The cost of doing business and heightened competition in top markets such as the Bay Area, Silicon Valley and the Los Angeles metro is increasingly untenable, and companies are setting their sights on inland markets.
By Lisa Brown | July 20, 2020 at 04:00 AM
WALNUT CREEK, CA—Before the global pandemic that roiled the economy and commercial real estate industry, commercial real estate brokers were noting a growing trend of companies moving out of dense West Coast markets. Faced with rising prices, and lack of office and industrial space, along with the rising cost of housing and business taxes, many small- and middle-market enterprises were under pressure.
The cost of doing business and heightened competition in top markets such as the Bay Area, Silicon Valley and the Los Angeles metro was untenable, and companies began to set their sights on inland markets. The COVID pandemic is projected to accelerate this trend, according to Edward Del Beccaro, executive vice president with TRI Commercial/CORFAC International.
In California’s major markets pre-March 2020, vacancies were decreasing in every sector except retail, which had exhibited an overall demand dip regardless of location. At the same time, the affordability and availability of housing in California were making it difficult for working- and middle-class people to find homes. In 2019, Census data showed that more people had moved out of California than had moved in for the seventh year in a row and a University of California Berkeley poll found 71% of people cited high cost of housing as the top reason for wanting to leave the state.
Mid-sized and small businesses such as billing companies, insurance firms, enterprise service companies, and smaller manufacturing and logistics firms couldn’t compete with larger employers for space or talent. Those firms needed to relocate where workforces could find lower cost of living and better quality of life.
“Particularly in the Bay Area, our firm has seen companies reach their limits,” Del Beccaro tells GlobeSt.com. “Because the Bay Area is constrained due to water, companies have spread out as far as Sacramento 60 miles northeast, creating super-commutes for their employees with travel times exceeding 1.5 hours one way. Business owners are looking beyond the Bay Area where both they and their employees can find better value and have more balanced home life. The COVID crisis also has companies looking at remote working and even leasing satellite locations in the outer suburbs away from downtowns.”
In the Western US, smaller companies have increasingly moved into inland states including those in the near west such as Utah, Nevada, Colorado and Arizona. Chief Executive reported that from to 2015, more than 1,800 companies left California.
One beneficiary of the Cal exit is Nevada, where the favorable business climate and growth of companies following a new Google data center in Henderson is causing a new housing boom. MDL Group/CORFAC International, a brokerage based in Las Vegas, recently found flex industrial space for a solar panel company moving from Fontana, CA.
“We expect this trend to continue with similar type energy-related companies because the overall cost of living and cost of doing business within the Southern California market is excessive,” said Hayim Mizrachi, president and principal of MDL Group. “Plus, Nevada has an excellent new home market and construction market, which will drive demand for alternative energy sources. Our climate is ideal for solar use and related businesses.”
While the full impact of the COVID-19 pandemic is yet to be known, one possible trend brokers are watching is that more businesses will look to spread beyond dense urban centers and coastal cities, which have been harder hit by the virus. Similarly, as remote work becomes more accepted, resulting in changing needs for space and staffing, companies may no longer need to be in expensive coastal cities. The California exodus may accelerate as middle-market firms choose to relocate operations to cities that are friendlier for business and more livable for employees, Del Beccaro says.
Read original article on GlobeST.com here.
By GEORGE AVALOS | gavalos@bayareanewsgroup.com | Bay Area News Group
PUBLISHED: June 15, 2020 at 5:45 a.m. | UPDATED: June 15, 2020 at 8:57 a.m.
OAKLAND — PG&E sought for years to find ways to exit its inefficient San Francisco headquarters complex and transplant its offices to the East Bay before finally striking a deal for a downtown Oakland office tower, bankruptcy court records show.
Court documents also reveal PG&E’s official estimate for the number of workers the utility expects to deploy to the new Oakland headquarters: 4,500.
PG&E’s deal for a lease with an option to buy a 28-story office tower perched on the shores of Lake Merritt is intricate, according to documents in PG&E’s $58 billion bankruptcy case that’s now in its final days.
Yet it appears the deal is a win for PG&E customers, the utility, and for TMG Partners, the veteran developer that intends to ultimately lease and sell the highrise to PG&E.
