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A chat with commercial real estate broker Phil Mahoney

Sat, 27 Apr 2013 05:52:42 +0000

When a megadeal lands in Silicon Valley, there’s a decent chance veteran Bay Area commercial real estate broker Phil Mahoney had a hand in making it happen.

Google’s 715,000-square-foot lease in Sunnyvale. The 600,000-square-foot campus for LinkedIn in Sunnyvale. A Sunnyvale lease for 600,000 square feet for a new campus to be occupied by Amazon unit Lab 126. The just-concluded 100,000-square-foot deal for Softbank affiliate Starburst in San Carlos. Mahoney, an executive vice president with the Santa Clara office of Cornish Carey Commercial Newmark Knight Frank, helped guide all of these to a successful conclusion.

Each year, Mahoney kicks off the Cornish Carey annual forecast for the commercial property sector in the South Bay. This newspaper recently spoke with him about his outlook for the Silicon Valley commercial property sector. Mahoney’s comments have been edited for length and clarity.

Q How do you see the Silicon Valley market in 2013?

A There is no way that 2013 will repeat what occurred in 2011 and 2012. Those were incredible years, and there was so much space leased that it was not sustainable. We never expected that this year would be like either of those years. The market is taking a bit of a breather in that tenants have absorbed millions of square feet. Much of that square footage that was leased the last year is now being retrofitted for occupancy.

Q How long might this breather

last?

A We see 2014 returning to a very strong leasing mode when companies have digested what they took in in 2011 and 2012. Late 2013 and into 2014 should be very good.

Q What is driving the leasing?

A This is all underpinned by a strong economy, a good tech economy. The economy is strong enough to withstand problems, whether they be things such as North Korea or budget sequestration.

Q Is it helpful that there is a breather?

A If you are a property owner with a big empty building, now is not a good time to take a breather. But it is healthy in that it gives transportation infrastructure time to catch up to all the leasing that has occurred. And if you get into an overheated situation, you can get an overbuilt market, which isn’t good.

Q San Francisco’s mayor has said his city is the innovation capital of the world, which suggests San Francisco overshadows Silicon Valley. Is that assessment on target, or off target?

A I’d say the reports of San Francisco becoming the new Silicon Valley are overdone. Quietly, some of the larger tech companies are starting to push back a little bit on the whole San Francisco scene. There is a little bit of a wait and see about how it all works out. Some of companies have deferred major expansions in San Francisco and are doing it in the Santa Clara Valley proper instead.

Q Is the current surge in tech leasing like the dot-com boom that became a bubble, or is this the real deal?

A There is no comparison. This time there are no Pets.com, no Webvan. There is very little fluff we can see. These are real companies with real revenues and real profits. They don’t just depend on eyeballs looking at their websites.

Q How strong is the current crop of tenants?

A Never in my 30 years have I seen this number of creditworthy tenants in the market. Amazon, Google, Apple, LinkedIn, Facebook, Microsoft, Juniper, these are strong multibillion-dollar companies with healthy balance sheets.

Q This tech boom looks to be here for a while?

A This definitely has legs. We are probably in the middle innings of a recovery in Silicon Valley.

Contact George Avalos at 408-373-3556 or 925-977-8477. Follow him at Twitter.com/george_avalos.

Phil Mahoney
Age: 53
Birthplace: Cambridge, Mass.
Company: Cornish Carey Newmark Knight Frank
Position: Executive vice president
Residence: Los Altos Hills

Five things about Phil Mahoney
He was a lifeguard on Cape Cod while in college.
He is a former college football player, a starting defensive end with Stanford University and a teammate of NFL Hall of Fame quarterback John Elway.
He has lived in England, in a small town on the Thames River as part of a Stanford overseas program.
He once skied in Scotland.
When he began his current career, he had three jobs: commercial real estate broker, a mover for a moving company, and a bouncer at a Palo Alto night club

Article source: http://www.insidebayarea.com/breaking-news/ci_23115274/chat-commercial-real-estate-broker-phil-mahoney

Avison Young opens new office in San Francisco

Wed, 11 Apr 2012 18:06:36 +0000

TORONTO, April 11, 2012 /PRNewswire via COMTEX/ –
Leading Canadian commercial real estate firm opens 12th location outside
Canada as part of strategic plan to expand its services across U.S.; Nick Slonek becomes Principal and Managing Director, Northern California

Mark E. Rose, Chair and CEO of Avison Young, Canada’s largest independently-owned commercial real estate services
company, announced today the opening of a new office in San Francisco.

