Alternative workplace update: “Motivated more by a desire to save money on real estate than to please finicky employees, companies including Motorola, Ernest & Young and Cisco Systems report that they have cut real estate costs significantly by adopting “alternative workplace” designs.  Cisco, for example, has seen 37 to 40 percent savings from its new approach.  Capital One Financial Services Corp has made the concept a key part of its “Future of Work” initiative by swapping traditional offices and cubicles for a mixture of unassigned desks, sofas and conference spaces.  The company’s cafeteria is designed to accommodate informal meetings, and there are scattered café areas that look remarkably like the local Starbucks.  Employees equipped with wireless laptops, Blackberries and cell phones, are free to work wherever they wish.  A recent Gallup poll commissioned by CoreNet Global, a corporate real estate association, found that 20 percent of large companies expect to have between 25 and 50 percent of their employees working in unassigned spaces by 2010, and by 2020 the majority of large companies are expected to have adopted the practice to some extent.  Alternative workplaces offer an opportunity for deeper (expense) cuts because they represent a shift from thinking about occupancy (how many people a building can accommodate) to utilization (how many people actually use a building or office at any given time).  ‘Companies are starting to realize that instead of being satisfied that their building is 95 percent occupied they should instead be worried that it’s only 40 percent utilized because people are often out of the office,’ says Prentice Knight, CEO of CoreNet Global.”  CFO (October 2006)

“California’s job market is expected to expand faster than the rest of the country’s, a new report says, and analysts believe the East Bay and the rest of the Bay Area could nestle into the vangard of that growth.  Overall, California is expected to increase its job base by 17 percent between now and 2015, while the nation will expand its job totals by 13 percent.”  Contra Costa Times (10/17/06)  “California will add            3 million jobs, 5 million residents and 2 million households by 2015.” San Francisco Chronicle (11/14/06)  “Jobs are being added in the East Bay at a fast enough pace that it tops regions either touted as today’s boomtowns – such as Sacramento County – or generally viewed as giant pillars of employment – such as San Diego, Los Angeles, Orange County, San Francisco area and Santa Clara County.”  Contra Costa Times (10/16/06)

“Google recently unveiled plans to build a solar-powered electricity system at its headquarters.  The rooftop system – capable of generating 1.6 MW - will rank Google’s facilities as the largest U.S. solar-powered corporate office complex.  According to the company, once the system is in place, it will rely on solar power to supply nearly a third of the electricity consumed by office workers at its roughly one-million-square foot headquarters.  Most of the solar panels will sit on the rooftops of office buildings in the Googleplex – the nickname for the site.  Others will provide shaded parking as part of the newly constructed solar-panel canopies over existing Google car parking lots.”   ElectricalZone (11/1/06)

Deals & Rumors:  Office leasing activity during the past 60 days in San Francisco was overwhelming in comparison to the rest of the Bay Area… StubHub leased 38,000 sf at 199 Fremont St.; Office General took 14,000 sf at 580 California St.; Fliesler Meyer signed for 15,000 sf at 650 California St.; Blue Shield expanded by 30,000 sf at 50 Beale St.; Degenkolb Engineers leased 25,000 sf at 235 Montgomery St.; Ironwood Capital Management took 16,000 sf at Steuart Tower; Golden Gate Regional Center leased 33,000 sf at 875 Stevenson St; Bar Association of San Francisco signed for 24,000 sf at 301 Battery St.; Levin Simes Kaiser & Gornick took 16,000 sf at 44 Montgomery St.; Mellon Financial Corp. may have a LOI for 75,000 sf at 50 Fremont St.; Advent Softway leased 104,000 sf at 650 Townsend St.; Sirna Therapeutics expanded by 19,000 sf at 1700 Owens St.; FTI Consulting leased 17,000 sf at One Front St.; where in the same building Wells Fargo expanded by 32,000 sf; Offit Hill Capital Management leased 42,000 sf at One Maritime Plaza; Ingenio leased 38,000 sf at 201 Mission St.; Smith Group took 35,000 sf at 301 Battery St.; Learn It signed for 14,000 sf at 22 New Montgomery St.; and Novo Construction leased 13,000 sf at 608 Folsom St.  Down the Peninsula in San Mateo, SalesForce.com leased 114,000 sf at 900 Concar Drive and Wageworks took 40,000 sf and Epocrates 60,000 sf, both leases at 1100 Park Place.   In Vacaville, State Compensation Insurance Fund is planning a 430,000 sf office campus to house 1,200 employees.  In Emeryville, I represented Environ in their expansion to 22,000 sf at 6001 Shellmound Street.  In Walnut Creek, I helped TriStar with their 11,393 sf lease renewal at 470 N. Wiget Lane, and AirTouch just expanded by 15,000 sf at Walnut Creek Executive Center.  In Concord, North American Title is reportedly relocating to 16,000 sf, T-Mobile is renewing and expanding to 67,000 sf and BNC Mortgage signed for 18,000 sf, all three tenants for Concord Gateway at 1855 Gateway Blvd.  In   San Ramon, California Newspapers leased 35,000 sf at 2527 Camino Ramon, and farther down the        I-680, Zantaz signed a 67,000 sf office lease at 5794 W. Las Positas Blvd. in Pleasanton.

