A total of 5,404 houses and condominiums were sold, down 1.8 percent from January and more than 6 percent from February of 2012, DataQuick said.

The median sales price for a home in the nine-county area was $405,000. That was down 2.4 percent from January but still nearly 25 percent higher than a year ago.

Although prices remain well below the peak of several years ago, they have soared by double digits each month for the past nine months when compared with the same months a year earlier. The gains have topped 20 percent in the past four months in year-over-year comparisons, DataQuick said.

“Isn’t this Economics 101? Supply and demand?” DataQuick President John Walsh asked in a statement. “If demand outstrips supply in a free market, the price goes up.”

“Now, with a recovering economy, prices still closer to the bottom than to the top, with ultra-low mortgage interest rates and tight supply, the stage is set for price gains. This spring is going to be interesting,” Walsh said.

There were continuing indications that California’s housing market is recovering from its five-year slump.

“Foreclosure activity is well below peak levels reached in the last few years. Financing with multiple mortgages is low, and down payment sizes are stable,” DataQuick said in a statement.

Sales in February shifted from low-cost, distressed homes to mid-market and higher properties, with the number of homes selling for $500,000 or more jumping by 27.7 percent, DataQuick reported.

Foreclosures and short sales, those in which the price was less than the amount owed on the property, both were down over January and there were a lot fewer of them compared with February a year ago.

Investors, as compared with first-time homebuyers, accounted for a sizeable chunk of the sales. Absentee buyers, who mostly are investors, bought 28.2 percent of all Bay area homes.

That was an all-time high based on DataQuick figures going back to 2000, the company said.

In Southern California, homes sales continued strong, with 15,945 sold – the most for a February in the past six years.

The median sales price in Los Angeles and five other counties was $320,000, DataQuick reported Wednesday.

Article source: http://www.vcstar.com/news/2013/mar/14/sf-bay-area-february-home-sales-dip/

A total of 5,404 houses and condominiums were sold, down 1.8 percent from January and more than 6 percent from February of 2012, DataQuick said.

The median sales price for a home in the nine-county area was $405,000. That was down 2.4 percent from January but still nearly 25 percent higher than a year ago.

Although prices remain well below the peak of several years ago, they have soared by double digits each month for the past nine months when compared with the same months a year earlier. The gains have topped 20 percent in the past four months in year-over-year comparisons, DataQuick said.

“Isn’t this Economics 101? Supply and demand?” DataQuick President John Walsh asked in a statement. “If demand outstrips supply in a free market, the price goes up.”

“Now, with a recovering economy, prices still closer to the bottom than to the top, with ultra-low mortgage interest rates and tight supply, the stage is set for price gains. This spring is going to be interesting,” Walsh said.

There were continuing indications that California’s housing market is recovering from its five-year slump.

“Foreclosure activity is well below peak levels reached in the last few years. Financing with multiple mortgages is low, and down payment sizes are stable,” DataQuick said in a statement.

Sales in February shifted from low-cost, distressed homes to mid-market and higher properties, with the number of homes selling for $500,000 or more jumping by 27.7 percent, DataQuick reported.

Foreclosures and short sales, those in which the price was less than the amount owed on the property, both were down over January and there were a lot fewer of them compared with February a year ago.

Investors, as compared with first-time homebuyers, accounted for a sizeable chunk of the sales. Absentee buyers, who mostly are investors, bought 28.2 percent of all Bay area homes.

That was an all-time high based on DataQuick figures going back to 2000, the company said.

In Southern California, homes sales continued strong, with 15,945 sold – the most for a February in the past six years.

The median sales price in Los Angeles and five other counties was $320,000, DataQuick reported Wednesday.

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Article source: http://www.sacbee.com/2013/03/14/5262908/sf-bay-area-february-home-sales.html

A years-long effort to build a performing arts and education center at the intersection of Market, Turk and Mason streets could collapse now that an out-of-town property owner has ended talks with the project’s backers and put the lots up for bid.

“I’m hoping that whoever ends up with the property is willing to do an arts component and not just make everything market rate,” said Will Thacher, whose family has owned the rest of the proposed project, the adjoining property at 950-964 Market St., since 1937. “But San Francisco is one of the hottest real estate markets in the nation and Mid-Market now is one of the hottest areas in the city.”

It wasn’t always that way. Just a few years ago, Mid-Market was a seedy urban desert plunked in the middle of the city’s signature boulevard. Then-Mayor Gavin Newsom and current Mayor Ed Lee worked to create tax breaks and incentives to bring in businesses to replace the empty buildings, boarded-up storefronts and cheesy retail shops that contributed to the area’s dangerous, down-at-the-heels vibe.

