san francisco commercial real estate brokers

Category: san francisco commercial real estate brokers (51)

Feb

Commercial Real Estate News: $177MM Development Coming to South San Francisco

HCP to Start $177 MM Spec Development in South San Francisco
Reporter: Jon Peterson
Posted on February 10, 2015 by publisher6
Link to Article: SSF Development

Irvine-based HCP has broken ground on a new life science spec development in South San Francisco, The Cove at Oster Point. The first phase of his project involves the construction of 253,000 square feet and the entire development totals 884,000 square feet. The company is planning to spend up to $177 million according to this morning’s conference call.

“We feel that starting the Cove at this time will optimally meet the demand in the market. This is reflected in that the direct vacancy for life science properties in South San Francisco is [below] one percent,” says Jon Bergschneider, executive vice president for HCP Life Science Estates.

The company believes that the type of product that it will be creating will be new for the marketplace. “Our amenity center will be a feature that is not seen in any life science project,” said Bergschneider. The amenity center will be located on the first floor of the project. It will include a fitness center, recreation and meeting space, which is typically not found in life science real estate operations.

The first phase of the development broke ground last week. It will consist of two buildings totaling 253,000 square feet. The plan is to have these buildings completed by the third quarter of next year. The other phases of the project will be started based on the leasing success of the first phase.

The leasing efforts on the development will be led by CBRE through its life sciences group. This will include Chris Jacobs, an executive vice president, and Rick Friday, a senior vice president. They both work for the company out of its office in Foster City.

The life science market in South San Francisco has very strong market characteristics. “Strong life science market demand has resulted in a vacancy rate below 1 percent in South San Francisco. This inventory crisis has fueled raising lease rates. Over the last year, lease rates have increased approximately 30 percent from $2.85 to $3.70 NNN per square feet per month. Given the strong market fundamentals, we anticipate lease rates to push past $4 NNN per square foot per month in the near future,” says Jacobs.

He anticipates a mixture of tenants being interested in The Cove project. “We expect the project to attract local tenants from 30,000 square feet, as well as larger campus users,” said Jacobs.

HCP has owned The Cove site since 2011. This is when the company paid $65 million to acquire the 20 acres for the development. The project is projected to be a pre-certified LEED silver project. Some of its other features are a 5.5-acre outdoor green space and retail and hotel entitlements.

HCP is a real estate investment trust that focuses on the healthcare industry. It’s a major player in the San Francisco Bay Area, where it owns 4.8 million square feet of life science space in the region. This includes 2.8 million square feet within South San Francisco.

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Feb

Commercial Real Estate News: Warehouse Owners Enjoy Accelerating Rents

With Little Available Modern Space, Investors Scrambling for Bulk Warehouses in Second-Tier Markets, Ramping Up New Development

Source: CoStar
Reporter: Randyl Drummer
Date: February 5, 2015
Article Link: Warehouse Owners

Package shipper UPS isn’t the only one who loves logistics.

Property owners and investors are singing the praises of the unattractive but highly functional and in-demand property type after another quarter of strong rent growth and increasing demand for modern, bulk warehouse space in key distribution markets.

So much so in fact, that investor demand for warehouse and logistics properties is limited only by the current shortage of modern new buildings available to buy, according to CoStar analysts presenting their findings at the Fourth Quarter Industrial Real Estate Review and Outlook last week.

With rental rates on the rise, especially for new, high quality logistics space, “You can build and lease a building potentially for the next 10 years with a good credit tenant,” said Rene Circ, director of research, industrial for CoStar Portfolio Strategy. “This is as good a time in industrial real estate as you could possibly imagine, and we are seeing that in terms of questions from our clients and people wanting to get into the market.”

Co-presenter and senior real estate economist Shaw Lupton also noted that, despite the dearth of property available in the market, sales of institutional grade properties have never been stronger in terms of sales volume and square footage traded.

Capitalization rates are at a record low of below 6% for institutional properties, with reports of much lower cap rates for sales of big box warehouse leased to triple-net credit tenants in the best markets, Lupton said.

