VIEW Q1 2014 Hit Reset for Retail! by scharchitecture

1st Quarter 2014

Hit Reset for Retail! inside

MID MARKET • TOD • FORMULA RETAIL

Be an Angel

I N SIDE T H IS ISSUE Bringing Retail to TOD Housing

POV: Formula Retail SF Neighborhood Study

Market Street Place

Current Trends in Retail Across North America

Resaurant Report: Crystal Jade

Pioneer Retail in Emerging Mid-Market Neighborhood

What is in a Brand?

Member News: Congratulations Tracy Everwine

CREW SF and the America’s Cup

Understanding the New Laws Governing California Condominiums and Common Interest Developments

A Word from Our Sponsors

This issue inaugurates an exciting new direction for CREW SF¹s quarterly publication, the VIEW. Before opening the first page, you might have noticed the new design for the cover emblematic of these changes. Each issue will have a topical focus, culling from the extensive range of expertise and knowledge available within the CREW San Francisco and Bay Area community. As such, each issue will be spearheaded by a VIEW “angel”, a CREW SF member who steps forward to assist the VIEW in finding writers and relevant topics. As a leader in the field, our “angel” shares her connections and insights to get the discussion started and the conversation flowing. For making introductions, brainstorming, and generally helping to structure the publication, our angel is then gratefully acknowledged for her contribution. Gabrielle has been a terrific inaugural angel, helping me to formulate the concept both of the Hit Reset for Retail! issue, as well as helping me through the organic process of discovering just what an angel might be and the vital (but simple) role she can play. Thank you Gabrielle! Donna Schumacher Editor, the VIEW

A NGE L P R O FI L E

THE CREW SF COMMUNICATIONS CALL FOR 2014 VIEW ARTICLES Please submit your idea for a future article to the VIEW on any CREW related topics: law, real estate, leasing, architecture, gender equality and beyond. If you have an idea, even a tiny gem of one, or maybe just the intent to participate, please email our editor at news@crewsf.org to get the conversation started. We are here to help you launch your voice into the San Francisco real estate community! Upcoming publications of the 2014 VIEW will focus on the following topics: 2014 Quarter 2: Art and Real Estate 2014 Quarter 3: Medical Office Buildings 2014 Quarter 4: Transportation Facilities 2015 Quarter 1: Social Media and Real Estate

Contributers

HQ: Mill Valley Founded: 2011 Background: MBA from University of Southern California, Acting VP/Director Store Development, Greater China, Starbucks Coffee International, Real Estate Representative, McDonald’s Corporation

National CREW Foundation Trustee 2004 to 2007, Governance Committee 2012, Foundation Champion 2013 to 2014.

Donna Schumacher Winnifred Ward Amy Teutemacher Gabrielle Tierney Jennifer Fink Krystal Grubb Carol Gilbert Kim Edmonds Frentz Michelle Jones

What it does: Retail Real Estate Advisory Services

CREW: Member 1996 to present, Board Member 2005 to 2007,

THE VIEW EDITORIAL STAFF Editor Editorial Review

GABRIELLE TIERNEY

President | Tierney Consulting Group

Charities: 10,000 Degrees, Girls Inc., The Center for

Reproductive Rights, MALT and Earth Justice

First Job: Hostess at Coco’s Restaurant Extracirricular Passions: Travelling, Hiking, Biking,

Latin Jazz, Cooking

Tiffany Avila Miriam Montesinos Deborah McCarthy Melissa Holmes Faith Hope Consolo

Travel Tip: When traveling abroad especially to developing

countries, pack your suitcase partly full of gently used clothing or school supplies. You will find a worthy place to donate them abroad, I promise. And it leaves you space to fill with travel treasures. Recent Travel Highlight: Bagan, Myanmar Top Pic SF Restaurants: Coqueta, Piperade, Mandalay,

Cover photograph: Gensler, MarKet Street Place 2014 CREW SF. All submissions are subject to editing for clarity and brevity, unless otherwise noted. ©

Plant Organic Cafe, Fang

Birthplace: Misawa, Japan

Developers of residential projects with ground floor storefronts know that their commercial space requires a different set of development and marketing skills than their housing. Nonprofit housing developers often face even more unique challenges when their new mixed-use projects are pioneers in neighborhoods that haven’t yet begun to attract the interest of mainstream retailers. These fledgling markets require an approach that is free from preconceived limitations and includes a unique complement of resources in order to be successful. An example of such a project is the new mixed-use Transit Oriented Development (TOD) constructed by MidPen Housing in Union City. The Station Center project is directly across the street from the Union City BART station and includes 157 affordable housing units above retail. The Urban Land Institute has honored it as one of only 15 projects worldwide to win its 2013 ULI Global Award for Excellence. TODs are the wave of the future—clustering housing and commercial development at critical transit nodes. They epitomize a great idea resulting from thoughtful urban planning. The Master Plan for the area calls for the BART station to be revamped to include Dumbarton Rail, ACE, and Capital Corridor, upgrading it to an Intermodal Transit Oriented Hub and promising a mass transit bonanza. The neighborhood surrounding the project is slated for construction of more than a thousand residential units and over a million square feet of commercial space. Pedestrian access from this newly built environment to the transit station will funnel through a beautifully landscaped promenade and plaza directly adjacent to MidPen’s project.

