California Markets Dominate Fall/Winter New Office Deliveries
Fall and winter will be busy for California’s biggest office markets. Technology, advertising, media and information tenants are driving demand in California, and 13M SF will be added to the office stock through the end of the year, according to a CommercialCafé report based on Yardi Matrix data. California makes up nearly a third of the nation’s new 48M SF of office. The Bay Area will deliver more office than New York with its expected delivery of 7M SF through winter. New York is expected to deliver 5.1M SF of office, the most of a single city.
Check out how California cities stack up to office deliveries expected through winter.
San Francisco
Total Office To Deliver: 3.7M SF
Total Buildings: 8
Largest Project: Salesforce Tower (1.4M SF)
San Francisco is the second-most-active city nationwide after New York City and the most active for office in the state. While San Francisco is adding much needed office space, the new office is delivering nearly or fully pre-leased. Boston Properties' Salesforce Tower, San Francisco’s largest tower, will deliver in early 2018 with much of the office pre-leased. Salesforce is expected to take up a bulk of the 1.4M SF. Jay Paul Co.'s 181 Fremont, which leased its entire 436K SF of office to Facebook, and Lincoln Property's 350 Bush, with Twitch taking up 185K SF, about half of the building's 360K SF of office space, also are nearing completion.
Cupertino
Total Office To Deliver: 2.9M SF
Total Buildings: 1
Largest Project: Apple Park (2.9M SF)
While Apple officially started moving employees into its new Apple Park in Cupertino earlier this year, the entire office complex is expected to officially deliver in October. About 13,000 employees will occupy this office. It is Cupertino’s only large office project to deliver by year’s end. The campus has been in the works since 2014.
Irvine
Total Office To Deliver: 1.8M SF
Total Buildings: 3
Largest Project: Five Point Gateway/Broadcom Campus (1M SF)
Five Point Holdings bought the Broadcom campus in August for $443M in a buyback of Broadcom’s under-construction office park. Broadcom is the largest tenant with 660K SF and a 20-year lease. Five Point Gateway is expected to deliver in November. FivePoint, the company's development arm, also may build up to 1,000 housing units near the office complex. Another large project from Trammell Crow, The Boardwalk, delivered in September.
Sunnyvale
Total Office To Deliver: 1.6M SF
Total Buildings: 5
Largest Project: Central & Wolfe (883K SF)
Jay Paul Co. is developing Sunnyvale’s largest office complexes: Central & Wolfe, leased to Apple, will deliver in January and two buildings at Moffett Towers II will deliver in October. These three projects total nearly all of the office square footage expected to deliver in the coming months in Sunnyvale. With its Apple Park and Central & Wolfe project, Apple will occupy a little over half of the new office space in the Bay Area.
Santa Clara
Total Office To Deliver: 1.1M SF
Total Buildings: 4
Largest Project: Santa Clara Square (1.1M SF)
All of the new office to deliver by the end of 2017 will be at Santa Clara Square’s second phase of development, which will add five six-story buildings of about 220K SF each. Irvine Co.’s Santa Clara Square will have 1.7M SF once the final office delivers. Initial tenants include Ericsson, Advanced Micro Devices and Cambridge Industries Group. The office is part of a large mixed-use 100-acre development, which includes 125K SF of retail anchored by Whole Foods and 1,800 apartment units under development.
San Jose
Total Office To Deliver: 873K SF
Total Buildings: 6
Largest Project: Midpoint@237 | The Office (415K SF)
Nearly half of the office to be delivered in San Jose will be at Midpoint@237 | The Office under development by Gemdale USA Corp. and Lincoln Property. The office complex consists of two 83K SF two-story buildings and two 124K SF three-story buildings with average floor plates of 41K SF. It is adjacent to Midpoint@237, an industrial complex developed by Trammell Crow and Principal Real Estate Investors, which delivered 563K SF of Class-A advanced manufacturing space in late 2016.
Mountain View
Total Office To Deliver: 643K SF
Total Buildings: 3
Largest Project: 1625 Plymouth St. (225K SF)
Broadreach Capital Partners’s Class-AA+ office project is pre-leased to Google and is expected to deliver in December.
Los Angeles
Total Office To Deliver: 600K SF
Total Buildings: 7
Largest Project: Broadway Trade Center (400K SF)
The Broadway Trade Center at 801 South Broadway will transform the 1.1M SF building, which is more than 100 years old, into a mixed-use complex with retail, office, a hotel and a rooftop deck. The redevelopment is being done by Broadbridge, a subsidiary formed by Waterbridge Capital to handle the project. Jamestown provided $164.5M of capital in 2016 to fund the project.
