Livermore Cuts Ties With Lennar in Downtown Mixed Use Development

The saga continues… City Council did not extend the 9-month contract with Lennar Multi-Family Communities, ending the year long relationship. As some might recall, this time last year a number of developers were asked to present plans for the former Lucky Supermarket site, now a half dirt parking lot between First and Railroad Avenue. Lennar was selected as the developer who would then work with City staff, Council, and the community to come up with a final plan. Unfortunately, Lennar didn’t get that opportunity due to the November elections. With fresh Council members, the project is back to square one.

Development is always tricky, you are asking a community of people who already have homes in that area to decide on more people, more traffic, more impact on services; rarely does a community gather to encourage more housing and more people when their needs are met. While I do believe the project should be carefully planned to reflect the actual needs of the community, the wants and priorities of those closest to the situation may not actually understand the real needs of the greater market and what is actually marketable.

For example, we know Livermore is a sought-after community, filling apartments and condos is no problem. However, we have no idea if a 130-room hotel will ever sell out or if a 75,000 square  retail center will find an anchor store. In fact, Livermore traditionally has not supported big-box retail outside of the “freeway zone” and vacancy rates of the local hotels are not low enough for hoteliers to be attracted to building a new facility, downtown or otherwise. The market will dictate what makes economic sense, someone just needs to be listening.

Link to EBT Article

La PanotiQ Opens in Downtown Livermore

The newest addition to the downtown line-up has officially opened! La PanotiQ is located the former Nestle Toll-house Cafe at 2470 First Street. The french style cafe has slowly expanded their collection of family operated restaurants, the original location being in Cambell. Other locations include San Francisco (Marina District and Noe Valley), Mountain View, and Berkeley to soon open.

To read more about La PanotiQ CLICK HEREDSC_0290

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!

 

Medical/Dental Building For Sale in Livermore

For those practicing in the medical and dental fields, you know how challenging finding space can be. Staying within the confines of zoning districts, water/sewer fees, extensive and expensive construction costs of building the space… it can be a mess. Very rarely does a second generation building medical or dental space come available for lease, let alone for sale. Today I would like to highlight one of those coveted buildings located near downtown Livermore.

Our subject building is not the most aesthetically pleasing in the world but it does offer great amenities including location, parking, and renovations. At 2,200 square feet it is well appointed for one or two practitioners. Having been remodeled back in 2006 it has two separate suites with newer roof, updated restrooms, raised floors, and newer HVAC. The location on East Avenue near N. Livermore Avenue and 4th Street makes for great visibility.

2415 east ave

The Stats:

2412 East Avenue

FOR SALE @ $1,092,500 ($496 per square foot)

Size: 2,202 square feet

Comments: Great free-standing building, hard to find medical/dental buildout. Price per foot is steep but the savings in dental infrastructure counter balances the cost. Potential income producer, occupy one suite and lease out the other.

Goodbye Toll House, Hello C.R.E.A.M Cookies and Ice Cream!

Creamlogo

Are you one of the hundreds of people that crave ice cream sandwiches from Cream every day? Tired of driving to Berkeley or Walnut Creek to get your fix? You’re in luck! Cream has officially signed a lease in downtown Livermore!

Cream, which stands as “Cookies Rule Everything Around Me” is Bay Area concept that has caught fire. They specialize in all natural gourmet ice cream sandwiches and best yet, they are affordable at around $3 each.

The new location will be next to the 13-screen movie theater and Bankhead Performing Arts Theatre at 2375 Railroad Avenue in the Livermore Valley Plaza. The location is ideal, just across from the free city parking garage and on the way to all the major attractions. Cream is anticipating a February opening date.

Nestle Toll House Cafe closed at the end of October leaving behind 1,800 square feet of prime real estate on First Street. That space is now for lease. Contact Jessica for more information jmauser@lee-associates.com or 925.737.4168.

DSC_0290

Until recently Livermore Valley Plaza lacked excitement and had many vacant spaces. Over the past 18 months we have seen the center become near completely full and the epicenter of downtown shifted to this area. Establishments such as Sauced BBQ & Spirits, Patxi’s Pizza, and The Last Word (coming soon) are among the new line-up.

 

 

Livermore Downtown Retail/Office Space For Lease

An adorable little space on 3rd Street near South L Street has just come to market for lease. The space has a great glass line and retail frontage but would make for a nice professional office, personal service use (salon), or medical office. Because it is located on 3rd Street the zoning allows for many uses that cannot be accommodated on First Street.

