Video Tour of 729 Fulton Shipyard Rd, Antioch, CA
Here is a video tour of our listing at 729 Fulton Shipyard Rd in Antioch, CA.
The light industrial space boasts ±2,500 sf of warehouse & office space. We are asking $2,200/mo.
Reasons for Optimism on April 10
Happy Easter!
Wishing that you and your loved ones have a blessed and healthy weekend. Hopefully you will find a way to be physically distant but socially engaged over the holiday weekend.
I have included a few items below to brighten your day or week. My current real estate listings and some art from my daughter.
Reasons for Optimism
These days there seems to be a shortage of good news in the world today. But here is why I am cautiously optimistic these days.
Social Distancing Physical Distancing Working? – Coronavirus Model Revised Down
CNN and other news sources are reporting that one of the influential models tracking the coronavirus pandemic has revised the total deaths number down.
The numbers for California have improved with peak utilization of hospital resources occurring on April 13 and without an overload of hospital resources.
This doesn’t mean that we can stop being vigilant with our handwashing and stop following CDC guidelines.
Auto Insurers Offering Rebates
I received notice that I will be getting a discount on my auto insurance due to the reduced driving. The EastBayTimes.com is reporting this is occurring with a number of carriers and lists some of the programs offered.
Some Good News by John Krasinski
John Krasinski (of The Office and Jack Ryan) has uploaded two episodes of Some Good News. In the videos he highlights good news from around the web. In the first episode he interviews The Office costar Steve Carell. In the latest installment he surprises a young girl with a Zoom call.
Zoom Surprise: Some Good News with John Krasinski Ep. 2
Maria Told Her Mother Gladly – Humor
Maria came home from Sunday School on Palm Sunday and told her mother that she had learned a new song about a cross-eyed bear named Gladly.
It took her mother a while before she realized that the hymn Maria had been singing was really: “Gladly The Cross I’d Bear.”
Holiday Reading
On Good Friday
Why We Call the Worst Friday ‘Good’
“It was the single most horrible day in the history of the world.
No incident has ever been more tragic, and no future event will ever match it.”
On Sunday
And as they were frightened and bowed their faces to the ground, the men said to them, “Why do you seek the living among the dead? He is not here, but has risen.”
Luke 24:5-6
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Commercial Real Estate Listings
This high visibility location along Monument Boulevard in Concord, CA is zoned Commercial Mixed-Use (CMX) by the City of Concord allowing a variety of retail and service uses. Learn More…
For Lease – Antioch Warehouse
This open and bright space is ideal for the cabinet maker, the contractor, the plumber, the carpet installer, or other trade. The space contains a small office, a private restroom, and mezzanine space. Keep Reading
For Lease – Martinez R&D Space
±16,885 Sq. Ft. of beautiful, bright R&D space. Warehouse and office space. Two roll up doors. Find Out More
How Real Estate Technology Is Changing the Game
Innovators, disruptors, and productivity enhancers: technology is persistently creeping into the real estate market. In the last 20 years, technology has transformed our nation’s economy, providing innumerable opportunities as well as some threats to real estate brokers.
For this reason, brokers must adapt with the emerging technology if they want to stay in business. The commercial market is perhaps slower than the residential market to adopt new tech, but nonetheless, successful brokers don’t waste time on outdated strategies.
CREtech identifies the four major areas where technology has affected real estate: mobile search, automation, chatbots, and big data.
Mobile Search – Across all markets, 58% of property buyers start their search on a mobile device. This carries huge implications for online marketing, as it demands simplicity and mobile-responsive web designs. This may also affect the agent-facing documents (i.e. MLS and other information resources), as virtually all real estate agents rely on their smartphone for quick access to property data.
Automation – With familiar software such as DocuSign, brokers, agents, and property managers are able to streamline workflow by automating many processes. New websites and applications are emerging every year, each offering a solution to one of the many time-consuming tasks Realtors face.
CBInsights mapped over 100 of these new rising companies in real estate tech, shown by the graphic below.
