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CORFAC is pleased to announce that a record number of Next Generation members attended the 2015 Fall Summit in Minneapolis Sept. 9-12. The more than 15 Next Gen attendees provided some fresh perspectives and new energy to the organization’s second annual meeting of the year.
Special congrats to the Next Gen Scholarship winners who were also first-time CORFAC conference attendees, including: Morgan Pepper, The Klabin Company/CORFAC International; Ian Ameche, The Klabin Company/CORFAC International; Cole Sweatt, TRI Commercial/CORFAC International; Gabriel Galiothe, TRI Commercial/CORFAC International; Jesse Bauer, Pro Ten Realty/CORFAC International; Dino Alevizos, Shindico/CORFAC International; Jorge Lara, IVI Instrumentos/CORFAC International and Zach Meyer, The Zacher Company/CORFAC International.
CORFAC provided a range of opportunities for all Next Gen attendees to network including a roundtable lunch and “huddles” with CORFAC principals who shared their insights and perspectives on the business. Other Next Gen attendees included Adam Tarantur, Podolsky Circle/CORFAC International; Cale Berg, The Dickman Company/CORFAC International; Lucas Gaughan, The Gaughan Companies/CORFAC International; Michael Hussey, Podolsky Circle/CORFAC International; Marina Kukharenko, Bright Rich/CORFAC International; Kent McCoy, Centric Commercial/CORFAC International; Kevin Riley, Weber Wood Medinger/CORFAC International and Andy Swanson, Centric Commercial/CORFAC International.
Congrats to all Next Gen brokers on a great Fall Summit!
CORFAC International announced its annual Charlie King MVP Award, Thomas B. Hayes Award and Olen Monsees Award winners and the 2015 Standards of Excellence Award winners at its annual Fall Summit held September 9-12 in Minneapolis, MN.
CORFAC 2015 President Scott Savacool, CCIM, SIOR, (right) presented Tom Martindale, SIOR, President of San Francisco, CA-based TRI Commercial/CORFAC International, with the Charlie King MVP Award. Martindale received the award for his exemplary leadership as a member of CORFAC’s Executive Committee and past chair of its Communications Committee, among many other contributions he has made to the organization.
Charles B. “Charlie” King is one of the founders of CORFAC International, as well as the founder of King Industrial Realty/CORFAC International in Atlanta, GA. The award was created to recognize King’s dedication to CORFAC.
Savacool also presented the Thomas B. Hayes Award to Phill Tomlinson, a sales and leasing consultant with Commercial Properties Inc./CORFAC International in Phoenix, AZ. The Thomas B. Hayes Award was created to recognize a former CORFAC member who remained on the front-edge of technology in commercial real estate.
In recent years, Tomlinson has led best practices workshops and educational sessions at CORFAC conferences on social media, new industry apps and other technology trends.
Finally, James “Jim” E. Klements, CPA, SIOR, with Cleveland OH-based Weber Wood Medinger/CORFAC International was honored with the Olen Monsees Award. Named in honor of Olen Monsees (1940-2012), former president of Karbank Real Estate Company/CORFAC International in Kansas City, MO, the award recognizes an individual member who goes above and beyond the call of duty without being asked.
Throughout his distinguished career, Monsees worked with a natural sense of responsibility, without complaint or excuses. Klements has formerly served on CORFAC’s Executive Committee, has been a consistent leader in CORFAC for many years and is one of the organization’s top referring brokers in multimarket transactions.
2015 Standards of Excellence Awards
The Standards of Excellence Awards recognize CORFAC firms that exceed industry standards and consistently operate with the CORFAC values, mission and vision in mind. The winning firms are the CORFAC affiliates who participate the most in the CORFAC network, are recognized in the industry for their excellence and leadership and consistently represent the CORFAC brand. CORFAC International recognized seven firms in three categories: Platinum, Gold, and Silver. The winning firms are:
Platinum Award Winners
Patterson Woods Commercial Properties/CORFAC International – Wilmington, DE
Podolsky|Circle CORFAC International – Chicago, IL
Gold Award Winners
Joel and Granot/CORFAC International – Atlanta, GA
TRI Commercial/CORFAC International – San Francisco, CA
Weber Wood Medinger/CORFAC International – Cleveland, OH
Silver Award Winners
Piedmont Properties of the Carolinas/CORFAC International – Charlotte, NC
L. Mason Capitani/CORFAC International – Detroit, MI
Congratulations to all CORFAC 2015 Award winners.
