ViewRay Inks Mountain View R&D Lease Deal

Comparable details:

Address:  815 E. Middlefield Road, Mountain View, CA

Landlord:  Boston Properties

Tenant:  ViewRay

SF Leased:  25,518

Pricing:  $2.85 /psf NNN

Type:  R&D

Term:  62 Months

Office, Industrial Markets in U.S. Strengthen in Q3

By Michael Gerrity

According to data from CBRE Group, office vacancy rates declined in most major U.S. markets during Q3 2014. Twelve out of 13 major metro office markets saw vacancy fall and 11 markets saw average asking rents increase as tenants’ appetite for space continues to grow.

“Office space demand is expected to remain strong with continued improvement in the U.S. economy and steady expansion in office-using employment. Demand growth, coupled with the subdued national development cycle, bodes well for vacancy declines and sturdy rent growth,” said Sara Rutledge, Director of Research and Analysis, CBRE.

The U.S. industrial market also had healthy activity in Q3 2014, according to CBRE, with availability declining in 10 of the 12 major markets. Third-party logistics firms continued to expand nationally, with many markets reporting robust demand driven by that sector.

“The U.S. economy continues to expand, with employment rising and exports growing faster than expected. Q3 is predicted to be a strong quarter. This will help drive industrial space demand nationally,” said Jared Sullivan, CBRE Senior Economist.

U.S. Office Data:

Denver, which has seen steady demand from energy and business services firms, led the way in vacancy declines, with a vacancy rate drop of 80 basis points (bps) during Q3 2014. Despite this, asking rents slipped over the quarter as occupancies were taken in high-quality space, which has yet to be replenished with new deliveries.

  • New York saw its vacancy rate drop 60 basis points.
  • Atlanta, Dallas/Ft. Worth and Seattle all posted 50 basis points declines in Q3 2014.
  • Washington, D.C. was the lone market with flat vacancy over the quarter, holding at 15.2 percent since Q2 2014.
  • Boston posted the strongest quarterly average asking rent growth, at 4.0 percent on a dearth of availability in quality space and continued strong demand from tech and life sciences firms. San Francisco was second, with 3.3 percent growth in Q3 2014.
  • Office development remains subdued nationally, but many of the strongest markets are seeing increased pipeline activity. Houston continues to lead the pack, with 17.3 million sq. ft. underway to-date in Q3 2014.

Q3-2014-Preliminary-Office-Stats.jpg

U.S. Industrial Data:
The Texas markets posted the largest quarter-over-quarter availability rate decreases, with Dallas/Ft. Worth and Houston down 50 bps and 40 bps, respectively. Dallas/Ft. Worth benefited from expanding logistics companies, which are taking advantage of the strong local infrastructure, while Houston continued to ride the expanding energy boom occurring throughout the nation.

  • Although rents still remain below prerecession levels in most markets, rents increased in nine of the 12 major markets during Q3 2014, a reflection of improving market fundamentals.

Read entire World Property Channel article here.

Los Altos-based Box Takes Down New Crossing 900 Project in Downtown Redwood City

Comparable details:
Address:  900 Middlefield Road, Redwood City, CA

Landlord:  Kilroy Realty Corp/Hunter Storm LLC (joint venture)

Tenant:  Box.com

SF Leased:  334,000

Pricing:  $4.40 /psf NNN (est.)

Type:  Class A Office

Term:  144 Months

Box will take over the two-building complex in phases, occupying the first 226,000 square foot building in the third quarter of 2015 and the second 108,000 square foot building in early 2017.

Mosser Companies Takes Down 6-Story Mixed Use Building for $15.4M

Address: 1029 Geary Street, San Francisco, CA

Seller:   Urban Green Investments

Buyer:   Mosser Companies

RBA SF: 38,184 SF building

Lot size:  0.21 AC (9,147 SF)

Selling price: $15,450,000 ($404.62/SF )

Type:   Apartment – Mixed Use

The property is a 58-unit, 6-story retrofitted brick building, comprised of 22 two bedrooms, 32 one bedrooms, 4 studios and a one story wood frame building that is currently leased to a restaurant.