Against that background, the plan for a mixed-use arts center that would transform three-quarters of one of the sketchiest blocks on Market Street was a gift from above. City officials, the arts community and neighborhood groups from the adjoining Tenderloin quickly embraced the plan.

“Theater groups are getting priced out of the city, even as people are coming to the city for the arts,” said Carmela Gold, president of the Tenderloin Economic Development Project, which has put together the proposed arts project. “If you talk to anyone in the arts, even an organization as big as (the American Conservatory Theater), they’ll say they’re going to be priced out of the city in five years.”

The plan for the 950 Center for Art and Education calls for four small theaters, rehearsal space, meeting rooms and public areas that could be shared by several performing arts groups, along with office space. ACT, which is converting the nearby Strand Theater into another performing space, would also use the new center for administrative and education efforts, according to a January 2013 report on the project.

“We want to provide affordable space for arts groups that are being squeezed out of the city because of what’s happening in the real estate market,” said John Clawson, founder of Equity Community Builders, the development consultant on the project.

With the arts activity on the second and third floors of the proposed development, there would be room in the sprawling building for street-level restaurant and retail space, as well residential or office uses on higher floors, making the project more attractive to a developer.

Ideal for small groups

The shared space idea is perfect for small local theater groups, which wouldn’t be burdened with the day-in, day-out costs of running their own performance spaces, said Steven Anthony Jones, artistic director of the Lorraine Hansberry Theatre.

“We can share office and rehearsal space and put the money we save into the artistic side,” he said.

But, except for Thacher, property owners’ early interest in the arts plan waned as the price tag rose on Mid-Market property. The Lone Star Fund of Dallas, which now owns the other three Market Street parcels earmarked for the arts center, turned down an offer by the project’s backers and opted to put the properties up for bid late last month.

City officials, however, continue to see the arts as a major part of Mid-Market’s revival. On Jan. 30, the mayor and Supervisor Jane Kim sat down with the arts center’s sponsors and potential bidders for the Lone Star property and made it clear the city would work with developers to get the deal done.

“We’re excited about the economic growth we’re seeing,” Kim said. “But the concept also was to recognize the existing community that had always been there … and continue to protect services and the arts who were the area’s original tenants.”

Trying to stay in S.F.

If the arts plan dies, it will be a loss to the city and the artists who make it home.

The Lorraine Hansberry Theatre has been the Bay Area’s signature professional black theater company for 32 years, all of it spent in San Francisco. But after losing their theater a few years back, “we’ve been barnstorming, making plans and then looking for a venue,” said Jones. “This would mean we’d have a permanent home.”

Without the new arts center, “I’m not sure we can stay in San Francisco,” he said.

For now, there’s not much Gold and other supporters of the arts hub can do.

“We’re just waiting for Lone Star to pick a winner and then talk with whoever gets the bid,” she said.

But Gold remains confident. The arts center has both political and financial backing and is the type of project that could transform the adjoining Tenderloin neighborhood.

“We want the Tenderloin to benefit from the extraordinary growth of business along Mid-Market,” she said. “We want development to increase to where people are happy to walk down Turk Street.”

John Wildermuth is a San Francisco Chronicle staff writer. E-mail: jwildermuth@sfchronicle.com

Article source: http://www.sfgate.com/bayarea/article/Mid-Market-arts-center-at-risk-amid-boom-4342332.php

If we hadn’t been told over and over that it is an evil word that should never be uttered in San Francisco, even cynics would say it is the g-word:

Gentrification.

And it’s happening with surprisingly little grumbling.

“Or,” says 30-year real estate veteran Joske Thompson, “I think it is a different kind of grumbling. Even the long-termers in neighborhoods are appreciating the changes. Those people in the Mission like the fact that they can walk the neighborhood and feel safer.”

The difference this time is that the push is coming from the bottom up. Rather than fat-cat developers promoting ugly skyscrapers, the demand is coming from young techies who work here or in the Silicon Valley and want to preserve the feel of unique neighborhoods. Their presence is being felt not only in the Mission, where Facebook founder Mark Zuckerberg now has a home, but to areas that were once considered downtrodden.

“Young people with talent are the new movers and shakers in the city,” says Thompson, who says the city sells itself. “Last weekend I had some clients who were looking in the Mission. We drove by Dolores Park, and it was packed. They said, ‘Is there a street fair?’ “

Nope, just another afternoon in trendy town.

“This is a small city of 800,000 people,” says Supervisor Scott Wiener, who chairs the Board of Supervisors’ Land Use and Development Committee. “And 2 to 3 million people want to live here. We just need to make sure we don’t kill that quirkiness and uniqueness.”

Displacement in ’70s, ’80s

While the city experienced a similar boom in the ’80s, the concern then was “Manhattanization” – and that’s when gentrification became a dirty word.