“It’s a great time to own industrial real estate, and it’s increasingly competitive to get into it,” Lupton said. Investment sales were up a solid 8% in the industrial sector in 2014 to $60 billion.

Despite the robust investor interest, industrial property sales still lagged multifamily, office and retail property sales, largely because there simply wasn’t enough buildings available to buy. Construction on new bulk warehouse space is ramping up, but it has yet to catch up with investor demand for the new modern facilities favored in tenants for their increasingly sophisticated and high-tech logistics supply chains.

CoStar analyzed the inventory of newer logistics buildings five years old or less compared with all existing logistics buildings and found that both the supply of newer buildings and the ratio of sales has dwindled significantly since 2002, when 32% of all trades were of buildings less than five years old. Today, the number is closer to 10%.

“New supply will be needed to raise the overall level of transaction value,” Circ said. “You can make the argument that lack of new construction is holding back sales by as much as 10 percentage points. Building (prices) are being bid up because there are just not enough sellers.”

While industrial real estate rarely outperforms other more glamorous property sectors, rents for industrial space, led by demand for newer, high-functioning properties, grew an average 4.5% for all industrial properties in 2014 over the previous year. That rate of increase outstripped the healthy 3.7% rental rate increase logged by the office market, 3.2% in the apartment sector, and the 3% rent growth in retail real estate.

The amount of available space on the market is tightening. The 8.7% vacancy rate for logistics space in the fourth quarter compares with a reading of 9.9% at the height of the last real estate cycle in 2007. Absorption totaled 167 million square feet in 2014, slightly lighter than the year before only because of the lack of usable vacant space, Lupton said.

“There just isn’t enough space out there to allow for [larger] numbers,” he said. “We’re not lagging much below the absorption peak, but to get beyond that, we absolutely need more new construction.”

While logistics construction was up 14% in 2014 to 136 million square feet, it’s still about 44 million square feet below the early 2000s peak of 180 million square feet.

While the recovery in rents and property values for high quality logistics space is nearly complete, Circ and Lupton noted that the light industrial property segment is still in the early expansion phase, with very little new construction, which is expected to change over the next few quarters.

“There’s still a lot of runway for growth in light industrial,” Circ said, adding that the improvement in this sector of the industrial real estate market is a very promising sign for the recovery of numerous local markets.

“These are not the big multinational companies, the Amazons, these are local businesses. We’re seeing the light industrial segment doing really well, which gives me a lot of comfort in the strength of local economies,” Circ said.

“When you see these local manufacturing and housing-oriented businesses taking space and making lease commitments, it means they have a lot more visibility into their business growing again, and that supports the guts of the local economy.”

Jan

San Francisco’s Vacancy Decreases to 3.9%

The San Francisco Industrial market ended the fourth quarter 2014 with a vacancy rate of 3.9%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 278,485 square feet in the fourth quarter. Vacant sublease space decreased in the quarter, end- ing the quarter at 285,144 square feet. Rental rates ended the fourth quarter at $15.94, an increase over the previous quarter. There was 108,080 square feet still under construction at the end of the quarter.

ABSORPTION
Net absorption for the overall San Francisco Industrial market was positive 278,485 square feet in the fourth quarter2014. That compares to negative (98,393) square feet in the third quarter 2014, positive 979,226 square feet in the second quarter 2014, and positive 106,799 square feet in the first quarter 2014.

Tenants moving out of large blocks of space in 2014 include: FedEx moving out of (60,100) square feet at 200 Littlefield Ave, Vitasoy moving out of (52,500) square feet at 584 Eccles Ave, and KaloBios Pharmaceuticals moving out of(49,351) square feet at 260 E Grand Ave.

The Flex building market recorded net absorption of positive 131,243 square feet in the fourth quarter 2014, compared to positive 38,309 square feet in the third quarter 2014, positive 299,408 in the second quarter 2014, and negative (33,399) in the first quarter 2014.

The Warehouse building market recorded net absorption of positive 147,242 square feet in the fourth quarter 2014 com- pared to negative (136,702) square feet in the third quarter 2014, positive 679,818 in the second quarter 2014, and positive 140,198 in the first quarter 2014.