Charlie King MVP Award: Scott Savacool, SIOR, CCIM, (R) and 2015 President of CORFAC International presented Tom Martindale (L), SIOR, with the annual Charlie King MVP Award.
Martindale is President of San Francisco, CA-based TRI Commercial/CORFAC International. He received the award for exemplary leadership as a member of CORFAC’s Executive Committee and past chair of its Communications Committee.
Charles B. “Charlie” King is one of the founders of CORFAC International (1989), as well as the founder of King Industrial Realty/CORFAC International based in Atlanta, GA. The award was created to recognize King’s dedication to CORFAC. Savacool is also a Senior Associate with St. Louis, MO-based Sansone Group/CORFAC International.
By Cory Weinberg: Reporter for San Francisco Business Times
Uber Technologies Inc. will open a large office in Oakland, taking all of the workspace in the refurbished Sears building that will open in two years, according to a source with knowledge of the deal.
The deal gives Uber all 330,000 square feet of the building. Uber made the deal official Wednesday morning, announcing it bought the building from Lane Partners, the building’s owner, for an undisclosed price.
For Oakland, the deal may ignite a real estate market that hasn’t seen a new office building built in over a decade and hasn’t gotten a bite of the region’s huge growth in $1 billion technology companies. It could also give investors more confidence to finance the construction of thousands of residential units that developers want to build.
“Oakland just changed. Wow,” Chris Foley, a land broker in San Francisco and Oakland for Polaris Pacific, said when reached by phone and told of the news.
For Uber, the deal shows more of its massive growth. The $50-billion-plus ride-app company already has about a half-million square feet of space rented across three buildings on Market Street and another 423,000 square feet that will open in its new Mission Bay headquarters by 2017. The San Francisco-based company had been kicking the tires on Oakland this summer, meeting with developers about potential spaces, as I reported earlier this month.
Uber also has partial ownership future Mission Bay building, though owning real estate is still a rarity for such a young company.
The former Sears building, which recently covered up its rooftop logo with a sign designating it as the rebranded “Uptown Station,” has room for 3,000 employees, according to the building’s marketing website.
If Uber fills that space completely, it would become Oakland’s largest employerthat isn’t a government agency or medical center. It would also surpass the size of downtown offices rented by private companies like Clorox and Pandora, which lease 275,000 square feet and 200,000 square feet, respectively, according to the brokerage Cushman & Wakefield.
This deal is a huge win for Menlo Park-based developer Lane Partners, which bought the failing Sears building at 19th and Broadway last year for $25 million and has been working on a $40 million gutting that will transform it into prime tech space. A rough San Francisco comparison for that bet would be Shorenstein Properties’ investment in an old furniture market that became Twitter’s global headquarters, now worth $900 million. It’s unclear whether Lane will stay onto the project as a fee developer until the renovation is completed.
Lane has shown its confidence in getting a deal done, wrapping up sites for residential development around the Sears building, I reported this month. Rumors have been escalating about a potential lease lately as Lane apparently stopped marketing the building to new tenants.
Industry sources have said Lane was shopping the space to tenants for about $45 a square foot annually once you factor in operating expenses – 28 percent higher than the average price of downtown space in Oakland, according to the brokerage Avison Young.
The building sits on top of the 19th Street BART Station, adding to its lure for potential employers, who increasingly stress their employees’ needs for access to public transit to avoid clogged bridges and highways. It’ll also be packed with amenities, like a rooftop strewn with picnic tables and fire pits for workers. About 50,000 square feet on the ground floor will have a large food hall and retail space. Gensler, which recently opened an office across the street from the project, is the architect for the renovation.
The building is the centerpiece of the Uptown neighborhood’s decade-long comeback. In recent years, the neighborhood has seen the revitalization of landmarks like the Fox Theatre and new housing built by real estate giants like Forest City.