“For PG&E ratepayers, it’s a smart deal for the company to make. For TMG, it’s a brilliant deal,” said Edward Del Beccaro, an executive vice president with TRI Commercial/CORFAC International, and Bay Area managing director for the commercial real estate firm.
The utility’s deal for the downtown Oakland office tower includes a base rent of $57 a square foot per year, which works out to $4.75 a month per square foot, U.S. Bankruptcy Court files show.
“That rental rate is very low for downtown Oakland office space,” Del Beccaro said. “I would have predicted it would have been $70 a square foot per year.”
PG&E is poised to shell out up to $892 million if the utility buys the 300 Lakeside Drive tower, which totals 910,000 square feet, from TMG Partners.
The $892 million is an over-arching “all-in cost” with several components. Court files state the elements are: $420 million as the basic purchase price to acquire the office tower; $141 million for required code improvements and building improvement costs; $171 million for development fees, carrying costs, and transaction fees and expenses; and $160 million in allowances for custom-tailored tenant improvements that include technology systems, security, floor arrangements, and seismic work. These work out to $230 a rentable square foot.
Since the early 2000s, PG&E has been mulling what to do with the San Francisco office buildings, executives stated in court records.
“Many of the utility’s (headquarters office complex) employees commute to San Francisco from the East Bay area, where the cost of living is far more affordable than in downtown San Francisco,” PG&E said in a court filing.
Plus, the San Francisco headquarters complex has become steadily more expensive to operate.
“The costs of maintaining a headquarters in San Francisco have continued to increase due to both the growth of the local real estate market and significant costs PG&E would face to upgrade and maintain the San Francisco office complex,” the utility stated in court documents.
By early 2018, PG&E intensified its efforts to extract cash from the San Francisco properties and hired TMG to evaluate the company’s real estate prospects in San Francisco and the East Bay. In September 2018, PG&E tasked TMG with finding an East Bay site for the future headquarters, bankruptcy papers show.
“The utility most recently began evaluating a number of specific options to monetize the San Francisco General Office headquarters complex, including a full or partial sale of the San Francisco offices, in early 2018,” PG&E stated in the bankruptcy court records.
The PG&E office complex in San Francisco consists of 77 Beale St., 215 Market St., 245 Market St., and 45 Beale St., court records show.
TMG and PG&E scouted an array of East Bay sites, including the Bishop Ranch business park in San Ramon and a portion of the redevelopment project at the Concord Naval Weapons Station. No deal materialized.
“By mid-2019, PG&E had been unable to locate a satisfactory property in the East Bay area that could meet the utility’s various business needs,” the court records stated.
PG&E pondered selling 77 Beale St. and moving workers into 245 Market St., or the reverse. But 245 Market was deemed too small, and 77 Beale was too large.
Then came a break. In November 2019, realty firms Swig Co. and Rockpoint Group put on the block the 300 Lakeside Drive tower along with an adjacent mixed-use office building and a big parking garage.
Well aware of PG&E’s unrequited ardor for a new East Bay headquarters, TMG raced to make Swig and Rockpoint an offer.
“The utility quickly investigated and determined that the Lakeside Building would provide significantly greater economic benefits” than retaining a San Francisco headquarters. the court papers stated.
In January 2020, PG&E agreed to a deal for 300 Lakeside. A month later, Swig and Rockpoint picked TMG as the buyer of the tower, the mixed-use building, and the parking garage.
TMG negotiated a purchase of the complex while well aware PG&E was waiting in the wings as a 300 Lakeside tenant after the departures of tenants BART and the University of California Office of the President.
“PG&E intends to use the Lakeside Building as its new company headquarters, where it can consolidate approximately 4,500 employees currently located in San Francisco and at least two satellite offices in the East Bay,” the court records state. The East Bay sites are in Concord and San Ramon.
The 300 Lakeside renovations are slated to start in 2022.
“It is currently anticipated 3,200 employees will be relocated to the Lakeside Building by early 2023, approximately 600 employees in 2025, with the balance of the space to be made available for an additional 600 employees beginning in 2026,” the bankruptcy files stated.
TMG, after selling the tower to PG&E, would retain the parking garage and smaller mixed-use building. Those sites have a large enough footprint that they could be developed into one or more towers.
Obstacles remain. TMG must buy the site. A bankruptcy judge must grant approval. PG&E’s track record of a string of fatal disasters that include an explosion and wildfires creates uncertainty.
