Story & Concept by Garrick Brown
Vice President of Retail Research, Americas

Cushman & Wakefield Names North America’s Top 15 “Cool Streets”
A new breed of urban, experiential, and independent mid-market retailers catering to millennial consumers has led to the rise of 100 “Cool Streets” across the U.S. and Canada.

Cushman & Wakefield has published its first-ever Cool Streets of North America report (click here to download) It explores the phenomena behind the rise of dozens of new, edgy retail districts across the U.S. and Canada.

While some of these areas featured in the report are longstanding bohemian enclaves and focal points for local arts, music, or LGBT communities, the renaissance in nearly all of the Cool Streets has been driven by an explosion of unconventional new retail concepts.

Top 15 American Cool Streets
The report captures the top 15 Cool Streets as follows: Sunset Park in Brooklyn; Logan Square in Chicago; Over-the-Rhine in Cincinnati; RiNo in Denver; Silver Lake in Los Angeles; Wynwood in Miami; North Loop in Minneapolis; Roosevelt Row in Phoenix; Carytown in Richmond, Va.; East Village in San Diego; Jackson Square in San Francisco; West Queen West in Toronto; Mount Pleasant/Main in Vancouver; and Shaw in Washington, D.C.

Fashion, the Fickle Mistress
Retail lives and dies by cool. Concepts connect, build loyalty, and grow by being cool. They also disengage, wither, and die by not being cool. If nothing else, the history of fashion is the history of what is cool and what is desirable. But, as anyone in retail will tell you, fashion can be a fickle mistress.

Every generation has had its own definition of cool, but cool constantly evolves. In today’s media-saturated age some may argue that the issue of what is cool has never been more important to consumers, nor has it ever been as likely to change with lightning speed as it is now.

Cool Matters More Than Ever
If retailers live and die by cool, the same also holds true of retail properties, shopping centers and entire neighborhoods. Whenever we speak about real estate, the issue of location and a number of other factors come into play, but the reality is that cool matters.

In an age of frugal consumers, e-commerce encroachment, and vast gaps in performance between trophy malls and Class B and C shopping centers, cool matters now more than ever. San Francisco’s most famous redevelopment is the Mission District, where an influx of tech-industry millennials has transformed the neighborhood into the city’s hottest restaurant and bar scene. It certainly is a Cool Street, and probably more of an actual hipster haven than historic Jackson Square (most of the buildings here pre-date the 1906 earthquake). So why are we not focusing on the Mission District? Because it has nowhere near the retail upside of Jackson Square.

San Francisco’s restrictive “formula retail” code effectively locks out chains with more than 11 locations internationally unless they obtain a conditional use permit. Even when successful, this is a cumbersome process that takes retailers months to navigate and usually costs tens of thousands of dollars.

Supporters believe that by keeping larger chains out they are maintaining the character of San Francisco’s many neighborhood retail districts and also protecting mom-and-pop retailers. But by setting the definition of “formula retail” at just 11 units, the law basically makes it cost prohibitive for many smaller new retail concepts to expand in the City by the Bay.

Historic Flavor: San Francisco’s Coolest Square
Jackson Square is one of the few San Francisco districts where significant portions of the neighborhood are exempt from this code.

Jackson Square is only approximately 10 square blocks and is almost entirely a commercial district. Lodged between San Francisco’s booming Financial District and the tourism-rich enclaves of Chinatown and North Beach, Jackson Square’s official boundaries are Columbus Avenue to the west, Battery Street on the east, Washington Street to the south and Broadway on the north. While San Francisco’s mid-Market area is also undergoing a retail revival, the availability of large blocks of space there is proving most alluring to off-price big box users.

Meanwhile, Jackson Square is increasingly attracting hip, Cool Street concepts and upscale retailers alike due to its zoning advantages, historic flavor, and rents still averaging anywhere from half to a third of comparable Union Square rates.

 

 

“Jackson Square provides old world charm, tree-lined streets and beautiful old storefronts, all in a city where historically protected storefronts cannot be changed dramatically. Most of the tenants are new to market: such as Isabel Marant, A.P.C, Jake, Guideboat, Shinola and Filson. The rents in Jackson Square are a fraction of what the rents are on other popular neighborhood streets, and in Union Square, and are still manageable for tenants with realistic sales volume expectations.  Jackson Square provides a one-of-a-kind visual experience and the most interesting neighborhood environment for the leaders in unique and emerging brands.”

Pamela Mendelsohn
Senior Managing Director, Cushman & Wakefield San Francisco

Check Out Other American Cool Streets

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Welcome, Xinyi
Xinyi (pronounced “Shin-Knee”) McKinny has joined the San Francisco offices of Cushman & Wakefield as Senior Managing Director – China Direct Investment. Xinyi will be responsible for supporting and driving new business opportunities with Chinese investor and occupier clients in the Bay Area and Los Angeles.

Chinese Investment
As a global company, we are witnessing an increasing number of Chinese companies seeking to invest in and develop real estate projects in California.  We only expect this trend will continue in the years ahead, as Chinese firms seek to diversify their interests outside of China.

The addition of Xinyi, who is fluent in both Mandarin and English, will enable Cushman & Wakefield to meet the needs of this expanding segment of the investor and occupier communities. While Xinyi will officially be based in San Francisco, the newly created role also involves spending two to three days per week in our San Jose and Peninsula offices, as well as regular visits to Los Angeles to support new business pursuits in Southern California.

Career Background
As a licensed architect, Xinyi most recently worked as a Project Architect for DES Architects & Engineers in Redwood City, CA. Her work experience also includes nearly a decade of working for two other architectural firms, Perkins & Will in San Francisco and Bennett Wagner & Grody Architects in Denver, CO. During her career, she has managed and directed the full implementation lifecycle from pre-design to substantial completion work, including marketing, planning, schematic design, construction document development, consultant coordination and construction administration.

Boulder via Qingdao
Xinyi earned her Bachelor’s Degree in Environment Design from the University of Colorado at Boulder and graduated with honors. She subsequently received her Masters in Architecture from the University of Colorado at Denver. As a native Chinese speaker, Xinyi also completed three years as a Bachelor in Architecture student at the Qingdao Technological University in China, where among other activities, she was the  Editor-in-Chief of University Magazine.  Today, she is enrolled at the University of California, Berkeley and is pursuing her Masters of Business Administration, with an emphasis on Real Estate.

Professional Affiliations
Among her professional affiliations are HAAS Forté Fellow (Women in Business), LEED AP BD+C (Leadership in Energy and Environmental Design Accredited Professional in Building Design + Construction), NAIOP member (National Association for Industrial and Office Parks), ULI member (Urban Land Institute), AIA member (The American Institute of Architects) and NCARB member (National Council of Architectural Registration Boards).

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Cushman & Wakefield Joins Warriors Chase Arena Team
Cushman & Wakefield has joined the “all-star team” working on Chase Center and the Warriors’ new sports and entertainment complex in the city’s Mission Bay neighborhood, GSW Arena LLC announced today.

Cushman & Wakefield’s San Francisco Retail Team has been selected as the leasing agent responsible for developing more than 100,000 square feet of retail and restaurant space at Chase Center. Retail Vice Chairman Kazuko Morgan, Managing Director Rhonda DiazCaldewey and Director Kelly Vinson will lead the effort.

All Star Team
“We’ve put together an all-star team for the design, construction and operation of this spectacular destination in Mission Bay,” said Rick Welts, president of GSW Arena LLC. “Cushman & Wakefield will play a vital role.”

“The Cushman & Wakefield Retail Team is delighted to be an integral part of the Warriors’ plan, which will be a boon to San Francisco and have a positive economic impact on our entire region,” DiazCaldewey said.

Morgan added: “We are extremely proud to have the opportunity to work with what we consider the best professional sports franchise in the world.”

Cushman & Wakefield’s retail experts will lead the effort to secure dining and retail operators that will be a perfect fit for the location, and that will enhance the fan experience at Chase Center.

“Chase Center will be a cultural hub for the Bay Area that will be enjoyed throughout the entire year,” Vinson said.

In January, the Warriors announced that the new state-of-the-art sports and entertainment center will be named “Chase Center,” as part of a 20-year naming rights partnership with J.P. Morgan Chase.

Set to open for the start of the 2019-20 NBA season, the 18,000-seat Chase Center will anchor 11 acres of restaurants, cafes, offices, public plazas and other amenities the neighborhood currently lacks, along with a new five-and-a half-acre public waterfront park.

Chase Center will be located on a major Muni Metro rail line with easy links to BART and other transit options. When complete, it will be the only privately-financed facility of its kind built on private property in the modern era.

Chase Center will be built by Joint Venture partners Clark Construction Group and Mortenson Construction, combining an expertise in sports and entertainment construction with a long history of successful projects in San Francisco.

The sports and entertainment center will be built on a vacant lot that has been slated for development since 1998. The team purchased the property at Third and 16th Street in 2014 and has spent two years participating in a public planning process. The project won approval from 100 percent of city agencies and commissions, including the San Francisco Board of Supervisors, which voted 11-0 to uphold the project’s Environmental Impact Report.

About GSW Arena LLC
GSW Arena LLC, founded in 2010, is privately funding the construction of a new sports and entertainment center to be named Chase Center, which will be the anchor of an 11-acre mixed use complex on private property in San Francisco’s Mission Bay neighborhood. For more information, please visit

www.chasecenter.com.

About JPMorgan Chase & Co.
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.4 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. The firm uses its global

resources, expertise, insights and scale to address some of the most urgent challenges facing communities around the world including the need for increased economic opportunity. Information about JPMorgan Chase & Co. is available at

www.jpmorganchase.com.

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Vanbarton Group LLC
Vanbarton Group LLC, together with one of its U.S. pension fund partners, has acquired 100 Montgomery Street in San Francisco, CA. The 25-story, 429,095-square-foot office building with ground floor retail is centrally located in the heart of the North Financial District.

About 100 Montgomery
The Property provides tenants with a premier list of nearby amenities, including some of San Francisco’s finest dining, shopping and cultural options. Located just one block from the Montgomery Street BART station and Market Street, 100 Montgomery offers outstanding access to public transportation in the San Francisco Bay Area.

Built in 1955, 100 Montgomery appeals to both traditional office users as well as technology and media companies. The Property has been, and continues to be well-positioned to benefit from the increasingly diverse tenant base resulting from tech and creative tenant relocations, while also retaining the traditional FIRE office users.

The North Financial District
San Francisco continues to be one of the most highly sought after, supply-constrained metros in the nation with the North Financial District having been a major beneficiary of San Francisco’s technology boom. Traditionally considered the ‘gold standard’ for FIRE related companies, the North Financial District has attracted a growing cluster of technology users which now make up more than 2 million square feet of class A office space.

“Situated in an unparalleled location with immediate access to public transportation and premier amenities, the building provides the features that tenants are seeking today” said William Bond, a managing director with Vanbarton.

The building is currently well leased to a diverse roster of credit tenants, and Vanbarton will continue to maintain the Property’s market positioning by strategically deploying capital to target specific building improvements.

Other Vanbarton Transactions
This transaction follows the firm’s recent acquisitions of the Astor retail condominium and 31 Penn Plaza, both in New York City, as well as preferred equity interest in the office-to-residential conversion project at 20 Broad Street in New York City.

Vanbarton also owns nearby 301 Howard Street, where it recently completed a major lobby renovation and retail expansion. Vanbarton, a multi-strategy real estate investment company, specializes in equity and credit investing and origination strategies.

Cushman & Wakefield will handle exclusive leasing for the Property with veteran brokers Mark Anderson and David Duble managing the listing.

