Mixed-Use: San Francisco & Portland

Back to the prospecting for active owners and developers...They are looking at more condo projects here in San Francisco and Office demand remains solid in Oakland.

Notorious Folsom Street warehouse may go condo - San Francisco Business Times - by J.K. Dineen

"The two-story warehouse at 935 Folsom St. last made news five years ago when the U.S. Department of Justice raided the property as part of a multi-agency investigation into illegal sweatshop operations. Now Eugene, Ore.-based condo developer Spring Capital Group, which bought the 14,000-square-foot property in 2005 for $4.1 million, has filed an application to replace the building with an eight-story, 75-unit condominium development.

The proposed building, designed by Portland-based Ankrom Moisan Associated Architects, is glassy and modern with a green roof. It reaches 85 feet along Folsom Street, but steps down to lower townhouses opening onto the Shipley and Falmouth alleys. It will feature retail along Folsom Street, keeping with the city's efforts to transform Folsom into a pedestrian-friendly shopping boulevard connecting Rincon Hill with west SoMa. The project includes 57 parking spaces, plus, at the request of the neighborhood, motorcycle parking on the street."

Looks like Spring Capital Group does some nice work throughout the Northwest although it is hard to say how active they are currently from my cursory research effort. The architect (Ankrom Moisan) on the other hand looks to be extremely active and quite a player in sustainable design. Check out their site and the recent write-up on the Eliot Tower Project in Portland (photo right).

It is promising to see growing portfolios of projects like these even if most seem to be in Portland still.

Gas prices park new tenants at BARTable City Center (from the same article by JK Dineen)

"The one-two punch of rising gas prices and stubbornly high office rates in San Francisco is generating opportunities for Shorenstein's 3.5 million-square-foot City Center. The downtown Oakland property at the 12th Street BART station, has scored several new transit-conscious tenants, including two San Francisco companies. The complex is now 95 percent leased.

"With the price of gas skyrocketing, our location is ideal," said John Dolby, vice president of leasing for Shorenstein Realty Services. "We hear this comment often as we work with existing and potential tenants...

Obviously the sustainable community talk is not going to slowdown any time soon. The SF Office market is very solid in spite of the job loss down here in the financial district.

Mixed - Use Project: Garland, TX

By STEVE BROWN / The Dallas Morning News
stevebrown@dallasnews.com

"A Trammell Crow Co. subsidiary has begun construction on a mixed-use development in Garland.

Crow's High Street Residential and USAA Real Estate Co. are building the 5th Street Crossing at Garland Station, adjacent to DART's light rail station in downtown Garland."

Yesterday I was reading apartment newsletters, today mixed-use case studies. Sustainability has been on my mind quite a bit lately so my cruise around the Highstreet Residential Site was most interesting.

In addition, I found an interesting release on some info that scooted by me:

CARROLLTON, TX—The City of Carrollton has selected High Street Residential, a wholly owned subsidiary of Trammell Crow Company, as the exclusive master developer to spearhead private investment for three Transit-Oriented Development (TOD) areas. These areas include the Downtown Carrollton Transit Center District, the Trinity Mills Transit Center District and the North Carrollton Station Development Site. Each site, which anchors existing or planned DART rail lines, is expected to feature sustainable, vibrant, livable districts with a variety of high-density residential, office, and retail uses and enhanced pedestrian amenities.

These guys are definitely active. Check them out and get connected. I need to make sure we get them to represent at the Developer Conference in October.

Pacific Northwest: Multifamily and Mixed-Use

There are a couple more markets making the news with some solid headlines. Both Portland and Seattle experts are optimistic about multifamily and mixed-use fundamentals going forward.

Vacancies are down, rents are on the rise and investors/lenders feel strongly about long term prospects for the market.

The return of the renters: Upended housing market spurs Portland's apartment market

Jitters send the developers running to rentals

Once again, the national trends we are hearing all seem to be well-supported on a regional basis.

Return of Renters?