“In the ’70s and ’80s there was massive displacement of residents in the Haight, Noe Valley and the Castro,” says Randy Shaw, executive director of the Tenderloin Housing Clinic. “But now you are seeing a massive influx of upper-income people into previously unoccupied areas.”

This boom has its share of concerned activists, but we have yet to see the stop-any-kind-of-development movement we saw in the ’80s.

Still, higher rents are higher rents, and if monthly rates top $2,000, that will affect the entire rental stock.

“In over 30 years of doing this, I have never seen rents like this,” says Delene Wolf, executive director of the city’s Rent Stabilization Board. “My surmise is those Google buses must be fueling that. The whole demographic has changed. I just think about what people on the low end of the economic ladder are feeling.”

Tenants feel at risk

Sara Shortt, executive director of the Housing Rights Council of San Francisco, says the booming rents create a climate that encourages landlords to drive out rent-controlled tenants.

“I am hearing from people who are feeling like survivors in isolated pockets,” she said. “Don’t be fooled. There are still big-money real estate developers creating that market.”

But, those changes are largely happening in neighborhoods that have made the progression from urban blight to uber-hot.

Take Dogpatch, an obscure right turn off Third Street south of ATT Park. Until recently, it was best known as home to the clubhouse of the San Francisco chapter of Hells Angels.

In 2002, Arienne Landry moved her Just for You Cafe from Potrero Hill, but not before she parked her truck on the street for a few days to check out the vibe.

“It was pretty sketchy, almost industrial,” says Landry, who had to shoo drug users away from the cafe entrance after she opened.

Now there’s a line out the door for weekend brunch, and she says weekdays have gone from “whatever to craziness.”

Susan Eslick, an artist, has lived in Dogpatch since 1996. Now she can walk down 22nd Street and call out the changes on every corner. There’s Chocolate Lab, a local chocolate maker, Rickshaw Bagworks, which makes custom messenger bags, a cheese shop, a gourmet ice cream store and Olivier’s, a French butcher shop. And perhaps most important to the transformation, Puccino Restaurant. It opened in 2006, attracting both foodies and good reviews.

“When I got here, you’d have been hard-pressed to find a woman pushing a baby stroller,” says Eslick, vice president of the Dogpatch Neighborhood Association. “Now we have three preschools and a baby gym. It all happened around the time Puccino opened.”

Dogpatch hasn’t lost its funk. The Hells Angels are still there, and they’re active members of the Dogpatch Neighborhood Association.

So don’t try to tell her that upscaling of the neighborhood is a bad thing.

“The term gentrification is loaded,” she said. “I say bring it on. It just has to be designed well. There’s no tolerance for schlock.”

People mean change

There are surely more changes to come. The Tenderloin’s Shaw says the neighborhood has been relatively untouched by the surge, but thousands of residential units near Eighth Street are under construction, and with the arrival of both Twitter and Dolby Labs, it seems impossible that area won’t be transformed.

Those who have already ridden the wave say it is best to go with the flow. Now that her cafe has become a hot spot, startup millionaires stop by for lunch regularly.

“We just ignore them,” she says.

C.W. Nevius is a San Francisco Chronicle columnist. His columns appear Tuesdays, Thursdays and Saturdays. E-mail: cwnevius@sfchronicle.com Twitter: @cwnevius

Article source: http://www.sfgate.com/bayarea/nevius/article/Gentrification-no-longer-a-dirty-word-4302093.php

La Jolla, CA. – January 16, 2012 – (RealEstateRama) — The pace at which the Bay Area housing market is making up for lost ground quickened at the end of 2012 as sales increased year-over-year for the 18th month in a row and the median price rose at its fastest rate in more than 25 years. The market remained constrained by a tight supply of homes for sale and a fussy home loan environment, a real estate information service reported.

The median price paid for a home in the nine-county Bay Area was $442,750 in December. That was up 1.1 percent from $438,000 in November and up 32.0 percent from $335,500 in December a year ago. Last month’s median was the highest since August 2008 when it was $447,000, according to San Diego-based DataQuick.

The 32.0 percent year-over-year increase in the median is the highest in DataQuick’s statistics, which go back to 1988. At least half that increase is due to a change in market mix, with sales shifting away from low-cost distress homes toward more mid-market and move-up homes.

The median reached a high of $665,000 in June/July 2007 and then fell to a low of $290,000 in March 2009. On a year-over-year basis it dropped more than 30 percent each month from August 2008 through May 2009. At the median’s current rate of increase, sometime this spring it will have recovered about half of its loss since its summer 2007 peak.

