commercial real estate news | Calco Commercial, Inc.

Category: commercial real estate news (106)

Feb

4,736+/- SF of Funky/Creative Commercial Office Space for Lease

Calco Commercial Real Estate, is pleased to present 385-A 8th Street, which will be available to lease March 1, 2015. The commercial office space includes 4,736+/- square feet of second floor funky/creative space, a full kitche, skylights, hardwood floors, rooftop deck and an open floor plan. Situated in the SOMA, this space would be great for a creative user. The space will lease for $2.50 psf. or $30.00 psf. annual.

If you have any questions about this office listing, our other available properties, or the San Francisco commercial real estate market, please call our office at 415.970.0000.

Jan

National Industrial Outlook – 2015

Source: Costar
By: Randyl Drummer
Date: 12.30.14

The U.S. industrial real estate market’s amazing run shows no signs of slowing as the new year approaches, posting an incredible 19th consecutive quarter of falling vacancy rates to reach its lowest national level in nearly 14 years, ending 2014 at 7.2%.

Given optimistic forecasts for domestic growth in 2015, analysts expect 2015 to be another strong year for industrial space demand. Consensus growth forecast of around 3.5% in gross domestic product (GDP) as more people find work and wages begin to rise, said Bob Bach, director of research for the Americas with Newmark Grubb Knight Frank.

“This is very good news for the industrial market,” Bach said. “Expect the fall in vacancy rates and rise in rents to continue, although the pace should begin to level out by the end of 2015 as construction catches up with demand.”

GDP is considered a primary driver of demand for industrial space because its components — online and brick-and-mortar consumer spending, business spending, homebuilding, exports and imports — all generate activity in the warehouse and logistics market.

Healthy tenant demand, combined with a limited amount of quality ready supply, is tugging down the nation’s vacancy rate, said Aaron Ahlburn, senior vice president and director of research for the industrial and retail property markets for JLL’s Americas region.

“Although new big box construction is escalating, it does not appear to be overpowering current tenant requirements,” said Ahlburn. “E-commerce continues to be the headline-grabbing market driver, especially as retailers continue to determine their omni-channel distribution and fulfillment space needs.”

Outdated distribution centers that don’t support an integrated, omni-channel retail strategy will require updating or face obsolesence, Ahlburn added.
The only unwelcome guest at the warehouse party over the next 12 months could be overbuilding, which developers tend to do in times of economic growth. Even today’s vast 1 million-square-foot-plus mega warehouses are comparatively fast and easy to build, said Andrew Berk, vice president in Avison Young’s Los Angeles office.

According to NGKF’s Bach, the amount of space under construction has been ramping up slowly for 19 of the past 20 quarters. At year-end 2014, 130.5 million square feet was under way — up from 100 million square feet at the beginning of the year, but still below the prior peak of 190.1 million square feet in third-quarter of 2007, during the development heydays of the prior cycle, Bach notes.

Deliveries surged in the fourth quarter to a total of 45.4 million square feet, a quarter of which was completed in Dallas-Fort Worth. Houston was a distant second with 3.4 million square feet coming out of the pipeline. For the full year, industrial deliveries totaled 133 million square feet.

For now, the consensus among most analysts is that supply remains in line with demand across much of the country, even in the high-growth Dallas market.

“To date, no space has broken ground in Fort Worth during this cycle, so we should see landlords enjoying increased rental rates in 2015,” said Transwestern Principal Jeff Givens, adding that the Fort Worth office alone recently completed eight sales transactions totaling 525,500 square feet. “User sales were robust and the leasing market was very active, which increased occupancy.”

There’s so much absorption and a historically low vacancy rate which has remained consistent for so many years that overbuilding does not seem to be a major concern in Class A or even B markets, Avison Young’s Berk added.

“Investors are favoring ‘Main & Main’ assets of almost any condition and size,” Berk said.

He noted, however, that further from the core geographic areas, investors are keen to make sure that the assets are located in good logistics markets with recent upside improvements.