Chatbots – Responsive AI technology designed to answer user’s questions via direct message are becoming increasingly useful for large brokerages. Applications of chatbot technology could include answering frequently asked questions or providing clients with property information while you’re out of the office. This may not seem like a game-changing technology, but the application of AI to database searches has huge potential.
Big Data – Real estate companies have access to large amounts of information, and data aggregate technology could use historical data to make market predictions and save companies from making costly decisions, according to the CREtech article. This tech is particularly valuable to large brokerages with high turnover, and may be of use to economists studying the market at large.
Threats
Disruptors have also taken hold in the real estate market, with companies such as Redfin and Zillow luring sellers into listing without an agent or with a partial-service agent. These companies have been around for nearly 15 years, and although they boast a combined 42 million unique users every month, neither company has shown they are a true disruptor to the industry.
Redfin continues to occupy less than 1% of the market share (0.83% as of 2019Q1), while Zillow appears to be providing more leads than threats to both lenders and real estate agents. Both giants are still major national players, but most clients still opt to trust full-service brokers to sell their homes.
Julian Hebron from Housingwire.com puts it this way: “The only threat to lenders and Realtors is ignoring Zillow.”
How we can respond
Whether you’re up on the latest property management app or just now using e-signatures for the first time, technology integration is inevitable if you’re to remain competitive in the real estate market.
As of now, it looks like the leading disruptors have yet to become major threats, as long as real estate brokers continue to provide quality, personalized service to their clients.
Take another look at the market map above, or keep an eye on these 20 up-and-coming PropTech companies to stay informed–and possibly leverage these technologies for your business.
Wondering how you could enhance your business or transaction process? Unsure about what’s next for your investment? Reach out to Peter Maclennan by phone at 925-385-8798 or email at peter@maclennaninvestments.com for a consultation.
Commercial Real Estate Market Trends & Forecast
UCLA real estate experts recently published an analysis of the commercial real estate industry as part of the monthly UCLA Economic Letter, in which senior economist David Shulman dishes out “the good, the bad, and the ugly.”
While the commercial sector sees ups and downs just like the residential sector, commercial construction spending has grown steadily–and substantially–since 2010. However, spending has recently plateaued around $140 billion annually, as shown by the chart below.
Apartments & Industrial
Shulman points out the positive trends in two of the four largest commercial categories: apartments and industrial. A decline in homeownership from 64.8% to 64.2% means more people are renting (possibly due to delayed marriage and child-bearing among Millennials). This is why rental rates continue to rise by 3-4% per year and developers are building more apartments now than ever: 380,000 units annually over the last four years compared with 114,000 in 2010.
Median rent in Contra Costa County is well ahead of the rest of California, at nearly $1,766/mo across all housing types as of 2017 Q4. Respective state median rent is at $1,447 (Source: Department of Numbers).
Industrial rents rose at nearly double the rate according to the UCLA Economic Letter, between 6-8% annually. This is due in part to the rise in eCommerce business and the corresponding need for warehouse and distribution centers.
Office
Shulman identifies the threat that the coworking effect has on the office sector: declining square-footage per employee. The average employee has only 150 square feet of office space, down from the previous average of over 200 square feet. Office users’ decreasing space per employee results in higher office vacancy: now up to 16.6%.
Retail
The retail sector is what Shulman calls “the ugly” of the current commercial climate. The eCommerce boom has led nearly 6,000 retail locations to announce they’re closing in 2019. And although many online retailers are now opening physical locations, they maintain a fraction of the square footage of the retailers they are replacing. Shopping centers and malls are experiencing vacancy rates of 9-10%, comparable to recession-level rates.
As we can see, the commercial sector does not always ebb and flow as one, but each category is affected differently by shifts in the economy at large. As an investor, broker, or developer, it is important to keep a finger on the pulse of the market in order to make the best decisions for long-term success.
Effect on Commercial Real Estate Values
Trends in rental demand and usage will likely affect the value investors apply to individual real estate sectors. Those sectors with increasing vacancy will see declining values as investors weigh the greater risk and demand less of it for their portfolios or a greater return to offset the greater risk.
Those sectors with strong rent growth and lower vacancy (currently industrial and multi-family), will likely see strong demand from investors as the vacancy risk is lower and investors foresee rent growth. How soon investors start to make these adjustments is yet to be seen.
