New Development in California 2018 Mid-Year Update: New Additions to the Pipeline
New Development in California 2018 Mid-Year Update: New Additions to the Pipeline Volume 3, Issue 2 July 2018 This publication was prepared by: The California Economic Forecast Mark Schniepp, Director 5385 Hollister Avenue, Box 207 Santa Barbara, California 93111 (805) 692-2498 mark@californiaforecast.com Visit our website at: www.californiaforecast.com In partnership with: CIRB Terri Brunson, Executive Director 1215 K Street, Suite 1200 Sacramento, CA 95814 (916) 340-3340 tbrunson@mychf.org Visit our website at: www.mychf.org/cirb.html Copyright 2018 by the California Economic Forecast Reproduction of this document or any portion therein is prohibited without the expressed written permission of the California Economic Forecast. All queries regarding this publication should be directed to the California Economic Forecast or CIRB. NEW DEVELOPMENT IN CALIFORNIA 2018: MID-YEAR UPDATE 1
Table of Contents Introduction 3 Los Angeles and Ventura Counties 5 Orange and San Diego Counties 13 Riverside, San Bernardino, and Imperial Counties 18 San Francisco County 21 Alameda and Contra Costa Counties 28 San Mateo and Santa Clara Counties 30 Sacramento Valley 35 Central Valley 40 Central Coast 43 Acknowledgements 44 NEW DEVELOPMENT IN CALIFORNIA 2018: MID-YEAR UPDATE 2
Supplemental Mid-Year Report The California development environment is dynamic and constantly in a state of change. New development in 2018 is now on pace to become the most prolific in terms of housing units and non-residential square feet during the current economic cycle, with more than 130,000 homes started and more than $27 billion in new commercial and industrial structures. This report is intended to keep the development community informed on current activity. It focuses on new additions to the pipeline, and acts as a mid-year supplement to the principal and more comprehensive New Development report released each December presenting all major projects across the state. Since December, the pipeline has changed most substantially in the major business centers of units permitted 225,000 New Housing Production / California 1998-2018 billions of constant 2018 dollars 35 30 25 20 15 10 Real Investment in Non-Residential Structures California 1998-2018 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 California, including Los Angeles County, the San Francisco Bay Area, and the Sacramento Valley. Nearly 24,000 new units have been proposed in Southern California jurisdictions this year, and have entered the 2018 pipeline. Since December 2017, new projects have been identified that total more than 55,000 housing units statewide, as well as nearly 36 million square feet of non-residential space. thousands of units 24 Rate of Develpment Through Mid-Year New Additions to the Residential Pipeline / California As of July 2018 200,000 175,000 150,000 Rate of Develpment Through Mid-Year 20 16 125,000 12 100,000 75,000 8 50,000 4 25,000 0 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 0 Southern California Bay Area Sacramento Valley Central Valley Central Coast NEW DEVELOPMENT IN CALIFORNIA 2018: MID-YEAR UPDATE 3
millions of square feet 15 12 9 6 3 0 New Additions to the Non-Residential Pipeline California Sacramento Valley Bay Area Southern California As of July 2018 Central Valley Central Coast Some of these projects will potentially have substantial impacts on local economies and real estate markets, and include housing developments with thousands of units and urban skyscrapers that could break height records. While a supplement to the principal annual report may not be forthcoming every year, it appeared necessary this year due to the sheer volume of new projects entering the entitlement queue in 2018 across the state. An Indicator for the California Economy? The volume of new projects reported can be used as an indicator of the California economy. Construction activity is strongly pro-cyclical, and tends to rise in tandem with the positive health of the economy. Furthermore, signs of overbuilding or under-building can offer clues about economic inflection points in the business cycle. At this point in the economic cycle mid 2018 we are not observing any odious business conditions or signals that might suggest weakness and therefore concern about the California economy. Employment growth has eased but still remains positive, and the unemployment rate is now at the lowest level documented since reliable records have been kept. Home selling prices are at all time record levels in many counties, and apartment vacancy rates remain very tight in all urban centers. Furthermore, office and industrial vacancy rates are not generally easing. However, some analysts are now warning of an impending recession in the state. Consequently, as we remain alert in our primary charge to evaluate the likelihood of recession, it will be important to ascertain whether builders are pulling back at the appropriate time, or starting new projects that cannot be completed before the next downturn. NEW DEVELOPMENT IN CALIFORNIA 2018: MID-YEAR UPDATE 4
