December 18, 2015.

 

Here’s what happened in the San Francisco Bay Area Commercial and Real Estate Markets since 11/15:

 

We focus on Bay Area Real Estate but it is worth noting that Downtown LA has been gentrifying for years and the gentrification is accelerating: if the presence of numerous residential lofts and high end hotels such as the Ritz Carlton was not enough, Downtown LA is now getting an Apple Store which is rumored to be at 8th and Broadway.

 

Market Street Real Estate Partners purchased an office project in Oakland’s Jack London Square for $11.5 million, which comprises: The Commons at Jack London Square, 384 Embarcadero West and 140 Franklin St. + 160 Franklin St. The total square footage is 43,000 square feet, which means they paid only $267 per square foot.

 

TMG Partners purchased 1330 Broadway in Oakland, a 300,000 square foot building. While there is very little information about the transaction it is believed to have sold for $250 per square foot, or $75 million.

 

CIM is developing a 1 acre site at 323 22nd street right by Oakland’s Lake Merritt into an office building. It paid $11.1 M for the site which breaks down to $255 per square foot for the entitled site.

 

A 10 building office + retail project at Ninth and Washington in Oakland (469 Ninth St., 476 Ninth St., 483 Ninth St., 491 Ninth St., 492 Ninth St., 969 Broadway, 827 Broadway, 807 Broadway, 801 Broadway, 456 Eighth St.) sold for  $45.5 Million. They add up to about 225,000 sq. ft:

 

UBS purchased 1221 Broadway aka the Clorox building a 522,0009 sq. ft. building right next to the 12th street Bart Station. UBS is rumored to have paid $182M or $350 per square foot.

 

In SF Stitch Fix went from 30,000 square feet at 731 Market St to 100,000 square feet on five floors in One Montgomery Tower by 2017. The move will be gradual. We don’t have much info about the transaction but our guess is that space leased for $67 per square foot per year.

 

If you ever wonder how much return an institutional real estate investor makes on their money consider Blackstone which according to a recent Business Report returned 18% after fees on the money invested in their Real Estate funds: In other words, a 100K investment with them would have earned you an 18K return per year before taxes in a market environment where your money cannot even get a 1% return from a bank.

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We hear Swig wants to build on top of its structure at 631 Folsom (the red building right next to Blu). We hear there is another project with plans for 200 units but no word as to whether they will be condos or apartments. Also chances are that another developer will build on the site of Canton at 655 Folsom.

 

The September Case Shiller Index places homes in the larger SF market 13% above the August 2007 peak (we look only at the top 30% of the market). Condos are 17% higher than the all time high of October 2005.

 

The old auto repair shop on Franklin and Oak with a car on its facade (right by French American International School) will be 35 condos over commercial. The Parking lot across the street at Franklin and Oak has not found any suitors for now.

 

 

JP Morgan bought the 313,012 square foot  for a price rumored to be about $665 per square foot or about $207M. More to come.

 

It is no secret that Facebook owned Oculus is looking for a large floor plate in SF (about 60,000 sq. ft.)

 

Spaces, a Dutch Co-Working company leased the Commercial Space, which has been long vacant at the Paramount at 680 Mission street. Terms of the deal are not yet known.

 

116 New Montgomery, a 137,000 sq. ft. office building aka The Rialto building sold for close to $110 million or about $810 per square foot according to various sources with knowledge of the transaction.

 

Our colleagues at Hoodline compiled a very nice list of Mid-Market projects in the pipeline:

 

Mid-Market Projects

 

 

CIM Group is buying 274 Brannan from Swig and it should fetch at least $70M or $665 per sq. ft. CIM who is known for purchasing office buildings is also purchasing as mentioned above  a two-acre Mission Bay parcel at 1000 Channel St. an entitled site for 350 condos over 10,000 sq. ft.+ of retail. The purchase price for the entitled land (Block 1) is not known yet. However, it is probably higher than the $704 per square foot Kilroy paid for a Mission Bay site this summer.

 

Dolmen Property Group is completing renovations at the historic 40,000 sq. ft. Hibernia Bank and wants to turn the Mid-Market landmark into a new commercial destination. It is in our opinion one of the nicest buildings in SF along with 140 New Montgomery.

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Twill is about to lease 92,000 square feet at 375 Beale and Atlasssian is looking to expand into 100,000 sq. ft. at Pier 70 and New Balance is moving into the Puma Store Space on Market Street. The specifics of these transactions are not known at this point.

 

 

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