January 15, 2015

Colton Commercial's Latest Projects

Just two months into his new project management gig at Colton Commercial & Partners, Adam Felson gave us the scoop on two S.F. projects keeping him busy, one of which involves ashtrays.

The first is for Premier Staffing, which inked a 10k SF deal for the 18th floor at 353 Sacramento (below) and will move their offices from 111 Sutter. Adam is overseeing the build-out, which will wrap up at the end of February. The other was a large-scale move coordination for Concordia-Argonaut, helping them plan the emptying out of their 52k SF property at 1142 Van Ness. The occupant had been in the place for 125 years, so Adam's job was to inventory the thousands of items that they collected over time. (The buyer, which is undisclosed, is unclear on the scope and timeline for occupancy.)

With a background working under mega landlords EOP and Vornado, forming his own PM firm seemed “intimidating,” Adam says. So, he linked up with boutique brokerage Colton Commercial & Partners to launch a new PM division inside. (He's also good pals with Colton co-founding partner Jay Shaffer.)

Among the treasure trove of items Adam found in the Concordia-Argonaut: ashtrays with the historic logo, poker tables, a grandfather clock, high-valued paintings, fancy dishes, antique furniture, old books and decorative mirrors. (He even brought in a book expert to make sure he wasn't overlooking a Shakespeare gem.) Adam says he treats buildings like people and cares about keeping them alive. He handled all the ongoing construction work at 555 Cal for five years, overseeing build-outs for Goldman Sachs and Bank of America. Before that, he worked on EOP's extensive 10-building portfolio of 4M SF before the trade to Blackstone.

These days, tenants don't want to be stuck in their offices all day, so more are requesting a “third place” to break up the grind. One example he worked on in S.F.: dotting a floor with a dozen small telephone booth-sized rooms, designed for private phone calls and laptop typing. The East Bay native's construction genes began with his grandfather's great uncle, who secretly immigrated to S.F. by hiding as a stowaway on a Chinese container ship.  In California, he learned to be a builder and inspired three future generations of the family. Scroll down in this issue to find out why we strategically included this pic of Adam next to an outlet.

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How One Act of Congress Affects CRE

This week, Obama signed into law the six-year renewal of the federal terrorism risk insurance program--a big win for the commercial real estate industry. HFF's Jordan Angel (above) broke down for Bisnow just how important the law is. Not renewing The Terrorism Risk Insurance Act (TRIA) could have had huge repercussions on new and existing commercial real estate loans, he explains. Lenders often require terrorism insurance and with the lack of a federal backstop many insurers would have withdrawn coverage creating a major disruption to financing and insurance markets particularly in large cities like S.F.

NAIOP says the program ensures the development industry can continue to provide good jobs and economic growth for America, solidifying the still recovering construction loan market. Last year, the industry contributed $376B to GDP, supported 2.8M jobs and produced $120B in personal earnings. NAIOP was a big backer of the legislation.

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A New Video Starring Title 24

Colton Commercial & Partners director of project management Adam Felson just produced a six-minute video breaking down the six-month-old Title 24 code, starring a GC, electrician and energy engineer. He thinks Title 24 impacts all parties tied to tenant build-outs, from contractors and architects to brokers and tenants. The biggest shell shock has been the cost and scheduling impacts thanks to more workloads for electricians and lag time on equipment arrivals. Under Title 24, outlets need to be operating on occupancy sensors and are supposed to partially shut off when people leave a room. Adam says it's an important topic for the industry to grasp going forward (plus his video is more fun than a attending a half-day seminar or translating technical jargon online).

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A Condo "Steal" In S.F.; Will Prices Rise?

What's the cheapest condo of them all? Well it ain't the St. Regis residences, which just came in as the most expensive condo complex across S.F. The "most affordable" is The Beacon at Mission Bay, according to the newly released luxury modern condo building pricing guide for 2014. Here's a pic of a two-bedroom listed for $1.1M. The 595 condos, built in 2004, sit in two 16-story buildings next to AT&T Park. The report tracks almost 30 newer condo buildings and breaks down sales price by number of beds and also location in the building. The priciest, St. Regis, is followed closely by The Four Seasons residences and The Millennium Tower.

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What does the future hold? We asked a top condo sales broker, who doesn't have his crystal ball working past 2016 yet (that's around when Jay Paul's mixed-use condo project at 181 Fremont could deliver, above). The broker offers a glimpse into 2018 conditions, when other projects like Tishman's newly proposed project could land in SoMa (we hear it's currently working out entitlements for the two high-rises). If the national and Bay Area economy stays strong, S.F. is so short on supply expect prices to keep moving up and product to be rapidly absorbed, he says.

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First to tell us about a deal gets a free State of the Market ticket! Tierney.plumb@bisnow.com