“Prices are in the midst of bouncing off bottom right now, and nobody really knows what the trajectory of this bounce will be beyond this point. So far, supply has been a bottleneck, but as prices go up, more homes will be put up for sale,” said John Walsh, DataQuick president.

“Another bottleneck these days is that mortgage lenders are swamped. Not only by home buyers, but by homeowners who want to refinance. Rising home prices also mean higher appraisals, and tens of thousands of homeowners who couldn’t refinance half a year ago, now can,” Walsh said.

The number of new and resale houses and condos sold last month in the Bay Area was 7,832. That was up 7.3 percent from 7,296 in November, and up 4.5 percent from 7,494 for December 2011.

While last month’s sales count was the highest for any December since 8,372 were sold in 2006, it was still 9.0 percent below the 8,611 average for all Decembers since 1988. December sales have ranged from 5,065 in 2007 to 12,349 in 2003.

The number of homes sold for less than $500,000 decreased 12.6 percent year-over-year, while the number that sold for more than $500,000 shot up 61.2 percent, DataQuick reported.

Last month distressed property sales – the combination of foreclosure resales and “short sales” – made up 34.2 percent of the resale market. That was down from 35.5 percent in November and down from 52.4 percent a year ago.

Foreclosure resales – homes that had been foreclosed on in the prior 12 months – accounted for 11.8 percent of resales in December, down from a revised 12.5 percent in November, and down from 27.8 percent a year ago. Last month was the lowest since 10.1 percent in November 2007. Foreclosure resales peaked at 52.0 percent in February 2009. The monthly average for foreclosure resales over the past 17 years is about 10 percent.

Short sales – transactions where the sale price fell short of what was owed on the property – made up an estimated 22.4 percent of Bay Area resales last month. That was down from an estimated 23.0 percent in November and down from 24.6 percent a year earlier.

Jumbo loans, mortgages above the old conforming limit of $417,000, accounted for 40.2 percent of last month’s purchase lending, down from a revised 40.3 percent in November, and up from 26.5 percent a year ago. Jumbo usage dropped to 17.1 percent in January 2009. Before the credit crunch struck in August 2007, jumbos accounted for nearly 60 percent of the Bay Area purchase loan market.

Adjustable-rate mortgages (ARMs), an important indicator of mortgage availability, accounted for 11.1 percent of the Bay Area’s home purchase loans. That was down from a revised 12.0 percent in November, and down from 11.6 percent in December last year. Since 2000, ARMs have accounted for 48.7 percent of all purchase loans. ARMs hit a low of 3.0 percent of loans in January 2009.

Government-insured FHA home purchase loans, a popular choice among first-time buyers, accounted for 18.9 percent of all Bay Area home purchase mortgages in December, up from 17.0 percent in November and down from 22.9 percent a year earlier. In recent months the FHA level has the been the lowest since summer 2008, reflecting both tougher qualifying standards and the difficulties first-time buyers have competing with investors and other cash buyers.

The most active lenders to Bay Area home buyers last month were Wells Fargo with 15.5 percent of the market, RPM Mortgage with 4.2 percent and Stearns Lending with 3.4 percent.

Last month absentee buyers – mostly investors – purchased 25.8 percent of all Bay Area homes, an all-time high (absentee statistics go back to January 1999). Last month’s absentee level was up from 24.9 percent in November, and up from 23.8 percent a year ago. Absentee buyers paid a median $315,000 in December, up 34.0 percent from $235,000 a year earlier.

Buyers who appear to have paid all cash – meaning no corresponding purchase loan was found in the public record – accounted for 29.3 percent of sales in December. That was unchanged from November, and up from 27.3 percent a year ago. The monthly average going back to 1988 is 12.5 percent. Cash buyers paid a median $312,500 in December, up 36.2 percent from $229,500 a year earlier.

San Diego-based DataQuick monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts. Because of late data availability, sales were estimated in Alameda, San Mateo and San Francisco counties.

The typical monthly mortgage payment that Bay Area buyers committed themselves to paying last month was $1,561. That was up from $1,544 in November, and up from $1,336 a year ago. Adjusted for inflation, last month’s payment was 44.9 percent below the typical payment in spring 1989, the peak of the prior real estate cycle. It was 59.3 percent below the current cycle’s peak in July 2007.

Indicators of market distress continue to decline. Foreclosure activity remains high by historical standards but well below peak levels reached three years ago. Financing with multiple mortgages is low, down payment sizes are stable, DataQuick reported.

(chart)

All Homes           #Sold     #Sold     Pct.     $Median      Median      Pct.