People always want something else, Part 631: For a number of years, Bay Area business leaders have bemoaned our high cost of housing as one key reason it is difficult to attract companies and employees to relocate to the Bay Area, and yet when our housing prices begin to decline, it is headlined as a major economic disaster …we complain there isn’t enough housing supply, but no way would any of us want new development in our communities … no, we want it built “elsewhere” and then we complain about the increase in traffic congestion due to these long-distance commuters …

Corporate America and CRM’s (Client Relationship Managers) … “Client relationship management - the hottest buzzword in corporate real estate circles these days - is taking on heightened importance even as several real estate functions are being outsourced.  Combining a corporate background with real estate expertise, CRMs form a bridge between real estate and the C-suite to maximize the overall corporate strategy.  The client relationship managers, who know and understand the concerns of their business unit, are able to help the corporate real estate department present the initiative to the business units in a way that answered their concerns and demonstrated the companywide benefits of the plan.”  National Real Estate Investor (September 2006)

I received my BS as well as my MBA from UC Berkeley, so it was great to note: “UC Berkeley’s Haas School of Business hit No. 5 on the Wall Street Journal’s ranking of graduate programs this year, up from No. 7 last year.  It beat out neighboring Stanford University’s business school which fell from No. 15 to     No. 18 this year”  East Bay Business Times (11/22/06).  Now if we could just figure a way to make the Rose Bowl in 2007. (I played tenor sax in the Cal Marching Band way back when …)

“Green” furniture and “green” buildings … Steelcase has a lightweight office chair, called the Think, with   44 percent of the chair coming from recycled materials.  After the chair has been used for years, most of its 32 pounds are, in turn, recyclable.  Herman Miller sells two “green” chairs, one of which, the Celle, can be 99 percent recycled.  Knoll has its Life chair, with 70 to 80 percent of its materials recyclable.  New York Times (10/22/06).  “Tishman Speyer is seeking permission to build a 33-story ‘green’ office tower at Second and Howard Street, a project San Francisco officials are calling a pioneer in a new program giving priority to sustainable developments …  The 700,000-square foot building, which would cost approximately $350 million ($500/sf) based on a current construction rates, would be the first office tower in the city built to comply with ‘gold’ standards set by Leadership on Energy and Environmental Design (LEED) … while green construction generally costs 2 percent more than traditional construction, the millions saved in the expedited permitting process more than compensates for the cost.”  San Francisco Business Times (11/3/06).  “Only five percent of new commercial buildings built this year are expected to LEED certified.   In a 2005 survey of construction and real estate industry executives by Turner Construction Co., 68 percent said they avoided green construction because of concerns about cost …  In June, during the U.S. Conference of Mayors annual gathering, the non-profit organization identified buildings as the largest consumer of fossil fuel in the nation.  According to the group, whose more than 300 members represent cities with at least 30,000 residents, between 40 percent and 60 percent of greenhouse gas emissions in the U.S. are created from operating buildings …  Experts point to a recent study by Lawrence Berkeley National Lab that found the financial benefits of green design over the life of the building more than 10 times the additional cost associated with building green.”  National Real Estate Investor (November 2006)