About Vanbarton
Vanbarton Group is a privately owned, vertically integrated real estate investment and advisory firm founded in 1992 with corporate offices in New York City and San Francisco. With its proven expertise successfully investing across the capital stack in varying ways throughout real estate cycles, Vanbarton’s investments include core plus, value-add and opportunistic equity investments, preferred equity, junior participations, bridge loans, secondary market debt acquisitions and securitized credit.

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Xiny McKinney Joins Cushman & Wakefield – China Direct Investment
Blog.cushwake.com, June 30
Xinyi (pronounced “Shin-Knee”) McKinny has joined the San Francisco offices of Cushman & Wakefield as Senior Managing Director – China Direct Investment. Xinyi will be responsible for supporting and driving new business opportunities with Chinese investor and occupier clients in the Bay Area and Los Angeles.

Bay Area Research & Brexit Too
Blog.cushwake.com, June 29
Robert Sammons provides an in depth overview of what happened in Q2 2016. According to Sammons, ” The statistics gave hardcore proof to what we’ve known since the beginning of the year – there is a fundamental shift underway in this office market.” The most glaring change was in the vacancy rate with the overall citywide figure jumping 160 basis points in Q2 2016 to 7.3%.

Jackson Square Among Coolest Streets
The Registry, June 29
A new breed of urban, experiential, and independent mid-market retailers catering to millennial consumers has led to the rise of 100 “Cool Streets” across the U.S. and Canada, according to an inaugural report released by Cushman & Wakefield.

San Francisco’s Jackson Square is Officially a Cool Street
Blog.cushwake.com, June 27
Garrick Brown opines on America’s up and coming streets. According to Brown, “Fashion is a fickle mistress and retail lives and dies by cool. Concepts connect, build loyalty, and grow by being cool. They also disengage, wither, and die by not being cool.” If nothing else, the history of fashion is the history of what is cool and what is desirable. This article received tremendous local and national coverage.

SF Business Times Honors Most Influential Women
Blog.cushwake.com, June 26
600 + Attend SF Business Times Honoring Most Influential Women in San Francisco. On Thursday, June 16th, approximately 600 well – heeled and high – heeled professionals from throughout the Bay Area converged on the Hilton Union Square in The City to celebrate an eclectic, diverse and star studded group of exceptional professional women. Among the 150 Influential Women recognized were Kazuko Morgan, Rhonda DiazCaldewey & Karen Vincent

Northern California Participates in Daylight Hour
Blog.cushwake.com, June 25
Organized by Building Energy Exchange, Daylight Hour spreads the word through office involvement and social media about the benefits of utilizing available natural light in lieu of electric lighting, including reduced greenhouse gas emissions, improved well-being, and financial savings. Locally, Daylight Hour was organized by Cushman & Wakefield’s Veena Muthusamy who manages our Corporate Responsibility Program, which was launched earlier this year.

LeEco acquires Yahoo’s Santa Clara land for $250M
Silicon Valley Business Journal, Jun 17
Chinese tech company LeEco has completed the acquisition of Yahoo’s nearly 50-acre development site in Santa Clara, a prelude to an ambitious growth strategy as it ramps up its North American R&D operations. LeEco paid exactly $250 million for the 48.6-acre site, where it is approved to build up to 3 million square feet of space. Steve Bouret of Cushman & Wakefield, represented Yahoo.

Toll Brothers Buy Big Fremont Site
Silicon Valley Business Journal, June 15
Toll Brothers this week acquired a large vacant lot across from the new Warm Springs BART station in Fremont. The 34-acre site comes with approvals for roughly 1,000 residential units, ranging from dense apartments to condo flats and townhomes.The buyer and the seller were represented by Erik Hallgrimson of Cushman & Wakefield.

C&W Represents Ridge Capital Investors in $28.5 Million LeSarra Luxury Apartments
Blog.cushwake.com, June 10
Cushman & Wakefield has successfully represented Ridge Capital Investors in the sale of LeSarra Luxury Apartments, Sacramento’s most luxurious multifamily property. Cushman & Wakefield Directors Jason Parr and Seth Siegel spearheaded the $28.5 Million transaction.

Pan-Asian Restaurant To Debut in Former Bike Shop Space
Sacramento Business Journal, June 10
Inchin’s Bamboo Garden, a Georgia-based franchiser, will enter the Sacramento region with a site in the Folsom Corners shopping center at 1760 Prairie City Road. Bicycle Planet, which closed last summer, previously filled the 2,779-square-foot space. Shaun Morrow of Cushman & Wakefield represented the landlord.

French Based Tech School Acquires 200k sf in the Bay Area for First US Campus:
rentv.com, June 8
A non-profit technology school based in Paris, known as 42, has acquired nearly 200,000 sf of space in the Bay Area for the launch of its first US campus. Cushman & Wakefield’s Kalil Jenab and Marcus Wood represented the school in the acquisition.

Silver Peak Systems Takes an Additional 74k sf at Santa Clara Biz Park
rentv.com, June 8
Silver Peak Systems has expanded its space by an additional 74k sf within @Central (formerly known as Airport Technology Park) in Santa Clara.
Brandon Bain, Steve Horton, Bob Simpson and Kelly Yoder with Cushman & Wakefield’s San Jose office represented the landlord in the transaction.

Prominent Retail Brokerage Executives Pamela Mendelsohn and Vikki Johnson Join Cushman & Wakefield
The Registry, June 3
Industry veterans Pamela Mendelsohn and Vikki Johnson have joined Cushman & Wakefield San Francisco in the Retail Services Group as Senior Managing Directors.The team’s addition solidifies the firm’s retail service offering as the most dominant in the industry.

Local Food Operator Signs Lease at 2150 Bell Ave.
Sacramento Business Journal, June 2
A local food operator has signed a five-year lease for a space at 2150 Bell Ave for an industrial space in Sacramento, which will help ramp up his trucks’ operations. Bryce MacDonald of Cushman & Wakefield represented the landlord.

Major Retailer Doubles Size in N California
Sacramento Business Journal, June 3
Discount retailer Big Lots Inc. plans to nearly double the size of its Folsom location by early next year. The store in the American River Plaza shopping center is expanding to include a neighboring space previously intended for a Fresh & Easy Neighborhood Market, according to brokers Shaun Morrow and James Teare of Cushman & Wakefield’s retail services group in Sacramento. Cushman represented the landlord in the deal.

The post Cushman & Wakefield N. California In the News – June 2016 appeared first on Cushman & Wakefield Blog.

Bisnow’s 10 Part Series 
Each year, Bisnow San Francisco features an online, 10-part series highlighting some of the top leaders in commercial real estate. The series, “Bay Area Power Women,” recognizes 50 influential players in the industry. Karen Vincent, Executive Vice President of Global Occupier Services, was among those featured in the June 22 issue.

Click here to see the full article, which summarizes Karen’s experience and growth. Karen got into the industry when she was working as a mortgage broker, and was promoted to head of real estate after bringing innovative ideas to the table. Photo: Karen Vincent, left, with Monica Morales-Anderson

Helping Others & Today’s Talent
Helping others achieve great success is the most fulfilling part of Karen Vincent’s career. She tells us there’s a shortage of new talent entering the industry and the industry is still very traditional in how it responds to the changing needs of business and economic volatility. Talent entering the workforce thinks differently, operates differently and has different priorities; the industry needs to innovate to attract talent to keep pace with the dynamic changes going on in the world.

Karen’s Keys to Success
Karen got into the industry when she was working as a mortgage broker and was promoted to head of real estate after bringing a truly innovative idea to the table. “Broad experience and diversity are key to success,” she recently told Bisnow.

“Don’t be afraid to make a lateral move or what seems like a small step back if you can gain valuable experience.”

Karen Vincent

Karen, pictured above with Monica Morales-Anderson at an award reception, enjoys hitting the slopes with her son, relaxing at the spa with her daughter, and golfing with the whole family in her spare time.

Mark Your Calendars: September 21st, 8:00 a.m.
All honorees will be acknowledged at a special awards reception on September 21st in San Francisco. Stay tuned for more Bay Area Power Women award news.

About Bisnow Power Women
Bisnow’s Power Women Initiative Aims to Shine a Bright Light On the Women Making a Big Impact on the Commercial Real Estate Industry. Over The Last Few Years, Bisnow has Celebrated Hundreds of Women at Events in New York, Atlanta, San Diego and more. Now We Bring This Effort to San Francisco. Please Join Us for a Lovely Affair to Celebrate & Recognize These Trailblazers in Our Business.

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Power Women: Bisnow’s 10 Part Series
Every year, Bisnow San Francisco features an online, 10-part series highlighting some of the top leaders in commercial real estate. The series, “Bay Area Power Women,” recognizes 50 influential players in the industry. This week, San Francisco Executive Director Margaret Duskin was among those featured.

Early Career to Executive Director
During an informational interview process in college, Margaret Duskin learned there were no women in office leasing in San Francisco. This was not reasonable, in her view, and she took up the challenge to break into the field. Now as an executive director and a recognized office market expert, Margaret says she is constantly inspired by being able to solve problems and help others, both in business and in higher pursuits.

“ Ramping up for a career in commercial real estate in the Bay Area is a two- to three-year process. It is critical for anyone trying to get started in the industry to select an employer that cares about women as a successful part of the organization. ”

 

Margaret Duskin

Sound Advice: Breaking Into Commercial Real Estate
Ramping up for a career in commercial real estate in the Bay Area is a two- to three-year process. It is critical for anyone trying to get started in the industry to select an employer that cares about women as a successful part of the organization, she says, not simply in support roles, but as leaders and achievers.

Technology has aided the quality and delivery of work product and some communication, but Margaret says analysis and reporting are not enough to provide the service, interaction and guidance needed for optimum results.

Margaret enjoys spending time with her husband at their home in wine country and cheering on her Bay Area sports teams.

Mark Your Calendars: September 21st, 8:00 a.m.
All honorees will be acknowledged at a special awards reception on September 21st in San Francisco. Stay tuned for more Bay Area Power Women award news.

About Bisnow Power Women
Bisnow’s Power Women Initiative Aims to Shine a Bright Light On the Women Making a Big Impact on the Commercial Real Estate Industry. Over The Last Few Years, Bisnow has Celebrated Hundreds of Women at Events in New York, Atlanta, San Diego and more. Now We Bring This Effort to San Francisco. Please Join Us for a Lovely Affair to Celebrate & Recognize These Trailblazers in Our Business.

Bisnow’s Power Women

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Report by Guest Blogger Travis Zeiler
Research Analyst
Cushman & Wakefield Sacramento

Midyear is Here; Sacramento Still Going Strong
Widespread growth across many industries propelled the Sacramento Valley to a record total 932,700 nonfarm positions, an increase of 18,000 or 2% over the past twelve months. There have now been 113,000 jobs added since the post-recession low of 819,700 jobs in January 2011.

Year-over-year, the office sector recorded 2,700 new positions for an annual gain of 1.5%, while the all-important government sector was up 3,800 positions, for a 1.6% annual gain.

Healthcare remained a pillar of Sacramento job creation as well, with 4,600 positions added over the last year, representing a 3.6% increase. Meanwhile, the regional unemployment rate dropped to 5.0%, which is the lowest figure since the 4.6% recorded in December 2006.

Office Vacancy
The office vacancy rate for the Sacramento Valley has tumbled 120 basis points (BPS) since the second quarter of 2015, from 13.7% to 12.5%. Partially fueling that decline is the fact that the region has not produced any major new office product of 100,000 SF or larger size since the first quarter of 2013. All other quarterly deliveries since then have been for much smaller amounts of space.

