While every boom must eventually end, traditional valuation measures are much different than they were during the run-up during the tech bubble in the late 1990s.

Source: Blanca Torres (Reporter) – San Francisco Business Times

 

Enhanced by Zemanta

2770 Sea View Pkwy, Alameda, CA

4 Beds / 2.5 Baths Townhouse

Monthly Rent: $3250

2-story serene setting, 4 bedrooms and 2.5 baths townhouse by walking trail and water.

Lower level: Marble entry to wall to wall carpet in living room with fireplace, shutters provide the elegant classic setting and privacy. L shape dining area opens to a separate patio, great spot for morning coffee. Spacious updated eat-in kitchen comprises of tile floor, Corian counter top, bay window, stainless steel appliances, pantry and plenty of cabinets space. Another patio extends the outdoor living outside the kitchen.

Upper level: Staircase leading to the 4 bedrooms and 2 full baths. Hallway bath was remodeled and covered with marble flooring and shower over tub. Double sinks in the updated master bathroom and vanity setting.

Amenities and Appliances included: Two-car side by side garage, guest parking ample off street parking; stove, refrigerator and washer & dryer.

For more info: http://www.postlets.com/rts/9999136

Enhanced by Zemanta

Bay Area commercial real estate boom on track for record year

A surging tech economy has sparked a Bay Area commercial real estate boom that is on track to make 2013 the best year on record.

New construction and renovation of commercial real estate — including office, retail, industrial and hotel properties — will exceed $6 billion this year across the nine-county Bay Area, according to this newspaper’s analysis of figures supplied by McGraw Hill Construction, a widely respected source for data about the development and building sectors.

Mike Fau, left, and Bob Gongora help install a window at a Santa Clara Gateway office complex building under construction in Santa Clara, Calif. on Monday, Nov. 4, 2013. (Jim Gensheimer/Bay Area News Group) ( Jim Gensheimer )

“High tech is spurring this — you have the Facebook, Samsung and LinkedIn buildings that have gone up or are going up, and you have expansions by Google (GOOG) and Apple (AAPL),” said McGraw Hill economist Anne Thompson. “The economy is improving in the Bay Area. You have strong hiring in high tech that is spurring more demand for office space.”

Through the first nine months of this year, the value of Bay Area commercial real estate construction totaled $4.9 billion. That already was more than the full-year totals for 2009, 2011 and 2012, and was approaching the $5.41 billion annual total for 2010.

Total commercial real estate spending in the Bay Area for 2013 is projected to be $6.3 billion to $6.7 billion. That would be the largest amount documented by McGraw Hill, whose records are based on building-permit data and go back to 1967. The current record was set in 2000, when Bay Area construction activity reached $6 billion.

The boom is not spread evenly across the region, however. Santa Clara, San Mateo and San Francisco counties all are seeing a surge in construction, while the East Bay counties of Alameda and Contra Costa are lagging far behind.

Jeff Hoopes, chief executive of Swinerton Builders, said the building boom does not appear to be a bubble. “This surge is a direct result of job creation.”

Chad Leiker, a vice president with commercial real estate firm Kidder Mathews, said the development surge resulted from rising rents, which “are finally high enough to justify developers taking risks on construction or renovation of buildings.”

The tech sector upswing has made Santa Clara County the Bay Area’s top region for commercial real estate construction, McGraw Hill found. For the first nine months of this year, commercial real estate construction in the county totaled $1.86 billion, and it could reach $2.17 billion by the end of the year. That doesn’t include the $1.3 billion Levi’s Stadium project underway in Santa Clara because McGraw doesn’t count open-air stadiums in its totals.

Among the tech companies that have contributed to the commercial real estate boom is Infoblox, a software company that struck a deal last year to expand to a new headquarters in Santa Clara. It would be able accommodate 500 employees, up from 250 in the middle of last year.

“We were bursting at the seams in tired old spaces in Santa Clara,” said Shawna Belardi, global facilities manager for Infoblox.

This year, Infoblox moved into an office complex that had undergone an extensive renovation by developer Bixby Land, which added fire pits, sports courts, a gym, a cafe and other amenities to help the company attract and retain engineering talent.

The Infoblox renovation is part of a trend. In the South Bay, much of the construction involves face-lifts or replacements of existing buildings, said Phil Mahoney, executive vice president with commercial realty firm Cornish & Carey.

“The renovation and upgrade of existing buildings is unprecedented,” he said. “I have never seen anything on this scale in 30 years of being in the business.”

Builders also are succeeding with new projects. Santa Clara Gateway, a 916,000-square-foot complex near the Great America amusement park, found tenants quickly, said Andrew Goodman, regional vice president with Irvine, the project developer.

“Dell and Arista were the first deals, and then we got Global Foundries,” he said.

Plenty more projects are in the pipeline.

Apple is expected to begin construction next year on its new campus in Cupertino, which published reports say could cost $5 billion. Google, while facing delays with its second campus at the NASA Ames Research Center, still intends to build the Mountain View complex.

Jim Beeger, a senior vice president with Colliers International, does not see the market cooling any time soon.

“At the beginning of this year, we had 20 tenants that were looking to lease space of 100,000 square feet or greater, and now the number is 31,” he said.