“You can’t always predict what will happen with PG&E,” Del Beccaro said.
Read original article on Mercury News here.
Written By: Teddy Swain, TRI Commercial Real Estate Advisor
Given all that is going on in the world today – Covid-19, shelter in place, record unemployment – it is now more than ever crucial that we continue to see the much needed affordable and market rate housing be built in the Bay Area. Cities and counties are still under pressure from state guidelines to meet the needed housing production thresholds despite a market that has been at a standstill for the last two months.
As things begin to open back up, it won’t take long for investors, builders, and developers to remember that the Bay Area remains one of the most underserved housing markets in the nation. To discuss how these projects can still get funded during this public health crisis I interviewed Vern Padgett, a 40+ year banking and finance veteran and colleague of mine at TRI Commercial.
Vern – I appreciate you taking the time today to talk over Zoom. Can you share a bit about your background in finance?
I started my career in business out of college back in 1977 as a management trainee at the Mechanics Bank. At that time the bank did engage in commercial real estate lending but it was typically activity in support of clients that the bank had worked with for multiple generations. It was a rather docile institution from a business development standpoint.
As I worked my way up through Mechanics Bank, I became involved more and more with CRE lending and eventually started the corporate banking division. We basically revamped the bank into a real estate industries group and a corporate banking group. I took over the real estate industries side as that was my specialty for several years and eventually left the bank in 2006. I was then a founding member of Presidio Bank and after that the Chief Banking Officer at Bay Commercial Bank. Eventually I left Bay Commercial to start Black Oak Ventures where we offer more creative bridge financing for borrowers who aren’t quite ready for the institutional lenders for whatever reason.
Let’s jump right in with two examples of spec housing development: an 8 unit condominium project and a 100 unit mid rise apartment building. Both are speculative housing developments but both have vastly different debt requirements. How are those loans typically funded?
The first, smaller project would be of interest to your local or regional bank and there are any number of those banks in the Bay Area that would be interested in funding those loans today.
For the larger loan you are going to look for somebody in the market that is looking to fund a larger deal. Wells Fargo is the knee-jerk option because they are probably the most active in that space. They are very fussy about who they lend to so you’re going to need to be a Wells Fargo client in order to get a Wells Fargo loan. Union Bank would also be a lender that may be interested as they are also a large player in that space. All these guys basically operate in a similar way; they have hold limits so they’ll do a $100MM loan but they won’t hold the full amount. They’ll participate out with bank partners so you may have a Wells Fargo originating the loan but they’ll have a ‘bank club’ and bring in say Union Bank, B of A, California Bank and Trust and they’ll spread the $100MM across their partners and keep the piece they want.
So essentially on the larger loans banks are spreading out their holding risk with a select number of bank partners?
Yes – that’s the business that a lot of these big lenders are in. They’re in the business of managing the big relationships, taking care of their client needs, absorbing the amount of balance sheet exposure that is best for them and shedding the rest to their bank participants. Loan demand isn’t high enough for a lot of the bank participants who try and originate their own deals and they don’t have the clients to fill their balance sheets. We are wash with liquidity right now, so as one of these banks you don’t want to be running at 60% loans to deposits because you don’t make any money, you want to be up around 80%, 90% or 100%. That’s why these partner banks are out there anxiously buying participations.
How has the underwriting for these loans changed given the trouble our economy is facing?
Well, there hasn’t been that much done in the last month and a half. Things have pretty much tamed down as people wait to see how things will play out but I’ve talked to a number of construction lenders recently who are still actively soliciting projects and have closed construction loans on the smaller type deals that we discussed. However, post Covid-19 the rules on those loans have changed: you need to be able to underwrite a hold on the loan as though you are going to hold the asset long term as an apartment building and cover it at a Debt Service Coverage on a 25-year amortization of that construction loan fully funded based on your proforma. Construction lenders today are looking to price their loans on an either or basis; say prime plus 1 – prime is currently 3.25% – so that is a 4.25% minimum rate but they probably are going to fix the floor at 4.5%. So, you can look at it as prime plus 1 or 4.50%, the higher of those two.