VACANCY
The Industrial vacancy rate in the San Francisco market area decreased to 3.9% at the end of the fourth quarter 2014. The vacancy rate was 4.2% at the end of the third quarter 2014, 4.1% at the end of the second quarter 2014, and 5.7% at the end of the first quarter 2014.

Flex projects reported a vacancy rate of 5.3% at the end of the fourth quarter 2014, 5.8% at the end of the third quarter 2014, 6.0% at the end of the second quarter 2014, and 9.3% at the end of the first quarter 2014.

Warehouse projects reported a vacancy rate of 3.4% at the end of the fourth quarter 2014, 3.7% at the end of third quarter 2014, 3.5% at the end of the second quarter 2014, and 4.5% at the end of the first quarter 2014.

RENTAL RATES
The average quoted asking rental rate for available Industrial space was $15.94 per square foot per year at the end of the fourth quarter 2014 in the San Francisco market area. This represented a 4.4% increase in quoted rental rates from the end of the third quarter 2014, when rents were reported at $15.27 per square foot.

The average quoted rate within the Flex sector was $25.58 per square foot at the end of the fourth quarter 2014, while Warehouse rates stood at $12.05. At the end of the third quarter 2014, Flex rates were $24.68 per square foot, and Warehouse rates were $11.65.

DELIVERIES AND CONSTRUCTION
During the fourth quarter 2014, no new space was completed in the San Francisco market area. This compares to 0 buildings completed in the previous three quarters. There were 108,080 square feet of Industrial space under construction at the end of the fourth quarter 2014. The largest projects underway at the end of fourth quarter 2014 were 901 Rankin St, an 82,480-square-foot building with 100% of its space pre-leased by Goodeggs and Mollie Stone’s Markets, and 1 Kelly Ct, a 25,600-square-foot facility that CS Bio Company, Inc. expanded.

INVENTORY
Total Industrial inventory in the San Francisco market area amounted to 94,659,417 square feet in 4,843 buildings as of the end of the fourth quarter 2014. The Flex sector consisted of 23,849,302 square feet in 789 projects. The Warehouse sector consisted of 70,810,115 square feet in 4,054 buildings. Within the Industrial market there were 511 owner-occupied buildings accounting for 12,380,944 square feet of Industrial space.

SALES ACTIVITY
Tallying industrial building sales of 15,000 square feet or larger, San Francisco industrial sales figures fell during the third quarter 2014 in terms of dollar volume compared to the second quarter of 2014. In the third quarter, nine industrial transactions closed with a total volume of $83,684,000. The nine buildings totaled 377,408 square feet and the average price per square foot equated to $221.73 per square foot. That compares to 20 trans- actions totaling $109,016,000 in the second quarter. The total square footage was 558,793 for an average price per square foot of $195.09.

Total year-to-date industrial building sales activity in 2014 is up compared to the previous year. In the first nine months of 2014, the market saw 36 industrial sales transactions with a total volume of $346,298,100. The price per square foot has averaged $215.98 this year. In the first nine months of 2013, the market posted 19 transactions with a total volume of $107,082,100. The price per square foot averaged $166.89.

Cap rates have been higher in 2014, averaging 6.70%, compared to the first nine months of last year when they averaged 6.10%.

Source: CoStar Year End 2014 Industrial Report

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

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.

Oct

San Francisco Industrial Market – Q3 Overview

Source: Costar.com

The San Francisco Industrial market ended the third quarter 2014 with a vacancy rate of 4.5%. The vacancy rate was up over the previous quarter, with net absorption totaling negative (82,427) square feet in the third quarter. Vacant sublease space decreased in the quarter, ending the quarter at 305,115 square feet. Rental rates ended the third quarter at $15.29, an increase over the previous quarter. There were no properties under construction at the end of the quarter.

Absorption
Net absorption for the overall San Francisco Industrial market was negative (82,427) square feet in the third quarter
2014. That compares to positive 957,648 square feet in the second quarter 2014, positive 88,854 square feet in the first quarter 2014, and positive 493,540 square feet in the fourth quarter 2013.