Despite the promise of a golden future, the project faces several short-term obstacles. A chain link fence stands between the beautiful plaza and the transit station across the street. Until the fence is removed and the new access constructed, the only way to reach the station is by walking approximately ½ mile around the long block. At the time we started marketing the space, the removal of the fence was almost three years away, although now it is expected within the year. Additionally, this project is the first out of the ground, and is an island among empty lots waiting for future development. Some adjacent and nearby parcels are just fenced dirt and others are used for parking. The river of commuters walking by will not be realized for a while, and the first trickle is expected when the 350 residential units approved next door are completed in about 18 months. Gradually, additional development will proceed in the wake of the station upgrade. This timeframe could seem like an eternity for businesses that rely on the anticipated concentration of humanity for their survival. This pioneer project calls for a multi-level approach to finding the right mix. Sometime down the road, this location will be attractive to top flight national retailers. Signage and merchandising requirements were implemented to prepare the project for this future scenario. The standards established at the outset would influence the tone for the neighborhood. (continues on page 6)

POINT OF

VIEW

Since 2004, San Francisco has imposed restrictions on formula retail locations, requiring chain stores to obtain additional approvals for building permits in the city. These ordinances and regulations have been amended 16 times and there are 7 more awaiting consideration, reflecting the heated debate surrounding the topic. A consortium of real estate brokers have come together to conduct a study of formula retail and the effects it has on neighborhood retail in San Francisco. Carol Gilbert of CGI has spearheaded this study and shares her findings and opinions in this issue’s Point of VIEW. A group of real estate brokers who specialize in leasing retail space share the goals of the anti-Formula Retail legislation along with a commitment to maintaining and promoting retail productivity in the City. A chain is currently defined as a retailer with 11 or more stores in the United States. To take some of the guess work out of determining the appropriateness of additional legislation, an informal study inclusive of a series of retail maps was created by walking, driving, and researching existing retail businesses in San Francisco. Nearly 4,500 retail locations were surveyed in more than 28 neighborhoods. Comparing the total number of retail spaces to existing vacancies yields a 4.8% vacancy factor in neighborhood commercial districts. There are 586 chain stores representing just over 13% of retail stores of which 36% were founded and/or based in San Francisco and/or the Greater Bay Area. Approximately 34.3% of retail space is devoted to food service (restaurants, specialty food shops other than grocery stores, beverage bars/stores). Just under 3% (130 branches) of retail space is occupied by banks, almost all of which are Formula Retail under San Francisco’s definition. Retail is a complicated business with many variables, however, successful retail includes the following characteristics:

Massing: Two stores on a residential street offer limited potential while two blocks of shops is a potential popular shopping destination;

able retail environments offer a mix of retailers who are big and small, conventional and cutting edge, established and new age;

Co-tenancy: Neighbors have a strong impact on shopper demographics and determine, to a large extent, the viability of cross shopping; Visibility: Whether a particular store is on a corner, on the sunny side of the street, is visually blocked by trees, bus shelters, etc. impact whether shoppers will visit; Perceived Value: The point where cost, quality, and service intersect must fit the consumer; and

Intangibles: All of the aspects of a retail establishment that determine whether customers return include cleanliness, friendliness, ambiance, and a host of other items that impact the shopping experience. Attempts to legislate what people can buy and where such purchases can be made is challenging for the simple reason that legislation assumes a more or less static world. In fact, the world we live in keeps changing, evolving, and otherwise providing surprises. By way of example, when horses were the primary mode of local transportation, parking cars was not an issue; when most women stayed home to clean house, care for children, and cook dinner, the restaurant industry was tangential to most people’s lives; and it is an understatement to say that our needs and preferences have been impacted by personal computers, the internet, and FedEx.

Tenant Mix: The healthiest and most vi- Statistics and existing studies about retail

are primarily applicable to shopping centers, rural and suburban neighborhoods where change is measurable, and circumstances that are very different from San Francisco to be applicable. In other words, the experience of a suburban neighborhood in the Midwest doesn’t apply to the second most densely populated city in America. The fate of regional malls in towns with a single Main Street shopping area doesn’t relate to San Francisco which boasts the most vibrant downtown in America with more than 30 identifiable neighborhood commercial districts. Rents in small towns, vacancy rates in regional malls, and the experience of retailers who follow rather than lead their respective industries are not especially helpful in mapping programs which are likely to benefit San Francisco. Rene Frojo in the San Francisco Business Times (January 3 – 9, 2014)summarizes the pending proposals as follows: • To expand the definition of Formula Retail to apply to businesses with 11 or more outlets worldwide. • To expand the definition of Formula Retail to apply to subsidiaries of those considered chain stores. • To require proposed Formula Retailers to conduct a study on the economic impact of other retailers. • To create a Third Street Restricted Use District, requiring chain stores to seek a conditional use permit. • To require the definition of chainowned food trucks in the public rightof-way to be widened to include “affiliates” of Formula Retail restaurants. • To create a Fillmore and Divisadero neighborhood commercial district that would require chain stores to file for conditional use permits. • To expand controls to adult entertainment stores, tourist hotels and gas stations. About the Author Carol Gilbert, President and CEO of CGI. CGI is a full service real estate brokerage specializing in the leasing and sale of restaurants, specialty food concepts and numerous retail categories.

