Ever since the affordable housing component of the MacArthur Transit Village 
was completed, all eyes have been on the surrounding lots that are supposed to remake this former parking lot into a vibrant and welcoming mixed-use development.
This coul
d be a potential game-changer for increasing our housing stock in the Bay Area:
Gov. Jerry Brown has proposed sweeping statewide legislation that would allow new market-rate projects with onsite affordable housing to be approved “as of right,” in potentially California’s most significant housing policy change in years.
The proposal has big ramifications for the Bay Area, where many cities and well-organized residents’ groups have long fought residential development.
Find more in a recent article on the SF Business Times.
Of course, we’re all excited to hear that Uber just agreed to purchase the Sear’s Building in Downtown Oakland. While Oakland seems to finally be realizing the potential many of us have been predicting for too many years now, I worry that the increased cost of doing business here will clip the wings of our economic expansion. Housing costs are rising far faster than median wages, and there is only so long we can keep pushing up the percentage of income going towards housing costs.
For a great graphic on how far the East Bay (among other areas) is behind on creating additional housing, check out a recent “map of the month” from our Metropolitan Transportation Commission.
Not a week goes by when I don’t hear of another potential development being entitled in the hottest Oakland neighborhoods, particularly Temescal, West Oakland and Uptown.
I’m also asked, with the same frequency, when we’ll start seeing some of that inventory arrive on the market for sale.
Odd as it may seem with our rapidly rising rents and sales prices, the answer may be “not anytime soon”; especially for the highrises. Given our constructions costs in the Bay Area, it simply doesn’t make sense to break ground on a taller building unless you are certain you can exit over $700/sf. As our sale prices are currently tapering off at well below that, our future may be in the lo-rise type of construction already prevalent in Emeryville and West Oakland, no matter what the most ardent density advocates would argue.
Unless, of course, labor and material costs come way down, and/or new modular construction techniques really do prove to be viable options.
“Paul Zeger, partner at Polaris Pacific, said stick-built townhomes need to garner $500 a square foot, mid-rise buildings need about $650 and highrises need about $700 a square foot in order to justify building.”
via Why no one is building condos in Oakland and why there’s hope – San Francisco Business Times.
Developers seem more optimistic that funding will be available to increase our high-rise rental stock around the Lake. Let’s just hope that construction costs don’t continue to rise and scuttle these potential deals:
“High-rise development is starting to show signs of life in Oakland for the first time since the Great Recession, with a 298-unit apartment building on the brim of Lake Merritt expected to receive entitlements early next year.
Lake Merritt Boulevard Apartments, set to rise 270 feet on a vacant site on 12th Street and 2nd Avenue, needs the City Council to greenlight a redevelopment plan for the surrounding Lake Merritt BART station area this month in order to skate through environmental review.”
Oakland’s central city gains traction in retail and residential projects.
THIS ARTICLE WAS PUBLISHED IN THE ‘Q’ – THE REGISTRY’S PRINT PUBLICATION – IN APRIL 2014
By Joe Gose
Oakland’s growing reputation as a hip and affordable alternative to San Francisco is fueling waterfront and downtown development, furthering a resurgence that began taking hold a few years ago.
From Ellis Partners’ $400 million Jack London Square mixed-use redevelopment on the Oakland Estuary, to Signature Development’s $50 million renovation of six 90-year-old industrial buildings into a mixed-use project known as The Hive in Uptown, the urban environment now provides a younger crowd with more reasons to live and work in central Oakland, say boosters.
“We really have all the components that are appealing to the young urbanite today,” said Deborah Boyer, a senior vice president with The Swig Co. and president of the Lake Merritt-Uptown Association community benefit district. “And the housing situation in San Francisco is so untenable that were are just getting more and more attention.”
The most dramatic changes have occurred uptown around 17th Street and Telegraph Avenue near the historic Fox Theater, said John Dolby, a senior vice president with brokerage Cassidy Turley in Oakland. For workers like him at City Center, it’s a short walk.
“This whole area is changing; there’s more bars, more restaurants and more nightlife—and there’s more coming online,” he said. “There are people restoring older buildings and their façades. So there has been a big transformation.”
Nearly 120 new businesses opened between the beginning of 2009 and June 2013, with more than half of those arriving over the 12-month period ended last June, according to the Lake Merritt-Uptown Association.
Room for improvement still exists, however. Some observers are concerned that more retail shops are needed to balance the onslaught of bars and restaurants. But cafes and bars tend to arrive in revitalizing areas first and retailers follow, Boyer said, and that is playing out in both downtown and uptown Oakland, too. In 2013, for example, 16 retailers opened, up from five in 2011. Still, she would like to see more retailers, noting that empty or underused storefronts continue to dot Broadway.
Among other efforts, the districts have partnered with Oakland Grown, a promoter of local independent businesses, to develop “shop local” campaigns, she said. Additionally, business incubator PopUpHood has helped to establish five permanent stores in the area. The concept provides small businesses free rent for six months.
“That has been really helpful in allowing businesses to get on their feet,” Boyer said. “We’d like to see more of it.”
