It’s Not Google Time Any Longer

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How do IPOs affect San Francisco real estate? – San Francisco Real Estate | Examiner.com

The workweek started with more than a thousand newly minted Bay Area millionaires. How will this affect San Francisco real estate prices?

Well, one of Paragon’s clients, who qualifies as one of these millionaires, asked our analyst to run a price history for San Francisco real estate in the wake of the Google IPO. He found, among other things, that there was a huge leap in prices for both houses and condos. In fact, it was the biggest monthly median price in two years.

You can find the chart here.

Keep in mind that the Google IPO occurred in 2004, when the real estate bubble was boiling toward its climax a year or so later. At that point, a butterfly sneezing in Tokyo could have goosed SF real estate prices by a significant amount.

Also, Google’s stock went <i>up</i> after the IPO, creating an add-on wealth effect among the new rich kids.  That’s not happening with FB – at least not yet.

Facebook Faceplant?

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Facebook effect on SF housing market – May. 17, 2012

Facebook san francisco housing

(StockTwits) — The Basis Point is a popular mortgage and housing blog that tracks consumer critical issues and data. It is edited by Julian Hebron, a retail mortgage lender who runs the San Francisco branches of RPM Mortgage.

Three weeks ago, some clients wrote a $1.25 million offer on a 1,400 square foot 3-bed, 1-bath house with original kitchen and bath near San Francisco’s Dolores Park. They weren’t even close. There were 51 offers. It sold for $1.4 million and closed 8 days after offers were due.That’s the most offers I’ve seen in 10 years. And a different property at that week got 23 offers.

No doubt about it, the FB IPO is going to make a lot of City sellers very, very happy.

Although with the current price of FB stock now crashing, you may see a sudden burst of caution on the part of all these newly-minted zillionaires, who may be finding themselves only millionaires as this long week after kicks off.

Old Buildings Offer New Cachet

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Harvest Properties and Invesco Real Estate Acquire Historic Bancroft Building in Downtown San Francisco – MarketWatch

EMERYVILLE, Calif., May 09, 2012 (BUSINESS WIRE) –
Full service commercial real estate firm Harvest Properties today
announced that it has purchased, with investment partner Invesco Real
Estate, the Bancroft Building, a 93,108 square-foot multi-tenant office
property with street level retail located at 731 Market and Third
Streets in downtown San Francisco.

This building, as I recall it, fronts on the south side of Market, technically making its location the high-cachet “SOMA” neighborhood. These legacy buildings have suddenly become a great deal more valuable, thanks to the recent Twitter buy at the other end of the Market corridor.

Help Me, I’m Drowning!

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Homes for Sale Grow Scarce as Sellers Await Higher Prices – Businessweek

A real estate agent near California’s
Silicon Valley seeks sellers by combing property records for
people who’ve owned their houses for at least 40 years. A
Denver-area broker offers half his commission for a listing,
while a counterpart in South Florida hosts happy hour gatherings
at bars to loosen up homeowners reluctant to sell.

Real estate agents, who spent the six-year U.S. housing
collapse coaxing buyers off the fence, are now hunting for
sellers as home inventories hover near lows last seen in 2005. A
scarcity of properties signals the housing market’s uneven
recovery as purchasers trying to take advantage of record
affordability run up against homeowners choosing to stay put in
properties that aren’t worth as much as they owe.

“It’s a sign of transition from a slow slide down to what
hopefully will be a solidly improving market,” Susan Wachter, a
professor of real estate and finance at the University of
Pennsylvania’s Wharton School, said in a telephone interview.
“We’re not going to have a healthy market until we can have
move-up buyers purchase homes and not simply stay in place.”

“Aren’t worth as much as they owe” is a polite way of saying “underwater,” or, “drowning in place.”

Even The City proper, the strongest of the SF Bay Area markets, the underwater/short sale plague has been significant:

Under Water Around the Bay Area

I wonder how many homes the Facebook IPO and its accompanying millionaire glut will drag onto the market?

Bike San Francisco

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Minneapolis, Portland And San Francisco Top Walk Score Ranking Of Most Bikeable Cities – MarketWatch

“Bicycling saves money on gas and fosters better health and a cleaner environment. But the best part about it is not being trapped in traffic. Biking can turn your commute into the best part of your day,” said Josh Herst, CEO, Walk Score. “Across the country, biking is growing in popularity and we’re excited to celebrate Bike to Work Week by introducing Bike Score to help more people find bicycle friendly places to live.”