I would say that the underwriting metrics have been tightened down a quarter twist on the screw. Deals that would have been done at say 70% of retail value are now being done at 65%. So you’re seeing like a 5% cram down on the tightness of the underwriting. I think we still need a couple of months to see really where things will land.
We are currently in the midst of the pandemic; do you see lenders’ ability to fund construction loans like the two in our example continuing?
The answer to the question really depends on the product type and the track record of the sponsor. Retail development right now is somewhat radioactive so you’re probably not likely going to see much ground up retail development… for obvious reasons. Multifamily though is radically underserved especially in the Bay Area. It is very difficult to achieve entitlement for multifamily and the cities are under immense pressure from the state to fulfil their housing mandates and so I would suspect there will continue to be heavy demand as lenders like to see unfulfilled demand as a driver behind the reason to develop real estate. Not withstanding all the trouble that the economy is dealing with at large today as a result of COVID-19 and the SIP regulations; I can’t imagine that there will be any kind of long term interruption in that category from a lending standpoint.
There seems to be a shift towards pursuing business with existing clients rather than procuring outside clients that lenders may not have an existing relationship with, is this correct?
Yeah, it’s not as though we are in the midst of a go-go upcycle where banks are going to stretch to open up the doors to people who have very limited experience. People who used to work for a homebuilder and now want to BE a homebuilder are going to have a tough time. Those that have relationships and can demonstrate a successful track record in-line with the deal that they are trying to get approval for will still be able to find success today.
If you had to summarize our conversation into a few main takeaways what would they be?
I recently had a discussion with Bank of Marin regarding post Covid speculative for-sale residential product. Some of the key points that we discussed were:
By GEORGE AVALOS | gavalos@bayareanewsgroup.com | Bay Area News Group
PUBLISHED: April 1, 2020 at 7:35 a.m. | UPDATED: April 2, 2020 at 2:19 p.m.
DUBLIN — Amazon has bought a big Dublin office building where it could employ as many as 1,000 or more people, paying nearly $50 million in a deal that marks a dramatic new East Bay expansion for the tech titan.
Amazon.com Services purchased the Dublin office building, which is located at 5160 Hacienda Drive, paying $49.5 million in cash for the property, according to Alameda County property records reviewed by this news organization.
The office building, which totals 202,000 square feet, was bought on March 17, the county public files show.
“We are constantly exploring new locations and weighing a variety of factors when deciding where to develop sites to best serve customers,” said Brittany Parmley, an Amazon spokesperson. She added, “We don’t provide information on our future roadmap.”
Amazon’s purchase of the office building at the corner of Hacienda Drive and Gleason Drive marks a departure from the tech titan’s property activity in the East Bay.
In November, the e-commerce and video streaming behemoth leased a huge industrial building in Livermore at 400 Longfellow Court that totals 612,000 square feet.
“Amazon Logistics will open a new California Delivery Station, located in Livermore,” Amazon said in November in an email sent to this news organization. “The new station will power Amazon’s last-mile delivery capabilities to speed up deliveries for customers in the Bay Area.”
In contrast to the company’s other efforts, Amazon has now bought an East Bay building, rather than leasing space.
In Sunnyvale, using a series of leasing agreements, Amazon occupies more than 1 million square feet of offices where the company has enough space for 5,000 workers.
In the East Bay, Amazon could potentially employ 1,000 or more at the Dublin office building it purchased.
“Silicon Valley is spreading from west to east,” said Edward Del Beccaro, an executive vice president with TRI Commercial/CORFAC International, a commercial real estate.
Read original article on East Bay Times here .
Written By: Teddy Swain, TRI Commercial Real Estate Advisor
With 10,000+ units under construction and just as many more approved or proposed in the pipeline, there is no denying the San Francisco East Bay Area is experiencing a significant construction boom unlike past development cycles. To fuel that amount of new development the region is host to a massive influx of capital investment that, in the past, has seemingly been limited to only San Francisco and the Peninsula. With a large portion of those investment dollars flowing into new development projects, where does that leave all of the existing, aging product? I caught up with Eric Wang, Principal at Rev Projects, a Bay Area investor and developer to explore how he finds opportunity in existing buildings.
