San Francisco Tenant Representation

A significant corner in the South Financial District here in San Francisco is headed for the planning department, and the ownership group is hoping to break new ground for green development. 

According to J.K. Dineen of the San Francisco Business Times, 350 Mission Street plans on seeking LEED Gold certification, and will use Styrofoam and plastic bottles in place of some of the concrete to achieve this goal.  This new technology is intended to lighten and strengthen the foundation and super-structure, and it will add to the overall greening of Mission Street, which is quickly becoming the new center of downtown San Francisco with nearby developments underway.

The most impressive part of the plan in my opinion is the effort being made to open the lobby to the outside world by raising the ceilings, creating movable glass walls on the street level, and adding mezzanine level dining.  This section of Mission Street is quickly becoming a bustling center of activity for lunch time employees, and 350 Mission will add to the enjoyment of the area.  Other recent and future development nearby include the Transbay Terminal, 555 Mission, 535 Mission, and the Millenium Tower.  These projects will bring tenants, which will mean very busy retail opportunities and a chance for the entire atmosphere to be recreated through proper planning. Read the rest of this entry »

Tishman Speyer has landed another big name for their soon-to-be completed building located at 555 Mission Street in San Francisco.  Sequoia Capital, the well respected venture capital firm currently located on Sand Hill Road, has apparently committed to the property and plans to take the top floor.  As we have covered over the past three months on this blog, that makes three major tenants (Sequoia, Gibson Dunn, DLA Piper) to choose the future LEED Certified building, and all three have mentioned sustainability as one of the top reasons for the choice. 

In my opinion Sequoia is a perfect tenant for this building, as it is important they retain a high-class appeal to their offices to continue to attract big investment dollars, but it is important also to be able to relate to the technology companies they fund, most of which are located South of Market. 

Major changes are underway for this small corner of the City.  The financial district has to grow, and it will grow, and the path of this growth continues to be towards Yerba Buena and the Moscone Center.  535 Mission will be built, the fourth building at Foundry Square will be built, 680 Folsom will be redeveloped, and 370 Third is already in the process of signing tenants (so we hear). 

Although several years away still, I am looking forward to the time when the developers will look to the neighborhood that sits between the ballpark and showplace square, along Townsend and Brannan Streets.  Until it is formally decided that the City will go vertical with its zoning, it seems the next logical place to buy and build. 

Enjoy the well written and well researched article below featured in the San Francisco Business Times.  As is customary for this blog, I have tried to take recent tenant news and give it some context in the bigger picture of the San Francisco commercial real estate market. Read the rest of this entry »

In what is becoming a rarity of sorts lately, a downtown San Francisco high rise is set to change hands in the very near future.  One Sansome, located where Sansome St., Market St., and Sutter St. come together across Market St. from the Market Center, is tied up by a Korean investment firm.  The property, as detailed in the GlobeSt.com story attached below, is part of a portfolio of San Francisco properties, three of which are either publicly or privately being marketed for sale today. 

There has been a dearth of skyscrapers sold recently, and it will be interesting to discover after closing what rents are being anticipated at One Sansome to justify the predicted purchase price.  As we have discussed previously, rents in the financial district appear to be flattening or headed South, while Landlords that bought into the real estate market at its height last year are expecting and needing rents to increase. 

The article below also addresses some greater economic indicators affecting values, most notably the weak dollar in comparison to foreign monies.  I anticipate that more San Francisco properties will be sold to oversees investors over the next two years as our downturn, and the weak U.S. dollar are of benefit to those with cash reserves looking for undervalued assets here in the United States.  Read the rest of this entry »

The ownership shuffle continues in Mission Bay as 500 Terry Francois changes hands after the completion of construction.  This transaction gives an insight into the different business models development and real estate investment groups use to create a return on the dollar. 

Some firms specialize in land banking and will wait for area growth patterns to shift their way before selling.  Some firms specialize in early stage development consisting of getting the proper entitlements and architectural work done before selling.  Some firms specialize in completing construction while marketing a property for “pre-lease” and then selling at the completion of construction.  Some firms specialize in buying a built asset and taking responsibility for the lease-up of the property.  Some firms only buy assets with existing tenants with a long-term hold in mind.

This property is clearly set for continued value growth over a long period, but may struggle in the very near future in my opinion.  Threats of a nationwide recession, ongoing difficulties in the biotech field, and a potential softening of the San Francisco office market all lead me to believe that potential tenants may sit on the sidelines for short while to see what direction rents are headed. 

In the bigger picture however, eventually 4th Street will be a shopping district starting South of King St, the current parking lot for the Giants will be developed into a likely mixed-use concept, and the rest of Mission Bay will be completed.  All of these factors make 500 Terry Francois an excellent lease and hold opportunity at this time. 

