commercial real estate | Calco Commercial, Inc.

Category: commercial real estate (161)

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

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.

Oct

Office Development Reaches Highest Level Since Great Recession

Source: CoStar News
By Randyl Drummer
October 8, 2014

U.S. office construction has reached its highest level since 2008 as developers break ground on new projects in a growing number of markets where job growth, rising rents and falling vacancies are finally justifying new development.

An analysis of CoStar Analytics data shows about 86 million square feet of higher-end office properties larger than 50,000 square feet under construction, a 25.7% increase compared to 2013’s 68.5 million square feet and the highest total since the end of 2008, when 105.7 million square feet of new office space was under construction.

This total amount under consturction for the year is likely to rise even higher as CoStar researchers discover more new projects breaking ground before the end of 2014.

CoStar expects 44.5 million square feet of office project deliveries by the end of 2014 — a 22% increase over 2013. New office construction starts, meanwhile, stood at 42.6 million square feet as of Sept. 30, already exceeding last year’s total, ensuring a steady supply of new product through early 2017.

“Developers are hustling now to get new product to the market, given the stronger absorption trends, particularly for newer, high-quality space,” explained Cassidy Turley Chief Economist Kevin Thorpe. “But it will take a couple of years for all of this new development to materialize, meaning demand will continue to outstrip supply, which will keep upward pressure on rents.”

Editor’s note: For a comprehensive look at the U.S. office market, register for the CoStar State of the Office Market Third-Quarter 2014 Review & Forecast on Oct. 21. CoStar subscribers may log on and click the Knowledge Center tab.

John Sikaitis, managing director of U.S. office market research for JLL, believes that managing the development pipeline will become the biggest challenge for the office market, especially in hot construction markets like Texas and the San Francisco Bay Area.

He points out that office development has shifted from being largely focused on build-to-suits to now primarily multi-tenant construction, which has lower 50% to 60% pre-leasing rates, versus a 100% pre-leasing rate on build-to-suit developments. While that signifies improving sentiment in both the office sector and the overall economy, it also foreshadows the oversupply issues from past cycles.

“A lot of developers now are thinking about breaking ground on that next project, and we could be in that same exact situation 36 months from now that we were in during 2009 and 2010,” Sikaitis said. “We really need to pause and think about the momentum in the market, and if it’s sustainable with this new development.”

Case To Be Made for Market Equilibrium
For now, analysts say, the good news is that strong leasing activity is more than offsetting concerns about potential oversupply. Only 45% of space under construction remains available, with large blocks taken by tech, creative and energy companies such as Salesforce.com, Comcast, ConocoPhillips, Google, State Farm and LinkedIn.

Walter Page, CoStar Portfolio Strategy director of research, office, said the U.S. is on pace for office tenants to take 77 million square feet of office space in 2014 — a 77% increase over 2013 — followed by another 90 million square feet in 2015 and 2016.

The vacancy rate will trend down to a projected low of about 11% in 2016 as shadow space evaporates and office job growth continues to rise. In the improving economy, even the rate of decline for average space per employee has slowed from 2% to 1%.

“We have significant less supply than demand, which will allow vacancy rates to continue to move down until 2017,” Page said.

“The office market recovery is at its best point of the past seven or eight years. We experienced more occupancy gains in the third quarter than so far in the recovery,” Sikaitis added.

Preliminary CoStar data shows that net new office supply of 23.5 million square feet nearly caught up with demand of 24.9 million square feet in the third quarter. But that’s not likely to last, with absorption expected to remain north of 30 million square feet per quarter through late 2016.

By that time rent growth is expected to slow, as many of the new office developments now under construction enter the market, such as Hines’ 48-story tower at 609 Main Street in Houston, Hanjin Group’s 73-story, 1.7 million-square-foot Wilshire Grand Tower in downtown Los Angeles, and towers in North Riverside Plaza and 444 W. Lake Street in Chicago.

Mid-size projects beginning in the current quarter and early 2015 will reach the market in late 2016 early 2017 at the same time.

“We’re going to see a pickup in construction, which will ultimately weigh on fundamentals,” said CoStar Portfolio Strategy real estate economist Sam Tenenbaum.

