Blog | Calco Commercial, Inc.

Dec

Two Mixed-Use Projects Proposed Near Millbrae BART Station

Two transit-oriented development projects proposed for the area surrounding Millbrae’s BART station would bring new retail, housing and office space to the Peninsula city.

San Jose-based Republic Urban Properties LLC is planning an approximately $200 million mixed-use development that would replace surface parking on the east side of the BART station.

Gateway at Millbrae Station, which would sit on about nine acres of BART-owned land, is expected to include 150,000 square feet of office space, up to 45,000 square feet of retail space and as many as 350 market-rate apartments along with a 110-room extended-stay hotel, likely under a Hilton or Marriott flag, said Michael R. Van Every, president and CEO of Republic Urban. The company is working with BART on a replacement parking strategy based on a transit study that is under way.

“We want to make it a destination for BART riders, for residents, for employees and then, of course, for the greater surrounding communities,” Van Every said. “We’d like to take the next step and say how can we not just serve commuters, but how can we serve the greater region and Millbrae itself by redefining what we consider a gateway location.”

City approvals are pending, but Republic Urban, which is part of the Republic Family of Companies with offices in Washington, D.C. and Reston, Va., looks to break ground on the project by late 2015. The build-out should take five to seven years, Van Every said.

The project would be part of BART’s overall plan to create more transit-oriented developments around its stations to increase ridership and boost revenue, said Ellen Smith, a project manager at BART.

“The goal is to have higher ridership as a result of having uses surrounding the station that would bring more riders to us than the parking spaces do,” Smith said.

Because the Millbrae station also is a Caltrain station and includes a SamTrans bus pickup and drop-off area, the three agencies are coordinating to ensure “all access modes are supported” by the new development, Smith said. The station also is slated to be a stop on the planned high-speed rail line.

Additionally, Serra Station Properties is proposing a mixed-use project on 3.5 acres west of the BART station. That development would include approximately 270,000 square feet of office space, 32,000 square feet of retail space and 500 residential units, according to a report from the City of Millbrae. Serra Station is led by Vincent Muzzi, who did not return a call for comment.

The Serra Station project would occupy land the company already owns, which now holds a closed convalescent hospital, said Bill Kelly, a Fullerton, Calif.-based economic development consultant for the City of Millbrae.

Both projects are being analyzed by the city as it works to update its Millbrae Station Area Specific Plan and supporting environmental impact report. The specific plan, adopted in 1998, aims to redefine a vision for an approximately 116-acre area around the Millbrae BART/Caltrain Station and was adopted to encourage sustainable smart growth around the transit station. Republic Urban’s and Serra Station’s projects fall within the specific plan area. The updates will include changes such as land-use density and height requirements, Kelly said. Hearings about the plans with the planning commission and city council are expected during the first quarter of 2015.

Source: The Registry
Reporter: Nancy Amdur
Date: December 9, 2014

Link to article: Peninsula Development

Dec

More Breweries Coming to SF’s Bayview

Source: San Francisco Business Journal
Reporter: Annie Sciacca
Date: December 9, 2014

The Bay Area craft beer boom may be about to hit San Francisco’s Bayview.

The Board of Supervisors passed an amendment Tuesday to allow small beer manufacturing licenses along the Third Street corridor of the Bayview, after years of restricting alcohol sales in the area.

The move is part of the city’s push to support food and beverage manufacturers and comes as the Dogpatch neighborhood, just north of the Bayview, has become ground zero for the city’s craft brewing scene. The idea is also to create more jobs in the Bayview neighborhood, which has historically struggled with high unemployment and crime. However, the area is starting to see a wave of gentrification and has also been the site of rising home prices recently, with professionals moving in and buying up property.

The change in city law comes after 2003 legislation prohibited any new alcohol-related outlets on the corridor, citing an “unusually large” number of spots selling alcohol for both on-site and off-site consumption. That legislation attributed the high number of alcohol sellers to the “numerous peace, health, safety and general welfare problems in the area.”But legislators appear to be changing their tune. The Third Street Restricted Use District was amended to allow the sale of alcohol at grocery stores in 2007 and again in 2013 to allow wineries into the area. The amendment passed Tuesday will allow small beer manufacturing licenses for the production of up to 60,000 barrels of beer per year, tasting rooms and the sale of microbrewed beer.

With the passage of the amendment, Laughing Monk Brewing has plans to start brewing Belgian style beers at 1439 Egbert Avenue and to open an onsite tasting room with retail sales by the middle of 2015, according to planning documents. That brewery will join longtime Bayview brewery, Speakeasy Ales & Lagers.

