Category: commercial real estate (161)

3130 20th Street is now available for lease. 3130 20th Street is centrally located in the Mission District just a few blocks from BART, countless shops and restaurants. The 13,850+/- square feet that is available can be divided into three spaces (9,000+/- main PDR space; 3,250+/- separate PDR space; and 1,600+/- SF of auxiliary warehouse). The spaces will be available on or about January 1, 2015 @ $2.25 psf./$27.00 annual.

For more information on this space, our other available listings or San Francisco real estate market conditions, call 415.970.0000.

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3130 20th Street Property Brochure

Source: San Francisco Business Times
Author: Adam Weintraub

These are exciting times to be a manufacturer in San Francisco. But nerve-wracking, too.

With the rise of the ‘maker’ movement and rebirth of artisan food and drink, manufacturing firms and jobs in the city are burgeoning after several decades of decline.
That growth is creating its own problems: It’s driving up rents and increasing competition for space from tenants that can pay more than a low-margin manufacturer. Rents have surged in the last two years, and rich sale prices for industrial sites suggest that new owners will charge rents too high for the mainly small firms behind San Francisco’s manufacturing rebirth.
Even the city’s recent effort to create incentives for construction of more light-industrial space — by allowing developers to combine it with office development — faces looming clouds. With the first combined office/industrial project under the new rules getting ready to face the Planning Commission, officials worry that a flood of office development proposals will quickly hit the Prop. M development ceiling.

“We remain very concerned about how tight the market is right now for industrially zoned space,” said Kate Sofis, executive director of SFMade, a nonprofit supporting the manufacturing sector and companies in the city. “We’re seeing asking rents nudge up above $2 a square foot (per month), which is very difficult for a traditional manufacturer.”

Bidding wars
Dave McLean started searching in 2010 for a larger space to produce beer for his Magnolia Brewing Co., which had maxed out capacity in the basement of his Haight-Ashbury brewpub. He found about 10,000 square feet in one of the few available spaces at the American Industrial Center at 2505 Third St. in Dogpatch. He opened the brewery late last year and Smokestack BBQ restaurant in May.

“I suspect the window may have shut right as we got in,” said McLean, who calls the giant AIC complex with its hundreds of small spaces a unique asset in San Francisco’s manufacturing world. “I don’t think I’d want to be looking right now.”

The space crunch has bakers and chocolatiers competing for space with repair shops and HVAC distributors, and now also with small clothing manufacturers, 3D-printer developers and robotics startups. Some firms are struggling with bootstrap finances while others are backed by investors, and there can be a big difference between the profit margins on a robotic manipulator and a barrel of beer.

That sets up bidding wars for so-called “PDR” space (for “production, distribution and repair”) just as it does for offices, with high-margin or well-financed tenants squeezing out those with weaker cash flow.

“It’s certainly getting to the point price-wise where a lot of business services (companies) are having a tough time making rent,” said Scott Mason, president of Calco Commercial Inc., a real estate brokerage firm with extensive experience in San Francisco industrial property from SoMa to the Bayshore.
“There is a shortage right now; rents are up 30 to 40 percent just in the past two years or so,” said David Lai, a principal with Yosemite Investment LLC, of South San Francisco. The company develops and runs industrial space, including at Yosemite Plaza, a former bottling plant in the Bayview where tenants have included a tech accelerator, a commercial kitchen, a chocolate maker and a towing firm.

Now Yosemite is looking to replace a 1,200-square-foot storage building and surface parking at 2200 to 2250 Jennings St. with a 13,500-square-foot industrial building, 26 feet high, which could be divided into six individual spaces for lease or sale, according to preliminary plans filed with the city. “There is a lot of demand for small spaces,” Lai said.
Rising demand and prices have attracted some investor interest. ASB Real Estate Investments, in a joint venture with SKS Partners and ProspectHill Group, said in July it would buy the 103,000-square-foot office-warehouse complex at 1400 16th St. in Showplace Square that’s been the headquarters of Jessica McClintock Inc. SKS declined to comment, but the buyers have said they intend to redevelop the three-building complex for R&D, prototyping and manufacturing.
SFMade chief Sofis said the word in the marketplace is that the price was high enough that she’s expecting rents in the neighborhood of $2 to $3 per square foot per month. “That’s not an ideal outcome from the standpoint of SFMade,” she said.