Market Street Place

San Francisco’s mid-market neighborhood is in the midst of an unprecedented amount of redevelopment. New housing, entertainment venues and tech firms are springing up from Fifth to Eleventh streets and are dramatically altering the landscape. We’re already seeing the effects with the addition of companies like Twitter and Dolby Laboratories, and restaurants such as Dottie’s True Blue Café and Pearl’s Deluxe Burgers. In the fall of 2012 the American Conservatory Theater announced they will be restoring the historic Strand Theatre on Market between Seventh and Eighth streets, a building that is almost 100 years old and has been blighted for years. With this type of mixed use the neighborhood is becoming a vibrant area that will be bustling day and night. Another new addition will be Market Street Place, six story, 250,000 square foot vertical retail building to be located at Fifth and Market Streets, in the heart of the mid-market neighborhood. Real estate firm Cypress Equities and Private Equity firm Carlyle Group closed the deal to realize the Market Street project in 2012, recognizing the area’s potential for success. Designed to house a variety of lifestyle tenants such as retailers and restaurants, the building aims to be more than simply a mall in the downtown shopping district, but a place that will further energize and support mid-market businesses, the arts and residential communities. Unlike a suburban mall which depends on internal common areas to be the lifeblood, this urban vertical retail center will become one with the street, and its all-glass façade will give (continues on page 12)

(continued from page 3) The search for inaugural tenants focused on finding entrepreneurs with the creative chops to bring something special to the project. The initial analysis concentrated on identifying businesses that could sustain themselves with the customer base composed of nearby residents, with the potential for developing destination traffic before the transit windfall kicks in. Personal services and neighborhood retail fit the bill. These businesses can provide immediate benefits, and have the potential to adapt and transition with the market as the neighborhood blossoms. A broad search through commercial marketing networks combined with grassroots outreach to local businesses uncovered a variety of candidates. Infrastructure for a corner café was included as part of the cold shell buildout. This paved the way for attracting a restaurant that could serve neighbors and draw interest from the larger community. The café that ultimately leased the space built clientele at its first restaurant through social media and word of mouth. Eschewing signage, the business experienced overwhelming demand by customers who sought the cool factor of finding a spot that was off the grid to most of the public. The temporary isolation of Station Center suits this business model perfectly, and the restaurant will also benefit when pedestrian traffic increases. Taking a hands-on approach to supporting these small businesses through planning and then implementing their vision is not for the faint of heart. It takes specialized resources and commitment, and the ultimate reward is successfully planting the seeds of a new neighborhood. About the Author Kim Edmonds Frentz, President and CEO of Ventura Partners. Ventura Partners provides professional development consulting and property management services. offering comprehensive support to property owners and tenants.

Current Trends in Retail Across North America © 2013 Faith Hope Consolo Chairman, The Retail Group Douglas Elliman Real Estate NYCREW Network AREW The Chairman of the Retail Group of Douglas Elliman Real Estate, Faith Hope Consolo has achieved worldwide renown as a dealmaker, consultant and re-maker of retail districts, working with some of the most famous names in retail and fashion. She also is known as a longtime supporter of women in real estate, working with organizations including CREW, NYCREW, AREW and YM/WREA, and as a philanthropist through her Real Estate Has a Heart Foundation. Urbi et Orbi (The City and The World): The phrase is not just the theme of an annual speech from the Pope, but also summarizes what’s taking place in retail across North America: urbanization and globalization. After decades of suburban malls and neighborhood centers dominating retail site selection, our city streets are once again becoming favored locations. And retailers looking at those sites come as never before from around the world, in a variety of rapidly expanding categories. The urbanization of North American retail is due in no small part to the near-cessation of new shopping center development during the most recent downturn. With credit at a standstill, developers in the United States were unable to refinance projects that were already up and operating, let alone obtain funds for new projects. This may not necessarily have been a bad thing – according to the International Council of Shopping Centers, the United States has 23.1 square feet of retail space per capita, some 7 billion square feet of shopping! The lack of new construction left existing space ready for new retailers to take quickly. In Canada, urbanization has always been a trend, particularly as so much of the population is clustered along the border with the United States. In addition, the U.S. economy left many customers unwilling or unable to shop beyond necessities. Supermarkets and drug

stores continued to expand, and do well throughout the period. Meanwhile, luxury shoppers returned to the stores rapidly – the very affluent simply aren’t affected as badly during any recessionary period. So it wasn’t surprising that as the recovery began, the sectors that bounced back first were the discount stores (particularly the dollar stores) and the luxury market. This is a major factor in expansion patterns around the country, encouraging growth in and near cities. Dollar stores and discounters rely on volume, and urban areas have the density of population needed for them to succeed. (In addition, many had already saturated the most convenient suburban locations.) On the other side of the spectrum, luxury retailers by nature tend to locate in urban locations first, particularly if they are coming from abroad, where they generally operate on High Streets. Thus, we saw an influx of new stores coming to Madison Avenue, Michigan Avenue, Rodeo Drive and more, all taking advantage of a temporary drop in asking rents to secure prime locations. But this trend was, and is, not just limited to luxury stores. Fifth Avenue in New York City, one of the most famous and expensive retail streets in the world, has been seeing an influx of more moderately priced chains seeking to establish themselves as international brands. It is indeed a street where Armani is across the street from Hollister, where Cartier and Uniqlo coexist, where H&M can meet H. Stern. But there is another major reason why retailers are seeking urban locations: According to the most recent census, just over 80 percent of Americans live in or near urban areas. Retailers are returning to the cities because that’s where the people are! This is in fact a global trend, so expect Main Streets, High Streets and vertical downtown malls (commonplace in other parts of the world, less so in North America) to remain most-favored-locations. The downturn also boosted an already existing trend toward globalization. Once again, luxury led the way, as newcomers sought to establish themselves as major

