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P.O. Box 1184 San Mateo, CA 94403 415.738.6434

(GLWRULDO%RDUGV Board members of The Registry serve without expectation of recompense or reward. They advise the magazine’s executive team on matters of relevance to the region’s commercial and residential real estate community. The board’s makeup reflects the wide readership of the magazine including attorneys, architects, interior designers, residential and commercial real estate brokers, investors, lenders, general contractors and subcontractors, engineers and other professionals.

0LVVLRQ6WDWHPHQW The Registry is a real estate journal that aspires to fulfill the need of Bay Area professionals for accurate, unbiased and timely news, analysis and information.


3XEOLVKHU Vladimir Bosanac

3UHVLGHQW Heather Bosanac 415.738.6434

0DUF&XQQLQJKDP President AllWest


Principal Thompson | Dorfman Partners, LLC



President & Founding Principal Huntsman Architectural Group

-HVVKLOO(/RYH,,, Partner Ropers, Majeski, Kohn & Bentley

Sharon Simonson 408.334.2512

'HVLJQ Jelena Krzanicki Janet Raugust

3KRWRJUDSKHU Chad Ziemendorf


Partner, Real Estate Practice Group Leader Wendel, Rosen, Black & Dean LLP


President & Chief Executive Officer The Swig Company


Partner Luce Forward


Principal TRI Commercial

:ULWHUV Brad Berton, Douglas Caldwell, Robert Celaschi, Michael Fitzhugh, Sharon Simonson, Sasha Vasilyuk

&RQWULEXWRUV J. Tom Boer, Peter Ingersoll, Rob La Eace, Jesshill Love, Brock R. Lyle, John McNellis, Michael Nann, Kathryn L. Oehlschlager

3KLO:LOOLDPV3( /(('$3 Vice President Webcor Builders


Principal, President & CEO Pacific Marketing Associates

$GYHUWLVLQJ Denise Franklin 408.366.1984





(WKLFV3ROLF\ The Registry embraces a strict ethics policy for its staff and contributing writers, including columnists and freelance reporters. No person employed by or affiliated with The Registry has accepted or will accept any compensation, monetary or otherwise, in exchange for editorial content. All information that appears in the magazine is selected solely for its informational value to readers.

-HQQLIHU'L]RQ&3$ Audit & Advisory Partner Hood & Strong, LLP


Executive Managing Director Newmark Knight Frank Cornish & Carey Commercial


Co-Chair, Real Estate Group Hoge, Fenton, Jones & Appel, Inc.


Director, Commercial Real Estate The Sobrato Organization

The Registry is a registered trademark of Mighty Dot Media, Inc. Š2011 Mighty Dot Media, Inc. All rights reserved. This publication and/or its contents may not be copied, reproduced or republished in whole or in part without the written consent of Mighty Dot Media, Inc.


J U N E 201 1


President Hulberg & Associates, Inc.


Regional Manager DPR Construction, Inc.


Vice President of Public Policy & Communications San Jose Silicon Valley Chamber of Commerce


Executive Vice President NorthMarq Capital

0HGLD3DUWQHUV The Registry would like to acknowledge its partnerships with the following organizations:

/HWWHUIURP WKH3XEOLVKHU Dear Reader, The stars are aligning across the Bay Area. Attitudes not seen since the dot-com boom are returning. Technology startups crowd the streets of Palo Alto and San Francisco’s SoMa. Twitter and Facebook are emerging as the latest tech sector behemoths. Apple is on fire. Google is still growing. LinkedIn went public. Mission Bay continues to blossom. And everyone needs real estate. I received the initial awakening of what was to come at our first editorial board meeting of this year, when I heard from one of our board members that in a matter of two quarters tenant demand in Silicon Valley had surged seven-fold from roughly two million square feet to 15 million square feet—and that excluded the Facebook deal. At nearly the same time, we began to see rents in Silicon Valley move up and a slew of activity in San Francisco’s SoMa district. Then we saw large swaths of available Silicon Valley space—much of it vacant for years—gobbled up in a matter of weeks. HewlettPackard, Motorola, Dell, VMware and Microsoft all leased hundreds of thousands of square feet apiece. The economy of the Bay Area seemed to have snapped back almost overnight. Job growth has surged, and job boards across the region swelled with new listings as tech companies scrambled for talent. But not everyone is convinced all is well. “The New Tech Bubble” is the title of the cover story in the May 14th edition of The Economist. “Compared with the rest of America, Silicon Valley feels like a boomtown,” reads the opening paragraph of the magazine’s first “Leader.” If the euphoria isn’t as obvious as the late 1990s and early 2000s, when the NASDAQ soared (it is less frothy now), it is because the excess valuations are being expressed in private markets, the magazine concludes. Signals from my personal interactions also urge caution. An outplacement executive who I know—someone with a truly unique perspective on labor markets—recently told me he expected

We know we have high costs, but we also have high value-add workers and firms. Can we continue to run fast enough to outpace ourselves? Major players in our region think it will be very difficult for the Bay Area to compete with international technology centers in China and India over the long haul. This publication agrees. Not because our technology is becoming obsolete or the incredibly inventive culture of the region is dimming. But because the cost of living and operating a business in the Bay Area remains so expensive. Housing costs and commercial property values are again on the rise. While that is welcome news to those in our industry, the fact remains: The more expensive it is to do business here, the more creative and productive workers must be to generate the added value to justify their expense. Kevin Klowden, a demographer and economist for the Milken Institute who appeared as a speaker for The Registry at a June 8 Web event, noted that Bay Area companies have a hard time recruiting 20- and 30-year-old workers because it is so expensive to live here. In some cases, companies are moving operations out of the region and out of state simply to get access to that tender demographic. While understandable, that does nothing to secure the Bay Area’s long-term competitiveness. The same issue arose in an analysis for the San Francisco Board of Supervisors as it evaluated the incentives it would offer to get Twitter Inc. to stick around. Drawing on data from the National Establishment Time Series database created by Oakland’s Walls & Associates and Dun and Bradstreet, the San Francisco Controller’s Office notes that during the last economic upswing from 2003 to 2008, more companies left San Francisco on a proportionate basis than left Santa Clara, San Mateo, Alameda and Contra Costa counties. In San Francisco, 3.6 percent of the establishments there in 2003, or 2,393, were gone at the end of 2008; 3.3 percent left

another round of corporate layoffs before the year ends. The work force thinning of 2009 and 2010 helped improve productivity, he said, but the firms are realizing that they have not cut enough. Cisco’s recent announcement to cull 4 percent of staff is one such public confirmation. As the magazine went to press, The Wall Street Journal and others were reporting that Hewlett-Parkard Co. was hitting an unexpected skid related to slower PC sales, a rejiggering of its software business and fallout from the Japan disaster. Locally, it’s not immediately clear if tech’s growth is translating into the larger economy. Are law firms, accountants, architects, designers and the myriad other services companies that cater to tech’s needs really catching the wave? Whether you are floating inside the bubble or not, it all begs an obvious question: Is doing business in the Bay Area sustainable?

Alameda County; 3.5 percent moved from San Mateo, and 2.5 percent departed Santa Clara. While those figures might not seem so bad, consider this: slightly more than half of one percent of all California establishments left in the same five years and slightly less than half of one percent left Texas in the period. The move-out rate in Los Angeles was 1.5 percent and in San Diego it was 1.3 percent. Our region has a lot to offer, and perhaps the enthusiasts are seeing enough opportunity in that. But we should understand that our region also relies on other industries and parts of the country to improve. Indications point to a conclusion that perhaps we are not out of the woods quite yet. Regards, Vladimir Bosanac


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Brock R. Lyle

Shifting Landscape pg. 10

Eyes Wide Open pg. 25

J. Tom Boer is a partner at Barg Coffin Lewis & Trapp LLP, a San Francisco-based law firm that specializes in environmental law. His practice focuses on environmental litigation and compliance counseling under federal and state statutes, as well as commercial and other litigation. This includes representing clients in government enforcement actions arising out of state and federal statutes, including the Resource Conservation and Recovery Act, also known as RCRA, the federal Clean Water Act, the federal Clean Air Act and California’s Polanco Redevelopment Act, which is designed to promote brownfields’ reuse by limiting liability for developers and others in certain circumstances.

Brock R. Lyle is an associate in the Redwood City office of Ropers Majeski Kohn & Bentley PC. His primary focus is commercial litigation with specialization in employmentrelated matters, insurance defense, intellectual property and legal research. He is also experienced in international business, corporate transactions and corporate formation. Lyle is a member of the State Bar of California and the San Mateo County Bar Association. He is admitted to practice in all federal and state courts in California. In 2010, Lyle was president of the San Mateo County Barristers.

John McNellis

Peter Ingersoll

Brokers with Principals

New York State of Mind pg. 24

pg. 22

Peter Ingersoll is chief executive of East Bay investment advisory Safe Harbour Equity Inc. and a serial entrepreneur. He has an economics degree from the University of Pennsylvania Wharton School and several advanced degrees from the School of Hard Knocks earned while working in the construction, development, site acquisition, private banking & trust, investment banking, securities and, most recently, the Northern California commercial real estate industries.

Rob La Eace Practice Makes Purpose pg. 26 Responding to emergencies as a firefighter in a variety of uncertain situations and diverse neighborhoods taught Rob La Eace a lot about how people should be treated, not only during a crisis, but also everyday. Today, these same skills are an asset to those who work with this San Francisco native in his career as a broker associate with Paragon Real Estate Group. The tools he puts to work as a firefighter are what makes the difference to the clients La Eace works with as an agent. While it may help that La Eace is the type of guy with a warm smile and a friendly attitude, his professionalism, organization and drive to succeed are what make him stand out in his career. Working in his sixth year in the industry, La Eace is in touch with his clients’ needs and with the city—putting a local’s perspective to work.

Jesshill Love Eyes Wide Open pg. 25 Jesshill Love is a business and real estate partner in the Redwood City office of Ropers Majeski Kohn & Bentley PC. His primary focus is serving as outside counsel to companies with limited or no in-house legal capabilities that require legal assistance with ongoing business operations. In addition to his legal training, Love has a master’s degree in business administration and has been an active real estate investor since age 19. He has negotiated more than $100 million in combined real estate acquisitions, sales and leases. He is a member of the California Bar Association and is admitted to all state and federal courts in California. He serves on the Editorial Board for The Registry Bay Area Real Estate Journal and is a frequent contributor to the magazine.

John McNellis is a Palo Alto-based retail developer and investor. Since its inception nearly 30 years ago, McNellis Partners has developed more than 50 projects in Northern California, primarily shopping centers ranging from 30,000 square feet to 200,000 square feet. McNellis serves on the national board of trustees for the Urban Land Institute and is a ULI governor. He is a member of the International Council of Shopping Centers and serves on the Policy Advisory Board for the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley. He also serves on the national board of directors for Outward Bound USA and the board of Rebuilding Together Peninsula, a volunteer partnership to rehabilitate homes and community facilities. He is a former board member of Lambda Alpha International (Golden Gate Chapter), an honorary society for the discussion of land-use and economics. On occasion, he lectures for the ULI, the ICSC and Stanford University’s schools of business and law.

Michael Nann Electronic Eyes Grow Sharper pg. 15 Michael Nann is vice president and division manager for W. Bradley Electric in Novato. The company is among the Bay Area’s largest contractors with more than 200 employees and revenue of more than $65 million. He is an electrician by trade and sits on the TYCO Security Products Integrator Advisory Council. He spent 12 years teaching for the International Brotherhood of Electrical Workers Local 6 in San Francisco.

Kathryn L. Oehlschlager Shifting Landscape pg. 10 Kathryn L. Oehlschlager is an associate at Barg Coffin Lewis & Trapp LLP. Her practice focuses on environmental litigation and compliance counseling under both federal and state environmental statutes, as well as land use, commercial and other litigation matters. This includes representing clients in all aspects of the project review process under the California Environmental Quality Act, including preparation, review and analysis of negative declarations, draft environmental impact reports and final environmental impact reports. Q

J U N E 201 1 5


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:DWFKGRJ5HSRUW4XHVWLRQV+LJK6SHHG5DLO The nonpartisan and powerful California Legislative Analyst’s Office issued a critical report about the high-speed rail project envisioned to connect the state’s three major regions. The availability of the additional funding assumed in a 2009 business plan as necessary to complete the rail project is highly uncertain, the report says, and federal deadlines and conditions attached to the money already provided to the state limit California’s options for the successful development of the system. In addition, the existing governance structure for the project is inadequate for the imminent development and construction stages, and the legislature lacks the good information it needs to make the critical multi-billion dollar decisions that it will soon face, the report says. “Significant improvements are needed in the way both day-to-day and longer-term strategic decisions are made. We have concluded that the current governance structure for the project is no longer appropriate and is too weak to ensure that this mega-project is coordinated and managed effectively,” the report says. Proponents of the system said the LAO’s report was off base: “Rather than trying to help the project, the LAO recommendations would jeopardize almost $4 billion in federal funding,” said Daniel Krause, executive director of Californians for High Speed Rail.