“Development has been more controlled and disciplined this cycle, especially compared to past ‘boom’ cycles,” JLL’s Ahlburn said. “Although a handful of markets, including the Inland Empire, Dallas and Indianapolis, have flirted at times with overbuilding, the majority of U.S. markets are evenly-paced.”

Net absorption was solid at 42.1 million square feet for the quarter and 172.4 million square feet for the year. Atlanta led all markets for both periods, absorbing 3.8 million square feet in the fourth quarter and 8.8 million square feet in 2014. California’s Inland Empire took second place in both periods.

The average asking rental rate ended 2014 at $5.64 per square foot per year, triple net, up by just a penny from the third quarter. The yearly gain was more impressive -an increase of 3.8%. Of the 45 markets tracked in the survey, eight markets posted double-digit rent gains in 2014, led by Austin at 14%.

Other double-digit gaining markets included the Inland Empire, Indianapolis, San Antonio, Silicon Valley, Denver, Boston and Oakland-East Bay, according to NGKF and CoStar data.

Finally, risk mitigation in supply chains is another important factor in 2015, Ahlburn noted. Congestion at major West Coast seaports and the impending truck driver shortage has supply chain executives seeking alternative strategies.

“To avoid interruptions, they are moving discretionary shipments to East Coast ports,” he said.

Link to article: Industrial Outlook

Jan

Tech Users Race for More Space

Source: San Francisco Business Journal
Reporter: Cory Weinberg
Date: January 20, 2015

Social media companies Twitter and Pinterest and mobile payments startup Stripe are hunting for hundreds of thousands of feet of office space each, multiple real estate sources said.

Their eventual decisions have the potential to drive the leasing market this year and next. As it is, tech companies leased 91 percent of the 3.6 million square feet of office space taken in San Francisco last year, according to CBRE.

The companies could head to Oakland to anchor the refurbished 400,000-square-foot Sears Building when it opens by 2018, giving the East Bay city a techie jolt. More likely, they’ll have their eyes on spaces like Kilroy’s 1800 Owens St. (known as the Exchange on 16th) in Mission Bay, set to deliver 650,000 square feet next year, or 510 Townsend St.

If companies need hundreds of thousands of square feet, they could also look toward Transbay buildings such as the Salesforce Tower (opening in 2017), 181 Fremont (2016), 199 Fremont (2016) or 303 Second St. (2015).

“I don’t think you’ll see a large number of those kinds of users go to Oakland. Having said that, I do think there are some indications that (the Sears Building) could snatch some sort of user from San Francisco who decides that San Francisco doesn’t have enough space,” Mike Sample, a broker who specializes in tech companies for Newmark Cornish & Carey, said at a SPUR event last week.

Stripe, which has received $200 million of capital from the likes of Sequoia Capital, Peter Thiel, and Elon Musk, now leases about 27,000 square feet at 3180 18th St. in the Mission. It also scored a big coup by landing a spot as an Apple Pay partner earlier this year, fueling growth.
One source who spoke on the condition of anonymity said Stripe has looked at the 300,000 square feet available at the 500 block of Townsend Street, just west of the I-280 off-ramp near 6th Street.

Twitter has 760,000 square feet leased in Mid-Market. One broker who works with tech companies – and also declined to speak on the record – said Twitter is in the market for a few hundred thousand square feet and has its eye on Mission Bay now that Uber has decided to park its headquarters there.

“There’s a lot of energy going in that direction. I wouldn’t be surprised if they did something similar,” he said.

Pinterest has about 225,000 square feet across two buildings south of Market. One source said the company’s space need isn’t urgent because they just inked a new lease last fall. Pinterest, Stripe and Twitter did not return requests for comment.

Even if those companies don’t start expanding their offices this year or next, they’re increasingly thinking about future growth because of Prop. M. The city’s office space cap is likely to start squeezing the market later this year and possibly causing the current city average of $65 a square feet to increase at a faster rate.