Dec-11    Dec-12     Chng      Dec-11      Dec-12      Chng

Alameda             1,584     1,623     2.5%    $328,000    $410,000     25.0%

Contra Costa        1,534     1,530    -0.3%    $259,000    $333,500     28.8%

Marin                 280       291     3.9%    $517,818    $660,750     27.6%

Napa                  132       129    -2.3%    $317,500    $350,000     10.2%

Santa Clara         1,611     1,822    13.1%    $440,000    $544,500     23.8%

San Francisco         499       646    29.5%    $594,500    $720,000     21.1%

San Mateo             602       626     4.0%    $500,000    $600,000     20.0%

Solano                714       610   -14.6%    $182,250    $218,000     19.6%

Sonoma                538       555     3.2%    $279,500    $345,000     23.4%

Bay Area            7,494     7,832     4.5%    $335,500    $442,750     32.0%

Source: DataQuick, DQNews.com

edia calls: Andrew LePage (916)456-7157

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Enlarge image

Twitter Causes Rent Surge in Mid-Market Neighborhood

Marc Perrier/Bloomberg

Twitter’s relocation next month to Mid-Market, an area better known until now for drug deals, graffiti and vagrants, has sent rents up as much as 60 percent in a business district that didn’t exist a year ago.

Twitter’s relocation next month to Mid-Market, an area better known until now for drug deals, graffiti and vagrants, has sent rents up as much as 60 percent in a business district that didn’t exist a year ago. Photographer: Marc Perrier/Bloomberg

May 11 (Bloomberg) — Douglas Shorenstein, chief executive officer of Shorenstein Properties LP, and Terry Kwik, partner at RMW Architects, talk about Shorenstein’s $300 million investment in Market Square, located in the Mid-Market area of the city.
Twitter Inc. will relocate to Market Square next month, a move that has sent rents up as much as 60 percent in a business district that didn’t exist a year ago. (Source: Bloomberg)

Enlarge image

The Future Offices of Twitter Inc.

Marc Perrier/Bloomberg

Scaffolding hangs on the future offices of Twitter Inc. in the Mid-Market neighborhood of San Francisco on May 9, 2012.

Scaffolding hangs on the future offices of Twitter Inc. in the Mid-Market neighborhood of San Francisco on May 9, 2012. Photographer: Marc Perrier/Bloomberg

Enlarge image

The Future Offices of Twitter Inc.

ZUM via Bloomberg

An artist rendering depicts the building where Twitter Inc. will relocate next month.

An artist rendering depicts the building where Twitter Inc. will relocate next month. Source: ZUM via Bloomberg

Frank Fudem, a San Francisco broker
for office tenants, realized that rents in the city were about
to spike as Twitter Inc. agreed to move to a gritty neighborhood
and leasing by technology companies started to accelerate.

“Twitter was and is the whole phenomenon,” said Fudem, a
partner at real estate services firm Cassidy Turley. “I tell
clients to make their deal as soon as they can.”

Twitter’s relocation next month to Mid-Market, an area
better known until now for drug deals, graffiti and vagrants,
has sent rents up as much as 60 percent in a business district
that didn’t exist a year ago. That type of growth is making San
Francisco the best U.S. office market as demand from Internet
and social-media companies surges.

The city’s five-year investment outlook, based on rent-
growth forecasts, beats West Los Angeles, Boston and midtown
Manhattan, its closest competitors, according to Green Street
Advisors Inc. Office occupancy in the first quarter surpassed
the pre-recession peak in 2007, at almost 75 million square feet
(7 million square meters), data from Cassidy Turley show. Annual
effective rents in the metropolitan area rose 6.8 percent, the
biggest gain in the U.S., Reis Inc. reported last month.

“It’s an outright boom,” said Kenneth Rosen, chairman of
the University of California’s Fisher Center for Real Estate and
Urban Economics in Berkeley. The economist, who advises U.S.
banks and real estate investment trusts on market trends, said
hiring at social-media and other Internet companies accelerated
office-rent gains he thought would occur in 2013.

Below Peak

Pensions, REITs and foreign funds seeking to buy U.S.
commercial property can expect values to keep rising because
rental rates are still well below the previous peak, said Joe Rodriguez, managing director at Invesco Real Estate, which
oversees $48.9 billion of property investments. The Dallas-based
company since August has purchased two office-retail buildings
in the Union Square shopping district, for $51 million and $30
million, according to Real Capital Analytics Inc.

“It’s worth noting that during the dot-com boom, office
rents approached $70 a square foot on average,” Rodriguez wrote
in an e-mail, referring to San Francisco’s late 1990s run-up,
which collapsed in 2000. “Tech and creative company demand is
healthy, and there is a robust venture capital and IPO market
for companies that happen to reside in the Bay Area.”