3OHDVDQWRQ·V%HUQDO1DEV7HQDQW MegaPath Inc., a data, voice and security services provider, has leased nearly 26,000 square feet in Pleasanton’s Bernal Corporate Plaza. The plaza consists of two Class A, three-story buildings with 217,000 square feet. MegaPath will occupy its second floor space at 6800 Koll Center Parkway in the third quarter of 2011. Cornish & Carey Commercial Newmark Knight Frank’s Jeff Morgenstern, Dan Watson and Marcy Place represented Bernal Corporate Plaza for landlord Principal Real Estate Investors. Kevin Mechelke and Tom Maloney of Jones Lang LaSalle represented MegaPath.

0RUH0LVVLRQ%D\%X\V Two residential sites in San Francisco’s Mission Bay have sold to BRE Properties Inc. for $41.4 million, or $247 a square foot. The two transit-oriented sites are 3.84 acres. Institutional Property Advisors, a boutique brokerage under the Marcus & Millichap umbrella, represented the sellers, FOCIL-MB. IPA serves institutional and major private investors in the multifamily arena. “The city’s vision for Mission Bay has been very well executed and represents one of the last growth corridors in San Francisco,” said Stan Jones of IPA. “Opportunities to acquire entitled market-rate sites in the city are truly rare, as evidenced by the strong roster of both public and private developers that have committed to the area.” The two sites are entitled for 360 units and represent the last two market-rate residential development sites available in Mission Bay, said Phil Saglimbeni, also of IPA. The sites are within walking distance of two light-rail stations, two bus lines and a Caltrain station. The Mission Bay neighborhood, which covers 303 acres, represents the largest urban development in San Francisco since the building of Golden Gate Park.

$SDUWPHQW5HQWV+HDGLQJ+LJKHU San Francisco’s tech renaissance should continue to generate renter demand citywide through 2011, according to new research from Marcus & Millichap Real Estate Investment Advisors. Vacancy in the submarket fell 180 basis points last year to 4.9 percent, driving a nearly 8 percent jump in asking rents. The company projects another nearly 1 percent decline in vacancy this year, and a 5.2 percent gain to $1,801 a month in effective rents during 2011. As the jobs recovery filters into other industries, particularly those related to tourism, and the city’s renter pool expands, the overall vacancy rate will slip below historical averages, fueling one of the strongest asking-rent gains in the nation.

Meanwhile, the South Bay rental market is recovering. In 2010, renewed employment gains and the unbundling of households released demand, promoting the metro’s most significant vacancy-rate decline in a decade. Class A complexes near major employment hubs should benefit most from the expanding technology industry. As corporations move forward with deferred information-technology spending, tech employers will re-staff, generating demand for Class A units in Sunnyvale, Santa Clara and Mountain View, the brokerage predicts. Asking rents are expected to rise 5 percent this year to $1,519 a month and effective rents to jump 5.6 percent to $1,424.

6REUDWR6HOHFWV%URNHUIRU0LVVLRQ%D\%X\ The Sobrato Organization named Cornish & Carey Commercial Newmark Knight Frank to market the firm’s first San Francisco property for lease. The 291,000 square-foot, Class A waterfront building at 500 Terry Francois Blvd. represents a rare opportunity for a single tenant to lease a large block of premium space in the city. Sobrato specializes in the lease of large buildings to single tenants. Donnette Clarens and Mike Brown in San Francisco and Jack Troedson of the firm’s Palo Alto office are the listing team. Currently, only seven buildings in the city offer leasing opportunities of 250,000 square feet or more. Four of those buildings are located in the technology-centric South of Market area, of which Mission Bay is a submarket. Cornish will market primarily to companies in the technology sector located in San Francisco or Silicon Valley or looking to re-locate here. Construction on 500 Terry Francois was completed in 2008. The property has completed ground-floor common areas including an impressive lobby and large executive briefing conference area.

1HW=HUR(QHUJ\+RXVLQJ&RPSOH[5LVHVLQ'DYLV A joint venture led by San Francisco-based Carmel Partners is building the largest zero-net energy development planned in the country at the University of California, Davis. The 130-acre mixed-use project is a public-private venture between UC Davis and West Village Community Partnership LLC, which is led by Carmel. The project combines advanced energy-efficient design features with a 4-megawatt, high-efficiency SunPower solar power system. Zero-net energy means that the community will put back into the electrical grid, annually, as much electricity as it consumes. The project’s first phase, to be completed by fall, has apartment housing for 2,000 students, an education center for Los Rios Community College, recreation and study facilities and a village square with neighborhood-serving retail. Two initial student housing components should open in less than four months. More than 340 single family homes will be built for sale to faculty and staff.

8QLWVLQ6DQ/HDQGUR)HWFK00 Cabot Bay, an apartment community located in San Leandro, has sold for $9.9 million. This sales price represents $106,452 per unit and $154 per square foot. Cabot Bay was built in 1965 and underwent an extensive renovation in 2008. The seller was Bancroft SPE, LLC, and the buyer was FAOF Cabot Bay, LLC (Fowler Property Acquisitions) of San Francisco. The transaction was negotiated by Mark J. Feldman of the San Francisco-East Bay office of Hendricks & Partners on behalf of both parties.

/HQGHU6HFXUHV)XQGLQJIRU&DOLIRUQLD3URSHUWLHV Cohen Financial has arranged $5.5 million in refinancing for the Maxwell Village Shopping Center in Sonoma. The 98,000 square-foot property’s tenants include Rite Aid Pharmacy and Lucky Supermarket. Paul Schroeder, a managing director in Cohen Financial’s San Francisco office, secured the fixed-rate, long-term, non-recourse financing. The lender is Sun Life Financial of Canada. continued on page 30

3(23/( on the move 0DKRRG7DNHV+HOPRI6LOLFRQ9DOOH\&KDPEHU Matthew R. Mahood is the new president and chief executive of the San Jose Silicon Valley Chamber of Commerce. He replaces Pat Dando, who has held the position since 2005. Mahood, 45, led the Sacramento Metropolitan Chamber of Commerce since 2002 and grew that chamber from $3.1 million in annual operating revenue to a peak of $5.5 million.


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The Sacramento Metro Chamber is similar in size and scope to the San Jose Silicon Valley Chamber and is also a regional business organization representing nearly 2,000 members throughout six counties. Mahood was recognized as the 2010 Executive of the Year by the Western Association of Chamber Executives. Mahood started his career as a station manager for the FedEx operation in San Jose and eventually became vice president of online supermarket from its founding in 1999 to its closing in 2001.

*UXEE$QQRXQFHV3URPRWLRQV Simon D. Clark (left) has been named senior vice president, managing director of Grubb & Ellis Co.’s San Mateo office. Clark, who joined the company’s Office Group in 2001, has represented clients in leasing nearly 1.8 million square feet of space and has been recognized as a top producer multiple times. Grubb Vice President Seth McKinnon (middle) has been selected to lead the company’s Investment Services group in San Mateo and Mike Davis (right), vice president, was selected to lead the office’s Industrial Group. McKinnon joined Grubb in 2007 and has closed transactions valued in excess of $500 million throughout his nine-year career, $135 million of which were closed over the past 18 months. Prior to joining Grubb in January 2010, Davis spent nine years with Coldwell Banker Commercial, where he began his career in 2001.

6ZLQHUWRQ1DPHV%XVLQHVV'HYHORSPHQW+HDG Lief Kaiper has been selected by Swinerton Builders and HMH Builders to lead their health care business development in Northern California. Beginning in 2011, Swinerton and HMH became an integrated health care construction provider. In his new role, Kaiper will provide a unified sales and marketing approach. Before joining Swinerton, Kaiper was director of business development at Affiliated Engineers Inc. in Walnut Creek. Kaiper will be based out of the Swinerton office in San Francisco

*UXEE([SDQGV5HWDLO*URXS Commercial real estate veteran Patric Davis has joined Grubb & Ellis Co. as vice president in its retail group. Davis joins Grubb after 15 years as a principal with Lee & Associates. In this position she specialized in retail leasing on behalf of tenants and landlords, as well as shopping center sales in the East Bay and San Joaquin Valley. Previously, Davis specialized in neighborhood shopping center development and leasing in the Denver region with Ambrose & Co., where she began her career in 1973. “Grubb & Ellis has significantly increased its presence in the East Bay retail property market over the past year,” said Edward F. Del Beccaro, managing director. “We are thrilled to continue this growth by welcoming Patric to our office. She is a well-known and respected retail professional with a successful track record and an intense focus on client service.”

&XVKPDQ+DV1HZ5HVHDUFK'LUHFWRU Caroline Green has joined Cushman & Wakefield as its Northern California and Pacific Northwest research director. She will be based in the firm’s San Francisco office. Green brings 15 years of experience in analyzing global economic and real estate markets, as well as consulting and institutional investment research. She was previously senior vice president at Rosen Consulting Group and head of client services for Rosen Real Estate Securities in Berkeley.

&RQWUDFWRU+LUHV3URMHFW0DQDJHUV Dave Ponciano (left) has been named a project manager for Skyline Construction in its Santa Clara office. Ponciano has 19 years of construction experience in life sciences and tenant improvement project management. Tim Mullen (right) has been hired by Skyline as a project manager in its San Francisco office. He has 13 years of construction experience.

'RPH·V1HZ)RFXV*URXS /HDGHUVKLS$QQRXQFHG Matt Heathwood (left) has been made the Seismic and Special Projects Focus Group leader for Dome Construction Corp. He has been in the construction industry for more than 18 years, at Dome for 14 years, and has focused on seismic and special projects for the last decade. The company also welcomes Wendy Wang (right) to her new position as Tenant Improvement Focus Group leader. She has worked in the construction and commercial real estate development industry for nine years and has completed more than a million square feet of tenant-improvement and renovation projects.

%XLOG*URXS+LUHV&KLHI)LQDQFLDO2IILFHU Build Group has hired Jason Berry as chief financial officer. Berry has a diverse background including significant international business experience and specialized expertise in building financial models and restructuring companies. He played key roles in expanding two prominent Bay Area construction companies at critical times in their growth. continued on page 31


San Jose seeks to parlay its largest transit hub into a downtown redevelopment stimulus. By Doug Caldwell


here are no timid dreams in Silicon Valley, including the building of the country’s first Grand Central Terminal since the Great Depression. Imagine zipping in two hours from Los Angeles to San Jose aboard the California high-speed rail at speeds up to 220 miles an hour. As you stepped off at San Jose’s Diridon, you would enter one of the largest train stations in the country, with tracks on four levels, shops, restaurants, offices and more. Built onto and around the existing 25,000 square-foot historic structure, the new Diridon would encompass nearly 100,000 square feet of interior space. In addition to bullet trains, it would service Amtrak, the Altamont Commuter Express, the Capitol Corridor system, the Valley Transit Authority’s light-rail service and Bay Area Rapid Transit. It also would be a hub for bus service and perhaps even connect with an automated people-mover to the Mineta San Jose International Airport, two miles north. More than 36,000 people a day—nine times the current traffic—would pass through it. But what is at stake for San Jose is much more than mass transit. The expansion of Diridon Station and the re-framing of the neighborhood around it are emerging as a critical economic development strategy. The effort is aimed at expanding the footprint of the city’s current downtown while infusing the vitality of a busy transportation network into an urban center that has struggled to come into its own. “The Diridon Station area is a big, game-changing economic development opportunity,” says Hans Larsen, San Jose director of transportation. “It is the best chance to make downtown San Jose the center of life in the South Bay.” The Capital of Silicon Valley has suffered in the wake of the recent recession, capping a tough decade following the dot-com bust. Employment in San Mateo and Santa Clara counties still does not match the highs of the late 1990s. This year at the city of San Jose, six hundred employees are receiving pink slips, Larsen told a business gathering May 4 in downtown San Jose.