Breaking down the change since the second quarter of 2015 by class, the overall vacancy for Class A space eased 30 BPS to 11.6%. Class B vacancy plummeted a sharp 220 BPS to 12.4% since the second quarter of 2015, for the biggest year-over-year change. This was due to three consecutive quarters from 3Q15 to 1Q16 of high net absorption in Class B space, totaling at 950,000 SF. Class C declined by 40 BPS since last year, to 14.0%, with mostly negative net absorption during that time period.

As the vacancy rate has declined, the average asking rents in Sacramento have been on the rise, albeit at a gradual pace. For all three classes of office space, the overall average rent increased by $0.02 per-square-foot-per-month (PSF) since first quarter of 2016, and climbed $0.04 PSF since the second quarter of 2015.

Sacto’s CBD
The Sacramento Central Business District (CBD) remains the most expensive, with the overall rental rate averaging at $2.27 PSF, up by$0.03 PSF for the quarter and $0.14 PSF from one year ago. Class A CBD office space rents ranged from $2.25 to $3.30 PSF in the second quarter.

Non CBD
In the Non-CBD submarkets, Midtown has overtaken Campus Commons as the second most expensive submarket. Average asking rents in Midtown rose 5.2% since the first quarter, moving from $1.94 PSF to $2.04 PSF, whereas Campus Commons climbed by just one penny over the quarter to $2.03 PSF.

Overall net absorption in the second quarter was a robust 155,000 square feet (SF), compared to the (177,900 SF) of net absorption seen last quarter and the (37,90SF) of net absorption in the second quarter of 2015. For the full year of 2015, Sacramento managed a healthy 1.38M SF of overall net absorption.

Top Deals
The top deal signed in the second quarter was The Office of Statewide Health Planning & Development, for 124,340 SF at 2020 West El Camino Avenue in the Natomas-Northgate submarket. This is compared to the largest deal of the second quarter of 2015, when Dignity Health leased 50,928 SF at 10901 Gold Center Drive in Rancho Cordova.

Portfolio sales made up the majority of the top sale transactions of the second quarter. The largest included Benvenuti Plaza at 1515 S St, a 350,000 SF Class B office building in the CBD, and both 10961 & 10971 Sun Center Dr – each 45,000 SF in size – for a combined 90,000 SF of Class B office space.
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Hines REIT sold this portfolio to Oaktree for $79M in May, with the price-per-square foot breakdown of $169/SF for 1515 S St and $117/SF for 10961 & 10971 Sun Center Dr. The second largest portfolio sale of the quarter was for 2868 Prospect Park Dr 2890 Gateway Oaks Dr, which Hines & Oaktree purchased from A&B Properties for $30.3M, or $136/SF for 223,028 SF total.

The Buzz: Downtown/Midtown/DOCO
The local news is abuzz with talk of new Downtown and Midtown projects of various types, but none have broken ground yet.

Generally, leasing metrics are going in the right direction to spur this development: absorption is positive, vacancy is declining, and rents are rising (though modestly).

With several projects at least making it to the drawing board, it might not be that much longer until we see new office construction in the center of Sacramento to complement the new Golden 1 Arena and Downtown Commons (DOCODowntown Commons (DOCO), which both open later this year. Stay Tuned.

Travis Zeiler is a Research Analyst working out of Cushman & Wakefield’s Sacramento office. He is responsible for Sacramento market research and economic analysis as well as support for presentations, reports and periodicals. A Bay Area transplant, Travis lives in Midtown Sacramento and holds his BA in Marketing from UC Santa Cruz. He is a regular guest blogger for blog.cushwake.com. Check out Travis’ latest story on DOCO here.

The post Sacramento Valley Marketbeat Office Snapshot 2Q 2016 appeared first on Cushman & Wakefield Blog.

By Guest Blogger Derek Daniels 
Senior Research Analyst,
San Francisco

Entering Correction Territory
A combination of slowing labor force growth and a rise in the ranks of the employed pushed the unemployment rate down to 2.8% in May, its lowest figure since December 2000. Total private sector positions climbed to 950,600, up by 32,100 or 3.5% year-over-year. Jobs that require the use of an office workspace have increased 4.0% over the past 12 months to 404,100. The subsector of professional services led the way, followed by financial activities, and information.

CRE & Tech
The San Francisco commercial real estate market has soared along on its longest “up-cycle” in decades, but there were signs of easing back on the throttle in the second quarter of 2016. The single most influential contributor to this local economic expansion has been the rapid rise of the “tech sector” which has become a rather ubiquitous term covering all businesses that have a significant technology focus or component.

Slow or No Growth?
However, recent changes in the tech sector have begun to affect the local office market. Slow or no growth policies have emerged among start-ups as well as some more established firms, resulting in a significant increase in new, vacant sublease space.

M&A activity is also on the rise, with two transactions involving local companies announced before the close of the second quarter. While M&A activity has yet to make a material impact on the market, it is certainly an important activity to monitor as it could lead to more sublease space.

Vacancy Rates
The increase in sublease vacancy and several larger blocks of direct space hitting the market has propelled the Citywide overall vacancy rate to 7.3% in the second quarter of 2016, up 160 basis points (BPS) from the first quarter of 2016 and the largest quarterly increase since the first quarter of 2009.

The overall Citywide asking rent continued to climb, (this metric being slow to adjust in a quickly changing market), closing at a record high of $69.30 per square foot (PSF). Sublease vacancy stood at 1.5 million square feet (MSF), up from the 822,000 SF reported one quarter ago, with tech accounting for 48.0% of the latest figure.

CBD overall vacancy landed at 8.0% in the second quarter of 2016, up from both the 6.5% reported last quarter and the 7.4% reported one year ago. Non-CBD vacancy increased 180 BPS over the quarter to 5.9% from 4.1%.

The North Financial District Class A submarket recorded the highest negative net absorption: -386,245 square feet (SF). However the Class A average asking rent still recorded an increase of +1.1% to $71.42 PSF.

Completed Office Projects & Construction
There were four office buildings completed in the second quarter, all of which were delivered 100% pre-leased: Kilroy Realty Corporation’s 444,000 SF building at 350 Mission Street in the South Financial submarket delivered in May with Salesforce occupying the entire building; Dropbox’s HQ at 333 & 345 Brannan Street; and Splunk’s building at 270 Brannan Street.

As of the end of the quarter, there was 3.8 MSF of space under construction Citywide of which 25.0% was pre-leased. There is one building scheduled to be delivered in 2016: the 55,000 SF boutique property located at 500 Pine Street that is 100% available.

New Leasing Activity
New leasing activity totaled 1.3 MSF in the second quarter of 2016, down from 1.4 MSF last quarter and the lowest second quarter figure since 2009. Tech continued to drive transactions.

The largest deal of the quarter was Fitbit’s sublease at 215 Fremont Street in the South Financial submarket. The wearable tech manufacturer will occupy all of Charles Schwab’s former building to be phased in over 36 months.

There were two significant transactions signed at China Basin Landing (185 Berry Street) in the East SOMA submarket: Lyft took 206,000 SF in a mix of direct and sublease space and Stripe subleased 102,000 SF. Both sublease blocks were originally occupied by Dropbox which moved into its new headquarters.

There were 3.6 MSF of active tenant requirements at the close of the second quarter; down from the 5.5 MSF reported one year ago. Technology users currently account for 65.0% of those tenants in the market.

Sales Activity
While uncertainty (China, oil, BREXIT fallout, US election, etc.) continues to be a major theme in the capital markets, the San Francisco office market is still viewed as an attractive investment for institutional, high net worth, and foreign capital.

Cushman & Wakefield tracked seven sales in the second quarter of 2016 totaling $1.3 billion with an additional five sales totaling $1.2 billion expected to close by the end of August. While many investors believe that the market has peaked and may be cooling, they still consider San Francisco to be a great long term investment.

Some of the more notable transactions included Blackstone’s purchase of 555-575 Market Street (one of the largest sales transactions in this cycle) and Pembroke Real Estate’s acquisition of 140 New Montgomery Street. Given where we are in the cycle, we could see cap rates creep up an additional 25-50 BPS in the second half of the year as investors are now requiring cash flow (as opposed to appreciation) to make up a material portion of their overall return.

Outlook
Though new leasing activity will likely remain subdued compared to the past two years, the market is not dead. Several leases greater than 100,000 SF are expected to close before year-end with some of these pure expansions.

Rents will likely flatten in the second half of the year after reaching record levels.
Only one new building (500 Pine) will enter the market in the second half of the year ahead of four major projects delivering in 2017 (Salesforce Tower, 181 Fremont, The Exchange on 16th, 350 Bush).

THE INCREASE IN SUBLEASE VACANCY AND SEVERAL LARGER BLOCKS OF DIRECT SPACE HITTING THE MARKET HAS PROPELLED THE CITYWIDE OVERALL VACANCY RATE TO 7.3%.

Derek Daniels is a Senior Research Analyst with Cushman & Wakefield, based in the heart of San Francisco’s booming Financial District. With nearly a decade of eclectic research experience in the Bay Area commercial real estate market, his career includes a wide variety of work ranging from local market research to advising tenants and landlords in the lease and sale of office and industrial space.

As an avid social media participant, Derek is an active commercial real estate guest blogger for blog.cushwake.com and engages with the online stratosphere on a consistent basis.

The post San Francisco Marketbeat – Office Snapshot 2Q 2016 appeared first on Cushman & Wakefield Blog.

Why the Rise of On-Line Shopping is Far More Disruptive Than We Ever Imagined

Story by Guest Blogger Eugene McGrane
Senior Director, Cushman & Wakefield

Consumer Patterns: Can Change as Subtly as Shifting Traffic

Major Retail Disruption
Retail is facing a major disruption – it is predicted by industry analysts that by the end of 2017 Amazon will be the world’s largest retailer. Amazon just reported its most profitable quarter ever.

For the first time since the days of the Sears and Roebuck catalogue, the largest retailer will generate the vast majority of its volume outside of a traditional brick and mortar setting. This is set to have a dramatic impact on consumer patterns, retail real estate and employment.

Retail Real Estate, however, will be just fine. The fundamentals behind retail Real Estate are sound. Location proximity to consumers and availability of parking will allow most high quality Real Estate to find a second life; either as consumer services, healthcare or as a residential redevelopment. The disruption will be painful but in only extreme cases will the functional obsolescence be fatal.

“ Consumer patterns will be difficult to quantify, as they can change as subtly as shifting traffic patterns, or as disruptively as municipal sales tax revenue shortfalls. We will have to get used to a very different world; both as city planners and as tax planners.”

American Manufacturing : Steady Over the Last Twenty Years

The Coming Wave
The coming wave of underemployment isn’t where you would think it is. The current political rhetoric centers around how America doesn’t manufacture anymore and that because of globalization those jobs have been shipped overseas. This is a vast oversimplification and it denies us the most important parallel we could draw from the hollowing out of the middle class through the loss of well paying manufacturing jobs.

A direct refute of the premise of American manufacturing moving overseas is that American manufacturing has remained steady over the last twenty years, rising at a clip commensurate with the GDP per annum.

“ US manufacturing output is close to a record high, even when adjusted for inflation. The reason that sounds surprising is manufacturing jobs have been disappearing since the late 1980s, and now that number is just 12.3 million. Since 1989, manufacturing output has surged 69% while employment has fallen by 32% .”

 

finance.yahoo.com

The Culprit: Technology
Despite the fact that we are making as much or more from a manufacturing standpoint, it isn’t blown smoke that we have lost those jobs. Technology has been the main culprit, not outsourcing. The solution for what to do with our society as we shift from a manufacturing economy to a service economy is still a question we haven’t answered.

Technology: The Shift from a Manufacturing to a Service Economy

Automation – Competing With the Online Behemoth
The purpose of this article is to discuss what happens when most of the service economy becomes automated. The clearest example of this trend is Amazon. Amazon now employees 220,000 people and it is predicted to be the largest retailer in America by the end of 2017.

