Estate Sales in Sf Eastbay - PDF

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					                                                June 13, 2005

                    RESEARCHRANT                                                         SM

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                     Michael Speers - Dan Wald - Gary Willard - Ric Russell
                      “If you can't dazzle them with brilliance, baffle them with bull.”
                                                - W.C. Fields

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SAN FRANCISCO – “TMG Partners said Monday it closed sale of The Landmark at 1 Market St. The sale
of the Class A, historic office building to American Assets includes the 380,000 square feet of office
space and the leasehold interest from Equity Office Properties for the 44,000 square foot annex.”

“Although neither TMG nor American Assets stated a final purchase price, the San Francisco Business Times
reported in April that the property would sell for about $190 million or roughly $496 per square foot.”

“Located at the foot of Market Street across the Embarcadero from the Ferry Building, The Landmark was built
in 1917 as the original Southern Pacific Railroad headquarters. Current tenants include Microsoft, Autodesk, and Del Monte.”

SAN FRANCISCO – “American Assets of San Diego has acquired the 393,000-sf Landmark at One
Market Street here and the leasehold for the 44,000-sf annex building for about $190 million, according
to industry sources familiar with the transaction. TMG Partners sold the Landmark and EOP sold the
leasehold. The price reflects the over-market rents being paid by tenants as much as the prominence of the fully
leased building, its recent renovation and the white-hot investment market, according to the sources.”

“The sale by TMG Partners comes after a $125-million rehab that among other things included all new building
systems and a complete seismic retrofit, local industry sources tell TMG then proceeded to ink
long-term leases with brand-name tenants like (132,973 sf), Del Monte (104,729 sf) and
Microsoft (45,795 sf) at year 2000 lease rates.”

“Earlier this month, American Assets made its first San Francisco acquisition, paying about $411 per sf
($69 million) for 160 King St., a 168,000-sf class A office building across from SBC Park that was
completed in 2002. The South of Market property totals nine stories above ground and one below. Five floors
contain office space and five stories contain parking. Major tenants in the building include the law firm of
Gray Cary and Brown & Toland Medical Group. Tenants representing about 70% of the building are on
leases that extend through 2010. The seller was ROK Properties, which includes Rosenberg Ventures.”
SAN FRANCISCO – “A SoMa selling spree is under way, with longtime landowners banking on the
biotech boom to boost their bottom lines. ClubCorp is offloading the San Francisco Tennis Club at Fifth
and Townsend streets. SKS Investments, which owns a dozen projects in the area, is selling half of 350
Rhode Island St. and all of 501 Second St., while the San Francisco Flower Grower's Association
recently posted a "for sale" sign at its Sixth and Brannan property known as the San Francisco Flower

“The grower's association is selling its portion of the land and building, roughly one-third of the
240,000-square-foot structure. Along with parking, it stretches nearly the entire block to Fifth Street. The
balance is owned by the California Flower Market Inc., a separate, but similar group that purchased the
property and built the structure with its San Francisco counterpart and a now defunct Peninsula group back in
the '50s.”

SAN FRANCISCO – “The University of California, San Francisco Center for AIDS Prevention Studies
(CAPS) leased 57,401 square feet at 50 Beale St. in San Francisco's South Financial District. CAPS
signed a five-year deal and will occupy the entire 12th and 13th floors. It will be relocating from 74 New
Montgomery St., also in the South Financial District, in August of this year.”

FREMONT – “Lam Research Corp. said Friday that an unnamed buyer will purchase two properties that
were part of its Fremont campus but which Lam has vacated.”

“Lam leased four properties in June 2003 from SELCO Services Corp. Lam will receive $10 million for
selling the properties to the buyer, which it will apply against the $27.4 million the Fremont chip equipment
maker owes to SELCO, according to a statement.”

“Lam will pay the remaining $17.4 million to SELCO and continue to lease the two remaining properties plus an
additional two properties from a March 2003 lease with SELCO. Lam has set aside $85 million to pay the
remainders of those leases, which are worth $75 million.”