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Now the promise of two major rail-based systems converging on the Diridon Station—both heavily subsidized by federal and state funding—is igniting hope among community leaders. With the city’s redevelopment agency bogged down by billions in debt, council and staff have turned to Diridon and a potentially wildly enhanced public transit network as a potent force to help catapult the community forward. In a nutshell, the city is proposing the rezoning and redevelopment of 240 acres within a roughly half-mile radius of Diridon. Of that total, the city, VTA and Caltrain own some 35 acres of surface parking immediately south of the HP Pavilion and adjacent to Diridon. In coming months, the city intends to seek interest from a master developer in the redevelopment of the parking lots. Overall, in the 240 acre area, city staff hope to see new development of up to five million square feet of offices, light industrial and R&D buildings; 420,000 square feet of retail shops and restaurants; 2,588 housing units; and 900 hotel rooms. Also planned is a stadium for a Major League Baseball team. The proposed transportation nexus at Diridon offers tremendous development potential and “would be just spectacular,” said Ted Tanner, executive vice president for real estate development for Los Angeles-based AEG, a wholly owned subsidiary of the Anschutz Co. AEG owns or controls a collection of companies including facilities such as the Staples Center in Los Angeles, the Prudential Center in Newark, N.J., and the Sprint Center in Kansas City, Mo. Tanner served as a member of a developer focus group that advised San Jose on its Diridon plans. “It would be quite unusual and therefore in my view quite able in the longterm to support a significant amount of mixed-use development,” Tanner said. “I would think that would include the full gamut of office, residential, potentially hospitality and entertainment uses, including a ballpark.”

“Whether the manna of public money falls from heaven or not, Diridon will be a key development opportunity.” San Jose Councilmember Sam Liccardo



The plan, of course, is nowhere near guaranteed. Without BART and highspeed rail, two thirds of the increased passenger volume through Dirdon won’t occur, and the city has no clear idea when, or if, Major League Baseball will decide the fate of the Oakland As, said Nanci Klein, deputy director of the San Jose Office of Economic Development. Building BART to Diridon is not going to be quick or cheap. Two extensions with a combined price tag of more than $6 billion lie between BART’s current terminus and Diridon. The Berryessa Extension is a 10-mile, two-station project that begins at Fremont’s Warm Springs Station (currently under construction) and ends in the Berryessa district of East San Jose. It has an estimated cost of $2.1 billion and has been recommended for a full-funding grant of $900 million via the federal New Starts Program. A fully executed grant agreement is anticipated in January 2012, says Bernice Alaniz, communications director for VTA’s BART Silicon Valley Project. Another $352 million comes from the state’s Traffic Congestion Relief Program, and $848 million is being drawn from the Measure A half-cent sales-tax, approved by Santa Clara County voters in 2000. A request for proposals was issued in March for the first major design-build contract for the Berryessa Extension. Proposals are due in August and an award is planned for November, Alaniz said. Trains are to haul the first passengers in 2018, if reality follows plans. But federal funding for the second, $4 billion segment has yet to be committed. Current plans call for extending the system from the Berryessa neighborhood to downtown San Jose and onward to Santa Clara. While the initial part of the route would be along existing Union Pacific Railroad tracks, the line would dive underground in a five-mile tunnel beneath downtown San Jose, rising back to street level for a final mile-long run to neighboring Santa Clara. If completed, this extension would include six stations: one in Milpitas, four in San Jose and one in Santa Clara. Also at issue is the alignment of the high-speed rail line through downtown, not to mention the viability of the huge project overall. The city is worried that an elevated high-speed line, which could reach up to eight stories or 80 feet, could become the “Embarcadero Freeway of San Jose.” The Embarcadero for years divorced San Francisco’s shoreline from the rest of the city until its partial collapse in the 1989 Loma Prieta earthquake, prompting the city to pull it down. The snag, of course, is money. Early estimates put the cost of building an elevated line at $1 billion, Larsen said. The cost to build an underground line is estimated at three to five times that: $3 billion to $5 billion. Politics are likely to determine if federal funding materializes anytime soon for the final BART leg to Diridon, said Councilmember Sam Liccardo, who serves on the city’s general-plan task force, which is preparing the city’s master land-use template for the next 30 years. “There’s good reason to believe some of that construction will be underway within five to seven years if the winds blow favorably in Washington,” he said. San Jose is also well-positioned as a “top priority destination for the [highspeed] rail authority,” Liccardo said. Even so, the councilman argues that not every piece of the transportation puzzle needs to be in place before the implementation of the grand design can start. He points to the VTA’s $150 million bus rapid-transit route being built down Santa Clara Street, passing in front of Diridon Station. “That is actually going to carry more riders than any other bus line in the county,” he said. “Whether the manna of public money falls from heaven or not, Diridon will be a key development opportunity,” Liccardo asserts. “Whether there’s a baseball stadium or not, that location provides a great headquarters opportunity for any major corporation.” For generations, Oakland has been cursed by the quote from author Gertrude Stein: “The trouble with Oakland is that when you get there, there isn’t any there there.” San Jose has fought to escape a similar assessment. Diridon could be its most effective weapon yet. Q

6KLIWLQJ/DQGVFDSH California wants to expand the territory defined as wetlands, further limiting and prohibiting development. By J. Tom Boer and Kathryn L. Oehlschlager


roperties designated as wetlands have been subject to strict regulatory control for decades under the federal Clean Water Act. Now the state of California is trying to expand the scope of its oversight and regulation. The proposal revolves around a new definition of wetlands that is different from and broader than its federal counterpart. Coupled with the state’s protective policies specifying no net loss of wetland areas, the new approach could have widespread consequences for property owners. It would expand the amount of land classified as wetlands in California, subjecting owners to new permitting requirements and restrictions. The impact would likely be felt by public and private sectors throughout the state, ranging from ranches in eastern California to high-speed rail projects in central California, from municipal construction projects everywhere to developments near existing urban areas. From a practical standpoint, it means regulatory confusion, increased costs, permitting delays and litigation. Already, certain development that impacts wetlands is prohibited outright, and countless other types of development require intensive site assessment, costly permitting and mitigation. Since the late 1970s, the federal government, through the Army Corps of Engineers and the Environmental Protection Agency, has taken the lead on regulating development and use of areas designated as wetlands under the Clean Water Act. The state has participated only through a concurrent process.


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Federal agencies identify wetlands based on three criteria including hydrology and the types of vegetation and soil. Is the prevalent vegetation of a wetlands species? Is the area saturated permanently, or periodically inundated for at least 14 consecutive days a year? Two decisions by the U.S. Supreme Court in 2001 and 2006 limited the scope of the Clean Water Act and restricted the federal government’s ability to regulate wetlands with no connection to interstate waters, so-called isolated wetlands. In early 2011, the EPA issued draft guidance apparently intended to expand the federal reach, but it remains unclear whether or how this guidance will apply. Late in 2010, the California State Water Resources Control Board proposed its own broad expansion of the state’s regulatory scheme for wetlands. The proposed program would allow the state to regulate isolated wetlands, but the initiative would not stop there. Rather, the board proposes to redefine and significantly expand what constitutes a wetland. The proposed definition conflicts with the federal definition regarding both wetland vegetation and soil, and requires only seven days—as opposed to 14—of consecutive saturation to meet the hydrology criteria. The amount of acreage meeting the new definition could be significant. Numerous areas not previously regulated as wetlands would likely meet the new definition, including itinerant pools; areas surrounding isolated ponds, pools and other geographic depressions where there


are seven or more days of annual saturation; the pits and depressions caused by uprooted trees that remain devoid of vegetation and subject to saturation; certain agricultural land; and playas and mudflats devoid of vegetation but otherwise meeting the criteria. All would be subject to state regulation largely restricting development, regardless of the size of the feature or whether it is part of a bigger wetland system. The proposal also would result in dueling federal and state definitions of wetlands, resulting in widespread confusion in the regulated community and ultimately, litigation. The proposed regulations also pose serious logistical challenges. They would likely increase the costs associated with development projects involving land that meets either the state or federal wetlands definitions. Landowners presumably would be required to conduct two assessments to identify what areas qualify under the state and federal standards. The new definition proposed by the state board also has the potential to severely complicate the permitting process. The change in the definition of â&#x20AC;&#x153;saturatedâ&#x20AC;? from 14 to seven consecutive days a year would mean that many areas meeting the federal wetland definition would be surrounded by a circle of property that is subject to between seven and 13 days of annual saturation, therefore meeting the state definition. Presumably, property owners could be required to obtain multiple permits, resulting in delay and increased costs. Finally, the new regulations would add to the demands on state agencies, particularly the regional water quality boards. That increased

The California State Water Resources Control Board proposes to redefine and significantly expand what constitutes a wetland. The proposed definition conflicts with the federal standard. burden could have cascading consequences, delaying or killing projects that contribute to the stateâ&#x20AC;&#x2122;s economic development. There is no way to know for sure what happens next. The water board recently extended the deadline for a public comment period to later May. It could adopt the regulations as written, or revise and recirculate them for comment. Our best guess is that they will be adopted late this year or early next. In the meantime, watch for puddles, pools and ponds. Q J. Tom Boer can be reached at or 415-228-5400. Kathryn L. Oehlschlager can be reached at or 415-228-5400.


$ORQH7RJHWKHU Explosion of startups fuels microleasing and coworking trend in San Francisco and beyond. By Brad Berton



an Francisco south of Market Street became a hotbed of technological innovation during the dot-com days of the late-1990s. Today SoMa is once again ground zero for tech startups. But this time, the formerly industry-heavy SoMa district is seeing a new generation of landlords perhaps better identified as â&#x20AC;&#x153;hosts.â&#x20AC;? These enterprising trendsetters are operating an everelongating roster of high-energy work environments designed to make money by clustering startups, other tiny-footprint operations, freelance pros and the like. The property operators have adopted varying business models for the cool, collaborative, open spaces that they are creating, but their Wi-Fi-equipped office beehives, which began in SoMa, are now proliferating south and east. Dubbed â&#x20AC;&#x153;co-workingâ&#x20AC;? facilities generically, in SoMa they have assumed an array of brand names, including The Reactor, Sandbox Suites, CO-Spot, Founders Den, Hub SoMa, NextSpace, RocketSpace, SOMA Central and PariSoMa Innovation Loft. Operators offer flexible membership choices ranging from hourly and daily rates to private offices let on a month-to-month basis with discounts for six-month

commitments. Monthly rates for access to a desk and maybe six hours of conference-room use run from roughly $400 to more than $600, depending on the plan and facility. Membership fees usually include coffee and other beveragesâ&#x20AC;&#x201D;and open invitations to frequent mixers and other events hosted at the facilities. While most of the spaces occupy no more than a floor or two with mezzanines in some cases, their collective growth in SoMa alone over the last several years amounts to hundreds of thousands of square feet, based on informal estimates from industry sources. Various operators are scouting for an additional 300,000 square feet or so, too, said veteran tech entrepreneur Duncan Logan, the proprietor of the large and growing RocketSpace facility on San Franciscoâ&#x20AC;&#x2122;s Fremont Street. That new square footage would be enough to accommodate another 2,000 or so dues-paying members, calculates Janine Watson, a vice president with brokerage Grubb & Ellis Co. Operators say the ongoing and larger evolution in workspace concepts will keep coworking facilities in business for years to come. Indeed, RocketSpace, PariSoMa and NextSpace are all planning expansions in the Bay

â&#x20AC;&#x153;Itâ&#x20AC;&#x2122;s only a matter of time before supply catches up with demand.â&#x20AC;?