Tenenbaum recommends that investors start thinking about developing in secondary and tertiary markets such as Portland, Minneapolis, Denver and Nashville, where demand has been fairly strong, vacancies have tightened, and pricing has picked up substantially, especially for newer office buildings built since 2008.

Ultimately, however, the usual host of economic wildcards will determine how much office space gets built.

“Prevailing macroeconomic factors, lenders’ willingness to start projects on a speculative basis, rising construction costs and the rise and fall of interest rates will determine how much of the pipeline will begin construction sooner rather than later,” JLL’s Sikaitis said.

Link: http://www.costar.com/News/Article/Office-Development-Reaches-Highest-Level-Since-Great-Recession/164805?ref=100&iid=400&cid=F71709A5A477E585B421836E22A066F4

Oct

San Francisco Office Sales Near Historic Levels

Source: The Registry Bay Area Real Estate
Author: Nancy Amdur

San Francisco office sales are reaching near historic levels in 2014, mainly due to fast-growing technology companies and limited supply, real estate analysts said.

Office sales in the city are on track to hit $6.7 billion this year, the second highest volume total in history, according to a report by commercial real estate services firm CBRE Group, Inc. Further, the average price per square foot for Class A office space is at a record high of $648.

“San Francisco is one of the hottest investment markets in the country, and it’s garnering the attention of investors all over the world,” said Colin Yasukochi, the director of research and analysis at CBRE in San Francisco.

“The primary driver of the office market is the technology-driven economy that has created a tremendous amount of demand for office space here in San Francisco, and it’s increasing the rents, which increases the income potential of properties and attracts investors,” Yasukochi said.

Foreign investors, pension funds and other institutional investors are among the players in the market, real estate analysts said.

“[Investors] are looking to put money into a market where they see their income potential continue to grow over the long term,” Yasukochi said.

“There is a lot of money looking for prime assets in gateway cities and San Francisco, given the strong leasing and the strong rent and the strong rent projections, will continue to attract capital,” said Caroline Rooney, the managing director for capital markets at real estate brokerage Cushman & Wakefield in San Francisco.

San Francisco’s office market has been on the upswing since 2011, but the highest sales volume was in 2007, with $9 billion. That was mainly attributed to the sale of Equity Office Properties Trust’s portfolio, Yasukochi said.

The largest transaction so far this year was New York-based Blackstone Real Estate Partners’ $550 million purchase of a 49 percent stake in One Market Plaza, he said. Morgan Stanley Real Estate sold it for approximately $750 per square foot. New York real estate investment firm Paramount Group, Inc. is the majority owner of the 1.6 million-square-foot property.

Last month, a joint venture of Norway-based Norges Bank Investment Management and New York pension fund TIAA-CREF paid $390 million, or roughly $748 per square foot, for 405 Howard St. GE Real Estate and Langley Investment Properties sold the 521,000-square-foot property.

Also in September, Paramount Group paid $395 million for 50 Beale St. The firm bought the 662,000-square-foot skyscraper for about $596 per square foot from Rockefeller Group Investment Management Corp., on behalf of a joint venture of Rockefeller Group U.S. Premier Office Fund LP and Mitsubishi Estate New York.

“[This building] is the type of iconic asset where we believe we can utilize our operational expertise to attract and retain a premium tenant base and enhance cash flow over time,” said Paramount President and CEO Albert Behler in a statement.

“People want to be in San Francisco,” said Ben Thypin, the director of market analysis at New York-based global research firm Real Capital Analytics. “Demand from tenants and employees, but also competition from investors are driving this activity.”

Indeed, businesses seem to covet a San Francisco address. With 7.6 million square feet of city office space leased through the third quarter this year, the amount already surpassed the previous full-year leasing record of 7.4 million square feet, set during the dot-com boom in 1999, said Robert Sammons, a San Francisco-based regional research director at Cushman & Wakefield. Vacancy for Class A space in the city totaled 7.9 percent through the third quarter this year, he said.

Technology companies, such as Salesforce, Google, LinkedIn and Uber, took much of the space. Competition for space is helping to boost rents, but prices are not peaking, Sammons said. The average rent per square foot for Class A office space citywide is $61.38, and in 1999 it was $75.24.