SOUTH SAN FRANCISCO – “Exelixis (that’s’ Sixilexe backwards) entered into a lease agreement to
expand into 220 E. Grand Ave., a facility containing approximately 47,566 square feet of office and
laboratory space. The building is adjacent to the company's existing facilities in South San Francisco at 210 E.
Grand. The new lease also replaces and terminates an existing sublease between Sugen Inc. and the company
for 67,672 square feet of office and laboratory space in the 210 building.”

“The term of the lease for the new building commences on July 1, 2005, and the term of the direct lease for the
existing building commences on the effective date. Both lease terms end on July 31, 2018.”

HAYWARD – “A Hayward warehouse that hit the market with 205,000 square feet in March has been
snapped up by Homelegance Inc. Homelegance, a home furnishing manufacturer and wholesaler founded in
1984 and based in Hayward, now has 533,000 square feet of warehouse space in Hayward, making the
company one of the largest, if not the largest, warehouse users along the Interstate 880 corridor.”
“Financial terms were not released, but Homelegance signed a 5-year sublease with Diageo Chateau &
Estate Wines Co. for below the average monthly market rate of 34 cents per square foot.”

“Jay Hagglund of BT Commercial represented Diageo in the transaction. The Cabot Boulevard warehouse
was originally leased by Joseph E. Seagram & Sons in 1991. The lease was inherited by Diageo when it
acquired Seagram in 2001 and runs to 2010.”

OAKLAND – “Eagle Holdings LLC purchased 101-159 Hegenberger Road, Building C, for $5.69 million,
or $135 per square foot. The new owner will use the facility as part of its existing business, the Bob Dron
Davidson Dealership, which is across the street. The 42,000-square-foot flex building was completed in 2004
and is on 1.8 acres.”

OAKLAND – “Electronics Boutique, Quiznos Sub and T-Mobile are among the new tenants at Oakland's
Hegenberger Gateway shopping center. T-Mobile occupies a nearly 3,000-square-foot store, while Quiznos
fills a 1,100-square-foot shop and Electronics Boutique, which sells computer games, has a 1,688-square-foot

“The 245,000-square-foot retail center at Hegenberger Road and I-880, located between the McAfee
Coliseum and Oakland International Airport, is owned by Simeon Commercial Properties of San
Francisco. The development also counts as tenants Starbucks, Panda Express, In-N-Out Burger and
Oakland's first Wal-Mart store, which should open later this year.”

SAN LEANDRO – “Grand Tile has bought a 22,000-square-foot building on Fremont Avenue in San
Leandro from Finzer Coated Products LLC. BT Commercial Real Estate NAI broker Paul Beckwith
represented Grand Tile in the sale.”

HAYWARD – “BT Commercial brokers Jay Hagglund and Adan Martinez represented Portal Publications
in a sublease transaction for a 75,000-square-foot warehouse on Arden Road in Hayward.”

BERKELEY - “BT also announced Friday that brokers Eli Ceryak and David Englert represented Rilco-
Addison LLC in a 5,000-square-foot lease transaction on Addison Street in Berkeley.”


SUNNYVALE – “Westcore Properties LLC of San Diego is razing and redeveloping a portion of
Advanced Micro Devices’ former seven-acre property here, which has sat dormant for the better part of
a decade. Westcore recently acquired the entire five-building property from AMD for $4.8 million in an off-
market transaction and promptly sold off three, one-story concrete tilt-ups, two to an owner-user and one to an

“‘The sales substantially reduced our cost basis in the remainder of the property,’ Westcore director of
acquisitions Gary Katz tells He declined to reveal the actual sale prices and they were not
otherwise immediately available.”
“On the remaining 3.5 acres sits a two-building, 50,000-sf former circuit board manufacturing facility that
Westcore plans to raze. Although the tentative plan is to redevelop the site with several small industrial
buildings for sale to owner-users, Katz says Westcore may also just map it and sell the lots or sell the
property as a whole. ‘The sales comps are terrific for small buildings,’ Katz says.”

EMERYVILLE – “San Francisco-based apartment REIT BRE Properties Inc. plans to build up to 500
apartments at what is now a six-story office tower in Emeryville.”

