To ensure delivery, please add firstname.lastname@example.org to your address book, learn how
May 7, 2014
Oakland's Best Cheerleaders: Themselves
At Bisnow's Oakland State of the Market event yesterday, we found out why its real estate community is rooting for each other more than ever (and the answer partly has to do with one of its sports teams).
Oakland has a projected population spike of 30% in 20 to 25 years. (Carpooling will be easier at least.) That means developers in the room are going to get wealthy if they can build product in demand, says Madison Park Financial prez and CEO John Protopappas. The reality is it's going to be very difficult to get 10,000 to 20,000 people to move to Oakland. If the mayor's "10K" plan were to balloon to a "50K" goal, that would result in real transformative change. Developers need to flock to where zoning allows growth to take place: West Oakland, downtown and most of East Oakland below and around Highway 880. Madison is finishing up the 92 live/work Lampwork Lofts at 1614 Campbell, calling the units closer to S.F. "than S.F. is to itself," finished another panelist. It's East of Market, John jokes.
The Swig Company SVP of asset management Deborah Boyer has been an Oakland fan for decades, loving its weather, central location, affordability, and transportation options. But it's really Oakland's moment now thanks to a cultural shift in what workers today want. It's not the sanitized Silicon Valley environment, but rather a diverse, rich and authentic urban fabric, with arts, entertainment and vibrant neighborhoods. (We could all use a break from the startup types once in awhile... or often in awhile.) She says the 28-story Kaiser Center fits nicely into Swig's portfolio because it's an iconic and historic building that's part of Oakland's story. The investor and operator is actively expanding its 9M SF portfolio by considering value-add opportunities on both ends of the state, she says.
Allen Matkins real estate attorney Elizabeth Clark, who moderated,says one of Oakland's standout attributes is the fact that its property owners and developers collaborate with each other. (They should all start a band together.) She witnessed that teamwork firsthand while working with Deborah on the Lake Merritt/Uptown and Downtown Community Benefit Districts.
Oakland is on fire right now for a basic and intuitive reason: In the past 10 years the Bay Area's center of gravity and VC dollars have shifted north and somewhat eastward, says Mission Bay Development managing principal Seth Hamalian. There's no better city to capture that activity and job growth than Oakland, he says. Natives and longtime residents like himself have a strong sense of Oakland pride, and real estate people sense something special that's not always acknowledged. When the MLB evaluated ballpark options for the A's and found no viable sites in Oakland, a band of volunteers joined Seth to come up with a professional presentation to show there are, in fact, multiple options. That shows this town can rally very quickly to protect what's its own, he says.
There's a general sense in Oakland we are rooting for each other, says Seth, which sparked applause from California Capital & Investment Group prez and CEO Phil Tagami (cheers from the crowd ensued). The collaboration that exists in Oakland is born out of necessity, Phil says, because there are always so few of us. Nothing significant gets done with one person's effort, he says, and any project worth mentioning can take hundreds of city and port employees and state officials. (It takes a village to make a city.) Oakland is willing to welcome and embrace having more people, and in order to cross pollinate ideas and get projects off the ground, the city freely sharesinformation. He admits he'd rather hear from voices around the room than himself, because he wants to know what Oakland needs.
SPUR exec director Gabe Metcalf was all smiles making a groundbreaking announcement: SPUR is very close to opening an Oakland office. Why now? The idea to plant a flag here dates back to Jerry Brown's tenure as mayor. He threw a fundraiser for SPUR and made a real play for SPUR to expand to Oakland in the early 2000s. At the time, it was hard to wrap their heads around the idea, but not anymore; as regional planners, SPUR views the Bay Area today as three central cities: Oakland, San Jose and S.F. The San Jose office opened two and a half years ago, and the strategy to be in all three locations will articulate the shared urban agenda on a regional scale. He senses there's a common interest in building a prosperous and equitable city out of Oakland.
Live from BASH!
If you've been biting your nails over the state of higher education, stop. American Campus Communities CEO Bill Bayless told a crowd of 400 yesterday afternoon at the Bisnow's national Annual Student Housing Summit (BASH) in Philadelphia that there's been a lot of misinformation in the media, but if you drill down, “the fundamentals are fantastic.” (We snapped him, right, with MSC University VP Matthew Stein, who moderated the keynote.) Even though we're at the end of the Echo Boomer age, there are more 18- to 24-year-olds going to college than ever, he says, leading to stable, growing enrollment, particularly at Tier 1 schools. Even Moody's says higher ed remains a valuable, long-term investment, which means more opportunity for real estate.
ACC's formula for success, according to Bill: proximity to campus, a differentiated product, and entering markets with high barriers to entry. (Not to mention school pride: He's donning a Drexel tie.) Student housing developers continue to make the mistake of overbuilding at a price point, which Bill's seeing in college towns across the US. Another: not having the right mix of retail at a project, leading to empty space. “Every bad deal takes three good deals to make up for it,” he says. Overall, the 18-to-24 set is innovative, tech-oriented, and on the cutting edge, so they demand good technology and access. “If they can't use their smartphone in your building, they'll move elsewhere,” he says. They're also more health conscious, so kitchens and in-building fitness centers are also attractive.
We Got Your Mayors
Bisnow has been busting out the mayors for you: Our recent Oakland, Baltimore, and Denver State of the Market summits were all keynoted by the local head honchos. (Plural: Hizzonii?) Above, 400 attendees saw Oakland Mayor Jean Quan flaunt her city's titles: Top turnaround city, home to the fastest-selling homes in the US, and No. 5 best city for attracting VC. She's particularly proud of Oakland's international prowess, noting the $1.5B Chinese investment for the Brooklyn Basin project. The restaurant scene isn't too bad either; "If you're a foodie like me,” she says, this is the place to be. (We'll just have to do extensive research on that and get back to you.)
Baltimore Mayor Stephanie Rawlings-Blake celebrated progress toward her goal of 10,000 new families in the city: 4,200 housing units have been created in Baltimore City since 2010, and 3,700 are in the pipeline. (So tell your kids to move out already.) Apartment development and conversion incentives should keep the momentum going, but a city can't grow unless the people who already live there have a reason to stay. Hers: She'll continue to cut residential property taxes; the City is issuing RFPs for City-owned properties in the Bromo Arts District; and her administration has $1.1B lined up for school construction.