Western Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Western United States.
Issue link: https://westernrealestatebusiness.epubxp.com/i/595440
M A R K E T H I G H L I G H T: N O R T H E R N C A L I F O R N I A 20 • November 2015 • Western Real Estate Business www.REBusinessOnline.com The I-880 East Bay Industrial mar- ketplace remains one of the strongest in the nation. Access to the Port of Oakland and the proximity to popu- lation centers give the I-880 Corridor a natural advantage for general distri- bution and e-commerce delivery. With continued employment growth in the Bay Area, the only thing slowing down the absorption along the I-880 Corridor is a lack of inventory. Vacancy along the I-880 Corridor is at historically low levels, hovering around 3 percent, blended, across all product types. Landlords are beneft- ting from the low vacancy and com- petitive marketplace that have al- lowed them to increase rents and limit concessions. Lease rates have seen a drastic increase over the past two years, rising more than 20 percent in that time and more than 10 percent in 2015 alone. With low vacancy, low interest rates and high lease rates, owner/user sales prices have responded accordingly. The pace of building sales has only been slowed by the current inventory — there are less than 10 core buildings currently on the market and not in es- crow. Sale prices have hit or surpassed previous highs and continue to trend upward. The majority of the industrial prod- uct in the marketplace was built in the 1980s. Most lack many of the core ele- ments of the modern distribution cen- ters. The shortage of today's Class A product has developers aggressively pursuing land sites in the region for new development. There are currently 1.3 million square feet of speculative warehouse under construction, with an additional 2.3 million square feet planned to break ground — many of which are preleasing and preselling. The lack of inventory is driving both lease rates and sales prices sharply upward, and will continue to do so through the end of the year and into 2016. INDUSTRIAL ACTIVITY ACCELERATES ALONG NORCAL'S I-880 CORRIDOR Chris Schofeld Founding Principal, Lee & Associates MULTI-FAMILY FINANCING ONE OF THE TOP 100 MULTI-FAMILY LENDERS IN AMERICA $1,678,000 Purchase of an 18-Unit Multi-Family Property 3.25% 5-year fxed Hawthorne, CA 90250 $1,300,000 Purchase of a 9-Unit Multi-Family Property 3.25% 5-year fxed Buena Park, CA 90621 $1,518,000 Purchase of a 9-Unit Multi-Family Property 3.25% 5-year fxed Glendale, CA 91202 $2,000,000 Purchase of an 8-Unit Multi-Family Property 3.25% 5-year fxed Los Angeles, CA 90026 DONE DEALS Program Features Underwriting Features • Loan amounts from $1,000,000 to $7,000,000 • 75% LTV loans both purchases and refnances • 30-year term / 30-year amortization • Subject to a 1.20 DCR at the start rate • 40-year amortization is available • Today's 5-year fxed is 3.50% as of July, 2015 • 3, 5, & 7-year fxed rates • Broker rebates are available Lending Territory Southern California, the San Francisco Bay area, Miami-Dade, Boston, and Seattle We ofer some of the lowest rates in the market today. In return we are looking for experienced investors with excellent credit, good reserves, and a proftable real estate portfolio. Wayne D. McCoy OneUnited Bank Multi-Family Loan Consultant tel: 323.290.7569 • wmccoy@oneunited.com in the nine-county Bay Area (San Francisco, San Mateo, Santa Clara, Alameda, Contra Costa, Marin, Napa, Sonoma and Solano), according to Kidder Mathews. There are also 22,577 units in various stages of con- struction and 31,187 units planned. San Francisco alone accounts for about 15,000 of the planned apart- ment homes in the region. It is hard to forecast how long this cycle will last, though it does seem like the venture capital industry is slowing, and there have been fewer IPOs this year compared to 2014. While everyone hedges their bets, the general consensus at the moment is that we are probably in the seventh inning but the game may go into ex- tra innings. NorCal Multifamily continued from page 19 North I-880 Industrial Inventory: 60,469,406 Availability: 2,284,734 Availability Rate: 3.78% I-880 Industrial Inventory: 83,113,368 Availability: 2,744,725 Availability Rate: 3.30% Fremont/Newark Industrial Inventory: 55,613,739 Availability: 3,167,029 Availability Rate: 5.69% Source: Lee & Associates I-880 CORRIDOR INDUSTRIAL MARKET SNAPSHOT