If you want to know how changes in the commercial market may affect the value of your commercial real estate, reach out to Maclennan Investment Group by email: peter@maclennaninvestments.com or phone: (925) 385-8798 and see how we can assist you.
Adaptive Reuse: Maximizing Property Value
Adaptive reuse is the repurposing of one type of building space into another to better suit the needs of the owner, tenant, or community. Today we will talk about the economic potential and success stories of adaptive reuse, as well as some of its inherent limitations.
How Adaptive Reuse Happens
In the 60s and 70s, U.S. industry was booming, leading to the construction of thousands of manufacturing and warehouse buildings. When industry began to slow and city population began to climb, many of these industrial buildings along the coast and in the Midwest were left vacant. Since then, these buildings have been repurposed into restaurants, apartments, and event centers with rustic charm.
Most buildings are built to serve a long-term purpose, but occasionally that purpose is met long before the building is due for demolition. For example, a large brick factory built in 1960 may still be structurally sound, but it has ceased operation and no longer serves the function of manufacturing. Rather than tearing it down, a developer may see the building as an opportunity for adaptive reuse and decide to renovate the existing structure for a new function.
Another reason buildings end up being repurposed is if they are deemed historic by the city and therefore illegal to demolish. Owners or developers may turn to adaptive reuse to make use of the space without selling the building.
Below are three unique and innovative examples of successful adaptive reuse projects of different scopes.
Arcade Providence
Built in 1828, the Arcade Providence mall in Providence, RI is the oldest indoor shopping mall in the U.S. The building’s combination of historical significance with the beautiful granite columns made the Arcade mall the perfect candidate for adaptive reuse.
The building was converted into first-floor retail and dining with 48 tiny one-bedroom apartments (“microlofts”) on the second story. Apartments range in size from 225 to 800 SF and monthly rent starts at $850. That sounds impossibly affordable given the city’s average rent for single bedroom apartments is over $1,600, but on a square-foot basis it is well above the rest of the market.
The Phoenixville Foundry
Northwest of Philadelphia lies the historic city of Phoenixville, PA. At its heart is an old foundry left behind by Phoenix Iron & Steel Company in the 1970s. The foundry’s rustic charm, in addition to its historical significance, made it the perfect building for the Hankin Group developers to renovate into a full-service wedding venue and event center.
Event rental is year-round, and rates range from $5,000 to $11,500, according to Here Comes the Guide.
Western Metal Supply Co.
In Petco Park, home of the San Diego Padres, lies one of the most creative adaptive reuse projects in the country. Nestled behind the left field foul pole is a large brick building bearing the words “Western Metal Supply Co.” The building was built in 1909 and was home to the supply company until it declared bankruptcy in 1975.
The building remained vacant for over two decades, and was eventually purchased by Petco Park for construction in 2001. Rather than demolish the 51,400 SF warehouse, developers incorporated it into the design of the park, refurbishing the inside to contain a team shop, restaurants, and private suites. The Western Metal Supply Co. building is now an iconic San Diego structure and remains a valued part of the city’s history.
Limitations of Adaptive Reuse
There are many stories of adapted buildings making successful transitions from one property type to another, but ensuring legal compliance and long-term feasibility can be an issue.
First of all, developers must ensure the property is zoned for the intended use, or that the renovation is compliant with governmental codes. Developers must verify the land use matches the actual property function or risk fines and litigation.
Second, a developer making a permanent change to an existing structure wants to ensure the new purpose is suitable to the location and the market. Take, for example, Miami’s Wynwood district: adaptive reuse projects are everywhere, and they are all thriving off of each other. Ultimately, for an adaptive reuse project make financial sense in the long-term, it has to be within a strong market to begin.
Be sure to consult a professional who knows the commercial market and zoning regulations before considering an adaptive reuse project. While it may not be for the faint of heart, adaptive reuse can prove an effective strategy to revitalize a property for long-term success.
You can reach Peter Maclennan at 925-385-8798 or by email at peter@maclennaninvestments.com.
For another helpful resource, read this Thought Co. article on adaptive reuse.
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