January 5, 2015

S.F.'s Newest Import

We got the scoop on one multifamily giant looking to move into the city.

Broadstone

Phoenix-based Alliance Residential is on the prowl for its first piece of land in the city, sources close to the company tell us. We had the chance to recently visit San Diego's Broadstone Little Italy, one of its signature brands (above). Among the apartment community's perks: a zero-edge pool with underwater speakers and a high-def golf simulator. The company already has a presence in Silicon Valley and East Bay.

Above, a picture-perfect shot we took facing the Bay from the patio area. (The company is getting ready to debut another property in another part of San Diego County.) We checked in with a Bay Area multifamily broker, who hasn't heard of anything in S.F. Alliance has taken down yet, but notes that "everyone" is looking for land here these days. Alliance, which has invested in more than $3B of real estate and manages a $9B portfolio, didn't respond to a request for comment.

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Sunnyvale's (Already) The Next Big Thing

Newport Beach-based Irvine Co just scooped up five office and R&D buildings totaling 113k SF in the Peery Park submarket, and we have the exclusive deets on the price: $350/SF, according to Bisnow market sources. Irvine's already got an existing Sunnyvale portfolio nearby, and this expansion is part of a long-term investment in Silicon Valley. The buildings sit at 323 N Mathilda, 755 N Mary, 617 Palomar, 720 Palomar and 840 Del Rey and range from 20k SF to 33k SF. Heavy-hitter neighbors include Google, Apple and LinkedIn. The seller of the 95% leased portfolio was Arden Realty, repped by CBRE. 

Flickr

Sources are amazed at how much Sunnyvale changed in 2014. With both Google and Apple acquiring/leasing space, and firms like Irvine buying blocks of properties, the opportunities for tenants and investors are quickly diminishing. If you are a tenant (or investor) looking for opportunities in Silicon Valley, say sources, you are really being pushed further south. The source thinks the current heart of activity in the Valley now is the 101/237 intersection. "It has been an amazing transition." Yahoo's Sunnyvale HQ, above.

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The Realities of Requirements

Swinerton Builders VP division manager Kerry Atkinson, speaking at our recent Creative Office Summit, let us in on some challenges of adaptive reuse. He's seeing some firms desire to locate within existing buildings that are below today's standards of energy consumption. Or they want the ability to manage off-hours operations, since the building management system might be incapable of allowing sections or single floors of an existing building to operate. Or the BMS isn't in place at all to manage singular lighting and heating/cooling demands. With a full blown café, the infrastructure (which may include available power, power distribution and/or sanitation--aka drains--systems) all need to be assessed to ensure the program needs are feasible. Things like grease interceptors become problematic in placing them for regular servicing and maintenance.

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Why Stockbridge Shopped For Walmart

S.F.-based Stockbridge bought itself an early Christmas present in Q4: a DC Walmart, for $32M. We asked managing director Mark Carlson what attracted his group to the buy, and his answer was short and sweet: "predictable cash flow and strong customer draw." DC waited what seemed like forever to get the Walmart brand to come to town, and this is one of the first to arrive, located in the Northwest quadrant of the city. Mark, speaking above at Bisnow's retail event last month, didn't comment on whether S.F.'s inventory of Walmarts is on Stockbridge's radar as well.

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What is your New Year's Resolution? tierney.plumb@bisnow.com