Meanwhile, the city has had some of the fastest-rising residential rents in the country with paltry construction of market-rate housing.
Major residential and hotel projects still sit in the city’s pipeline, and real estate insiders have reported that investors are still lukewarm about committing equity to Oakland projects. The presence of a globally known technology company will change that, Todd Vitzthum, a broker for Cushman & Wakefield, said last week.
“We’re 5 years into the (economic) cycle with continued rent and value growth – why haven’t we built yet? We’re just at the point to get capital support for projects,” he said. “There’s a tremendous amount of anticipation on who will move into old Sears building. If it’s a high-profile, marquee tenant, it’ll have a very positive effect across Oakland.”
The question now becomes: Will more technology companies follow?
Right now, there’s no major spaces where they can land. Oakland has two major office sites controlled by SKS Investments and Shorenstein Properties, who won’t start construction until they have tenants wrapped up. Other land deals for potential offices are being shopped, too.
The city should be a destination for startups who want to save money in particular, said startup investor Chamath Palihapitiya at Social + Capital last week.
“It’s fine to fail,” Palihapitiya told attendees, according to TechCrunch. “But if you fail because you didn’t have the courage to move to Oakland and instead you burned 30 percent of your cash on Kind bars and exposed brick walls in the office, you’re a (freaking) moron.
So far, Oakland has been successful in cultivating strong homegrown startups without huge venture funding. Design firms, law firms and other types of companies have also been trickling from San Francisco to Oakland.
The public policy think tank SPUR cautioned in a report earlier this month that Oakland can’t bank on a cascade of large companies coming across the bay.
“Downtown has about a dozen co-working spots and a half dozen or more distinct business incubators and accelerators. Future growth should build off this existing infrastructure,” read the report.
By Randyl Drummer
Kilroy Realty Corp. has started construction of a 700,000-square-foot, $485 million project in the Mission Bay submarket consisting of two six-story and two 12-story office and life science buildings.
The Exchange on 16th’s four interconnected buildings will align to provide three “super floors” of up to 95,000 square feet. Kilroy is targeting LEED platinum certification for the building, which includes floor plates with high ceilings, natural light and views of the bay.
The company did not disclose a completion date for the speculative office project. With The Exchange underway, Kilroy now has four projects encompassing more than 1.6 million square feet of space of construction with a total estimated investment of $1.1 billion in progress in the Bay Area. The other projects are 100% leased to Salesforce.com, Box, Inc. and Dropbox. Kilroy has 3.9 million square feet of properties in the region.
Kilroy’s portfolio at midyear totaled 13.1 million square feet of office properties, located in greater Seattle, the San Francisco Bay Area, Los Angeles, Orange County and San Diego. The company also has 2.4 million square feet of office and mixed-use development under construction with a total value of roughly $1.5 billion.
By Cory Weinberg
After years of political and financial maneuvers that tinkered with heights and affordable housing schemes, New York-based Paramount Group got the green light to build one of San Francisco’s most contentious towers Thursday.
The 75 Howard residential tower will include 130 high-priced units rising 220 feet on prime real estate next to the Embarcadero, replacing a parking garage that adds “blight to the neighborhood,” according to the project architect at Skidmore, Owings & Merrill.
The project has attracted heavy opposition from neighbors and nearby condominium owners who object to the building’s height, its potential to cast shadows on neighboring Rincon Park, and the lack of below-market-rate housing. It’s been compared to another “Wall on the Waterfront,” like the 8 Washington project voted down at the ballot in 2013.
Opponents – like former mayor Art Agnos and environmental attorney Jon Golinger from that “No Wall” campaign – have threatened another ballot measure against this project and others as a result of its approval.
But those objections rang hollow in front of the Planning Commission.
The opposition was mostly drowned out late Thursday night by a string of public commenters from emerging groups like San Francisco Bay Area Renters Federation advocating for more housing supply regardless of price points. “We’ve torn down the Embarcadero freeway and the real wall on the waterfront. Everyone agrees it’s a good thing. That parking garage is one of the only relics left,” said Kyle Huey, a member of SFBARF who works near 75 Howard.