The space is 1,775 square feet and the asking rent is $1.50 per square foot. Very reasonable rent, especially given the attractive retail frontage!

Call Jessica for more information on this property and other availabilities in the downtown area: jmauser@lee-associates.com or 925.737.4168

Buffalo Wild Wings Moves Into Downtown Livermore

Watch out Livermore, we have another new restaurant to add to the scene! Buffalo Wild Wings has taken a big chunk of space near the Vine Theater at 1780 First Street. The new location is not on the main pedestrian traffic, but close enough to downtown hot spots that it is still walkable.

Buffalo Wild Wings has established locations in both Dublin and San Ramon. Known for their wings and sports bar the large restaurant will be 7,320 square feet – bigger than Dublin but smaller than the San Ramon location.

Other businesses in the complex include Zephyr Grill, Casbah Cafe, Vine Movie Theater, and Edward Jones. Prudential Real Estate Company was located in the center but relocated to 2nd and L Street, the former J Rockcliff Realtor space within the past few weeks.

Does this location help expand the downtown core? What effect, if any, do you think it will do for pedestrian traffic on this side of First Street? What do you think of Buffalo Wild Wings joining the downtown line-up? Sound off in the comments section below!

Vine Cinema1790 first street

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!

Downtown Livermore – Small Retail Space For Lease!

By far, the most popular email I receive is “do you know of any space downtown or on First Street in Livermore under 1,000 square feet?”

My standard answer,”No!”

The problem with downtown Livermore is that there is only a handful of spaces under 1,000 square feet and very rarely do those very few buildings/spaces come available. But, at last, there is relief! Not just one but TWO small spaces.

1. The first space is located smack in the middle First Street, awesome and very desirable location and the smallest in town at about 600 square feet.
2. The next space is located on a side street between First and Second. This is another great space with big window line and a single restroom. This space is a great size at 950 square feet.

Another vacancy in this size range is at 1981 First Street, just across from the old Groth Brothers dealership. This 1,100 square foot space is now available due to the departure of In Your Space, who moved their interior design business to a design studio elsewhere.

Milano Joe’s, just because every keeps asking… is not officially for lease. The original tenant retains the lease-rights and rumor has it, he is shopping the market for a buyer.

In the news of tot so small space, a great free-standing building on Second Street has come available. You might remember it as the former Knott’s Flower (for the Livermore old-tiemrs) but most recently occupied by Ultra Spective Photography. At 2,000 square feet the building has a great identity. Just a heads-up, this building is the perfect location for viewing the Rodeo Parade.

Questions or want additional info on these spaces? Feel free to contact me @ jmauser@lee-associates.com or 925.737.4168

Sunset Office Plaza, Another Heated Livermore Debate

Sunset Office PlazaLivermore has once again found itself in a very divided and passionate conversation. The topic this time around? Redevelopment of a 40-year-old office/medical plaza. Nevermind the fact that most cities across the nation would pay people to buy homes and rent commercial space. Our isolated corner of the country is one of the first and only to experience new development and redevelopment since the economy took a dive. But I digress.

I will start with a quick synopses of the owner/developer. Sunset Development Company, a well-known Tri-Valley, family owned operation. They also own and developed  Bishop Ranch in San Ramon. Bishop Ranch is a widely successful 10 million square foot office project consisting of Fortune 500 companies including: Bank of West, Chevron, JPMorgan Chase, and Ford. When the economy crashed Bishop Ranch experienced lackluster leasing activity and tenants vacating, just like everyone else. What has not been told is the story of successful leasing that has taken place since 2011. The park has experienced close to, if not more than, half a million square feet of new leases and expansions in the past few years, leaving it near full occupancy.

Sunset Office Plaza in Livermore is located on a main thoroughfare and consists of 10 buildings and 75,000 square feet of rentable space. The 14-acre site is surrounded by residential and located across from a grocery anchored shopping center. The office plaza no longer makes economic sense. Rents are not high enough to offset property management, maintenance, and plaza’s aging infrastructure. The question becomes: What is the highest and best use?

If you have been keeping with my blog, you will note Livermore is still lagging in terms of retail shopping center leasing, having the highest vacancy rates in the area. Certainly adding more retail space is not a winning proposition. The only thing more depressed than retail is office space. What is thriving you may ask? Residential. The site naturally lends to residential due to the highly valued school district and ideal South side location. With the lack of new residential building the past few years, inventory is low and multiple offers are common making residential the highest and best use.