This is an important number because the other major Big Box Retailers, Walmart, Target and Home Depot employ 3,000,000 workers. Sadly, their future resembles that of Sports Authority, which just declared Chapter 11, laying off the remainder of its 16,000 employees. They struggled in vein to compete with online sales. The problem is a function of overhead; Amazon operates a much more efficient model on so many levels that this trend borders on the inevitable.

The Fringe of Economic Insecurity
For another example, see what’s happened to Borders Books. Border’s plight illustrates a far more important argument and policy problem affecting retail workers. Of the top 10 national employers in the United States, six are large retailers. Their employees, by nature of their wages live much more on the fringe of economic insecurity. These jobs are typically the most vulnerable to technological disruption and it is already beginning.

Amazon is aggressively carving into retailers market share and consumer comfort level with purchasing online is only growing. Thusly, we can observe very clearly from having spent the last fifty years dealing with the loss of major manufacturing jobs, that replacing those jobs is incredibly difficult. The difference, however, is that the security of many of the manufacturing jobs allowed for some economic mobility within the generations.

With retail jobs, which often pay minimum wage or even lower, there is no security that enables workers to aspire to seek a better education and eventually enjoy better economic mobility.

Walmart vs. Amazon
Contrast Amazon with Walmart, the current largest retailer. In more than half of the 50 states Walmart is the biggest employer. Amazon by contrast will soon have Walmart’s position as top retailer but with only a fraction of the headcount. Not only that, but Amazon is always pushing towards more automation, not less.

Clearly, a crisis is heading our way, one that draws parallels to the 1980s and the Rust Belt, but it will be far more pervasive. Today, 10% of the total U.S. Labor Market is employed in the Retail Trade Industry; what happens when 50% of that workforce is functionally obsolete? Essentially we will become a consumer economy without any consumers.

Eugene McGrane is a Senior Director at Cushman & Wakefield’s Walnut Creek Office. He is both an advocate and advisor for companies who lease or own real estate and has an extensive and wide ranging background in complex commercial real estate projects, from small business office leases, to large corporate site selection and negotiation. Eugene has also handled complex disposition and acquisition of Retail, Land, Office, Industrial, Medical and Development sites. He is a regular Guest Blogger for blog.cushwake.com. See Eugene’s previous article here.

The post What To Do When the Music Stops? appeared first on Cushman & Wakefield Blog.

Vacancies Jump; Subleases Surge; Few White Elephants

by Guest Blogger Eli Ceryak
Senior Vice President
Cushman & Wakefield, San Francisco

Office Vacancies Jump to 7.3%
2016 continues to be one of the most fascinating years in recent memory for the San Francisco real estate market, with vacancy experiencing its biggest jump since early 2009. San Francisco office vacancy jumped to 7.3% at the end of June; a significant increase from the 5.6% number recorded at the end of March. It was also only the third time that quarterly vacancy has increased since the beginning of 2010.

The Subleasing Phenomenon
Vacant sublease space nearly doubled to 1.5 million square feet from 822,000 square feet at the end of the first quarter.

Of the available subleases, only five were 30,000 sf or larger; those accounted for 18% of the available square footage. The bulk of the sublease space consisted of availabilities between 10,000-30,000sf, with 43 different spaces totaling 706,000sf; those had an average size of 16,400sf and constituted 47% of the available space.

Twitter’s recent announcement of an additional 184,000 square feet of sublease at their mid-market headquarters will be a bellwether of the market. It’s the largest sublease available in San Francisco, and should prove attractive to large users whose options are largely limited to big blocks of direct space that required a significant investment in construction. Based on the lack of supply in this size range, we wouldn’t be surprised to see this leased prior to the end of the year.

” It’s worth noting that sublease space represents 26.4% of the total available space of 5.6 million square feet. This percentage is the highest it’s been in several years. “

 

Few White Elephants
Also worthy of note is that this market is not seeing an abundance of white elephants (An expensive, unprofitable investment that is difficult to sell). The sublease inventory currently available is, by and large, functional and not oversized, which will often limit the pool of potential buyers/users.

Strong Demand
Despite this uptick in available space, we are still seeing strong demand in the sublease market. Based on the current level of activity, I expect sublease inventory to decrease slightly over the next quarter as many tenants focus on sublease opportunities with shorter terms, attractive pricing and minimal construction requirements.

During the month of July, we’ve already seen several companies dispose of large sublease blocks, including Neustar (70,000+ sf), Wells Fargo (36,000+ sf) and CPMC (27,000sf).

What’s Really Happening in the Tech Sector?
Surging growth in the tech sector has pushed rents to all-time highs and spurred the biggest office building boom in nearly 20 years. However, investor and media sentiment regarding the Bay Area tech sector turned negative early in the year; sending numerous stock prices down and creating speculation that the tech boom could be in its final stages. The recent uptick in vacancy is certainly fodder for those with a bearish view of the market.

Tech IPO Market
The tech IPO market has been essentially shut down, although one notable exception is San Francisco-based Twilio. Twilio is now valued at $4.3 billion or $52 per share, more than three times its $15 per share IPO price of just a month ago.   One IPO doesn’t make a data set, but Twilio is demonstrating that investors will rally to businesses where they see discipline, sustainability and growth potential.

Mergers & Acquisitions
M&A activity continues to counter-balance the absence of an IPO market. Thus far many companies that have made significant acquisitions – such as Microsoft buying LinkedIn – have indicated that they’re going to keep space and talent in San Francisco, rather than moving jobs to corporate headquarters or cheaper locations.

” We anticipate M&A will continue to have a significant impact on Bay Area companies and their real estate needs. At the risk of stating the obvious, the M&A affect will largely depend on who acquires who, and where they decide to keep or relocate jobs. “

Conclusion: No Implosion; Less Frenzy
Finally, what we haven’t seen is significant dot-com style implosions or imminent collapse of financial institutions. Tech companies are retrenching, but in large part that’s applying needed financial discipline, with a focus on becoming sustainable businesses or building assets that are attractive to prospective buyers.

In short, for the near term I expect a market that’s less frenzied and more tenant-favorable, but still functional and reasonably stable.

Guest Blogger Eli Ceryak is a Senior Vice President and commercial broker for Cushman & Wakefield San Francisco. He represents a broad and eclectic client base, ranging from startup growth-stage tech companies to established Fortune 500 firms. Eli earned his undergraduate degree from Harvard University and received his Masters of Business Administration from the Walter. A Haas School of Business at University of California Berkeley.

The post Tech Boom Cools Off appeared first on Cushman & Wakefield Blog.

Michael Yuras, Ryan Forsyth, Vincent Aicale and Scott Crowle Join Cushman & Wakefield
Cushman & Wakefield recently announced  that a premier net leased investments sales team, comprised of Michael Yuras, Ryan Forsyth, Vincent Aicale and Scott Crowle has joined the firm from Newmark Cornish and Carey.

HQ Based in Bay Area: Offices in Sacramento & Walnut Creek
The Yuras Aicale Forsyth Team is based in the San Francisco Bay Area and provides services to developers, institutional and private capital clients in the disposition of leased investment properties across the U.S with an emphasis on newly constructed properties secured by long-term leases.

The Northern California Headquarters for Cushman & Wakefield are located at 425 Market Street in San Francisco.

Brokered over 400 Deals
The Yuras Aicale Forsyth Team provides services throughout the sales and development cycle with a focus on dispositions. The collaborative four-broker team has successfully sold more than 400 properties valued at nearly $3 billion since 2010 and currently controls over 75 exclusive listings across 26 states.

“This team has gained its national status by providing clients with unsurpassed insight and services in an effort to achieve market leading values,” said Mike Kamm, Cushman & Wakefield Market Leader, Northwest Region.

 

Michael T. Yuras, CCIM, will be based in Sacramento and serves as Executive Director. He has represented developers and private owners in the sale of net leased investment properties for over 12 years. During his tenure at Newmark Cornish & Carey, Yuras was consistently recognized as a top performer, including being ranked as a top 10 broker in the company in 2015. Prior to brokerage, he held several positions which highly contributed to his ability to best represent his client base. Yuras provided project underwriting and site selection services for a Texas-based developer. Additionally, he worked as a budget/cost engineer for several of Turner Construction’s high-profile projects in Los Angeles. He is a member of ICSC, a Certified Commercial Investment Member (CCIM) and a graduate of the University of Texas at Austin with a degree in Architectural Engineering.

Vincent Aicale will serve as Senior Managing Director and will be based in Walnut Creek. In 2013, 2014 and 2015, Vince was ranked a Top Performer at Newmark Cornish & Carey. Aicale has represented some of the most active developers and investment companies across the country. He has been in the commercial real estate industry for 15 years and started as a summer intern at a boutique investment company in San Francisco. He holds a B.S. in Finance from The Leeds School of Business – University of Colorado at Boulder. Aicale previously attended Santa Clara University where he earned a scholarship to play on the men’s golf team.

Ryan Forsyth will also be based in Sacramento and serves as Senior Managing Director. He was consistently ranked a Top Performer at New Cornish & Carey, and in 2015 he achieved the prestigious Top Performer award with Newmark Knight Frank reached by only 400 out of approximately 12,000 professionals companywide. Forsyth serves as a strategic partner to his clients by providing meticulous service with integrity leading to repeat clients by some of the most active developers and owners nationwide. Prior to brokerage, he was a financial analyst for a Wall Street Firm, which has benefited his clients by providing in-depth experience with detailed underwriting and the ability to navigate complex transactions to maximize value. He is a member of ICSC, ARGUS Certification and is a graduate of California State University, Sacramento.

Scott Crowle will serve as Senior Managing Director and will be based in Sacramento. An industry veteran, he began his investment real estate career in 2001 at a large national investment real estate firm where he specialized in the sale of shopping centers in Northern California. After a successful 10-year career there as a top agent, Scott joined another national full-service brokerage where he specialized in the representation of build-to-suit developers for net-leased assets nationwide. Crowle’s consistently high performance levels have earned him nominations for Sacramento’s Association of Commercial Real Estate (ACRE) Investment Broker of the Year award on four separate occasions. Crowle is a graduate of the University of California, Berkeley.

“We are delighted to have this leading net leased team joinCushman & Wakefield, growing our national platform to helpsatisfy our clients’ demand for top-tier representation.”

 

Mike Kamm

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Cushman & Wakefield Brokers Historic Investment Sale and Will Manage the Property

Cushman & Wakefield represented Thor Equities in the $374 million ($1,256 per square foot) sale of San Francisco’s historic Phelan Building at 760 Market Street in the city’s Union Square district. Additionally, a New York-based team represented the building’s buyer, a private family owned entity with global holdings.

Cushman & Wakefield’s Retail Vice Chairman Kazuko Morgan and Executive Director Seth Siegel represented New York-based Thor Equities. Senior Director Joshua Goldman represented the buyer.

The 11-story, 250,000-square-foot building is fully leased to tenants such as tech startups Obvious Ventures and Medium, both led by Twitter co-founder Ev Williams, and personal finance company Credit Karma. The building’s 52,000 square feet of retail space includes Walgreens, Starbucks and Orogold.

A Union Square Landmark
Union Square’s largest building that is not a department store, the Phelan Building was built in 1907 by former San Francisco Mayor James Phelan, whose family owned the property for nearly a century. The landmark asset in the heart of Union Square’s retail corridor includes prestigious neighbors such as the Four Seasons Hotel, Four Seasons Residences and Barneys New York.