Rents Up 24%

San Francisco office rents rose 24 percent to an average
$46.66 a square foot in the first quarter from a year earlier,
and are up 39 percent from the market bottom in 2010, according
to Jones Lang LaSalle Inc., which tracks rates within city
limits. In the South of Market district, a popular location for
tech companies and Twitter’s current home, the vacancy rate
shrank by more than half in the first quarter to 3.8 percent,
the lowest since 2000, the brokerage said.

Yelp Inc. (YELP), the website that allows people to comment on
businesses and services, said yesterday it will relocate its
headquarters to a historic South of Market tower that’s being
renovated. The annual rent on an eight-year lease for 98,144
square feet begins Oct. 1, 2013, at $54 a square foot and
concludes at $66 a square foot, the company said in a filing
with the U.S. Securities and Exchange Commission.

Boston Properties Inc. (BXP), the biggest U.S. office REIT, and
closely held Tishman Speyer Properties LP, owner of New York’s
Rockefeller Center, describe San Francisco as their top-
performing market. Rents rose 15 percent last year at Boston
Properties’ Embarcadero Center complex and recent lease deals
were completed at rates of more than $70 a square foot, Douglas Linde, president of the Boston-based company, said on a May 2
earnings conference call.

Limits to Gains

Tishman Speyer, based in New York, will start work on two
Class A offices in San Francisco and expects annual rent gains
in the “high single digits” when leasing begins in 2014, Co-
Chief Executive Officer Rob Speyer said in an interview.

The market may not be as robust as it seems, said David
Churton, Twitter’s broker at Jones Lang LaSalle. Most tenant
leases, at 7,000 to 10,000 square feet, are smaller than high-
profile deals, and technology allows companies to produce more
with fewer people and less space, Churton said at a March real
estate conference. Macroeconomic disruption in China or Europe
might have a negative effect on local growth, he said.

“What if tech falters?” Churton said. “We’re not at peak
conditions, but we need to be cautious.”

‘Early Innings’

The boom hasn’t been limited to offices, said Steven Brown,
senior portfolio manager at Kansas City, Missouri-based American
Century Investments. REITs that own apartments in the San
Francisco area will see rents advance as much as 13 percent this
year, while revenue per available room at hotel REITs will rise
15 percent. Both will double the U.S. average, Brown said.

“It’s the strongest region in the country, and we’re still
in the early innings,” Brown said in an interview.

One of the biggest areas for growth is Mid-Market, a
forlorn stretch of the city’s main corridor where Twitter, the
global messaging service with 140 million active users, is
scheduled to move on June 1. The company’s presence will
transform the area into a “legitimate submarket,” said Fudem,
the Cassidy Turley broker.

The district resisted efforts by public officials, arts
groups and property developers to improve it over the years,
said Cathy Simon, an architect who didn’t mind the area’s
grittiness while working there from 2000 to 2009.

‘Unsavory Place’

“You had to step over people or somebody’s vomit in the
morning,” Simon, a principal at Perkins + Will and designer of
the Ferry Building offices and food market, said of her Mid-
Market years. “It was an unsavory place, not part of sanitized
San Francisco.”

Twitter chose an empty furniture mart as its new
headquarters after negotiating a six-year payroll tax exclusion
supported by San Francisco Mayor Edwin M. Lee as a way to keep
growing firms in the city and build up Mid-Market. The benefit
applies to any company that relocates to the district, roughly
defined as Market Street between Sixth and Tenth streets, said
Christine Falvey, the mayor’s spokeswoman.

Twitter had to consider all options as it experienced
“staggering” growth, including moving out of the city, said
Ron Conway, founder of San Francisco-based venture firm SV
Angel, an investor in the company.

The search overlapped with locally based Shorenstein
Properties LP’s acquisition in March 2011 of the old mart for
$120 million. As recently as 2007, barbed wire was strung on
parts of the property, which includes a 1930s main building and
1970s annex spanning Market Street from Ninth to Tenth streets,
to thwart graffiti vandals.

Ripple Effect

The purchase was made before Twitter agreed in May to be a
tenant, said CEO Douglas Shorenstein. His firm will spend a
total of $300 million on Market Square, as the 1.1 million-
square-foot property is now called. An expanded lobby with 17-
foot ceilings, six high-speed elevators, a retail area spanning
the width of the building, a courtyard, loggia and basketball
court are among the improvements, Shorenstein said during a tour
of the site.

The combination of a well-regarded developer, whose
investors include Yale University’s endowment, and the marquee
tech company produced a “ripple effect,” Lee said in an
interview. It revived a 749-unit apartment project, now under
construction across Tenth Street, and led to two purchases in
late 2011 of nearby office buildings that together have 1.4
million square feet, he said.

“That was significant and reverberated across the real
estate community,” Lee said.