The multifamily bandwagon is filling up these days, but as I mentioned before, it can be very misleading to take a few national statistics or headlines and blow them out of proportion.

That said, these two recent articles from the Atlanta Business Chronicle showcase some interesting anecdotal evidence on apartment activity and investment.

"Atlanta-based Pollack Partners LLC, in partnership with New York-based investment firm The Goldman Sachs Group Inc., has raised $56 million to acquire and develop apartments in the metro area and the Southeast. With additional investment from third parties and debt, Pollack Partners hopes to leverage the fund into $800 million to $1 billion worth of multifamily projects."

Mixed-use momentum also continues to build in Atlanta and in other major markets.

"Now Coro is planning a $55 million 20-story, 155-unit luxury apartment tower, which will include 9,100 square feet of office/retail space."

Return of renters: Money pours into apartments
Developers ditch condos in favor of apartments

The piece quotes several area developers who are placing some large bets on the strong industry fundamentals. Some of these firms include: Pollack Partners, Williams Realty Advisors, Lane Company, Coro Realty Advisors, Wood Partners and Julian LeCaw.

These projects will not come online into the Atlanta market overnight but is exactly what keeps multifamily fundamentals consistently favorable for investors and a relatively predictable market to serve versus other segments of real estate.

Developer Conference: The Next Great Places

September 11-12, 2007 - The Omni Shoreham - Washington, DC

Over the past week or so many of our customers have been asking about the attendee profile of this 2nd Year event. Typically, a bulk of our promotion is directed to single-family, multifamily and mixed use owners/developers. This year we are expanding to include more retail developers to the discussion.

We have a copy of last year's attendee that can be provided upon request, but here is a general overview from 2006 (using primary business data compiled by yours truly):

1. Community Developers/Master Plan Specialists: Abdo Development, Costa Pacific, Black Mountain Ranch (a 5000 acre master plan in SD), EYA, Newland Communities, Westrum Development, Federal Realty Trust.

2. Single-Family Publics: WCI Communities, Beazer Homes, Centex Homes, KB Homes, Lennar, Pulte Homes, Standard Pacific, Brookfield Homes.

3. Multifamily Publics/Top 50: Gables Residential, Home Properties, ING Clarion, KSI Services, LeCesse Development, Shelter Development, Morgan Stanley, Trammel Crow Residential, Walton Communities, Wood Partners, Wallick Properties.

4. Land Developers: Value Companies, Regency Land Development, Metro Development, McBride Land Development, Landworks Development, Cafritz Company, Taylor Woodrow, Ginsburg Development.

It is important to note that just about all attendees were senior level executives and many were CEO's, Presidents and Partners. Some notables: Marjorie Nesbitt, Rudy Kadlub, Bill Bensten, Robert Youngentob, Nelson Leenhouts, Robert Kettler, Emile Haddad, John Westrum and Barry Teague.

In total we had 145 paid attendees (limited to developers, owners, operators or architects) last year and only 6 sponsoring firms (service providers). We will keep you posted as registrations start to come through.

Trends: Modern Communities

While we are all trying to figure out what the housing market shakedown means for multifamily rentals there is some interesting consumer research out there that links social networking and online communities with real estate trends. It is proven that people want to be a part of a community but some argue that communities created by technology have actually alienated many of us in some ways.

Have a look at what a leading consumer research firm, Gfk Roper has observed about American values these days. The study is called "Modern Communities" and the link takes you to a Denver Post Article from earlier this year. Given the population growth this country is expecting over the next 20 years this study might lead you to some interesting conclusions about how the landscape will change.

The jury is still out on how the concept of New Urbanism will be embraced by municipalities in the near future, but we intend to follow it closely in the pages of Developer and at our upcoming Developer Conference in Washington, DC on September 11-12.

Judging from the turnout at last year's event, and the early success of the publication, we are betting that smart growth is going to be a force to be reckoned with in the coming months. The end-user certainly seems to be on board with the concept and we expect to see the convergence of production builders, leading multifamily players and retail developers try to figure out a successful go forward strategy.