San Francisco County Mission Rock The San Francisco Giants are leading the plan to redevelop A&T Park s parking lot. The proposed project is made up of 1.4 million square feet of office, retail, and restaurant space, and over 1,300 apartments. The apartment buildings will vary in size, with the tallest being 240 feet, and 40 percent of all units will be reserved for low and middle-income households. The developers have agreed to restore Pier 48 and incorporate improvements to waterfront access. The project will also contain an 850,000 square foot parking structure (3,100 parking spaces) and 8 acres of parks and open space. The project is planned to be developed over 4 phases, which could take up to a decade to complete. It is expected to be approved in the second half of 2018, with possible groundbreaking in 2019 and completion by 2025. Sources: 1. http://www.socketsite.com/archives/2018/02/giants- massive-mission-rock-development-slated-for-approv- al.html 2. https://sfport.com/missionrock Mission Rock NEW DEVELOPMENT IN CALIFORNIA 2018: MID-YEAR UPDATE 21
Balboa Reservoir Redevelopment AvalonBay Communities and Bridge Housing are proposing to redevelop the Balboa Reservoir site. Located near the City College of San Francisco s Ocean Campus, the project consists of 1,100 multi-family residences (both for rent and for sale), with half reserved for low and middleincome households. The units would be arranged in two and threestory structures on the western edge of the property, and seven-story buildings on the eastern edge. Currently, the site is owned by the San Francisco Public Utilities Commission, and is occupied by a parking lot that serves the nearby CCSF campus. The new facilities would include 1,260 parking spaces, including a 500-space structure open to the public, and 2.2 acres of open space. But there is significant opposition to the project by community members because the project would eliminate 2,000 public parking spaces. A group called Save CCSF is attempting to introduce a ballot measure to block the project, and this measure could appear on the November 2018 ballot. If the project is approved, groundbreaking could occur in 2021 and the first units could be completed by 2023. Sources 1. https://sf.curbed.com/2018/3/16/17130218/balboareservoir-save-ccsf-yimby-nimby-housing 2. http://www.socketsite.com/archives/2018/02/timing- and-new-details-for-massive-balboa-reservoir-redeve- lopment.html 3. http://www.sfexaminer.com/balboa-reservoir-housingproject-opponents-launch-ballot-measure/ 4. http://sf-planning.org/balboa-reservoir Balboa Reservoir Redevelopment NEW DEVELOPMENT IN CALIFORNIA 2018: MID-YEAR UPDATE 22
Transbay Parcel F Transbay Parcel F, also known as 542-550 Howard, is a 61 story mixed use project that will be San Francisco s fourth tallest building. The team behind the project includes Hines, Goldman Sachs affiliate Broad Street, and Urban Pacific Development. The 800-foot skyscraper will consist of: 170 residential units 210 luxury hotel rooms 251,000 square feet of class A office space 79,000 square feet of shared amenity space 9,000 square feet of ground floor retail space The project will also contain access to the Transbay Transit Center and 10,000 square feet of open space. The project is currently in the environmental review process. Sources: 1. https://sf.curbed.com/2018/1/31/16955862/transbayparcel-f-redesign-pelli-building-housing 2. https://www.connect.media/revised-plans-submittedtransbay-parcel-f/ Transbay Parcel F NEW DEVELOPMENT IN CALIFORNIA 2018: MID-YEAR UPDATE 23
88 Bluxome TMG Partners is planning to redevelop the San Francisco Tennis Club located at 88 Bluxome St. The project contains: 833,000 square feet of office space A 30,500 square foot community center with a public pool 24,000 square feet of ground floor retail and restaurant space 9,500 square feet of production and repair space An underground parking structure with 171 spaces An affordable-housing component that is currently undefined and unfunded The site will also retain a tennis club, which will be located under the basement parking facility. It will contain 12 tennis counts (with 35-foot ceilings) and new clubhouse space. Source: http://www.socketsite.com/archives/2018/02/ The proposed project is dependent on the adoption of San Francisco s Central SoMa Plan, and no timeline for development has been determined. plans-to-underground-the-san-francisco-tennis-clubrevealed.html 88 Bluxome NEW DEVELOPMENT IN CALIFORNIA 2018: MID-YEAR UPDATE 24