Tenants moving out of large blocks of space in 2014 include: FedEx moving out of (60,100) square feet at 200
Littlefield Ave, Vitasoy moving out of (52,500) square feet at
584 Eccles Ave, and KaloBios Pharmaceuticals moving out of
(49,351) square feet at 260 E Grand Ave.

Tenants moving into large blocks of space in 2014 include: Formations Brands moving into 120,000 square feet at 530
Forbes Blvd, LeeMah Properties, Inc. moving into 87,000 square feet at 155 S Hill Dr, and Stitch Fix moving into 80,000 square feet at 245 S Spruce Ave.

The Flex building market recorded net absorption of posi- tive 36,585 square feet in the third quarter 2014, compared to positive 299,408 square feet in the second quarter 2014, negative (50,744) in the first quarter 2014, and positive 73,956 in the fourth quarter 2013.
The Warehouse building market recorded net absorption of negative (119,012) square feet in the third quarter 2014 com- pared to positive 658,240 square feet in the second quarter 2014, positive 139,598 in the first quarter 2014, and positive 419,584 in the fourth quarter 2013.

Vacancy
The Industrial vacancy rate in the San Francisco market arean increased to 4.5% at the end of the third quarter 2014. The vacancy rate was 4.4% at the end of the second quarter 2014, 6.0% at the end of the first quarter 2014, and 6.1% at the end of the fourth quarter 2013.

Flex projects reported a vacancy rate of 5.9% at the end of the third quarter 2014, 6.1% at the end of the second quarter
2014, 9.3% at the end of the first quarter 2014, and 9.1% at the end of the fourth quarter 2013.

Warehouse projects reported a vacancy rate of 4.0% at the end of the third quarter 2014, 3.9% at the end of second quarter 2014, 4.8% at the end of the first quarter 2014, and 5.1% at the end of the fourth quarter 2013.

Rental Rates
The average quoted asking rental rate for available Industrial space was $15.29 per square foot per year at the end of the third quarter 2014 in the San Francisco market area. This represented a 2.1% increase in quoted rental rates from the end of the second quarter 2014, when rents were reported at $14.97 per square foot.

The average quoted rate within the Flex sector was $24.66 per square foot at the end of the third quarter 2014, while Warehouse rates stood at $11.64. At the end of the sec- ond quarter 2014, Flex rates were $23.85 per square foot, and Warehouse rates were $11.26.

Inventory
Total Industrial inventory in the San Francisco market area amounted to 95,118,337 square feet in 4,848 buildings as of the end of the third quarter 2014. The Flex sector consisted of 23,921,073 square feet in 790 projects. The Warehouse sector consisted of 71,197,264 square feet in 4,058 buildings. Within the Industrial market there were 511 owner-occupied buildings accounting for 12,334,611 square feet of Industrial space.

Sales Activity
Tallying industrial building sales of 15,000 square feet or larger, San Francisco industrial sales figures fell during the second quarter 2014 in terms of dollar volume compared to the first quarter of 2014.

In the second quarter, 20 industrial transactions closed with a total volume of $109,016,000. The 20 buildings totaled 558,793 square feet and the average price per square foot equated to $195.09 per square foot. That compares to seven transactions totaling $153,598,100 in the first quarter. The total square footage was 667,191 for an average price per square foot of $230.22.

Total year-to-date industrial building sales activity in 2014 is up compared to the previous year. In the first six months of 2014, the market saw 27 industrial sales transactions with a total volume of $262,614,100. The price per square foot has averaged $214.21 this year. In the first six months of 2013, the market posted 14 transactions with a total volume of $86,969,600. The price per square foot averaged $168.65.

Cap rates have been higher in 2014, averaging 6.70%, compared to the first six months of last year when they averaged 6.04%. One of the largest transactions that occurred within the last four quarters in the San Francisco market is the sale of 268-298 Alabama St in San Francisco. Totaling 34,545 square feet, the two industrial buildings sold for $20,000,000, or $578.95 per square foot. The property sold on 5/22/2014 and will be occupied by the buyer, Dandelion Chocolate.

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.

Aug

3175 17th Street – LEASED!

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.

Aug

SF Economy On Fire thanks to Real Estate Market

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

Aug

Tech’s dominance in San Francisco office market grows further

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