Eric focuses on revitalizing underappreciated properties – hence the name Rev Projects – in order to return profits to his investors and also the communities in which he works. Alongside his investments, Eric partners with local non-profit organizations specializing in areas of rehabilitation, homelessness, and education through donating a portion of his upfront fees on every deal. Some of Rev Projects past investments include Old Mother’s Cookies Lofts in Oakland, a R&D facility in Fremont, and most recently student housing in Berkeley. During this interview, Eric takes us through his decision making process for his latest student housing investment, where he finds opportunity in today’s market, and why he chose to invest here in the Bay Area.
Thanks again for doing this, Eric. Let’s start with your background. How did you get into real estate?
Well let’s see, I started right out of college as an investor in institutional real estate with Prudential Real Estate Investors. I really valued those early experiences at Prudential because I got to understand, on a professional level, how institutional investors approach deal making, manage their investments, and develop projects! I eventually decided to go out on my own and that is when the idea to do Rev Projects came to life.
What motivated you to start Rev Projects and what exactly do you do?
I wanted to work on deals that I care about in areas that I care about. Rev Projects is focused on the middle market and acts as an investor, operator, and developer. Right now our focus is on the East Bay because we feel there is still a lot of value that we can add.
A lot of cities in the East Bay have seen significant inflow of new residents. Old Mother’s Cookies in Oakland was a perfect example of this: its former use was a cookie factory and several years ago a developer bought and re-purposed it into live/work housing to support an increased demand for loft style units with creative space.
Why the Bay Area?
This is a very good question; first things first, I wanted to be as close to the projects I work on as possible and I live here, so in that respect, the Bay Area made sense. The Bay Area is also one the strongest markets in the world. As an investor, if you are looking for a ton of upside on your investment, the Bay Area had that for a while but markets are now pretty much stabilized. However, what comes with that stabilization is some downside protection because it is such a core market, unlike some of the other tertiary markets that I think could be hurt in a falling economy.
If you don’t get the upside investing in the Bay Area that you might get elsewhere, fine, but you do get some protection. I think sooner rather than later people in my field are going to have to start thinking about not losing money rather than just the upside on their deals. That could happen tomorrow or it could be sometime in the next couple of years but that’s where people’s minds should be.
How do you approach each of your investments?
The approach I take is very much a value-add investment approach slowly underwriting and evaluating deals on a case by case basis. I only move forward with projects that I feel very comfortable with in terms of my strategy and execution. I am not a fund; I don’t need to deploy a ton of idle cash immediately so therefore I do fewer deals and tend to let stuff pass by. The deals that I really care about and I think I can do something great with I pursue.
In 2019 Rev Projects acquired a 120-unit student housing building on Telegraph Avenue in Berkeley. Can you take us through the strategy and decision making behind that deal?
Yes, Spectra Southside is essentially student housing. When it was first brought to my attention, I immediately noticed its location was just steps from the UC Berkeley campus and after some further investigation I realized it was very poorly managed. The property had been leased to a master tenant who was managing all of the residential units and that was just not run very well. I also knew that because students frequently move in and out, I would be able to get in there right off the bat and complete the improvements that were needed.
What are your thoughts on investing in Student Housing in general?
Student housing is more recession resistant than traditional housing, especially if you are close to a tier-one university. This is particularly true in supply constrained areas like Berkeley where there is already limited housing and university enrollment is increasing. You know, often times university enrollment increases during bad economic times because people want to go back to school to earn a higher degree.
I think overall, student housing is a great investment, especially at this time in the market cycle. Going in as an owner/operator you have to realize that it’s always going to be a bit heavy operationally. There is high student turnover and more wear and tear than your typical apartment complex but that’s why we contract out our property management to experts who specialize in student housing. Investors tend to pass on student housing because of the operational intensity but if its properly budgeted and managed, the pros far outweigh the cons.
East Bay Area housing development is booming. Would you consider getting involved with a ground up housing project?
Where I’m at right now with Rev Projects is very focused on acquisition, renovation, and revitalization. Taking old projects and breathing new life into them. That is fun enough for me!
If we were at a different point in the market cycle, I might reconsider my answer and take a look at some sites but ground up development is a different business entirely. I would love to be there one day but I don’t feel a deep need to be there today. Get back to me in 10 years and let’s see where I’m at.
So, what’s next for Rev Projects?