Duncan Logan, proprietor, RocketSpace Inc., coworking facility on San Franciscoâ&#x20AC;&#x2122;s Fremont Street


J U N E 201 1

Area and beyond, with NextSpace soon to follow its recent Los Angeles opening with a downtown San Jose site. The Bay Area also is becoming the epicenter of what is quickly evolving into a national trend, said Cushman & Wakefield broker Justin Bedecarre. Bedecarre has negotiated leases between several coworking-space operators and their landlords. “They’re popping up everywhere—Minnesota, Colorado, the Southeast,” he said. Jeremy Neuner, chief executive of Santa Cruz-based coworking company NextSpace, says he is finalizing his arrangements for a third location, in downtown San Jose. NextSpace recently doubled the size of its SoMa coworking facility to 7,400 square feet. It opened just last year on 2nd Street near Market. The modestly sized initial site became profitable in just five months, quickly growing to roughly 75 members. Neuner anticipates “a couple hundred” members in short order. The dense urban districts between San Francisco and San Jose, such as downtown Mountain View, also are viable locations for coworking sites, he said. In that spirit, former PariSoMa member Dave Nugent has just set up a site in downtown Palo Alto dubbed Backstage Coworking. RocketSpace’s Logan wants to expand his model to other big markets like New York, and perhaps even globally to developing nations such as China. He envisions the operation as something akin to Regus PLC’s multi-brand network of executive suites and related workplaces, but obviously with an emphasis on accommodating techoriented startups with less-costly space. The French coowners of PariSoMa, faberNovel, plan to open in New York and Paris this year and are considering other farflung locations such as Sao Paulo in booming Brazil. PariSoMa nearly quadrupled its SoMa space to a bit over 10,000 square feet at 11th and Natoma streets a couple months back. With mostly tech startups eager to join, membership had tripled in a few months. “Hitting capacity is a great problem to have,” Business Manager Julian Nachtigal said. Logan for one soon realized he under-ordered furniture as he opened RocketSpace to approximately 30 enthusiastic charter members in early February. He had figured he would likely need 30 desks a month, but ended up putting in an order for 100 when the initial 30 arrived—and another 100 a week later. He’s since focused on squeezing in all the startups seeking his offering and has expanded the operation to additional floors. At just more than five, the average number of employees among RocketSpace customers is more than most other coworking sites. The biggest is fast-growing mobile-game developer Pocket Gems, which has more than 30 and is larger than Logan anticipated. “It’s like a giant game of Jenga here,” he said. RocketSpace in May expanded into the top floor of SKS Investment’s 181 Fremont building, boosting capacity to roughly 350 members. Logan says he’s actively seeking another 100,000 square feet to 200,000 square feet. “We’re seeing tremendous demand for these kinds of spaces,” said Cushman’s Bedecarre. Savvy entrepreneurs launching new startups appreciate that they can simply bring in their laptops and plug them in at a workstation or private office at a fraction of the

cost of leasing space. It’s a lot cheaper and easier for freelancers and small startup operations to pay for the most appropriate of the various available coworking membership plans than it is to lease business space directly from a landlord or pay an executive suites operator, Bedecarre and others stress. Veteran SoMa landlord Paul Stein of SKS also points out an important distinction between the current startup set and so many of the dot-gones: “More than a few of these small companies are actually making money.” While coworking facilities appeal because they help their users avoid real estate risk, those same risks seem destined to come to the forefront for coworking space operators as rents continue upward. Near-term in SoMa specifically, they are concerned about maintaining profitability as more facilities come on line and their wholesale leasing cost continues to rise. As the current crop of new space becomes available, Grubb broker Watson for her part wonders, “Where all the bodies are going to come from to fill all these spots?” In a niche business with low barriers to entry, Neuner likewise worries that the supply of coworking spaces could become glutted—especially in the SoMa tech hub. “I think it’s inevitable,” said Logan. “It’s only a matter of time before supply catches up with demand.” And Nachtigal wonders whether the general coworking facility business model will prove sustainable as rental rates continue to recover. “If we get to 1999 rent levels here in the Bay Area, can coworking coexist” with the traditional commercialspace market, he asks. “That’s still an open question.” As SoMa costs rise, SKS’s Stein expects to see activity migrate to the East Bay. Considerable tech-related activity along with lower rents and easy access to San Francisco should make transit-served sites in Oakland prime candidates for coworking facility locations, he said. Meanwhile, it certainly helps that most of the successful coworking facility operators have long and strong backgrounds nurturing small startups and tech outfits in particular, says Cushman’s Bedecarre. “They’ve already had to deal with pretty much all the same problems that startups in the coworking spaces are likely to experience,” Bedecarre said. “So they also know how to solve them.” Q

J U N E 201 1 21


%URNHUVZLWK3ULQFLSDOV Give a little to get a lot. By John McNellis

The problem with brokerage’s jungle meritocracy is that it can act like a human cement-hardener, turning too many too hard too fast.


J U N E 201 1


efore examining a few mistakes this undervalued profession makes so often, it’s worth noting that practically everyone is a broker. That is to say, everyone is using someone else’s money, and everyone has to sell. Whether you’re a baby-faced runner at CBRE or running CalPERS, you’re still a broker—you need to sell your deal to somebody, whether to a shirttail investor or a stuffy investment committee. It’s not your money and, for that matter, it’s usually not theirs. The only true principals in real estate may be the millions of retirees who are the capital behind every major player in the industry. It should also be mentioned that, while not as cinematic as “Ice Road Truckers,” brokerage is every bit as deadly. Having one’s cash-flow meter reset to zero every Jan. 1 is a stress only a handful endure much beyond their twenties. Some say part of golf ’s charm is that its professionals, unlike those in every other sport involving a ball, make exactly what they earn; they either win the tournament or they don’t. They don’t sign $61 million guaranteed contracts, then get fat. So it is with brokerage—if you kill, you eat. Unfortunately, the problem with this jungle meritocracy is that it can act like a human cement-hardener, turning too many too hard too fast. The mistake many young brokers make every day of their short careers is that they don’t give it away. Or at least not enough. A principal asks for a comp or a bit of information or a small favor, and the agent immediately wants a listing, saying, “I have a client who may be interested, but I’m faxing you a commission agreement that I need signed before I’ll show your center.” Or, on some woebegone dirt, “If I introduce you to this landowner, you’re giving me the leasing on whatever you build.” Wrong approach. “Let’s put the deal together first, and then worry about my commission.” In several decades of deals, your correspondent can count the number of times he’s heard this— the right approach—on a deer hoof. True, when your commission pipeline is so dry bums are sleeping in it, and every developer you’re dealing with makes Bernie Madoff look like one of the guys, it may be hard to remember your best long-term strategy is indeed to give it away. But it is. Giving away your time and market

info—even your off-market knowledge—is like a collegesavings plan: It hurts at first but eventually pays off. Why? Because trust is flattering, and everyone wants to be trusted; practically everyone responds well to trust. And let’s face it, no one trusts developers—in Hollywood’s hierarchy of egregious villains, developers invariably get the Silver Medal. (Bronze goes to lawyers; gold to Colombian coke lords.) Everyone—cities, tenants, landowners—thinks developers only lie when they are moving their lips. So when a developer is trusted, it’s like pulling a thorn from a lion’s paw: The developer remembers the favor and, having learned everything he ever needed to know about business from “The Godfather,” he will repay it one day. Even openly trusting notoriously dishonest developers can be a winning tactic. (And notoriously dishonest developers may not be as hard to find in our business as you think). You can get burned, but more often, the crook is so pleased—or spooked—by your unusual treatment that there is a rising to meet your trust. If you can’t work without a net, you might still consider the following: When a buyer suggests you write an offer at a price you think outrageously low, never respond: “Are you kidding? I would buy it myself at that price.” Don’t call the harried escrow officer before the closing with, “Is there anything I can do to help?” Even the 17-year-old receptionist knows there’s nothing you can do and that your question is just Vulcan for, “Where the hell’s my commission?” Resist the temptation to tell a buyer that your listing— which has been 50 percent vacant since Prohibition—just needs professional management. If this isn’t the oldest lie in real estate, it is certainly the most tired. Don’t tout a project by claiming, “It’s selling for land value” without figuring out who controls that value. If, as is usually the case with retail, the major tenants have medieval cheap leases that run until the Chicago Cubs win their next World Series, the property may in fact be priced at its land value, but that’s because the seller doesn’t really own it—the majors do. We may all be brokers, and certainly all of us are always selling (ourselves, if nothing else), but we can all be better at it, and we can all give it away a little more often. Q


1HZ<RUN6WDWHRI0LQG Small investors should not take heart from the recovery in trophy property values because attitudes will not carry over to more common fare. By Peter Ingersoll


he fortunes of the haves and have-nots have long interested social scientists. Real estate investors, especially Main Street owners, are more recent comers to the action, but their interest is well-founded. At the Zell/Lurie Real Estate Center conference in Philadelphia on April 28, David Simon— a guy who should know—shared some particularly relevant and interesting insights about the have and have-not world of today. Simon is chairman and chief executive of retail behemoth Simon Property Group Inc., the largest real estate company in the country. According to Simon, sales per square foot in his Louis Vuitton stores increased significantly year over year, and the high-end consumer is not being affected by gasoline price hikes. The Wal-Mart shopper, conversely, is a “devastated consumer,” Simon said. Devastated consumers, who greatly outnumber Louis Vuitton shoppers, do not bode well for Main Street commercial real estate. For those institutional investors who live east of the Hudson River, many of them in attendance at the spring Zell/Lurie event, the commercial real estate recovery is in full swing. The bulk of large distressed loans have been modified, sold or otherwise put to bed; equity is flooding back into the market; CMBS 2.0 is just around the corner; and deal flow is kicking into high gear as ultra-low interest rates drive prices higher, at least for trophy properties. The financial ninjas in NYC know that this period of optimism cannot last and want to cash in while the money spigot from the Federal Reserve is belching currency like water from Brooklyn fire hydrants on a sweltering summer day. Washington politicians are eager to claim credit for this financial recovery, however transient. Meanwhile, Main Street owners and investors are left to fend for themselves. The phrase: “Let them eat cake” is commonly misattributed to Marie Antoinette, but Jean Jacque Rousseau first wrote those words several years before Antoinette arrived in France. But let’s not split hairs: Misperception by the elite is still misperception. The fact is: There is a stark disconnect between the average investor on Main Street, on one hand, and Wall Street and its hand maidens in Washington on the other. The documentary “The Inside Job” notes that there are five financial services industry lobbyists for every legislator in the U.S. House of Representatives and U.S. Senate. Five pairs of lips whispering in the ears of our lawmakers leave no room for the quavering voice of the average Joe. According to Joel Kotkin, a Presidential Fellow in Urban Futures at Chapman University, New York tends to represent the most-extreme polarization of income in the nation. Expensive “megacities” with finance-driven economies in particular create high costs and less opportunity for middle and working-class families, he says. In 1980 Manhattan ranked 17 among the nation’s counties for social inequity; by 2007 it ranked first, with the top fifth of wage earners collecting 52 times that of the lowest fifth, a disparity roughly equivalent to Namibia, a post-colonial, African nation with a history of apartheid.

Misperception by the elite is still misperception. 24

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The middle classes in America are under siege. They are wrestling with the rising price of essential commodities without commensurate wage increases; they face higher taxes at the federal, state and municipal levels even as services recede. The political theater in Wisconsin over who should make up governments’ budget shortfalls will soon be coming to a municipality near you. High-income earners, who may think themselves above such petty preoccupations, should not breathe a sigh of relief. Anyone with less than $5 million in net worth is in the same lifeboat as the school teacher and the general contractor looking for work. Whether you are a Democrat or a Republican in your political outlook, the financial distress of today makes no political distinctions. Inflation will make paupers of millions of Americans, and only investors who position their portfolios to benefit from this very same inflation will ultimately prosper. Inflation is a tax that silently takes money from the pockets of citizens on fixed incomes and savers reliant on their interest earnings. The “stolen” proceeds go directly to the treasuries of sovereign governments in the form of devalued debt. Uncle Sam is the largest borrower in the world. Inflation needs no press conference or policy statement to complete its task, and its complexity provides great political cover. In the short run, it also adds a couple of points to corporate profits as price increases precede cost increases. But, however much cash that corporations stockpile, the trickle-down effect does not create jobs any more than a politician’s campaign promise. Much of this cash is being used for mergers and acquisitions to quash competition and consolidate market positions in virtually all sectors. This cash is not being used to invest in manufacturing plants or warehouses or new shopping malls. Still, there is a silver lining. Commercial real estate provides one of the best inflation hedges available to investors if two conditions exist simultaneously. The property must be able to increase rents with inflation, and interest-rate risk must be mitigated to avoid getting clobbered if the loan matures in a high-interest-rate environment. Gross rents need not match inflation percentage point for percentage point but must increase sufficiently to drive net-operating income growth faster than inflation’s rise. Additionally, with the right loan—for example, a fully amortizing loan—the financing becomes inflation hedged in and of itself, with the payments in each successive year being made with less valuable dollars. Yet, finding a small- to mid-sized commercial property with the pricing power to increase rents that is also attractive to lenders is no small feat in this market. The recovery in trophy properties will not trickle down to Main Street in short order, giving small investors a feast of their own, despite the emerging euphoria east of the Hudson. If there is one fact we have learned in the last five years, it is that the rules for the smaller real estate investor are not the same as those for the Wall Street elite, and care must be taken not to fall prey to that belief. In the words of Piano Man Billy Joel in his hit, “New York State of Mind:” “It comes down to reality.” Reality is in short supply these days, and therefore has high value to those who seek it. Reality is also the bedrock of sound investment decisions. If you are as bullish as Wall Street wants you to be, your reality is not real. Q


(\HV:LGH2SHQ Ferris Bueller wisdom in the Internet age. By Jesshill E. Love III and Brock R. Lyle

