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PGE has struck a deal to sell its San Francisco headquarters complex in an $800 million deal, the utility said Monday, a key milestone in its move to relocate its head offices to downtown Oakland.

Hines Atlas US, an affiliate of a real estate development and investment firm, is the buyer of the property.

The utility had previously leased an office tower in downtown Oakland that’s perched on the shores of Lake Merritt for its future headquarters.

“PGE remains on track for a phased move into its new headquarters at 300 Lakeside Drive in Oakland, beginning in the first half of 2022,” the utility said in a prepared release.

The transaction marks another high-profile corporate exodus from San Francisco.

PGE is seeking approval for the property sale in San Francisco from the state Public Utilities Commission.

CBRE, a commercial real estate firm, advised PGE in its efforts to sell its headquarters hub in San Francisco.

The PGE office complex in San Francisco consists of 77 Beale St., 25 Beale St., 215 Market St., 245 Market St., and 45 Beale St., a filing with the Securities and Exchange Commission shows.

“We are working hard every day to make fundamental changes at PGE and become the utility our customers expect and deserve,” Patti Poppe, PGE’s chief executive officer, said in a prepared release.

The company intends to return to its ratepayers any profits harvested from the sale of the headquarters complex, PGE said.

Hines has agreed to deposit $20 million into an escrow fund to cover any shortcomings by Hines, the SEC documents show.

The San Francisco headquarters transaction could be terminated if the PUC doesn’t approve the proposed sale by the final day of 2021, according to a purchase agreement document filed with the SEC.

In downtown Oakland, PGE also has reached a deal to purchase the 300 Lakeside office tower as a way to create a long-term presence in the East Bay’s largest city.

“We’re so excited to deepen our ties to the wonderful Oakland community,” Poppe said.

The downtown Oakland transaction initially is a lease of the office tower with an option for PGE to eventually purchase the landmark highrise.

“PGE intends to use the Lakeside Building as its new company headquarters, where it can consolidate approximately 4,500 employees currently located in San Francisco and at least two satellite offices in the East Bay,” PGE stated in Bankruptcy Court records. The East Bay sites are in Concord and San Ramon.

Renovations at the 300 Lakeside tower in Oakland are slated to start in 2022.

“It is currently anticipated 3,200 employees will be relocated to the Lakeside Building by early 2023, approximately 600 employees in 2025, with the balance of the space to be made available for an additional 600 employees beginning in 2026,” the bankruptcy files stated.

Since the early 2000s, PGE has mulled the future of its San Francisco office buildings, executives stated in federal court records for the company’s bankruptcy case.

“Many of the utility’s (headquarters office complex) employees commute to San Francisco from the East Bay area, where the cost of living is far more affordable than in downtown San Francisco,” PGE said in a court filing.

Plus, the San Francisco headquarters complex has become steadily more expensive to operate.

In September 2018, PGE tasked real estate developer TMG Partners with finding an East Bay site for the future headquarters, bankruptcy papers show. Bishop Ranch in San Ramon and part of the Concord Naval Weapons Station were top candidates, but nothing came of those prospects by mid-2019.

PGE pondered selling 77 Beale St. and moving workers into 245 Market St., or the reverse. But 245 Market was deemed too small, and 77 Beale was too large.

Then came a break. In November 2019, realty firms Swig Co. and Rockpoint Group put on the block the 300 Lakeside Drive tower along with an adjacent mixed-use office building and a big parking garage.

TMG raced to make Swig and Rockpoint an offer.

“The utility quickly investigated and determined that the Lakeside Building would provide significantly greater economic benefits” than retaining a San Francisco headquarters, the court papers stated.

All of that ultimately led to PGE’s deal for a lease and purchase option at the 300 Lakeside office tower.

PGE hopes it can use the corporate relocation to help the company reinvent itself after a decade of disasters from 2010 through 2020, including a fatal gas explosion in San Bruno in 2010 as well as a string of deadly wildfires.

PGE believes Oakland’s increasing cachet as a corporate and jobs magnet dovetails with the utility’s fresh strategy.

“As an economic and innovation hub for California, Oakland is the perfect place for PGE to call our hometown,” Poppe said.

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Article source: https://www.mercurynews.com/2021/05/24/pge-sale-headquarters-800-million-oakland-wildfire-real-estate

SAN FRANCISCO (CBS SF) – After more than a year of rent declines due to the COVID-19 pandemic, the cost of renting is once again on the rise in the Bay Area, according to a new report.

An analysis from real estate website Zumper found the median 1-bedroom rent in San Francisco rose 1.9% in May to $2,650 a month, which remains the highest in the country. In Oakland, 1-bedroom rent has risen 1.5% to $1,980 a month.