Well like I said, I operate in this middle market space where I’ve done a live/work loft deal, I just sold a R&D building, and now I’m working on the student housing project I bought last year. I am currently underwriting a couple of office deals so I actually stay pretty open in terms of asset type. I give up deal flow and total dollars invested for high quality deals that I know I can execute, no matter what asset type.
So, what’s next? That’s always the question and I leave it open – actually, what’s next is a good deal!
By Blanca Torres – Reporter, San Francisco Business Times
Jan 3, 2020, 7:47am PST Updated Jan 3, 2020, 10:59am PS
While many office tenants feeling squeezed in the core Bay Area have left the region — or the state altogether — a Solano County landlord is now hoping to lure them.
To capture some of the exodus, the Wiseman Co. plans to break ground by April on a 50,000-square-foot, Class A office building at 5000 Wiseman Way in Fairfield with no tenants signed up. The site is 50 miles northeast of both San Francisco and Oakland.
“We are seeing an increasing number of corporate executives realizing that, due to lifestyle and financial reasons, this option is better than Austin, Denver and Phoenix, and because of their love for the Bay Area,” said Zen Hunter-Ishikawa, chief business development officer for the Wiseman Co.
The landlord owns a dozen other buildings in Fairfield, Napa, Suisun City and Woodland.
Wiseman plans to build its new building on a 2.75-acre vacant lot. The $20 million project, designed by TWM Architects & Planners, will be built by Midstate Construction. ZFA Structural Engineers is also part of the development.
The landlord has had some success attracting new tenants from other parts of the Bay Area, albeit for leases under 5,000 square feet.
In the past year, companies including San Francisco-based internet security company TrustedSite and Michigan-based Flagstar Bank each took about 3,000 square feet to expand into Wiseman-owned buildings.
Another tenant, information technology security firm BPM LLP plans to triple the size of its office to 2,400 square feet this year in the Green Valley Executive Center at 5030 Business Center Dr. Fairfield. The satellite office of the larger corporation started out in Fairfield more than a decade ago with employees working remotely before moving into Class A office space.
“The decision for our team, even when it was small, to move to Green Valley, was to be centralized to our existing employees and attract those who might drive in, but want to commute under 30 minutes,” said Sarah Lynn, a partner with BPM who heads the Fairfield office.
Moving to a larger city would mean higher rents for similar space, more traffic, and longer commutes for employees. Fairfield also offers proximity to colleges and military bases where the company can recruit, Lynn said.
Colliers International counts about 5.3 million square feet of office space in Solano and Napa counties with about 15% vacancy. Average asking rates for Class A space run around $24 to $28 per square foot — a steep discount compared with more than $80 per square foot in San Francisco and $60 per square foot in Oakland.
Fairfield sits in what one real estate broker called the third loop of the Bay Area. Companies priced out of San Francisco and Oakland, the first loop, then look at the second loop, which includes San Ramon, San Mateo and Marin County, said Ed Del Beccaro, a longtime East Bay broker and San Francisco Bay Area Manager for TRI Commercial.
If the first and second loop become too expensive or crowded for office space and housing for workers, some tenants will then consider the third loop if they want to stay in the Bay Area metropolitan region, Del Becarro said.
“It will happen, but it won’t be dramatic in the next five years,” he said.
So far, the exodus to markets such as Solano County has been “a trickle.” The move only really works if most of a company’s employees live within a 30 mile radius such as in the East Bay, Del Beccaro said. Employees living in San Francisco or the West Bay are unlikely to follow their employer to Solano County.
A major shift to the third loop “is going to take time,” Del Beccaro said. “But the fundamental premise that over time, inner bay tenants will migrate to Solano County is correct. …The only question is how fast and how much.”
Read original article on the SF Business Times here.
WALNUT CREEK, CA—TRI Commercial/CORFAC International has increased its roster by nearly 25% in the last year, adding new brokers in the East Bay, San Francisco and Roseville. And, just one year after joining TRI as executive vice president and manager of the company’s East Bay offices, veteran Edward Del Beccaro’s recruiting efforts have paid off, with his subsequent promotion to San Francisco Bay Area regional manager.
“Ed is a dynamic leader with a clear vision for the future of TRI that aligns perfectly with our mission and strategic initiatives. His appointment to oversee Bay Area operations is a reflection of our ongoing commitment to provide great service to our brokers and empower talent throughout the company,” said Charles A. Wall, TRI chairman.