“The firm is in contract to acquire the tower from Equity Office Properties, according to Emeryville's
development director, and has submitted to the city preliminary diagrams for an eight-story building, including a
two-story garage and six stories of housing. The firm has told the city it is looking at between 400 and 500
rental units for the site, located off Christie Avenue near Powell Street and Interstate 80.”

OAKLAND – “San Francisco-based Pocket Development reports brisk sales at its West End Commons
project in West Oakland, where it is set to construct 91 townhomes.”

“A lottery for eight market-rate units last month drew 49 buyers, and the firm expects an additional 36 units will
be released over the summer. Located at 3100 Mandela Parkway at 28th Street, the development is
adjacent to Rick Holliday's proposed 1,550-unit residential development around a blighted former train
station and approved by the city last month.”


Compliments of Bill Brizendine's weekly e-mail...

“The yield on the 10-year Treasury has been drifting upward (if you call a nearly 30 bp increase from a
week ago Thursday's low of 3.80%, "drifting") since the French rejection of the European Union Constitution.
Much quacking in the press about the "real estate bubble" - residential mainly - has also served to put pressure
on the longer-term indices.”

“Closing at 4.04% on Friday, the 10-year yield was up over 5 bps at Noon today.”

”Himself (Dr. Greenspan) continues in full-furrowed-brow mode over the inability of the Fed to move long-term
rates. Continued jawboning about how wonderfully the economy is doing continues to be the Chairman's party
line. Read in this as follows: the Federal Funds Target Rate will increase again at the end of the month.”

“LIBOR creeps onward and upward.”

Key Rates as of Friday, June 10, 2005...

30-Day LIBOR:         3.22%
6-Month LIBOR:        3.59%
10-Year Treasury:     4.04%

William Brizendine
L.J. Melody & Company

Thanks Bill!


NATIONAL – “The recently passed bankruptcy-reform bill may turn out to be a plus for landlords who
own retail property while making it harder for struggling retailers to emerge from bankruptcy

“The bill, which passed Congress and was signed by President Bush in April, will take effect in October and
strengthens landlord rights in a number of ways, including forcing retailers to make decisions on leases
much more quickly and moving landlords into a preferred class of creditors.”

“A retailer will have seven months after it files for bankruptcy protection to decide whether to assume or reject a
lease, unless the landlord agrees to an extension. Previously a judge could extend it indefinitely, which left
landlords in limbo about their space.” (Click for more details.)

SAN LEANDRO – “Bayfair Mall plans to celebrate the Fourth of July with a bang this year (ideally, not one
from a gunshot) by adding a major tenant - a 31,700-square-foot Bed, Bath & Beyond store - right next-
door to a Kohl's department store that opened last fall.” (Kidding about the gunshot – from what I read, they
have done a remarkable job at this once troubled center. Click for more details on Bayfair’s turnaround under
Madison & Marquette’s ownership.)

RETAIL – “Oakland is finally shaping up as a hot retail destination -- even though it may take three years
to get there. A recent study by real estate investment brokerage Marcus & Millichap ranks Oakland fourth in the
country for retail real estate investment potential -- over the next three years.”

“Looking just at 2005, Oakland ranks 10th, behind such markets as Riverside and Ft. Lauderdale, Fla.
But through 2008, Oakland trails only No. 1 Seattle, No. 2 Orange County and No. 3 Phoenix.”

“The firm said it compiled the rankings by analyzing ‘critical economic, demographic and supply and demand
indicators.’ Oakland gained 25,000 jobs last year and had overall unemployment of just 5 percent, and an
influx of new residents downtown is changing demographics. A number of downtown landlords are
converting office space to retail.”

RICHMOND – “Steelscape Inc. will shutter its painting and metal coating plant in Richmond and put the
property up for sale, the firm said Friday. The Richmond operations will move to a new plant in Shreveport,
La., by March 2006.”

BAY AREA – “Wells Fargo Bank is bucking the trend in rising unemployment numbers. The San
Francisco-based bank plans to fill as many as 125 new positions in the Bay Area.”