Alexandria Real Estate and Uber Partner Up to Acquire Two Development Sites in Mission Bay

Alexandria Real Estate Equities, a roughly $9.3 billion total market capitalization real estate investment trust based in Pasadena, CA, has formed a partnership with Uber Technologies to acquire two development sites in San Francisco’s Mission Bay.

The parcels, located at 1455 and 1515 Third St., will support a 422,980-square-foot ground-up development for Uber as the San Francisco-based ride sharing service looks to expand its corporate headquarters.

The strategic partnership will see Alexandria maintain majority ownership, owning 51% compared to Uber’s 49%. Alexandria originally sold the parcels to saleforce.com back in 2010.

The development is in concurrence with a 15-year lease for Uber. The sale also included approximately 425 existing parking spaces, plans, permits and piles.

Read entire Costar article here.

 

 

555 Sutter Street, SF Changes Hands for $7.5M

Address: 555 Sutter Street, San Francisco, CA

Seller:   Brothers International Holding Corp.

Buyer:   Rich State – Arkansas Inc.

RBA SF: 20,765 SF building

Lot size:  0.14 AC (6,081 SF)

Selling price: $7,350,000 ($353.96/SF )

Type:   Office – Mixed Use

 

This building was approximately 50% occupied, with some storefront retail on the ground floor.  The Union Square submarket has been hot recently with a solid mix of residential, hotel, and office occupancy rates all remaining strong.

Essex Property Trust Purchases Downtown San Mateo Land for Development

Essex Property Trust (NYSE:ESS) purchased 1.2 acres of land on 5th Street in downtown San Mateo from the Sand Hill Property Co. in a step to develop the property.  The space is currently a parking lot situated between Central Park Plaza and the Central Park tennis courts and baseball stadium.  Essex plans on building a 117-unit mixed use building which promises to be the largest development in downtown in quite a while.  According to several sources, residents and business owners have voiced concerns especially considering the already-tight parking situation in downtown.  This article was posted back in January of this year detailing the development and the concerns:  “San Mateo Mulls Biggest Downtown Development Since 2003″.

Apparently Essex felt confident enough in their ability to overcome these concerns, since they purchased the land for $10,800,000 or approximately $206/per sq foot on the dirt.  San Mateo has certainly upgraded their image in the past decade with the introduction of “Theatre Way” in the heart of downtown and now the halfway-completed Bay Meadows project just south on the Caltrain track.

 

Kidder Mathews Q2 2014 Peninsula Industrial Report

Things continue to look good from a landlord/seller perspective as inventory reaches new lows and demand continues to drive prices and lease rates upwards.  SBA and conventional interest rates are certainly helping on the buy side of things.  Here’s an excerpt from the report:

The San Francisco Peninsula saw 606,574 square feet of positive net absorption this quarter, and 1,159,864 square feet of positive gross absorption. The industrial market continues to stay productive with deals of all sizes completed throughout the San Francisco Peninsula in the second quarter of 2014. San Mateo County experienced minimal occupancy losses as well, which is not due to a lack of demand on the Peninsula, but rather a shortage of quality available space.

Read entire KM report here:  industrial-market-research-peninsula-2014-2q

 

 

Kidder Mathews Q2 2014 San Francisco Office Report

San Francisco remains the hottest city in the nation for commercial real estate. The 714,000 s.f. Salesforce lease at 415 Mission Street (formerly known as Transbay Tower and renamed Salesforce Tower) signed during the second quarter is the largest office lease in San Francisco history. Massive pre-leasing deals such as this, along with continuing investment and redevelopment activity, show that both tenants and institutional investors still see value and potential upside in San Francisco despite the huge market gains of the past few years. It is clearly their belief that the market fundamentals are strong enough to support current rents and sales prices into the future.

Read entire report here:  office-market-research-san-francisco-2014-2q

KM Helps Ink Retail Ground Lease in San Jose

Comparable details:

Address:  2284 Monterey Road, San Jose, CA

Landlord:  RI San Jose, LLC

Tenant:  Taco Bell

SF Leased:  29,798

Pricing:  $3.59 /psf NNN

Type:  Retail – Ground Lease

Term:  180 Months

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