By Robert Sammons, Senior Director, Northern California Research
The Salesforce (Transbay) Transit Center opened with a splash this past weekend and to more or less rave reviews. It’s all shiny and clean inside but the real star of the show has been the park on top – it is truly beautiful and affords an entirely new perspective of San Francisco. The older buildings juxtaposed with the modern steel and glass towers surrounding the park, the availability of food and even cocktails, the crazy array of plants – it all finally makes the tech capital of the world LOOK like the tech capital of the world. Maybe I’m gushing too much. Admittedly there are just buses running down below for now – about as old school as it gets. But it all feels like a step in the right direction and, because projects such as this take SO long here (or really anywhere in the U.S.), it’s really refreshing that it has now been completed.
Which leads to a related topic, that being transit-oriented development. We’ve just released our latest Bay Area map on submarkets within walking or biking distance to a (rail) transit node versus the greater area. It’s not really a surprise that generally, those projects close by a BART or Caltrain stop outperform those that are not. There are exceptions but usually just because there might be one major availability in that close-in submarket or the entire area is essentially one big transit node (San Francisco across both its CBD and many of its non-CBD submarkets being the best example of that). The difficulty with the smaller downtown submarkets along the Peninsula is that there is only so much land to build on and only so many entitlements available such that if they are not completely occupied now, they likely will be soon and for some time to come.
The big three in the region – San Francisco, Oakland and San Jose – have a lot of runway remaining for the most part. But development near Muni or BART or Caltrain in San Francisco will move slowly going forward, not because there isn’t the need but because of timing and also because of obstacles such as Prop M and the yet-to-be approved Central SoMa upzoning. Development now rising in Oakland near its two CBD BART stops are likely to be big winners partially because of the San Francisco issues but also because of the ongoing boom in housing in Oakland (also driven by rail transit). And for San Jose, the future looks to be golden around its Diridon Station which already combines several forms of rail transit just to the west of the CBD (and with BART on the horizon too). Already, Adobe is looking to expand its campus exponentially (story below) while Google and others plan future mega-projects.
Now there are naysayers that mention that, in the future, TOD will become less important. Already, ride-sharing is making a dent in rail transit figures here and elsewhere. And in the future (me thinks way into the future) autonomous vehicles will allow people to commute from far distances, working or playing while they do. I’m not knocking ride-sharing, it’s one reason I still haven’t bought a car myself, even after being in San Francisco for four years this week (happy anniversary to me). But it’s not a cure-all and mass transit will still be necessary – it of course just needs to be on-time and safe and clean and expansive. I believe that the various forms of transit are best when they work in concert with one another. It’s a bit cost prohibitive to be taking a ride-share between San Francisco and San Jose every day. And you’re not exactly unburdening traffic on the freeway either. There will be lots more from me and many others on this topic going forward. So stay tuned.
Meanwhile, I’ve stepped on my colleague Garrick Brown’s toes a bit in this issue with several stories on retail including a really sad one to anyone that has spent any time at all in San Francisco – the likely closing of Gump’s. Meanwhile, Walmart and restaurants are performing outrageously well for the most part. And there’s some big deals on the horizon down the Peninsula and into Silicon Valley.
Feel free to send me a note – would love to hear your opinions on TOD in particular.
This post is commentary from the latest weekly edition of our NorCal Newsline, which you can subscribe to for free by e-mailing firstname.lastname@example.org.
Robert Sammons is Cushman & Wakefield’s Senior Director, Northern California Research. Based in San Francisco, Robert’s principal roles include working closely with the C&W research teams across the Northwest – including Northern California, Portland and Denver. Robert is author of numerous documents that delve into a wide variety of real estate and economic trends. He has been a quoted source for all manner of real estate and related economic information in many widely known media outlets across the country. Robert has 29 years of real estate experience as both an appraiser and researcher. He earned a BBA in Real Estate from The University of Georgia and an MS in Real Estate from Georgia State University. Robert is a member of the Urban Land Institute.