San Francisco led the nation in rent growth in the first half of this year, according to a Real Capital Analytics report, and prices may jump at least 20 percent over the next three or four years, Rooney said.

Rising prices may push demand to neighboring markets.

“This cannot continue forever. It’s likely that this demand will eventually spill over into the East Bay and the South Bay” where space might be less expensive, Thypin said.

For now, demand is expected to continue as tech firms seek to attract employees with city space, analysts said. Also, new supply is limited, in part by Proposition M, which caps the amount of San Francisco office space that can be built annually.

“What [investors] are pursuing is a market that has strong growth and a continued appetite for office space,” Yasukochi said. “It’s a market that is becoming even more supply constrained as we run up against the limit on how much new development can occur in the city. Investors see the market as having strong upside potential.”

Link: http://news.theregistrysf.com/san-francisco-office-sales-nearing-record-high/?utm_source=The+Registry+Database&utm_campaign=01e4288cfc-Mid+week+edition_10_8_2014&utm_medium=email&utm_term=0_efa1d9206e-01e4288cfc-79152865

Oct

$250MM-$300MM Mixed-Use Development slated for San Mateo

Source: The Registry Bay Area Real Estate
Author: Jon Peterson

On the heels of large development announcements and purchases in Redwood City, San Mateo now seems poised to capture the attention of the development world as it unveils a new large development in the middle of the hot Peninsula submarket.

Philadelphia-based EBL&S Development is planning the development of Station Park Green, a mixed-use apartment, office and retail development in San Mateo located at 1700 and 1790 South Delaware Street.

The large development showcases the opportunity this market has to offer as one of Bay Area’s best connected towns. “I would think that this project will have a total development cost somewhere in the range of $250 million to $300 million,” says Alan Talansky, a vice president of development for EBL&S. He works out of the company’s regional office located in San Mateo at 30 West Poplar Avenue.

The developer is now going through a design review stage but anticipates the project to kick off shortly. “We should be able to start the project sometime during the first quarter of next year,” said Talansky.

This project was first brought up for approval in 2011. It was then put on hold by the developer due to the financial circumstances brought on by the Great Recession. All the while, the developer anticipated a time when the market would recover and allow the development to commence.

EBL&S has been given the okay by the city to construct 599 apartmens, 10,000 to 15,000 square feet of commercial space, 25,000 to 30,000 square feet of retail and 2.3 acres of parks.

It’s anticipated that the first part of the development will be with the housing. “I would think that the initial part of the development will be with around half of the apartment units constructed,” said Talansky.

The vast majority of the apartments will be market-rate units. In terms of the affordable development, the project is planning to have either 15 percent affordable units, or 10 percent will be considered as low-income units. Most of the apartment units are planned to be one-bedrooms. This kind of housing should attract either single and/or young professional working couples and empty-nesters. The project will have only five three-bedroom units, which is something that the city of San Mateo had requested.

EBL&S estimates that employees of nearby companies should be attracted to the apartment portion of the development. “I believe that the employees located in the nearly 300,000 square feet 400-450 Concar office project owned by Hines located across the street and other close by office buildings should be attracted to the housing that we will be providing,” said Talansky.

Station Park Green is a transit oriented development. There will be a Caltrain stop located in the development. This will allow apartment renters to commute either to the north or south. This project has been selected as one of the first LEED-ND projects to attain Gold status.

The retail planned for the development will feature a neighborhood retail theme. This will serve the existing customers already living in the area and the new renters of the apartment project. One amenity planned for the apartments is to have six car-sharing spaces for its renters to use.

EBL&S is unsure at this time what the ownership structure of the project will be in the future. There is a possibility that traditional construction financing could be used on the project. There also is a chance that some institutional partners might be brought into the project. This could be a REIT or a private equity real estate fund.

EBL&S owns two other properties in the San Francisco Bay Area, according to its Web site. This is the Sun Microsystems Building located at 2525 North First Street in San Jose and Kmart Plaza at 1700 South Delaware in San Mateo.

San Mateo Planning Massive $250MM to $300MM Mixed-Use Development