“This is the first time ever that 760 Market Street has been openly on the market,” Morgan said. “Although there have been a few trades investor-to-investor, they were always done off market, and it is rare that a property of this magnitude becomes available. The buyer believes the asset’s prime location combined with strong market fundamentals make this acquisition a great long-term investment.”

Kazuko Morgan

“In our experience, many buyers, whether they are prominent families or reside off-shore, do not want a commodity building,” Morgan continued. “If they are going to acquire an asset, it has to be special and impactful. The Phelan Building is one of the most recognized buildings in San Francisco and is located in a neighborhood surrounded by world renowned retailers and internationally recognized accommodations.”

760 Market Street
Added Seth Siegel, “Thor Equities has done a fantastic job converting an iconic building with over 300 smaller tenants on the upper floors and replacing them with full-floor tenants. The building has also been consistently occupied by very strong retailers on the ground floor. 760 Market is now considered one of the top creative buildings on the West Coast and routinely generates some of the highest rents in San Francisco.”

Cushman & Wakefield Director Blake Peterson has been retained to lead property management for the Phelan Building.

“This transaction is a prime example of the seamless collaboration our capital markets, retail and asset services teams provide to clients,” said Noble Carpenter, Cushman & Wakefield President, Capital Markets, Americas. “Across service lines, geographies and product types, we are setting a new standard for exceeding clients’ expectations at every phase of the process, from acquisition, finance and disposition to leasing and management,” he said.

According to Joshua Goldman, “I have known the buyers of the asset for 20 years. I was fortunate enough to match a requirement with a fantastic asset in one of the strongest office markets in the country.”

Other prominent deals completed by Cushman & Wakefield San Francisco include Salesforce Tower and 50 Fremont Street. The retail team also recently was awarded the leasing assignment for the NBA Warriors Chase Arena.

The post San Francisco’s Landmark Phelan Building Sells for $374 Million appeared first on Cushman & Wakefield Blog.

Jason Karbelk (red shirt) and Konrad Knutsen (far right) run the Corporate Challenge

40th Annual Race
Cushman & Wakefield’s San Francisco office recruited a team of 24 Bay Area employees to participate in the regional J.P. Morgan Corporate Challenge on September 8th, our firm’s 15th year in the 40th annual race.

San Francisco’s evening chill descended just as the race was preparing, launching thousands of warmed-up runners from McCovey Cove at 7:20 p.m.

Seventeen of our recruits followed through to run the 3.2-mile course along with approximately 12,000 participants.

4th Place Finish
This year’s Cushman & Wakefield team placed fourth overall in the race, just a notch below last year’s third-place finish. We’ve enjoyed a tremendous track record in our years with the Challenge, particularly in 2005 when Konrad Knutsen and Scott MacDonald were part of our winning regional team and went on to compete in the world championships.

Research Analyst Jason “Marathon Man” Karbelk

Some of our mainstays took part again this year, including team captain, Jason Karbelk, a gifted runner and member of the Bay Area’s oldest running club – the West Valley Track Club.

Red, White & Grey
As our exceptional team captain, Jason encouraged our runners and delivered ongoing race updates. Leading up to the race, he worked with Justin Delatorre, Liz Dreessen and Robin Addams to coordinate a ‘design our t-shirt’ competition. Liz opened the competition to our Northern California Graphics team, and the talented Rishad Amarkhel won the runners’ hearts with his red-white-and-gray ‘clean lines’ design.

Designer Rishad Amarkhel Won the T-Shirt Design Contest

Marathon Man: 16:20 Minutes
Jason also bolstered his legendary status as the firm’s fastest runner, finishing 11th in the race overall, with a time of 16:20 minutes. Chris Chavez, from UBS Private Wealth Management, won the race, as he did last year. Lauren Centrowitz from Omada Health took first place in the female category, improving on her third-place finish in 2015. Incidentally, Lauren’s brother Matthew Centrowitz took home the Gold Medal in this year’s Olympic Games in Rio for 1,500-meter track.

Our very own Konrad Knutsen, who competed at the 2008 Olympic Trials in the Marathon, finished with an impressive time of 16:37, which earned him 2nd place among Cushman & Wakefield (20th overall). In years past Konrad earned top honors, finishing first in both 2005 and 2007. After the race, Konrad said, “This year’s Corporate Challenge had assembled the most competitive field to date.”

Girl Power: 24:47
Rising to the occasion, Monica Coen – our best-placed female participant –outran many in the competition, finishing in a lightning speed of 24:47. This achievement placed her at 270 overall in the race’s female category. Monica ran track and field in high school and college, and in the lead up to the race started training consistently again, covering race distance three times per week.

Some of our recruited team members were unable to make race day and were duly covered by speedsters Stephen Llevano, 20:42 (running for Kevin Waldman); and Aaron Stein, 22:38 (running for Eric Kathrein).

By 8.30 p.m., Cushman & Wakefield team members reconvened at Pedro’s Cantina for post-run celebration and nachos-and-beer recharging.

Race Results for Cushman & Wakefield N. California

Apres Race Results for Cushman & Wakefield N. California

Cushman & Wakefield J.P. Morgan Corporate Challenge participants celebrating their finish post-race at Pedro’s Cantina (Steve Llevano (20.42) and David Mastro (18:39) said they had clocked in Personal Records).

An Amateur Runner’s Log of the Journey to Challenge
By Guest Blogger Caroline James

With six weeks until the J.P. Morgan Corporate Challenge®, team captain Jason Karbelk – or ‘marathon man’, as hailed by Mike Kirner – was in recruit phase, patrolling the Cushman & Wakefield San Francisco office for known runners.

Jason located my desk neighbor, three-time Challenge participant Justin Delatorre. Their enthusiasm inspired, as I lost track of typing and mulled the idea of beginning to run again.

With Justin’s participation secured, Jason resumed his search for known suspects. Of course, I’d been unwittingly snared.

My competitive nature sparked, the ever calm and collected Justin was about to be cornered again. After fueling my interest with additional detail, he sent me in search of Jason and my indoctrination into the Cushman & Wakefield running team.

One doesn’t quite know who in life is going to provide us with our next source of inspiration, but for the next few weeks, our research analyst, Jason Karbelk, was it.

Jason and I discussed a probable training schedule for me, which included first getting adjusted to running again. “Try the treadmill for a couple of weeks to condition the body, and then run outside about three times a week,” he instructed. Jason suggested completing one short-and-fast run; a second run that covered the race distance; and a third, longer run on the weekend.

Jason and I connected for a couple of runs before work, but given that “he runs like a gazelle,” as Robin Addams declared, Jason took his own track. This included conquering San Francisco’s copious hills, across a six-mile distance.

Nonetheless, with team-captain aplomb, Jason engineered a course for me via Google Maps – a calmer two-mile path from the Ferry Building to the Willy May’s statue at AT&T Ball Park and back.

Now all in, I started morning jaunts, traversing my custom course in yoga pants, no makeup and wind-blown hair. After one such run, I boarded our office elevator as Gerard Herrera stepped inside, glancing my way without a word. “Hello Gerard,” I said. He looked at me again and apologized, “Oh, I didn’t recognize you!”

Race day approached and 17 of us from the company braved the feat. Together, we were excited for the challenge, which provided a perfect opportunity to meet fellow employees and bond as a team.

I completed the course in 32:33 minutes – third place out of the six females from the firm.

Post-run, I expressed to Jason how much fun I had. The next morning, he emailed: “I’m so stoked for you! After a solid month of training and fighting those early runner pains, you completed the 3.2-mile race and crushed it! Well done! Keep the momentum going! Look into another 5K race in the next month or so. Turkey Trots are great as well.”

Ahhh, the legendary runner’s high that keeps us hooked…and Thanksgiving (aka Turkey Trots) is just around the corner.

Caroline James
PR/Communications Lead

Caroline has 15 years’ in-house and global agency PR experience – having joined Cushman & Wakefield from the tech/startup world in San Francisco. She specializes in brand positioning, stakeholder relations, and media strategy. Caroline is responsible for overseeing the development and execution of our external communication strategy in the West Region.

The post Cushman & Wakefield Runs the J.P. Morgan Corporate Challenge® appeared first on Cushman & Wakefield Blog.

Kazuko; Siegel Advise on Stunning Sale
Cushman & Wakefield has acted as exclusive advisor to Greenstone Realty Advisors LLC and 360 Post LP, for the sale of San Francisco’s iconic Tiffany Building to an undisclosed international investor. Retail Vice Chairman Kazuko Morgan and Executive Managing Director Seth Siegel led the team that advised on the sale. Financial terms are not disclosed.

The world renowned luxury retailer is located directly on Union Square at 360 Post Street, adjacent to Saks Fifth Avenue and Apple’s new flagship store. The 11 – story Tiffany Building is one of San Francisco’s most impressive buildings; comprised of 96,882 square feet of luxury high-street retail and office space, and is highlighted by 75 feet of prime retail frontage on Post Street.

“This building has had the same ownership for more than 20 years and throughout that period it has received frequent sale inquiries and unsolicited offers. This sale is a further confirmation that investors take a very long term approach. The owners are pleased by its outcome and entrust the new owner to carry on its enduring legacy,” said Spencer McCann and Andre Kinney, Principals, Greenstone Realty Advisors LLC.

World – Wide Appetite for Irreplaceable Asset
“The Tiffany building is an irreplaceable asset that generated world-wide appetite from the highest caliber of investors and represents the continuing demand of iconic trophy buildings around the globe,” Kazuko Morgan said. “This highly sought after property faces directly onto the center of Union Square and suitors have been clamoring for it for decades.”

According to Seth Siegel, “Very few buildings in San Francisco offer a comparable level of access to such a large complement of restaurants, shops, convention and entertainment centers, and fine hotels – all conveniently located within walking distance. Apple opened its new flagship store at 300 Post earlier this year and is expecting foot traffic to double upon its relocation from One Stockton to Union Square.”

Carlo Barel di Sant’Albano, Chairman EMEA and Chief Executive, Global Capital Markets, Cushman & Wakefield, said, “Kazuko Morgan and Seth Siegel have successfully closed this significant and high-profile transaction that involved global collaboration across the firm. San Francisco is recognized as a prominent growth city with an economic prosperity bolstered by the tech boom. Cushman & Wakefield has the ability to reach globally to investors and this sale ultimately was concluded with a European buyer.”

Gene P. Spiegelman, Vice Chairman, Head of North America Retail Services, Cushman & Wakefield said, “Cushman & Wakefield is a leader in urban high street sales in the US and Europe and this sale emphasizes the trend for recognizable high streets around the world. Kazuko is highly-sought after for her expertise in luxury retail leasing and urban high street sales. We have been fortunate to work on the best properties in the world due to our global platform and Kazuko’s strength in this sector,” Mr. Spiegelman said.

Global Flagship Store
For nearly 25 years this location has served as one of Tiffany & Company’s most important global flagship stores. The Tiffany Building is also the U.S. headquarters for Cathay Pacific, one of Asia’s largest airline carriers. It is one of the tallest buildings on Union Square and its prominent presence is heightened by its extremely valuable signage and prime retail frontage along the most visited area of San Francisco.

Access to mass transit is a key consideration for San Francisco’s retailers and office tenants. The Tiffany Building has direct access to multiple public transportation options. The Powell Street BART/MUNI station and San Francisco’s famous Powell Street cable car are within a short walk. The new Central Subway line (scheduled for completion in 2019) is also steps away.
San Francisco’s Union Square retail district is recognized as one of the world’s premier shopping destinations such as Fifth Avenue, Rodeo Drive, Michigan Avenue, Champs-Elysees, Bond Street, Oxford Street and the Ginza District.

