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Photo by Nolita

Our good friends purchased the gorgeous Vineyard Knoll Estate where The Bachelor is currently filmed.   We are so looking forward to chillax amongst the 200 acres of Pinot Noir and Chardonnay grapes this year.

You can rent this when we are not there.   The home is tastefully furnished with 6 bedrooms and 4 bathrooms.   Rental rate, subject to availability is:

  • Night: $1,675 - $2,100
  • Week: $10,575 - $13,225
  • Month: $28,175 - $35,225

Without doubt, this is the best development site available, for those with the appetite to develop in this low interest rate environment.

There is a lot of history to this site and it is located directly opposite the Transbay Terminal which the City of San Francisco has been moving forward to create state-of-the-art transportation hub for the Bay Area and Northern California to integrate regional bus service, BART, Muni and the Caltran line, which will eventually offer high-speed rail service to Los Angeles.

The highly successful Millenium project is directly across the street which was a joint venture by our good friends at Sun Hung Kai Properties in Hong Kong with Millenium.   Their chairman & founder of SHKP, now deceased, and my Father's good friend purchased the site of the Millenium San Francisco moons ago.   He was a far-sighted and kind person.   My good friend Donald put together that joint venture.

Computer renderings show how changes proposed for the Transbay Terminal area might alter the skyline. The red images are towers higher than 850 feet. The blue ones are towers now allowed. 

The investment market, as indicated by the transactions below, is still strong despite world economic uncertainty.   Those in the know recognize the long-term value of investing in San Francisco and it  tends to be instiutional investors or The Seriously Rich.

ARCHIVED HISTORICAL FACTS:

The Seriously Rich are 'upping' prices in Bay area

Out in the East Bay, the wealthy are congregating in Piedmont and Alamo. Known for the country like feel right by Mt. Diablo, Alamo saw their home sales skyrocket by 85%.  Neighbouring Oakland, Piedmont also jumped up their home sales by 56%.

Down in the South Bay, Hillsborough, Cupertino and Saratoga made the list. While all fifteen cities had median home values over $1 million, many of them were in the low $1 million range. Hillsborough blew all the other towns on the list away with a median home value of $2.1 million - almost twice the values of some of the other communities that made the cut. This is probably also due to the fact that Hillsborough does not have any type of multi-family housing - no apartments or condos and your house - or estate - has to be a minimum size.

In an effort to preserve the stately nature of grand homes, the incorporated town regulates a minimum house size (which has shifted with different zoning laws) and a minimum lot size of one-half acre.

Cupertino and Saratoga have benefited from the rising tech riches of Silicon Valley. Apple is based in Cupertino, and what employee doesn't want a short commute? Don't forget other tech giants like HP and Oracle who have started and stayed in the South Bay, and helped the pockets of employees get fatter.

Significant sales in 2010*

  • Lasalle Hotels purchase the Hotel Monaco for $68.5 million - $341,000 per room for 201 rooms       >>   DETAILS     -  2010 September                       
  • Affluent Zipcodes Foreclosed

351 California snapped up by Turkish buyer

Polidev International, a new San Francisco-based real estate fund backed by investors from Istanbul, bought 351 California St. at auction today for $35 million. There were no other bidders.   - 2010 June 10

Everybody knows that the debt of California is even larger than the debt in Greece so we watch carefully for trends that could indicate of what's to come next.   The population of California is larger than the whole nation of Canada.

The plan to sell top-notch state-owned office buildings for quick cash could cost California taxpayers about $1.3 billion over the long haul, according to documents associated with the proposed sale.

Through a move known as a “sale-leaseback” the state hopes to generate $2 billion or more by selling 11 office properties, most of them in the Sacramento region, and lease them from the new owners for 20 years.

The sale, prompted by the state’s budget crisis, would provide some immediate benefits, such as paying off debts on the buildings, freeing up about $660 million for the general fund and shifting repair and maintenance costs to new landlords.

That might provide a modicum of relief to cash-strapped California, but it also would mean taxpayers would foot the bill for about $5.2 billion in rent over the next two decades.

Bids from prospective buyers are due Wednesday and the state’s Department of General Services, which is handling the transaction with CB Richard Ellis, has said the response has been “tremendous.”

The proposal has raised eyebrows around Sacramento.

“Looking at it from a taxpayers’ perspective, there are question marks,” said Bob Dean, who heads the Sacramento office of commercial real estate brokerage Grubb & Ellis. “What are we obligating ourselves to pay for the next 20 years? Is it a healthy decision?”

In today’s market, tenants are looking for ways to reduce operating costs, but the leaseback deal would escalate the state’s annual costs, Dean said.

