Newsletterq3 2015
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Colton Commercial & Partners, Inc. State of San Francisco the Market NEWSLETTERQ3 2015 Quick Trends Manhattanization of San Francisco Historically, San Francisco’s skyline has been dominated by the Transamerica Pyramid, the Statistics Bank of America Building, and the Golden Gate Bridge. If you hadn’t visited the city in the past ten years and were returning via car from SFO, you might think you were somewhere other than San Francisco. Let’s examine the current landscape of development activity: Citywide Average Vacancy MAJOR OFFICE PROJECTS* Citywide Average Asking Rates • The developers of 505 Brannan Street, Alexandria Real Estate Equities and TMG Partners, now want to increase the height limit from 85 feet to 250 feet for their new Class A Buildings Asking Rates office tower. This property is 100% preleased to Pinterest. • Boston Properties development at 415 Mission Street, AKA Salesforce Tower, should be Class B Buildings Asking Rates completed by the beginning of 2017 and will reach a height of 1,070 feet, consisting of 61 stories. This property is 50% preleased currently to Salesforce. Sublease Inventory • TMG’s proposed tower at 1st and Mission Streets, if approved, will reach a height of 850 feet, consisting of 64 stories and 1,250,000 square feet. Unemployment Rate • Tishman Speyer’s development at 222 Second Street, now under construction, is projected to be completed by the end of 2015 and will reach a height of 356 feet. This property is 100% preleased to LinkedIn. • Jay Paul Company’s development at 181 Fremont is planned to reach a height of 801 feet. There are no leases currently signed in this property. “Success is not final; • Park Tower at Transbay at 43 floors high, sitting just below the height of 181 Fremont, will provide over 751,500+ square feet of Class A space delivered in Q1 2018. failure is not fatal: • Tishman Speyer is in initial discussions with the Planning Department to build a proposed office tower at 10 Van Ness Avenue, which could reach a height of 570 feet. It is the courage to • 524 Howard Street is a proposed office tower which is presently on hold, but the initial plans are to build a tower reaching to 310 feet. continue that counts.” PROMINENT RESIDENTIAL PROJECTS* • Crescent Heights recently developed and completed four interconnected residential - Winston S. Churchill towers called NEMA located at 8 10th Street. The tallest of the towers reaches a height of 352 feet. • Align’s new proposed residential tower at 30 Otis could be 450 feet tall, according to the current development proposal. • Millennium Partners’ completed development, known as the Millennium Tower, located at 301 Mission Street, rises to a height of 645 feet. *Partial list. In summary, is bigger equal to better? Developers think so! The operative question will be whether or not the “Manhattanization” of San Francisco is a good idea. We do know that it has been great for the creation of jobs and good for the San Francisco economy, but what COLTON will be the long-term aesthetic effects on the quality of life for the San Francisco business and commercial & residential communities? PARTNERS 565 Commercial Street, 4th Floor San Francisco, CA 94111 An API Global Affiliate P: 415.834.1600 • F: 415.834.1601 • www.coltoncommercialsf.com State of San Francisco the Market NEWSLETTERQ3 2015 COLTON COMMERCIAL Top 10 Recent Leases* & PARTNERS RECENTLY CLOSED TENANT ADDRESS LEASE TYPE SQUARE FEET +/- TRANSACTIONS Stripe Inc. 510 Townsend St. Direct 300,000 Property: Office Building Uber 555 Market St. Direct 172,838 Location: 1 California Street Represented: LendingHome Broker: J. Shaffer LendingClub 595 Market St. Direct 133,534 Corporation Property: Office Building Location: 140 Geary Street Advent Software, 600 Townsend St. Renewal 129,491 Represented: 2600 Hz. Inc. Broker: A. Galindo, I. Osborne Property: Office Building First Republic Bank 388 Market St. Renewal 103,000 Location: 340 Brannan Street Represented: ArcTouch