“Oakland is the less expensive alternative to San Francisco,” said Sarah Bridge, president of RealFacts, a Novato company that collects information on rents at large, professionally managed apartment complexes. “It’s an urban core and offers some of the same amenities on a small scale, and is still about $800 (a month) less expensive than San Francisco. It’s a spillover from the growth occurring in San Francisco.”

The average asking rent at buildings with at least 50 units in Oakland hit $1,925 in the third quarter, up 19 percent from the same time last year, RealFacts said. That figure averages rents for units ranging from studios to three bedrooms, but the trend is just as pronounced for each size. One-bedroom apartments, for instance, were asking $1,761, a 20.1 percent increase from a year ago, RealFacts said.

San Francisco’s already sky-high rents continued climbing, with a new average asking of $2,768 at big complexes, up 7.6 percent from a year ago. San Jose saw a 9.6 percent increase to an average of $1,845, RealFacts said.

Apartment hunters on both sides of the bay are reeling from sticker shock.

Matt and Jennifer Renner are moving back to the Bay Area after a few years living in Brooklyn and Boulder, Colo. They’re seeking a two-bedroom in Oakland for about $1,900, Despite both having stable employment, good credit and excellent references, the pickings are slim.

“In the four years we’ve been gone, it’s staggering how much the rents have gone up,” Matt Renner said. “We considered looking at San Francisco, but the rental market there was crazy, comparable to Manhattan.”

Big increases in 4 years

In 2008 when they were last here, it was a different story, he said. “I was in a three-bedroom, really nice house in the Lower Haight for $3,000 a month,” Renner said. “My wife had a nice one-bedroom in a safe neighborhood in Oakland for $875 a month. Now that’s almost doubled.”

In San Francisco, what passes for good news is that the trajectory for rent hikes appears to be slowing, which might mean the market is close to saturation.

“It’s not as if San Francisco is going to experience a rent drop, but I think it’s gone as far as it can go,” Bridge said. She said she thinks San Francisco is following a pattern set by East Coast cities such as New York and Washington, which saw rapid price appreciation and now appear to have maxed out the increases.

“It’s not a demand issue; there would be more people willing to rent an apartment (in San Francisco). It’s affordability,” she said. “There aren’t that many high-paying jobs that (landlords) can just keep raising the rents to ridiculous levels.”

People who are apartment- hunting in San Francisco continue to report that it’s a blood sport.

‘Massive changes in wealth’

Bo Lu, co-founder and CEO of FutureAdvisor, which offers online financial advice, is moving his seven-person Seattle startup to San Francisco to be closer to the talent pool and the startup community.

He and his girlfriend, Marlo Struve, hired real-estate agent Wendy Willbanks, who runs an “apartment concierge” company called She Moves You, to help them look. After four intensive days of touring more than a dozen units, they signed a lease on a two-bedroom in the Castro for $3,200 a month, including parking.

“The cost was enormous in both time and money,” he said. His theory about the escalating rents takes a macroeconomic view of the tech boom.

“Many startups like mine are replacing humans with computers,” he said. “Whenever you take an industry that used to employ tens of thousands and instead employ a few hundred engineers, you end up with massive changes in wealth. Engineers are being paid a lot, so they are bidding up these insane prices.”

Willbanks, who sees plenty of units in her capacity as an apartment scout, said the rent increases are astounding.

“It’s just insane; $3,000 a month is a mortgage payment,” she said. “Some of the square footages (for that) are horrendous. These places are 600 to 900 square feet, and they’re charging three grand a month.”

Target for investors

The escalating rents make Bay Area cities increasingly attractive targets for large-scale real estate investors.

Ivanhoé Cambridge, the real estate subsidiary of a major institutional fund manager in Quebec, has spent more than $600 million in the past year buying apartment complexes from Cupertino to San Jose, totaling 2,300 units. It plans to build a high-end, 648-apartment complex in San Jose in partnership with Shea Properties, breaking ground in the spring with occupancy in about 2 1/2 years.

“We like the dynamic of the employment base. We like the fact that there are natural barriers to entry in the area,” said Sylvain Fortier, president of the residential division. “We like the combination of more tenants in an environment where new supply may not meet demand. We are seeing market increases on rents that are (already) fairly substantial. That will not continue forever, obviously.”

Managing expectations

Lu, the Seattle entrepreneur who is moving his company here, said he knows his employees will confront similar challenges when they house-hunt.

“When I get back, I will tell my team to manage their expectations,” he said. “In Seattle you can get a 700- or 800-square-foot place with parking in a nice neighborhood with a view of the water for $1,000 a month. They should budget time, be patient and expect prices that we’ve never seen before, even though we live in a metropolitan area. This is an order of magnitude beyond what I’ve ever seen.”

