California Academy of Sciences Green Credentials Explained
September 27th, 2008 Filed Under Development Updates, Midmarket/ City Hall, South of Market, Tenant Activity, Yerba Buena
As we rapidly approach the opening of the California Academy of Sciences tomorrow (Saturday, September 27th), I thought it important to explain just what it is that makes this property so unique and green. We have all been paying close attention to the project of course, and San Francisco as a whole seems energized to be associated with such a ground breaking building.
The reason this reopening is important to San Francisco office tenants beyond the obvious is that the Academy has been housed at 875 Howard since 2004. That space is now going to be available for lease and the intention is to create office space. This is good news for the Soma/ RIncon Hill/ Yerba Buena submarkets, as growth is positive and these neighborhoods continue to meld into one. [More...]
San Francisco Office Space: Sublease Space Arrives, More Coming Fast
September 26th, 2008 Filed Under Financial District, South of Market, Tenant Activity
According to an article in today’s San Francisco Business Times, negative net absorption for the year in San Francisco stands at over 600,000 square feet, with much more coming over the next several months.
From a tenants perspective, this downturn in our local economy will mean more space to look at, lower rates, more leverage in negotiations, and an opportunity to reset long term rents at more favorable economics. San Francisco has over three million square feet of leased space expiring in 2010, with only roughly one million expiring this year, and another one million in 2009. The timing of the financial services meltdown, triggered by bad bets on mortgage backed assets, comes at a very critical time for our City. [More...]
San Francisco Development Update: 350 Mission Renderings Online
September 25th, 2008 Filed Under Development Updates, Financial District, South of Market, Zoning & City Hall Issues
The future appearance of 350 Mission Street is now available for viewing on the official website of the development team working on the project. The property, on the corner of Mission and Fremont, was discussed in a previous post back in July when it was announced that the structure will be LEED certified, 27 stories high (well under zoning limits), and across the street from the planned Transbay Terminal. Socketsite brought the site to my attention and pointed us towards the renderings.
Will this project receive the financing it needs to move forward in the midst of a credit crisis? Will tenant demand at the time of completion be enough to fill a beautiful project like this? Will the costs and profits necessary to build a building such as 350 Mission Street be higher than the potential rental income available in our market at that time? [More...]
San Francisco Development Update: Jessie Street Explained
September 24th, 2008 Filed Under Development Updates, Financial District, Midmarket/ City Hall, Mission Bay, Showplace Square, Zoning & City Hall Issues
John King of the San Francisco Chronicle is a fantastic writer, and today he covered a little know street that happens to be ground zero for the Transbay development we have covered extensively on this blog. Jessie Street runs in-between Market and Mission, and starts at 1st Street just across from the food court.
It has been well reported now that this area is slated for vertical growth [More...]
San Francisco Office Update: AKQA renews and expands on Townsend
September 19th, 2008 Filed Under South of Market, Tenant Activity
According to Kristin Vanderluit of the Costar Group, AKQA has expanded and extended in their current location at 123 Townsend near the ballpark, taking a total of almost 50K square feet of office space. 123 is a wonderful building on an excellent street and the property is full of solid, class “A” tech-type companies.
The opportunity to take more office space occurred when Splunk moved over to the old Gallo building and took 34K square feet at 250 Brannan. 250 Brannan is another wonderful building that has been rehabbed, rebuilt, and is in the process of being refilled with tenants. The message is resonating here, tech companies, and those associated with them, are growing and expanding in the face of a U.S. economy sputtering along. We have previously reported on Xoom, Slide, Nokia, Symantec and others [More...]
San Francisco Development Update: Politics get in the way of sustainability
September 17th, 2008 Filed Under Development Updates, Midmarket/ City Hall, Zoning & City Hall Issues
John King of the San Francisco Chronicle released a very well written analysis today of the current state of City’s future (maybe) PUC headquarters at 525 Golden Gate Avenue. According to the article the building may get built, it may not get built, or it may get built on a smaller scale than what Mayor Newsom had hoped for when he stood in front of Congress and spoke highly of the project earlier this year.
Two things grab my attention from this article from a tenant’s perspective. First off, the message from the City is that going green is too expensive. I tend to disagree with this because I read the reports that come from the U.S. Green Building Council discussing the reduced costs surrounding sustainability [More...]
San Francisco Office Update: O’Melveney moves, HOK expands
September 12th, 2008 Filed Under Financial District, Tenant Activity
Although tenant relocations have been slow as of late, J.K. Dineen and Blanca Torres of the San Francisco Business Times reported on a couple of happenings here in San Francisco this week.
As you will see in the article after the jump, O’Melveney & Myers LLP has vacated its old space and made the move over to the Embarcadero Center, while HOK has expanded its presence at One Bush Street. In the interest of full disclosure, my colleagues represent 275 Battery, although I only represent tenants and have no knowledge of happenings at that project.
The expansion of HOK does pique my interest however as One Bush Street is one of my favorite buildings in San Francisco. It is a beautiful property, it is a side-core building [More...]
San Francisco Office Update: Newsom, Cohen headline event
September 10th, 2008 Filed Under Development Updates, Mission Bay, South of Market, Zoning & City Hall Issues
The San Francisco Business Times put on their annual “Structures” event yesterday at the Marriott on 4th Street, and I had the opportunity to listen to City leaders discuss the future and recent history of development here in our City.
The event was sold out (I attended as a guest of my friend Mike Ma from Turner Construction), and the topics were timely and important. I will make sure and link to the Business Times article about the event (as professional journalists they are top notch on the details) when the paper comes out this Friday, but on a personal note I found the following three items potentially interesting enough to San Francisco office users to share on my site. [More...]
San Francisco Office Update: End of August Vacancy Report
September 3rd, 2008 Filed Under Financial District, Mission Bay, North Beach/ Waterfront, Showplace Square, South of Market
The information below represents a breakdown of the number of buildings currently advertised as available here in San Francisco. For the sake of this explanation, I use three broad submarkets and search for spaces available in a variety of sizes. Visit the “Current Vacancies & Market Stats” tab at the top of the page for a downloadable version of this information.
South of Market Vacancies as of August 31, 2008:
- 27 buildings have spaces between 5-10K sq.ft.
- 19 buildings have spaces between 10-15K sq.ft.
- 17 buildings have spaces between 15-25K sq.ft.
- 15 buildings have spaces between 25-50K sq.ft.
- 12 buildings have spaces between 50-100K sq.ft. [More...]
San Francisco Office Update: Symantec, Sports Basement, & Nokia all renew
September 2nd, 2008 Filed Under Financial District, Showplace Square, South of Market
It was a busy week heading into Labor Day as three solid San Francisco tenants all renewed their leases instead of taking new space. As reported by Ryan Munneke and Megan Gilmore from the Costar Group, Nokia, Symantec, and The Sports Basement chose to either exercise options, or renegotiate and expand within existing properties.
What this says about the marketplace is unclear because the negotiations and strategies are unknown at this point. It does however raise the conversation of the current cost of tenant improvements if and when tenants do choose to relocate to new buildings. Unless a new space lays out perfectly, tenants in today’s market are typically out of pocket on construction costs, as the amount being contributed by landlords does not cover the work needed.
We will discuss more about this in future postings, I will try to nail down some real numbers and report back. The important thing to take away from this line of thinking however is that when tenants pay for their own improvements, they typically consider the dollars spent a loan, and the monthly cost to service that loan is tacked onto rent and called “occupancy cost”. This allows for fair comparisons to alternative properties. [More...]