Greenstone Realty Advisors
Greenstone Realty Advisors is a professional real estate asset management and advisory firm that is based in Leesburg, VA. Principals of the firm have combined experience of more than 70 years in all facets of real estate strategy, structure, development, oversight, acquisitions, dispositions and financial management and have worked together for approximately 60 of those years at various firms. Their clients include both foreign and domestic institutions and ultra-high net worth investors. Prior to forming Greenstone, the principals created the asset management division for a prior employer that grew to more than 18 million square feet valued at over $7 billion through new client acquisition and organic growth. To learn more, visit www.greenstonerealtyllc.com

The post Prized Gem Tiffany Building Sells in San Francisco appeared first on Cushman & Wakefield Blog.

by Guest Blogger Eli Ceryak
Senior Vice President
Cushman & Wakefield, San Francisco

The Tech Fueled Economy
In the past six years San Francisco’s tech-fueled economy has pushed rents to all-time highs, sparked a massive building boom and made the Bay Area one of the most dynamic and expensive regions in the world.

Tech companies have accounted for virtually all of this expansion over the past several years, and justifiably most of the media coverage on the San Francisco economy has focused on how technology companies have affected the real estate market and the region.

“ There’s a worthwhile conversation to be had about whether the San Francisco economy is too exposed to tech; not unlike the Rust Belt was to manufacturing, or Russia and the Middle East are to oil.”

A commonly overlooked reality is the fact that the San Francisco economy is pretty diverse. Companies like Salesforce, Twitter, Uber and Airbnb have fueled massive amounts of job creation and absorption of office space. However, if one looks at who’s occupying the 75+ million square feet of office space that is leased in San Francisco, tech companies occupy less than half of the space. So how are more traditional companies navigating a commercial real estate landscape that has been completely transformed by the booming tech companies?

Corporate Behemoths Provide Stability
In addition to the aforementioned tech stalwarts, the largest employers in San Francisco include companies like Levi’s, The Gap, PG&E, Williams Sonoma, Wells Fargo and Charles Schwab. While these companies employ large numbers of people and lease or own significant amounts of real estate, they tend to not be active players in the real estate market, and in some cases have leased or owned the same buildings for decades.

They provide an underlying base of stability for the market, but for the past decade generally haven’t been consumers of space in S.F. Occasionally, companies like Schwab have cut back on large blocks of space – although in the most recent case for Schwab that space at 215 Fremont was immediately absorbed by a 300,000sf expansion by FitBit.

While the overall trend with these types of companies is stability, recently some large users have re-evaluated how they use their space in San Francisco. McKesson, headquartered in San Francisco since the 1960’s and with roots dating back to New York in the 1830’s, is currently pursuing a sale of its headquarters building at 1 Post in the financial district. This sale would keep their corporate headquarters in San Francisco, but downsize their footprint in the building, while cashing out of a long-held real estate asset that has appreciated considerably in the last few years.

Union Bank is evaluating a similar strategy at their 400 California building in the heart of the financial district. A historic bank building overshadowed by a hulking 1960’s concrete high-rise, the structure would require a significant renovation in order to be marketable office space.

Union Bank and McKesson offer examples of long-time San Francisco companies re-evaluating their real estate needs in a changing market. However, the overall theme with similar large traditional employers in San Francisco is hunkering down in their current location and not making significant waves in the real estate market.

Who’s Active in the Market Other than Tech Companies?
The companies that are considering significant expansions in San Francisco are still, almost universally, technology companies. Of the 20 largest companies currently looking for space, 15 of them are tech companies, and all are looking for 50,000 square feet or larger. Based on typical occupancy standards, this is space for a minimum of 300 people for each of those requirements.

If we look at companies that are looking for 10,000-40,000sf – or, generally speaking, space for about 50 to 250 employees – there are a lot more non-tech companies in the market. These include financial services firms, law firms and consumer products firms, with FIRE (finance, insurance, real estate) and professional services firms comprising most of the demand.   In this size range, there are still slightly more tech companies in the market than non-tech companies, but the numbers are closer to 50%/50%.

Looking at who has signed office leases in San Francisco over the past 6 months highlights the disparity between tech and non-tech. Of 197 companies that signed leases, 86 are tech companies (44%) and 111 are non-tech companies (56%) – fairly balanced, with non-tech companies slightly outnumbering tech.

However, of the 4 million square feet leased by those 197 companies, tech companies leased 3.16 million square feet (77.5% of the total space) and the 111 non-tech companies leased 918,000 square feet (22.5%). The average tech deal was 36,750sf and the average non-tech deal was 8,270sf –in other words, the average tech company is signing a lease that is 4x the size of the average non-tech company.

 “ These stats drive home the point that in a market where space is expensive and scarce, the large tech companies are making it very hard for the more traditional businesses to compete. “

David Vs. Goliath
In the San Francisco Bay Area, tech companies are Goliath and non-tech companies are David. How does David compete?

For most of the non-tech companies, San Francisco’s expensive rents and high cost of living are huge challenges. However, there are changes happening in San Francisco’s extremely competitive commercial real estate market that help make this scenario more favorable to those non-tech businesses.

First, landlords are concerned about being overexposed to tech tenants. Landlords have reaped the rewards of tech companies causing rents to double over the past 6 years, but they also want to make sure they’re making a deal with a tenant that will be paying rent for the next 6 years. That makes established businesses increasingly attractive as tenants.

“ In many cases, we’ve seen landlords willing to offer more attractive terms to a more traditional, stronger credit business – perhaps a slightly cheaper rent, free rent or more generous tenant improvement allowance.”

Tenant Improvements
Tenant improvements are one of the biggest areas where established businesses have leverage with landlords. Despite a recent increase in vacancy, rents in San Francisco haven’t changed much – essentially they’ve stabilized after years of massive increases. Many landlords recognize that rents are very favorable to them, but also that the market has slowed down and tenants have more options, including move-in ready subleases.

In order to compete, it’s increasingly common for landlords to agree to a full turnkey renovation or to build a space out speculatively, as opposed to the typical model of a tenant improvement allowance where tenants are funding a significant portion of the build-out costs. As such there are more abundant opportunities to move into newly renovated and refreshed space without tenants having to make an investment of their own capital.

We’ve also found that the challenges of doing business in an economic boom-town can provide some leverage for tenants in negotiations with landlords. Many companies that have been in San Francisco for years and are dealing with burdens like snarled traffic and the disruption of major construction projects feel their rents should be going down, not up. For those tenants, making a compelling case to their landlord that a high rent is going to be the catalyst that forces them to downsize to a smaller space or move out of the city can help get concessions in a lease negotiation.

  “ In short, the cost of doing business in San Francisco is as challenging as ever, particularly for companies that aren’t in the tech space. “

Companies that understand the changing nature of the commercial real estate market, and what makes them desirable as a tenant, can position themselves to take advantage of increased motivation by many landlords.

Guest Blogger Eli Ceryak is a Senior Vice President and commercial broker for Cushman & Wakefield San Francisco. He represents a broad and eclectic client base, ranging from startup growth-stage tech companies to established Fortune 500 firms. Eli earned his undergraduate degree from Harvard University and received his Masters of Business Administration from the Walter A. Haas School of Business at University of California Berkeley.

The post How Non-Tech Companies Get By in Tech-Frenzied San Francisco appeared first on Cushman & Wakefield Blog.

TMG Partners Buys 1330 Broadway in Oakland
TMG Partners, one of the San Francisco Bay Area’s largest mixed-use property developers, announced their purchase of 1330 Broadway in Oakland. TMG purchased the property from Zimmerman Investments.

1330 Broadway is an 18-story, 300,000 square foot building with immediate access to BART at Oakland City Center’s 12th Street Station.  The building was built in the International Style of architecture, a modernist movement that is also represented by the iconic design of One Bush St. in San Francisco and Lever House in New York City.   TMG will conduct a major renovation of the building interior, including a new main lobby and entrance, new common area finishes, and major elevator and building systems modernization.

Additional upgrades to the property include amenities such as enhanced bike parking, conference facilities, creation of an art program, and a new retail tenant to add to the extensive food and cafe culture in the burgeoning City Center submarket. “TMG looks forward to the opportunity to restore and modernize this architectural gem. We believe that the amenities, views, and planned renovation will make this one of the top choices for office tenants in Oakland”, said TMG partner and development manager Adam Chall.

“TMG has been active in several cities in the East Bay, including Oakland, for decades and we look forward to restoring this important part of Oakland’s history as a home for local companies and culture,” said Michael Covarrubias, chairman and CEO, TMG Partners. John Dolby and Dane Hooks of Cushman and Wakefield’s Oakland office represented both parties in the transaction. They were also retained by TMG to handle the leasing assignment.

Cypress Equities Names Cushman & Wakefield as Exclusive Listing Agent for 6X6
Firm’s Power Trio Continues to Transform San Francisco’s Retail Landscape

Cushman & Wakefield is Exclusive Leasing Agent for 6X6 in The City
SAN FRANCISCO, CA, September 19, 2016 – Cypress Equities announced today that Cushman & Wakefield has been named the exclusive leasing agent for 6X6, a bold new development encompassing more than one third of the block between 5th and 6th Streets, in the heart of San Francisco’s Mid-Market retail corridor.

Led by Vice Chairman, Kazuko Morgan and Senior Managing Directors, Pamela Mendelsohn, and Vikki Johnson, the Cushman & Wakefield team is spearheading commercial leasing of 6X6, the largest retail development in San Francisco since the Westfield San Francisco Centre.

6X6 comprises more than 250,000 square feet of multi-level retail over six levels, with a stunning glass exterior. Strategically located where Union Square, the convention center, and the hotel and theater districts all converge, this unique urban project offers expansive floor plates, crowned by an extraordinary upper level with an inside terrace featuring glorious city views.

Construction of 6X6 is on track to be completed by year end 2016 with a Grand Opening of Holiday 2017. 6X6 is the latest development by Cypress Equities.
“With this significant project it is important that we have an experienced team in place to secure the best-fit tenants,” said Chris Maguire, CEO of Cypress Equities. “Cushman & Wakefield’s retail experts will lead the effort to secure dining and retail operators that will be a contemporary fit for the location, and will enhance the ambient experience for visitors,” Mr. Maguire said.

Cushman & Wakefield Brokers Seal $34 Million Deal in San Jose
San Francisco’s Steve Hermann and Eric Fox of San Jose represented TA Associates Realty of Boston in the recent sale of two San Jose office buildings for $34,150,000 to Bay Area developer TMG Partners. 2460 and 2480 North First Street total 148,000 square feet (sf).

The two office/R&D buildings were completed in 1986. One of the buildings’ tenants is Google, which occupies 37,000 sf at 2460 North First Street.

The asset is positioned directly across First Street from a 43-acre development parcel and also known as the North First Campus, which was purchased by Apple in August 2015 for a reported $138 million. Apple has also bought two other major parcels along North First Street in the past six months, according to TMG Partners.

The two properties’ location is in a part of Silicon Valley that’s also home to major tech companies such as eBay, Cisco, Broadcom, Philips, Samsung, Qualcomm, and Texas Instruments. The site offers quick access to I-880, Highway 101, SR 237 and Montague Expressway, is within minutes of the Mineta San Jose International Airport, and is a short distance from the Component station on the Santa Clara Valley Transportation Authority’s light rail system.

Cushman & Wakefield’s Northern California Capital Markets Team
Advises on Sale of Prominent Peninsula Asset
Cushman & Wakefield’s Northern California Capital Markets team was the exclusive advisor in the recent sale of 777 Mariners Island Boulevard, located along the San Francisco Peninsula in San Mateo, CA. Situated in heart of San Mateo’s business and retail center, the seven-story, 187,372 square foot office building was purchased by Wafra Investment Advisory Group Inc., and is leased to a diverse tenant roster, including Keynote Systems/Dynatrace, IXL Learning and AlphaDetail. The seller was Cornerstone Real Estate Advisers.