In his new position, he will have direct responsibility for the management and recruitment of the San Francisco office as well including recruiting a day-to-day brokerage manager for that office.
“We are focused on recruiting dynamic brokers, a brokerage manager for our San Francisco office and hiring young talent,” Del Beccaro tells GlobeSt.com. “We have a very defined training program that includes milestones and accountability.”
When he joined TRI, Del Beccaro was tasked with a major revitalization of the East Bay operations, to lead recruitment efforts and handle day-to-day operations. His recruitment efforts have already brought some well-known faces in the brokerage community to TRI.
“Ongoing efforts to grow a stronger more competitive regional presence require intention and purpose. Ed has the knowledge and experience to take TRI to the next level. He shares our belief that by offering competitive splits and building a sophisticated platform, we empower our brokers to achieve their business goals,” said TRI president Tom Martindale.
Del Beccaro’s career in commercial real estate spans more than 40 years in the Bay Area. He began at Grubb & Ellis in 1977 and ran his own development company for nine years before returning to brokerage in 1992. Previously, he served as East Bay manager at Colliers, Grubb & Ellis and most recently Transwestern, where he built the East Bay and San Jose offices to more than 40 brokers, property management and staff.
“My goal in this new position is to create a San Francisco Bay Area and Northern California regional real estate services powerhouse,” Del Beccaro tells GlobeSt.com. “The company will be a full-service real estate company that will include class-A brokerage, property management, project management and consulting services lines. My goal is to disrupt the old TRI model to embrace cutting-edge marketing tools in order to provide our clients the sophisticated services they deserve. We are not a Wall Street firm. Our goal is to create a real estate culture of innovation, excellence and entrepreneurship.”
Del Beccaro’s capabilities include brokerage operations management, property management, development, entitlements and consulting.
View original GlobeSt.com article here.
October 10, 2019 Dean Boerner, Bisnow San Francisco Reporter
When Pacific Gas & Electric Co. broadened its shut-off map to about 600,000 customers Wednesday night, the utility company also added to the number of owners and property managers forced to enact emergency measures.
It’s a potential, but untenable, new normal for Northern California.
“There has to be a better way,” said Ed Del Beccaro, executive vice president of TRI Commercial, a prominent Northern California brokerage and property management firm. “We can’t be doing this four or five times a year. This can’t become the new norm.”
PG&E did not reply to a request for comment about how often it expects to enact rolling blackouts.
In San Diego County for much of the decade, Public Safety Power Shutoffs by San Diego Gas & Electric Co. have been a norm of sorts. The utility company has executed 13 such power shut-offs since the first instance in 2013, SDG&E told Bisnow.
SDG&E’s PSPS have affected largely the more rural, less densely populated East County, San Diego area, the Southern California Rental Housing Association said Wednesday. PG&E’s power shut-offs to over 30 counties in Northern California have impacted considerably more multifamily and office buildings.
Thrust into new territory starting Wednesday morning with the North Bay Area and counties inland falling into outage zones, Bay Area office and residential property managers have had to do some thinking on the fly while utilizing long-existing protocol.
“You can’t be in a building without power,” Transwestern Northern California Vice President of Asset Services Blake Peterson said.
For the many older office buildings throughout the Bay Area, that means working remotely, or not at all, and hiring personnel for emergency 24/7 services.
“The whole building card access system goes down, and a lot of times that system is not on emergency power, but runs independently,” Peterson said. “Engineers are on-site, security is on-site checking IDs, letting people in, often just to get medicine or cellphones.”
Both Peterson and Institute of Real Estate Management San Francisco President Vanessa Honey say constant fire watch is a necessity. Honey says security will be compromised to an extent, even with more personnel brought to monitor darkened, unpowered multifamily buildings.
“We actually have to hire someone who is trained to use their eyes and their nose to monitor buildings and notify the fire department in the event of a fire,” Peterson said.
Many of Transwestern’s buildings, including its 1M SF footprint of life science ones in south San Francisco, have generators, but the company has faced several outages in unspecified properties in San Ramon and Walnut Creek. Peterson said Transwestern has taken precautionary measures for properties “on the cusp” of PG&E’s shut-off map, which is based largely on weather forecasts, and has been in flux.