 

Top 10 Most Bikeable Cities

 

  1. Minneapolis (bike score:79)

 

  1. Portland (bike score:70)

 

  1. San Francisco (bike score:70)

 

  1. Boston (bike score:68)

 

  1. Madison (bike score:67)

 

  1. Washington, D.C. (bike score:65)

 

  1. Seattle (bike score:64)

 

  1. Tucson (bike score:64)

 

  1. New York (bike score:62)

 

  1. Chicago (bike score:62)

 

“There’s no doubt that Bike Score will add to the growing number of riders in these leading cities by helping everyday cyclists, and those who want to give biking a try, find bikeable neighborhoods and commutes,” said Andy Clarke, president of the League of American Bicyclists, sponsor of Bike to Work Week and the Bicycle Friendly America program.

No big surprise that SF ranked high. We are a hilly city, but a very compact one, and experienced riders who don’t aspire to Olympic athletic levels are usually able to find routes from point A to point B that go around, rather than over, the higher elevations.

Buying at the Bottom

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Insight: Salesforce’s plan for opulent campus a costly debacle | Reuters

(Reuters) – In early 2010, Marc Benioff, founder and chief executive of Salesforce.com, summoned several of his top real estate and finance executives to his San Francisco home to float a bold idea.

He envisioned a world-class corporate campus to house the high-flying provider of online sales management tools, which employed more than 2,500 people in the city.

Soon after, Salesforce bought 14 acres of waterfront property for $278 million. The company hired acclaimed Mexican architects Legoretta + Legoretta, who created an elaborate, avant-garde design for an office complex that would marry luxurious executive perks with expansive public spaces.

City leaders got behind the project, which promised to be the biggest office development in San Francisco in decades.

Then, this past February, just days before it was set to receive final approvals from the city, Salesforce abruptly pulled the plug.

This sort of fiasco isn’t as rare as it seems.

I’d hang onto that waterfront property, though. In the not too distant future, it might be worth a hell of a lot more than they paid for it.

The City’s Bright Real Estate Future

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Twitter Rent Surge Makes San Francisco Best Office Market – Businessweek

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.

This is from just one company. But there will be many more. And the comping IPOs, especially Facebook’s, are going to similarly juice The City’s residential market.

Old Vic

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House for Sale: Living in ‘Sunny’ San Francisco | Open House – WSJ.com

STATS: A 1,947-square-foot Victorian home with three bedrooms and three bathrooms in San Francisco’s Noe Valley neighborhood is asking $1.7 million, or $873 a square foot. Property taxes in 2011 were $14,807.

Photos: Living in ‘Sunny’ San Francisco

View Slideshow

[SB10001424052702304203604577396114138642798]

Adam Willis

A 1,947-square-foot Victorian home with three bedrooms and three bathrooms in San Francisco’s Noe Valley neighborhood is asking $1.7 million.


DETAILS: The owners bought this house in 2005 because they loved its historic frame—it was built in 1887 and survived both the 1906 and 1989 earthquakes—as well as its location in a sunny area that is central to both downtown San Francisco and Silicon Valley. They spent $500,000 in two remodels to upgrade and remodel the home, including redoing the foundation, excavating and adding the living space downstairs, installing radiant heat, replacing all the fixtures and adding another bedroom and bathroom.

Well, I guess Noe Valley is sunny, depending on your metric for “sunny,” and is certainly so in comparison to, oh, Ocean Beach or other parts of the far west.

Still, I don’t get all that excited about these ancient rehabbed Victorians – underneath all the fixes and beautifying, it’s still a house nearly 150 years old. That said, it’s probably good to go for at least another half century, and there are stately homes on the east coast that have been perfectly fine for twice that long (with a lot of work, of course).

San Francisco Will Always Be San Francisco

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Transparency in real estate biz key to sector rebound: C&W – CNBC-TV18 -

Q: Are they in pockets or across the country? What kind of geography spread are we seeing there?

A: There are pockets in better markets and less better markets. The coastal cities, by and large, are better than the interior of the US. But each of the coastal cities can have a different story. For instance, San Francisco is a very good market because of technology. Dallas and Houston Texas are booming markets because of energy. The North East is doing well. We understand that financials are doing little less well, but technology, media, healthcare are growing very rapidly in the North East. So, each section of our country may have a different driver, but by and large, it’s the coastal cities that are benefitting.

Way back when this catastrophe was first beginning to unfold, I told you that the SF market in The City proper would fare better than the Bay Area at large, and certainly better than California in general, which was at the time gripped in a bubble of ferocious proportions complicated by one of the shakiest financial superstructures you could find anywhere in the mortgage business.

This is an example of what I was talking about.

Government Regulated Green Thumbs Not So Green

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Helping communities make S.F. bloom | Andrea Koskey | Local | San Francisco Examiner

“Depending on who you talk to,  you might hear a different thing on how to get started,” said SPUR food program and urban agriculture manager Eli Zigas. “This legislation would dedicate a staff person to coordinate it, which was one of our recommendations.”

Urban garden backers say some neighborhood initiatives have taken up to two years to get projects started because of approvals needed before work can begin.

