Norcal Waste takes 20,000 square feet at 50 California Street
January 30th, 2009 Filed Under Financial District, North Beach/ Waterfront, Tenant Activity
50 California Street has signed up a real and credible tenant of significant size in San Francisco’s financial district during a period of otherwise relatively slow leasing activity. Norcal Waste, currently housed at 160 Pacific but with subsidiaries scattered across the Bay Area (including some composting and landfill operations), has leased almost 20,000 sqft as reported today by the San Francisco Business Times.
This lease is significant to office tenants here in San Francisco for two reasons. First and foremost, any lease of this size signed in the financial district during our current recession is newsworthy because most tenants are waiting for future pricing declines before taking space if they are able to. That being said, trying to time the market is not advised and if the right opportunity presents itself you have to be prepared to strike, and it sounds like this space is a great fit for Norcal.
Secondly, as you will discover in the story by J.K. Dineen below, there is some back story to how this deal happened including a signed Letter of Intent that did not lead to a lease at a different location. I know nothing about how this process unfolded but I do know that over the past few months, as the market has declined, it has become the norm for tenants to ask for rental rate reductions [More...]
888 Brannan Street Jewelry Mart repositioned for office use
January 26th, 2009 Filed Under Development Updates, Showplace Square, South of Market, Zoning & City Hall Issues
The new owners of the long time home of the San Francisco Gift Center and Jewelrymart have begun their expected transition of the property by announcing the introduction of an office component. The Eastern Neighborhoods Plan, recently approved for implementation, allows a mixed-use to take place that drastically improves the market value of the property by increasing what the owners will be able to charge in rental rates.
As you will see below in the article from the San Francisco Business Times, the SOMA/ Showplace Square area in which 888 Brannan is located suffers from high vacancy numbers yet it enjoys high rental rates at the same time. These two numbers normally work against each other but the uniqueness of these neighborhoods create a marketability to tech tenants and smaller tenants that is not comparable to other submarkets. Also, the great majority of available space is tied up in large properties that are still undergoing a transition and not necessarily suitable for a 5-25K sq ft user, 370 Third and 1355 Market Street being the best two examples.
From a tenant’s perspective this is welcome news. [More...]
Friday Updates: Condos sales slow, Soma Sale, Transportation 2035
January 23rd, 2009 Filed Under Development Updates, Financial District, Mission Bay, South of Market, Tenant Activity, Zoning & City Hall Issues
This website is designed to gather information that is relevant to my clients doing business in San Francisco. Normally we cover tenant relocations, construction updates, and indicators such as vacancy rates and pricing adjustments.
Occasionally however I link to stories that are important to those that spend time in the City, but that may have an effect on us in a different way. Below you will find residential, pedestrian, and streetcar coverage. Plus a link to a great explanation of the latest updates to the Regional Transportation Plan. Enjoy!
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Condo developers in S.F. hurting for buyers (Chronicle)
New streetcar to link parking lot development (Examiner)
Market/ Octavia bike lane will stay for now (StreetsblogSF)
Regional Transportation Plan: A 2035 Blueprint (Transbay Blog)
Universal Electric buys two SOMA properties (Costar Group)
Federal building face-off, Giants parking lot & 110 The Embarcadero
January 21st, 2009 Filed Under Development Updates, Financial District, Midmarket/ City Hall, Mission Bay, South of Market, Zoning & City Hall Issues
The San Francisco Chronicle has two writers that cover aspects of commercial real estate either full time or part time and the paper has produced three very interesting news stories over the past week.
John King, who runs a regular column called “Place” on Tuesdays in the Chronicle, reported this week on the contrast between the newly opened (relatively speaking) federal building on Seventh and Mission and the former federal building across the street that opened in 1905. The discussion is not just about structure, but about style and cost as well. In today’s world, City leaders are cognizant of public perception regarding use of tax payer dollars, and new state financed properties are designed to be as efficient and sustainable as pricing allows. His article is worth your time as King [More...]
Tishman Speyer writes down property values, San Francisco included
January 16th, 2009 Filed Under Development Updates, Financial District, South of Market
The parent company of the entity that owns several downtown San Francisco office buildings has chosen to write down the values on a large number of their U.S. holdings, as reported by the Costar Group this week. Tishman Speyer, which has ownership control over 595 Market and One Bush Street decreased the worth of the overall portfolio by more than 10%. Tishman is also finishing the construction on 555 Mission Street which was not mentioned in the article. Despite having done a great job with this building they do still have quite a bit of vacancy in a decllining market.
This action on behalf of Tishman is reflective of what our commercial properties are facing on a much grander scale. Downtown San Francisco properties are valued and sold on a cap rate basis, which means potential investors see rental income as a return on investment. Recently rents have declined, and vacancy has gone up. Therefore when a building gets “valued” in today’s economy it is likely the computed value will have decreased as well. This is somewhat similar to what happened in the housing market where property values decreased to prices lower than what was owed on the mortgage, resulting in foreclosures. Will that happen in our great city to any of our beautiful office buildings? Stay tuned… [More...]
625 Second expands Fox Interactive, parent company of Myspace and IGN
January 9th, 2009 Filed Under South of Market, Tenant Activity
Fox Interactive Media expanded it’s footprint near the San Francisco Giants ballpark by completing lease negotiations to occupy three out four full floors at 625 Second Street. As reported this week by the Costar Group, the lease runs out for seven years and occupancy starts in early 2010. Fox Interactive Media is the parent company for Myspace and the Internet Gaming Company (IGN).
This is very positive news for the Rincon Hill/ Soma/ Waterfront neighborhoods as it continues the trend of tech companies with a National presence choosing creative space South of Market. There are a number of large tech tenants already near this property including AKQA, NG Moco, Slide, Omniture, Service Source, and Splunk. The downside for tenants seeking space today near 625 Second unfortunately is that this will push the vacancy rate downward, which [More...]