Al Norman, president of the Bayview Merchants Association, said the amendment is drawing some resentment from merchants who have long requested but have been denied permits for selling alcohol.

But Barbara Gratta, a longtime Bayview resident and owner of Gratta Wines, said she sees the amendment as positive for the community.
Gratta will open up her first tasting room in Bayview in January in Butchertown Gourmet, which will consist of her Gratta Wines and Fox and Lion Breads.

“We’re a totally different kind of business than the existing alcohol sellers in the area,” Gratta said, pointing out that many of the existing sellers are corner liquor stores. “I think that’s one reason the (amendment to allow) wineries passed. What we’re intending to do is to promote a food and wine environment.”

Oakland has experienced a similar movement throughout the city to allow craft brewers to move in. For years, Oakland has put restrictions on the number of companies with liquor licenses in an attempt to limit a proliferation of corner liquor stores that tend to populate poor neighborhoods, said Margot Prado from Oakland’s Office of Economic and Workforce Development. But with the recent trend in local brewing, the city is not only lifting those restrictions, but encouraging breweries to open.

Prado said that Oakland recently passed an amendment to its zoning laws that allows breweries with manufacturing onsite to enjoy a shorter permitting process, and breweries are flourishing there because of it.

Link to article: Bayview Breweries

Nov

500,000 SF Mall Coming to Candlestick

Source: San Francisco Business Times
Author: Marlize van Romburgh

The site around the soon-to-be-demolished Candlestick Stadium in San Francisco is slated for redevelopment as a 500,000-square-foot shopping center. Homebuilder Lennar Corp. and shopping center developer Macerich are joint partners in the venture. The mall would include shopping, restaurants, movie theaters, a hotel, performance venue and an African-diaspora marketplace and would serve to anchor a planned 6,000-home project.

“We fully expect that the Candlestick Point project will be a magnet for economic activity and community-building,” Randy Brant, executive vice president of real estate at Macerich, said in a statement.

Candlestick’s development will kick off with the demolition of the defunct stadium in coming months and will include more than $1 billion of new investment and infrastructure over the next four years, the firms said.

“The partnership with Macerich to develop the urban outlet jumpstarts the overall Candlestick redevelopment,” Kofi Bonner, president of Lennar’s San Francisco division, said in a statement.

Up to 12,000 units of new housing are planned in new developments in the neighborhoods surrounding Candlestick Park. Lennar has started construction on The San Francisco Shipyard, a 6,000-home development just north of Candlestick Point. The project will also include 3 million square feet of office and commercial space as well as 230 acres of parks and open space. The first homes at the Shipyard hit the market in June.

Lennar said it has also started building out infrastructure for the nearby Alice Griffith affordable-housing community, a 248-unit project to be built on vacant parking lots next to Candlestick Park. Construction is expected to start next year.

“Rebuilding and redeveloping Candlestick and The Shipyard is helping us deliver on our promise to make sure San Francisco remains a City where families at all levels of the economic spectrum can succeed,” said Mayor Ed Lee, who is pushing an agenda to build or rehab 30,000 units in San Francisco by 2020, in a statement.

link: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2014/11/candlestick-stadium-lennar-macerich-sf-shipyard.html?ana=e_sfbt_bn_breakingnews&u=19ELr7OrYiuRqEUxO8W3yQ0d406714&t=1416418279

Nov

National Demand for Warehouse/Distribution Space Spikes

Source: Costar.com
Author: Randyl Drummer

Continued Demand for Warehouse/Distribution, Light Industrial Space Expected to Meet Supply Wave
With Few Modern Logistics Facilities Available (For Now), Investors Gobbling Up Available Portfolios

Absorption of U.S. industrial real estate, which was fairly muted in the first three quarters of the year due to lack of new supply, is expected to end 2014 on a strong note as developers wrap up construction on an estimated 50 million square feet of new warehouse and light industrial space.

Demand wasn’t red-hot for industrial property through the first nine months of 2014 by historic absorption levels, according to analysts presenting the CoStar Third Quarter Industrial Real Estate Review and Outlook. While demand for U.S. warehouse space has traditionally stepped up each quarter in previous years, 2014 has bucked the trend, posting consistent but relatively flat net absorption totals.

Look for leasing and absorption to spike in the last three months as dozens of new build-to-suit and speculative buildings open their bay doors before Dec. 31, CoStar Portfolio Strategy Real Estate Economist Donald Hall said.

