Wednesday, May 15, 2013

San Francisco

Avison Young just released an eye-opening report this morning that summarizes how high rents are these days for 100 top-tier buildings in the CBD, as well as what's up for grabs. In its Tier 1 building group, average low-rise starting rents start at $66.50, full service, and surge to $82 for high-rise product (floors 16 and up). The Ferry Building (pictured) starts at $85/SF, with 82k SF of direct space available. One Market's 42-floor Spear Tower (which Google is leasing a big chunk of) asks $91/SF for upper floors, where 25k SF is available.

Meanwhile, 101 Cal has the most space available out of the Tier 1 group, at 222k SF mostly above floor 16. There high-rise space in the 48-story tower costs around $85/SF. Out of the top-tier product, 8.3% is available. For Tier 2 buildings, which include 650 Cal and 525 Market, 14.5% is available and high-rise space starts at $71/SF, on average.  -- 2015 February 26

Lay of the Land

Courtesy:  Colliers

photo by John G Mabanglo

Rents as at February 2015

Chinese flock to California to acquire real estate

Mainland Chinese companies and individuals are ramping up purchases of property in California, accounting for an increasingly significant share of real estate deals in the Golden State.

Property agents in San Francisco and Los Angeles fly in groups of Chinese investors, sometimes as many as 50 people in one group, to buy property, said Robert Pearce, a director of Blackfish, a company that markets United States real estate. The Chinese end up buying property as well as top brands like Chanel, he said, adding: "What do mainland Chinese have? Cash."

Chinese buyers accounted for 18 per cent of the US$68.2 billion that foreigners spent on homes in the US during the 12 months to the end of March, according to the US National Association of Realtors. That is up from 11 per cent in 2011, 9 per cent in 2010 and 5 per cent in 2009.

California is the second most attractive state for foreign buyers of US property after Florida, said an Asia Society report. At present, more than half the homes sold to foreign buyers in California go to Chinese nationals, estimates CNN Money.

California, with its historical ties with Asia, has the biggest Chinese population in the US and accounts for more investment deals from China than any other US state. This puts it in a position to lead the US in attracting Chinese investment, said Charlie Rosier, director of Blackfish.

The Chinese go to the US for their children to be near schools and universities, clean air, and the American lifestyle, "which continues to be highly aspirational for Chinese buyers", said Andrew Gates, international realty associate broker at auction house Sotheby's.

The number of documented Chinese investments in US real estate has increased from virtually zero five years ago, said the Asia Society report. A new trend is of Chinese property firms acquiring projects in California, said Gregory Karns, a partner at US law firm Cox, Castle & Nicholson.

Shanghai-based Greenland Group acquired a site in Los Angeles in July with a planned total investment of US$1 billion.

"These Chinese groups see a flattening of their [domestic] market, and are looking to the US and California for greater returns," said Karns.

Two Californian cities, Stockton and San Bernardino, have gone bankrupt, said Christopher Thornberg, founding partner of Beacon Economics, an economic consultancy, adding that the economy is otherwise resilient.  --  2013 October 7    
South China Morning Post

Published March 15, 2012
Fairmont hotel in San Francisco to be sold for US$200m

(LOS ANGELES) Maritz, Wolff & Co and Saudi billionaire Prince Alwaleed bin Talal agreed to sell the Fairmont San Francisco hotel after failing to win permission to convert part of the property into residences.

Woodridge Capital Partners LLC, a Los Angeles-based real estate developer and investor, will pay about US$200 million for the hotel, said Heather Turner, vice president of acquisitions at Maritz Wolff. Woodridge will work with Howard Marks's Oaktree Capital Management LP, also based in Los Angeles, on the purchase, she said in an interview. Fairmont Hotels & Resorts will remain the property's manager.

The 591-room luxury hotel in San Francisco's Nob Hill neighbourhood was put up for sale in June as part of a Maritz Wolff plan to cut the size of its portfolio. An Oaktree fund and Michael Rosenfeld, Woodridge's founder, announced in November that they purchased the Fairmont Orchid luxury hotel in Hawaii.

Maritz Wolff, founded in 1994 by Lew Wolff and Philip 'Flip' Maritz, has been unable to get city permission to convert a portion of the Fairmont San Francisco into a residential tower. The Los Angeles-based firm acquired its stake in the hotel in 1998.

'Our desire to improve this Nob Hill property did not materialise as we had hoped, and we are confident that perhaps a different ownership will be able to implement the improvements at the hotel, which we think will be beneficial to the city of San Francisco,' Mr Wolff, also co-owner of the Oakland Athletics baseball team, said in an interview last June.

Maritz Wolff's acquisition of the Fairmont San Francisco was part of a purchase that included several other Fairmont hotels, including properties in Dallas and New Orleans. The firm sold the Dallas hotel in 2006 and the one in New Orleans the following year, according to the company's website.

Oaktree in September made an investment in the Beverly Hilton hotel in Los Angeles, averting a sale of the landmark property, a person with knowledge of the situation said at the time. The company manages assets of about US$75 billion for public and private pensions, corporations, sovereign-wealth funds and other investors.

Mr Marks and Mr Rosenfeld didn't immediately return e-mail and telephone messages seeking comment. Lori Holland, a spokeswoman for Fairmont Hotels & Resorts, declined to comment.

The agreement was reported earlier on Tuesday by newsletter Real Estate Alert. -- Bloomberg


notable sale transactions > Q1 2011
1355 Market St.
$101 per sq. ft.
530 Bush St.
$219 per sq. ft.
Waterfront Plaza (leasehold interest)
$148 per sq. ft.
200 California St.
$402 per sq. ft.
550 Kearny St. (note sale)
$197 per sq. ft.
250 Brannan St.
$355 per sq. ft.

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