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com

Article source: http://www.sfgate.com/business/article/Apartment-rents-rise-in-Oakland-San-Francisco-3961019.php

“Oakland is the less expensive alternative to San Francisco,” said Sarah Bridge, president of RealFacts, a Novato company that collects information on rents at large, professionally managed apartment complexes. “It’s an urban core and offers some of the same amenities on a small scale, and is still about $800 (a month) less expensive than San Francisco. It’s a spillover from the growth occurring in San Francisco.”

The average asking rent at buildings with at least 50 units in Oakland hit $1,925 in the third quarter, up 19 percent from the same time last year, RealFacts said. That figure averages rents for units ranging from studios to three bedrooms, but the trend is just as pronounced for each size. One-bedroom apartments, for instance, were asking $1,761, a 20.1 percent increase from a year ago, RealFacts said.

San Francisco’s already sky-high rents continued climbing, with a new average asking of $2,768 at big complexes, up 7.6 percent from a year ago. San Jose saw a 9.6 percent increase to an average of $1,845, RealFacts said.

Apartment hunters on both sides of the bay are reeling from sticker shock.

Matt and Jennifer Renner are moving back to the Bay Area after a few years living in Brooklyn and Boulder, Colo. They’re seeking a two-bedroom in Oakland for about $1,900, Despite both having stable employment, good credit and excellent references, the pickings are slim.

“In the four years we’ve been gone, it’s staggering how much the rents have gone up,” Matt Renner said. “We considered looking at San Francisco, but the rental market there was crazy, comparable to Manhattan.”

Big increases in 4 years

In 2008 when they were last here, it was a different story, he said. “I was in a three-bedroom, really nice house in the Lower Haight for $3,000 a month,” Renner said. “My wife had a nice one-bedroom in a safe neighborhood in Oakland for $875 a month. Now that’s almost doubled.”

In San Francisco, what passes for good news is that the trajectory for rent hikes appears to be slowing, which might mean the market is close to saturation.

“It’s not as if San Francisco is going to experience a rent drop, but I think it’s gone as far as it can go,” Bridge said. She said she thinks San Francisco is following a pattern set by East Coast cities such as New York and Washington, which saw rapid price appreciation and now appear to have maxed out the increases.

“It’s not a demand issue; there would be more people willing to rent an apartment (in San Francisco). It’s affordability,” she said. “There aren’t that many high-paying jobs that (landlords) can just keep raising the rents to ridiculous levels.”

People who are apartment- hunting in San Francisco continue to report that it’s a blood sport.

‘Massive changes in wealth’

Bo Lu, co-founder and CEO of FutureAdvisor, which offers online financial advice, is moving his seven-person Seattle startup to San Francisco to be closer to the talent pool and the startup community.

He and his girlfriend, Marlo Struve, hired real-estate agent Wendy Willbanks, who runs an “apartment concierge” company called She Moves You, to help them look. After four intensive days of touring more than a dozen units, they signed a lease on a two-bedroom in the Castro for $3,200 a month, including parking.

“The cost was enormous in both time and money,” he said. His theory about the escalating rents takes a macroeconomic view of the tech boom.

“Many startups like mine are replacing humans with computers,” he said. “Whenever you take an industry that used to employ tens of thousands and instead employ a few hundred engineers, you end up with massive changes in wealth. Engineers are being paid a lot, so they are bidding up these insane prices.”

Willbanks, who sees plenty of units in her capacity as an apartment scout, said the rent increases are astounding.

“It’s just insane; $3,000 a month is a mortgage payment,” she said. “Some of the square footages (for that) are horrendous. These places are 600 to 900 square feet, and they’re charging three grand a month.”

Target for investors

The escalating rents make Bay Area cities increasingly attractive targets for large-scale real estate investors.

Ivanhoé Cambridge, the real estate subsidiary of a major institutional fund manager in Quebec, has spent more than $600 million in the past year buying apartment complexes from Cupertino to San Jose, totaling 2,300 units. It plans to build a high-end, 648-apartment complex in San Jose in partnership with Shea Properties, breaking ground in the spring with occupancy in about 2 1/2 years.

“We like the dynamic of the employment base. We like the fact that there are natural barriers to entry in the area,” said Sylvain Fortier, president of the residential division. “We like the combination of more tenants in an environment where new supply may not meet demand. We are seeing market increases on rents that are (already) fairly substantial. That will not continue forever, obviously.”