Yes, there are new shops for mom, particularly in the beauty sector. M.A.C. continues to expand in all locations, including one of the most expensive leases ever – a reported $3,000 per square foot on Fifth Avenue! Aesop, mentioned earlier, also is finding new locations, as is Bond No. 9, which offers fragrances inspired by New York City neighborhoods. Also keep an eye on Lush and L’Occitane en Provence.

players. We saw U.S. entrants from Europe (Sandro, Maje, AllSaints, Topshop, Ted Baker, Marimekko, de Grisogono) India (Kimaya), South America (Nancy Gonzalez), Australia (Aesop) – and from neighboring Canada (Joe Fresh, lululemon athletica and the expansion of Aritzia). This is not just a phenomenon in the largest major markets such as New York, Los Angeles, and Chicago. Those cities have always been very oriented around High Street retail, and see retailers looking to establish themselves as international brands. Once they’ve done so, they then open locations in top malls. A case in point is Uniqlo, which opened a 90,000-squarefoot flagship in New York City to great fanfare, taking the most expensive retail lease in the city’s history -- $300 million for 15 years! Since then, Uniqlo has announced plans to open in Palisades Mall in West Nyack, N.Y., and Ridge Hill in Yonkers, N.Y., in addition to an existing location in Paramus, N.J.

continued to increase its store count around the United States. Today, we’re seeing new and expanding haberdashers at all price points, including luxury offerings from Lanvin, Berluti and Dior, among others, and moderate-priced retailers such as Men’s Wearhouse. Hugo Boss is creating a three-level flagship at the Time Warner Center in New York City. Children’s apparel continues to grow as a specialty store sector, with entrants from around the world, including MonnaLisa from Italy, Caramel Baby & Child from the United Kingdom, and My Little Sunshine from the United States. MonnaLisa already has begun expanding to other Main Street locations around the United States, and look for the others to do the same.

In addition, look for more Internet-based retailers to test physical stores – it seems bricks really are needed in addition to clicks! Microsoft is growing its store count around the country, and Gap is testing a store for its Piperlime e-commerce site. Other Internet-based shops have popped up, and will continue to do so as they learn the very different logistics of store-based retail. And several individual retailers also continue to expand around the country. Value remains important for many shoppers, and Family Dollar, which plans some 500 new stores this year, is certainly working hard to accommodate them. Five Below plans 100 stores this year. The result: rents that now exceed pre2007 levels in major coastal cities and an increasingly diverse retail. As the recovery takes hold even in the most-affected parts of the nation, expect both trends to continue and expand around the country. And, thus, from the city to the world!

Another truism is that retail tends to expand in packs, with certain categories seeming to explode at once. Fitness and healthrelated chains certainly are continuing to grow – in addition to the yoga-inspired lululemon, The Gap has launched Athleta, which sells fitness apparel at a slightly lower price point. Both of these retailers are locating in both better malls and in urban locations. Whether it’s because of the popularity of “Mad Men,” or a historical tendency to dress more conservatively in a cautious economy, but menswear retailers are expanding everywhere! Even during the depth of the downturn, Jos. A. Bank

RESTAURANT

REPORT

It used to be that going to dinner in the Financial District was something you did only if you worked late. More recently, though, downtown has become a “dinner destination” due to the growing trend of top-notch restaurants opening in the neighborhood. In Spring 2014, the options for exceptional food will get even better due to the opening of internationally acclaimed Crystal Jade at the Embarcadero Center. Crystal Jade is an award-winning, upscale Singapore-based restaurant brand that provides authentic Cantonese and Shanghai cuisine. The San Francisco location will be the company’s first restaurant outside of Asia. Well-known local restaurateur Gus Murad (Medjool) has partnered with the company in its foray into the U.S. market. According to Crystal Jade Culinary Concept Holdings Chairman and CEO Yiutung Ip, the company selected San Francisco because it is a vibrant city accepting of different cultures. They decided to locate in the Embarcadero Center specifically because of its accessibility and the spectacular views. The space, located at the second level of 4 Embarcadero Center, will feature a sophisticated-level dining concept serving Jiang Nan and Cantonese cuisine, and Singapore specialties at a to-go counter, unlike other Crystal Jade locations. Although located on the second level, the restaurant will have an entrance at the street level. A grand stairway will lead to the upstairs restaurant, which will have 16,000 square feet of interior space and a 4,000-square-foot outdoor area shielded by a transparent, removable roof. Approximately 30% of the interior floor space will be dedicated to the kitchen, which will be air conditioned and partially visible to customers. The motivation behind such a large, air conditioned kitchen is Mr. Ip’s dedication to ensuring that his employees are comfortable while working and food remains fresh,

as well as to providing ample room for the different functions: interior dining (main area and private space), bar, outdoor seating, catering, and “to go” counter.

the Bay Area. Once the Embarcadero Center location is operating, Crystal Jade hopes to work with local brokers to find locations for its casual dining concepts.

Recognizing San Francisco’s commitment to healthy eating, the restaurant will feature natural, fresh produce, meats and seafood, many of which will be sourced from local farms.