The following is an article pulled from Globest.com, an industry website that puts out informative, daily information for people in my industry.

Read the rest of this entry »

In a major change to a very interesting story, David Choo has listed his Transbay properties for sale due to the recent credit crunch.  As we have followed closely, the South Financial District is due for some major zoning changes that will allow for increased building heights in the area immediately surrounding the proposed Transbay Terminal.  The idea is to increase the vertical presence, but to do so in a thoughtful way that allows for tapered elevations. 

In my opinion things are just beginning to get interesting.  There will be many more properties changing hands over the next 5-10 years now that it appears the rezoning will be moving forward.  Property values in downtown settings are based upon buildable square footages, which makes it difficult to determine value if you do not have a known height limit.  This is still the case for the First and Mission area, making the future sales price of Mr. Choo’s properties difficult to predict.

The following article by JK Dineen from the San Francisco Business Times dives into further detail and explains the history behind the accumulation of this wonderful block of downtown real estate. Read the rest of this entry »

In what appears to be a breakthrough in the efforts to redevelop Hunters Point, Lennar Development has come to terms with a major labor group concerning the percentage of affordable housing to be built on the old Naval shipyard. 

There is still a lot of work to be done, but support now appears to be in place for the ballot measure that would green-light the project this June.  If all goes according to plan, housing, affordable housing, commercial office, open space, and a new 49er’s ballpark will share space in what is now essentially abandoned land.  The scope of the project is reminiscent of Mission Bay, and the powers that be at City Hall may take this opportunity to create a greentech/ cleantech business hub in the hopes of attracting companies from outside the Bay Area to set up their headquarters in San Francisco. 

The following article by Heather Knight from the Chronicle is a well researched piece that goes into greater detail and also discusses some existing opposition to Lennars current plans. Read the rest of this entry »

The continued blending of the various submarkets surrounding Downtown San Francisco has been a constant source of discussion for this blog, and the growth specific to the Embarcadero is well documented.  In the following well thought out column from John King of the Chronicle (a favorite writer of mine for both information and style), Google’s current S.F. headquarters at Hills Plaza is the focal point for the coming together of the South Financial and Rincon/ South Beach submarkets.

Urban planning through zoning has worked well in San Francisco, and our City has been succesful in getting people to live closer to where they work.  This concept alleviates traffic and environmental concerns related to commutes, and also provides a neighborhood a sense of character that does not exist in the North Financial District.  John does not have the space to discuss the other major changes related to this corner of our town, but when looked at from an aerial perspective there are lots of dynamic moving pieces contributing to the growth.  The Transbay plans are under way, the on-ramps and off-ramps connecting the city streets to the Bay Bridge are almost complete, Mission Bay is well into its development, and the Ballpark is surrounded by succesful Tech Companies and well visited restaurants.  It has been a very fast conclusion to what started when the old Embarcadero freeway was destroyed following the 1989 earthquake.  Read the rest of this entry »

Marin County continues to struggle with the future of Marin General Hospital, as detailed in the following article by Chris Ruaber of the San Francisco Business Times.  Upgrades are expensive for both Seismic and IT concerns, ownership is transferring control from Sutter to a public agency, and confusion in contract language are all adding to what has been and continues to be an uncertain future. 

The hospital is the key part of a business community that is medical in nature, stretching from Bon Air Shopping Center up Sir Francis Drake Blvd to Marin Catholic High School, and then across the river towards Larkspur.  Cardiologists, Pediatricians, and other private operators benefiting from the nearby hospital are nervous about having such an important facility in the hands of a governmental agency not focused on bottom line.

 Enjoy the article, I will post follow ups as they occur whether they come from the Biztimes, the Chronicle, or the Marin IJ. Read the rest of this entry »

The following article by James Temple from the Chronicle is a great examinaton of the state of the commercial real estate industry as we are now experiencing it. From a personal perspective, we are seeing rents flattening or decreasing as landlords start to compete with each other a touch more. We will start to see which ownership groups made great decisions in taking reduced rents early before the dip started, and which groups will get stuck hanging on to high asking rates. Depending on the size of the tenant requirement, sitting tight for a couple of months may increase your ability to get concessions.

Enjoy the article, it is very well researched. Read the rest of this entry »

 A significant restaurant group based out of New York is taking the top floor at the Metreon, according to an article by J.K. Dineen of the San Francisco Business Times.  When combined with the changes occuring at 633 Folsom and 307 Third, and with the opening of the Intercontinental, these upgrades to the Yerba Buena area will significantly increase foot traffic and bring a resurrgence in popularity to a part of town temporarily overlooked.  Hopefully now the tourism industry can get its way and convince the City to spend some money upgrading the convention halls. 

Here is the rest of the story… Read the rest of this entry »