Managing expectations

Lu, the Seattle entrepreneur who is moving his company here, said he knows his employees will confront similar challenges when they house-hunt.

“When I get back, I will tell my team to manage their expectations,” he said. “In Seattle you can get a 700- or 800-square-foot place with parking in a nice neighborhood with a view of the water for $1,000 a month. They should budget time, be patient and expect prices that we’ve never seen before, even though we live in a metropolitan area. This is an order of magnitude beyond what I’ve ever seen.”

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com

Article source: http://www.sfgate.com/realestate/article/Rents-rise-in-S-F-Oakland-San-Jose-3961019.php

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The Plaza

Inland Empire

PALM SPRINGS, CA-Fowler Property Acquisitions of San Francisco has acquired two distressed apartment complexes in this week’s roundup of sales, leases and other transactions in the West. The properties are the 156-unit Plaza at 2300-2490 E. Tahquitz Canyon Way and the 155-unit Palm Springs Village at 2700-2786 E. Tahquitz Canyon Way. The Plaza sold for $8.9 million and the Palm Springs Village for $7.6 million. Plaza, built in 1972, includes six studio, 96 one-bedroom, and 50 two-bedroom units. The seller was Tahquitz Plaza Associates LLC of Seattle. Palm Springs Village, also built in 1972, comprises 107 one-bedroom and 49 two-bedroom units. The seller was Palm Springs Desert Park Associates LLC of Seattle. The buyer plans on major interior and exterior renovations at both properties, according to Robin D. Ossenbeck, a partner in the West Los Angeles office of Hendricks Partners, who represented the buyer.

San Diego County

Core Capital Investments of Irvine has secured an $8.9 million refinancing for its 146-pad Lanikai Lane Mobile Home Park at 6550 Point Dr. in Carlsbad. The four-year loan, arranged by an HFF team led by director Tina Derderian, is at 6.55% fixed, interest-only, with ING Investment Management. Loan proceeds are paying off existing debt as well as providing an interest reserve until an existing ground lease expires in two years. The borrower owns the land, which it leases to the unaffiliated owner/operator of the mobile home park. The mobile home park is across the street from the South Carlsbad State Beach and adjacent to the Carlsbad Poinsettia Station of the Coaster rail line providing access into downtown San Diego. The 14.3-acre site is also within walking distance to the new Hilton Carlsbad Oceanfront Resort and Spa.

Douglas Wilson, owner of San Diego-based Douglas Wilson Cos., has been appointed off-panel trustee on GCIC Development Corp. in Oklahoma and the 6,500-acre Sargent Ranch in the San Francisco Bay Area. GCIC Development Corp.’s portfolio includes a variety of commercial and hospitality properties throughout the Southwest. The Sargent Ranch project comprises 6,500 acres of primarily pristine farmland in the town of Gilroy, CA. There is more than $90 million in debt on the property. The assignment of Douglas Wilson as off-panel trustee by the United States Trustee reflects the extraordinary nature of these two bankruptcies, Wilson says. “These are uniquely complex assignments,” said Wilson, whose firm has provided problem resolution services for over 600 projects since 1989. “Both involve big, complicated assets with tremendous upside opportunities.”

FFP Ltd., a limited partnership with Walter and William Fiedler as general partners, has acquired a 7.5-acre parcel with a 72,712-square-foot industrial building at 4370 Jutland Dr. in Clairemont from the Conner Family Trust for $3 million. The deal is “an early sign that real estate developers and investors are positioning for infill spec development projects,” according to associate Deborah Hunkeler of Cushman Wakefield, who?along with Jay Arnett of Colliers International?represented the seller in the transaction. “There appears to be improving demand for infill properties that offer redevelopment opportunities,” Hunkeler continued. Hunkeler noted that the Jutland Drive property, which was originally developed in 1967, was listed for sale with little activity until recently. The property went into escrow with a qualified backup offer on the table. “Seller financing is playing a crucial role in these transactions since the commercial real estate lending market remains largely frozen still for spec developers,” said Hunkeler, who worked with the seller, Richard Conner of Conner Family Trust, throughout the market downturn to position the property and promote the seller’s interest in providing potential buyers with financing. “Both offers on the property were made with the intention of speculative development following the demolishment of the existing facility,” she said. The buyer is a general contracting firm with a 30-year track record in San Diego. Specific plans and timing of redevelopment have not been announced.

