San Francisco is a veritable boom town that has already surpassed the market roar of 1999. It can even conceivably be compared to 1849, when gold was discovered 100 miles east. In fact, this year is so utterly off the charts that most of us in the commercial real estate industry have never seen an upcycle like this in our entire careers. Witness the fact that through the first three quarters of 2014, San Francisco’s gross office absorption reached 7.6 million square feet. Net absorption in this same period was 2.4 million square feet. This compares with 1999, the record year, when gross absorption was 7.4 million square feet – and that was for the entire year! It is quite possible we’ll hit 10 million square feet of gross absorption by the time 2014 closes out. Incidentally, net absorption for 1999 was “only” 526,000 square feet. Not surprisingly, three out of the four biggest leases in the third quarter were completed by tech companies. The tech frenzy in San Francisco has been well documented. Most of the Silicon Valley companies want, or need, to have a presence in the city. The trend is employment-driven. Young techies don’t want to commute …
REDMOND, WASH. – Guitar Center has announced plans to open at the Redmond Town Center next spring. The Southern California-based music company will occupy 15,000 square feet on the second level of the shopping complex, just above Eddie Bauer. Four new retailers are also set to join the center, which is located in Redmond, just northeast of Bellevue. They include Big 5 Sporting Goods, Evereve, Cow Chip Cookies and Jujubeet. The landlord is JSH Properties.
TEMPE, ARIZ. – A 38,225-square-foot retail building at Emerald Design Center has sold to Otium Real Estate Co. for $2.6 million. The free-standing building is located at 1725 West Ruby Drive. Otium is the owner/user entity of the current tenant, Salt Creek Home, a furniture store that has occupied the building since 2010. The showroom was built in 2006 as part of the 250,000-square-foot Emerald Design Center. The center features an eclectic mix of home furnishing retailers in the East Valley. Rick Robertson, Dave Johnson and Jerry Marrell of Lee & Associates represented both the buyer and the seller, Granco Enterprises, in this transaction.
LOS ANGELES – Selective Real Estate Investments has acquired an 82,660-square-foot industrial complex in North Hollywood for an undisclosed sum. The three-building complex is located at 11605 & 11611 Hart Street. The seller, Bobrick Washroom Equipment, has occupied the space since 1965. Selective Real Estate was represented by David Young and Chad Gahr of NAI Capital’s Encino office.
MANHATTAN BEACH, CALIF. – True Religion Apparel has leased a 72,246-square-foot office building in Manhattan Beach. The new space is located at 1888 Rosecrans Ave. The jeans and apparel company will be relocating its corporate headquarters from nearby Vernon. The landlord is Continental Development Corporation. The transaction was executed by John Minervini, Erik Larson, Robin Dodson, Chris Tolles, Michael DeSantis and John Doyle of Cushman & Wakefield.
PHOENIX – Popeye’s Louisiana Kitchen will open a 2,565-square-foot outpost in Phoenix. The new restaurant is situated at the southwest corner of Central and Dunlap. It was formerly occupied by KFC. The site will be repurposed for the new Popeye’s location, which will open next year. Popeye’s was represented by Darren Pitts, Michael Clark, Nick Ault and Dave Cheatham of Velocity Retail. The landlord, an entity controlled by Lawrence Geyser & Associates, was represented by Jason Fessinger of Strategic Retail Group.
SAN FRANCISCO – A 600,000-square-foot office building in San Francisco has received a $150-million loan. The 48-story property is located at 345 California Center in the city’s Financial District. The loan was secured by JLL’s Keith Largay, John Manning, Alex Witt and Fiorentina Malko. It was provided to an affiliated entity of Metropolis Investment Holdings by Cornerstone Advisers, which acted on behalf of MassMutual.
BEVERLY HILLS, CALIF. – Jenel Management Corp. has acquired a 26,500-square-foot office building in Beverly Hills for $47.2 million. The building is located at 461-469 N. Beverly Drive, within the Beverly Hills Triangle. The former Bank of America building was fully redesigned in 1995 by Richard Meir and the Paley Center for Media, which previously was known as the Museum of Television and Radio. It is situated on the southwest corner of North Beverly Drive and Little Santa Monica. Jenel Management was represented by John Bertram of Savills Studley. The seller in this all-cash transaction was composed of several trusts representing several generations of the original business partners who had initially purchased this property in the 1920s from Burton Green. At the time, the space served as the buyers’ lumber company headquarters. The seller was represented by Chris Holland and Patrick Sheekey of Coldwell Banker Commercial WESTMAC.
LOS ANGELES – The University of Southern California (USC) has completed its new Wallis Annenberg Hall at Annenberg School for Communication and Journalism. The $40-million project features 88,000 square feet situated over five levels. The new building is near the USC Central Campus in Los Angeles. It will house broadcast network equipment, media classrooms and laboratories. The project was constructed by Bernards and designed by Dan Benjamin of Harley Ellis Devereaux. This is Bernards’ third major project with USC. The building was named for the benefactor, Wallis Annenberg, president of the Annenberg Foundation and the longest-serving USC trustee.
SAN DIEGO – Northrop Grumman Systems Corporation has renewed its lease for 182,870 square feet of office space at the Kearny Mesa Spectrum Center. The three-building office campus is located at 9326 and 9356 Spectrum Center Blvd. and 4830 Ruffin Road in San Diego. Northrop Grumman is the property’s original tenant. It has occupied this space for nearly 10 years. The campus was built in 2005. It features a large data center, 608 surface parking spaces, electric vehicle charging stations and a cafeteria with multiple outdoor eating areas, among other things. Northrop Grumman was represented by CBRE’s Tom Martinez and Evan Knutsen. The landlord, American Fund US Investments, LP, was represented by Tom Wilcox and Jay Arnett of Colliers International.