About the Author

The Embarcadero Center location is the first phase of what promises to be a long relationship between Crystal Jade and

Miriam Montesinos is Of Counsel at the Pelosi Law Group, a boutique law practice with a focus on land use and real estate.

Pioneer Retail in Emerging Mid-Market Neighborhood ÂŠ 2014 Tiffany Avila, BNBuilders

Mid-Market has experienced an exciting burgeoning over the past year, with real estate development, office construction, jobs, and residential housing â&#x20AC;&#x201C; making it a new 24/7 neighborhood in San Francisco. The development of Mid-Market also includes pioneering local retailers who see an opportunity to be part of a transitional time for the city. 1355 Market Street, also known as the Twitter building, is a prime destination for new retail in San Francisco. Market Square has approximately 62,000 square feet of street-level retail, and all the space is currently leased except for one location in the commons area. The retail tenants include The Market, Bon Marche, First Republic Bank, Walgreens, and Cadillac Bar and Grill. The Market will be a 22,000 square foot food emporium, ten times the size of its sister grocery store Small Foods in SoMa. Similar to Whole Foods, The Market will offer destinations within the destination, including a local coffee roastery, bakery, salad bar, sushi bar, wine bar and pizza bar, catering to the local Tweeps, tourists and residents. It is scheduled for completion in the fall of 2014.

BNBuilders repurposed. The retail space also features another iconic element-exposed massive concrete columns.

The team behind the visionary new locale at Market Square is: Shorenstein Realty Services, the developer; BNBuilders, the local general contractor; BCV Architects, the designer for the interior build-outs; and RMW, as core and shell architects. BNBuilders completed the historic renovation and seismic upgrades, and most recently the retail shell build-out, including the lobby renovation.

Restoring 1355 Market Street preserved the iconic architecture, while integrating modernizations and technical advancements to create a progressive new space. The showpiece of the project will be the addition of the invigorating retailers and the conversion of Stevenson Street into a vibrant, beautiful promenade lined with retail shops, restaurants, and gathering places. The landscaped plaza will enhance the connection to both Market Square buildings and create a cohesive urban campus for its tenants and a new destination for its local community.

The renovation transformed the existing dark space into a ground floor, light-filled, open community. Used throughout the interior is reclaimed wood, from the roof of the building, which

About the Author Tiffany Avila, Director of Marketing at BNBuilders, a local general contractor that specializes in highly technical construction projects.

Image. Identity. Design. These are all key elements of a brand.

Commercial Real Estate Women San Francisco

Hundreds of professionals with a limitless supply of talent, motivation, and spirit ready to make it happen. Are you ready?

A strong brand is based on delivering a message clearly and connecting to customers emotionally while creating credibility. The need for a successful brand is invaluable as the competition for customers intensifies every day. A brand can be expressed in various aspects of a retail environment. Graphics, architectural treatment, packaging and product design and customer service all contribute to a brand’s successful message. These factors, when packaged together cohesively, will sell a brand and create the impact retailers need to be successful in today’s competitive environment.

Visit our website to view upcoming events. JOIN

T O D AY

W W W. C R E W S F. O R G

Technology has changed the way we buy today. Online retailing has evolved dramatically, making purchasing as easy as the click of the button. Therefore, today’s physical retail environments need to respond to this evolution by engaging the customers to keep them returning to the store. Today’s retail store needs to sell the experience, not the product.

Many formula retailers (formula retailers = national brands) will focus simply on location, traffic, and visibility to determine viability of a successful location and space. Small business local retailers, though, have the larger challenge and opportunity. Many districts in San Francisco frown upon formula retailers,

Technology can’t sell a brand on its own . . . well, even Apple knows

understanding the need to create and support local busi-

this, right? Brick and mortar stores become showrooms and provide

nesses and show cultural diversity associated with this region.

the opportunity for customers to experience the products.

Creating opportunities for local retailers to establish their own

Branding and architecture need to “tell the story” as an integrated delivery. This “sets the stage” for the experience. Once the stage is set, the products delivered with refined customer service become “the Act” to complete the production. It is time for retail-

identity and brand will create an environment of innovation that supports the vision of San Francisco planning. Therefore, additional support to create a vision of “image, identity and design” for potential retail space is necessary.

ers to create an engaging and memorable experience as a testa-

Visual tools assist with creating potential vision of selling spaces.

ment to their attention to detail and commitment to delivering

Depending on the client’s sophistication, three-dimensional im-

exceptional shopping experiences.

ages versus two-dimensional (floor plans) are great selling tools.

Spaces in San Francisco are optimal for creating the environments

The following is a case study of a new retail rollout that lies

to tell and sell “the story” and create a showroom for experienc-

between the concept of formula and local retailing. This is an

ing retail products. The influx of residents focused on lifestyle in

example of a new brand that will site-adapt to its locale, incor-

San Francisco further supports the need to create retail spaces

porating the region’s environment and lifestyle. The intent is to

that draw in the customers and give them an interactive space in

communicate the importance of branding, interior architecture

which to engage. That said, selling this concept of opportunity

and the final component of customer service, which is depen-

and vision associated with raw or existing commercial space is a

dent upon the operator. These elements combined cohesively

challenge we also face in the commercial real estate sector.

create the success of a retail brand.

CASE STUDY EAST GOURMET MARKET This new rollout is based on a hypothetical space of approximately 10,000 square feet of main floor space and 4,000 square feet of mezzanine area.