“We expect to see a strong fourth quarter. One theory is vacancies have been so low, that there’s really no place for tenants to move into, particularly for newer space,” Hall said. “If even half of the 50 million square feet of new deliveries expected is absorbed, absorption should be much higher in the current quarter, barring an unexpected scare in the economy.”

Senior Real Estate Economist Shaw Lupton also noted that logistics construction is ramping up — and more of it is being built on a speculative basis without any signed tenants in tow. Rising rents justify construction in most markets and developers have once again become confident enough to build on spec.

Today, the U.S. has around 100 million square feet of logistics under construction, more than half of it without signed sales or leases – and that figure remains about 30% below what Lupton believes is the market’s potential based on the last cycle, which peaked in 2007.

The U.S. vacancy rate has fallen to 6.9%, edging below the same point in the last cycle, and rents are within about 0.8% of their long-term trend, prompting developers to warm up their bulldozers for more building as rents rise at a higher rate than replacement costs, Lupton said.

Rent growth is 3.4% year over year through the third quarter across both logistics and light manufacturing — a very strong showing, albeit with significant performance differences between higher quality and less functional space. Rising rents are pushing construction beyond the main logistics and industrial hubs into the middle of the country, where land is cheaper and tenant costs are lower.

Link: http://www.costar.com/News/Article/Continued-Demand-for-Warehouse-Distribution-Light-Industrial-Space-Expected-to-Meet-Supply-Wave/165735?ref=100&iid=404&cid=F71709A5A477E585B421836E22A066F4

Nov

2130 Oakdale Avenue – LEASED

Calco Commercial has represented the Landlord in the leasing of 2130 Oakdale Avenue to Hocckke Yeo, LLC. 2130 Oakdale Avenue consists of 12,800+/- square feet of clearspan warehouse with 25′ ceiling height, concrete construction, 400 amp 3 phase power, sprinklers, and one (1) large drive-in loading door. 2130 Oakdale is located in the Bayshore Corridor area of San Francisco, which is bounded by Highway 101, I-280 and Cesar Chavez. This industrial property has great access to both Downtown San Francisco and the Peninsula Areas.

Per CoStar, industrial product in the 10-15,000 square foot range in the Bayshore is quickly evaporating, with only two buildings actively available for lease in the same square footage. If you would like more information on the San Francisco commercial real estate market place, or our other available listings, please call 415.970.0000.

Nov

Calco leases 40,500+/- SF at 1950-2020 Cesar Chavez

Calco Commercial real estate has facilitated a 7-year lease at 1950-2170 Cesar Chavez between the Landlord and the new Tenant, McMillan Electric. The leased property is a total of 40,500+/- square feet which includes dock load, office area & private fenced parking. The premises is part of the Gibraltar Business Center located on Cesar Chavez in between Highway 101 and I-280.

For more information on our other listings, or current San Francisco commercial real estate conditions, call 415.970.0000.

Nov

2170 Cesar Chavez – 12,500+/- SF Warehouse for Lease

12,500+/- square feet of superb and centrally located distribution space will be available for lease December 1, 2014 at 2170 Cesar Chavez. The space includes 4 docks, 1 drive-in loading door, a small office area and large exterior loading and parking. The lease rate is $1.25 PSF, IG. 2170 Cesar Chavez is located off the Bayshore Corridor and within close proximity to Highway 101 and I-280.

For more information on this property, our other commercial real estate listings, or the San Francisco marketplace, call 415.970.0000.

Nov

820 26th Street – LEASED!

Calco Commercial has leased 820 26th Street. 820 26th Street is 6,300+/- square feet of prime warehouse and distribution space located one block away from the 3rd Street rail line. The property is of concrete, tilt-up construction, totally clearspan, with 20′ ceilings, sprinklers, two drive-in loading doors & heavy power.

If you have questions about the San Francisco commercial real estate market or our other available listings, call 415.970.0000.

Oct

San Francisco Industrial Market – Q3 Overview

Source: Costar.com

The San Francisco Industrial market ended the third quarter 2014 with a vacancy rate of 4.5%. The vacancy rate was up over the previous quarter, with net absorption totaling negative (82,427) square feet in the third quarter. Vacant sublease space decreased in the quarter, ending the quarter at 305,115 square feet. Rental rates ended the third quarter at $15.29, an increase over the previous quarter. There were no properties under construction at the end of the quarter.

Absorption
Net absorption for the overall San Francisco Industrial market was negative (82,427) square feet in the third quarter
2014. That compares to positive 957,648 square feet in the second quarter 2014, positive 88,854 square feet in the first quarter 2014, and positive 493,540 square feet in the fourth quarter 2013.