“Those who have time and are tenacious will succeed,” Zigas said.

Or they could just sell the land to the would-be gardeners and get out of the way.

Nah. That’s crazy talk.

Besides, They Can Afford It

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Allure of city itself a factor in S.F.’s tech boom

Tech action mainly in S.F.

The city’s surge in tech jobs reflects another difference between today and the dot-com era: San Francisco, not Silicon Valley, has emerged as the center of the current tech boom. With the exception of Facebook, which recently moved from Palo Alto to Menlo Park, most of the high-profile companies from the current surge have chosen to locate their headquarters in the city.

The city’s lifestyle and cultural amenities have drawn young workers adept at engineering, design and social media, which are top concerns for current tech companies. That differs from the dot-com era, when winners like Google and eBay were still building out the basic infrastructure of the Web.

Exactly. There is only one San Francisco. It is not Silicon Valley, or Oakland, or Emeryville. It is a world city like New York, London, Singapore, or Hong Kong. And once you throw in the tech synergy once found only in Silicon Valley, it becomes irresistible to the tech best and brightest.

Mid-Market Swallows Another One

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Mid-Market Street Dashes Developer – WSJ.com

David Addington, a real-estate investor who has struggled to help revamp San Francisco’s mid-Market Street neighborhood, is now deep in bankruptcy proceedings, highlighting the hazards of trying to turn around the troubled area.

ADDING

Nicole Franco for The Wall Street Journal

1028 Market St. in San Francisco, owned by investor David Addington, whose company has filed for bankruptcy reorganization.

Mr. Addington’s company, Fair Market Properties LLC, filed for Chapter 11 reorganization in January. The company owns a vacant, two-story building at 1028 Market St., near Sixth Street, that once was home to businesses including a pool hall and strip club.

Sad to say, the mid-Market area has eaten more than a few would-be developers over the years.

Juicy Opportunity, Thy Name is Facebook

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Will Facebook finally open a San Francisco office? – San Francisco Business Times

At least once a year, San Francisco’s commercial real estate circles buzz with talk that Facebook is touring buildings and looking to establish a satellite office in the city.

It’s a scintillating idea — but as far we can discern there has never been credible evidence that it’s true. Along with Apple and Pixar, Facebook is the tech superstar that seems to be resistant to San Francisco’s charm and the conventional wisdom that tech firms have to be in the city because this is where all the hot-shot kids want to be.

But now with Facebook’s $1 billion acquisition of Instagram, suddenly the idea is a lot more plausible.

Instagram is currently in a little office at 181 South Park. We are not sure how much space they have there, but it can’t be much because the entire building is only about 9,000 square feet.

It seems highly possible, even likely, that Facebook will be looking to move Instagram into bigger San Francisco office and that, following the example of Google, the social media kingpin will take the opportunity to grab a little space for itself as well.

Agents all over the city just began salivating.

And if you’re really, reallty lucky, you just might get your commish paid in pre-IPO Facebook stock.

Same Old Bubble, Or A New One?

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San Francisco Leads Rent Growth as U.S. Office Vacancy Falls – Bloomberg

Demand from technology and energy-
industry tenants led the U.S. office market to its fifth
straight quarterly gain in net occupancy, with San Francisco
leading the country in rent growth, Reis Inc. (REIS) said.

Office landlords had a net increase in leased space of
almost 6 million square feet (557,000 square meters) in the
three months through March, compared with 6.1 million square
feet a year earlier, the New York-based real estate research
firm said in a report today. The vacancy rate dropped to 17.2
from 17.6 percent in the first quarter of 2011.

Commercial in SF never took as big a hit as the rest of the Bay Area, let alone the national markets at large. And now it appears we’re heading into a new boom.

Biotech Money On the Horizon

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San Francisco to Pass New York as Top-Performing Office Market – Bloomberg

San Francisco is set to displace
New York as the best-performing office market in the U.S. this
year as hiring by technology firms helps fill space, brokerage
Marcus & Millichap Real Estate Investment Services projected.

The California city moved up five places to the top spot in
the firm’s 2012 National Office Property Index, which ranked the
country’s 44 largest office markets based on employment,
vacancy, construction and rents. New York (COLA) placed second and
Houston third, Marcus & Millichap said in a report today.

Left un-noticed in all the new influx of dot.com money is that in the not-so-distant future, the biotech revolution, anchored by the UCSF campus at Mission Bay, will start pouring new millions into the local markets.

Home Depot: Lower Prices, Bigger Selection In the Ghetto – How Terrible!

