| Technically, 700°C is when most metals will lose structural integrity (but anything over 105°F isn't really livable, in our opinion). The 350 aficionados who packed into our Future of SoMa event recently at the Westin Market Street heard speakers say that the submarket’s explosive success is exciting, but a two-edged sword. |
| Panelist Chris Peatross, who'd served as CEO of Equity Office Properties, created Swift Realty in 2010 and has since acquired almost 2M SF in the Bay Area. He said prices are nearly at replacement rates, and the frenzy continues: “If I wanted to go to dinner every day with a capital partner, I could.” (Why not? They'd probably pay.) He says the big question is what secondary markets are attractive where you get in front of the wave. Fremont, Milpitas…or Petaluma, anyone? |
| Cornish & Carey Commercial’s Mike Brown said (only half-jokingly) that if this were 2008 at an event on what’s happening in SoMa, he’d be sitting in the room alone. His notes: tech hiring there has brought overall city unemployment down 120 basis points in the last 12 months to 7.5%; tenants from the Valley are looking for 800k SF in the submarket; vacancy is around 6%; and nine tenants are each looking for large blocks in excess of 100k SF. He’s expecting ongoing rent growth in 2012, and increased attention to secondary areas of SoMa such as Showplace Square and Midmarket, with other activity spilling into the financial district and elsewhere. |
| Webcor Builders CEO Andy Ball, whose firm has built 10M SF in SoMa over the last 10 years (from the California Academy of Sciences to Infinity Towers, Foundry Square, and now Trans Bay Terminal and the rehab of Moscone Center) says a spike in oil prices will greatly affect costs of construction (eg, prices of metal, concrete, and steel), as will Apple, Google, SalesForce, Twitter, and Facebook all competing for contractors as they do for their new multibillion dollar office projects. |
| Hudson Pacific’s Drew Gordon—whose office REIT went public two years ago and though well-known in SoCal, is a new player in SF —has acquired more than 2M SF in the city, including three buildings in SoMa. He says full-service rents there were in the low-to-mid 20s in ’08 due to lack of demand rather than vacancy, and as soon as tech companies started seeking space again, quickly popped to current levels of $40 to $50/SF. He sees highest potential in “going out on the risk spectrum” to add value via entitlement and renovation, rather than just hoping for a continuation of trends. |
| Inspired by an area known for “cool and creative” space, we created a theatre in the round for a sense of intimacy and scattered the eight panelists on bar stools throughout the audience, which is why some of those heads are bobbing above the crowd. Stay tuned for part two of our event tomorrow. |
News
Sign up for more articles like this
Subscribe to Bisnow's Houston Newsletters
Related Stories
