January 21, 2017

Here’s what happened in the SF Bay Area Residential and Commercial Real Estate Market since 11/26:

Tishman sold Foundry Square lll, a 91,093-sq. ft. building which it built and leased for $350M or $1200 per sq. ft. You may love them or hate them but the end result speak for itself.

Note for example that 140 New Montgomery sold for $284 M or around $962 per square foot back in April 2016…222 2nd street is next…

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The 100,325-sq. ft.  medical office building at 19000 Homestead in Cupertino directly across Apple sold for $67 M or $667 per sq. ft.

 118-unit residential development will be built at Golden Gateway and Van Ness.No news if it is going to be condo or rentals. There is a lot of activity in that area. We discussed French American building a 320 footer mixed use on the lot it owns across its campus on Franklin with at least 300 units, most likely rentals. Then at One Oak there is another tower planned which will be 300 condos. Another 329 condos will be built at 1001 Van Ness. CPMC will open its hospital on Van Ness in 2019. As readers of this blog can attest, we never tought the Van Ness corridor would undergo such transformation. It would be great to plan trees all along Van Ness from Lombard to Market…

We hear that Family Offices of Arab Royals are eagerly looking to purchase real estate assets in the US: The Qatar Investment Authority  bought the St. Regis for $175M. This raises an important issue for owners of branded condos such as the St Regis condos. The value of the condos is closely related to the quality and brand of the management.

55 Francisco a 145,000 sq.  ft. office building  with 274 parking stalls at Francisco and Montgomery sold. for about a rumored $93M or per sq. ft. or $641 per sq. ft.

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Park Tower at Transbay (corner of Beale and Howard) is about to start construction and will be  743,000 square feet of office space.

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NerdWallet is sub-leasing part of Twitter’s space on Market (about 100,000 sq. ft). Nexdoor and Thumtack are next and we don’t know the square footage they plan to sub-lease.

 

 

100 Pine street a 402,000 sq. ft. office building  sold for $289M or $720 per sq. ft.

 

 

CIM Topped the 350 unit One Mission Bay which will be rentals.

 

 

The 900 foot Oceanwide Center Next to Golden Gate University second in height only to the Salesforce Tower broke ground. It will be hotel office and condos over retail.

 

 

Meineke Car Care Centers is looking for 30 locations in the Bay Area…which comes as no surprise since the Bay Area and SF in particular have the worst roads in the country according to TRIP.

 

CIM Group (full disclosure CIM is a client) paid $123M to purchase 55 Hawthorne  a 143,000 square foot Class A Building or $860 per sq. ft.

 

 

400-430 California a 247,000 sq. ft. office sold for $135M or only $547 per sq. ft.

 

 

 

Our colleague Redfin who has written very insightful residential real estate reports indicates in a widely disseminated article  that bidding wars for residential real estate in SF have ended except for only 3 neighborhoods: inner Richmond, Dolores Heights and Parkside.

 

 

 

88 Bluxome Street site of the 230,000 sq. ft. San Francisco Tennis Club sold for for $140 million or $608 per sq. ft. and will lease it to Seller for unknown period of time. New owners plan to get entitlements to develop 1M square feet of office space. We always advise clients to entitle their assets which is the best protection against eminent domain and also the best way to command high prices. Note that the Central Soma Plan has not been approved and the buyers of this asset and other similarly situated assets also face the uncertainly of office rents going down, new condo prices going down while labor and material costs go up. Not easy to be a developer…

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