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Home Depot will have to build trust in Bayview – San Francisco Business Times

The proposed 24-hour store comes nearly four years after Home Depot abandoned plans to build a new store on the former Goodman Lumber location at 491 Bayshore Blvd. The store was vehemently opposed by many Bernal Heights residents who argued that the Home Depot would clog neighborhood streets with traffic as well as harm locally-owned garden and hardware stores. On the other side of the battle were former District Supervisor Sophie Maxwell and some Bayview District residents and community leaders who welcomed Home Depot’s promises of local jobs and construction contracts.

Eventually the San Francisco Planning Commission approved the store. But shortly after obtaining building permits in 2008, Home Depot walked away from the project and the site was instead developed by Lowe’s, Home Depot’s biggest competitor.

Left unmentioned is that Home Depot, after years of trying to develop the property in the face of ever-more voracious demands from the Board of Stupes, as well as ferocious opposition ginned up by people who didn’t actually live in the Bayview (as I do), finally told SF to stuff it.

Home Depot will have some work to do to mend fences with Bayview residents who felt betrayed when the big box retailer walked away from a Bayshore Boulevard site in 2008.

That is the assessment of Al Norman, president of the Bayview Merchants Association and owner of Al Norman’s Plumbing on Third Street.

Right. Go to a plumber for an objective opinion about a Home Depot moving in.

Good Thing We’ve Got A Brand New Batch of Dot-Com Zillionaires in the Pipeline

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Buying a home is a better deal than renting – Mar. 21, 2012

NEW YORK (CNNMoney) — It’s the eternal question in real estate: Should I buy or rent?

The answer has never been clearer: Buy.

In 98 of the top 100 housing markets, buying a home is more affordable than renting, according to the online real estate company Trulia. Only Honolulu and San Francisco buck the trend.

San Francisco. Get that? San Francisco.

We’re special!

Technology Keeps Pushing Us Into the Future

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42 Floors offers listings of office space

42Floors

The website 42 Floors consolidates listings of office space that is available to lease.

Looking for office space, entrepreneur Jason Freedman says, should be as easy as looking for an airplane flight.

But when companies go looking for real estate in San Francisco these days, they find a mountain of obstacles. Listings are often inaccessible, outdated and hard to browse. Brokers are expensive and often unwilling to spend much time helping startups look for smaller spaces in which to build their companies.

Bit by bit, and step by step, technology continues to transform our industry into something previous generations wouldn’t even recognize.

Knight In Shining Armor for Owners?

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Wood brings property rights background to board

Where we see legislation that supports the economic health and vitality of our city, particularly in regard to real estate, we work to support that legislation. Conversely, where legislation seeks to impede an owner from reasonably using his or her property or has the effect of materially devaluing property, we will be speaking out on behalf of San Francisco property owners.

Well, somebody needs to. In rent-controlled – and rent-mad – San Francisco, the general take is that property owners are evil.

Harvest Picks Up Downtown SF Management Gig

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Harvest Properties Awarded Property Management Duties for 81,000 Sq. Ft. Mixed Use Office/Retail Building in Downtown S.F. – MarketWatch

EMERYVILLE, Calif., Mar 05, 2012 (BUSINESS WIRE) –
Commercial real estate investment and management firm Harvest Properties
is the new property manager for 715-721 Market Street, an eight story,
81,416 square-foot office building with street level retail.

 

The property, located on Market at 3rd Street in downtown San
Francisco, is just over 84 percent leased. It was recently acquired from
Ellis Partners by Digital Garage (
www.garage.co.jp/en/ ),
an internet technology firm headquartered in Japan. Harvest Properties
assumes management duties effective immediately. The CAC Group managed
the property under the previous ownership.

 

Comprised of two interconnected structures, the initial eight-story
building was constructed in 1908, and the two-story adjunct was built in
1967. Within the last five years, the property received an $8.2 million
total renovation, including a new granite facade on the first two
floors, a lobby makeover, new building systems, and floor-by-floor
repositioning.

The commercial SF property market continues to turn, churn, burn, and earn.

Suburban Parrot Flight?

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San Francisco’s parrots join flight to the suburbs » Anderson Independent Mail

The wild parrots of Telegraph Hill, apparently jaded by city life, have headed for the suburbs.

The goofy, green birds are now the mild parrots of Brisbane.

“We’ve got a pool, a park, and now we’ve got parrots. They make more noise than the airplanes,” said Ron Davis, a Brisbane real-estate agent and longtime resident.

San Francisco’s famed flock of cherry-headed conures, immortalized in an award-winning movie and book, has become so populous that about 100 or so birds have fled San Francisco for the verdant slopes of San Bruno Mountain, where they’re feasting on juniper and hawthorn berries and delighting the locals with their acrobatics.

Another 100 or so are still flapping around the northern edge of San Francisco, but the flock appears to have branched beyond the foggy confines of the waterfront, probably in search of food, said Mark Bittner, author of the best-selling “The Wild Parrots of Telegraph Hill.”