Live/Work/Play Driving Silicon Valley's Growth
Among developers, there is a general sense Silicon Valley's growth will be driven by the combining of housing, office and retail in a synergistic fashion previously missing in many area cities. Add to that development around transportation hubs, and you have a recipe for a strong Silicon Valley.
Mixed-use and multifamily projects were a key part of the discussion at Bisnow's Future of Silicon Valley: Hot Projects event last month. Calvano Development principal Mark Calvano, our moderator for two panels, got developers talking about their work in Silicon Valley.
The event was held at Irvine Co's Santa Clara Square, which will bring together office, retail and residential. Irvine Co is committed to the different elements of the project to the point of tearing down functional office buildings that could draw good rents and appropriate returns to put up an anticipated 1,800 apartment units in their place, Hanns said. The area wasn't zoned for a mix of uses, but Santa Clara saw the value, and opportunity, of having that mix at Santa Clara Square, he said.
The result is a walkable, sustainable community. "We certainly want to do more of what we've done here," he said.
Insight Realty managing partner Dennis Randall (here with Raquel Bito of Steinberg) talked about his company's Railyard Place project in San Jose's former Union Pacific railyard. The site is next to the freeway and the rail line and right downtown, creating a gateway on 10.5 acres of what Dennis calls the most important city in the US." (He has a bit of a bullish bias toward San Jose.)
People in San Francisco live near their offices, he said, why not San Jose? "If we don't build it, they won't have the option to do this," he said. He mentioned Museum Place, which will have office and residential space. Office tenants already have approached Insight Realty about leasing out a block of the apartments to house employees transplanted from elsewhere in the US or other countries. Dennis expects economic cooling, and welcomes it for the drop in construction costs it will likely bring.
Lennar Multifamily Communities Northern California president Alex Waterbury said a lot of the developer's projects are infill developments near office and retail, adding a housing component where it may have been lacking. In southern Fremont, where one of Lennar's projects is going in near Tesla, more than 20% of people (both blue-collar and white-collar workers) said they would live next to where they worked, he said.
Alex said there is a lot of opportunity for housing and offices to share parking, particularly in transit-oriented communities. As for amenities, he's excited about DIY maker spaces, a concept that fits well with the tinkering culture of Silicon Valley. It could be a raw space for working on bicycles, art projects or making music, he said. Even if the economy slows, Alex remains confident Silicon Valley will stay strong for multifamily.
Sobrato Organization president Rob Hollister (above left talking with Todd Hedrick) said Sobrato is a huge believer in job/housing balance, with the majority of its projects mixed-use. Mixed-use is one part of a regional solution to the area's transportation problems and need for growth to support new jobs, he said.
Rob said one of the things he looks at is what tenants want today and how to tell lasting change from a fad. "We spend a lot of time trying to figure out what's durable, since we're going to own these buildings for generations," he said.
He mentioned bocce ball courts as an example of a likely fad. Nontraditional workspaces, however, including roof decks, pavilions and breakout areas, are something he expects to last long term. Another lasting change is the demand for larger floor plates—which presents an opportunity and a challenge for long-term owners, Rob said. There's also a more democratic approach to who gets a window. The glass line belongs to everyone, he said, not just the execs.