The newest American office marks Avison Young’s 12th location outside of
Canada, the company’s third California office, and the next step in the
firm’s aggressive growth and expansion strategy.

Effective immediately, Nick Slonek joins Avison Young as a Principal and Managing Director of the Northern
California region. Based in Avison Young’s new downtown San Francisco
office, Slonek will focus his efforts on overseeing the growth and
development of the company’s presence throughout Northern California,
as well as servicing new and existing clients. He was most recently a
Principal and Senior Vice-President in the San Francisco office of
Cornish Carey Commercial Newmark Knight Frank.

Over the past three years, Avison Young has grown from 11 to, now, 29
offices in 26 markets and from 300 to more than 900 real estate
professionals across Canada and the U.S.

“We are excited to be opening our newest office in San Francisco, which
will enhance our growing presence in the U.S. The hiring of Nick Slonek
is in line with our strategic plan to expand our commercial real estate
services with high-quality leaders across the nation,” comments Rose.
“The San Francisco Bay Area – and the entirety of the Western U.S.
region – is a vast and expanding real estate market and a focal point
for many of our investor and occupier clients. We are thrilled that
Nick has joined us to lead our efforts in Northern California as he has
an extensive and excellent track record of building a first-class
service platform in this market.”

“Nick is an experienced dealmaker and has terrific relationships with
many clients, both corporate and institutional, throughout the Bay Area
and beyond,” says Earl Webb, Avison Young’s President, U.S. Operations. “He shares our common
culture and our company’s enthusiasm for all the opportunities we have
in growing our market presence in Northern California and the Western
region. His commitment to our shared vision and our passion for
excellent client service was a determining factor in adding Nick as a
Principal.”

He continues: “The Bay Area is a critical location to our U.S. strategy,
given the city’s position as a corporate-occupier market as well as a
highly desirable investment market for our investor clients. We
couldn’t be more pleased to have Nick on our management team.”

Webb adds that Avison Young is using its highly profitable platform and
its pristine balance sheet to recruit other senior brokers and
executives to fill the company’s service delivery needs in San
Francisco and the Western region, and that plans for the company
include further acquisitions to grow the Avison Young brand
internationally.

Effective May 1, Avison Young’s new San Francisco office will be located
at 601 California Street, 5th floor, in downtown San Francisco.

Avison Young opened its first California office in Los Angeles in August
2011, followed by a second Los Angeles office in December through the
acquisition of Ramsey-Shilling Commercial Real Estate Services, Inc.
Today’s announcement comes on the heels of industry veteran Christopher Cooper joining Avison Young as a Principal and Managing Director of the
Southern California region last month.

“I am thrilled to be joining Avison Young at this point in my career.
The Bay Area market is well-positioned for a firm that is strategic,
debt-free and well-capitalized,” says Slonek. “I am also proud to
become a Principal at Avison Young. To be joining a firm and a
management team with a proven track record, and that is executing on
its plan to aggressively expand across the U.S. and globally, is very
exciting.”

“Avison Young has undergone significant growth over the past three years
and is prepared to continue on this pace. I am impressed by the
company’s current performance and leading-edge strategic direction.
Avison Young is composed of a savvy group of professionals and I look
forward to learning from them. Of course, servicing existing and new
clients with a fresh set of eyes is my number one priority.”

Slonek brings to Avison Young 25 years of experience in the commercial
real estate industry. In 1988, he worked at Nelson Peterson
Associates as a downtown San Francisco office leasing broker. In 1990,
he joined Coldwell Banker (now CBRE) and enjoyed a successful career
there until 2004, at which time he opened the San Francisco office of
Cornish Carey Commercial, Inc. (which merged in 2010 with Newmark
Knight Frank to become Cornish Carey Commercial Newmark Knight
Frank).

Primarily focusing on corporate tenant representation on a local,
national and international basis, Slonek has represented more than 10
million square feet of office tenants during his career. At Cornish
Carey Commercial Newmark Knight Frank, Slonek consistently ranked among
the top performers during his nine years with the company. While with
Coldwell Banker, he ranked # 1 in revenue production in the San
Francisco downtown office in 1998, 2002 and 2003. He and his partners
were also Top 5 performers from 1996 to 2003.