Market Square Leases

Twitter’s six-year lease at Market Square gives the company
three floors with 215,000 square feet at an average annual
rental rate of $30 a square foot. In February, call center
company Callsocket.com committed to 29,000 square feet in the
building at $42 a square foot. Onekingslane.com, a home-decor
sales website, followed in March, renting 52,000 square feet at
$44 a square foot.

Yammer.com, a social network for businesses, last month
signed the most recent lease, taking 79,000 square feet at $48 a
square foot, or 60 percent more than Twitter.

Rates in a nearby office property purchased in the wake of
Twitter’s announced move will range from the high $30s to the
low $50s a square foot, said Stuart Shiff, CEO of DivcoWest
Inc., which bought the building in a joint venture with TMG Inc.
The closely held San Francisco firms paid $44 million in October
for the 385,000-square-foot property, according to New York-
based Real Capital. It is scheduled to open in the first quarter
of 2013, Shiff said.

‘Head and Shoulders’

For landlords, the city’s market should outperform for at
least the next four years, according to Green Street Advisors.
San Francisco office properties are forecast to gain 7.9 percent
in annual revenue per square foot through 2016, “head and
shoulders” ahead of 6.6 percent for West Los Angeles, 6.3
percent for Boston and 5.7 percent for midtown Manhattan, said
Jed Reagan, an analyst at the Newport Beach, California-based
real estate research company.

“The concentration of tech in San Francisco is driving it
as a whole,” Reagan said in an interview. “From our
perspective, it’s the hottest market in the country.”

To contact the reporter on this story:
Dan Levy in San Francisco at
dlevy13@bloomberg.net

To contact the editor responsible for this story:
Kara Wetzel at
kwetzel@bloomberg.net

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Article source: http://www.bloomberg.com/news/2012-05-11/twitter-rent-surge-makes-san-francisco-best-office-market.html

OAKLAND, Calif. MENLO PARK, Calif., Jan 11, 2012 (BUSINESS WIRE) –
Waypoint Real Estate Group, the nation’s leading acquirer of distressed,
single-family properties, and GI Partners, a leading mid-market private
equity firm, announced today that GI has made a significant equity
investment in Waypoint to fund its expansion. The GI investment will
initially enable the acquisition of more than $250 million in single
family rental homes, and is anticipated to ultimately support the
acquisition of more than $1 billion in single-family rental homes over
the next two years.

Since its founding in 2008, Waypoint has successfully acquired nearly
1,000 homes in the San Francisco Bay Area and Inland Empire in Southern
California, and developed a sophisticated proprietary system to
underwrite and manage the portfolio of homes. With the GI investment,
Waypoint plans to launch a national expansion, with the goal of entering
into multiple new geographic markets in 2012.

“Our approach to buying and renovating distressed homes and leasing to
residents who are committed to a path to future home ownership is a
viable solution to our nation’s housing crisis,” said Colin Wiel,
managing director and co-founder of Waypoint. “Our unique approach to
acquiring homes and converting them into rental properties speaks
directly to the Federal Reserve’s recommendations included within its
recent white paper. This partnership with GI Partners ensures we can
take the next step in our company’s evolution.”

GI Partners will invest in Waypoint through GI Partners Fund III L.P.,
which has approximately $1.9 billion of capital commitments from
institutional private equity and real estate investors.

“Waypoint has not only developed an effective strategy for investing in
distressed single family homes, but has built a business that has
positive social and economic benefits in the communities in which they
invest,” said Rick Magnuson, executive managing director of GI Partners,
who has joined Waypoint’s Board of Directors in conjunction with the
investment. “We believe Waypoint has the potential to thrive given the
current market dislocation in single family housing and the sustained
tenant demand for rental property.”

Waypoint employs proprietary technology to identify residential real
estate markets characterized by strong rental demand and an identifiable
pipeline of discounted home purchase opportunities.

The company, after acquiring distressed single-family houses, renovates
each property so they are as attractive and vibrant as possible,
improving the quality of each local neighborhood. The company’s lease
program, Lease Plus Rewards(TM), helps put families on a path to future
home ownership and keep families connected with their communities.

Doug Brien, Waypoint’s managing director and co-founder, added, “GI has
played a major role in building several impressive businesses over the
past decade, and we are eager to work with GI leadership to build
Waypoint into another success story.”

Gary Beasley, an industry veteran who recently joined Waypoint as
managing director, added, “There are nearly four million homes
nationwide which are now either bank-owned or in a serious state of
delinquency or distress. To address this massive problem we are
beginning conversations with lenders to facilitate our “REO-to-rental”
model which can help avoid the dislocation and negative societal
consequences of foreclosures.”

