Ikea Purchases Dublin Land

Yes, this is 2016 not 2005. Doesn’t this story sound eerily familiar?

Ikea has purchased a 25 acre parcel encompassed by Hacienda Drive to the east, Martinelli Drive to the North and I-580 to the South. This is the site Ikea sold to Blake Hunt Ventures back in 2006.

The 2006 sale was sudden, Ikea siting the Emeryville and East Palo Alto locations sufficiently serviced their East Bay clients and the need for Dublin had diminished. At that point, the Ikea site was just just 14 acres with plans for a 230,000 square foot store. Blake Hunt Ventures, a prominent retail and residential developer, owned the neighboring parcel slated for residential development. The purchase of the Ikea site nearly doubled the size of BHV original development plans.

Fast forward to 2015.

Blake Hunt Ventures was delivered a blow mid-2015 when the City of Dublin shot down the mixed residential and retail development plan. It become increasingly clear that residential was not going to future for the site. In walks Ikea. After a short escrow period Ikea closes the deal in early March 2016.

The new plan? A 339,000 square foot store, equipped with a restaurant and children’s play area on approximately 21 acres. The remainder 6 acres could accommodate up to 52,000 square feet of retail or ancillary development.  If approved by the City of Dublin the targeted opening date is mid-2018.

Registry Article on Ikea

Ikea Dublin

 

Tesla Motors Enters Dublin Market

IMG_20150811_192634_108

If you have been wondering what was going to take the place of the old Chrysler, Jeep, Dodge dealership in Dublin, I have some news for you. The signs went up last night (Tuesday, Aug. 11th) and Tesla Motors is moving in!

Located at 6701 Amador Plaza Road, Tesla will operate a retail showroom, sales, and service center. The deal has been quietly in the works for close to a year. This is the first sales and service store for Telsa in the Tri-Valley. Other sales and service centers are located in Fremont (HQ), Palo Alto, Burlingame, and Sunnyvale.

An opening date has not been officially announced.

Stoneridge Chrysler, Jeep, Dodge Relocating from Dublin

For those driving past the the now empty Chrysler, Jeep, Dodge dealership at the end of Amador Plaza Road in Dublin, don’t fret, it will not be vacant for long.

Stoneridge Dodge Jeep is in the process of moving to a brand new facility near the outlets in Livermore. Easily seen from I-580 on the Pleasanton side of Fallon Road, there is a beautiful new grey building taking shape. The moving trucks seen earlier in the week at the old Dublin dealership were parked over the weekend at the new facility.

In addition to Stoneridge Dodge Jeep relocating to Fallon Road, CarMax is planning a new location on a neighboring site on the Fallon Road corridor. No word on when CarMax plans to begin construction.

Retail and Office Buildings For Sale – San Ramon, Livermore, Danville

I am often asked why there seem to be no “small” buildings in the Tri-Valley market and why more of these “s234 mainmall” buildings do not come to market for sale. The most requested size range for the small business owner is 5,000 to 10,000 square feet, which constitutes a small building; especially when comparing to the half million square foot buildings commonly found in Bishop Ranch.

Due to living in such a suburban market, the majority of the shopping centers and office projects are planned and built as one large parcel that may contain multiple buildings. As opposed to an urban and older markets which had the tendency to be developed by individual owners to accommodate their needs. The larger the parcel, the more square footage, the more rents collected, the bigger the price tag. Thus, the inventory of free-standing buildings within a smaller size range more suited for small business owners are far and few in suburban markets (like the Tri-Valley) and more plentiful in urban markets.

Lately we have seen an influx of owner/user office and retail buildings come to market. These range in price from $1 million to $7 million. One of my favorite buildings being a 9,000 square foot two-story building in San Ramon once occupied by a bank but would make for a great medical building. Pleasanton has a beautiful multi-tenant retail building in downtown, a trophy for any real estate investor. Surprisingly, Danville has a couple options as well! Dublin remains very tight, with virtually no inventory of small retail and office buildings readily available for purchase.

Due to confidentiality reasons I am not able to share specific details on these properties.

If you are looking for a building, as a business owner or investor, retail, office, medical, or mixed-use, please feel free to contact me for a comprehensive market survey.