“Nine-tenths of wisdom is being wise in time.” Theodore Roosevelt


hen did the sales pace of men’s underpants become an economic indicator? When former Chairman of the Federal Reserve Alan Greenspan famously referenced a decrease in their sales as a tell-tale sign “that is almost always a prescient, forward impression that here comes trouble.” His claim, first made in the 1970s, was that men who generally replace underwear on a regular schedule will delay this purchase when they are concerned about the economy. Kiplinger Publications, a Washington-based financial-advice company, says that when divorce rates tick up, the economy must be getting better, even if official data don’t show it. When times are tight, couples stick together, even those who don’t like each other that much. With recovery, the marital knot frays. Before the world was measured in kilobytes per second, business people relied on social indicators to gain insight into what tomorrow would bring. Nothing about our technological progress has negated the worth of these observations. Surfers know that if you start paddling when it is fully clear that a wave is going to be a good one, the opportunity has passed. Astute wave riders are monitoring a spot much farther from shore, which experience has taught is a fruitful source of advanced intel. Call it visceral understanding. From it they glean critical clues about upcoming events—a seagull’s particular bobble or a touch of foam atop a wave—which presage an especially powerful set. Similarly, savvy investors and real estate professionals know that by the time a trend is identified in the local press or a quarterly market report, they have already lost first-mover advantage. Business genius lies in identifying trends before everyone else and having confidence to act on your beliefs when others doubt. Warren Buffett famously said he is fearful when others are greedy, but greedy when others are fearful. The classic real estate mantra is location, location, location, but as important in a high-beta market like the Bay Area is timing, timing, timing. President Theodore Roosevelt could have been talking about speculative development when he said, “Ninetenths of wisdom is being wise in time.” Experience shows that good intuition precedes successful development. Based on his experience in the late 1980s, late 1990s and mid- 2000s, Bay Area developer Bob

Lalanne says that mid- and high-rise condo prices take a few years to reach their peak after covering construction costs. But projects take up to two years to build. That means successful developers must commit to construction as early as possible, based on signals— not known facts—that home prices will justify costs on the back end. If they wait until all is crystal clear out front, they will be selling into a falling market on the back. The events of recent years illustrate graphically what a disaster this lack of early wisdom can be. Ned Spieker, who was inducted May 5 into the NAIOP Silicon Valley Developer Hall of Fame, said intuition played a key role in the decision to sell Spieker Properties Inc. to Equity Office Properties

Trust in February 2001 for more than $7 billion. Executives started talking to him about selling the company a year before the deal hit the headlines. Co-Chief Executives John Foster and Craig Vought and he did not predict the dot-com blow up, Spieker says. But they did infer from the world around them that the then-current situation was not sustainable. “Euphoria” had set in, and by definition, euphoria ends, he said.

Many predictors involve increases in discretionary spending. Restaurateurs say that when people start ordering more desserts and appetizers, the economy is turning around. Plastic surgery appointments increase. Venti lattes are back in fashion; golfers return to the courses; and taxi cabs are full of people who, in tougher times, would walk or ride a bike. An Atlanta company recently came up with what it called the Dye Jones Index, which looks at the sales of home hair-dye products, which decrease as the economy improves and more people go to the salon. Most of the predictors specific to real estate are not as offbeat, particularly because purchasing a home usually comes well after buying a latte on the continuum of consumer comfort. Larry Aikins, the broker and owner for Terrace Associates in Redwood City, keeps a close eye on for-rent signs and tracks daily apartment and home listings on Craigslist. Chris Hansen, a first vice president for investments with Marcus & Millichap in Palo Alto, looks at numbers like vacancy and lease rates to see market trends on commercial properties. But he also pays attention to the number of investors who contact him, indicating greater confidence in markets, and calls agents with available listings to find out how long properties are staying on the market. Construction cranes dotting a city’s skyline mean that investors are confident of growth in the coming years. Longer commute times mean more people are traveling to work each day. An increase in out-of-state license plates indicates an influx of employees from other states. An uptick in the number of temporary employees shows that businesses may be looking to expand. Long before laptops and smart phones were a glimmer in the vacuum tube of history, smart investors learned to feel a coming recovery from the sum of their everyday observations, of people and the world around them. Those who fail to heed those, often early clues will keep wondering why the big waves pass them by. In the words of the 1980s movie character Ferris Bueller, “Life moves pretty fast. If you don’t stop and look around once in a while, you could miss it.” Q Jesshill Love can be reached at or 650-780-1611. Brock Lyle can be reached at or 650-780-1647.

J U N E 201 1 25


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’m a recovering golfer. In my early teens I was hooked. Back in those days, we had these things called books, and one Christmas my dad gave me “Golf My Way” by Jack Nicklaus. I still remember a core concept of Jack’s philosophy regarding training: Practice with a purpose. The famous golfer alluded to the guy at the driving range who mindlessly works his way through a bucket of balls—pausing every so often in admiration when he hits a really pretty one. But, Nicklaus asked: Did the shot hit an intended target? Even during practice, every swing must have an objective, he said. If not, you are not honing a skill. You are just hitting balls. Real estate professionals must practice the same discipline. Our actions must be purposeful if we want them to help us reach our goals. An industry icon once told me, “The home is 70 percent sold before it ever hits the market.” That is so true. What we do in preparation often can be the deciding factor in our success, starting with price determination. In today’s market, our listings sell based in large measure on how accurately we price them. After the pricing is settled —an especially rigorous dance in today’s market—we coordinate the hauling of clutter, upgrade landscaping, paint and re-carpet, conduct handyman repairs, stage, handle tenant issues, conduct a photo shoot and create a property Website and print ads—a complete laundry list of crucial tasks. On the surface, these are geared toward prepping a home for sale. But in reality, they are an opportunity for us to prove our competency to our client, establish trust and build rapport. When your painters show up an hour late, or your handyman tracks dirt onto the carpet, it mainly reflects poorly on the Realtor. The client will look at your team as an extension of you. Sellers need to trust us, and this trust must be built early on. They will have a much harder time swallowing advice down the road from those who have proven unreliable. Long gone are the days when an agent could stick a sign on a front lawn and wait for multiple offers to rain down. Today, we must be hyper mindful of where we direct both our energy and our budget. Where are your marketing dollars going? Are you marketing yourself or are you marketing the home? With less than 3 percent of buyers finding their new home through newspapers and magazines, does it make sense to spend money with these traditional outlets?

A basic open house ad costs $125 per week. If a listing takes two months to get an offer, you’ve thrown $1,000 towards something relatively worthless. Is that spending with a purpose? When marketing works, it produces traffic for your open house. I recently heard an industry professional ask, “What is the purpose of an open house?” Then, answering his own question, he replied, “To meet new buyers.” I don’t think so. The goal of an open house is to sell the home. Meeting new buyers can be a wonderful secondary benefit of the open house, but the purpose is and should be to sell. If your head is in that game, you know that an open home is about time on target. Offering wine and cheese can persuade people to stay at least ten to fifteen minutes longer. I bake chocolate-chip cookies during the open house. Some buyers love it; a rare few will utter a quip under their breath. But you know what? People still eat the cookies, still ask more questions and stay longer. That smell works on their olfactory system— strongly tied to emotion and memory. Chocolate just also happens to cause your body to release the neuro-transmitter phenylethylamine—the same chemical that is released when you fall in love. How convenient! Purpose. Where you stand at an open house matters, too. You may inadvertently be blocking access to the kitchen or another part of a room. And what does your body language say? What about your buyers’ body language? Body language works in reciprocation, too. If you change someone’s body language, you can change how he feels. I’ve had occasions where the buyers I was talking with had their arms crossed defensively across their chests. By handing them a piece of literature (such as a recent neighborhood sale that provides a price perspective on your offering), they had to uncross their arms to accept the item. With their open arms came a more open mind. Another purpose. Invariably, not all of our listings sell. There is a story behind each one. What is important is that we try to learn from each one. In deconstructing the sales campaign, we will often see in hindsight where we could have done better. Taking these lessons forward will allow us to perform, like a great golf swing, with the utmost efficiency of movement. Q Rob La Eace can be reached at 415.290.7228 or

Even during practice, every swing must have an objective, Nicklaus said. If not, you are not honing a skill. You are just hitting balls.


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Lease Size Sq. Ft.

Name of Tenant/Rep (Brokerage)

Name of Landlord/Rep (Brokerage)

Notes (ie. Lease type and/or lease longevity)

31260 Wiegman Rd



Sysco Guest Supply, LLC/CB Richard Ellis

Hayward Industrial Capital, LLC/ Greig Lagomarsino, SIOR, Rick Keely & Kevin Hatcher (Colliers International Oakland)

Renewal, 60M

Sunshine Business Park, 851 81st Ave



R & G Hayward LLC/Gary Fracchia & Brian Collins (Cassidy Turley BT Commercial Oakland)

Amerco Real Estate Co./Brian Collins & Gary Fracchia (Cassidy Turley BT Commercial Oakland)

60M Term, Industrial Lease Transaction

4671 Las Positas Rd



SCP Distributors LLC/UGL Equis

Arroyo/Livermore Business Park/Michael Lloyd, SIOR (Colliers International Pleasanton)

Light Industrial

Livermore Gateway Bus Park West, 261-299 Vasco Rd S



Kingway Construction Supplies, Inc/ Eddie Shuai (Cassidy Turley BT Oakland)

Ellis Partners LLC, SF/Direct

Renewal, 67M Term, Warehouse Lease Transaction

271 S Vasco Rd



Kingway Construction Supplies, LLC/ Cassidy Turley BT Commercial Pleasanton

Vasco Ventures/Ned Wood & Mark Triska, SIOR (Colliers International Pleasanton

Warehouse/Distribution Renewal

23674 Foley, 23674 Foley St



L.A. Hardwood Flooring, Inc./Andrew Briner (Cushman & Wakefield Oakland)

Wen Pin Lee/Chris Van Keulen & Sam Higgins (Cassidy Turley BT Commercial Oakland)

63M Term, Industrial Lease Transaction

1150 Stealth St



Solar Universe/CB Richard Ellis Pleasanton

Stealth Street Partners/Michael Lloyd, SIOR (Colliers International Pleasanton)

R&D Flex

Coast Crane, 14951 Catalina St

San Leandro


Coast Crane Company/Kate Webster Cassidy Turley BT Oakland)

SPIRIT OF 83/Kelly Dossa (Reynolds & Brown)

Renewal, 33M Term, Industrial Lease Transaction

Sunshine Business Park, 851 81st Ave



HS Trading, Inc/Dan Rubenstein (Rubenstein Capital)

Amerco Real Estate Co./Brian Collins & Gary Fracchia (Cassidy Turley BT Commercial Oakland)

60M Term, Industrial Lease Transaction

7679-7693 Longard Rd



iGate Corporation/Ned Wood & Mark Triska, SIOR (Colliers International Pleasanton)

Reynolds & Brown/Mike Carrigg & Michael Donnelly (Colliers International Pleasanton)

Light Industrial

1670 Delta Ct



MH Union Corp./Lee & Associates

McMorgan Institutional Real Estate Fund, LLC/ Greig Lagomarsino, SIOR & Rick Keely (Colliers International Oakland)

New lease, 37M

Performance Reps, 445 Lesser St



Sunday Marble & Granite/Kate Webster (Cassidy Turley BT Commercial Oakland)

Chris Kosmos/Greig Lagomarsino & Mark Maguire (Colliers International Oakland)

38.5M Term, Industrial Lease Transaction

R M C Lonestar, 808 Gilman St



Bear Engineering/Peter McNally (McNally Realty Advisors)

LONE STAR CALIF/Brian T. McCarthy & Bill Sawyer (Cassidy Turley BT Commercial Palo Alto)

20M Term, Industrial Lease Transaction

3678 Enterprise Ave



McCully Industries, Inc./Lee & Associates

Parker One,LLC; SB Hayward, LLC/Kevin Hatcher, Mark Maguire & Greig Lagomarsino, SIOR (Colliers International Oakland)

New lease, 38M

41316 Christy St



Impax Laboratories/John Steinbuch, SIOR (Colliers International Pleasanton)

SDC Fremont Business Center Inc/ John Steinbuch, SIOR (Colliers International Pleasanton) & Cornish & Carey Hayward

R&D Renewal

7922 Dublin Blvd., 7922 Dublin Blvd



American Furniture

Gilroy Theater Co INC/John Schaefer & Annie Jabuka (Terranomics)

50M Term, Retail Lease Transaction

6761 Sierra Ct



Northstar Emergency Services/ Lee & Associates Pleasanton

WCV Commercial Properties/Mike Carrigg & Michael Lloyd, SIOR (Colliers International Pleasanton)


Eastmont Town Center, 7200 Bancroft Ave



Telecare Corporation/Niels Von Doepp & Tony Lucchesi (Cassidy Turley BT Commercial Santa Rosa)

SKB/Grant Jones & Alex Petalas (CB Richard Ellis Oakland)

Renewal, 60M Term, Retail Lease Transaction

Sares Sabre St, 1942-1958 Sabre St



Dalo International/Chris Van Keulen (Cassidy Turley BT Oakland)

Distribution 1 Patent /Joe Yamin & Greig Lagomarsino (Colliers Internationa Oakland)

65M Term, Warehouse Lease Transaction

1944 Sabre St



Dalo International/Cassidy Turley BT Commercial

Falcon Real Estate/Joe Yamin & Greig Lagomarsino, SIOR (Colliers International Oakland)

New lease, 65M

1999 Harrison St



Med Assets, Inc./CRESA Partners

Beacon Capital Partners/Ken Meyersieck & Trent Holsman (Colliers International Oakland)

Consolidation, 89M

Livermore Airway Bus Park, 288-336 Lindbergh Ave



Your Safety Place Inc./Matt Manos & Mark Dowling (Cassidy Turley BT Commercial Pleasanton)

Livermore Airway Business Park/Jennifer Walker (Terrence J. Rose, Inc.)