The Department of General Services plans to perform a more detailed analysis of the costs and benefits once the bids come in — one that could paint a better long-term picture, state officials say. They cautioned it might be too early to scrutinize the financial implications.

“In the final analysis if it doesn’t pencil, we’re not obligated to sell the property,” said Gerald McLaughlin, a senior real estate officer with the department. He noted that the extra money paid in rent over time could be mitigated by the “time value” of money, meaning that funds in hand today are worth more than the same amount in the future. It’s a view shared by others in the real estate business.

“On the surface it may not look like a good deal, but when you understand the time value of money, it probably is a good deal,” said Chris Strain, who heads brokerage Cushman & Wakefield’s Sacramento office.

The sale would provide stability to the state by shifting liabilities to landlords for major repairs, General Services spokesman Jeffrey Young said.

The office properties include the massive East End Complex on Capitol Avenue, the Attorney General building on I Street, the Franchise Tax Board on Folsom Boulevard and properties in San Francisco, Los Angeles and Oakland.

Short-term windfall

Gov. Arnold Schwarzenegger’s office last year asked General Services to start examining a possible asset sale as the governor questioned whether the state should be in the real estate business, Young said. Representatives of the governor did not return calls seeking comment about the deal.

California owns about 10 million square feet of offices in the Sacramento region and leases 7 million square feet. It has built or purchased property with the idea of saving money over time through ownership. But unforeseen expenses, such as repairs that could run upwards of $40 million at the state Board of Equalization building in Sacramento, have the state’s experts rethinking the strategy.

And operating buildings generally costs California more than it would a private owner, which can farm out services to the lowest bidder.

General Services budgeted $71.9 million in annual maintenance costs for the 11 properties. According to CB Richard Ellis’ financial analysis, the upkeep, security and landscaping on the buildings would cost a prospective buyer about $50 million, a 30 percent savings.

The Legislature last year voted to authorize the sale after state workers determined which assets would make the best sellers. Pressure to sell might have increased due to the state’s financial condition. The Legislative Analyst’s Office has said the state must address a general fund budget shortfall of at least $20.7 billion before the Legislature enacts its next budget.

Under the deal as envisioned, the state would earn about $2 billion through the sale, then retire debt on the buildings at a cost of $1.3 billion to $1.5 billion. That leaves $660 million left to pay for general fund programs if the state gets its asking prices.

If the sale goes through, the state would no longer be responsible for an estimated $1.9 billion for repair and maintenance over the next 20 years; those costs would become the new landlords’ responsibility.  - 2010  April 9     BUSINESS JOURNAL

American Assets purchased the remaining 75% interest in the Landmark at One Market for $528 per square foot, in an off-market transaction.  - 2010 July

The 'sophisticated' investor appears to be working out their issues quietly if this article dated 2010 March 2nd is any indication.

San Francisco-based Shorenstein Properties has taken ownership of the distressed Santa Clara Towers from Tishman Speyer in a consensual transaction


ESSENTIALS 		Santa Clara Towers consists of twin, 11-story towers totaling 422,485 rentable square feet. 

Built in 1986 (Tower I) and 1998 (Tower II), the buildings feature striking glass and granite exterior facades which stand out along Silicon Valley’s 101-Corridor. 

Santa Clara Towers is located at the intersection of Highway 101 and Great America Parkway, one of the most sought after locations by both high-technology and service and sales related companies. Highway 101 allows for immediate access to the core of Silicon Valley and the San Francisco Peninsula, along with a myriad of transportation options.
Property Address 3945 & 3965 Freedom Circle
Santa Clara, CA 95054
USA
Year Constructed 1986/ 1998
Project/Building Architect Hoover Associates
Building Owner Tishman Speyer
Santa Clara Towers, L.P.
Santa Clara Towers II, L.P.
Previous Building Owner McCandless Management Corporation
Year Purchased 2007
Building Lender Lehman Brothers
Structure Structural steel
Number Of Floors 11
Rentable Area 3945: 208,403
3965: 214,080
Major Tenants Square Footage McAfee (208,368), Amkor Technologies (19,983), Wayne Mascia Associates (10,939), Marubeni (9,634)
Floor Plate Size 20,000 sqf.
Floors Above Grade 11
Slab To Slab Height +/- 13.5’
Floor To Ceiling Height Floor 1 = 20’
Floors 2-10 = 9’ to t-bar
Floor 11 = 1‘ to t-bar
Window Details Tinted black glass in aluminum frames
Column Spacing Typical exterior 25’ x 40’
Bay Depth 38’ to 42’
Elevators Each building has 6 elevators.
Parking 1,408 stalls
Major Tenants McAfee, Amkor Technologies, Wayne Mascia Associates, Marubeni

San Francisco-based Shorenstein Properties has taken ownership of the distressed Santa Clara Towers from Tishman Speyer in a consensual transaction.