Meanwhile, San Jose had one of the highest month-over-month jumps in median rent for a 1-bedroom in the nation, up 6.6% to $2,180 / month.

For 2-bedroom apartments, median rent in San Francisco is up 2.9% to $3,600 a month, while in San Jose the median has risen 1.5% to $2,700 / month. The median rent for a 2-bedroom in Oakland stayed flat at $2,500 / month.

Zumper said the rise in people being vaccinated against COVID-19, the ongoing reopening of the economy and the return of workers back to offices are helping drive up rents once again. The company said rents could face more upward pressures due to seasonal events such as college students returning to campuses or recent grads moving for work.

“As COVID restrictions have been lifted, Bay Area markets have stabilized in 2021 after being in free fall for much of 2020,” the company said in a statement.

While rents are on the rise, they remain well off their peaks before the pandemic struck in early 2020. Compared to a year ago, one bedrooms in San Francisco are down 21.1%, Oakland is down 15.7% and San Jose is down 9.9%.

Zumper said it remains an “open question” if rents will return to such highs, with tech companies likely switching to hybrid or permanent work-from-home policies as offices reopen.

The rise in rents comes as the market for houses in the Bay Area and nationally heats up. Prices are rising at the fastest monthly pace in more than seven years, according to the SP CoreLogic Case-Shiller 20-city home price index.

According to the California Association of Realtors, the median home price of a single family home in the state soared past the $800,000 mark in April. Home prices in most of the Bay Area are much higher, with median prices above $1 million in Alameda, Marin, San Francisco and Santa Clara counties, and above $2 million in San Mateo County.

Article source: https://sanfrancisco.cbslocal.com/2021/05/25/covid-housing-bay-area-rents-rise-may-21-zumper-report/

Tom Chiu, a pastor at a local church, needed a bigger house to conduct ministerial work – Bible studies, counseling and Christian fellowship.

In Silicon Valley, matching a minister’s salary to a comfortable home with a spacious yard required a minor miracle. Months of searching, lost bids and over-extended budgets led to an all-out plea to his real estate agent and a gracious seller.

With those pleas, and another $300,000 added to his budget, Chiu landed a three-bedroom house in San Jose for $1.5 million, complete with a backyard patio and gazebo for faith gatherings. They didn’t have the highest bid, but, Chiu said, “We appealed to the seller.”

It worked, but not every would-be buyer is finding grace in the ultra-competitive Bay Area real estate market.

Driven by intense demand, low interest rates and few houses for sale, the median price in March of an existing single-family home in the Bay Area rose nearly 15% to $1.02 million, according to CoreLogic and DQNews data.

March marked the first year-over-year comparison during the pandemic, showing the dramatic rebound for sales and prices from the initial COVID-19 shutdown. The state prohibited agents from showing occupied homes and limited many real estate transactions beginning in March and April 2020.

The market has come roaring back, with prices climbing in all nine Bay Area counties. Less expensive outer suburbs and communities continued to see big increases. Median sales prices boomed 29% in Contra Costa County to $850,000, jumped nearly 13% in Solano County to $500,000, and rose 8.5% in Alameda County to $980,000, according to CoreLogic data.

High demand for single-family homes continued to drive prices in the region’s most expensive communities: In Santa Clara County, prices rose 9% to $1.45 million, San Mateo County was up 2.6% to $1.68 million, and San Francisco, up almost 2% to $1.6 million.

The Bay Area reflects the national trend of rising home prices during the pandemic, but at an extreme premium. The median price of a single-family home in the U.S. rose 21% in recent weeks to $348,000 in March, according to online broker Redfin.

CoreLogic economist Selma Hepp said the demand for suburban space and low interest rates hovering around 3% continue to fuel the market, but there are some signs of slowing down. San Francisco, for example, was one of just four markets in the U.S. to see overall home values, including condos, dip in March.

National surveys also show buyers are becoming frustrated with high prices and few homes for sale, she said. As the economy starts to reopen with increased community vaccinations, more homes should come up for sale. “There’s going to be more inventory,” Hepp said, “but I’m not sure there’s going to be enough inventory.”

With few homes for sale, buyers are bidding up prices, pitching pre-emptive offers and pledging to take homes “as-is” without comprehensive inspections or contingencies. Sellers have been able to negotiate free rent for weeks while they hunt for new homes.

Prices have skyrocketed in desirable suburban neighborhoods popular with tech employees. “Everything’s been bumped up $1 million,” said Cupertino agent Ramesh Rao. “Four million is the new three million.”

Rao said the intense bidding has pushed some buyers out of the market – but many strong bidders still remain in Santa Clara County. Saratoga, Almaden Valley, Mountain View, Sunnyvale and Los Altos continue to command premium prices from tech families, he said.