Hub District Parcel In April 2018, Lendlease proposed to build 610 apartments, 234,000 square feet of office space, 21,000 square feet of retail space, and an underground parking structure with 224 spaces. The site is located at 30 Van Ness Ave. The project would maintain the existing five-story structure, ultimately yielding a new 48-story building that is 520 feet tall. The City of San Francisco, the current office tenant, is expected to vacate the building and move to 1500 Mission Street (also under construction). 1500 Mission is expected to be delivered in 2020, so construction at 30 Van Ness will begin in 2020 or later. Source: http://www.socketsite.com/archives/2018/04/ more-density-for-520-foot-tall-hub-district-tower-asproposed.html Hub District Parcel NEW DEVELOPMENT IN CALIFORNIA 2018: MID-YEAR UPDATE 25
469 Stevenson A new residential complex has been proposed at 469 Stevenson St. The structure would include 454 units that range from studios to threebedroom units and 13,000 square feet of retail space. The space is currently occupied by a Nordstrom parking lot. It is zoned for only 336 units, but because the developers plan to include an affordable housing component, the plan can contain more units through the State Density Bonus program. The project is budgeted between $200 million and $300 million, and no timeline for development has been set. Sources: https://www.bisnow.com/san-francisco/news/ multifamily/build-inc-proposes-new-residential-tower-inmid-market-82079 469 Stevenson NEW DEVELOPMENT IN CALIFORNIA 2018: MID-YEAR UPDATE 26
Principal Projects in San Francisco County July 2018 Project Res. Comm/Ind Hotel Name Developer Location Units Sq. Ft. Rooms Description Status Residential Projects Balboa Reservoir Rdvp. AvalonBay / Bridge Balboa Reservoir 1,100 General Multifamily Proposed 469 Stevenson St. BuiLD Inc 469 St.evenson St. 454 General Multifamily Proposed 4950 Mission Excelsior 4950 Mission St. 428 Apartments Proposed Transbay 2 TBD 200 Folsom St. 240 Apartments Proposed Baycrest Tidewater Capital 430 Main St. 144 General MultiFamily Approved 360 5th St.reet Trammell Crow 360 5th st. 127 Apartments Approved Fast Signs Redev Ankrom Mosian 650 Harrison 118 General MultiFamily Proposed 1965 Market David Baker 1965 Market 96 General MultiFamily Under Review 490 S Van Ness Bridge Housing Corp. 490 S Van Ness 81 Apartments Aprvd., Plan Check 2601 Van Ness CoSt.a Brown 2601 Van Ness 60 Condos Proposed Empire Room JS Sullivan 555 Golden Gate Ave 55 Condos Proposed 2345 16th St. TBD 2345 16th St. 53 General Multifamily Proposed 921-925 O Farrell David Baker 921-925 O Farrell 51 Apartments Proposed Mixed Use Projects Mission Rock S.F. Giants Pier 48 1,300 1,400,000 Apartments / Condos / Office / Retail Proposed Hub DiSt.rict Parcel LendLease Group 30 Van Ness Ave 610 255,000 Apartments / Office / Retail Proposed the 433 David Baker 33 Gough St.reet 518 5,600 General MultiFamily Proposed Transbay 8 Related California 250 Fremont 468 12,500 General Multifamily / Retail Under Construction Transbay 1 TBD 100 Folsom 393 10,000 Condos / Retail Under Construction Transbay Parcel F Urban Pac/Hines/Goldman 542-550 Howard St. 170 339,000 210 General Multifamily Under Review 540 Howard St. Ankrom Mosian 540 Howard St. 149 60,000 Condos / Office / Retail Proposed Commercial & Industrial Projects SF Tennis Club Redev. TMG Partners 88 BluxomeSt. TBD 897,000 Office / General Multifamily Proposed 598 Brannan St. Tishman Speyer 598 Brannan St. 917,000 Office Proposed Macy s Redev Morgan St.anley 120 St.ockton St. 289,000 Office / Retail Proposed Stonetown Galleria General Growth Properties 3251 20th Ave 280,000 Retail Proposed 505 Brannan Addition Pintrest 505 Brannan 165,000 Office Proposed S.F. Armory Kink 1800 Mission St. 136,000 Office Proposed 439 Washington St. Peninsular Realty 439 Washington St. 315 Hotel Proposed Marriott SOMA Marriott Mission Bay 250 Hotel Under Construction Source: California Economic Forecast secondary research NEW DEVELOPMENT IN CALIFORNIA 2018: MID-YEAR UPDATE 27
Acknowledgements This publication represents the third volume, second edition of the New Development in California series. Updated content will be available in subsequent reports. California Economic Forecast James Emrani New Development Research Shivani Prasad New Development Research Mark Schniepp, Ph.D. Principal Author & Editor Ben Wright, M.A. Author CIRB Terri Brunson Editor Allison Paul Editor NEW DEVELOPMENT IN CALIFORNIA 2018: MID-YEAR UPDATE 44