Category: Potrero Hill (2)

San Francisco CRE News:

Prop W to Raise Transfer Tax on Real Estate Sales

This November, in addition to the affordable housing measure (Prop U), San Francisco voters will also have Prop W on their ballots–otherwise known as the “Real Estate Transfer Tax on Properties Over $5 Million.” Authored by Supervisor Kim, the measure proposes increasing the rate of transfer tax on sales from a current rate of 2% to 2.25% on properties valued at $5-$10 Million; from 2.5% to 2.75% on properties valued at $10+ Million; and, from 2.5% to 3% on properties with a value in excess of $25 Million.

According to the Examiner, the transfer tax will not change on properties valued under $5 Million, which are currently taxed on a progressive tax schedule, with the lowest tax rate of “.68 percent for sales that are more than $250K and less than $1 Million.”

The majority of the Board of Supervisors support the Measure, but Prop W has its opponents as well, namely the San Francisco Apartment Association who fears the tax will have a negative impact on renters–in a city that already has some of the highest rents in the nation.

Related Article: San Francisco Business Times – Prop W

420 Taylor Street Sells for $45 Million

According to BISNOW, the 78,000+/- square foot office building located at 420 Taylor Street in Union Square has sold for $45 Million, or $576 a square foot.

420 Taylor Street Lobby

420 Taylor Street Lobby

420 Taylor “previously was the headquarters for NBC radio affiliate KNBR … and was the first air-conditioned building in the city. It had a secret entrance from the Clift hotel so the celebrities could sneak into the studio undetected. The secret entrance still exists, but is no being used,” the article reports.

Slated Potrero Hill Development would transform industrial warehouse property into dorms for Students of CCA

Socketsite has reported that the corner of Arkansas & 17th Streets in San Francisco’s Potrero Hill neighborhood is planned for a full transformation from a single-story industrial building to a “building (that would) rise up to 48-feet in height” with ground floor retail, bike storage, and a multi-purpose room for students.

75 Arkansas Street

75 Arkansas Street

As industrial spaces continues to disappear in San Francisco as zoning designations change along with redevelopment projects, warehouse and production facilities may become even higher in demand–and/or manufacturers make be forced east and south seeking industrial product.

San Francisco Office Leasing Plummets in Q3

Roland Li of The San Francisco Business Times has reported that office leasing activity in San Francisco has fallen to “the lowest third-quarter activity since 2001.”

While this dramatic decrease may signal a major real estate cool down on the horizon, some industry experts believe the drop in activity is due to the “overheated” market in the past few years. Amber Schiada, director of Northern California research at JLL, is quoted as stating that she “expects rents to stay flat for the next year, but no major downturn (and that) people shouldn’t worry,” the article reported.

SF Skyline_for web

Because office rents have soared over the past consecutive 12 quarters, driven by start-up and tech giants leasing mammoth sized spaces, many other smaller office tenants have been driven from the city. Leveling rents brought upon by the slowdown in office leasing activity could “bring some relief for Tenants”, suggests Li.

Deutsche AM Acquires 35 Property Portfolio

Randyl Drummer of CoStar has reported that Deutsche AM has acquired 3.3 million square feet of industrial properties spanning from San Francisco to Chicago:

Deutsche Asset Management has purchased a 19-property industrial portfolio from International Airport Centers (IAC), with properties totaling 3.3 million square feet in seven U.S distribution markets.


The portfolio consisting of 35 buildings in the Los Angeles, San Francisco, Seattle, Dallas, Chicago, Portland and San Diego markets. The portfolio is 99% leased to 76 tenants, with an average tenant size of about 40,000 square feet.

Deutsche AM’s real estate investment business acquired the portfolio on behalf of an institutional investor through direct negotiations with Perlmutter Investment Co., the seller’s investment advisor. Deutsche did not disclose the sale price or other terms of the sale which closed Sept. 22.

“The portfolio’s geographic diversity across large distribution hubs and stable tenant base makes it an attractive investment,” said Todd Henderson, head of alternatives – real estate, Americas.

Deutsche Asset Management’s real estate investment business, part of the bank’s alternatives platform, had $53.6 billion in assets under management as of June 30.

Frankfort, Germany based Deutsche Bank AG, under pressure to shore up its weak capital position, has been advised by some analysts to sell the lucrative asset management business, which is said to be worth up to $9 billion.

Plan to Revap S.F. transit, remove stretch of I-280 debuts

Source: San Francisco Business Times
By: Riley McDermid
Date Posted: February 23, 2016

The first part of a study that looks at razing a 1.2-mile stretch of Interstate 280 in San Francisco in order to revamp infrastructure ahead of the city’s Transbay Transit Center and high-speed Caltrain arrivals will debut Tuesday.

It will be the first look the public will get at the “Rail Yard Alternatives and I-280 Boulevard Feasibility Study” (RAB), which will be unveiled tonight at the Potrero Hill Recreation Center. A multiagency effort, the plan hopes to modify the Fourth and King rail yard and weave SoMa into the Dogpatch, Mission Bay and Potrero Hill, while freeing up 25 acres for possible development.

San Francisco

“The study will review construction methods and rail alignments, including the possibility of moving the Caltrain station at Fourth and Townsend streets to Third Street, between AT&T Park and the planned Warriors arena,” the San Francisco Chronicle reports.

“It will also look at the potential of creating a loop track at the Transbay Transit Center, rather than a stub, where trains have to end and exit on the same track. A loop track would increase the station’s overall capacity.”

But the plan already has some officials questioning parts of its reach, including how rail travel would be incorporated into the city.

The feasibility of creating a tunnel under 16th Street so that trains could travel on top of 16th Street and Mission Bay Drive is also worrisome to Gillian Gillett, director of transportation policy for the city, who told the paper it might make a dangerous zone for cyclists and pedestrians.

“Those two streets will be depressed at great expense, resulting in an urban form that is invasive and hostile,” Gillett said. “We don’t want our streets to get trenched. We did that to Cesar Chavez Street, and it doesn’t create a good environment.”

Even more worrisome? Where the funding would come from, given the increasing costs of the Transbay Transit Center itself, which has been mired in funding shortages and delays. The project has already has taken on a loan from Goldman Sachs that will cost taxpayers $37 million in charges and fees.

That amount is part of a $171 million “bridge” loan that Goldman Sachs (NYSE: GS) is lending the city so that it can continue building the project without a pause due to financial issues.
In December, the Chronicle reported that the price for the first phase of the Transbay Transit Center may jump another $244 million to almost $2.3 billion, and has now added another $4 billion for a related train track project that will run from the three-block building to Fourth and King streets.

Those sorts of operational challenges are why the city needs to get any overarching plan that includes removing a portion of I-280 right the first time, said officials.

“One of the reasons we are in the soup we are in is that development and transportation improvements have not been happening at the same time,” Gillett told the paper. “If you are going to invest in this big seismic shift from diesel to electric, which we have got to do, you also have to look at all the stations. Are the tracks in the right place? Are the stations in the right place so that we can create real connections to other systems?”

link to article: Transit Revamp