San Francisco’s strategy toward PDR space has its roots about 15 years ago, when the dot-com boom raised the same kinds of concerns heard today that residential and office development would crowd industrial businesses and jobs out of the city.

Prop. M looms
The Eastern Neighborhoods plan carved out areas preserved for light industrial uses. That was before the growth of the ‘maker’ movement, which diversified the kinds of businesses seeking space and increased demand for small, flexible production sites. (And, as one city planning official noted, from almost the moment PDR districts were created, residential and office developers were trying to nibble at their edges.)

More recently, the city has tried to create incentives for construction of new PDR space, recognizing that the lower rents make industrial space unattractive or infeasible for developers to build. An ordinance backed by Supervisor Malia Cohen, Mayor Ed Lee and others created incentives by allowing developers on 15 largely vacant sites to build a combination of office and PDR space (see story at right). The higher rent on the office space would subsidize the industrial space.
“It’s kind of an experiment, but some of those parcels have very low intensity,” now featuring parking lots, storage buildings or weeds, said Joshua Switzky, a San Francisco senior planner.
But with a long line of office development projects moving toward the approvals process, some fear the limits imposed by the 28-year-old Prop. M office development cap could keep this new approach from producing a single new building. Manufacturing interests fear that attractive, high-profile office towers may get preference over less flashy office/PDR ventures if choices have to be made.

Looking to Pier 70
City officials say they’re committed to helping makers thrive as a part of a vibrant, diverse economy. “We need to make sure they have new, modern efficient, well-located space in order to stay and grow,” said Todd Rufo, director of the Office of Economic and Workforce Development.

They also point to the prospect of new industrial space as part of Orton Development’s rehabilitation plans for Pier 70. McLean, of Magnolia Brewing, said one key tool for companies is to include a retail element with their manufacturing, noting that the zoning of American Industrial Center allows him to do both. “It’s one thing to pay $3, $4, $5 a square foot (per month) for a retail business where you’ve got that retail mark-up,” he said, and manufacturers can use that mark-up to support manufacturing even if the rents are a bit steep.

American industrial Center: 800,000 square feet, and full
Greg Markoulis has lived through decades of the challenges faced by manufacturers. His family bought the 800,000-plus-square-foot American Industrial Center, a former can-manufacturing plant, in 1975. At one point, the garment industry occupied some 275,000 square feet there, but within five years after the North American Free Trade Agreement (NAFTA) took effect in 1994 it had dropped to 10,000 square feet.

“We diversified tremendously after that,” said Markoulis, general manager of AIC. The family divided the property into roughly 320 different spaces over the years, catering to smaller tenants and startups and accommodating them as they grew, he said. The owners have changed their approach as the industry changed and keep lease rates low, and that keeps occupancy high.
But demand is fierce, Markoulis said. “For the last three years we’ve been over-full.”

Markoulis prefers to have a half-dozen vacant spaces in the complex so he has flexibility to shuffle if a tenant needs more room, but the property now stays booked almost solid. “We’ve stopped giving guesstimates as to when a space will be available,” he said.

Mixing manufacturing with other uses: is it the recipe?
One of the 15 parcels where San Francisco hopes to experiment with mixing manufacturing and other space is also in the sights of Dan Murphy, principal with UrbanGreen DevcoLLC.
Murphy has submitted preliminary plans to convert the San Francisco Mini Storage and truck rental site at 100 Hooper St. into a mixed-use urban campus with two 58-foot, four-story buildings linked by elevated walkways above a courtyard.

The project is envisioned with 60,000 square feet of PDR and 333,000 square feet of ‘flexible commercial space,’ which could include office, PDR, retail or other uses, including room for classes or other activities by the nearby California College of the Arts. Murphy received a preliminary project assessment for 100 Hooper in 2012 and will hold a community meeting Sept. 13 to present plans to neighbors; he hopes to present the project to the Planning Commission this fall.

“It’s extremely well-located; it’s a gateway property to Mission Bay,” Murphy said. Murphy sees the opportunity to create an industrial version of the fertile cross-pollinating tech communities that have grown in SoMa, with part of the courtyard serving as a pedestrian public space for the complex and part allowing access to loading bays for distribution and deliveries.
SFMade officials and Murphy are both concerned that the Prop. M office limits could create a new obstacle to building industrial space.


“It’s a little alarming that we may get folded into some new (review) process,” Murphy said.

