Category: commercial real estate (161)

In a partnership with Build Inc., the San Francisco Recreation & Parks Department (RPD) plan on redeveloping over 38 acres of land in the India Basin area of San Francisco into a mixed-use project consisting of retail, commercial, residential and open spaces.

According the Draft Environmental Impact Report (EIR) released on September 13, 2017 (EIR-1 and EIR-2), two iterations of the project are being considered: “(1) a residentially-oriented project with approximately 1,240 dwelling units, 275,330 square feet of commercial space, 50,000 square feet of institutional space, and 1,800 parking spaces; or (2) a commercially-oriented variant with approximately 500 dwelling units, 1,000,000 square feet of commercial space, 50,000 square feet of institutional space, and 1,932 parking spaces.”

The Draft EIR public comment period now open through October 30, 2017 with a public hearing date scheduled for October 19, 2017.

Amazon today is posting another unique offering you can bid for online: a new headquarters site in North America.

The company is seeking sites in major North American cities for a “full equal” to its Seattle headquarters, dubbed Amazon HQ2. The online retailer expects to invest over $5 billion to build and operate its new co-headquarters, which it said could include as many as 50,000 high-paying jobs.

In addition, Amazon HQ2 is expected to create tens of thousands of additional jobs and tens of billions of dollars in additional investment in the surrounding community.

Amazon estimates its investments in Seattle from 2010 through 2016 resulted in an additional $38 billion to the city’s economy, providing data that showed every dollar invested by Amazon in Seattle has generated an additional 1.4 dollars for the city’s economy overall.

Real estate owners and state and local government leaders interested in learning more about how they can bring Amazon to their community can visit AmazonHQ2.

“Amazon HQ2 will bring billions of dollars in up-front and ongoing investments, and tens of thousands of high-paying jobs,” said Jeff Bezos, Amazon founder and CEO, in announcing the new headquarters search. “We’re excited to find a second home.”

Amazon listed the following criteria for choosing the location for HQ2:
Metropolitan areas with more than 1 million people;
A stable and business-friendly environment;
Urban or suburban locations with the potential to attract and retain strong technical talent; and
Communities that think big and creatively when considering locations and real estate options.

Amazon said the new location could be, but does not have to be, an urban or downtown campus with a similar layout to Amazon’s Seattle campus and a fully entitled, development-prepped site.

“We want to encourage states and communities to think creatively for viable real estate options, while not negatively affecting our preferred timeline,” the company said in its announcement.

Amazon expects to hire new teams and executives in HQ2, and said it plans to allow existing senior leaders across the company to decide whether to locate their teams in HQ1, HQ2 or both. The company expects that employees who are currently working in the Seattle HQ can choose to continue working there, or they could have an opportunity to move to HQ2.

Growing Exponentially

Amazon has been experiencing exponential growth and announced earlier this year hiring projections of adding more than 100,000 new, full-time jobs through next June. And, it has been expanding in markets across the country. The following is a list of major expansions undertaken just this year.

-Amazon Expansion Move – Date
-Opens search for Amazon HQ2 – A second headquarter city in North America — September-2017
-Announces first fulfilment center in New York, creating 2,250 full-time jobs — September-2017
-Expands in Oregon with Salem fulfilment center — August-2017
-Announces plans for new fulfilment center in Ohio — August-2017
-Completes acquisition of Whole Foods Market — August-2017
-Announces new fulfilment center in Romulus, OH — July-2017
-Opens new fulfilment center in Orlando — July-2017
-Announces plans for Salt Lake City fulfilment center — July-2017
-Announces new fulfilment center in Thornton, CO — June-2017
-Announces new fulfilment center in North Haven, CT — June-2017
-Announces plans to open first Oregon fulfilment center in Troutdale — June-2017
-Announces plans to expand in Miami with new fulfilment center — June-2017
-Announces fulfilment center to open in Fresno, CA — June-2017
-Announces new fulfilment center in Georgia — June-2017
-Announces plans to open three additional New Jersey fulfilment centers — April-2017
-Announces second Houston-area fulfilment center — March-2017
-Announces new fulfilment center in Virginia — March-2017
-Announces two new California fulfilment centers — February-2017
-Announces new air cargo hub in Kentucky — January-2017
-Announces first fulfilment center in Colorado — January-2017
-Amazon announces ninth fulfilment center in Texas; new robotics site — January-2017
-Announces new fulfilment center in Maryland — January-2017
-Confirms second Jacksonville fulfilment center — January-2017

Details of Amazon’s Current Seattle Headquarters

-Number of buildings — 33
-Square feet — 8.1 million
-Local retail within Amazon headquarters — 24 restaurants/cafes + 8 other services
-Amazon employees — 40,000+
-Capital investment (buildings & infrastructure) — $3.7 billion
-Operational expenditures (utilities & maintenance) — $1.4 billion
-Compensation to employees — $25.7 billion
-Number of annual hotel nights by visiting Amazonians and guests — 233,000 (2016)
-Amount paid into the city’s public transportation system as employees’ transportation benefit — $43 million

Source: CoStar News
Author: Mark Heschmeyer

Link to article: AMAZON

Source: BisNow
By: Chuck Sudo
Date Posted: August 25, 2017

Industrial real estate is in a golden age of low vacancies and cap rates, record demand and a packed pipeline across the country. E-commerce remains the biggest disruptor in the sector, providing opportunities for developers and investors as well as new headaches.

