commercial real estate news san francisco

Category: commercial real estate news san francisco (74)

Aug

SF Economy On Fire thanks to Real Estate Market

Source: San Francisco Business Times

The current boom in the tech industry isn’t necessarily comparable to the 1990s dot-com bubble, although a downturn in high-tech would significantly hurt the Bay Area economy.
Those are some of the thoughts from John Williams, the Federal Reserve’s president in San Francisco, during a sit-down interview with the Contra Costa Times.
Williams said demand for products and services during the dot-com bubble came from companies that were a mirage. He noted the current tech boom isn’t necessarily as pervasive.

However, Williams said a burst tech bubble this time around would put a large dent in the economy, especially if the wealth of employees at companies such as Facebook and Google plummeted.
Williams said the Bay Area economy is improving dramatically with the exception of the housing industry in some outlying areas.
He noted San Francisco’s economy is “on fire,” thanks to in part to a strong real estate market.

http://www.bizjournals.com/sanfrancisco/blog/2014/08/sf-fed-reserve-president-high-tech-boom-bubble.html

Aug

Tech’s dominance in San Francisco office market grows further

Source: San Francisco Business Times
Author: Blanca Torres

It’s no secret that tech leasing is driving San Francisco’s office market, but exactly how much?
At the end of last year, San Francisco was home to more than 53,000 tech jobs— a number that has grown significantly in recent years and is expected to keep growing.
What that means for real estate is that of the close to 3 million square feet of office space under construction,100 percent of the tenants pre-leasing space in forthcoming buildings are tech companies according to data crunched by Cushman & Wakefield. So far, those firms snatched up 70.1 percent or about 2.2 million square feet of the space under construction.

That includes buildings such as:

222 Second St., 450,209 square feet: 100 percent leased to LinkedIn.
333 Brannan St., 180,000 square feet: 100 percent leased to Dropbox.
345 Brannan St., 113,000 square feet: 100 percent leased to Dropbox.
350 Mission St., 444,000 square feet: 100 percent leased to Salesforce.
270 Brannan St., 182,000 square feet: 100 percent leased to Splunk.
415 Mission St., 1,412,898 square feet: 50 percent leased to Salesforce.
535 Mission St., 303,780 square feet: 30 percent leased to Trulia.

For existing space, the tech leasing explosion means more landlords are looking for ways to make their buildings “creative” with features like taking out dropped ceilings — a trend that applies to 14 percent of commercial business district space in San Francisco. Landlords have modified about 10.2 million square feet of traditional office space to fit the needs of tech tenants. Rents for modified space have risen an average of 52 percent since the bottom of the market to $64.44 per square foot.

Rents for “prime creative space” went up even faster, by 76.5 percent since the bottom of the market in to average asking rates of $61 per square foot, Cushman & Wakefield said. San Francisco’s office market includes about 51 buildings constituting 6.5 million square feet of creative space defined as “historic and/or brick & timber construction that has undergone a major retrofit.”
Average asking rents in San Francisco’s overall office market shot up about 55 percent to $63 per square foot since the bottom of the market.

http://www.bizjournals.com/sanfrancisco/blog/real-estate/2014/08/tech-dominates-linkedin-salesforce-dropbox-trulia.html?page=all

Aug

2130 Oakdale Avenue – Clearspan Warehouse for Lease

2130 Oakdale Avenue has been brought to the market available for lease by Calco Commercial. This 12,800+/- square foot concrete building boasts 25′ ceilings, 400 amp 3 phase power and one (1) large drive-in loading door. Located in the Bayshore area of San Francisco, this property has great freeway access (to both Highway 101 and I-280) and will be available to lease October 1, 2014 at $1.30 per square foot.

If you have any questions about this listing or our other available commercial real estate, please call 415.970.0000.

Aug

375 Alabama Street – Ground Floor PDR Space for Lease

13,235 – 17,000+/- square feet of the ground floor at 375 Alabama Street has been brought to the market for lease by Calco Commercial. This space is zoned PDR, has three (3) loading doors, one (1) drive-in door, two (2) pony dock-high doors, 17′ ceilings, excellent natural light and side loading via a small exterior yard.

375 Alabama Street is centrally located in the Mission District with excellent access to public transportation, parks, restaurants and shops and will be available for occupancy January 1, 2015 at $1.65 per square foot.

If you have questions about this property, or out other available commercial properties, please call 415.970.000.

Aug

360 Bayshore Boulevard – FOR LEASE

Calco Commercial has just brought 360 Bayshore Boulevard to the commercial real estate market for lease. This 5,720+/- square foot clear span warehouse has one (1) drive-in loading door and has zoning that allows for wholesale and retail uses. The property is available now and is leasing for $1.50 per square foot, NNN.

If you have any questions about this property or our other available listings, please call 415.970.0000.

Jul

More Office Construction Slated for SOMA

Source: San Francisco Business Journal
Author: Kystal Peak

Alexandria Real Estate Equities has submitted plans to transform the collection of warehouses and parking lots on the 500 block of Townsend St into 258,000 square feet of office space.