Recent lease transactions include: First Republic Bank (230,000 square
feet (sf)), Citigroup (120,000 sf), Sears (50,000 sf) and Western Union
(26,000 sf). Slonek also represents GLL at 199 Fremont Street and 350
Mission Street (a 350,000-sf development site); Langley Investments,
Ashforth and GE Pension at Foundry II, 405 Howard Street; Sumitomo’s
123 Mission Street; and Kennedy Wilson’s 300 California Street.

Slonek is a senior member of The Guardsmen, a group that raises money
for underprivileged children. He has served with the March of Dimes and
the San Francisco Boys Girls Club and participated on the board of
directors of the Bay Area chapters for both organizations. He is a
member of the Big “C” Society/Bear Backers, which assists with funding
for the University of California at Berkeley’s athletic department; and
is acting President of the California Vintage Wine Society, of which he
has been a board member for the past five years. Slonek holds a
Bachelor’s degree in history from the University of California at
Berkeley where he played varsity water polo.

In February, Avison Young was named a winner of Canada’s 50 Best Managed Companies program for 2011, sponsored by Deloitte, CIBC, National Post and Queen’s School of Business.

Founded in 1978, Avison Young is Canada’s largest independently-owned
commercial real estate services company. Headquartered in Toronto,
Ontario, Avison Young is also the largest Canadian-owned,
principal-managed commercial real estate brokerage firm in North
America. Comprising more than 900 real estate professionals in 29
offices across Canada and the U.S., the full-service commercial real
estate company provides value-added, client-centric investment sales,
leasing, advisory, management, financing and mortgage placement
services to owners and occupiers of office, retail, industrial and
multi-residential properties.

•Editors/Reporters: please click on link to view and download photo of
Nick Slonek

http://www.avisonyoung.com/sites/default/files/content-files/Media_Room/Temp/Slonek_Nick.jpg

SOURCE Avison Young (Canada) Inc.

Article source: http://www.marketwatch.com/story/avison-young-opens-new-office-in-san-francisco-2012-04-11

Silicon Valley’s commercial real estate market expected to remain hot

Wed, 25 Jan 2012 06:10:56 +0000

With the tech boom building momentum, Silicon Valley companies are on the hunt for space equal to nine shopping malls.

That was the highlight conclusion of a conference Tuesday organized by realty brokerage Cornish Carey Commercial Newmark Knight Frank. The gathering heard brokers present a robust outlook for the Bay Area economy and the region’s commercial real estate sector.

“We had a lot of tenant demand in 2011, and there is still more tenant demand coming,” said Phil Mahoney, an executive vice president with Cornish Carey.

At present, tenants are seeking a combined 9.6 million square feet of office and research space in Silicon Valley, estimated Cornish brokers, who update tenant demand estimates every three months.

Demand in early 2012 follows a spike at the end of 2011 that saw tenant demand reach 11.1 million square feet of office and research space, the highest level in the past five years.

When San Francisco and San Mateo County are added to Silicon Valley, estimated tenant demand is 15.6 million square feet of office and research space.

“This is a strong recovery,” Mahoney said. “The hiring rebound is continuing.”

About 9,400 openings for tech jobs are currently listed in the Bay Area, according to Cornish Carey.

The South Bay during 2011 posted a 3 percent gain in total payroll jobs, more than twice the hiring pace for the U.S. overall, which reported a 1.3 percent gain.

“The

Bay Area will continue to be an outlier for job growth,” said Erik Doyle, an executive managing director with Cornish Carey.

To be sure, tenant demand won’t translate at a 100 percent rate into new leases. Tenants often decide to remain where they are and renew their leases. Still, Mahoney estimates that in a decent economy — which appears to be the case in Silicon Valley and the San Francisco metro region — about two-thirds of the demand winds up as a new office space lease.

That could mean 6.4 million square feet of leases in coming months in Silicon Valley alone. And it might result in 10 million square feet of leasing activity in the South Bay, Peninsula and San Francisco markets before long.

The amount of prime office space available in Silicon Valley has been chopped nearly in half, due to the strong demand. At the end of 2010, the region had a 20.6 percent vacancy rate. One year later, Class A office vacancies had dwindled to 11.9 percent, Cornish Carey reported.

Brokers suggested that recent activity in Palo Alto, Cupertino, Menlo Park, Sunnyvale and Mountain View is poised to spread to nearby regions.

The hottest spots in the short term are South San Francisco, San Mateo County and North San Jose.

