THE SHAPE OF THINGS TO COME IN WALNUT
CREEK
Breakfast Presentation
At the Walnut Creek Marriott Hotel
Hosted by the
Panelists: Mayor Sue Rainey, Jeffrey S. Weil, SVP
Colliers,
and Sanjiv Bhandari, Principal with BKBC
Architects
Here are Jeffrey S. Weil’s responses and
thoughts to the various issues
that were raised
at this presentation
Why did
Because of its location, some great architectural buildings,
walkability and being surrounded by tens of thousands of wealthy homeowners in
Plans for
The residential boom, up until a year ago, was just about anyplace in the Bay Area developers could get entitlements – There are long lead times from start to finish, so what we are seeing being completed now in Walnut Creek started years ago. But, right off the freeway, there is Bart, incredible retail amenities, and it is a super place to live.
The first of these new condo
projects is The Mercer. Is The Mercer project emblematic of what this wave of
multi-family housing in downtown
I have been asking people, if they like it, yes or no and I have received answers all across the board. Some do, some don’t.
The Mercer includes 21,000 square
feet of ground floor retail space. You’re not a retail guy, but what does you
agency’s retail people say about the way it’s performing? Is the space sold
out? Who are some of the tenants? What price is it leasing at vis-à-vis other
downtown retail space?
Counter Burger we heard was close to signing for 1600 sf,
Starbucks is rumored to be one of the new tenants, and there are a number of
rumors about a 6,700 sf
What kind of impact will all this
new multi-family downtown housing have on the retail sector?
It can’t help but improve business at restaurants, movie theaters, Longs, Trader Joes, Whole Foods and Safeway – mom and pops not catering to these more upscale residents might be worried that chi chi success will raise rents that only other chi chi businesses will be able to afford – I shop at Bonanza Books and Performance Bikes so it’s up to the consumers to vote with their shopping dollars as to which stores they want.
Downtown parking has been a
longtime complaint in
How actual a problem is there? Do shoppers expect to park on the street
right in front of their destination? Are
they willing to walk 2 – 3 blocks to a parking garage or is this
unrealistic? What do those folks do in
Kaiser Permanente did major Walnut
Creek expansion five years ago and John Muir is building 800,000 square feet of
new hospital space in the city over the next 20 years. What role is health care
playing in
An increasingly bigger factor, over the next 10 – 20 years Walnut Creek Shadelands usage is shifting – US baby boomers aren’t getting any younger, there are an awful lot of us, and aging increases the need for health services – I wish it wasn’t so!
Walnut Creek is the transportation hub for Eastbay,
intersection of 680, 24 and Ygnacio ‘freeway’, easy access to employees in East
County, North 680, top management
Orinda, Lafayette, Danville amenities.
I’m at 1850
What’s your ideal vision of The
Shadelands in 20 years?
It will be a health
What are the prospects for a
biotechnology cluster at The Shadelands?
Slim to none – It is not located next to UC Berkeley,
Emeryville or the
How are the demographics of
Younger? Downtown? 60% college degree. 47 yr median age. 70% of the people own and 30% of the people rent. $100k is the median income.
What is the future of the
Andronico’s building?
Rumor – Cheesecake Factory
I understand some boutique hotels
have shown interest in
Density and height, do we want a hotel bad enough to allow 6 or more stories? Also, is there a large enough site if the height limit is an issue?
Is 75,000 square feet of new
commercial construction per year enough for
No, it is not.
Because that annual allotment rolls
over from year to year,
For office, Class A office rents range is around $2.75 to $3.25 a square foot full-service. In 2001 they hit $4.25 at the height of dotcom before crashing back to earth. New Class A mid-rise office construction, including land and tenant improvements, would require $4.50 – $5.00/sf full-service. We are a long ways away from new office construction being viable in this region.
With land costs rising, can we
actually continue to hold buildings to 7 stories and still get project to
pencil financially – or are we going to have to start moving toward taller
office buildings and high-rise condos?
Two opinions – some want dense and up, others want quaint
and low-rises. Some developments require density to maximize profit. Max density.
Max tax revenues. However, do we
want a mini-San Francisco for
How big a deal is arts and culture
to the overall success of
Downtown impact is $34 - $40 million per year annual positive.
Have arts and culture in
A 2,200 seat theatre is their dream.
Regarding arts and culture, you’re
getting some challenges from cities like
Means nothing –– Lesher does over 1,000 performances a year in its four theatres. This has a big positive impact on Downtown Walnut Creek’s retail – this and the arts events provides $34 - $40 million per year, along with Lesher providing $4 million direct to the general fund. Regarding other cities also having performing arts centers, just like other towns having a movie theater doesn’t mean there aren’t enough patrons to go around – Walnut Creek’s dream is a 1,800 – 2,200 person theater – their biggest competitor now is the Paramount Theatre in Oakland, not Livermore or other I-680 Corridor cities.
There is concern about the city
running short on Class A office space and perhaps losing some of its growing
companies as a result. What do you have to say about that?
Walnut Creek Downtown Class A 7.6%, Downtown 402,000 sf
available (247,000 sf Class A)
Shadelands 12.6% vacant, with 244,000 sf available. On the big picture,
would we want to compete with
Give us a vision of what
Boutique office, quaint retail, abundant parking, traffic flowing, and a wonderful sense of community.