Jack London Square also is facing retail challenges even though office space is leased well enough that some restaurants are succeeding. So far, chef Daniel Patterson’s 3,500-square-foot Haven restaurant is the sole tenant of the 62,000-square-foot Jack London Market building developed several years ago to cater to entrepreneurial food operations and shops.
James Ellis, managing partner of Ellis Partners, suggests that the tough lending environment coming out of the recession hamstrung the types of businesses that would occupy the Market. Filling the space remains a priority, he said, and Oakland’s improving economy coupled with pro-business political leadership is providing a good foundation. But Ellis refuses to rush the Market.
“We’re not willing to compromise our vision,” he said. “We want it done with the right mix of tenants, and we won’t open it until we have a critical mass of tenants.
Part of the retail challenges in Oakland center on the struggle to generate daytime foot traffic. Although workers coming out of the City Center BART Station can catch the Broadway B shuttle for the roughly 10-block trip to Jack London Square, the large office users get more reluctant to consider buildings as they get farther from a BART stop, Dolby said.
Still, plans to add offices and residences throughout the area could help create more tenant traffic.
Ellis Partners is seeking city approval to build a tower with some 537 residential units in Jack London Square. MBH Architects is on the consulting team, but Ellis has yet to select engineers or contractors. Ellis also is working up plans to convert the Pavilion building—formerly a Barnes & Noble—into a beer garden, restaurant and other entertainment uses, he added.
The Hive will include 104 apartments and 100,000 square feet of incubator space, offices and retail. Signature Development has added Hub Oakland, Numi Organic Tea, Balfour Beatty Construction and others to the tenant roster. Signature hired Flynn Architecture to design it as part of a team that includes Proforma Construction, BKF Engineering and furniture supplier Herman Miller.
San Francisco-based Strada Investment Group has entered into a negotiating agreement with the city to develop city-owned parcels near City Center for a potential mixed-use project that could include residential units. Similarly, The Swig Co. has an entitlement to redevelop the Kaiser Center’s mall into a high-density development that could include a large residential component, Boyer said. The firm has no immediate plans to start the project.
Developers and city officials also are trying to create more inviting spaces. The Downtown Oakland Association and Lake Merritt benefit districts, which are jointly operated, launched a beautification program that restored landscaping and irrigation to medians and added planters along sidewalks, among other efforts, when they formed in 2009.
The groups are also working with the city on the renovation of Latham Square, a pedestrian plaza at the foot of the Uptown district where Telegraph Avenue and Broadway meet. Latham Square will grow by four times its size to 9,500 square feet later this year and will hold events and provide space for popup retailers.
“We knew it was an asset—there are very few places where you can plop down furniture and carve out little nodes and create a fun space for people,” said Andrew Jones, district services manager for the downtown association. “It’s a very valuable space that has the ability to bring out people and hold events.”
In Jack London Square, Ellis Partners has broken up vast concrete spaces to create more intimate gathering places and foster continuity. It has added palm trees, lawns, outdoor patios, fountains, furniture and artwork. It also eliminated a surface parking near the waterfront.
“Visitors were faced with going into these big open areas with nothing there,” Ellis said, “and those types of environments, especially from a retailing mindset, don’t work.”
Photography by Laura Kudritzki
According to the San Francisco Business Times, the Richmond Field Station is now considered the front-runner in the competition to host the expansion of Lawrence Berkeley National Labs.
“The proposed LBNL’s second campus would combine their Energy and Life Sciences research cluster with the existing UC Berkeley Engineering research cluster on university-owned properties in Richmond’s southern waterfront area. The first phase of the second campus would include up to 500,000 square feet of research space for LBNL and through later phases grow up to two million square feet. The proposed complex is expected to accelerate innovation, technology transfer and commercialization in the region, while creating new jobs. LBNL’s selection committee will make final decisions in early winter.”
As many of the investors I’ve worked with know, we’re seeing some very interesting opportunities in the Marina Bay area. These distressed properties, which are already producing cash flow in the current rental environment, are poised for even more rewards should LBNL locate it’s second campus next door. The campus would be a very short commute by foot or bike from Marina Bay (pictured in the illustration above on the upper right). In addition, one of LBNL’s conditions for development is proximity for public transport, so expect to see an increase in service to the area as well.
The City of Richmond is in full support of the project, again from the Business Times:
Richmond businesses leaders and officials have launched campaigns including “Richmond on the Rise” and “I [heart] LBNL” to show support for the second campus proposal.
“The location is close to UC Berkeley’s main campus and ample enough to allow for future growth,” said Catherine Koshland, UC Berkeley’s vice provost for teaching, learning, academic planning and facilities who heads the steering committee for the development project. “We would like to extend the kind of vibrant partnership that already exists between the campus and the lab to the city of Richmond, acting as a catalyst for green and cleantech development.” San Francisco Business Times – by Blanca Torres Wednesday, July 13, 201
The final decision is expected in November. If you’d like to discuss opportunities for investment in the area, I’d advise you to contact me soon as we’re already seeing transaction activity increase.