“It seems like tenants are thinking five years out, especially the bigger ones who want to stay vested in San Francisco and think about how they will keep their headquarters in San Francisco,” Alexa Arena, vice president of Forest City’s San Francisco office, said at a Bisnow forum on Tuesday. “That’s clearly difficult for them because there’s not a lot of swaths of space where you have a single location to get the critical mass they need.”

Office complexes under construction or renovation south of San Francisco in Daly City and San Mateo will also hope to attract tech tenants this year. (It should be said that Reddit’s CEO was ousted over his proposed move to Daly City.) About 70,000 square feet at the Ferry Building in San Francisco will also likely fetch top dollar later this year.

Article Link: Tech Giants Race for More Space

Jan

2015 Forecast: SF Office Spillover

Source: San Francisco Business Journal
Reporter: Cory Weinberg
Date: January 2, 2015

If the much-hyped San Francisco spillover of office tenants is ever going to happen, this will be the year. The city’s squeeze could start to take a noticeable toll in 2015, and other cities will be waiting with giant nets to scoop up big-name companies.

Until now, the tenant trickle to the East Bay and San Mateo County has been mostly talk. Companies recruiting young workers have flocked to San Francisco and seem to think the high cost of renting offices is worth the trouble.

Two converging forces may turn the hype into reality. First, San Francisco officials expect the city this year to hit the new office space cap imposed by the 1986 law under Proposition M.

About 4 million square feet of large office projects will be up for approval this year, enough to tip over the annual limit and constrain what gets approved. That doesn’t mean that office users will see much of an effect this year, but it is a restriction on new space nonetheless that may eventually send office rents much, much higher.

Meanwhile, Oakland, Daly City, San Mateo and San Ramon all have openings in large, attractive buildings near transit.
Oakland’s Sears building should land a tech tenant in the first half of 2015.

“San Francisco tech job growth has been seven times greater than in Silicon Valley. When you see the stats, it’s stunning,” said CBRE broker Bill Cumbelich, who is leasing the Sears building.

Bay Meadows in San Mateo also has its first office building under construction, while Bishop Ranch in San Ramon has 1 million square feet up for grabs. Daly City’s DC Station has space available, too. Still, cities in northern San Mateo County and the Tri-Valley haven’t been gotten down to single-digit vacancy rates.

“The market is getting very tight for large blocks of space and almost all of it is a result of local expansion, not San Francisco spillover,” said Bill Nork of Newmark Cornish & Carey. “Everyone was hoping, but it didn’t happen.”
Wait ’till this year?

5 key events from 2014

Salesforce dominates: Salesforce was ready to drive into Mission Bay office space when it hit the brakes. Instead, S.F.’s largest tech tenant made two huge office plays. First, it took 714,000 square feet in a Transbay tower. Later, it paid $640 million for the 50 Fremont tower.

Mission Bay’s tech future: There are about 300 acres in the Mission Bay neighborhood, and 30 of them could change the place’s whole dynamic. Uber announced it will build its headquarters there, while Kilroy Realty Corp. sketched plans for a new tech haven and the Golden State Warriors plotted office buildings next to its new arena. The turn toward tech offices could alter the identity of Mission Bay as a research hub.

Big plays for tech on the Peninsula and in East Bay: Four major office developments outside of San Francisco opened up over 2 million square feet of space geared toward tech tenants: the Sears building in Oakland, Bay Meadows in San Mateo, Bishop Ranch in San Ramon and DC Station in Daly City.

Rent gets too high for nonprofits: Increasing office rents, gentrifying neighborhoods and cheaper space in Oakland has created an exodus across the Bay for nonprofits. According to a city report, half of the city’s nonprofits left between 2011 and 2013 as rents have doubled to more than $50 a square foot in the last few years.