Paramount Group also showed that the building would contribute shadows of less than 1 percent on Rincon Park – known for its Cupid Span sculpture and as one of South of Market’s few green spaces. At 220 feet tall, 75 Howard would also be shorter than the three buildings surrounding it directly to the north, south and west.
“It’s not on the waterfront. It’s a street away. There’s a parcel in front of it. It’s not on port property,” said Planning Commissioner Dennis Richards, who voted to approve the project. “I was interested in shadows and how they affect Rincon Park…I don’t think it’s that significant.”
‘Through the ringer’
The project passed by a 5-1 vote. The Planning Commission also granted a 10 percent height increase and more parking. Commission Vice Chair Cindy Wu opposed the project.
The site sits on private land that Paramount bought from Morgan Stanley Real Estate in 2007, even then considered one of the best places to build in San Francisco. But the project has given Paramount fits and starts, especially since the developer pitched a 350-foot version of the tower in 2013 and kicked up more height aversion complaints from opponents.
Paramount tried to trade extra height for added affordable housing dollarsearlier this year, but those talks fell through. The developer will instead contribute the minimum required affordable housing fee to the city – about $9 million – and lowered heights to 220 feet. It will also add about $15 million to fund open space near the future Transbay Transit Center.
“This project has been through the ringer, it deserves your support,” urged Tim Colen, executive director of the San Francisco Housing Action Coalition.
More battles loom
The project elicited opposition from groups like Save Rincon Park, the Coalition of SF Neighborhoods, the Harvey Milk LGBT Democratic Club and the Sierra Club for what they saw as outdated height limits, inadequate setbacks and too many shadows cast on the park.
The park is what San Francisco Chronicle architecture critic John King called the “the green punctuation on the stroll from the Ferry Building toward the Bay Bridge — a distance, by the way, of barely half a mile.” Opponents have also levied opposition against Tishman Speyer’s 160 Folsom St. tower because of Rincon Park shadow issues.
But Rincon Park is exempt from the 1984 “sunlight ordinance” that states a project taller than 40 feet can’t make a “significant” impact on additional shadows on a park under the jurisdiction of the Recreation and Parks Department. Earlier this year, that 1980s ordinance led to the rejection of a six-story, 10-unit project in South of Market that would increase shadows by only 0.07 percent a year.
Golinger, a 75 Howard opponent, has said he is looking to go to the ballot to expand that ordinance to all city parks.
“This is just the first skirmish in what will be a long battle over whether an uber-luxury condo tower should block this important part of San Francisco’s waterfront,” he said. “ This vote has exposed a gaping loophole in the Sunlight law that voters enacted 30 years ago to protect San Francisco’s parks for everyone to enjoy.”
By Cory Weinberg: Reporter for San Francisco Business Times
San Francisco-based Carmel Partners is the frontrunner to build at least 600 residential units on a city-owned site at the corner of Market Street and Van Ness Street, sources say.
The residential developer is close to sealing the deal with the city to buy the site for at least $87 million. The buyer is expected to build a tower up to 400 feet tall at 30 Van Ness in the western portion of Mid-Market, which is on the brink of heavy development change (see map below). About 4,000 housing units are in the pipeline in the surrounding few blocks.
The deal is in due diligence between the two parties, said San Francisco’s real estate head John Updike, who wouldn’t confirm the identity of the chosen developer. Carmel Partners declined to comment. The precise unit count and project proposal likely won’t come to light for at least another week. The current building, which counts the Department of Public Works as its largest tenant, can’t be demolished until 2019 when city agencies move out.
But the approximately 600 units would make it one of the top 10 largest projects in the city’s development pipeline. Carmel Partners is also building 330 units in Oakland’s Jack London Square. The full-service firm has been aggressive in the Bay Area in recent years. Last year, it spent about $130 million buying more than 2 million square feet of development sites in East Bay cities – Pleasanton, Fremont and Hercules – according to the research firm Real Capital Analytics.
The 30 Van Ness property would be its biggest recent buy. The site was marketed by brokerage Newmark Cornish & Carey as being in the “most active commercial and residential neighborhood in San Francisco. Home to Twitter, Uber, Square, and more.”