Tri-Valley Year End Retail Review

The long awaited market rebound has finally come to fruition. It has been a slow moving train but vacancy rates all across the Tri-Valley have stabilized at five-year lows. In addition to vacancy rates dropping dramatically, there has been a boom in new construction. Unfortunately, the additional inventory and quick absorption of this new space does not translate into the numbers. When analyzing the numbers, they are actually better than extremely positive results illustrated. Large deals such as Hobby Lobby and the copious amount of shop space being absorbed at Fallon Gateway are just a few examples of emerging new businesses helping to elevate 2014 into an exceptional year in retail leasing.

The story of 2014, and a trend that will continue in 2015, is residential development. Land and redevelopment acquisitions for residential purposes dominated the market. From Taylor Morrison’s 210 detached and attached housing projects in downtown Livermore to Trumark Homes, 184-acre, 805 single family homes in Dublin; residential deals are larger and more aggressive than we have seen in years.

-Jessica Mauser, Associate & Retail Specialist

Editor’s note in regards to Downtown Danville vacancy: The jump of about four percent may seem alarming, but the numbers are skewed due to Danville Hotel redevelopment.

 

Tri-Valley Retail Market Continues to Burn

Exciting times if you work in the retail side of commercial real estate. We are seeing deals in all shapes and sizes, something we thought may never happen after the massacre of ’08… errr… I mean economic downturn. New development, old development, partially developed, the train is moving full steam ahead.

Vacancy is extremely low and prices have most certainly jumped by over 20% in most places and even closer to 30% in select pockets. Keep a finger on the mouse, more new posts to come, including some of the hot lease and sale opportunities currently on the market.

P.S. – I hope everyone has had a chance to discover Gotta Eatta Pita. They have two locations, Danville and Pleasant Hill with a location coming soon in Pleasanton near Hopyard and Owens Drive. I am in no way affiliated with the company they are just my favorite new quick serve restaurant. I promise you will not be disappointed!

 

Church/ Religious Facility for Sale in Livermore

Even at the bottom of the market, we saw very few bank owned or foreclosure properties come to market in our area. The hardest hit was the office market with a couple troubled office buildings trading hands between ’10-’12. The majority of troubled assets were able to workout or restructure loans rather than go into foreclosure.

The commercial market generally runs about two years behind the residential market. This means we are just now seeing the market get really hot with multiple offers in both sale and lease transactions along with extremely low inventory. Despite this, we have seen a sudden surge of bank owned and foreclosure properties, including a large religious facility in Livermore.

Built in 2009, the facility is 23,000 square feet situated on a lot just under two acres. The location is ideal on North Livermore Avenue with more than adequate parking. This is a turn-key facility complete with fixtures, furniture, and equipment ready for a new congregation. The price has been dropped by a million dollars, now asking $5.2 million.

In addition to this facility, there is also a smaller (about half the size) religious facility for lease in the east side of town. It is not often we see these types of facilities come to market and to have two at one time is even more of a rarity.

Included in this surge of distressed properties we have seen multiple newer industrial condos and few free-standing buildings go to foreclosure auction in the area.

If you are looking for distressed assets, foreclosures, or religions facilities please contact me! jmauser@lee-associates.com

 

Restaurant Closures in the East Bay

January always lends to a couple of restaurant closures. Operators of struggling establishments will get through December, traditionally a great money making month, and close in January, just before the slow season begins. This year was no exception.

The two largest closures include Max’s Diner in San Ramon and Mama Rosa Pizza and Pasta in Pleasanton. Both high traffic locations with great visibility. A third closure was The Cove, a newer restaurant located in the Bernal Plaza just across from the street from the new Safeway Center on Bernal and Valley Avenue. You might remember this used to be Rage Burger previously.

According to an article written by the local Patch.com, the operator of Max’s in San Ramon blamed the high rent for the closure. The space is large by typical restaurant standards at 6,500 square feet. The space is being marketed for lease at the moment with a number of suitors showing interest but no deal on the table as of yet. The asking rent, a staggering $31,000 per month when you add the base rent and triple net expenses.

Magnolia aerial

The space located at Bernal Plaza in Pleasanton has already been leased. The quick turn around is due in part to both a smaller size space (2,900 square feet) and lower lease rate because of the class “B” location. Look for a new sushi restaurant to open in this location.

bernal plaza

Commercial rents are no doubt on the rise. Supporting comparable deals in the market include the recently completed lease in the former Macaroni Grill at Dublin Hacienda. With over seven offers on the building  competition is steep for prime locations with restaurant infrastructure.