Read more at:

Source: BisNow
By: Julie Littman
Date Posted: July 17, 2017

According to Bisnow, BioMed Realty will be constructing approximately 1.5 Million square feet of life science offices in South San Francisco.

With R&D office vacancy rates at historical lows on the Peninsula, developers are working hard to meet the demand–which often includes open office layouts, and “amenity-rich” campuses with fitness centers, on-site cafes, etc. As drug approvals move forward, the BioTech industry is projected to continue its “boom” with developers and Owners vying to take advantage of the sharp increases in rents.

According to Bloomberg News, Blackstone Group has advised its investors to “dial back their expectations” regarding future return rates on real estate assets. Chris Heady, Asia Pacific Chairman, reasoned that expectations should be managed because the the return rates previously achieved over the last 5 years will become “harder to replicate.”


According to Bisnow, other commercial real estate industry leaders aren’t shouting “bubble” just yet. “Reis economist Victor Calanog said in March the industry still has room to grow,” and that market deceleration is “not on a national level.” Even markets such as San Francisco where rents have consistently climbed quarter over quarter, Calanog predicts Landlords will have to offer more “concessions” but that concessions do not equate to “burst bubbles.”

California to Consider New Legislation on Dual Agency
Bills Supported by Brokerage Industry Rivals Could Clarify Disclosure Requirements in Dual Agency Transactions – Or Restrict Practice Outright

By: Randyl Drummer
April 6, 2016

A pair of bills addressing dual agency broker representation have been introduced in the California State Assembly. If taken up and passed, the proposed legislation has the potential to upend and reshape the way commercial real estate brokerages do business in California, and influence real estate practices in other states across the country.

As reported by CoStar on Friday, Assembly Bill 1059, introduced by Assemblywoman Lorena Gonzalez Fletcher, D-San Diego, would add a section to the California Civil Code prohibiting a brokerage firm, broker or any of the broker’s or brokerage’s licensees from acting as a dual agent in its representation of both the buyer and seller or any of their principals in the same commercial property transaction. The bill is scheduled for a hearing before the Assembly Judiciary Committee on May 2.

Jason Hughes, president and CEO of San Diego-based tenant representation firm Hughes Marino and a vocal critic of dual agency transactions, said he approached Gonzalez Fletcher’s office after the high court’s decision last fall about potential legislation to ban dual agency. Hughes said he recently formed a new nonprofit organization called the Association for Commercial Tenants (ACT) to advocate for the rights of businesses and tenants in commercial transactions.

“For the last 100-plus years, the commercial brokerage industry’s primary constituent has been landlords, but the real consumers are tenants,” Hughes tells CoStar. “Companies that lease or purchase office, industrial, manufacturing, retail, R&D, lab, and other space have always been on the short-end of the receiving stick in the commercial real estate industry. I fully support this bill and I know there are thousands of companies who lease and purchase commercial space who support it also.”
Industry Supported Bill Focuses On Disclosure

Another bill introduced last Friday in the California State Legislature, rather than ban dual agency outright, proposes to clarify and expand current disclosure requirements and has received early support from a lobbying group representing the broader CRE brokerage and business communities. AB 1626, introduced by Assemblywoman Jacqui Irwin, D-Thousand Oaks, would clarify the disclosure responsibilities of associate licensees and supervising brokers in dual agency transactions.

The Irwin bill, currently scheduled for Judiciary Committee hearing on April 25, would more clearly define when a dual agency condition exists and specify the fiduciary duties of licensees engaged in such transactions under existing state law.

Both bills are in response to a decision by the California State Supreme Court last November upholding a lower-court ruling that a listing broker had a fiduciary duty to both the buyer and the seller in a dual agency transaction. In the case, Hong Kong businessman Hiroshi Horiike sued Coldwell Banker and its agents in a dispute over the square footage of a Malibu home purchased by Horiike in 2007.

“We see Assemblywoman Irwin’s bill as the serious legislation that’s trying to address the concerns in the Horiike case,” said Matthew Hargrove, senior vice president of governmental affairs for the California Business Properties Association (CBPA), a legislative advocacy group representing CRE owners, tenants, developers, brokers, contractors, attorneys and other industry professionals.

“The real estate industry is already working with many advocates on the consumer side to look at the policy implications of what the Supreme Court said what needs to be fixed, in the statute and in practice, to make sure that the lessons handed down in the Horiike case are actually implemented,” Hargrove added.

The CBPA, which boasts a membership of 10,000, describes itself as the designated legislative and regulatory advocate for several major industry groups, including the International Council of Shopping Centers (ICSC), Building Owners and Managers Association of California (BOMA California) and CCIM of Northern California.