About Waypoint Real Estate Group

Based in Oakland, Calif., Waypoint Real Estate Group (
www.waypointhomes.com )
has created a next-generation real estate company with an innovative
business model to help address the lack of liquidity contributing to the
prolonged U.S. housing crisis. The Waypoint solution centers on buying
distressed single-family houses, renovating them, and then leasing them
to residents via innovative leasing programs which are designed to
provide a path to future home ownership for the residents. A leader in
the emerging REO-to-rental industry since its founding in 2008, Waypoint
has acquired nearly 1,000 homes in California, and is poised to begin an
aggressive national expansion program in 2012.

About GI Partners

GI Partners, headquartered in Menlo Park, Calif., makes investments in
asset-intensive, middle-market businesses and portfolios of assets
located in North America and Western Europe. Key sectors of focus
include commercial real estate, specialty healthcare, IT infrastructure,
leisure and financial services. Across all of its investments, GI
Partners seeks to identify companies with market leading positions and
to establish a partnership orientation with management that drives
operational value creation. GI Partners’ investments have included First
Republic Bank, STAG Industrial, SoftLayer Technologies and Digital
Realty Trust. For more information about GI Partners, please visit
www.gipartners.com .
Reach GI Partners in Menlo Park, Calif. at (650) 233-3600.

Photos/Multimedia Gallery Available:

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SOURCE: Waypoint Real Estate Group

        Allison + Partners
        Marcus Gamo, 415-277-4925
        waypoint@allisonpr.com
        or
        Chris Tofalli Public Relations, LLC
        Chris Tofalli, 914-834-4334
        chris@tofallipr.com

Copyright Business Wire 2012

Article source: http://www.marketwatch.com/story/waypoint-real-estate-group-and-gi-partners-establish-partnership-to-build-single-family-rental-platform-launch-national-expansion-campaign-2012-01-11

Your best bets: a small handful of “property-wealth islands,” including San Francisco and San Jose/Silicon Valley, both seen as “primary 24-hour gateways located along global pathways,” according to a report being released today at the Urban Land Institute conference in San Francisco.

San Francisco ranks third out of 51 cities as a place to invest in and develop commercial and multifamily apartment properties and fourth in for-sale home building, with San Jose two or three rungs lower in each category, according to the survey compiled by the institute and PricewaterhouseCoopers.

Washington, Austin and New York are the other top-rated cities.

“We come out very well as top investment places, although even here it’s still a bit of a chug,” said Kate White, executive director of ULI San Francisco.

Put the “chug” down to the enduring doldrums in the housing market, which continues to weigh on San Francisco and San Jose, if not as badly as in other parts of the Bay Area and nation. Even though both rank high in the home-building category, according to the report, their prospects for investment and development are described only as “fair.”

“There’s still an understandable reluctance by potential homeowners to get into the market,” said White.

Not so, however, when it comes to renting or leasing commercial space in high-tech areas like San Francisco’s Mid-Market and South of Market, a trend driven largely by the influx of a younger, more mobile and urban-oriented workforce.

“Gen Y is driving up the demand for apartments and driving up rents, which makes investing in apartments a safer bet,” said White.

Depending on how long it lasts, such a trend could be a game-changer for real estate.

“Living smaller, closer to work, and preferably near mass transit holds increasing appeal as more people look to manage expenses wisely,” notes the report. “More companies concentrate in urban districts where sought-after generation-Y talent wants to locate in 24-hour environments.”

A separate Urban Land Institute report, examining land use changes in California, takes the point further.

Projecting out to 2035, the report says demand for traditional single- family homes will decline, by as much as 10 percent, while “changing demographics” and other factors shift the real estate focus to smaller lots and “multiple or intergenerational households” within walking distance of “transit station areas.”

“California’s future is a lot more urban and transit-oriented than it has been historically. There’ll be an increasing demand for the 24-hour, livable city model,” said White. “The next generation is ushering it in, and local agencies need to plan accordingly.”

– These and other provocative notions will be chewed over at the ULI conference, today in San Francisco at the Hotel Nikko, and Wednesday at the Corinthian Event Center in San Jose. Agenda, speakers and registration at sfg.ly/sDt7tE.

The ULI/PwC report, “Emerging Trends in Real Estate 2012,” can be read and downloaded at sfg.ly/rKT6up.

The California land use report, “The New California Dream: How Demographic and Economic Changes May Shape the Housing Market,” is at sfg.ly/stQrNV.

Blogging: www.sfgate.com/columns/bottomline. Facebook page: sfg.ly/doACKM. Tweeting: @andrewsross. E-mail: bottomline@sfchronicle.com.

This article appeared on page D – 1 of the San Francisco Chronicle

Article source: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/12/13/BUMU1MBG04.DTL&type=business