Broker: J. Shaffer Mixpanel 405 Howard St. Direct 60,593 Property: Office Building Location: 750 Clementina Street Instacart 50 Beale St. Direct 56,228 Represented: Nebia Inc. Broker: I. Osborne Property: Office Building AON 425 Market St. Direct 53,180 Location: Hills Plaza Represented: Breather Broker: A. Galindo, I. Osborne Slack Technologies 155 5th St. Sublease 48,812 Property: Office Building Location: 353 Sacramento Street WeWork 995 Market St. Direct 45,738 Represented: Dillingham & Murphy LLP Broker: B. Colton * Year to Date Property: Office Building Location: 425 2nd Street Represented: US Enterprise Corp. Broker: M. Walker Top 5 Recent Sales** Property: Office Building Location: 121 2nd Street (Multiple Leases) Represented: Fjeld Family LP ADDRESS PRICE PRICE perSF RBA BUYER Broker: B. Colton, J. Shaffer, I. Osborne, A. Galindo 50 Fremont St. $640,000,000 $782.96 817,412 Salesforce Property: Office Building Location: 1244 Sutter Street Represented: ARGONAUT The Blackstone One Market Plaza $610,050,000 $832.39 732,893 Broker: B. Colton, J. Shaffer Group LP Property: Office Building Location: 349 Sutter Street 50 Beale St. $395,000,000 $596.62 662,060 Paramount Group Represented: Korth Sunseri Hagey Architects Broker: M. Walker Columbia 650 California St. $309,000,000 $645.91 478,392 Property: Office Building Property Trust Location: 381 Bush Street Represented: Landlord (Several Leases) 275 Battery St. $306,200,000 $644.44 475,138 Rockpoint Group LLC Broker: R. Walker, M. Walker ** Within the past 12 months State of San Francisco the Market NEWSLETTERQ3 2015 Market Data Asking Rents Are Being Driven By The Top 5% of the Market SUB MARKET AVG ANNUAL ASKING RATE PER SF VACANCY RATE RENTAL RATE TREND N. Financial District $65.50 8.4% x S. Financial District $67.00 7.0% x Jackson Square $56.25 6.5% x North Waterfront $49.00 6.1% x Union Square $57.50 5.0% x Yerba Buena $60.75 5.2% Civic Center $56.50 8.5% Rincon / South Beach $69.00 4.2% x SOMA $60.00 8.1% x Mission $51.25 8.25% x S.F. Historical Unemployment Data 9% 8% 7% 6% 5% 4% 3% 2% 1% 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015* *Projected Citywide San Francisco Vacancy 12% 10% 8% 6% 4% 2% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015* *Projected Colton Commercial & Partners, Inc. Colton Commercial & Partners is a full-service commercial real estate firm specializing in Leasing, Investment Sales, Property Management and Project Management in San Francisco and the Greater Bay Area. With over 150 years of combined experience, our team of commercial real estate brokers bring service and expertise to a whole new level. Bradley L. Colton President [email protected] Colton Commercial License #00805116 and Partners is Jay D. Shaffer pleased to present the Partner & Co-Founder exclusive sale listing of: [email protected] License #01444640 701 Sutter St., Robert J. Walker Broker Associate San Francisco [email protected] License #00442500 701 Sutter Street is Mark D. Walker an 18,800 +/- sf Senior Vice President mixed-use commercial [email protected] property that is License #00878051 currently 100% R. Ian Osborne Senior Associate leased. [email protected] License #01936294 701 Sutter is a strategic value-added investment Adon P. Galindo opportunity. 701 Sutter is located in the Union Sales & Leasing Associate Square district of San Francisco. [email protected] License #01964002 For more information, please contact exclusive listing agent: Adam Felson Jay D. Shaffer Director of Project Management [email protected] [email protected] (415) 834-1600 ext. 203 Sonia C. Santiago License: 01444640 Senior Project Manager [email protected] COLTON commercial & PARTNERS 565 Commercial Street, 4th Floor San Francisco, CA 94111 P: 415.834.1600 • F: 415.834.1601 • www.coltoncommercialsf.com The foregoing is based upon information provided by others which we believe is accurate, however, no guarantee, warranty or representation is made. We recommend that all interested parties independently verify its accuracy and completeness. .