COVID-19 restrictions and intense demand have meant buyers have often had to make snap decisions on a $3 million home after a 15-minute tour of a property, he said. Homes have been selling at a record pace – as little as a few days on the market – in some Bay Area hot spots.

“It’s a very interesting market,” Rao said.

Bridge Association of Realtors president Jeffrey Neidleman said many sellers are looking to the East Bay for bigger spaces. Young couples, often backed by their families, are moving to Alameda County from San Francisco or the Peninsula, he said. In the East Bay, he said, “at least you have a better chance” at getting a home. “You get land, too,” he said.

Saratoga agent Mark Wong helped Chiu find and purchase his home. Wong has seen desirable homes get as many as 40 offers. He said buyers need cash as well as a skilled negotiator on their side to win the competition. “It’s not a buyer’s market. It’s not a seller’s market,” Wong said. “It’s an agent’s market.”

Chiu and his wife, Lucia, returned to the Bay Area in 2019 after spending several years on missions through Lord’s Grace Christian Church in Asia. The couple sold their San Jose apartment to finance the down payment on the house. They’re still getting settled, but are happy to be closer to their three children and five grandchildren.

“We thank God,” said Chiu, a former semiconductor engineer. “He looked after us.”

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Article source: https://www.mercurynews.com/2021/05/10/bay-area-home-prices-top-1-million-amid-covid-19-concerns

“It was like something out of a movie, you know. We were dressed in the all-white suits with the full face masks,” he said.

Ramos, 29, has spent the last 10 years on 25th Avenue in a duplex owned by his family. Over that decade, the real-estate firm Zillow estimates that Oakland’s median home value ballooned from under $380,000 in 2011 to over $890,000 — a trend that the coronavirus pandemic accelerated. Now his neighborhood is the hottest real estate market in the nine-county Bay Area region, the epicenter of a pandemic-era housing price boom in the East Bay.

Since the start of the pandemic, Reservoir Hill’s median home value has shot up by nearly 25%, from over $643,000 to about $800,000, per Zillow’s estimates. The neighborhood, which sits just south of the MacArthur Freeway and west of Fruitvale Avenue, is one of 14 in Oakland where estimated home prices increased by 15% or more in a single year. Most of these neighborhoods are in the eastern flatlands, from Reservoir Hill to Durant Manor.

“The data definitely shows a lot of these Oakland neighborhoods (are) among the fastest appreciating,” Jeff Tucker, a senior economist at Zillow, told The Chronicle.

But the trend extends far beyond Oakland. The housing market exploded nationwide in 2020: Home prices rose by 12%, the largest annual gain in 15 years, according to the SP Case Schiller Price Index. Tucker said the pandemic accelerated the home-buying process for many Americans by highlighting the importance of personal space, while de-emphasizing proximity to workplaces and city centers.

According to Tucker, Zillow generates a median home value estimate for a given neighborhood based on several factors, including the neighborhood’s location and its recent sales. Reservoir Hill had only five sales from March 2020 to March 2021, but those homes sold for much higher than Zillow would have expected — which is partly why its home values soared so much in the past year.

As for location, Tucker said many East Oakland neighborhoods appear to be in a “sweet spot” for young, upwardly mobile families.

“These neighborhoods in Oakland provide single-family homes at an affordable price point with some of the urban lifestyle amenities that people still like,” he said.

The surge in home values may benefit East Oakland homeowners looking to sell, but it’s also creating what Policy Link is calling a “displacement crisis” for struggling owners and renters. Even in early 2015, when Oakland’s median home value was a mere $520,000, most of the city’s residents could not afford to purchase a median-priced home in their own neighborhoods, according to Policy Link, a national research institute based in Oakland.

And even when they can afford it, families of color in East Oakland might not be able to get their offers accepted in a red-hot housing market like this one, according to Tucker.

“There’s a major downside here,” he said. “When there’s this super-elevated competition for homes, and people shopping from all over the Bay Area, it’s just harder to keep up if you’re not coming to the table with high income and sterling credit, where you can get preapproved for a mortgage and move quickly on closing. Or … where people are making cash offers. All this effectively locks out people who, in many cases, could afford homes.”

Soaring home prices have contributed to an exodus of people of color: Black people made up 44% of Oakland’s population in 1990, and now they make up less than 25%. In the census tract encompassing Reservoir Hill, the percentage of Black residents declined from 38% to 21% of the population from 2000 to 2019, while non-Hispanic white residents increased from 22% to 31%. (Hispanic populations rose and Asian populations declined, though both at more modest rates.)

Many Black and Latino ex-Bay Area residents have migrated to more affordable cities inland like Sacramento, according to a 2018 analysis by the UC Berkeley Terner Center. Ramos said many of his friends have moved to Stockton.

