|
|
|
|
|
| October 15, 2014 |
What Palo Alto Numbers Aren't Revealing
Given greater Palo Alto's very tight market conditions and limited vacancy, sometimes the data does not communicate the full story. CBRE SVP Joe Kelly helps us read between the lines.
Joe, here putting around at The Olympic Club with dad Phil (a Santa Rosa lawyer), has proof tenants are craving more office space near transit: five of the top 11 greater Palo Alto leases in Q3 are for new construction; one is a sublease in a previously unoccupied building (and over half are walkable to Caltrain). In general, asking rate data is limited due to lack of vacancies (Palo Alto's increased by 69.8% from the 2010 low of $4.15) and high level of renewals. As a result, the actual new leasing comps are fewer. Understanding the differences in a few data points is critical to understanding relative value for the various buildings in markets, he says.
 Yelp's 42k SF lease at 2100 El Camino Real was a top Q3 deal (we broke the story in August). Of the significant construction projects under way, most are pre-leased. Without these types of projects getting built, more companies would be forced to grow outside the greater Palo Alto market. And as a real estate strategy to lease the most desirable space, companies will proactively lease more than they can occupy, sublease a smaller portion for a short-term, and proceed to grow into all of it a few years later, effectively land banking their own real estate (i.e. Box in Redwood City, Palantir and AOL in Palo Alto). In many cases, leasing a minimum square footage is a requisite of being the first deal in a new development.
 As more coveted space gets eaten up (vacancy is 4.8%), tenants are being forced to look elsewhere for meaningful expansion space. Look at Machine Zone moving from downtown Palo Alto to the Stanford Research Park, Box, originally from Palo Alto to Los Altos, and now, to Redwood City, above. Another example: 23 & Me is expanding in Mountain View. Joe made it to the Giants game yesterday, but will not be back today (CBRE's got an afternoon panel in San Jose). Among his recent deals: AmericanExpress for Windy Hill Property Ventures in downtown Palo Alto and Ayasdi and AcademixDirect subleases for E*TRADE in Menlo Park. |
|
|
|  |
|
|
|
More Retail For Silicon Valley
Goodbye Thai Pepper, hello TBA retail. SRS Real Estate Partners secured a ground lease on the site of a 5,367 SF former freestanding restaurant on behalf of a private investor. Located at 2000 S. Bascom in Campbell, the tenant plans to build a 5k SF retail building. The site is across from The Pruneyard Shopping Center, with Trader Joe's, Marshalls, and Sports Basement. SRS' Bob Quigley repped the landlord, O.T. Martin Trust. Kurt Grundman with Lockehouse Retail Group represented tenant MV Campbell, a retail developer. It's always been a restaurant use since being built in the 1950s. Bob tells us because of the cost to renovate, a long-term ground lease made more sense. It could take on a multi-tenant use (maybe two to three smaller restaurants) or just go the retail route. |
| |
Come Fly (And Eat) With Me
CREW Silicon Valley flocked to the prestigious Silicon Valley Capital Club in downtown San Jose last week for lunch to hear from San Jose airport principal property manager Sandra Oberle. Appropriately donning a sky blue dress, she spoke about the latest happenings at the Norman Y. Mineta International Airport. Here she's joined by Bay Area Builders' Tom Anthony, Transwestern's Anna Mcquillan Rose, AEI Consultants' Christine Velasquez, Iron Construction's Claudia Folzman (and CREW SV prez) and SRS Real Estate Partners' Sarah Edwards.
 She chatted about potential incoming airline carriers (no one new's signed on board just yet), additional international flights, gates, and expanded concession options. Football has been good for business, with a clear uptick of travelers thanks to the new 49ers stadium (which is in clear view at the end of the runway). A terminal is also in the works to house private aircrafts for big Silicon Valley giant Google and others major companies, she says. Above, the airport's year-old lush club for weary feet.
|
|
|
| |
|
|
|
Recon Comes Out to Play
Why the big crowd in front of Bridge Bank SVP, market manager Paul Duren? Here he's at Myth Taverna & Lounge for Recon (Real Estate & Construction) Networking's Silicon Valley chapter happy hour, about to draw some lucky biz cards to give out a free iPad Mini or one of two bottles of Silver Oak cab. The group has dished out $54,000 to local charities such as Boys & Girls Club, Make-A-Wish, and First Tee. Tonight, the Recon Bay Area party continues at Region on the Embarcadero.
|
| |
|
|
|
Crain's Names Bisnow to
Fast 50!
Crain's New York Business just named Bisnow No. 38 on its annual list of the city's 50 fastest-growing companies. We are overwhelmed with gratitude for this recognition. Among other fun facts, you'll learn that our CEO Ryan Begelman sojourned to Burning Man in August in search of inspiration for our (almost) never boring events and publications. (We promise we won't start pumping patchouli into our morning conferences.) We'd like to thank each of our 600,000 subscribers for your support and look forward to finishing off 2014 with top-notch events and actionable, edgy articles. |
Send us your pics from the game tonight! tierney.plumb@bisnow.com |
|
|
| |
This newsletter is a journalistic news source which accepts no payment for featured interviews. It is supported by conventional advertisers clearly identified in the right hand column. You have been selected to receive it either through prior contact or professional association. If you have received it in error, please accept our apologies and unsubscribe at bottom of the newsletter. © 2013, Bisnow LLC, 1817 M St., NW, Washington, DC 20036. All rights reserved.
|
|
|
