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Article source: https://www.law.com/therecorder/2019/05/03/dla-brings-on-sf-real-estate-partner-from-paul-hastings/

Next to the Warriors’ new arena in San Francisco’s Mission Bay, Uber’s four new headquarters buildings are rising. The ride-hailing giant, which has filed to go public this year, plans to move 7,000 employees there starting in 2020.

About a mile west, Airbnb transformed a 1917 battery warehouse in Showplace Square into a gleaming headquarters with four glass-wrapped floors surrounding an atrium with a three-story living wall. The vacation-rental marketplace will reportedly go public by late next year.

And a few blocks away in the South of Market area, Pinterest, the image-sharing service that had its initial public offering Thursday, recently signed a 490,000-square-foot lease — San Francisco’s largest this year — at 88 Bluxome St., a project that hasn’t yet been approved by the city. The company already leases three offices nearby along Brannan Street.

The boom in initial public offerings coincides with an increase in hiring and follows record-setting years in office leasing. Uber, Airbnb and Pinterest are now among San Francisco’s 10 largest private tenants, according to real estate brokerage Cushman Wakefield. Uber rival Lyft and messaging software maker Slack, both of which expanded their offices in the past year, are among the top 40 largest tenants. Lyft (in the South of Market district) went public last month, and Slack (in China Basin) has filed to go public.

Office rents have recently reached record highs. And the scale of tech growth in San Francisco outpaces even the original dot-com frenzy two decades ago. That’s when Silicon Valley’s tech scene was just starting to spill over into San Francisco and online retailers like Pets.com and internet consultancies like Organic and Scient were snapping up offices — often near the same spots where today’s tech leaders are building real estate empires.

Between 1995 and 2000, tech leases accounted for 36% of the 3.6 million square feet leased in San Francisco, according to brokerage CBRE. Last year, tech accounted for 62% of all San Francisco leasing activity. Tech companies signed 8 of the 10 biggest deals.

The biggest San Francisco lease during the first dot-com boom didn’t belong to a tech company: It was JPMorgan Chase’s 650,000-square-foot lease for a new tower at 560 Mission St. (However, Chase had recently acquired Hambrecht Quist, a tech-focused investment bank that underwrote initial public offerings for Apple, Adobe and Amazon.) Levi Strauss, Charles Schwab and the Gap also had big expansions around the turn of the century.

“Tech is the growth engine today,” said Robert Sammons, Cushman Wakefield’s Northwest research director. The boom 20 years ago, he noted, was more diversified.

The high cost of real estate has pushed many non-tech companies to expand elsewhere. Corporate titans like McKesson and Bechtel are moving their headquarters out of San Francisco. “Those companies can spread to less expensive markets,” Sammons said.

The biggest tech leases at the turn of the millennium were signed by newly public companies that mostly faded away.

Organic, which went public in 2000, signed a 212,000-square-foot deal that year at 601 Townsend St. After the dot-com crash, it was taken private in 2001 and is now part of Omnicom Group.

Scient went public in 1999 and signed a 166,600-square-foot lease at the Landmark at One Market that year, what would become Salesforce’s longtime headquarters before that company moved into its eponymous tower. In 2002, Scient filed for bankruptcy and was sold to SBI Group.

MarchFirst, an internet consulting firm that was formed in 2000 by the merger of San Francisco’s USWeb/CKS and Chicago’s Whittman-Hart, signed a 270,000-square-foot lease at 500 Terry Francois Boulevard in Mission Bay. The project hadn’t started construction, and a year later, MarchFirst filed for bankruptcy.

After the economy crashed, 500 Terry Francois went into foreclosure and wasn’t completed until 2008. It wouldn’t attract a tenant until 2014. The building is just a block from Uber’s future headquarters.

Airbnb’s headquarters and a Pinterest office are on the same block as Pets.com’s onetime office South of Market — a three-story building at 945 Bryant St. which, according to the landlord, Bridgeton Holdings, is fully leased.

Roland Li is a Chronicle staff writer. Email: roland.li@sfchronicle.com Twitter: @rolandlisf

Article source: https://www.sfchronicle.com/business/article/Tech-IPOs-add-fuel-to-San-Francisco-s-office-13781937.php

At a time when Oakland is trying to cure its pothole epidemic, the city is planning to use $2.9 million in state gas tax money to keep its streetlights on, then use what it saves of its own money to stave off cuts in parks and recreation.