Description of the East Gourmet Market Concept The East Gourmet Market is conceived to be an upscale Asian gourmet market which is dramatically different from anything currently in the U.S. market. East will provide top quality Asian foods, supplies, and housewares from a variety of Asian countries. What sets EAST apart from the competition is: • Rarity and variety of merchandise • A fun and unique merchandise presentation (a contemporary, state-of-the-art shopping experience) • Cleanliness • Exceptional service featuring personal chefs and/or shoppers • Affordable price point • Convenience • Integrated marketing between prepared food, package food, fresh produce, and service • Provide an Asian fusion experience

Target Customers Local foodies, working professionals, Asian affluent residents, chefs, executive offices, tourists

Main Features of the East Concept Creative aesthetics. This concept provides a store that is contemporary, stylish, and exotic. The overall store design presents contemporary clean lines and smart detailing. Overlaying the basic store design are exotic visions of Asia which are provided by wood and stone carvings from various counties along the high perimeter walls. The detailing of the column wraps, the retail fixtures, merchandising, and the floor material selections all contribute to a sophisticated expression of Asian esthetics. When approaching the store, the customer immediately views a Candi Bentar, which is a Balinese entrance carving. By passing through the entrance, the customer is transported into another world, making East a very unique shopping experience

The East Gourmet Market branding is an integrated program designed to capture the attention of the public and create a positive brand identity and customer loyalty. The East graphic is clean and simple, depicting a distinct Asian influence. Store signage, product labels, uniforms, shopping bags, and cookbooks will all be incorporated into a single brand identity. As part of this branding approach, there are four main foods that are common to all Asian cultures. They are spice, rice, noodles, and tea. A private label, Elements, distinctly identifies each of these four groups and provides the customer with instant recognition of the product. The Elements graphics are clean and fresh and work with the overall branding concept of East Gourmet Market.

Overall Food Concept

The overall food concept is based on an integrated strategy of providing prepared dishes of Asia that utilize the packaged foods and spices which are sold in the store. In addition, East will provide exemplary customer service and education to teach the customer about the best recipes and techniques to achieve outstanding results. Also offered are housewares (plates, placemats, pots, etc.), fresh produce, and flowers to allow the customer to achieve Asian cooking with spectacular results. All aspects of the concept work in harmony and give the customer a coordinated and unequalled shopping experience. RIM Architects is an Architectural and Interior Design firm with offices in San Francisco, Hawaii, Alaska, and the Micronesian Islands. Additional retail highlights can be viewed at www.rimarchitects.com. About the Author Michelle Jones, AIA, NCARB, LEED AP BD+C is the Managing Principal of RIM Architects San Francisco, California office.

Branding

(continued from page 4) most tenants a storefront presence. The atrium lobby is designed as a vertical extension of Market Street, with storefronts open to the atrium at all levels. The building’s unique geographical setting gives long views down Mason Street, and will be a welcoming, luminous presence at night. Stevenson Street, the alley behind Market Street Place, will serve as the primary access for customer parking and service access, but will also have three to four “micro” retail tenants as well as landscaping and paving upgrades. The size of the retail spaces along the alley are similar in size to the stalls at the Ferry Building, and are well suited to accommodate vendors such as a coffee or flower stand, bringing activity to the street. The building’s central design goal is flexibility. Nestled next to Union Square and down the street from Twitter and 5M, the project has felt the shifts of San Francisco’s booming technology and retail economies. The original design with roots dating back to 2005 was based in retail with potential housing. Now the space is designed for maximum retail flexibility. Market Street Place features a vertical atrium within a space that can hold an anchor tenant on the ground or top floor, contain many smaller retailers,

while also accommodating restaurants, and possibly a grocery store. The unique design “takes the traditional retail mall and turns it on its side,” says Geno Yun, Design Director at Gensler in San Francisco. “Retailers want visibility, and with this approach it’s all about the connection with the street. And with floor plates that are as large as 42,000 square feet, it is an uncommon offering in this part of the city.” It’s an exciting time for San Francisco. The city is changing at a pace not seen since after the 1906 earthquake, and the mid market neighborhood, which has been badly in need of an urban renaissance for decades, is poised for reinvention and revitalization. Market Street Place will be one of many new projects designed to delight locals and visitors alike. About the Authors

MEMBER

NEWS

Congratulations Tracy Everwine Tracy Everwine, CREW San Francisco member, has been appointed the Executive Director of San Francisco’s Central Market Community Benefit District (CMCBD). The 98 acre CMCBD oversees strategic Central Market neighborhood initiatives with the goals of: increasing pedestrian activity, strengthening existing small businesses and cultural institutions, attracting new invest-

Krystal Grubb is a designer in the architecture studio at Gensler in San Francisco.

ment, and enhancing the public rights-of-way for people of all incomes, ethnicities and ages, including residents, businesses and property owners, workers and visitors to the area.

Jennifer Fink is the Northwest Public Relations Manager for Gensler in San Francisco.

Prior to joining CMCBD, Tracy soent eight years with economic development non-profit Urban Solutions. She has worked in the Central Market are since 2005, implementing economic development programming for the former San Francisco Redevelopment Agency and Mayor’s Office of Economic and Workforce Development with a focus on the 6th Street corridor and the Tenderloin. Tracy served on the CREW San Francisco’s Membership Committee 2008-2012 and regularly participates in CREW Careers. In 2008 she and Urban Solutions were awarded a CREW National Impact Award for their pioneering economic development work on Sixth Street commercial retail. Tracy is a certified Economic Development Finance Professional and a licensed real estate broker. Tracy is an active member of SPUR, ULI and CREW San Francisco.