Article Link: http://www.bizjournals.com/sanfrancisco/print-edition/2014/09/05/san-francisco-manufacturers-search-for-maker-space.html

820 26th Street is now available for lease. This 6,300+/- SF warehouse/distribution space is totally clearspan with 20′ ceilings, sprinklers, heavy power and two (2) large drive-in doors. The property is situated only one block from the 3rd Street rail line and is located in the Dogpatch/Potrero Hill area. $8,700.00/month ($1.38 psf.)

If you have any questions about this property or the San Francisco commercial real estate market, please call 415.970.0000.

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Calco Commercial has leased 3175 17th Street in San Francisco. This 6,800+/- square foot ground floor “creative” space includes HVAC, heavy power & electrical distribution, exposed wood ceilings, and is in close proximity to public transportation and BART. Located in the Mission District, 3175 17th Street is located directly across from Mission Bowling and the ODC Theatre.

If you have any questions about our other available listings, the San Francisco commercial marketplace or market conditions, please call our office at 415.970.0000.

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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

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

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.

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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.

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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.

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Oakland looking more and more like the new SoMa for tech leasing

Source: San Francisco Business Journal
Author: Blanca Torres

As office rents soar and available space plummets in San Francisco and the Peninsula, now may be the right time for tech companies to pack up for Oakland.
Oakland is a prime position to attract tech tenants that could be priced out or simply can’t find space in the West Bay, said Bill Cumbelich, a broker with CBRE. Cumbelich mostly concentrated on San Francisco, but is now handling leasing for Oakland office buildings.
In the past, price was the primary reason to defect from San Francisco to the East Bay, but the scenario has changed. Oakland now boasts many of the urban amenities that draw tech tenants to San Francisco: proximity to BART and other public transportation, restaurants and nightlife. On top of that, housing is more affordable.
“We see this real estate cycle as a different scenario,” Cumbelich said. “It will be easier to attract and retain employees in Oakland. We think Oakland could be another submarket of San Francisco.”

Cumbelich isn’t the only person who sees Oakland as the SoMa of the future. Mitch Kapor, an early tech founder and philanthropist, moved his foundation and investment fund to Oakland two years ago and also made the Oakland-SoMa comparison. What made SoMa what it is now is that it started out as gritty and underutilized and was transformed into an edgy office market that attracted companies to break the norm.

Already, the migration trend of tenants going west to east is taking hold, said Trevor Thorpe, who manages CBRE’s East Bay operations. The wave started with non-profits, grew to professional services like law and engineering firms. Tech, he said, is next. The same pattern happened when SoMa went through revitalization as tenants were priced out of other parts of San Francisco. In the past three years, average asking rents in San Francisco shot up by 90 percent to $59 per square foot in 2013 from $31 per square foot in 2010. In Oakland, rents have climbed by 15 percent during the same period from $24 per square foot in 2010 to $28 per square foot in 2014 — half of the San Francisco average.

Besides rents soaring, San Francisco is the middle of a space crunch despite more than 4 million square feet of office space under construction since much of the new space is pre-leased. In a few years, development activity could hit a voter-approved cap on office development known as Prop. M that would stall prospective projects. Oakland’s has cheaper rents along with more available space will work in Oakland’s favor. The vacancy in San Francisco is 7 percent vs. 14.2 percent in Oakland.”We believe that the recent commercial real estate renaissance in the Oakland market is supporting a more broad-based and sticky (i.e. permanent) economic recovery and transference of users to the East Bay,” Thorpe said.

So far, the spillover effect from San Francisco to the East Bay counts more than 300,000 square feet of leasing. The East Bay has yet to land a marquis expansion or headquarters in this cycle, but that could happen once more creative space opens up in repositioned properties like the Sears department store that was recently bought by Lane Partners. Lane has plans to revamp the building as Uptown Station. Lane Partners is planning an extensive renovation of the 400,000-square-foot property that should be done by 2016. The work hasn’t even started and already a tech tenant with a requirement for 150,000 square feet has toured the building, Cumbelich said. “The building is being designed for tech,” he said. “We can land a big tenant in the next 12 months.”

http://www.bizjournals.com/sanfrancisco/blog/real-estate/2014/08/oakland-new-soma-office-leasing-tech-tenants.html?ana=e_du_pub&s=article_du&ed=2014-08-05&u=19ELr7OrYiuRqEUxO8W3yQ0d406714&t=1407279084&page=all