Redwood City’s emergence: The southern Peninsula city’s office market has the second-lowest vacancy and the second-highest rents in San Mateo County thanks in part to big plays by Google and Box this year. First, Box locked up 334,000 square feet at Crossing/900. Then, Google inked 934,000 square feet at Pacific Shores. Developers have since flooded the city with new proposals to build offices.

Link to article:
SF Office Spillover

Dec

Lenders Ease Tight Underwriting Standards for Commercial Real Estate Loans

It may be easier for Ben Bernanke to get a loan to buy an apartment building than to refinance his home mortgage.

While addressing a conference of the National Investment Center for Seniors Housing and Care in Chicago this fall, the former chairman of the Federal Reserve mentioned that he and his wife had recently been turned down by their lender after seeking to refinance their mortgage.

“The housing area is one area where regulation has not yet got it right,” Bernanke said. “I think the tightness of mortgage credit, lending is still probably excessive.”

Meanwhile, it certainly appears that commercial lenders have gotten it right, judging by the flood of capital available for commercial real estate borrowers.

However, after commercial real estate underwriting standards eased for the third consecutive year in a row according to the Office of the Comptroller of the Currency’s 20th Annual Survey of Credit Underwriting, some are beginning to sound a note of caution that perhaps lending standards are becoming too accommodating.

Surveyed banks noted that they have continued to ease underwriting standards and take on increased levels of credit risk in response to abundant liquidity for commercial property and competitive pressures in the current low interest-rate environment. Large banks, as a group, reported the highest share of eased underwriting standards among those surveyed.

Ratings agencies are particularly sensitive over underwriting standards after taking heat from Congress and investors for failing to adequately account for risks and when rating securities backed by residential and commercial mortgages before the recession.

Slippage in underwriting standards should remain a key credit concern for investors, particularly in certain segments such as construction where lending conditions have been relatively frothy, Standard and Poor’s said in its 2015 banking outlook issued this week.

“In some loan classes (e.g., construction and development loans), ultra-low net charge-offs are prompting a rebound in construction lending among some banks. We remain cautious that some U.S. banks with below-average exposure to this category may be easing credit standards somewhat and pricing loans more aggressively to generate growth, which could eventually lead to deceleration in asset quality,” S&P analysts noted in their report. “While we do not expect widespread degradation in U.S. banks’ asset quality in 2015, we do expect a gradual build-up of provisions for the banking industry as reserve levels bottom out and loan growth increases more consistently.”

In the recent OCC survey, one-third of bank respondents reported an easing in commercial construction lending. This is the highest level of responses in this category this century. Only 2% reported tightening standards for commercial construction loans, the lowest level this century.

In addition to acknowledging the relaxed credit standards, bank respondents also noted that the level of credit risk in their construction loan portfolios has increased, excluding residential development. Twenty-one percent reported that credit risk has increased somewhat – more than double the number of respondents who indicated this trend last year. In addition, 44% expected this risk to rise next year.

When it came to CRE lending for residential construction including multifamily, 13% of bank respondents noted that credit standards had eased. This is the first time in six years that any bank has noted that trend.

Thirteen percent of bankers also noted that this has raised the credit risk somewhat for their residential construction loan portfolios – none did last year. In addition, 25% expected this risk to rise next year.

Thirty-seven percent of banks said underwriting standards had eased in their other commercial real estate loan portfolios – up from 24% in 2013. Just 4% said underwriting had tightened. That is the lowest level this century and compares to the 76% who said they tightened standards during the Great Recession years.

Twenty-seven percent of bankers this year said the easing has raised the credit risk in their other commercial real estate loan portfolios. And 44% expected that risk to increase next year.

Jennifer Kelly, senior deputy comptroller for bank supervision policy and chief national bank examiner, sounded a reassuring note in the OCC survey: “As banks continue to reach for volume and yield to improve margins and compete for limited loan demand, [OCC] supervisors will focus on banks’ efforts to maintain prudent underwriting standards, monitor portfolio credit risk, and reduce exceptions to policy,” she said.