What will happen to the tenants in plaza? There is plenty of office, medical, and retail space that needs to be leased all over town. This has been one of, if not the least expensive places to rent for years. Tenants should be happy to have been able to capitalize on this opportunity for as long as they have. It is unreasonable for people to expect the plaza to remain as-is, especially if economics do not make sense. Real estate is a business and just like any other business, it needs to make money in-order to survive.

Apartments, townhomes, or single family is the next question. Neighboring home-owners never like apartments and multiple story townhomes in our sleepy community have not been popular outside of downtown. How about a little devils advocate: While many find building apartments offensive, are residents taking into the consideration the massive expense to rent? Those who rent are not the same demographic you might remember in years past. Did you know a search on Craigslist only revealed a couple of homes, and only one 3 bedroom 2 bath in the South side of town. This duplex (attached home) is renting $2,550 per month! No doubt a new construction rental would be more expensive. Would high-end rentals really devalue and bring the shady characters everyone fears?

For now it seems Sunset has scratched the plans for multi-family units and is on track with single family homes. In my humble opinion, any residential use is going to be better for the neighborhood and community that what currently exists. It all comes down to what the highest and best use for the land because in the end, the highest and best use will boost surrounding property values which will lend to a stronger and more robust local economy.

What are your thoughts?

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.

McGrail Winery Grows Its Livermore Empire

I know this isn’t necessarily related to commercial real estate or downtown storefronts but it is news around Livermore. One of my favorite wineries, Picazo has been purchased by another local vintner, McGrail. If you haven’t tried a bottle of the scrumptious Picazo wines, you are missing out. My favorites are the lush Sauvignon Blanc and an ultra smooth yet complex Merlot that drinks like a cab … Is it happy hour yet? Picazo is only available via allocation but you can find them at local restaurants such as Campo Di Bocce.

McGrail is known for extraordinary Cabernet and a widening selection of whites including a stellar Chardonnay. Both wineries have a common denominator, Mark Clarin the master of wine making in the Livermore Valley. A press release on McGrail’s website indicates the Picazo label will be more readily available in the future and the brand intends to continue the legacy of ultra-premium vintages. Cheers to that!

Restaurants On the Move… What is going on?

For the last year the inventory of existing restaurant space in Livermore, Pleasanton, and Dublin has been zero. I receive multiple calls a week from experienced restauranteurs looking for second or third locations and I have had to tell them that there is nothing available. But that has changed…

Since September we have seen an influx of restaurant closures leading to a number of second generation restaurant on the market. A very unusual situation. The most recent victim is Cellar 9, the restaurant in Grafton Station next to Buffalo Wild Wings. The 3,800 square foot restaurant is available for lease upon a very quiet closing. The other big closure was Carl’s Jr. on Hopyard Road a now vacant 3,200 square feet. Denny’s Cafe has recently closed in Livermore leaving 3,600 square feet available. Roti8 in Blackhawk Plaza closed within the past few weeks. Finally, Danville still has a small downtown space available, 1200-square feet that was the former home to Wild Vine Hideaway.

Earlier in the summer Izzy’s Steakhouse exited the market, leaving behind their space in San Ramon which was quickly backfilled by a second Buffalo Wild Wings. Marcello’s on San Ramon Valley Blvd Danville closed late spring which is now pending a deal with Ruggies, the San Ramon diner. Ike’s Lair the SF based deli is opening in Danville Square which used to be a quick-service mexican restaurant. Chipotle, Panera, and Wing Stop all have deals lined-up on second generation restaurant spaces in Livermore. Wild Vine on First Street in downtown Livermore closed July 1st and will soon be Lord’s Ice Cream. Last but not least, Amelia’s in downtown Pleasanton closed mid-summer and has recently been leased to a mexican restaurant.

Of course we cannot forget about the two biggest closures, TGI Fridays which will be torn down and rebuilt for a new tenant and Macaroni Grill which has not had any public announcements as to a new tenant.

This is not a complete list of all the movement, it would literally take me all day to write all the deals in the past six months. What I can tell you is that it has been a busy year for restaurants, good and bad, and I have no doubt we will continue to see restaurants on the move and more second generation space come to market.