Northern California

Fontana Lee Apartments

Leeward Ventures LLC bought the 22-unit Fontana Lee Apartments at 290 Lee St. in Oakland’s Adams Point neighborhood from 290 Lee Street LLC. According to Kevin Turner, a senior vice president in the Oakland office of Marcus Millichap, the property is considered to be one of the top apartment complexes in Adams Point. The complex attracted multiple offers, he said, noting that “The buyer was motivated by the core Adams Point location, the significant barriers to entry, the opportunity for a long-term hold with equity preservation and the realistic exit timeline.” The complex is adjacent to Lake Merritt and Downtown Oakland. It was sold with a TIC survey map in place at the time of sale. A significant number of units have been renovated along with the common area to pre-condo conversion specs. Built in 1968 by Santos Construction, the property is a four-story wood frame and stucco building with a concrete block exterior and a concrete slab foundation. There are 15 one-bedroom/one-bath units, six two-bedroom/two-bath units and one large two-bedroom/two-bath penthouse with a wood-burning fireplace.

101 Redwood Shores Parkway

Kabam, a developer of multiplayer social games, has signed a lease to expand its headquarters for the second time in six months at 101 Redwood Shores Parkway, a four-story class A office property located at the gateway to Redwood Shores. Kabam established its headquarters at 101 Redwood Shores Parkway in March of 2010 in 15,000 square feet of office space, and first expanded in October of 2010 by leasing an additional 10,000 square feet. In March of this year, Kabam agreed to lease 15,000 sf of additional space bringing its total leased space to 40,000 square feet. Jon Mackey of Cornish Carey Commercial Newmark Knight Frank’s San Mateo office, together with Liz Hart of the firm’s San Francisco office, represent Kabam in all of its lease requirements. Kristoph Lodge and Matt Winters of Cornish Carey Commercial Newmark Knight Frank’s Palo Alto office represent landlord Diamond Investment Properties’ Redwood Shores property. In just over a year, Kabam has grown from 25 to 275 employees. The firm continues to hire and plans to add another 225 to 475 employees throughout its three locations over the next year. In early March, Kabam announced a new 25,000-square-foot lease at 405 Howard St. in San Francisco. The firm also has an office in Beijing. Currently, more than 200 Kabam employees work in the Redwood Shores headquarters.

Las Vegas

Boise, ID-based grocer WinCo Foods has acquired 17.25 acres on the southeast corner of Stephanie Street and Wigwam Parkway in Henderson from Insight Holdings for $7.1 million and plans to build a 95,000-square-foot store at the site. This will be WinCo’s first store in Southern Nevada, according to managing partner Jim Zeiter of Insight, which acquired the land in 2009. Micheal Read, spokesperson for WinCo, said the company has been looking at expansion opportunities in Southern Nevada for several years and will be looking for additional development sites at a later date. Zeiter said there was no bank involved in the sale and it is one of the few recent principal-to-principal land deals in the Las Vegas Valley.

Los Angeles

Owner-user Agron Inc. bought a 120,000-square-foot warehouse and manufacturing facility at 2060 E. Via Arado in Rancho Dominguez from 2060 E. Via Arado Property Co. for $8.1 million. The seller was represented by senior vice president Jerry Gillman and senior associate Chuck Berger of Grubb Ellis Co. Constructed in 1973, 2060 E. Via Arado is a freestanding facility situated on approximately five acres. Agron was represented by Brad Levin of DAUM Commercial Real Estate Services.

14255-14317 Lomitas

Colliers International, the second largest global real estate services organization, recently negotiated a five-year lease for a 155,992-square-foot industrial building located at 14255-14317 Lomitas Ave, City of Industry, Calif. The transaction is valued at $3.1 million. Built in 2001, the property offers state-of-the-art building features including 30’ minimum ceiling clearance and a secured concrete yard. It will be used as a warehouse by the new tenant. Steve Bellitti, senior executive vice president, Tom Taylor, senior executive vice president, and Tony Phu, executive vice president, all based in Colliers International’s Inland Empire office represented the landlord, Lomitas LP, a Orange County-based investor. The tenant, HOT Services, was represented by IDS Real Estate Group. “This is one of the few deals done greater than 100,000 SF size range in Industry this year. By tracking movement in the market, Colliers brokers were able to identify the potential tenant whose building recently sold,” said Phu. “By working with the tenant’s broker, Colliers was able to introduce the prospective tenant to the building and consummate a deal.”

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Bob Howard Bob Howard is a Southern California-based reporter for GlobeSt.com who has specialized in the commercial real estate industry for nearly 20 years. Before that, he was a business reporter in Los Angeles. Before specializing in business and real estate, he was a reporter for daily newspapers in California and Pennsylvania. Contact Bob Howard.

Article source: http://www.globest.com/news/1883_1883/inlandempire/308621-1.html