The new building would reach seven stories on Townsend Street and five stories along Harriet Street. This plan would presumably place the building right up against the I-280 freeway. However, in the proposal, the Planning Department notes that the freeway may eventually come down and be replaced by public space, according to SF Curbed. Alexandria planners were told to consider incorporating these hopes into their design in case it becomes a reality.

As SoMa continues to evolve in the latest tech and real estate boom, dozens of projects are changing the once very industrial landscape near the freeway.

http://www.bizjournals.com/sanfrancisco/blog/2014/07/alexandria-real-estate-equities-sf-office-townsend.html

Jul

Calco Commercial Leases 11,395+/- SF Office Space – 375 Alabama Street

Calco Commercial represented the Landlord in an 11,395+/- SF office lease with the Munchery located at 375 Alabama Street. The creative office space was recently renovated and includes a full kitchen, HVAC, conference rooms, private offices & open areas, high ceilings, with superb natural light and a saw-tooth roof. Located in the Mission, 375 Alabama Street boasts excellent public transportation and is in close proximity to a myriad of local amenities, shops and restaurants.

Calco Commercial specializes in both Landlord and Tenant representation in the San Francisco and Peninsula markets. If have any questions about our available listings or about market conditions, call our office at 415.970.0000.

Jul

2014 Mid-Year Industrial Report: Vacancy Continues to Shrink, CAP Rates Up

Source: CoStar www.costar.com

The San Francisco Industrial market ended the second quarter 2014 with a vacancy rate of 4.3%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 977,686 square feet in the second quarter. Vacant sublease space increased in the quarter, ending the quarter at 332,887 square feet. Rental rates ended the second quarter at $14.97, 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 positive 977,686 square feet in the second quarter 2014. That compares to positive 69,743 square feet in the first quarter 2014, positive 505,972 square feet in the fourth quarter 2013, and positive 185,186 square feet in the third quarter 2013.

Vacancy
The Industrial vacancy rate in the San Francisco market area decreased to 4.3% at the end of the second quarter 2014. The vacancy rate was 5.8% at the end of the first quarter 2014, 6.0% at the end of the fourth quarter 2013, and 6.5% at the end of the third quarter 2013.
Flex projects reported a vacancy rate of 5.8% at the end of the second quarter 2014, 9.1% at the end of the first quarter 2014, 8.9% at the end of the fourth quarter 2013, and 9.2% at the end of the third quarter 2013.

Warehouse projects reported a vacancy rate of 3.7% at the end of the second quarter 2014, 4.7% at the end of first quarter 2014, 4.9% at the end of the fourth quarter 2013, and 5.6% at the end of the third quarter 2013.

Sublease Vacancy
The amount of vacant sublease space in the San Francisco market increased to 332,887 square feet by the end of the second quarter 2014, from 240,425 square feet at the end of the first quarter 2014. There was 147,837 square feet vacant at the end of the fourth quarter 2013 and 222,073 square feet at the end of the third quarter 2013.
San Francisco’s Flex projects reported vacant sublease space of 147,882 square feet at the end of second quarter 2014, up from the 135,533 square feet reported at the end of the first quarter 2014. There were 129,587 square feet of sub- lease space vacant at the end of the fourth quarter 2013, and 136,326 square feet at the end of the third quarter 2013.
Warehouse projects reported increased vacant sublease space from the first quarter 2014 to the second quarter 2014. Sublease vacancy went from 104,892 square feet to 185,005 square feet during that time. There was 18,250 square feet at the end of the fourth quarter 2013, and 85,747 square feet at the end of the third quarter 2013.

Rental Rates
The average quoted asking rental rate for available Industrial space was $14.97 per square foot per year at the end of the second quarter 2014 in the San Francisco market area. This represented a 3.6% increase in quoted rental rates from the end of the first quarter 2014, when rents were reported at $14.45 per square foot.
The average quoted rate within the Flex sector was $23.85 per square foot at the end of the second quarter 2014, while Warehouse rates stood at $11.26. At the end of the first quarter 2014, Flex rates were $23.01 per square foot, and Warehouse rates were $10.85.

Deliveries and Construction
During the second quarter 2014, no new space was completed in the San Francisco market area. This compares to 0 buildings completed in the first quarter 2014, one building totaling 36,000 square feet completed in the fourth quarter 2013, and nothing completed in the third quarter 2013. There was no Industrial space under construction at the end of the second quarter 2014.

Inventory
Total Industrial inventory in the San Francisco market area amounted to 95,310,805 square feet in 4,853 buildings as of the end of the second quarter 2014. The Flex sector consisted of 23,910,714 square feet in 789 projects. The Warehouse sector consisted of 71,400,091 square feet in 4,064 buildings. Within the Industrial market there were 505 owner-occupied buildings accounting for 12,486,342 square feet of Industrial space.