Real estate developers complain
often and loudly about municipalities that make the approval of construction
projects a lengthy, frustrating and expensive process. How does
Fairly tough. At times extremely challenging.
What should
Keep architectural at a high level, maintain a diverse
retail mix, not too too tough on the approval process. Santana Row is a great example of what works.
One of
What excites you most about
The long-term big picture economic business drivers,
ecobusiness, software, telecom, biotech are all thriving in nearby office
regions. This helps protect the economic
well-being of neighboring communities like
What troubles you most about
Imagine if there were 5,000 more parking spaces at the
Walnut Creek Bart Station? Well, there
won’t be. Concord Naval Base development impact, and in the future the next
housing boom out in
I just talked to a technology
company that had to split its workforce into two separate downtown buildings. I
was told that as the company continues to grow it will likely have to leave
In October 1999 I wrote an article published in the Contra Costa Times for the Walnut Creek Chamber, titled, “Will the last high-tech firm to leave Walnut Creek please shut off the lights?” Commerce One had just announced it was leaving Walnut Creek to expand down in Pleasanton and if we tried to accommodate every company’s growth we’d be a sea of huge office buildings – we don’t have the vacant land or enough redevelopment, so ok, there they go.
Jeff Weil, what are you doing at
Shadelands right now; tell us what’s happening there.
Shadelands – In 1976, no one else wanted it. Major employers, 10,000 – 12,000
What is the goal for Shadelands?
Whose goal? Some of the tenants prefer R&D and manufacturing. Some – more retail, i.e. restaurants, dry cleaners right in the park. It is 2 ½ miles Pleasant Hill Bart and there are 40 restaurants … Some medical groups wish the City would rezone everything to medical.
I was told by one corporate
executive that the problem with Shadelands is that it’s off the beaten path, separate
from downtown and it’s hard to access because you must use the heavily
trafficked
It is 2 ½ miles to Pleasant Hill Bart, 3 miles to Downtown
Walnut Creek and the rents are 40% lower
– a typical 10,000 square foot tenant would save almost $1 million in just five
years of rent. Regarding the traffic on
When you look at Shadelands, what
do you see as the possibilities there from an architectural and land-use
standpoint? Is it all it could be, or
are some changes needed?
Older one-story concrete tiltup buildings like Westaff headquarters, lots of two-story woodies, only two, three story Class A buildings. It is basically a generic, clean, garden office park.
How do retail rents in downtown
Downtown Walnut Creek is $3.24 - $5.00 nnn, Broadway Plaza is $8.00 plus $2.00 equaling $10.00/sf, Danville is $3.75 - $4.00, Pleasanton is $3.00, Stoneridge is $7.50 - $9.00 – Probably way back there used to be a Walnut Creek Hay and Feed but then folks stopped going by with their pickups to load up on hay and out of business they went…now they have to drive to Alamo Hay. As much as I miss Simon’s Hardware and the old Union 76 Station, I much prefer the new movie theatres.
It is a slow but continual redevelopment improvement.
Because of the cost of land and the scarcity of land. Realization of value and importance of mixed use to a cities vitality. If gas was $8.00 a gallon, how would this change the future commute patterns? Bart is precious.
Where does
It is probably at or near the top in many aspects – business address, accessibility and destination retail shopping.
Jeff Weil, when you’re out there
finding space for a company, what are the advantages and disadvantages you find
in trying to bring people to
The disadvantages – Downtown there are few big blocks of
space, the rents are among the highest in the
It is only going to get worse. There are 76,400 vehicles per day. What about Concord Naval Base conversion and
the 40,000 residents and 35,000 office workers that went to live in
What are the parking issues in
Perception versus Realty – People want to park immediately in front of the store and not have to walk two blocks from a public garage.
Cities talk about turning their
downtowns into “destinations.” Is
Yes it is. There is a tenant mix, a restaurant mix, Lesher Theatre, movies and Events.
Will all the efforts being made by
the other municipalities to create destination downtowns; is
No –
Jeff Weil, how much business do you
do in
I do 20% of my business in
Is
It depends on what the client wants – image, accessibility
to San Francisco, walk to great retail, easy commute to Danville or Alamo and
smaller space needs versus needs of 150,000 sf, employees all live in Solano or
East County or need a portion of a high-ceiling R&D – Walnut Creek would
not be the right fit. But if you are a
personal services firm, i.e. law, CPA, financial investment, banking, and you
want easy access to a huge customer base of fairly high net-worth families then
Jeffery S. Weil, SIOR, is a Senior Vice President with Colliers
International. Jeff received his BS and
MBA both from UC Berkeley. Mr. Weil
exclusively represents office tenants, and sells owner-user regional and
headquarters buildings. Focusing on
Contra Costa and Alameda Counties Jeff has leased and sold millions of square
feet of space. His OfficeTimes Corporate
Real Estate newsletter is in its 27th year of publication. The East Bay Business Times Broker of the
Year Award for last year was one of over one hundred industry and professional
awards
Mr. Weil has earned throughout the years.
Jeffrey S. Weil, MCR.h, CCIM, SIOR
Senior Vice President
Colliers International
1850 Mt. Diablo
Blvd.,
Ph. 925.279.5590 Fax 925.279.0450
These
comments are the opinions of Jeffrey S. Weil and do not necessarily reflect
those of his company, his clients or his friends...