26M Term, Warehouse Lease Transaction

5880 W Las Positas Blvd



Aplegen Inc/Ian Thomas (Colliers International Pleasanton)

Chamberlin Associates/Chamberlin Associates Pleasanton


23759 Foley St



Normâ&#x20AC;&#x2122;s Refrigeration/Grubb & Ellis

Christensen Holdings/Joe Yamin & Sean Sabarese (Colliers International Oakland)

New lease, 25M

6761 Sierra Ct



United Commtel Inc/Cornish & Carey NKF Pleasanton

WCV Commercial Properties/Mike Carrigg & Michael Lloyd, SIOR (Colliers International Pleasanton)


6759 Sierra Ct



RREEF Management

WCV Commercial Properties/Mike Carrigg & Michael Lloyd, SIOR (Colliers International Pleasanton)

Office/Flex Renewal

360 22nd St



Borrego Solar/Scott Greenwood & Trent Holsman (Colliers International Oakland)

Pacific Real Estate Partners/ Cushman & Wakefield

New lease, 61M

740 Julie Ann Way



Weali Materials Corp./Lee & Associates

McCosker Equipment Corporation/David Henderson (Colliers International Oakland)

New lease, 37M

Address Alameda County

J U N E 201 1 27



Lease Size Sq. Ft.

Name of Tenant/Rep (Brokerage)

Name of Landlord/Rep (Brokerage)

Notes (ie. Lease type and/or lease longevity)

San Ramon


Accela, Inc./Josh Nelson (Cushman Wakefield)

Sunset Development Company


Sunset Development Company


Contra Costa County 2633 Camino Ramon 2633 Camino Ramon

San Ramon


Bechtel Communications/Troy MacDonald (CB Richard Ellis)

Bishop Ranch 6 (M & N), 2430-2440 Camino Ramon

San Ramon


Aerotek, Inc./Michael Copeland (Cassidy Turley BT Pleasanton)

Sunset Development Company/Rolf Jourgensen (Sunset Development Company)

66M Term, Office Lease Transaction

9 Commercial Blvd



Raptor Pharmaceutical, Inc./Matthew Storms (Keegan & Coppin Co., Inc.)

Dennis Gilardi/Matthew Storms (Keegan & Coppin Co., Inc.)

Office Full Service Lease Extension/Expansion

900 Larkspur Landing



Park West Asset Management LLC/ Nathan Ballard (Keegan & Coppin Co., Inc.)

Equity Office/Rob Elia (Equity Office)

Office Full Service Lease

The Promenade @ Sacramento GW, Truxel Rd @ I-80



Bed Bath & Beyond/Don Krieger (Terranomics)

ING Clarion Partners

120M Term, Retail Lease Transaction

Freeport Plaza Shopping Ctr, 4910 Freeport Blvd



Dollar Tree Stores, Inc./Bob Dong & Jared Dong (Terranomics)

Saca Development/Ken Noack (The Grubb & Ellis Company Sacramento)

120M Term, Retail Lease Transaction

One Maritime Plaza

San Francisco


Farallon Capital Management/The CAC Group

PPF FF One Maritime Plaza, LP/Phil Tippett (CB Richard Ellis)

New Lease

One Maritime Plaza

San Francisco


Hall Capital Partners

PPF FF One Maritime Plaza, LP (CBRE)

New Lease

One Maritime Plaza

San Francisco


Hellman & Friedman

PPF FF One Maritime Plaza, LP/Phil Tippett (CB Richard Ellis)

New Lease

One Maritime Plaza

San Francisco


Pisces, Inc.

PPF FF One Maritime Plaza, LP/Phil Tippett (CB Richard Ellis)

New Lease

One Maritime Plaza

San Francisco


Watershed Asset Management

PPF FF One Maritime Plaza, LP/Phil Tippett (CB Richard Ellis)

New Lease

185 Berry St

San Francisco


Verisign/John Lewerenz (Cushman & Wakefield)

McCarthy Cook & Co./Richard Hayes (McCarthy Cook)

5 Year Lease

2727 Mariposa, 2727 Mariposa St

San Francisco


Bay Area Video Coalition/Frank Fudem (Cassidy Turley BT San Francisco)

Mariposa Management Co./Bruce Wilson (The CAC Group San Francisco)

120M Term, Office Lease Transaction

150 California St

San Francisco


Blackstone Technologies

Morgan Stanley/Phil Tippett (CB Richard Ellis)

New Lease, 60M

National Industries Park, 2200-2285 Palou Ave

San Francisco


F.A. Bartlett Tree Expert/Scott Mason (Cassidy Turley BT Burlingame)

National Industries City Trust/Scott Mason (Cassidy Turley BT Commercial Burlingame)

Renewal, 60M Term, Warehouse Lease Transaction

Pacific Shores Center, 1700 Seaport Blvd - Bldg 5

Redwood City


Ingenuity Systems/Cherie Wittry (Cornish & Carey Commercial Newmark Knight Frank Palo Alto)

Starwood Capital Group/Ben Paul & Mike Moran (Cassidy Turley BT Commercial Burlingame)

Renewal, 36M Term, Office Lease Transaction

1850 Gateway Dr

San Mateo


Sprint/Beswick (CB Richard Ellis)

Legacy Partners

Renewal, 38M Renewal, 36M Term, R&D Lease Transaction

Marin County

Sacramento County

San Francisco County

San Mateo County

Willow Park, 998 Hamilton Ave

Menlo Park


Invisage Technologies, Inc.

AMB Property Corporation/Randy Arrillaga (Cassidy Turley BT Commercial Palo Alto)

Serramonte Business Center, 455 Hickey Blvd

Daly City


Farmers Insurance Exchange/UGL Equis

Nearon Enterprises, LLC/John Barsocchini & William Syme (Cassidy Turley BT Commercial Burlingame)

Renewal, 68M Term, Office Lease Transaction

Waters Technology Park, 2 Waters Park Dr

San Mateo


NextLabs, Inc/Mark Moser (Cresa Partners Palo Alto)

TA Associates Realty/Clarke Funkhouser & Marc Pope (Cassidy Turley BT Burlingame)

36M Term, Office Lease Transaction

30963 - 30971 San Benito St



Roofmaster Inc

TIAA-CREF/Dowd(CB Richard Ellis)

Renewal, 48M

Oyster Pt. Business Park, 384 Oyster Point Blvd

S San Francisco


Vistagen Theapeutics/CB Richard Ellis Foster City

Oyster Point LLC/Randy Keller & Dave Lardner (Cassidy Turley BT Commercial Burlingame)

Renewal, 24M Term, Warehouse Lease Transaction

Pacific Shores Center, 1600 Seaport Blvd - Bldg 6

Redwood City


LEAPFILE, Inc./Kevin Waldman & Brian McClenahan (Cassidy Turley BT Commercial Burlingame)

Starwood Capital Group/Mike Moran & Ben Paul (Cassidy Turley BT Commercial Burlingame)

26M Term, Office Lease Transaction

2899-2935 Mead, 2899-2935 Mead Ave

Santa Clara


K 1 Speed, Inc./CB Richard Ellis San Jose

Orchard Properties/Jim Kovaleski & Craig Kovaleski (Cassidy Turley BT Commercial San Jose)

84M Term, Warehouse Lease Transaction

990 Benecia Ave



XP Power LLC/Ben Stern (Cornish Carey Commerical Newmark Knight Frank)

CSHV Benecia Macara/ Friedrich & Sutherland (CB Richard Ellis)

New lease, 81M

535 Oakmead, 535 Oakmead Pkwy



Palo Alto Medical Foundation/Mike Connor & Mike Courson (Cassidy Turley BT Commercial Palo Alto)

Orchard Partners/Mark Schmidt & Jeff Houston (CB Richard Ellis San Jose)

90M Term, R&D Lease Transaction

630-646 San Antonio Rd. S., 630-660 San Antonio Rd. S.

Mountain View


Sunflower Market/James Chung & Patrick McGaughey (Terranomics)

World Plaza Associates

120M Term, Retail Lease Transaction

3400 Bayshore Rd, W., 3400 Bayshore Rd, W.

Palo Alto


The Girls Middle School/Annie Connor & Mike Connor (Cassidy Turley BT Commercial Palo Alto)

Geordie McKee (Renault & Handley)

120M Term, R&D Lease Transaction

1755 McCarthy Blvd



Zytek Corporation/GVA Kidder Matthews

DeGuine Ventures/Taylor & Fukuda (CB Richard Ellis)

New Lease, 60M

Santa Clara County


J U N E 201 1



Lease Size Sq. Ft.

Name of Tenant/Rep (Brokerage)

Name of Landlord/Rep (Brokerage)

Notes (ie. Lease type and/or lease longevity)

880 W Maude Ave



Ruckus Wirelesss Inc/Jim Abarta (Colliers International Pleasanton)

Silicon Valley CA-I, LLC/CB Richard Ellis

170 Barnard Ave

San Jose


Rizo Lopez Foods/Friedrich (Cassidy Turley BT Commerical)

CSHV Benecia Macara/ Sutherland & Friedrich (CB Richard Ellis)

Renewal, 60M

651 River Oaks Pkwy

San Jose


LEDEngin Inc.

Montague Oaks Associates Phase I & II/ Taylor & Woodworth (CB Richard Ellis)

New Lease, 50M

Lafayette Industrial Park, 2300-2318 Calle De Luna

Santa Clara


Gateway Precision, Inc./Derik Benson & Tom Snider (Cassidy Turley BT San Jose)

Lafayette Business Partners, LLC/Don Lonsinger (CB Richard Ellis San Jose)

36M Term, Industrial Lease Transaction

The Concourse III, 1731 Technology Dr

San Jose


First Alarm Security & Patrol, Inc./ Kevin Sweatt (Cassidy Turley BT San Jose)

Equity Office Properties/Katherine Roxborough, LEED AP & Michael Rosendin, SIOR, CCIM (Colliers International San Jose)

60M Term, Office Lease Transaction

Mountain View Business Pk, 1225-1245 Pear Ave

Mountain View


TVU Networks Corp./Kalil Jenab & Ron Miller (Cassidy Turley BT Commercial Palo Alto)

Nearon Enterprises, LLC/Kevin Cunningham & Tod Spieker (Cornish & Carey Commercial Newmark Knight Frank Palo Alto)

42M Term, R&D Lease Transaction

1440 N. McDowell Blvd



Cross Check, Inc./Joel Jaman (Keegan & Coppin Co., Inc.)

Cornerstone Properties

Office Lease

Expressway Marketplace, 575-605 Rohnert Park Exwy

Rohnert Park


Big Lots

Doerken Properties, Inc./Jennifer Hibbitts & John Schaefer (Terranomics)

120M Term, Retail Lease Transaction

2235 Mercury Wy

Santa Rosa


New York Life/Sean Heaton (Cushman & Wakefield)

Mercury Way LLC/Shawn Johnson & Jeffrey Wilmore (Keegan & Coppin Co., Inc.)

Office Full Service Lease Renewal

3161 Coffey Ln

Santa Rosa


Celebration: Love Your Neighbor, Inc./ Vicki Greenbaum (Northbay Leasing & Sales)

Digital Solutions/Annette Cooper (Keegan & Coppin Co., Inc.)

Industrial Gross Lease

3725 Westwind Blvd

Santa Rosa


GSA/Federal Bureau of Investigation/ Dave Peterson & Jeffrey Wilmore (Keegan & Coppin Co., Inc.)

Westwind Business Park/Dave Peterson & Jeffrey Wilmore (Keegan & Coppin Co., Inc.)

Office Full Service Lease

3510 Unocal Pl

Santa Rosa


Redwood Health Services, Inc./Joel Jaman (Keegan & Coppin Co., Inc.)

Sleepy Hollow Management Co.

Office Full Service Lease

101 Golf Course Dr, 101 Golf Course Dr

Rohnert Park


State Farm Mutual Automobile Insurance/ Cushman & Wakefield

Red Lion Associates/Richard Henderson (Cassidy Turley BT Comerrcial Santa Rosa)

60M Term, Office Lease Transaction

Sonoma County


Property Size



Sale Price

Price/ Sq. Ft.

