Second Quarter 2009-Market Overview
Overall activity on the Van Ness Corridor is marginal. While the office vacancy is up, the average rents are mysteriously up by a fraction. A few new retail vacancies are appearing on Polk and Union Streets. While there is limited leasing activity, a number of the well-located spaces are being leased. The newest condominium development at 77 Van Ness Avenue has opted to successfully go the sales route as opposed to a few other projects that have chosen to go rental. Investment sales activity is basically non-existent, with buyers reluctant to proceed on any purchases. 1285 Sutter Street, the approved development site dropped their asking price from $18M to $8M to try to attract a buyer. Academy of Art is finalizing the renovation of their Van Ness Avenue building and Polk Street is continuing with their beautification program by adding a few palm trees.
FEATURE TENANT
At Big Swingin' Cycles, we bring a rare blend of technical acumen, cycling professionalism and passion for the sport, married to a "main street" friendliness and attention to service that is rapidly disappearing in bicycle retailing. BSC is owned and operated by Brian and Lori Bruckner. Brian and Lori have been avid cyclists for over 25 years and have gained a vast knowledge of the sport through extensive participation in many aspects of cycling: on and off road racing, triathlons, coaching, and of course, fun rides with family and friends. We look forward to meeting you soon.
http://www.bigswingincycles.com
2260 Van Ness Avenue @ Vallejo Tel# 415-441-6294
Office
The office vacancy rate including sublease space is 9.7%. This is a jump of almost 2% from a 7.9% vacancy rate last quarter. The average rents for all office buildings for all classes of office space are $26.28, which is surprisingly up by about 50 cents psf from last quarter. Like the economy, activity is sluggish, with Class A space rents in the low $30.00 psf to upper $30.00 psf range. Vacancy of individual class A buildings range from 4% at Daniel Burnham Court to 12% at 1700 California Street. 77 Van Ness Avenue, the new mixed-use project is close on a number of office lease deals in the $28.00 psf range. 1375 Sutter Street, owned by CPMC is currently off the market while they seek approval to convert the 100,000 sf building to a Medical Office Building (MOB).
Retail
The retail availability is now at 154,967 sf, which equates to a vacancy rate of 4.3%. The various main streets such as Polk and Union Streets and the side streets are seeing new retail availabilities. Overall asking retail rents on the Corridor are $2.00-$5.00 psf NNN rate. 1130 Post Street, the old Circuit City Building has a 8,522 sf fully fixtured day spa facility for sublease at $2.50 psf NNN with CAM/Tax at $1.02 psf. The Sprint space of 3000 sf at 928 Van Ness is on the market at $4.17 psf NNN. 1651 Polk Street near Clay has 1000 sf at $3.75 psf NNN and 1423 Polk Street near California Street has 1400 sf at $2.00 psf IG. 1954 Union Street has 1400 sf at $5.00 psf NNN. 1160 Post Street is undergoing a renovation to open up a new restaurant.
The Artani Condominium project in the 800 block of Van Ness Avenue continues its rental program of its 52 residential units. 77 Van Ness Avenue, a new mixed use condominium project decided to go the sales route as opposed to rentals and have seen good activity with apparently 10 residential units in contract. There is a one-bedroom unit on the 4th floor of 949 sf with an asking price of $499,974 or $527 psf. They will shortly be putting on the market 10 below market units.
Investment
950 Van Ness Avenue, a 16,680 sf site with 44,000 sf building is back on the market at $8,950,000. 271 Austin Street, a small fully renovated Victorian office building of 3,250 sf is for sale at $1,895,000. 1285 Sutter Street, the approved development site dropped their asking price from $18M to $8M. 131 Fell Street, a 2-story auto body building on a site of 4,948 just sold for an undisclosed price. They were asking $2,300,000.