Hobby Lobby Opening Dublin Store

According to Hilbers Contractors and Engineers, Hobby Lobby will be opening a new store in Dublin. The contracting firm released a statement on their website on January 16th naming them as the general contractor for the construction of the leasehold improvements of the new store.

Hobby Lobby will be taking over the former Home Expo Design Center, the 90,000 square foot box between Target and Toys R Us on Amador Plaza Road. The space has been vacant for about five years with the exception of Halloween when the Spirit Store uses the space as a temporary location. Hobby Lobby will be taking a portion of the exceptionally large space, about 60,000 square feet.

Read the entire press release here

Nordstrom Rack Finally Lands a Tri-Valley Location

Nordstrom Rack has long been looking for the perfect Tri-Valley location. It was rumored they had been negotiating for space at both Fallon Gateway and potentially the second phase of Livermore Premium Outlets. But alas, they have found their new location, one that does not exist yet! They will be part of the opening phase of The Village at Dublin located on the corner of Dublin Blvd and Hacienda Drive.

The Transit oriented center was planned pre-recession days. Of course the look, size, feel, and tenant line-up has completed changed. You might remember Ikea was planning a store in this area before downturn, as was Whole Foods. Whole Foods has stood that stand of time and will be the grocery anchor to the center but the Ikea deal blew up about the time the market hit rock bottom.

With Whole Foods as an anchor and Nordstrom rack as a shadow anchor, I would expect this to be a very busy retail center with many national retailers and restaurants. Regency Centers is the developer who will be developing the center and own other assets in the East Bay including Tassajara Crossings in Danville (Safeway anchored center near Blackhawk) and a portion of the Diablo Plaza (also Safeway anchored) on Crow Canyon in San Ramon. In addition, Regency owns retail centers in Walnut Creek, Clayton, Pleasant Hill, and Emeryville.

There is no doubt the new center will command the highest rents in town. We have seen the high water marks created by Fallon Gateway (@ Fallon and I-580) and Gateway Pleasanton (@ Bernal Ave. and I-680) in excess of $4.00 per square foot, monthly ($48.00 psf annually). I would very much expect to see small shop space at or near $5.00 per square foot, monthly ($60.00 psf annually).

My guess as to who will be the next big box tenants to announce new stores? Home Goods and Buybuy Baby are strong candidates, watch for either of these stores to pop up in the new Village center or Fallon Gateway.

Yogurt, a failing fad?

Yet another yogurt establishment has gone out of business. Yogafina in Danville near Blackhawk is the latest to fall.  Located at 11000 Crow Canyon Road next to Baja Fresh on the corner of Camino Tassajara and Crow Canyon Road, the yogurt shop has shut its doors and removed all the interior finishes. Other tenants in the center include Starbucks and Pet Food Express.

Back in 2009 we saw a huge influx of yogurt shop openings. The growth rate of new establishments have since slowed and we have even seen a number of closures. Some of the non-starters include Viva Yogurt and TCBY both in Pleasanton, Top This! and Tutti Frutti in San Ramon, and Yogurtopia near Lundardi’s in Danville.

No word as to what will backfill the Yogafina space. If you are interested in leasing the space and want more specifics give me a call and I would be happy to discuss!

Black Bear Diner Opening First Tri-Valley Location

5100 hopyard
Black Bear Diner has been slowly been making its push into the Tri-Valley. With locations in Tracy and Walnut Creek they having been teasing us with those huge portions and traditional diner style service. Pleasanton, your time has finally come. Black Bear Diner will be taking over the Abhiruchi Indian restaurant at 5100 Hopyard Road.
5100 Hopyard Road has been sitting vacant for since late last summer with 5,000 square feet of restaurant space a large parking lot. Over the past few years there has been multiple operators and multiple name changes including Chef India Cuisine, Mauyra Indian Cuisine, and Abhiruchi Indian. Prior to this the space was occupied by the long-time local favorite Maestro’s Ristorante Italiano.
I would expect the building to under-go heavy renovation prior to opening. Having gone through the space since the closure, the frequent turn-over took a toll and the lack of updating in the past 20 years was obvious. Black Bear will be a great addition to the area and this is a great site for the family-oriented breakfast chain.

Tri-Valley Retail Report: 2012 Review

“2012 was reminiscent of a middle school dance; patches of activity mingled with awkward progression.”