Further out, the next waves of expansion are expected to reach Milpitas, downtown San Jose, central San Francisco and Fremont.

The East Bay will also benefit from the upswing if companies can’t find space in their primary target areas of Silicon Valley and San Francisco, said Thomas Fehr, a senior vice president with Cornish Carey.

“There is not enough existing space to fill all that demand,” Fehr said. “Historically, when there has been an overflow, it has come to the East Bay. We expect that overflow again.”

Contact George Avalos at 925-977-8477. Follow him at twitter.com/george_avalos.

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Article source: http://www.mercurynews.com/real-estate/ci_19812931

Swift Realty Partners’ One Concord Center Quickly Filling Up

Sun, 24 Jul 2011 09:05:29 +0000

Walnut Creek, CA, July 24, 2011 –(PR.com)– Cornish Carey Commercial Newmark Knight Frank announced that Swift Realty Partners’ One Concord Center is exceeding the firm’s expectations growing its tenant roster. In just 7 months, 14 lease transactions totaling 111,615 square feet (sf) were completed bringing the occupancy rate of the 358,589 sf property from 43.2% to 78.3%. Breck Lutz and Alex Grell of Cornish Carey Commercial Newmark Knight Frank’s Walnut Creek office represent Swift’s One Concord Center for lease.

Swift Realty Partners was founded in July of 2010 by former President and Chief Executive Officer of Blackstone’s Equity Office Properties Christopher Peatross. One Concord Center, purchased in late September of 2010, was Swift’s first investment. Several large tenants had vacated the 15-story Concord property located at 2300 Clayton Road prior to the sale and upon purchase, 203,821 sf remained available for lease.

“I am extremely pleased with the pace at which One Concord Center is filling up,” said Swift Founder Christopher Peatross. “I targeted this building as Swift Realty Partners’ first investment because of its incredible potential. With strong ownership and leasing teams in place, One Concord Center is proving itself to be the choice destination for East Bay and Bay Area companies.”

Recent lease transactions at One Concord Center include:

• Sutter Health leased a full floor – 24,960 sf – and will move a finance operation currently based in San Francisco to Concord.
• Swinerton Corporation leased a full floor – 24,960 sf –and will move local operations to the new property.
• Towill Inc. leased 15,680 sf and will expand its 9,238 sf Concord operations and relocate a San Francisco-based group to the new space.
• Progressive Insurance renewed its 11,208 sf lease at the property.
• TRC Environmental leased 9,789 sf and will move local operations to the new property.
• Jacobs Engineering leased 7,987 sf and will move Walnut Creek operations to One Concord Center.
• Rimkus Consulting, Pacific Pension, Business Thru Government, Inc., Closure Solutions, Inc., Validus Corporation, Carotrans International Inc., Lamar Advertising Company and Pacer each signed leases of less than 4,000 sf at One Concord Center.

One Concord Center is Concord’s premier Class A office building. The 358,589 sf 15-story property is located immediately adjacent to the Concord BART station. Occupants also enjoy access to numerous on-site amenities including a fitness facility with showers, a full-service cafe and a large tenant conference center. The building lies within walking distance to the downtown’s numerous restaurants, services and hotels. Other significant tenants at One Concord Center include United Health Group and Cardno Entrix.

“While the Concord commercial real estate market is gradually improving, we are experiencing a tremendous occupancy surge at One Concord Center because of the quality of the space, its location and stable ownership,” said Cornish Carey Commercial Newmark Knight Frank Senior Vice President Breck Lutz. “We anticipate the building to be fully leased in 2012.”

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A dominant regional real estate force since 1935, Cornish Carey Commercial partnered in 2010 with Newmark Knight Frank, one of the largest independent real estate service firms in the world, to become Cornish Carey Commercial Newmark Knight Frank. Regionally, more than 280 agents in 13 strategically located offices throughout Northern California create a powerful combination of people and services that uphold Cornish Carey Commercial Newmark Knight Frank core values of integrity and knowledge. Headquartered in New York, Newmark Knight Frank and London-based partner Knight Frank operate from over 220 offices in established and emerging property markets on six continents. With a combined staff of 7,300 and revenues last year exceeding $861 million, this major force in real estate is meeting the local and global needs of owners, tenants, investors and developers worldwide. For more information, visit: www.ccareynkf.com

Article source: http://www.pr.com/press-release/341018