The deal comes two years after Shorenstein bought the $51 million mezzanine loan on the 210,000-squar- foot building, at 3945 & 3965 Freedom Circle in Santa Clara.

Tishman Speyer spokesman Rich Matthews said the company and its lenders “explored various ways to restructure the debt, and ultimately decided that the best course of action would be for the mezzanine debt holder to assume ownership of the property.”

“The recent deterioration of commercial real estate markets across the U.S. has created many situations where the values of properties have fallen well below the debt that encumbers them. This is especially true in the Silicon Valley area and is true for Santa Clara Towers,” said Matthews.

Tishman Speyer bought the buildings from Birk McCandless for $213 million in 2007. One of the two granite towers is 100 percent leased to McAfee Inc.; the other has several tenants.

A Shorenstein spokesman confirmed that Shorenstein Realty Investors Nine, L.P., which is the holder of the mezzanine debt on Santa Clara Towers, has agreed to assume ownership of the two 11-story office buildings. After the transfer of ownership, the property will be managed by Shorenstein Realty Services, an affiliate of Shorenstein Properties.

“Consistent with all assets in its real estate portfolio, Shorenstein intends to invest new capital to maintain Santa Clara Towers’ premier status and high occupancy rate and to position the asset to take advantage of the anticipated recovery in the Silicon Valley office market,” stated Shorenstein.

Other assets currently owned and operated by Shorenstein Properties and its investment funds in the Silicon Valley and the mid-Peninsula office markets include 601 California Ave. in Palo Alto; 5000 & 7000 Marina Blvd. in Brisbane; 1400 & 1500 Seaport Blvd. in Redwood City; the Oyster Point Business Park in South San Francisco and Cisco Tower in Santa Clara. Shorenstein Properties owns and manages 24.2 million square feet nationwide.   -  2010 March 2   BUSINESS JOURNAL
 

Nob Hill's Huntington Hotel is for sale

The Cope family, which has counted the Huntington as a family member for some 70-odd years, has placed the iconic San Francisco hotel on the block in an unusual portfolio deal that also includes La Playa in Carmel-by-the-Sea and the ground lease for the Stanford Court Hotel in San Francisco.

This portfolio, which is being sold as a corporation, has been in the family for years, so this is not a case of owners needing to shed distressed assets. Rather, this is an estate management play following the November 2005 death of the family patriarch, Newton Cope.

The properties have reportedly been marketed before, but without fetching a price that met family expectations.

The family's real estate holdings, Nob Hill Properties, Inc., is currently headed by John Cope, a past president of the Hotel Council of San Francisco.

The portfolio does not have an asking price.

The Huntington has never been for sale, and La Playa, situated on almost two acres near the beach in Carmel proper, is all but irreplaceable.

The Huntington has 140 rooms and 40 suites, the popular Nob Hill Spa and Big Four Restaurant and bar. It was built as a residential tower in 1924, and has no brand affiliations.

La Playa is as much a landmark property as the Huntington. It has 75 rooms, two ocean-view suites and six cottages. Like the Huntington, it comes unencumbered, which means that the buyer can choose a brand of its choosing to manage the hotel, which usually commands a premium. Carmel has made it all but impossible to build new hotel properties.

The Galleria Park Hotel at 191 Sutter St. has 177 rooms and 15 suites and is managed by Joie de Vivre Hotels. The hotel is not for sale, but rather is offered as a long-term ground lease agreement through August 2039.

Informed sources say there has been significant early interest from international buyers, some of whom may be looking to enter Northern California with trophy properties like the Huntington and La Playa.

Other sources say that the portfolio may be challenging to sell because the three properties come as a package and are being offered as a corporation rather than as a traditional, fee-simple transaction.     - 2010 May 12   BUSINESS JOURNAL

Napa Marriott Hotel sale - $131,386 per unit

Sunstone Hotel Investors Inc. said Wednesday it was closing on the sale of a 274-room Marriott hotel here. The sale price is $36 million. Sunstone paid $21 million for the property in 1998.

The name of the buyer has not yet been made public. Sunstone says it would have had to invest $6 million or $22,000 per key in the asset in the near term in order to comply with Marriott’s brand standards.