CREW SF and the America’s Cup Spectacular Racing and Networking

CREW SF hosted an extraordinary afternoon for members, clients and sponsors, while viewing the “Holy Grail of Yachting” on San Francisco Bay—The America’s Cup. From the appropriately-named BayView Room at McCormick and Kuleto’s, we had expansive views of the race. A large screen enabled experienced sailor Jack Griffin of Cup Experience to enlighten us with the history of the Cup, the technology of the yachts, the tactics to watch, and the personalities of this America’s Cup. The San Francisco waterfront was abuzz all summer and fall with the America’s Cup races and its myriad of associated activities. CREW SF was able to bring 90 participants front and center with the Louis Vuitton Race, a semi-final race between Artemis Racing (Sweden) and Luna Rossa Challenge (Italy), in comfort and style. Luna Rossa won the race that day, eliminating Artemis Racing after four rounds. We were able to see these boats hydrofoil and tack, while sailing to the Golden Gate Bridge and back to the finish line. This event sold out a month in advance, drawing many CREW SF members and clients, as well as East Bay and Silicon Valley members, providing a spectacular afternoon of professional yacht racing and networking for all. About the Author Melissa Holmes principal/ owner of Holmes & Associates spearheads Real Estate Development Project throughout California. Her firm coordinates Development Strategies, Entitlement Processing, Urban Design, and Community Outreach efforts.

1. Kimberly Huangfu at Buchalter Nemer 2. Stephanie Ashton of ABM Janitorial Services 3. Lisa Blossom of Gensler and Michelle Jones of RIM Architects 4. Melissa Holmes of Holmes & Associates and Debra Leifer of Page and Turnball 5. Helen Duong of Boston Properties and Gary Nichols of Nichols Booth & Associates 6. View from the window at McCormick and Kuleto’s

On January 1, 2014, the long-awaited reorganization of the laws governing California condominiums and other common interest developments went into effect. The existing Davis-Stirling Common Interest Development Act, originally implemented in 1986 (the “Davis-Stirling Act”), has been revised to clarify and simplify certain provisions, and (ii) a new act governing only commercial developments has been established as the Commercial and Industrial Common Interest Development Act (the “Commercial Act”). The changes to the Davis-Stirling Act and the creation of the Commercial Act have been made largely to reorganize the existing laws governing common interest developments to make such laws easier to understand and use. However, there are a number of new provisions that developers, boards of directors and managers should consider in implementing and operating residential, commercial and mixed-use common interest developments. Commercial vs. Residential. The Commercial Act has been established separate from the Davis-Stirling Act to clarify the law applicable to commercial common interest developments. Prior to the Commercial Act, both commercial and residential common interest developments were governed by the Davis-Stirling Act, which was confusing for developers, associations, managers and owners. Over time, new provisions were added to the former Davis-Stirling Act with the intent to protect individual homeowners, inadvertently subjecting commercial developments to unnecessarily complicated consumer protection laws. Effect and Implementation of New Laws. The revised Davis-Stirling Act and the new Commercial Act each expressly provide that any documents prepared or actions taken prior to January 1, 2014 are not invalidated by the new law. To update existing governing documents, each act authorizes the board of the association to amend existing governing documents to correct references to the applicable law without member approval. Updated dec-

larations may be recorded in the public records also without member approval. Davis-Stirling Act: Residential Common Interest Developments. The changes to the Davis-Stirling Act have been made largely to reorganize the existing laws to group related provisions together or to simplify certain provisions; however, certain changes add new requirements and procedures. Certain provisions have been changed to add clarity to the Davis-Stirling Act, such as including the procedures for amending a declaration all in one section, or to modernize the act, such as allowing the association to provide notices to members by “general notice”, which can include notice through email transmission, newsletters or certain broadcast media. Other changes to the Davis-Stirling Act serve to expand association duties. The provisions regarding association financial disclosures have been reformulated to include distribution of two specific reports, an Annual Budget Report, comprised of the budget and other financial data for the association, and an Annual Policy Statement regarding specific association matters, such as owner notices, assessment collection policies and lien enforcement procedures. In addition, the revisions to the act now expressly require that owners are to receive notice for all board meetings, even annual meetings held at regular intervals. The New Commercial Act: Commercial Common Interest Developments. The new Commercial Act defines commercial common interest developments as those developments limited to industrial or commercial uses by law or by a recorded declaration. Commercial common interest developments can include small retail centers, office parks and large mixed-use projects containing retail, industrial and office developments. Many of the provisions included within the Commercial Act are identical to the revised Davis-Stirling Act and the two acts are similarly organized; however, many provisions of the Davis-Stirling Act