It’s a bit of a financial loop-de-loop, but money is money.

Here’s the story, straight from the source.

“Though cranes are rising across the skyline and Oakland’s revenues are growing at a steady rate due to the strong real estate market, the city’s expenses continue to rise faster than revenues,” Mayor Libby Schaaf said in her recent budget statement. “Particularly the cost of medical benefits and pensions — as well as insurance, utilities and fuel costs — are growing at two to three times the rate of inflation and revenue growth.

“These structural problems threaten our ability to deliver core services to Oakland residents, including our youth,” she said.

As a result, Oakland is facing an estimated $25 million deficit in its operating fund this year.

One of the most severe shortfalls is in the city’s Landscaping and Lighting Assessment District, which pays for a number of city services, including street lighting and park recreational facility maintenance.

Revenues collected by the special district, however, haven’t increased for more than 30 years, which has led to a sizable shortfall that could have meant choosing between keeping the city’s streetlights on or cutting into park funds.

Enter the state gas tax.

The mayor is proposing to use the $2.9 million to pay for the street-lighting portion of the shortfall, then use the savings to keep the parks open.

According to Article 19 of the state Constitution, gas tax money is to be used for the “research, planning, construction, improvement, maintenance and operation of public streets and highways (and their related public facilities for nonmotorized traffic).”

Oakland officials feel that gives them the cover to use the tax money to light the streets as well.

“This is a legitimate use of the funds” based on the state controller’s recent guidelines to include the “furnishing of power for street or road lighting and traffic control devices,” mayoral spokesman Justin Berton said.

Even with state road money as backfill, the the city will need to freeze 8 ½ unfilled park worker positions to make ends meet.

So, while the parks will be open, the city will be short workers to maintain them.

As for the roads themselves, Oakland has more than 7,700 open service requests to repair potholes.

In an effort to fix the problem, the city is embarking on a three-year plan to spend a record $100 million on badly needed street repairs.

“The state gas tax provides an incremental $7 million per year that we are directing toward that work,” said Oakland Department of Transportation spokesman Sean Maher.

So with a bit of budget finesse, you should be able to see that pothole before you hit it.

Ticket to ride: A San Francisco traffic control supervisor who was handing out a few early morning parking tickets the other day had his city car stolen out from under him.

According to police and Muni reports, Shawn McCormick was on a detail in response to neighborhood complaints about parking on the sidewalk when he pulled up to the 5800 block of Mission Street at about 5:30 a.m. on April 11.

At that time of day, it’s common to leave the car running and the lights on to keep the immediate area well-lit for personal safety.

On this morning, however, as McCormick got out of his city-issued 2013 Toyota Prius and started writing up tickets, a 25- to 30-year-old man in dark pants and a hoodie appeared out of the darkness.

What exactly happened next is unclear. But the upshot is that after a brief struggle, the assailant managed to get in through the passenger side and wind up in the driver’s seat, where he put the car into drive and took off toward Daly City.

The good news is that there was a tracker in the car and police were quickly able to locate it on the 900 block of Huron Avenue.

The bad news is that it had crashed into a parked car.

And the hooded car thief was long gone.

“Incidents like these have been a common occurrence on our front-line employees, which is why we have been moving forward with initiatives to help keep them as safe as possible,” Muni spokesman Paul Rose said.

San Francisco Chronicle columnist Phillip Matier appears Sundays and Wednesdays. Matier can be seen on the KPIX-TV morning and evening news. He can also be heard on KCBS radio Monday through Friday at 7:50 a.m. and 5:50 p.m. Got a tip? Call 415-777-8815, or email pmatier@sfchronicle.com. Twitter: @philmatier

Article source: https://www.sfchronicle.com/bayarea/philmatier/article/In-Oakland-money-intended-to-be-used-for-this-13827090.php

Home sales in San Francisco have contracted year-over-year for ten months in a row, according to groups like the California Association of Realtors (CAR) and the Orange County data firm Core Logic. But now SF-based real estate group Compass says that the trend reversed in April, citing anticipation of big initial public offerings like today’s Uber IPO.