Sales Activity
Tallying industrial building sales of 15,000 square feet or larger, San Francisco industrial sales figures rose during the first quarter 2014 in terms of dollar volume compared to the fourth quarter of 2013.

In the first quarter, seven industrial transactions closed with a total volume of $153,598,100. The seven buildings totaled 667,191 square feet and the average price per square foot equated to $230.22 per square foot. That compares to 12 transactions totaling $84,675,000 in the fourth quarter. The total square footage was 480,193 for an average price per square foot of $176.34.
Total year-to-date industrial building sales activity in 2014 is up compared to the previous year. In the first three months of 2014, the market saw seven industrial sales transactions with a total volume of $153,598,100. The price per square foot has averaged $230.22 this year. In the first three months of 2013, the market posted two transactions with a total volume of $5,764,000. The price per square foot averaged $163.24.

Cap rates have been higher in 2014, averaging 6.70%, compared to the first three months of last year when they averaged 6.11%.

Jun

2070 Newcomb Avenue – 7,500+/- SF – LEASED

Calco Commercial Real Estate has leased 2070 Newcomb Avenue: 7,500+/- square feet of totally clear span warehouse with 28-30′ ceilings, substantial power, fully sprinklered and a side yard with private parking. 2070 Newcomb is located in the Bayshore Corridor area, just two blocks from the San Francisco Produce Market, and within close proximity to public transit.

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

Jun

National Major Market Commercial Real Estate Prices Soar

Commercial property prices are approaching the levels seen during the last boom, according to leading price indices.

“Average sale prices for core multifamily and office properties in major markets have soared well above their 2006–07 average,” reads a June report from CoStar Realty Information Inc. “Investors continued to aggressively pursue those types of properties.”

As prices rise, investors seem torn between pouring more money into the most expensive assets and investing in properties that may have more potential for future appreciation. Meanwhile, the overall liquidity of the market continues to improve as the bid/ask gap shrinks and properties spend less time on the market.

June statistics from the Moody’s Real Capital Analytics Commercial Property Price Indices show continued steady growth in prices, bringing the index just 4.8 percent below its November 2007 peak.

Digging into the numbers, six of the 23 Moody’s/RCA’s indices are now higher than their peaks before the crisis, including apartment buildings in major markets; apartment and office properties in central business districts (CBDs) in major markets; office buildings in CBDs in non-major markets; major markets aggregate and retail in major markets.

Suburban office buildings in non-major markets have experienced the slowest recovery, regaining just over 30 percent of their peak-to-trough loss.

Future returns

Recently, non-major markets and less-favored property types have been gaining on the CPPI.

Appreciation for most asset types rose ahead of apartment properties, the long-time favorite, in the CPPI numbers for both April and the last 12 months.

The largest and most expensive properties have led the recovery in real estate prices and have an outsized importance in CoStar Group’s U.S. Composite Index, which in April had recovered to within 2.2 percent of its prior peak, according to CoStar’s June report. The prices for the priciest properties kept marching higher in April. The composite index advanced 2 percent in April 2014, according to CoStar.

Less expensive properties, however, show more potential to grow because they are still far below their old peak prices. CoStar’s equal-weighted U.S. Composite Index is 21.9 percent below its prior peak. An equal weighted index gives the same weight, or importance, to each asset in the index. So the smallest properties are given equal weight to the largest properties.

Throughout the first quarter of 2014, apartment properties showed a relatively weak total return of just 2.21 percent, according to the National Council of Real Estate Investment Fiduciaries (NCREIF). That’s the lowest total return for apartments since the first quarter of 2010. Part of the reason behind the weak returns is that appreciation is slowing for apartment properties. The 0.99 percent appreciation showed by NCREIF is also the slowest since the first quarter.

As investors become more optimistic about the broader economy, they are putting more money into other property types. Retail continued to lead the NCREIF index in the first quarter of 2014, with total returns of 4.3 percent. Investors are betting that a rising economy with help lift retail properties, which still suffer from relatively high vacancies in many markets.

“Despite the strong return performance, the fundamentals were poor,” according to NCREIF.

No haggling over price

The average difference between the prices sellers ask for their properties and the final sales price shrank by more than 1 percent over the 12-month period that ended in April. The sales price to asking price ratio was 88 percent that month, according to CoStar. The change shows improved liquidity in the investment sales market.

“Multifamily properties are driving much of this improvement,” say CoStar researchers. That’s especially true in core markets. For apartment properties in Los Angeles, San Francisco, Boston and New York, the average difference between asking prices and sales prices has shrunk to 2006-07 levels, according to CoStar.

In another measure of improving liquidity, the average time a for-sale property spends on the market shrank 3 percent to 417 days over the 12 months ending in April, and the share of properties pulled off the market by discouraged sellers also dropped by more than 2 percent, CoStar reports.

Source: National Real Estate Investor
http://nreionline.com/finance-investment/commercial-property-price-indices-approach-new-highs