Experts say further spurts of commercial construction could result from the desire by young tech workers to live in urban centers such as San Francisco and San Jose — even if they work elsewhere in Silicon Valley. To accommodate those workers, developers are laying plans for housing, office and retail clusters on or near light rail, Caltrain or BART train routes.

After Santa Clara County, San Francisco County is poised to post the second-highest commercial construction activity in the Bay Area this year with a total of $1.95 billion. That would be well ahead of the totals for 2011 and 2012, but below the level of 2010, McGraw Hill reported.

San Mateo County is expected to see $765 million worth of commercial real estate construction this year, which would be six times the amount for 2012.

In contrast, the East Bay remains in a slump. The combined totals of commercial real estate construction in Alameda County and Contra Costa County are on track to reach $681 million, which is lower than all of previous four years.

“The East Bay is a real laggard in development right now,” said Edward Del Beccaro, a managing director with Transwestern, a commercial realty firm. “The main construction activity in the East Bay is medical buildings and some retail. Otherwise, the East Bay is dormant.”

The remaining Bay Area counties — Marin, Sonoma, Napa and Solano — are projected to produce a combined $187 million in commercial construction, which would be 2.8 percent of the projected Bay Area total this year.

Source: Mercury News

Enhanced by Zemanta

Bay Area housing market stabilizing

After years of post-bubble turbulence, the Bay Area housing market appears headed for a period of stability as rapid price increases hit a wall and sales plateau.

October median sale prices for existing houses were up double digits from a year ago, but were down from peaks in June and July, DataQuick reported Wednesday. Sales of existing single family houses were down 6.8 percent across the Bay Area from the same month last year, though up slightly from September.

Without the frenzied competition that characterized the first half of the year, buyers are being more selective and sellers have to be more patient and realistic in their pricing.

“There’s more to choose from, less sense of urgency, and probably fewer people out there shopping,” said Andrew LePage of DataQuick. And the spike in interest rates during the summer also discouraged some buyers, he said.

“We’re clearly cooling off a bit,” said Lanny Baker, chief executive of ZipRealty, who noted that pending sales in the Bay Area ended October down 7 percent from the previous year. Nationally, and in the Bay Area, he said, housing prices in the cities with the strongest gains of early 2013 are moderating, and lagging markets are starting to accelerate.

But there are plenty of hot spots with low inventory and high demand. In Menlo Park, Palo Alto and Atherton, “We don’t have enough houses to sell,” said Wendy McPherson of Coldwell Banker. “Some parts of the market of course are slower by nature of the price range. That’s normal. But under $4 million we do not have enough houses to sell.”

Peter Giovannatto with Dreyfus Sotheby’s International Realty in Palo Alto said the “baseline price” for real estate there is $1,000 a square foot. “We’re getting random emails from investors offering $1.4 million to $1.6 million for lots,” he said.

Santa Clara County‘s median of $713,000 was up 15 percent from a year ago, but down 5 percent since June. San Mateo County‘s median price of $782,000 was up almost 15 percent from a year ago, but down almost 10 percent from a high in August.

Alameda County‘s median sale price was $568,000, up 35 percent from last year but down nearly 4 percent since a summer peak. Contra Costa County’s median sale price of $395,000 was up 31.7 percent from October 2012 but down 12 percent from July.

Alameda County saw a 13.4 percent annual drop in sales. Contra Costa County sales were down 5.5 percent from a year ago; Santa Clara County sales slid 1.9 percent from last year, and San Mateo County sales were down 13 percent annually.

“The multiple-offer hysteria has started to even out,” said Hank Perry of Empire Realty in Danville. “Confidence is back” among buyers moving up to larger homes, he said. “A large part of what’s driving the market is they feel they can go out and get what their family deserves” as a more relaxed market allows them to shop around.

Around the bay, there are more reports of homes sitting on the market for longer periods, and here and there a price reduction from home sellers unaware of the downward trend who set their price too high.

“Until a few months ago, price reductions were almost unheard of,” said Steve Pierce of Keller Williams Benchmark Properties in Fremont. “Now it’s becoming more commonplace, particularly if properties were not priced reasonably to begin with.”

Pierce said some places and price ranges are seeing brisk demand, and others aren’t. “In some areas where inventory is low, the market is just like the hot market we had earlier in the year. In other areas, buyers are being a little more cautious and a little more careful,” he said.

In Pleasanton, that became clear to Allison Cox, whose home drew lots of offers, only to have the first two back out.

“The next offer we’re waiting to see,” Cox said, adding that she’s happy to have so much interest. “Four or five other homes in the neighborhood have been sitting on the market and they either haven’t had offers or they have been getting offers and not accepting them,” she said.

When their sale is final, the Coxes will face another issue that has caused some people to think twice about selling now.

“We need to figure out where we’re going to live,” she said. “We’re going to come out with a good chunk of equity. Now what are we going to do? We’re in a pickle about it.”

Other factors also point to a more normal market. Distressed sales — foreclosures and sales of houses for less than their mortgage — made up 14 percent of the resale market, less than half of last October’s 35 percent.

All-cash buyers — who are often investors — made up almost 23 percent of October sales, down from nearly 30 percent a year ago.

In addition, banks were making more adjustable-rate mortgages. These are a key part of the high-priced Bay Area housing market. They were 20.5 percent of the area’s October home purchase loans, up from 11.8 percent a year earlier.

 

Source: Inside BayArea News

Enhanced by Zemanta