san jose market · vinay bhatia san jose market report third quarter 2012 sales summary real estate...
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San Jose MarketMarket Activity | Q3-2012
VINAY BHATIA | Associate650.320.0241 | [email protected] #01854270
About Vinay Bhatia San Jose Market Activity San Jose Market Sales Comparable Properties
650.320.0241 | [email protected] | Lic #01854270
VINAY BHATIA
San Jose Market ReportThird Quarter 2012
About the Multi-Family Group
Cassidy Turley’s Multi-Family Investments is Northern California’s source
for apartment brokerage services.
We are a collection of experienced real estate professionals providing
comprehensive market coverage to a diverse collection of clients including;
individual investors, operating partnerships, corporations, REITs and
equity funds. Our business model emphasizes the exclusive listing of
apartment properties by utilizing a transparent marketing process to
assist our clients in realizing their investment objectives. We monitor
the changes in the debt market in order to provide our clients real time
information relating to the impact of interest rates on property values.
We are also in constant contact with third party professionals such as
property management companies to help our clients in accessing the
best available services. Our mission is to assist our clients in their multi-
family investments, including when it meets their goals, representing
them in a property sales transaction.
Since our inception, we have grown to be one of the largest apartment
brokerages in Northern California. Our expansion has primarily been the
result of attracting experienced brokers to join us from our competitors.
We are further differentiated from other apartment brokerages by offering
a comprehensive network of submarket-based professionals that believe
in providing superior investor representation, advisory and advocacy.
OUR VALUES
Individual initiative balanced with collaboration and teamwork
Aggressive advocacy combined with integrity and trust
Creativity joined with discipline and focus
Knowledge and expertise put into action
Our values refl ect our group’s understanding that we must build client
relationships in order for us to further build our business. Experience
and market specifi city has been the foundation for our past success and
will remain so in the future. We are dedicated to Northern California’s
apartment investors and work had to maintain this commitment.
VINAY BHATIAAssociate
650.320.0241
Lic #01854270
BACKGROUND & EXPERIENCE
Vinay joined BT Commercial in the fall of 2008 focusing his energy
as an investment specialist on the apartment submarkets of Santa
Clara County. Prior to joining BT Commercial, Vinay worked within
the banking industry as well as an online advertising agency, where
he worked closely to build long-term relationships with successful
players within these markets. Vinay accepted a position as Associate
/ Investments with BT Commercial. He joins BT’s Multi-Family
Group as a specialist in the Santa Clara, Sunnyvale, San Jose and
Milpitas areas.
EDUCATION
San Jose State University / B.S. in Marketing
Visit www.ctbtapartments.com for more information.
Vinay Bhatia’s Bio
650.320.0241 | [email protected] | Lic #01854270
VINAY BHATIA
San Jose Market ReportThird Quarter 2012
Sales Summary
Real Estate Transactions by Vinay Bhatia in 2012
Sale Date Address City Units SqFt Sale Price Representation
11/5/2012 953 Helen Ave Sunnyvale 14 9,782 $2,500,000 Both Procuring and
Listing
10/23/2012 Carls Jr/ Hardee's Union, SC NNN 3,372 $1,640,511 Procuring Cause
10/23/2012 Carls Jr/ Hardee's Cowpens, SC NNN 2,390 $1,211,160 Procuring Cause
9/12/2012 645 Nido Dr Campbell 4 3,928 $890,000 Listing Cause
9/12/2012 2883 Old Almaden Rd San Jose 10 8,987 $1,705,000 Listing Cause
9/12/2012 528 S. Mathilda Ave San Jose 8 5,276 $1,475,000 Both Procuring and
Listing
8/1/2012 2137 Main St Santa Clara 4 3,928 $715,000 Listing Cause
8/6/2012 778 Teresi Ct San Jose 6 3,500 $825,000 Both Procuring and
Listing
7/18/2012 1125 Delna Manor Ln San Jose 4 4,219 $900,000 Listing Cause
4/25/2012 3725 Miramar Wy Santa Clara 14 8,860 $2,140,000 Procuring Cause
Pending 357 Rutland Ave San Jose 3 1,580 Call Vinay for More Details Listing Cause
Pending 361 S. Buena Vista Ave San Jose 3 2,188 Call Vinay for More Details Listing Cause
Pending 1151 Ayala Dr Sunnyvale 4 3,072 Call Vinay for More Details Listing Cause
Pending 1207 Leigh Ave San Jose 8 4,808 Call Vinay for More Details Listing Cause
Pending Carls Jr/ Hardee's Opelika, AL NNN 3,513 Call Vinay for More Details Procuring Cause
Pending 2991 Magliocco Dr San Jose 24 17,016 Call Vinay for More Details Procuring Cause
650.320.0241 | [email protected] | Lic #01854270
VINAY BHATIA
San Jose Market ReportThird Quarter 2012
Address Type Sq Ft Rent $/Sq Ft Rental Features
426 S. 6th St
San Jose, CA 951121+1 $995
Included 1 parking space, garbage. New Paint,
new blind Pergo fl oor
550 S 4th St
San Jose, CA 95112Studio $1,095
The unit has newer carpets, fresh paint, and newer window
coverings. The kitchen has white cabinets with new granite
counters, vinyl fl ooring, a refrigerator, and a gas stove. The
bathroom has a vanity with sink, newer vinyl fl ooring, and a stall
shower. Water and garbage is included with the rent
255 N 3rd St
San Jose, CA 951121+1 500 $1,195 $2.39
Upgraded with fresh new paint, new six panel doors, closet
doors, molding etc. The bathroom has a vanity/sink combo, tile
fl oor, and tiled shower/tub combo. Upgraded kitchen.