SAN FRANCISCO – “Interstate Bakeries Corp. will close two bakeries in San Francisco, consolidate
production, routes, depots and thrift stores in the area, and eliminate about 650 jobs in the process.”

“The two bakeries slated for closure as a result of this announcement are a 77-year old Wonder/Hostess
bakery and a 49-year old Parisian San Francisco bakery. The closures and consolidation won't affect the
company's distribution of products to supermarkets in Northern California.”

SAN LEANDRO – “Gardco Lighting is moving its longtime San Leandro factory to Texas, the third major
East Bay lighting manufacturer to leave in the past three years.”

“A division of billion-dollar lighting manufacturer The Genlyte Group Inc., Gardco confirmed May 31 in
filings to the state that 178 workers - including 100 members of the International Brotherhood of
Electrical Workers Local 2131 - will be laid off by year's end.”

“Only about 20 employees at the 150,000-square-foot facility at 2661 Alvarado St., behind the San Leandro
Auto Mall, will be moving to Gardco's new, technologically advanced factory in San Marcos, a suburb 30 miles
south of Austin, Texas, said General Manager Cheryl Fraga.”

SAN FRANCISCO – “A top union official expects the San Francisco Chronicle to lose 10 percent of its
900 Newspaper Guild jobs under a new labor contract now under negotiation, according to a report in a
newspaper trade magazine.”

“Doug Cuthbertson, executive officer of the union -- Northern California Media Workers Guild Local 39521 -
- called the 10 percent figure a ‘personal estimate.’”

(Not a very good week on a net basis – especially if you are in a union job. Is there a bank teller’s union?)

SILICON VALLEY – “In the 1990s, San Jose had the fastest growing personal income in the nation. So
far in the first decade of the 21st Century, the capital of Silicon Valley ranks last in income growth. Dead
last.” (Read on before you submit your resignation and pack up for New Orleans - #1 in the rankings, just
beating out #2 SHREVEPORT!)

“The numbers, from an American City Business Journal analysis of data from the U.S. Bureau of Economic
Analysis, show what might seem obvious to the more than 200,000 people who lost their jobs during the

“But the folks left behind appear to be well paid. The San Jose-Sunnyvale-Santa Clara metro area still ranks
high in personal income -- third behind second-place San Francisco-Oakland-Fremont and first-place
Bridgeport-Stamford-Norwalk, Conn.” (Not bad, two out of three on the personal income rankings. Why not
lead with this since even the folks in New Orleans were puzzled by the results…)
“Analysts express surprise that New Orleans leads the pack, given its unimpressive history of income
growth (ranking 142nd in the 1980s, 95th in the 1990s) and its weak record of employment. The area lost 9,100
jobs between 2000 and 2003 before beginning a slow recovery.”

“‘I've followed the Louisiana economy for 35 years, and my response is that I'm stunned,’ says Loren
Scott, president of a Baton Rouge, La., economic-consulting firm, Loren C. Scott & Associates.”


“General Motors Corp. plans to close plants and eliminate 25,000 manufacturing jobs in the United
States by 2008 in an attempt to restore profitability at the world's largest automaker, its chairman said
Tuesday as he fended off calls for his resignation.”

“Americans increased their borrowing for auto loans and other types of consumer debt at an annual rate
of 0.7 percent in April, the slowest increase in five months, the government said Tuesday.”


IMPORTANT DISCLAIMER! None of this was true. I made it all up. Any similarity between the characters and
events of this e-mail and real life is purely coincidental. This e-mail should not be used as a basis for making
any investment decisions. I'm just a researcher with an attitude - what do I know about this stuff!


Remember the deal - we'll send you this weekly e-mail for as long as you want to read it. If you have had
enough, just reply with the words "I Surrender" in the subject line, and we'll remove you from the list. And keep
in mind, I'm just the research guy, so if you would like more detailed information about our other investor
services, call Ric Russell, Michael Speers, Dan Wald or Gary Willard at 415.781.8100.

Jim Scotland
Investment Services Coordinator
BT Investment Services Group

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