Also on Wednesday Sunstone said it would sell about 20.7 million shares of common stock with which it hopes to generate $100 million to pay off credit lines and to fund a debt buyback. Taking into account the dilution, Sunstone’s stock price stood at $5.26 in late afternoon trading Thursday, down ($0.56) nearly 10% on the day. The share price is down about 70% over the past year.

Sunstone says the moves, including a recent tender offer for outstanding notes, are designed to help Sunstone weather the recession, which has lowered tourism and business travel spending. The stock sale proceeds will be used in part to repay any amounts drawn on the company’s credit facility and to cover costs related to its tender offer for $123.5 million [principal amount] of 4.60% Exchangeable Senior Notes due 2027, which expired this week. The repurchase will be consummated with $85 million in cash, the company said.    -- 2008 May  

Taiwanese real estate investor Steven Pan has finalized the purchase of 49 Stevenson St. for $24.2 million, the latest sign that San Francisco's long-dormant investment market is starting to come to life.

The $190-a-square-foot sale price represents a 40 percent decline for the value of the property, which the city currently assesses at $41 million. The seller was Invesco.

The sale price would be consistent with the other two similar second-tier downtown buildings that have sold in the last six months.    In November the Shorenstein family bought 188 Spear St. for $170 a square foot, a 56 percent drop from the $385 a square foot, or $56.9 million, the city assessed the 147,000-square-foot property for the last fiscal year. Another Class A financial district building that sold last year, 250 Montgomery St., traded for $172 a square foot, also a 56 percent drop from its previous sale in 2006.

Another Class A financial district building that sold last year, 250 Montgomery St., traded for $172 a square foot, also a 56 percent drop from its previous sale in 2006.

The city's most recent office building sale was 211 Main St., which the CIM Group bought for $112 million, or $300 a square foot. That building fetched a higher price per square foot because it is 100 percent leased to Charles Schwab through 2018.

In the mid-1990s Pan cut a wide swath through downtown San Francisco real estate circles, amassing a 1 million-square-foot portfolio with properties like the 700,000-square-foot Pacific Center at 22 Fourth St, and the Chevron building at 225 Bush St. He sold most of his properties between 1998 and 2000, telling the Business Times at the time that “we’re so used to bargains and now it’s absolutely impossible to find opportunities here.”

The San Francisco Business Times reported in December that Pan had the building in contract. At the time TRI Commercial Managing Director Anton Qiu, who has frequently represented Asian buyers interested in San Francisco, predicted that the 49 Stevenson St. sale will be the start of a trend.

“Since last summer I have noticed a lot of the overseas investors who used to be active in the mid-90s are back,” said Qiu.

Qiu said the Asian buyers have access to cheaper debt than U.S. investors do, and thus are willing to settle for lower capitalization rates, which is the ratio of annual net operating income produced by a building divided by its value.

“The local guys were looking 9 cap and foreign buyers looking at a 7 cap,” he said. “The cost of funds makes the difference. They can pay a little more.”

Pan, which Forbes magazine ranks No. 34 on Taiwan’s Richest 2009 with a net worth of $650 million, owns hotels and is chairman of the Formosa International Hotels Group. His father, S.R. Pan, started out in the Bay Area more than 40 years ago, buying up several hundred acres along the Alameda shoreline and looking for good deals.

“If you own a bargain, you have to create value with it,” Pan said in a 1998 Business Times interview. “To create value, you don’t just sit on it.”   -  2010 January 11  BUSINESS TIMES

Millionaire households in Bay Area

Here's a breakdown by county of Bay Area households with $1 million or more in financial assets:*

County Households
Alameda 23,402
Contra Costa 20,829
Marin 7,047
Napa 2,468
San Francisco 11,391
San Mateo 14,486
Santa Clara 31,246
Solano 6,262
Sonoma 8,485

*Includes liquid financial assets such as checking, savings and retirement accounts, mutual funds, stocks and bonds. Figures don't add up to Bay Area total cited in text, which is based on a market research region that doesn't precisely overlap county boundaries.     - Source: Claritas, Merrill Lynch, Capgemini      2008   June 25  SAN FRANCISCO CHRONICLE

MARIN COUNTY

Despite a 40 percent drop in real estate prices in the Bay Area during the economic downturn, affordable housing in Marin and other counties remains out of reach for many working families.

That is the conclusion of a report issued Thursday, "Priced Out: Persistence of the Workforce Housing Gap in the San Francisco Bay Area," issued by the Washington D.C.-based Urban Land Institute Terwillger Center for Workforce Housing.

"Despite this 40 percent drop, working families are priced out of the housing market, and the rental market as well," said Kevin Herglotz, spokesman for the center. "And with the economy getting better the situation will only get worse."