Project Type


24 Happy Valley Rd



Bluestone Foundation

Wells Fargo Bank NA



Office Class C

Buyer: Alliance Bay Realty; Seller: Ned Wood & Mark Triska, SIOR (Colliers International Pleasanton)

1640 E 12th St



Sam & Doris Chan

Community Commerce Bank



Light Industrial

Buyer: Urban Space; Seller: Rich Martini & Joe Yamin (Colliers International Walnut Creek)

2150-2160 Elkins Wy



Medine Enterprises

Rabobank NA



Light Industrial

Bill Hillis, Curt Scheve & Slocum (Colliers International Walnut Creek)

Willow Pass Business Pk



Pacific Utilities

Thomas/Denova LLC



Office Condo

Bill Hillis & Curt Scheve (Colliers International Walnut Creek)



Siemic, Inc.

ACC, Inc.




Cassidy Turley & CB Richard Ellis; Prosser & Whitstone



Carmax Auto Super Stores West Coast Inc

Napa Associates LLC II & SRS Real Estate Inc



Auto Dealership

Buyer: Bill Davini (Colliers International Walnut Creek) Seller: CB Richard Ellis

Santa Rosa


Pacific West Communities

West America Bank



Residential Development Land

Jeffrey Wilmore & Ken Bizzell (Keegan & Coppin Co., Inc.)

Acrew Management LLC



Residential Development Land

Buyer: Diandra Grohman (Wine Country Group Better Homes & Gardens); Seller: Ken O’Farrell & Bill Faherty (Keegan & Coppin Co., Inc.)

Address Alameda County

Contra Costa County

Santa Clara County 775 Montague Expwy

Solano County 2901-2955 Auto Mall Pkwy

Sonoma County 3330-3336 Santa Rosa Ave

6561 Highway 128



Schuster-Grohman Family Living Trust

1372 N. McDowell Blvd. & 5401 Old Redwood Hwy



Cornerstone Properties SA, LLC

CSFB 2002-CKS4 Redwood Way




Seller: Tony Sarno (Keegan & Coppin Co., Inc.) & Kathy Kelleher (CB Richard Ellis)

1331 Commerce St



The Erika & Michael Mountanos Trust

3M Company




Buyer: John Lee Lazaro (Coldwell Banker Mendo Realty); Seller: Shawn Johnson & James Manley (Keegan & Coppin Co., Inc.

1425 N. McDowell Blvd



Kimbro Properties, LLC

CSFB 2002-CKS4 Redwood Way




Buyer: Russ Mayer (Keegan & Coppin Co., Inc.); Seller: Tony Sarno (Keegan & Coppin Co., Inc.)

J U N E 201 1 29

6(17to us

(continued from page 6)

9DOOH\/DZ)LUP([SDQGV Silicon Valleyâ&#x20AC;&#x2122;s Hopkins & Carley has signed a lease for more than 9,500 square feet at 200 Page Mill Road in Palo Altoâ&#x20AC;&#x2122;s Stanford Research Park. The new space can accommodate expansion and includes prominent signage along Page Mill. Hopkins opened a downtown Palo Alto office in 2010 after the addition of attorneys from Wilson Sonsini Goodrich & Rosatiâ&#x20AC;&#x2122;s wealth-management group. Over the past year, the firm has continued to grow. Commercial real estate brokers Katherine Roxborough, Gary Nichols, Paul McManus and John McMahon of Colliers International represented Hopkins in the transaction.

&RQWUDFWRU%HJLQV00%RQG3URJUDPDW3HQLQVXOD 6FKRRO'LVWULFW Blach Construction has been selected to perform up to $60 million in new construction and modernization projects throughout the Belmont Redwood Shores school district. The program is funded by ballot measures I and N, which were approved by voters in November 2010. The district has seven schools (kindergarten through eighth grade) and serves the cities of Belmont, Redwood City, San Carlos and San Mateo. The projects focus primarily on growth and modernization, including updating classrooms, multipurpose buildings and restrooms, improving streetscapes and security, and new construction on select campuses.

862IILFH9DFDQF\&RQWLQXHV'HFOLQH'ULYHQE\(QHUJ\DQG +LJK7HFK6HFWRUV Commercial real estate is in a slow but steady recovery, according to Jones Lang LaSalleâ&#x20AC;&#x2122;s First Quarter 2011 United States Office Outlook. The market recorded its fourth consecutive quarter of occupancy gains with 4.5 million square feet of space absorbed in the first quarter of 2011. Markets in the energy and high-tech sectors continue to lead the recovery with Boston, Houston, Seattle and Silicon Valley recording the most activity during first three months of the year. The gain is especially significant as the demand levels and occupancy gains in the first quarter in the suburbs around the country recorded levels as high as in the central business districts, a sign that a full throttle recovery is underway.

/RDQ6DOHRQ'H+DUR&ORVHV Jones Lang LaSalle has completed the sale of the $28.7 million â&#x20AC;&#x153;Aâ&#x20AC;? note and $1.5 million â&#x20AC;&#x153;Bâ&#x20AC;? note on 444 De Haro St., an institutional-quality office building located in San Franciscoâ&#x20AC;&#x2122;s South of Market. Deutsche Bank purchased the debt. The notes are secured by the fee-simple interest in the property, which includes 444 De Haro, a two-story not quite 133,000-square-foot office building, and 488 De Haro, a three-story, nearly 13,000-square-foot building. The notes, which have an interest rate of LIBOR + 1.40 percent on an interest-only basis, are current and mature on Aug. 9.

1DSD0HGLFDO2IILFH%XLOGLQJV6HOO Seavest Inc., a New York based investment manager that specializes in health care properties, has acquired Napaâ&#x20AC;&#x2122;s Trancas Medical Center, two lenderowned medical office buildings totaling not quite 62,500 square feet. The sales price of $11.2 million represents $179 a square foot. John Smelter, senior director of Marcus & Millichapâ&#x20AC;&#x2122;s Healthcare Real Estate Group, represented the buyer. â&#x20AC;&#x153;This was a unique opportunity to acquire a Class B property on the campus of a very strong hospital system,â&#x20AC;? Smelter said. â&#x20AC;&#x153;The new owner plans to renovate the property, which will allow for higher occupancies in the future.â&#x20AC;? Seavest has partnered with San Francisco-based SKS Investments to oversee property management, leasing and renovation of the property, he said. Located at 1100 Trancas St., the property was approximately 80 percent occupied at closing and is located next to Queen of the Valley Medical Center, a 192-bed full-service diagnostic and therapeutic medical facility. Queen of the Valley is a major tenant in the project. Constructed in 1980, the property is situated on approximately three acres and includes 246 parking spaces.

%XLOGHU%XLOGV%RDUG Novato-based West Bay Builders has appointed two new directors to its board to assist in expanding its government construction and heavy civil work. Richard â&#x20AC;&#x153;Dickâ&#x20AC;? Farnsworth, a surety business veteran and former senior vice president of surety operations at Firemanâ&#x20AC;&#x2122;s Fund Insurance Co., and Gary LaBonte, formerly Bay Area Rapid Transitâ&#x20AC;&#x2122;s executive manager for development, will join West Bay Buildersâ&#x20AC;&#x2122; management team of Paul Thompson, president; Joseph Haas, vice president; and Vicki Fowler, controller.

$UFKLWHFW¡V:RUN([SDQGLQJ$FURVV&KLQD Heller Manus Architectsâ&#x20AC;&#x2122; sustainable-based design projects are getting a nod of approval across China.


J U N E 201 1

Among its achievements, the firm has won the design competition for Xiangyun Island International Cruise Terminal in Tangshan Bay and landed large architectural design projects in Shanghai and Guangzhou. In addition, Jeffrey Heller, president of the firm, has been appointed to the Green Growth Leaders Council in recognition of the firmâ&#x20AC;&#x2122;s sustainable work in China and the Bay Area.

5HSRUW1HZ/HDVH$FFRXQWLQJ(IIHFWV7R9DU\&RQVLGHUDEO\ Changes to lease-accounting rules proposed by the Financial Accounting Standards Board will significantly affect Bay Area companies, particularly those in the retail, distribution, service and technology sectors, according to new research from brokerage Grubb & Ellis Inc. Within each industry, some companies will be affected more than others. In â&#x20AC;&#x153;Impact of Proposed Lease Accounting: San Francisco, Bay Area,â&#x20AC;? Grubb finds that more than $30 billion in lease liabilities will likely be placed on corporationsâ&#x20AC;&#x2122; balance sheets. Nine Bay Area companies could see more than $1 billion apiece. Retailing and distribution companies are expected to be affected the most. Service companies will also see significant impact. Technology companies will be impacted less but still significantly. Currently, an operating lease does not appear on the balance sheet, and rent payments are treated as operating expenses, only appearing on the income statement. Under the new accounting standards planned by FASB, most leases will be treated as a form of financing and will appear on a lesseeâ&#x20AC;&#x2122;s balance sheet.

86&RPPLWPHQWWR,QIUDVWUXFWXUH/DJV:RUOG¡V The Urban Land Institute and Ernst & Young have released the latest results of their annual joint global infrastructure survey, and the findings are not good for the United States: The lack of an ongoing, sustainable and strategic commitment to rebuild and expand its infrastructure will begin to seriously weaken American competitiveness in the coming years, said Howard Roth, leader of Ernst & Youngâ&#x20AC;&#x2122;s Global Real Estate practice. â&#x20AC;&#x153;The leadership in the U.S. needs to neutralize politics by adopting a â&#x20AC;&#x2DC;Race To The Topâ&#x20AC;&#x2122; model for determining priorities and funding projects,â&#x20AC;? said Roth. One priority should be to concentrate on expanding global market gateway cities like New York, San Francisco, Los Angeles, Washington, D.C., Chicago, Miami, Atlanta, Houston and Dallas, he said. Roth also believes the nation should create national as well as state-sponsored infrastructure banks to funnel capital into strategic programs.

1RUWK6DQ-RVH%XLOGLQJ6HOOVIRUD)RRW Cannae Partners and J.P. Morgan Asset Management have acquired a 100,375-square-foot Class A research and development building in North San Jose for $9.95 million. The seller was Micron Technology Inc., a semiconductor company that has owned the property since mid-1999. Micron agreed to twoyear lease-back but does not occupy the building and does not plan to. Erik Hallgrimson and Eric Fox with Cassidy Turley CPS and Craig Fordyce of Colliers International represented the buyer. The three have been retained as leasing agents. The two-story freestanding building is located at 2125 Oâ&#x20AC;&#x2122;Nel Drive near the San Jose international airport.

$SDUWPHQWV1HDU/DNH0HUULWW6HOO Perkins Street Partners LLC has purchased a 35-unit Adams Point property at 314 Perkins Street, a block and a half from Oaklandâ&#x20AC;&#x2122;s Lake Merritt. The price was $133,571 a unit and $142 a square foot. The capitalization rate, a measure of yield, was 6.2 percent. Joel Kelly and Kris Lamont of Bay Apartment Advisors represented the buyer. The purchase validates the demand for quality buildings in Adams Point, an area on the north side of Lake Merritt directly adjacent to downtown Oaklandâ&#x20AC;&#x2122;s Uptown District and the Grand Lake district, the brokers said. Kevin Turner of Marcus & Millichap represented the seller, 314 Perkins LLC.

5HVLGHQWLDO%URNHUV2SHQ/RFDWLRQLQ0DULQ San Francisco-based Zephyr Real Estate has crossed the Golden Gate bridge to open a branch in Corte Madera at 201 Corte Madera Ave.

6DQWD&ODUD&RXQW\+RXVLQJ$IIRUGDELOLW\+LWV'HFDGH+LJK Home ownership was within reach for more people in the yearâ&#x20AC;&#x2122;s first quarter than it has been for the last decade, matching levels seen in 2009, according to the California Association of Realtors. The percentage of households that could afford to buy an entry-level home stood at 62 percent in the first quarter, higher than the 57 percent of the previous quarter, and more than double the 25 percent for the second and third quarters of 2007, the low since 2000. The minimum household income needed to purchase an entry-level home priced at $463,250 in the first quarter was $71,120, assuming a 10 percent down payment and one-year adjustable interest rates. The monthly payment including taxes and insurance was $2,370.

6DQ-RVH:LQV6XVWDLQDEOH&RPPXQLW\$ZDUG San Jose, Raleigh, N.C., and Greensburg, Kan., have earned Sustainable Community Awards, besting 90 towns and cities from 40 states that applied. San Jose won in the category of large community for its adoption of Green Vision, a 10-point plan for innovation and environmental responsibility. Launched in 2007, the Siemens Corp. Sustainable Community Awards recognize public-private coalitions for taking on the challenge of sustainable development. Siemens and the U.S. Chamber of Commerce Business Civic Leadership Center recognize communities and coalitions that are developing solutions for green and economic sustainability.