This unique property, located in what is arguably one of the top software markets in the region, recently underwent an extensive renovation which transformed the asset into one of the most desirable suburban office buildings in San Mateo County. The renovation included a complete lobby and auditorium renovation, upgraded fitness center, new roof, along with common area corridor and restroom upgrades.

San Francisco’s Historic Landmark Phelan Building Sells for $374 Million
Cushman & Wakefield represented Thor Equities in the $374 million ($1,256 per square foot) sale of San Francisco’s historic Phelan Building at 760 Market Street in the city’s Union Square district. Additionally, a New York-based team represented the building’s buyer, a private family owned entity with global holdings.

Cushman & Wakefield’s Retail Vice Chairman Kazuko Morgan and Executive Director Seth Siegel represented New York-based Thor Equities. Senior Director Joshua Goldman represented the buyer.

The 11-story, 250,000-square-foot building is fully leased to tenants such as tech startups Obvious Ventures and Medium, both led by Twitter co-founder Ev Williams, and personal finance company Credit Karma. The building’s 52,000 square feet of retail space includes Walgreens, Starbucks and Orogold.

Union Square’s largest building that is not a department store, the Phelan Building was built in 1907 by former San Francisco Mayor James Phelan, whose family owned the property for nearly a century. The landmark asset in the heart of Union Square’s retail corridor includes prestigious neighbors such as the Four Seasons Hotel, Four Seasons Residences and Barneys New York.

“This is the first time ever that 760 Market Street has been openly on the market,” Morgan said. “Although there have been a few trades investor-to-investor, they were always done off market, and it is rare that a property of this magnitude becomes available. The buyer believes the asset’s prime location combined with strong market fundamentals make this acquisition a great long-term investment.

“In our experience, many buyers, whether they are prominent families or reside off-shore, do not want a commodity building,” Morgan continued. “If they are going to acquire an asset, it has to be special and impactful. The Phelan Building is one of the most recognized buildings in San Francisco and is located in a neighborhood surrounded by world renowned retailers and internationally recognized accommodations.”

Added Seth Siegel, “Thor Equities has done a fantastic job converting an iconic building with over 300 smaller tenants on the upper floors and replacing them with full-floor tenants. The building has also been consistently occupied by very strong retailers on the ground floor. 760 Market is now considered one of the top creative buildings on the West Coast and routinely generates some of the highest rents in San Francisco.”

Cushman & Wakefield Director Blake Peterson has been retained to lead property management for the Phelan Building.

C&W’s McManus, Coons and Dowling Advise on Huge Industrial Facility in N. Cal
Dermody Properties is developing a 622,726-square-foot industrial facility at 2131-2301 E. Louise Ave.

“Lathrop is a perfect fit for one of our LogistiCenter developments,” said Dermody Properties West Region Office Partner George Condon. “Future customers will benefit from an outstanding transportation system, and the facility’s prime location in the Central Valley. We look forward to beginning construction on LogistiCenter at Lathrop and are continuing to pursue additional acquisition and development opportunities in the Greater Bay Area.”

Construction is underway with an expected completion date of May 2017.The facility will feature 36-foot clear height, 96 dock doors, 126 trailer parking stalls and 329 car parking stalls with the possibility of additional parking for e-commerce operations.It is located 1.5 miles from Interstate 5 and 12 miles from the Port of Stockton.

John McManus, John Coons and Mark Dowling of Cushman & Wakefield are representing the development on behalf of Dermody Properties.

Cushman & Wakefield Advises on 143,000SF Lease in Pleasanton
Locally-based mortgage application software company Ellie Mae has signed a lease to occupy an additional 143,515 square feet at 4430 Rosewood Dr. in Pleasanton, CA. Commonly referred to as Building 3, the six-story, 213,943-square-foot building was constructed in 1988 within Rosewood Commons, a six-building, 1+ million-square-foot campus located in Alameda County’s Hacienda Business Park submarket.

Rosewood Commons is a premier East Bay business facility featuring abundant, lush outdoor green spaces, soft seating collaboration areas, bocce, basketball, volleyball, putting green and a fire pit. The asset also offers an on-site conference center with auditorium, expansive meeting rooms and an on-site fitness facility with showers and lockers.

Cushman & Wakefield Senior Director Tenant Advisory Group, Mitch Hertz brokered the deal on behalf of Ellie Mae.

Fireside Hearth & Home Renews 72,005 SF in Northgate Industrial Park
Manufacturing Company Stays in Sacramento
Fireside Hearth & Home, a manufacturing company headquartered in Lakeville, MN, renewed its 72,005-square-foot lease at 3800 Pell Cir. in Sacramento, CA.

The 108,000-square-foot industrial building delivered in 1981 on 5.28 acres within the Northgate Industrial Park in Sacramento’s Natomas/Northgate Industrial submarket.

Matt Cologna of Cushman & Wakefield represented the landlord, Phelan Development Co., in the renewal.

Guitar Center Leases 14,500 SF in Dublin
Guitar Center leased an entire 14,500-square-foot pad site within Fallon Gateway Shopping Center located at the northwest corner of Hwy. 580 and Fallon Rd. in Dublin, CA.

The 379,053-square-foot shopping center is located in the middle of the Tri-Valley Trade Area, accommodating the cities of Dublin, Pleasanton and Livermore. Guitar Center expects to open its new location this quarter.

Matthew Kircher and Meaghan Haley of Cushman & Wakefield in Burlingame and Nicole Lyon of Cushman & Wakefield in Walnut Creek represented the landlord, Charter Properties, Inc.

Cushman & Wakefield Advises on $47 Million Dollar Sale in Pleasanton
Cushman & Wakefield’s Walnut Creek office recently represented Workday, the human resources management services firm, in the sale of a 209,000 square foot office property at 5928 Stoneridge Mall Road in Pleasanton CA.  Owned by Safeway, Inc.,  Workday purchased the asset for  $47 million.

The purchase is the second office purchase in the Stoneridge Mall area by publicly traded Workday since March, when the company paid $14,525,000, for a 60,000 square foot four-story building at 6000 Stoneridge Mall Road owned by Safeway subsidiary Vons Cos. In addition to the two acquisitions, Workday is under construction to build a 410,000 square foot “development center”. This development and acquisitions affirm Workday’s growing commitment to Pleasanton as its global headquarters. It has the best location being at the intersection of I580/680 and at the Pleasanton BART station.

According to Cushman & Wakefield’s Sabrina Hughes, Executive Vice President: “ These are significant purchases for Workday and continues to highlight tech companies major investments in the East Bay where you can, live, work and play.”

The transaction was spearheaded by Cushman & Wakefield’s Sabrina Hughes, GOS and Ben Pugh CFIB.

Dubs Draft Cushman for NBA Chase Arena
Earlier this summer, Cushman & Wakefield, Northern CA joined the “all-star team” working on Chase Center and the Warriors’ new sports and entertainment complex in the city’s Mission Bay neighborhood.

Cushman & Wakefield’s San Francisco Retail Team was selected as the leasing agent responsible for developing more than 100,000 square feet of retail and restaurant space at Chase Center. Retail Vice Chairman Kazuko Morgan, Managing Director Rhonda DiazCaldewey and Director Kelly Vinson will lead the effort.

“We’ve put together an all-star team for the design, construction and operation of this spectacular destination in Mission Bay,” said Rick Welts, president of GSW Arena LLC. “Cushman & Wakefield will play a vital role.”

“The Cushman & Wakefield Retail Team is delighted to be an integral part of the Warriors’ plan, which will be a boon to San Francisco and have a positive economic impact on our entire region,” said San Francisco’s Rhonda DiazCaldewey.

Kazuko Morgan added: “We are extremely proud to have the opportunity to work with what we consider the best professional sports franchise in the world.”

Are you a Cushman & Wakefield Broker and would like to have your deal featured next month? Simply send an email to mike.kirner@cushwake.com and provide all relevant information.

The post Done Deals – Recent Cushman & Wakefield Transactions & Victories appeared first on Cushman & Wakefield Blog.

90 Miles
On September 10th, 2016, Cushman & Wakefield broker Ted Gallagher embarked on a 90-mile trek around Lake Tahoe in a commitment to raise money to support the nation’s post-9/11 wounded veterans. Inspired by his dad’s legacy of surviving three tours of active duty in the Pacific Theater during World War II, and with his lifelong example of giving back, Ted set out on his mission to make a difference. A very big difference.

“I am going to push myself,” said Gallagher, whose initial target of raising $10,000 has now exceeded $100,000.

Gallagher completed the eight-day, 90-mile trek around Lake Tahoe, dressed in a pair of lightweight cross trainers, carrying a knapsack of water, snacks and an emergency kit, and sporting a T-shirt with a logo: The 72 for the 22 @ 62, with numbers referring to the lake’s perimeter miles, its elevation, and the 22 veterans, who on average commit suicide each day.

The San Jose Mercury News recently featured Ted and his moving story.

LAFAYETTE — Ted Gallagher has taken the U.S. Marines’ semper fidelis creed of being “always faithful” to heart.

A father’s legacy of surviving three tours of active duty in the Pacific Theater during World War II, and with his lifelong example of giving back, has inspired the Lafayette resident to remain steadfast in a commitment to raise money to support the nation’s post-9/11 wounded veterans.

His devotion is palpable to his wife Courtney, who describes his signature response to encountering a homeless vet or a related image on television.

“There’s this very deep, deep bond,” she says, “to him, they’ve made the ultimate sacrifice.”

Their property prominently features a pole with American and Marine flags — and a guesthouse, known by word-of-mouth, to be a place for an out-of-town veteran to stay, gratis.

A few weeks ago, Gallagher, 54, met such a vet on a San Luis Obispo street, thanked him for his service and rushed off to procure food, cash and clothing for the homeless man.

And on the morning of Sept. 10, Gallagher  set off on a roughly eight-day, 90-mile trek around Lake Tahoe, clad in a pair of lightweight cross trainers, carrying a knapsack of water, snacks and an emergency kit, and sporting a T-shirt with a logo: The 72 for the 22 @ 62, with numbers referring to the lake’s perimeter miles, its elevation, and the 22 veterans, who on average commit suicide each day.

Enjoy Entire Story Here:

Other Breaking C&W Northern California News

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Three Drastic Swings
San Francisco is the most volatile office market in the United States. This volatility is evident by drastic swings in 3 commercial real estate benchmarks: Office Vacancy Rate / Supply, Corporate Tenant Demand and Rental Rate Pricing.

” Extreme pricing fluctuations and corresponding negotiation leverage swings often put the San Francisco corporate tenant at risk, as the office tenant’s space solutions don’t always align with business objectives. Unmitigated, this disconnect can negatively affect the company’s financial health. “

A tenant, for instance, who must enter the market out of the need for expansion space or because of a lease expiration date near a peak market could find itself in financial harm’s way. Namely, a potential doubling in monthly rent spend, limited or no contraction options and high construction costs to improve space can all strain a company’s business plan.

The illustrations below provide a historical perspective:

Tenants in the Market: Pondering Longer
To further elaborate on this point, Cushman & Wakefield’s Tenant in the Market List indicates that so far in 2016 , tenants spent an average of 245 seeking an acceptable commercial space solution.

In 2015, the average time was reduced substantially to 219 days; which was preceeded by only 108 days in 2014. Clearly, today’s tenants are pondering their commercial space decisions longer.

The chart below suggests that San Francisco’s corporate tenants are paying closer attention and taking longer to make these impactful leasing decisions. The corporate tenant is becoming more risk averse. We predict that moving forward, the aggregate time spent making these critical leasing decisions will thusly increase by up to 15 % as we move into 2017.