Source: CoStar
Reporter: Mark Heschmeyer
Date: December 17, 2014

Link to Article: CRE Loans

Dec

SF’s Prop M Puts Development Under the Gun

With demand for office space in San Francisco at its highest level in 15 years, anxious developers are waiting for the city to determine how it will approve projects under Proposition M’s construction constraints.

The San Francisco Planning Commission most likely won’t implement a selection process until midway through 2015 at the earliest, but in mid-November an industry discussion panel provided an update on the city’s Prop. M policy formation and state of the office market.
The event was closed to the media, but presentations and attendees indicate that city planners continue to debate whether to institute a “competitive pool” policy, in which a group of projects compete for approval, or to continue evaluations on a project-by-project basis.

“What you can gather is that there are a lot of options about how to do this right now—there are procedural questions, substantive questions about criteria and questions about implementation,” said David Blackwell, who moderated the panel and leads the land use practice group for the Allen Matkins law firm in San Francisco. “There are a lot of variables that haven’t crystallized yet.”

Approved in 1986, Prop. M caps the amount of large new office projects at 875,000 square feet annually. Unused allocations are rolled forward, and the current cap is at a little more than 3 million square feet. But about 3.2 million square feet in applications are pending, and nearly 8 million square feet are in the pre-application process, according to a presentation that John Rahaim, the planning director for San Francisco, gave at the event. That amounts to a pipeline deficit of about 8 million square feet.

Meanwhile, office rents have skyrocketed amid a demand for space that parallels the height of the dot-com boom in 2000, a trend that shows no signs of slowing down absent an economic downturn.

Average asking rents since 2010 have doubled to $61.69 per square foot, while the average vacancy rate has dropped 150 basis points to 6.7 percent over the last year, according to a presentation made at the event by Phil Tippett, an executive vice president of CBRE in San Francisco. Users have absorbed 4.3 million square feet in the last three years, and tenants looking for an aggregate of about 6 million square feet are in the market.

History suggests that the planning commission will institute a competitive pool. The commission used the process the last time developers butted against Prop. M in 2000 and 2001 and then reverted to the project-by-project review during years of lower demand.

But the commission still must decide what criteria to use in such a process. In 2000 and 2001, for example, competitive pool principles focused on public views, shadows, housing displacement and a handful of other elements. By comparison, in the late 1980s, broader standards concentrated on design, location and consistency with the city’s general plan.

A planning department staff memo in September suggested that a competitive pool for this round of development include criteria such as green building design, proximity to transit and the impact on production, distribution and repair space.

According to Rahaim’s presentation, if the commission decides to implement a competitive pool process, it also needs to determine how to score or weigh different elements, when to officially begin the competition, how long review periods should be, and whether to approve proposed projects that are ready to move forward before launching the policy.

Overall, office supply constraints have put existing landlords in enviable positions. During their most recent earnings calls, executives with large publicly traded office real estate investment trusts discussed Prop. M amid concerns that the current level of demand is unsustainable.

Officials with Boston Properties, Inc., for example, suggested that their 61-story Salesforce Tower in the South of Market neighborhood, which is expected to be completed in 2017, is further along than most projects and that the views from the top 30 floors generally available for lease provided a competitive advantage. (The firm is asking for more than $95 per square foot, according to CBRE.)

Additionally, Hudson Pacific Properties Inc. earlier this year finished leasing up the 1 million-square-foot 1455 Market St., a property it repositioned to appeal to technology tenants after buying it from Bank of America in 2010.

“From our standpoint [Prop. M] is a non-existent issue because we don’t have ground-up development—everything we have and everything we’ve looked at is on a renovation basis,” Hudson Pacific CEO Victor Coleman told analysts in response to a question about Prop. M’s influence. “If you’re a landlord in San Francisco and you like your portfolio, I don’t think it hurts you.”

Source: The Registry
Reporter: Jose Gose
Date: December 16, 2014

Article Link: PROP M

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.