Tenants moving out of large blocks of space in 2014 include: FedEx moving out of (60,100) square feet at 200
Littlefield Ave, Vitasoy moving out of (52,500) square feet at
584 Eccles Ave, and KaloBios Pharmaceuticals moving out of
(49,351) square feet at 260 E Grand Ave.

Tenants moving into large blocks of space in 2014 include: Formations Brands moving into 120,000 square feet at 530
Forbes Blvd, LeeMah Properties, Inc. moving into 87,000 square feet at 155 S Hill Dr, and Stitch Fix moving into 80,000 square feet at 245 S Spruce Ave.

The Flex building market recorded net absorption of posi- tive 36,585 square feet in the third quarter 2014, compared to positive 299,408 square feet in the second quarter 2014, negative (50,744) in the first quarter 2014, and positive 73,956 in the fourth quarter 2013.
The Warehouse building market recorded net absorption of negative (119,012) square feet in the third quarter 2014 com- pared to positive 658,240 square feet in the second quarter 2014, positive 139,598 in the first quarter 2014, and positive 419,584 in the fourth quarter 2013.

Vacancy
The Industrial vacancy rate in the San Francisco market arean increased to 4.5% at the end of the third quarter 2014. The vacancy rate was 4.4% at the end of the second quarter 2014, 6.0% at the end of the first quarter 2014, and 6.1% at the end of the fourth quarter 2013.

Flex projects reported a vacancy rate of 5.9% at the end of the third quarter 2014, 6.1% at the end of the second quarter
2014, 9.3% at the end of the first quarter 2014, and 9.1% at the end of the fourth quarter 2013.

Warehouse projects reported a vacancy rate of 4.0% at the end of the third quarter 2014, 3.9% at the end of second quarter 2014, 4.8% at the end of the first quarter 2014, and 5.1% at the end of the fourth quarter 2013.

Rental Rates
The average quoted asking rental rate for available Industrial space was $15.29 per square foot per year at the end of the third quarter 2014 in the San Francisco market area. This represented a 2.1% increase in quoted rental rates from the end of the second quarter 2014, when rents were reported at $14.97 per square foot.

The average quoted rate within the Flex sector was $24.66 per square foot at the end of the third quarter 2014, while Warehouse rates stood at $11.64. At the end of the sec- ond quarter 2014, Flex rates were $23.85 per square foot, and Warehouse rates were $11.26.

Inventory
Total Industrial inventory in the San Francisco market area amounted to 95,118,337 square feet in 4,848 buildings as of the end of the third quarter 2014. The Flex sector consisted of 23,921,073 square feet in 790 projects. The Warehouse sector consisted of 71,197,264 square feet in 4,058 buildings. Within the Industrial market there were 511 owner-occupied buildings accounting for 12,334,611 square feet of Industrial space.

Sales Activity
Tallying industrial building sales of 15,000 square feet or larger, San Francisco industrial sales figures fell during the second quarter 2014 in terms of dollar volume compared to the first quarter of 2014.

In the second quarter, 20 industrial transactions closed with a total volume of $109,016,000. The 20 buildings totaled 558,793 square feet and the average price per square foot equated to $195.09 per square foot. That compares to seven transactions totaling $153,598,100 in the first quarter. The total square footage was 667,191 for an average price per square foot of $230.22.

Total year-to-date industrial building sales activity in 2014 is up compared to the previous year. In the first six months of 2014, the market saw 27 industrial sales transactions with a total volume of $262,614,100. The price per square foot has averaged $214.21 this year. In the first six months of 2013, the market posted 14 transactions with a total volume of $86,969,600. The price per square foot averaged $168.65.

Cap rates have been higher in 2014, averaging 6.70%, compared to the first six months of last year when they averaged 6.04%. One of the largest transactions that occurred within the last four quarters in the San Francisco market is the sale of 268-298 Alabama St in San Francisco. Totaling 34,545 square feet, the two industrial buildings sold for $20,000,000, or $578.95 per square foot. The property sold on 5/22/2014 and will be occupied by the buyer, Dandelion Chocolate.

Oct

238 Capp Street – SOLD

Calco Commercial represented the Owner in the sale of 238 Capp Street in the Mission District this week. 238 Capp is a 7,874+/-square foot two-story building with ground floor warehouse and second floor offices. The warehouse area is clearspan with 15′ ceilings and one (1) drive-in door. The second story offices include hardwood floors & high ceilings.

If you have questions about our other available commercial listings, or Bay Area real estate market conditions, call our office at 415.970.0000.

Calco Commercial, Inc.

Map