The pick is surprising considering Carmel Partners was also fending off competition from Related California, a development giant that is already building a mixed-use project with a residential tower one block away. As part of that project, which will sit on a site that’s now a Goodwill store, Related will build a new city office building that will house the departments now in 30 Van Ness.
Related’s chairman and CEO Bill Witte said the company was recently told it wasn’t picked to develop the site.
Updike told me last month that the city got “record-breaking kind of interest” in the site with more than 100 groups signing confidentiality agreements to view the property. The fierce competition helped jack up the amount that will pour into city coffers.
The sale will help the city repay $32 million of debt on the building and help finance construction of 450,000 square feet of city offices that will be part of a mixed-use development on the nearby Goodwill site.
By Steve Wells
Luxury department store chain Barneys New York will open a new location at 790 Market St. in San Francisco’s Union Square early next year after agreeing to an 18,384-square-foot lease with building owner, Stockton Street Properties.
790 Market is a 91,230-square-foot, 4-story, Class A retail building that consists of 36,492 square feet of retail and 54,738 square feet of office space. Originally constructed in 1907, the building today sits across from the Westfield San Francisco Centre and Marriott San Francisco Downtown, and up the street from the BART – Powell Street station.
Kazuko Morgan and Jennifer Pelino of Cushman & Wakefield represented the landlord in the transaction.
By Mark Calvey: Reporter for San Francisco Business Times
Zillow’s latest figures show that the nation’s housing market is cooling off, even the white-hot Bay Area.
The national housing market is slowing down, with home values showing the first monthly drop since the market began recovering four years ago, according to the real estate data company’s report for July.
San Francisco, San Jose, Denver and Dallas are still tallying double-digit year-over-year home value increases, but even those hot markets are seeing a pullback in their pace of appreciation from June, Zillow said.
In San Francisco, July’s Zillow Home Value Index stood at $756,100, up 0.6 percent from June and 11 percent higher from July 2014. In San Jose, July’s Zillow Home Value Index was $891,500, up 0.7 percent from June and 11.5 percent from July 2014.
“This slip in home values is a sign of the times. Many people didn’t think it was happening, but it is: we’re going negative,” Zillow Chief Economist Svenja Gudell said in speaking of the national housing market. “We’ve been expecting to see a monthly decline as markets return to normal.
“The market is leveling off, and it’s good news, particularly for buyers, because it will ease some of the competitive pressure,” Gudell said. (Note to loyal followers of Zillow’s number-crunching: Gudell’s predecessor Stan Humphries was promoted to chief analytics officer for Zillow Group.)
Zillow (NASDAQ: Z) expects that the pullback in June-to-July valuations in several cities, including Cincinnati and Washington, D.C., will spur home owners, who have been sitting on the fence pondering whether to sell, to finally put their homes on the market. That would help ease a shortage of available homes for sale that buyers have confronted over the last several months.
But the slower rise in appreciation, if not outright depreciation, will likely come as a shock to Bay Area home owners accustomed to robust growth in home values. Still, the key to home values will continue to be the pace of job growth.
Zillow says falling valuations and more homes on the market may spur renters to buy, especially given the dramatic increases in rents. San Francisco area rents jumped 14.1 percent to $3,285, according to the latest figures from Zillow. The company found that Bay Area rents can be quite painful, literally, as tenants skip doctor and dentist visits so they can pay the landlord.
As for the national picture on home values, Zillow saw declining home values in 204 of the 517 metro areas covered by the company. Economists have expected to see growth flattening as the recovery continues. After all, trees don’t grow to the sky.
(Note: Soon after this story was published, two stars from Bravo’s “Million Dollar Listing San Francisco” shared their insights on the Bay Area housing market.Justin Fichelson, a sales associate with Climb Real Estate in San Francisco, looked at the impact that stock market turbulence will have on the region’s residential real estate market, given the significance of tech buyers and their stock options on home prices. Andrew Greenwell, CEO of Pleasanton-based Venture Sotheby’s International Realty, weighed in with a prediction that the Bay Area’s ferocious bidding wars will become a distant memory.)