intended to protect individual homeowners have not been included in the new Commercial Act. As such, there are no requirements regarding preparation or distribution of an association budget or other financial statements to members, although those associations subject to corporate law may still have disclosure requirements, and there are no limits on increases in assessments. Owners within a commercial development do not need to be notified of or have the opportunity to attend association board meeting and have fewer rights than residential owners in lien enforcement and collection efforts. In certain instances, the Commercial Act has been drafted to expand laws applicable to commercial developments. There are now specific procedures established to amend a commercial development declaration and the required minimum coverage amount for liability insurance for commercial developments has been increased. Conclusion. The creation of the Commercial Act clarifies that the Davis-Stirling Act is intended to govern residential developments and protect the interests of individual homeowners. By definition, the Commercial Act applies only to those common interest developments that are limited to commercial and industrial use and those laws governing such commercial developments have been clarified. For any common interest development that includes residential and commercial use, the revised Davis-Stirling Act continues to apply to the residential portion of the development, but it may be beneficial to establish the commercial portion under the Commercial Act; however, a good understanding of both the Davis-Stirling Act and the Commercial Act is necessary in order to effectively create such separate ownership regimes. About the Author Stacie Goeddel is a real estate partner at Holland & Knight LLP and concentrates in the areas of development, hospitality and finance with a specialty in urban in-fill and resort mixeduse developments.

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RN Field is in it for the long haul. We have been providing full-service general contracting to a wide array of San Francisco, Bay Area and Southern California clients for over 35 years. We specialize in high-end tenant improvements for technology, law, financial services, entertainment, hospitality, retail, and the restaurant industry. We have an established reputation for on-time performance, on-budget cost control, quality workmanship, and most importantly, satisfied clients.

Boston Properties holds a superior track record in developing premium central business district office buildings, suburban office centers, and buildto-suit projects for the U.S. government and a diverse array of prominent tenants. After over ten years of developing and managing landmark commercial complexes in the Bay Area, Boston Properties is excited to add 680 Folsom, 535 Mission and the Transbay Tower to its San Francisco portfolio which already includes Embarcadero Center.

Sedgwick’s women attorneys believe, “Why follow, when we can lead?” That is one reason we were proud to add Laurie Gustafson, president-elect of CREW SF, to our team. At our firm, we celebrate women attorneys and what they bring to the practice of law. Many of our practice group and firm committee leaders are women, and 51 percent of our associates and 24 percent of our partners are women – well ahead of the current legal industry standards.

Mohawk Group is a designer-focused floorcovering resource— one where you can select products with confidence. Using an innovative sustainability strategy, every product and collection is designed with the environment in mind. As manufacturers, we talk a lot about our impact on the environment. Even more important is showing our clients exactly how those actions impact the environment.

Working with RN Field is like having a champion for design on your team, we implement great design in innovative ways that satisfies everyone involved. From a sketch on a piece of paper to the most detailed drawings, we work with the client’s vision from an experienced perspective. Our management team is comprised of experts in all phases of construction, project management, engineering, and administration. We are proud of our staff and confident in our abilities to execute complicated projects. Most of us have been working together for many years to create a company committed to building and maintaining strong relationships with clients, architects, construction managers, and brokers. Whether your construction needs involve new construction, remodeling, or renovation, you can rely on RN Field Construction.

Boston Properties, a self-administered and self-managed real estate investment trust (REIT), is one of the largest owners, managers and developers of Class A office properties in the United States, with a significant presence in five markets: Boston, New York, Princeton, San Francisco, and Washington, DC. Boston Properties’ property portfolio is comprised primarily of Class A office properties and also includes one hotel, three residential properties and four retail properties. Boston Properties is well-known for its in-house building management expertise and responsiveness to tenants’ needs.

Why is this? In part, because 10 years ago, the firm launched the Sedgwick Women’s Forum to foster professional growth and networking opportunities for women. The effect of the Sedgwick Women’s Forum can be felt in the growing number of the firm’s women leaders and the attorneys who cite the Women’s Forum as their reason for choosing to work at Sedgwick. Sedgwick’s Real Estate, Land Use, and Natural Resources Group is an example of one of our practices with a significant contingent of women attorneys. Headed by partner Anna Shimko, it is an interdisciplinary group of experienced transactional lawyers and litigators who represent clients in all aspects of real estate, finance, land use, and development. The group’s diverse project list includes everything from shopping centers, office and mixed use, sports arenas, research campuses, energy facilities, and water projects, to hotels and resorts, residential communities, hospitals, and churches. Sedgwick has more than 370 attorneys in 16 offices throughout North America and Europe. For more information about Sedgwick, its attorneys and services, visit www.sedgwicklaw.com.

Through third-party certifications, we can illustrate our commitment to sustainable products and methods. We offer a comprehensive selection of products that meet the rigorous NSF-140 standard, as well as Environmental Product Declarations (EPD) for our Ecoflex ICT modular carpet platform. EPDs help customers better understand a product’s sustainable qualities and environmental repercussions so they can make more informed product selections. As one of the Transformative sponsors of the International Living Future Institute (ILFI), Mohawk Group is working with ILFI to promote the Living Building Challenge, a green building certification program that defines the most advanced measure of sustainability for architecture and interior design. In addition, we’re participating in the ILFI’s Declare program, similar to a nutrition label for building products. The Declare label program is the Institute’s signature program related to product disclosures or “ingredients” for building products. Challenging ourselves every day to do more, we’re using important industry certifications and beyond to help us communicate what we’re doing. So, when we say “green,” we mean it.

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WELCOME Nancy Lundeen Partner | Allen Matkins Leck Gamble Mallory & Natsis LLP President

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2014 BOARD

Lada Kocherovsky Associate Principal Page & Turnbull Architects Director, Membership Samantha Low Project Manager, Special Projects Group. Hathaway Dinwiddie Construction Company Director, Programs