%XLOGLQJ2ZQHU([SDQGV/(('3RUWIROLR One Bush Street, a Class A office building in San Francisco owned by Tishman Speyer, has been awarded LEED Platinum designation by the U.S. Green Building Council. In addition, LEED Gold designations have been earned by two other Tishman Speyer properties—595 Market St. in San Francisco and 520 Pike Tower in Seattle. One Bush Street is a 19-story, 290,000-square foot building in San Francisco’s financial district. It was constructed in 1959 and renovated in 1990. 595 Market Street is a 30-story Class A building also located in the financial district.

6LOLFRQ9DOOH\0XOWLIDPLO\&RPSOH[6HOOVIRU 00 Essex Property Trust Inc. has acquired the Family Tree Apartments, a 121-unit complex in Santa Clara at 1000 Kiely Blvd. The sales price represents $259,504 a unit and $245 a square foot. Marcus & Millichap Real Estate Investment Services’ Theodore Kokernak, a senior vice president in the firm’s Palo Alto office, represented the seller, a local family trust.

2DNODQG7UDQVLW9LOODJH&KXJV$KHDG Redevelopment of nearly eight acres adjacent to Oakland’s MacArthur BART station has begun. The first-phase of the MacArthur Transit Village at 544 W. MacArthur Blvd. includes demolition of existing motel properties along with construction of a 478-space parking garage and site infrastructure. Construction of affordable apartments is to follow in 2012. Ultimately, the redevelopment is to include 516 market-rate homes, 108 affordable homes, 42,500 square feet of commercial and retail space and 5,000 square feet of space for community use. The master-plan architect is McLarand Vasquez Emsiek & Partners. The parking structure architect is Lowney Architecture and International Parking Design Inc.

,QGXVWULDO6DOH&RPSOHWHGLQ)DLUILHOG CB Richard Ellis completed the sale of a 607,000 industrial building in Fairfield to US Industrial REIT III, an affiliate of USAA Real Estate Company. The property was owned by Lincoln Property Group and the sale amount was not disclosed. The building, which is located at 5195 Fermi Drive, is 100 percent NNN leased through June 2017 to Owens-Brockway, an industrial packaging manufacturer. CBRE’s Darla Longo, Barbara Emmons, Steve Hermann, Bob Gilley, Joe Moriarty and Rebecca Perlmutter advised the seller in the transaction, along with local market experts Doug Norton and Conor Famulener.

1RUWKHUQ&DOLIRUQLD5DLVHV5HFRUG%UHDNLQJ6XPIRU &DQFHU5HVHDUFK Hundreds of real estate and construction industry leaders and City of Hope supporters gathered May 5 to honor BRE Properties Inc. President and Chief Executive Constance Moore with The Spirit of Life Award for her leadership and philanthropic contributions. Hosted by City of Hope’s Northern California Real Estate & Construction Council, silent and live auctions raised $644,000 for research, treatment and education for cancer and other life-threatening diseases, the highest amount raised by the group since its inception in 1986. In its 25-year history, the Real Estate & Construction Council has raised more than $4 million for research and treatment programs at City of Hope.

2DNODQG5HQWDO&RPPXQLW\6HOOV The Altezza, a 33-unit rented luxury condominium building at 6465 San Pablo Ave. in Oakland, has sold for $8.5 million. The sale was a disposition assignment on behalf of the bankruptcy estate of Cascade Acceptance Corp. The buyer is Klingbeil Capital Management. CBRE’s Todd Vitzthum and Richard Thompson represented Tim Hoffman, the bankruptcy trustee.

&UHVD3DUWQHUV)RUPV*OREDO5HDO(VWDWH$OOLDQFHZLWK6DYLOOV CresaPartners LLC has formed a strategic alliance with international real estate advisor Savills, an arrangement that will allow CresaPartners and Savills to serve international clients in North America, Europe and Asia.

Savills is a global real estate services provider listed on the London Stock Exchange. The firm has an international network of more than 200 offices in 40 countries and offers a broad range of specialist advisory, management and transactional services to clients all over the world. CresaPartners has more than 55 North American offices with more than 750 employees. Headquartered in Boston, it was formed in 1993 when leading regional tenant representation firms joined forces. Savills and Cresa will have a global alliance with more than 250 offices and 22,350 employees.

&DOLIRUQLD+LJK6SHHG5DLO3URMHFW$ZDUGHG$GGLWLRQDO )HGHUDO)XQGV The U.S. Department of Transportation has awarded $300 million in additional funding to the California high-speed rail project, bringing the total federal funding to nearly $3.5 billion. Combined with matching state funds, California now has $6.33 billion to invest in the development of its statewide high-speed train project. This new money comes from federal support for Florida’s high-speed rail project, which that state’s governor canceled earlier this year. The new money has been awarded to extend the initial Central Valley construction segment north toward Merced.

(TXLW\2IILFH+DV1HZ3DOR$OWR7HQDQW Harris myCFO has signed a lease for 36,594 square feet at Embarcadero Place, 2200 Geng Road, Palo Alto. The company is currently based in Menlo Park. Harris myCFO offers family-office services including investment advisory, income-tax planning, estate planning, insurance evaluation,financial reporting and expense management to ultra high-net-worth people and families. The company had $7.3 billion in assets under management at the end of last year. Rich Branning and Steve Levere of Jones Lang LaSalle’s Palo Alto office represented Harris myCFO in the lease negotiations. Cherie Wittry & Patty McGuigan of Cornish & Carey Newmark Knight Frank’s Palo Alto office represented Equity Office.

2DNODQG'LVWULFWV%HJLQ%HDXWLILFDWLRQ The Lake Merritt/Uptown and Downtown Oakland Community Benefit Districts unveiled the first phase of a beautification program to enhance the public rights of way. Among the significant changes was the unveiling of the refurbished antique art deco clock at 17th Street and Broadway. “For those of us managing Oakland’s Uptown and Downtown Districts, that broken clock, with its missing arms and tattered condition, seemed the perfect metaphor for what was wrong with Downtown Oakland,” said Lake Merritt/ Uptown District Association President Deborah Boyer. “It appeared as if time had literally stopped Downtown, and that broken antique clock was a reminder of the greatness of days gone by.” Q

3(23/( on the move

(continued from page 7)

%URNHU-RLQV(DVW%D\2IILFH Lee & Associates Commercial Real Estate Services’ Pleasanton office welcomes John Blatter. Blatter started his career in commercial real estate in 2001 at McColm Commercial Real Estate in Pleasanton where he worked in property management and leasing. He also acted as principal in several ground-up commercial developments, managing each project from concept to sale. In 2008, he started East Bay Commercial Real Estate in Danville, continuing to work with tenants and landlords along the interstate 580 and 680 corridors. One of Blatter’s specialties is representing dental and medical clients in their search for commercial space for lease or purchase, and he has completed over 50 such transactions. Blatter is to focus on retail and office leasing and sales for tenants and landlords.

&5,([SDQGV6DQ)UDQFLVFR6DOHV)RUFH Kristen McCarthy has been promoted to project principal at CRI, the oldest and largest Herman Miller furniture dealer in San Francisco. Her focus will be new business development within the San Francisco design and corporate communities. McCarthy has been with CRI for seven years.

-RQHV/DQJ*URZVLQ6DQ)UDQFLVFR Paul Lee has been named a managing director for Jones Lang LaSalle in San Francisco, charged with expanding the firm’s sales, acquisition, joint-venture and financing capabilities in the San Francisco market. Lee will partner with Michel Seifer, managing director and leader of the firm’s capital markets practice in Northern California and the Pacific Northwest. Before joining Jones Lang, Lee spent a decade as principal and chief financial officer for Silverwing Development where he was responsible for all debt, equity and asset management for the firm’s various developments. Q J U N E 201 1 31



WARREN E. “NED” SPIEKER JR. Chairman, Continuing Life Communities LLC


the associations I have collected. It is hundreds of people, not just executives but many others. The monetary success, you can almost put that aside. You can only eat so much.

A word of encouragement for C-average college students and their hand-wringing parents: Ned Spieker, the former chief executive and chairman of Menlo Park-based Spieker Properties Inc., earned just that G.P.A. as a student at Cal-Berkeley in the mid-1960s. He went on to found, expand, operate and ultimately sell a commercial real estate empire.

What did your dad do?

By Sharon Simonson

As a college kid, he didn’t see the relationship between books and professional success. With time, he has come to a more nuanced view of the value of formal education. But he retains a belief that being a successful entrepreneur mostly depends on attitude.

NS iHe was in the used-car business. After World War II, he opened a used-car dealership in Menlo Park. He eventually had two lots and went into the [car] leasing business. Do you go to work everyday? NS iI do. I need objectives and focus. I like accomplishment. Whom do you admire? NS iJohn [A.] Sobrato, Dick Peery, John Arrillaga, Dave Brown. They have survived and prospered.

Spieker displayed an intuitive grasp of real estate’s profit-making capacity while still at Berkeley when he arranged to rent his fraternity house over one summer to make money for his impoverished chapter. His achievement came to the attention of none other than Don Graham of the Dillingham Corp., a Berkeley alum and Bay Area native best known for developing Honolulu’s Ala Moana Center, one of the most profitable shopping malls in the world at one time. Spieker worked as an analyst trainee for Graham right after college and ultimately developed Palo Alto Square at Page Mill Road and El Camino Real on Dillingham’s behalf.

How do you find good workers and business partners?

In 2001, Spieker Properties Inc. was acquired by Chicago-based Equity Office Properties Trust in a transaction that valued the Menlo Park company at $7.2 billion. The deal symbolizes the final days of the dot-com boom. At the time, Spieker owned and operated 38.5 million square feet of commercial real estate in California and the Pacific Northwest. That included eight million square feet in Silicon Valley, three million square feet on the Peninsula and in the North Bay and five million square feet in the East Bay. He served briefly on the board of Equity Office with Sam Zell.

NS iIt has become strongly affected by institutions. That means it is more bureaucratic, heavy on capital, less heavy on entrepreneurial ability or risk. It is a capital-driven business versus need-driven or market-driven. People would not build with their own money if there were no market there, but institutions will.

Today, Spieker, who is 66 years old, is chairman of Continuing Life Communities LLC. His modest offices remain in a Sand Hill Road building in Menlo Park that he developed but that is owned by EOP. His company, a retirement-community developer, currently is engaged in the ground-up construction of Stoneridge Creek, a $400 million, 700-unit project in Pleasanton. CLC has four other retirement communities, all in Southern California. Spieker was inducted May 5 into the NAIOP Silicon Valley Developer Hall of Fame. Why didn’t you like school? NS iI didn’t see any relationship between business applications and books. Now I feel differently, but there is something about being an entrepreneur that you don’t learn in a book. It is the ability to take a measurable risk and be comfortable with it, to take on unknowns. Entrepreneurs have to invent solutions. What did you like about real estate? NS iI loved it because it required a broad-spectrum skill set. You had to know construction, design, finance, appraisals and on and on. I enjoyed balancing all of that. What do you consider your greatest business and life achievements? NS iLife achievements are more important than business achievements. When I’m with my wife of 45 years and my family, I know I had my priorities straight: family first. As far as business, it is


J U N E 201 1

NS iYou get to know them over a year or two. You look at their education, family life, private life, their goals. Values are so important. Business acumen can be learned. And there are lots of smart people. But how many of them are productive? I know a lot of appearing successful people. How much time do they spend on their health? It is the most important thing. Do they have other interests like philosophy or athletics? How has the real estate business changed in the Bay Area since you began?

How do you compete in that environment? NS iI changed product types. I see apartments and senior communities as much stronger than office and R&D space, with greater demand and less of a crowd. What is Sam Zell like? NS iSam is a very bright and motivated individual. Philosophically, we did not always agree on how to run a business. He was very shortterm oriented, in my view. What prompted you to sell Spieker Properties? NS iAmong the leadership in the company, there was a general belief that the elevator was going to come to a stop. It could not keep going up. We decided six months to a year before the deal was announced (Feb. 23, 2001) that we were going to sell. We knew there were few buyers who could pay the price and get the deal done. We identified EOP and Boston Properties. We had talks with both companies. How did you know it was near the top? NS iRents were getting so high that people were building into rents, so supply was growing. We didn’t have any idea about the dot-com explosion, but we saw the valuations. What are your thoughts on the events of the last three years? NS iThey are horrific. We have the financial issues of our government and people living beyond their means. Corporations have been the most responsible. I am very disappointed in our government leadership at all levels. He is not my favorite politician, but [former President] Clinton did a decent job. I was hopeful for [former President] Bush and most disappointed. I am disappointed in our current president and the entire legislative branch. „

The Registry June 2011 Issue  
The Registry June 2011 Issue  

The Registry June 2011 Issue