Chris Schildt, a senior policy expert at Policy Link, pointed out that the 2008 mortgage crisis hit East Oakland homeowners especially hard. Predatory lenders steered many Black and Latino homeowners into bad loans, forcing them into foreclosure when the recession hit.

“During the foreclosure crisis, so many private companies bought up homes in East Oakland, so they’re the ones profiting from this increase in home values right now,” she said.

These home value increases will likely make it harder for East Oaklanders renting from property management companies to stick around.

“Generally speaking, if the neighborhood home value rises, that’s a signal it’s becoming more desirable to people with higher incomes,” Schildt said. “A signal that rents will rise as well.”

Reservoir Hill feels a world away from these concerns — at least at first glance, and depending on whom you ask. The neighborhood is racially integrated, and is home to working people in education, engineering and the arts. Many residents have owned their homes for decades.

Lauren Beilin is one of the exceptions: She moved into her home on Sheffield Avenue soon before the pandemic hit. She was attracted to the two-bedroom house for two main reasons: It was what she could afford in Oakland, and it lay within the school map boundaries for Glenview Elementary, a public school she thought would be a good fit for her two young children. (25th Avenue lies just outside those boundaries.)

When told she lived in the hottest housing market in the Bay Area, Beilin was surprised.

“I mean, I know we’re in the Bay Area, but we’re below 580,” she said. Even though her home has likely appreciated since she bought it, Beilin said she wouldn’t consider selling anytime soon. “It’s the best neighborhood I’ve ever lived in,” she said.

Aside from Beilin and a few other young families, Sheffield Avenue has had a low turnover rate in the past few years — partly because the community is so tight-knit. But a few homes near Ramos’ street did have impressive sales in 2020, according to Zillow, which could have driven up home values for the rest of the neighborhood.

Ramos said those higher prices have brought wealthier, whiter neighbors to his street, and to other parts of the city. “Lots of people are coming from San Francisco,” he said. “Especially where I’m at, people have moved away. Mostly people of color.” He has mixed feelings about gentrification in Oakland overall: “Maybe the crime’s gone down,” he said. “But then it’s also sad, you know, seeing people that lived here for lots of years being pushed out of their homes. … When it was 2010, you could (rent) a place in Lake Merritt for $800 and now it’s like, $2,000 and up.”

Ramos still appreciates his street’s community feel. “I love my neighbors, and we look out for each other, exchange phone numbers,” he said. He’s close with his aunt and her daughters, who occupy the other half of his duplex. Ramos spent a recent evening walking down 25th Avenue knocking on doors, asking neighbors to sign a petition to add speed bumps to the street.

Still, that sense of closeness with the broader community has faded a bit. “When I first moved in over here, we used to have block parties, and we were involved with the neighborhood crime watch,” he said. But over time, he added, “people who were the leaders moved out here. They got older, passed away.”

Susie Neilson is a San Francisco Chronicle staff writer. Email: susie.neilson@sfchronicle.com Twitter: @susieneilson

SAN FRANCISCO, Calif. (KRON) – The price of a home in the Bay Area continues to rise.

A recent study says that in Contra Costa County alone, home prices were up nearly 20% in the past year.

Realtors say homes in the Bay Area are going fast, and for a high ticket price, due to low-interest rates, a lack of inventory, and intense demand.

“We’ve hit a new foundation here in terms of pricing and inventory in the Bay Area. We are not building enough houses. We are not building enough apartments which helps the rental market which affects the sales market, so we are kind of at a new plateau. I don’t see the prices coming down much in the near future,” said real estate broker Mark Ross.

Based off of a simple Zillow search, there are about 3 dozen single-family homes for sale in Walnut Creek right now.

All but one of them is at or above 1 million dollars.

“A Turnkey home like this we expect will go within 5-10 days,” Ross said.

The house in the video sits on a quiet street. It has a kitchen, a living room, three bedrooms, and two bathrooms, and it’ll be on market for just under one million dollars.

“It’s not a mansion, but you know it’s what a basic family would need. We’ve put in a lawn, we’ve put in some significant upgrades and it’ll do for most families,” Ross said.

According to a CoreLogic study, homes in Contra Costa County rose 19.4% in the past year from 632-thousand 500 dollars to 755-thousand dollars.

Home prices went up 25.2% in Walnut Creek alone.

So how do you even purchase a home in the Bay Area right no, when houses are selling so fast?

“Do your homework. Be ready. Be very aggressive when it comes to searching, willing to drop what you are doing. Go out and look at the home. Look at the neighborhood. Contact your professional if you are using one. Be ready to go at a moment’s notice.”

Article source: https://www.kron4.com/news/real-estate/why-bay-area-homes-are-selling-so-quickly-for-so-much-money/