Compass economist Selma Hepp writes in the group’s latest SF Market report: “While overall Bay Area housing market activity continued to post a year-over-year decline in April, the four percent decline was the smallest since July of last year. The decline was driven by fewer sales in Santa Clara County and Contra Costa, with a smaller contribution from the wine country.”

She adds, “San Francisco, San Mateo and Alameda, in contrast, posted solid year-over-year increases, putting their April sales at the highest levels in three years.”

According to Compass, which pulls its data from MLS and analytics company Terradatum, sales in San Francisco spiked seven percent in April compared to the previous year, with the biggest increase, 26 percent, in homes in the $2-million to $3-million range.

Across the nine counties, most locales declined in sales, from a two percent downturn in Marin County to 12 percent in Napa.

However, on top of the upward turn in SF, San Mateo sales jumped four percent and Alameda County eked out a gain of two percent.

Hepp specifically credits “anticipation of the impact of recent and upcoming IPOs [...] particularly in San Francisco” as the likely sources of the agitation.

Employees at recently public companies, like Lyft and Uber, are presently hobbled by the “lockout period” on shares they hold, so most newly minted tech millionaires aren’t out buying homes. At least not yet.

Nevertheless, Hepp projects that “buyers have been encouraged by favorable mortgage interest rates, more choices, and an influx of IPO[s].”

Hepp is more bullish about the tech set’s effect on home sales than Compass contemporary Patrick Carlisle, who told Bloomberg this week, “I have to assume that these IPOs will add some to buyer demand, [but] I find it extremely hard to believe that we will see a resurgence of the year-over-year appreciation rates that we saw last year.”

Even so, Fred Brousseau, director of policy analysis at SF’s Budget and Legislative Analyst’s Office, warned in an April memo to SF lawmakers that big-ticket IPOs are likely to drive up the price—but not necessarily sales—of homes in SF:

We applied the most conservative average increase per IPO [...] (1.8 percent) to San Francisco’s $1.3 million median sale price for a home to estimate the possible impact of up to six high visibility IPOs that have occurred or could occur in 2019.

[...] The higher estimate would represent an 11.3 percent increase in the median sale price for a home in San Francisco. This increase would be spread over one to two years, depending on when employees would be allowed to exercise their options.

Home sales in San Francisco and the Bay Area have been on a skid since last summer, declining for the tenth straight month in March, according to Core Logic’s monthly analysis.

The median price of a home across all nine counties also declined for the first time since 2012 in March, albeit by a mere 0.2 percent.

CAR reports that sales of single-family homes dropped more than 10 percent across the region in March, and more than 11 percent in San Francisco. Neither source has released April figures to compare to the most recent ones from Compass.

Today’s big Uber IPO is the third this year for an SF-based tech company, after Pinterest and Lyft.

Uber priced its shares at $45 each, but the stock opened Friday at $42. According to the New York Stock Exchange, the price is up since trading opened but hasn’t hit the $45 mark yet.

Lyft opened at more than $78 in March, but immediately dropped and has yet to return to levels of its debut, trading around $55 this week. Only Pinterest has consistently traded above its initial price.

No matter how the stock performs, it still represents a potential huge influx of cash for employees and executives with options at those companies.

Slack, Postmates, and Airbnb, all based in San Francisco, are expected to make public offerings later this year.

Article source: https://sf.curbed.com/2019/5/10/18564493/san-francisco-home-sales-compass-uber-ipo-sf

SAN FRANCISCO (KPIX 5) — It’s not an easy job to get tenants on rent control to leave a building. In fact, in the past few years San Francisco has passed even stricter eviction laws. But more than 100 tenants of the city’s biggest landlord tell us they think he’s trying to annoy them into self-eviction.

Jon Kessler is living in a constant state of construction at his apartment building on 1064 Dolores St. He’s forced to stand idly by as workers roll in tarps, move furniture around, hang plastic sheets and start hammering away, tearing down his walls for “exploratory demolition.”

It’s part of a project to transform some garage space into living units. To be clear, he doesn’t think the demolition was necessary. But it’s just the latest of many disruptive repairs and remodels he has had to endure. “It’s constant,” said Kessler. “Two weeks ago, they were in four days out of a five-day work week.”

ALSO READ: Tenants Say Renovations Are Pushing Them Out Of Rent-Controlled Housing

Upstairs, Adrian Anzaldua knows exactly how Kessler feels. “At one point they had a renovation below us, [and] a renovation down the hall,” said Anzaldua.