All joking aside, 2012 was an interesting time for retail commercial real estate in the Tri-Valley. Each City remained on trend with the previous year. Danville saw the largest decrease in vacancy due in part to the backfill of the former Blockbuster space and a couple other larger vacancies. Livermore saw the largest increase in vacancy rates which can be attributed the exit of Chevy’s FreshMex, Blockbuster Video, and a few other mid-size tenants. Pleasanton did well despite the deceiving numbers. Pleasanton Gateway saw 115,000 square feet of positive absorption alone but the increase in total inventory skewed the numbers which reflects slightly increased vacancy rate. Both Dublin and San Ramon had slight improvements in the way of vacancy rates. The market as a whole had very mixed results, intense leasing in one sector and a stalled activity in another. The best way to summarize the market is segmented with three main categories: new, good, and subpar.

New is categorized as all ground-up development including Fallon Gateway in Dublin, Paragon Outlets in Livermore, and Pleasanton Gateway in Pleasanton. Unlike most of the country, our retail vacancy rates have been relatively low and showing recovery over the past two years, this drove the demand for new construction. Pleasanton Gateway became a food focused center attracting the likes of Corner Bakery, Baja Fresh, Bagel Street Café, Ascona Pizza, Panda Express, and The Habit Burger Grill. The swift leasing created such high demand for space, the rents received eclipsed any previous apex in the Tri-Valley.
Paragon Outlets also had a great success story. Despite being a different product in general, the premium discount mall was able to deliver the project 95% leased. I would like to note, we do not include Paragon Outlets in our inventory because the sheer size and specific type of center would skew the numbers and not accurately depict the overall leasing activity; we also do not include Stoneridge Mall for the same reason. Fallon Gateway had success after the opening of Target, including BJ’s Brewhouse and Dick’s Sporting Goods (under construction). I would expect the demand for shop space and restaurants within Fallon Gateway to increase in the upcoming months. Both Pleasanton Gateway and Paragon Outlets were sold prior to year-end.

Good product can be categorized by being newer construction and with few exceptions, grocery store or big box anchored; I would also lump downtown storefronts into this section of the market. This category saw a slight improvement in rents and steady leasing and sales activity. The bulk of leasing activity was the offshoot of “new” product, mostly seen in the form of emerging tenants either being priced-out or not fitting the tenant mix of centers such as Fallon Gateway or Pleasanton Gateway.

Subpar can be described as everything that is not “new” or “good”. Unfortunately, this category is 60% of the market. This segment suffered from a lack in activity and continued to crawl with very little interest from new or growing tenants. The stagnant rents and lack of activity is contrary to the positive activity seen at the new product level.

Where does this leave us in 2013? Indicators point to continued new development and redevelopment. Investment retail building sales will continue to increase but the lack of “good” inventory is now hampering buying power and driving up prices across the board. A discrepancy in pricing will continue, as new construction comes to market there will be a flight to quality, leaving vacancies in older centers that will be difficult to lease. In the presence of ground-up construction, the rest of the market will continue to grow at a snail’s pace without a flood of growing and emerging businesses.

Retail Leasing Acitivity: A look at the numbers nationally

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I read a great article today that I thought others might be interested to read. Published by Retail Traffic Magazine, a retail focused website for owners, developers, and brokers, the article shows the trend line in leasing activity throughout the country. In our own area retail leasing has been a bit slower to come back, especially when compared to the industrial market. One particular part of the article stuck out to me:
“The retail sector should continue to post gains in both occupancy and rents, but the gains will be modest, according to Ryan Severino, senior economist with Reis.

“Even with so few completions occurring, the economy is not generating enough demand for space,” he wrote in a Jan. 15 report. “Until the economy begins to create more and better jobs, retail sales will remain listless, demand will remain at low levels and the vacancy compression will be slow and tedious.””

This statement mirrors what we are seeing in the market, with one exception. Despite the slow crawl, the Tri-Valley market has seen an increase in pricing, especially in the past six months. Tenants are still expecting to get the free rent and extremely low base rents reminiscent of 2009 but in reality those deals are very few and far between and only seen in struggling older centers. The new developments such as Pleasanton Gateway and Fallon Gateway have done exceptionally well. Theses two centers have created new high-water marks, even when considering pre-recession rates. This activity is driving rental rates on similar properties upward and creating a momentum shift in the favor of landlords.

Read the entire story at the link below:

http://retailtrafficmag.com/news/retail_leasing_fundamentals_improving_at_glacial_pace_01242013/