How the San Francisco Office Leasing Market Really Works
San Francisco’s average office rent and the NASDAQ have trended
together for 20 years now. This comparison……………………

Back to the Future
What does the future hold for San Francisco office tenants and how will you (the corporate tenant) navigate this correcting market?

“Landlords are seeking to maintain peak market pricing and lock-in longer
term leases, while San Francisco office tenants are trying to avoid the same. The data demonstrates that this dichotomy has led to a leasing stalemate due to hesitancy for compromise from both sides.”

Getting to the market early to explore all potential occupancy solutions will yield the best, fully-informed outcome that supports your company’s business goals.

This article is presented by Cushman & Wakefield’s Tenant Representation Team. For more information, please contact Kevin Brennan – kevin.brennan@cushwake.com

The post San Francisco Tenant 360 – How Will Corporate Tenants Navigate a Volatile Market appeared first on Cushman & Wakefield Blog.

Silicon Valley VC’s Pay Highest Rent in US
Bloomberg.com, September 19
Located in Facebook Inc.’s hometown of Menlo Park, California, Sand Hill Road has the most expensive office space in the U.S., even as the startup market moderates, according to data from commercial real estate firm Cushman & Wakefield. Robert Sammons & Jeff Cushman are quoted.

Fivepoint Names Cushman & Wakefield Listing Agent for SF Shipyard  
The Registry, September 15
FivePoint Holdings recently announced that Cushman & Wakefield has been named the exclusive leasing agent for approximately 5 million square feet of commercial space as part of the second phase of development at The San Francisco Shipyard, a multibillion-dollar waterfront community along San Francisco’s southeastern shoreline. Led by Managing Principals Mike Moran and J.D. Lumpkin, the Cushman & Wakefield team is spearheading commercial leasing efforts, attracting innovative office, life-science and research and development occupiers

Seasoned CRE Veteran Greg Fogg Joins Cushman & Wakefield
Costar, September 21
Greg Fogg, a well known San Francisco Bay Area commercial real estate broker has joined Cushman & Wakefield. The 26 year industry veteran has extensive experience in both landlord and tenant representation. Among other prominent brand names, Mr. Fogg’s past clients include Levi Strauss & Co, Virgin American Airlines, Mizuho Bank, Matthews Asia Funds, ARUP and Piper Jaffray.

Tiffany Building Trades Hands 
CPE Executive, September 27
A European investor has purchased the iconic Tiffany & Co. building in San Francisco. The 11-story property is located at 360 Post St. on Union Square. Kazuko Morgan and Seth Siegel advised on the transaction.

European Investor Buys Tiffany Bldg in SF

thenewsfunnel.com, September  19
Seth Siegel, executive managing director with Cushman & Wakefield, told Commercial Property Executive. “People buy this kind of real estate not just because its iconic real estate but because when you see properties like this—these rare properties in areas like Union Square—they tend to have a history of outperforming the average type of investment.”

Greg Fogg Has Joined Cushman & Wakefield
The Registry, September 15

Silicon Valley Office Campus to Add Office & Retail
CPE Executive, September  7
Washington Holdings, a Seattle-based institutional commercial real estate investment firm, is revamping its 46-acre Mission Park office campus in Santa Clara by adding 24,000 square feet of retail and a five-story, 175-room extended-stay hotel to the property. Cushman & Wakefield’s Todd Beatty to lead retal leasing efforts.

C&W is Listing Agent for SF Shipyard
bisnowsf, September 21

“The addition of commercial in the Shipyard space will draw a variety of businesses…having a significant long-term positive economic impact on the community,” says FivePoint regional president Kofi Bonner.

The Shipyard is a mixed-use development that will create thousands of homes, a commercial district including offices, makerspaces, research facilities, restaurants and shopping in new and reclaimed heritage buildings along with planned acres of public space and sports grounds.

SETA Extends Full-Bldg. Lease in Sacramento
Costar, September 30
Sacramento Employment and Training Agency (SETA) will maintain its location at 925 Del Paso Blvd. in Sacramento after agreeing to renew its full-building lease with property owner, McCuen Properties. Cushman & Wakefield’s Ron Thomas, Kevin Partington Bruce Hohenhaus and Chris Schwarze represented the landlord.

Santa Rosa Malls Are Changing
North Bay Business Journal, September 26
Santa Rosa’s two malls have long been premier retail spaces in the county, and construction of the 31,000-square-foot outlet represents the latest step in reinvigorating the 54-year-old center. In the past six years, Coddingtown has added a Whole Foods, a Target and a string of restaurants on its front face on Guerneville Road. Garrick Brown is quoted.

California Dreaming for Chinese Investors
Business Recorder, September 25
Chinese companies shelled out a record $15 billion last year in the US and that figure could more than double in 2016, according to research firm Rhodium Group and the National Committee on US-China Relations . Cushman & Wakefield’s Northern California research is cited.

Menlo Park Has Highest Office Rents
bisnow SF, September 21
Sand Hill Road in Menlo Park is the most expensive office rental submarket in the country, with Silicon Valley and Manhattan home to the submarkets that dominate the nation’s highest asking rents, according to a recent report by Cushman & Wakefield.

VC’s Spend More than Bankers
CB Insights.com, September 26
Here’s more proof that disruption is not cheap. Graph shows how Silicon Valley VCs pay more for their Sand Hill Road digs than East Coast finance types. Cushman & Wakefield’s Northern California research is cited.

Office Deal Award Winner: U.C. Santa Cruz Scotts Valley | Structures
Silicon Valley Business Journal, September 22
The Santa Cruz-area commercial real estate market hasn’t exactly seen much action during the current boom. So U.C. Santa Cruz’s lease in early May of about 130,000 square feet at Scotts Valley’s Enterprise Technology Center is a milestone for the market. Drew Arvay of Cushman & Wakefield is among winners.

Everything in Moderation
The Registry, September 21
“It’s still a healthy market, but we do have a lot of new construction underway [and] a lot of construction planned,” said Robert Sammons, regional director of Bay Area research at real estate brokerage Cushman & Wakefield in San Francisco. “We still see rather steady growth but just not at the record levels we’ve seen over the past six or seven years. This is the new reality setting in.”

220 Post in San Francisco Sells
The Registry, September 21
City Center Realty Partners, LLC (CCRP), a San Francisco-based real estate investor and developer, in a partnership with Angelo, Gordon & Co., has announced its acquisition of 220 Post Street. Kazuko Morgan of Cushman & Wakefield was retained to help lease the building.

 Power Women Honored at Sir Francis Drake in SF
bisnow SF, September 22
Bisnow recently honored the Bay Area’s 50 most powerful women in commercial real estate along with 300 friends, supporters and sponsors at the Sir Francis Drake Hotel in San Francisco. Rhonda Diaz-Caldewey; Margaret Duskin  (in photo) were among the elite and well deserving winners. Also in attendance were Cushman  & Wakefield’s Danny Pickard, Mary Davis and Mike Kirner.

Milpitas Office Complex Sold
The Registry, September 20
A joint venture of Westport Capital Partners and San Francisco-based Cannae Partners has bought the seven-building 466,000 square foot Oak Creek Business park in Milpitas. The listing agents included Eric Fox and Steve Hermann of Cushman & Wakefield.

Cypress Equities Names C&W to List 6×6 a Major New Retail Development
The Registry, September 20
Led by Vice Chairman, Kazuko Morgan and Senior Managing Directors, Pamela Mendelsohn, and Vikki Johnson, the Cushman & Wakefield team is spearheading commercial leasing of 6X6, the largest retail development in San Francisco since the Westfield San Francisco Centre.

Cushman & Wakefield Represents Huge Industrial Complex in N. Cal
The Registry, September 19
Dermody Properties, a national industrial real estate owner-operator headquartered in Reno, Nev., recently announced it will develop a 622,726-square-foot industrial facility in Lathrop, California. John McManus, John Coons and Mark Dowling of Cushman & Wakefield representeded development.

Real Estate Developers Stake out Sonoma Co. Warehouse Turf
N. Bay Business Journal, September 19
Warehouses are hot merchandise in Sonoma County these days. Two commercial-land sales north of Santa Rosa totaling about 50 acres were purchased by developers with deep local history recently. Cushman & Wakefield’s Steven Leonard, Trevor Buck and Brian Foster brokered the leases.

Global Leader in Intravascular Imaging Renews Lease in Rancho Cordova – Costar.com, September 11
Sean Mullen, Kevin Partington, Chris Schwarze and Bruce Hohenhaus of Cushman & Wakefield brokered the renewal on behalf of the owner.

Investors Buy Retail Building as Saks Fifth Avenue Men’s Store nears departure
SF Business Journal, September 21
The retail building that is home to the Saks Fifth Avenue Men’s Store in San Francisco’s Union Square has been sold, about a month before the tenant’s lease expires. Kazuko Morgan to lease building.

Large Warehouses Roll into Napa, Solano Counties
North Bay Business Journal , September 11
Construction hums along on 1.5 million square feet of warehouse space in Napa and Solano counties to meet demand from companies needing to store and move a large amount of North Coast wine and other goods coming into and going out from the San Francisco Bay area. Cushman & Wakefield’s Walnut Creek Managing Principal Brooks Pedder is featured.

Sublease Growth Tapers
The Registry, September 21
Office space available for sublease has continued to grow in San Francisco, but at a more modest pace than late 2015 and early 2016. It suggests the possibility of a “tech wreck” predicted by some observers doesn’t appear likely in the immediate future. Cushman & Wakefield’s Northern California research is cited.

Disrupt CRE Holds Annual Meeting
disruptcre.com, September 15
Technology is quickly changing the landscape of how the CRE industry operates. Top real estate decision makers around the world convened on September 15 at DisruptCRE to find out what’s here now, and what’s next in CRE tech. Cushman & Wakefield veteran Margaret Duskin was among top featured speakers.

Shipyard Industrial to be Leased by Cushman & Wakefield
SF Business Journal, September 21
The San Francisco Shipyard, the largest single commercial real estate project approved in the city, has hired real estate brokerage Cushman & Wakefield as it seeks tenants for 5 million square feet of planned offices, research facilities and commercial space in the Hunters Point neighborhood. JD Lumpkin and Mike Moran are featured.

Saich Way Station in Cupertino Sells
The Registry, September 21
Saich Way Station, a 15,525-square-foot multi-tenant retail center located less than one mile from Apple Inc.’s headquarters in Cupertino, California has been sold. The $16.5 million sales price equates to $1,063 per square foot. Cushman & Wakefield’s Tenny Tsai represented buyer.

Walnut Creek New Safeway to Open at Orchards
East Bay Times, September 18
“We’ve had exceptional interest in the project from both national and regional tenants, and we’re excited to get the project open this year and get it going,” said James Chung, an executive managing director with Cushman & Wakefield.

Institutional Investor Partners Acquire Walnut Creek Office Building
Costar, September 21
500 Ygnacio, a four-story, 105,495-square-foot office property at 500 Ygnacio Valley Rd. in Walnut Creek, CA was recently sold.  Built in 1987, the office property was 86% leased at the time of sale. George Eckard, Adam Lasoff and Seth Siegel of Cushman & Wakefield represented the seller.

San Jose City Council to Grant Multimillion $ Project
Silicon Valley Business Journal, September 22
This November, San Jose residents will be asked to tax themselves when they vote on a sales tax to fund the BART extension and road improvements throughout Santa Clara County. Cushman & Wakefield Northern California research is cited.

OTHER BREAKING NEWS: DONE DEALS & OTHER VICTORIES – RECENTLY CLOSED TRANSACTIONS

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