The tenants say it all started five years ago when a company called Veritas Investments bought their building through an LLC. It’s one of dozens of LLCs connected to Yat-Pang Au, CEO of Veritas and the biggest landlord in San Francisco. In a pension real estate association interview, Au explained his strategy is to attract a new kind of tenant, young tech workers from out of town.

Au has an ownership stake in nearly 250 rental properties throughout the city with more than 5,000 apartments, available through the company’s leasing arm, RentSFnow.

Kessler and Anzaldua are among the six remaining rent control tenants left in their 12-unit apartment complex.

While their monthly rents range from $1,600 to $2,500, the renovated units are fetching up to $5,000 or more. “Do you think they want you out of here?” we asked Kessler. His answer: “Oh, absolutely.”

“You get the sense that you’re not wanted and that there are other people who can pay more who are more desired,” said Anzaldua.

During their time on Dolores Street Kessler and Anzaldua endured what they claim in a lawsuit against Veritas is harassment in the form of construction. Tenants have come up with a word for it: Renoviction.

They regularly receive 24-hour notices that they won’t be able to park in their garage, that the water is being shut off or their power is being shut off, that the fire escape needs securing, that contractors and prospective buyers need to tour their place.

“There’s a tremendous incentive for a landlord to get them to move,” said attorney Ryan Vlasak. He’s heard this story time and time again; 165 times to be exact. His law firm, Bracamontes Vlasak, represents 165 tenants including Anzaldua and Kessler, who are all suing Veritas and Au. “This many people would not be mad at the same landlord in the city for no reason. I think that means something,” said Vlasak.

Au would not agree to an interview for this story. Instead his company sent us a statement addressing Anzaldua and Kessler’s building specifically. It reads in part: “We are confident this litigation will be dismissed. These tenants are living in a great building in the heart of Noe Valley with a landlord that is committed to the highest standards.”

The company also sent us before and after photos of dry rot repair work they did on Anzaldua and Kessler’s building to illustrate the kind of improvements they made. As for existing tenants, they told us “We have one of the lowest eviction rates of any landlord in the city so these tenants are welcome to stay.”

That’s exactly what the current legacy tenants intend to do because they say leaving this building would mean leaving the Bay Area. “If I were to leave here I would have to leave here,” said Kessler. And as the chaos of construction whirrs around them, they’re determined not to stay silent.

“At the moment we’re going to try to stay, not only because this is community, we know each other, but because it’s important we all keep doing this work,” said Anzaldua.

The company says the lawsuit is just a way for the lawyers to make more money by recruiting more tenants. Veritas gave us a copy of a flyer that they say has been posted in several of their buildings, encouraging tenants to sign up.

Spokesperson Ron Heckmann sent us the following statement:

“We are confident that the failing Evander litigation will be dismissed in due course, and, indeed, the San Francisco Superior court has already held that  “there is no viable cause of action alleged by any of the plaintiffs.”  Two of the plaintiffs in Evander, Adrian Anzaldua and Mirra Schwartz, have made statements to KPIX that do not fairly reflect conditions at 1064 Dolores street.  Since acquiring 1064 Dolores in 2014, Veritas has  greatly improved the building, including updates to the lobby and interior, a fire alarm upgrade, and the repair of dry rot found after acquisition.  We are now working on improving earthquake safety.  We have also provided these particular tenants with a new stove, a new refrigerator, new shower doors, new light fixtures, new screens and painted some of their windows and are replacing other windows.  So these tenants are living in a great building in the heart of Noe Valley with a landlord that is committed to the highest standards.  An independent firm that tracks resolution of complaints made with the department of building inspection found that “Veritas is definitely one of, if not the most proactive property management companies in San Francisco in dealing with building code complaints/violations,” and pointed to public data maintained by the Department of Building Inspection to substantiate it.  Contrary to plaintiffs’ allegations that Veritas seeks to drive out tenants, we have one of the lowest eviction rates of any landlord in the city, far less than 1% (0.18%) and almost exclusively due to continuing nonpayment of rent.  So, these tenants are welcome to stay and enjoy living at 1064 Dolores.”

Article source: https://sanfrancisco.cbslocal.com/2019/05/09/san-francisco-rent-control-renovation-harassment/