“We have a four-story building in Oakland, and we decided to stop using the elevators,” she said. “The really critical piece is communicating with building occupants and owners.”
IREM has stepped up its customer service, according to Honey. Many of its employees have dedicated their time to that given limited productivity on other tasks due to shut-offs. Most of IREM’s leasing offices don’t have generators.
“IREM professionals are going the extra mile from the leasing perspective and being extra kind and understanding during these times,” Honey said. “We have more time because we have less to do with our computers down.”
Transportation has been a widespread concern among tenants and property managers this week, including only recently allayed concerns that the vital Caldecott Tunnel would close and problems with BART would arise.
“The Public Safety Power Shutoffs are not affecting BART train service in any way because of the enhanced power redundancies we have put in place across BART’s system,” a BART spokesman told Bisnow.
But many were kept from work nonetheless, say Honey and Del Beccaro. Word that the Caldecott Tunnel would remain open barely arrived before outages commenced.
“I bet there is going to be a run on generators,” Peterson said. “There is potential for landlords to recognize that lack of occupancy means lack of productivity and employers are going to want to be in buildings that can sustain through this type of thing. Our hands are completely tied by what PG&E chooses to do.”
“Is this the new normal? That’s the question everyone is asking.”
Read original BisNow article here.
September 19, 2019
By Dennis Kaiser
San Francisco or San Jose tend to garner the lion’s share of attention when considering the Bay Area markets. Yet, the East Bay has emerged as a compelling alternative for many companies. TRI Commercial/CORFAC International’s Edward Del Beccaro shares insights into what’s driving the East Bay markets. Check out his responses to Connect Media’s questions about the East Bay’s growth, what’s attracting life sciences companies and the emergence of adaptive reuse in our latest 3 CRE Q&A.
Q: What’s driving growth in San Francisco’s East Bay, and which sub-markets are benefiting?
A: The Technology and Health sectors are the largest drivers of jobs, but we’re also seeing more FIRE (financial, insurance and real estate) sector companies migrating from San Francisco to reduce costs.
Most of the new development is multifamily. East Bay apartment rents have risen 10% over the past two years, compared to 20% in San Francisco, but rents have now reached a plateau and there are still many cranes on the skyline.
Office rents are still not at a level that can support new spec development in most of the East Bay, based on the high cost of construction, except for Oakland. There is new industrial space just completed in Hayward. There are also large amounts of office space in TriValley, Concord and Walnut Creek Shadelands sub-metros.
Q: What factors are making East Bay cities attractive to life sciences companies?
A: Life science companies are locating in East Bay to reduce occupancy costs and to attract employees who can’t afford to live in San Francisco. The workforce is here and there is access to venture capital. There are also world-class research partners located here. East Bay is home to UC Berkeley, one of the top bioengineering schools in the country, as well as three government labs that are mandated to share intellectual property. For instance, the Genome Center, which famously mapped the human genome and put the data in the public domain, is now doing the same with plants and animals.
Q: What trends are you seeing in adaptive re-use?
A: Empty retail big boxes are being absorbed or are in the process of being absorbed by medical facilities. Various hospitals are expanding rapidly by developing urgent care facilities throughout the region. This is coming at a time when a lot of retailers are hurting, so a lot of these new medical facilities are going into former Best Buys and other big-box retail spaces.
View original article on Connect California Commercial Real Estate News here.
AUGUST 22, 2019 |ELENA HARRIS
Berkeley Land Company Sells Building in Multimillion-Dollar Deal
An office and retail building in Old Town Danville, California, has been sold to an Orange County investment firm.
The Laguna Niguel-based Blue River Equity purchased the building at 321 Hartz Ave. from the local Berkeley Land Company for $6.25 million, or about $551 per square foot.
Constructed in 1985, the two-story, 11,333-square-foot property is home to multiple tenants, including real estate firm Rassier Properties, Patterson Ranch Co., America’s Best Karate, Vector Marketing, Antigua Doors, Salon H and speakeasy-inspired wine bar Auburn Lounge.
Berkeley purchased the property back in 2004 for $3.5 million.
Edward Del Beccaro and Theodore Bard of TRI Commercial/CORFAC International represented the seller in the deal.
Please see CoStar COMPS #4812841 for more information regarding this transaction.
View the original CoStar article here.
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