The severity of the problem threatens the region's future economic viability and, unless policy changes are made, new home development will leave significant unmet demand, leaving thousands of working families "priced out" of affordable housing options, the report concludes.

"The basic need for affordable housing is, in fact, growing, while the resources available are diminishing," said Dave Coury, executive director of the Marin Continuum of Housing and Services. "The old practices of restricting land available for higher density affordable housing has resulted in an inequitable and unsustainable situation. We import more than one-third of our workers in the county at lower paid job levels, which is the fastest growing segment in Marin."

Less than 10 percent of the homes for sale in the Bay Area are affordable to a family in Marin making a combined annual income of about $90,000, according to data provided by the report's authors.

"Marin is probably the worst affected in the entire Bay Area because the housing costs there are very, very high," said Adam Ducker, managing director with Washington D.C.-based RCLCO, which developed data for the report.

Approximately 30 percent of the Bay Area's 2.7 million households fall in the workforce household income range. That income can range as high as $100,000 annually and includes professions such as teachers, firefighters and nurses.

The study analyzed the housing market in Marin, along with Sonoma, Alameda, Contra Costa, Napa, San Mateo, Santa Clara, San Francisco and Solano counties. It found that only 15 percent of the existing homes for sale in the Bay Area are affordable to workforce households earning the median family income. That compares with between 50 and 60 percent in regions across the country similar to the Bay Area.

Every county in the Bay Area ranked as being one of the least affordable in the country. Only New York City ranked less affordable.

The report also found that high housing costs are pervasive in the rental housing market, which serves 42 percent of workforce households in the Bay Area. Workforce households have a much higher propensity to rent in the Bay Area, especially among families, than in similar metropolitan regions across the country.

And expensive Bay Area rents require a workforce household to pay more than 30 percent of their incomes on housing, more than in other metropolitan regions across the country.

The report concludes that the Bay Area suffers from a workforce housing shortage that is among the most acute and widespread in the nation. Despite the recent housing market downturn, the high cost of housing remains a critical challenge to the long-term economic health of the Bay Area because workers cannot afford to live here.

"If current trends continue, new construction will fail to meet the significant projected demand for workforce housing in the future," said Jim Wunderman, president and CEO of the Bay Area Council. "Unless these issues are seriously addressed, not only will Bay Area families continue to be priced out of housing options, but the region's future economic viability will be threatened."

There are groups working to address affordable housing in Marin. The Marin Workforce Housing Trust, a public-private partnership that was founded in 2004 to expand workforce housing in Marin County, has raised more than $3 million and offers low-interest loans from both for-profit and nonprofit developers seeking to build affordable housing in Marin.

In October 2008 the county established an affordable housing impact fee charged to builders depending on the size of a structure.

And last year the Marin Community Foundation announced plans for a $10 million, five-year plan aimed at boosting the supply of affordable housing in Marin.    - 2010 February 18    MARIN INDEPENDENT JOURNAL

The City has floated a concept to raise the heights of buildings in the Downtown Core.   The idea would be to raise height limits on several blocks south of Market Street to allow two towers as tall as the 853-foot Transamerica building and a third that would climb at least an additional 150 feet -- to more than 1,000 feet tall.   >>MORE

Silicon Valley High-Tech Rents Tumble

Rent in Silicon Valley for high-tech commercial real estate fell almost 30 percent in 2002, extending a slide that began a year earlier, according to a study released on Thursday.

Annual rent for high-tech work space in Silicon Valley averaged $15.24 per square foot in the fourth quarter, down 29 percent from $21.48 per square foot in the first quarter, according to commercial real estate services company Cushman and Wakefield.

Average annual rents in the region had been as high as $50.88 per square foot in the first quarter of 2001.

Silicon Valley, home to scores of big and small technology companies, has been hammered by the high-tech industry's downturn, sending local commercial rents tumbling as companies consolidated facilities while slashing payrolls.

Silicon Valley had about 30.15 million square feet of commercial space suited for high-tech companies available for rent in the fourth quarter of 2002, up 37 percent from 21.96 million square feet of such vacant space in the first quarter of last year.

The region's vacant high-tech real estate was a low 3.1 million square feet in the third quarter of 2000 when Silicon Valley's local economy was booming.

The unemployment rate in Santa Clara County, the region's heart, was 7.8 percent in November, down from 8.1 percent in the prior month but up substantially from 1.3 percent in December 2000 amid the dot-com boom and torrid business investment in tech goods and services of all kinds.    - Reuters   2 January 2003

 


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