While a commonplace practice for decades in both residential and commercial deals in the U.S. and around the world, several states in recent years have moved to regulate or ban dual agency real estate transactions in order to limit potential conflicts of interest and increase transparency in property sales. California, where dual agency deals are legal, adopted Senate Bill 1171 in January 2015, which requires disclosure to clients of dual agency relationships in commercial property transactions.

Hughes played a leading role in the passage of SB 1171 but said the Horiike decision demonstrates that dual agency in CRE deals needs to be banned rather than regulated. In supporting the Gonzalez Fletcher bill, Hughes noted a statement published last month by the Royal Institution of Chartered Surveyors (RICS), a global real estate accreditation body that certifies property and construction professionals, that advances more stringent conflict-of-interest requirements for its members, including an official ban on dual agency in the United Kingdom.

While a handful of states such as Colorado, Kansas, Florida and Wyoming in some form specifically prohibit dual agency, Hughes noted that about a dozen states closely follow California’s example on real estate regulation.

“Prohibition of dual agency would truly level the playing field for tenants, offering them legitimate transparency and conflict-free representation, something that should have happened decades ago,” Hughes said.
Lobbyist: Ban Would ‘Upend’ CRE Industry

However, the CBPA’s Hargrove argues that AB 1059 is too extreme a measure and would upend and disrupt the entire commercial real estate industry in California, while failing to address the core issue of fiduciary responsibility raised by the Supreme Court in the Horiike case.

“Under state law on the commercial side, you already have to disclose when there’s a dual agency situation in no uncertain terms,” Hargrove said. “We think those disclosures are right and appropriate, and we are concerned about how the political communications supporting AB 1059 are trying to undermine or claim that dual agency is nefarious. I absolutely disagree with that.”

“Under AB 1059, every single transaction would need to have two real estate agents,” Hargrove added. “It would disadvantage tenants by taking away the choice they now have to work with the real estate agency of their choice. Under current state law, you already have to disclose to tenants that you’re a dual agency, which allows the tenant to make their own decision.”

Hughes countered that AB 1626 is a “nothing burger bill” served up by advocates for the large brokerages and CRE groups that want to have it their way in maintaining the status quo.

“This is their way to proactively address the problem through misdirection and confusion with language that actually creates less accountability for brokers and adds more conflicts of interest, lack of transparency and consumer exposure than there is now,” Hughes said. “This is a legacy sponsored bill that continues to help the industry while hurting small business.”

While tenant representation firms would clearly benefit from a law prohibiting dual agency, the political influence and deep roots in the California market likely gives the advantage to legislation supported by the global full-service CRE brokerages and real estate lobbying groups, noted Katie R. Jones, real estate attorney with Walnut Creek, CA-based Miller Starr Regalia.

That being said, California agency law clearly requires more guidence from the Legislature in the wake of the Horiike decision, Jones said.

“The way the law is drafted now, based on current disclosure requirements, it’s an extreme challenge if not impossible for dual agents to adequately uphold their fiduciary responsibilities,” Jones said. “It makes more sense to find a solution that doesn’t upend the entire industry.”

Link to article: CoStar-Dual Agency Legislation

According to the New York Times, industrial real estate is experiencing a pot fueled “boom”. In the US states where steps have been taken to make marijuana legal, the demand for grow & pot processing warehouses and industrial spaces has increased with some “factories, warehouses, and self-storage units…being re-purposed for cultivation and processing of potent marijuana”.

While some in the real state industry view grow facilities as a gamble due to the fact that marijuana remains an illegal substance at the Federal level, for now Landlords across the nation are taking advantage of the premium rents being achieved for such facilities. Commercial real estate research firms are reporting prices for warehouse spaces increasing “by more than 50% from 2010 and 2015” in the Denver market where recreational pot was legalized in 2012. But, Denver is not the only commercial market experiencing a boom in industrial real estate activity. According to the New York Times, industrial areas “from Monterey, CA to Portland, ME” have undergone a transformation spurred by the pot industry and, “once-blighted neighborhoods and sending property values soaring.”

Furthermore, according to BISNOW, “legal pot sales hit $6.7B in 2016 and are expected to rise above $20B by 2021.” With increased sales of legal pot, the demand for industrial space will continue to grow, potentially creating a “new sector in the industrial real estate market.” But, with the new Federal Administration in place, some in the industry are concerned that the weed bubble will pop due to stricter regulation of pot sales and pot cultivation.

According to the Registry, two buildings located at 657 & 667 Mission Street in San Francisco’s South Financial District have sold for approximately $100MM to Align Real Estate and Vanke Holdings USA. “657 and 667 Mission Street total 130,000 square feet…are currently 65% occupied with short term leases allowing the new owners the flexibility to re-position the buildings as Class A creative office space with premier ground floor retail”, as reported by the article.

Registry has based the pricing of the assets on a press release from Square Mile Capital Management wherein the loan brokerage firm stated they originated a $70 Million loan for 657 & 667 Mission Street. According to the article, the loan “represented a 70 percent loan-to-value” which equates to approximately “$770 per square foot, or roughly $100 Million.”