311 East Reed St
San Jose, CA 951121+1 610 $1,300 $2.13 personal garage unit, laundry, gated entry
1050 S. 12th St
San Jose, CA 951122+1 840 $1,350 $1.61 N/A
641 South 11th St
San Jose, CA 951122+1 800 $1,450 $1.81 N/A
440 S 10th St
San Jose, CA 951123+1 $1,800
"upgraded: kitchen, carpets, and paint. The property also boasts
an enclosed back porch and parking"
945 Thackeray Ln
San Jose, CA 95116studio 500 $750 $1.50 N/A
221 Pamela Ave
San Jose, CA 951162+1 $1,350 Water and garbage included
Rent Survey
650.320.0241 | [email protected] | Lic #01854270
VINAY BHATIA
San Jose Market ReportThird Quarter 2012
Address Type Sq Ft Rent $/Sq Ft Rental Features
1055 Vermont St
San Jose, CA 95126studio 400 $1,075 $2.69
Walk In closet. Full Kitchen and Bathroom with Tub and Shower.
Covered parking
1376 Sierra Ave
San Jose, CA 951261+1 550 $1,195 $2.17
The unit has a very spacious living area and the kitchen has
plenty of working space and cabinets. Refrigerator and stove
included, plus there is coin-operated laundry on site.
1215 Pedro St
San Jose, CA 951261+1 $1,350
dishwashers, ceiling fans, and extra closet space. We also offer
on-site laundry, parking and a pool
1221 Francisco Ave
San Jose, CA 951262+1 $1,395
kitchen has all appliances; refrigerator, electric stove/oven, and
garbage disposal. There is also a dining area with ceiling fan in
the kitchen.
950 Meridian Ave
San Jose, CA 951261+1 700 $1,395 $1.99
Air conditioning and clean, comfortable electric heat * All
electric kitchens with dishwashers * Large patios and decks
1182 Leigh Ave
San Jose, CA 951262+1 900 $1,595 $1.77
Garbage disposal. Laminate fl ooring through the apartment.
Ceramic titles in the kitchen and bathroom. A big walking closet
in one of the room. Each tenant is assigned to one carport
parking. Coins operated washer/dryer
2080 Marlboro Ct
San Jose, CA 951281+1 530 $1,250 $2.36
Storage space *Refrigerator *Stove/Oven*Garden *Lawn *Air
conditioning*Ceiling fan *Double pane windows *Cable-
ready*Covered parking *Carpet in Bedroom *Ceramic Tile fl oor
992 College Dr
San Jose, CA 951282+1 800 $1,295 $1.62
kitchen eating area, electric cook top, refrigerator, new carpet,
tile fl oor in kitchen and bathroom, wall heater, 1-space carport,
coin operate laundry
3070 Van Sansul Ave
San Jose, CA 951282+1 $1,425
New Carpet throughout.*Newer Vinyl in Kitchen and New in
Bathroom.*Newly Reglazed Kitchen Counter-top.*Accent wall
in Living Room.*New Ceiling fans in every room.*New Blinds
throughout.*On-site Management & Maintenance*Laundry Room
on-site.
Rent Survey
650.320.0241 | [email protected] | Lic #01854270
VINAY BHATIA
San Jose Market ReportThird Quarter 2012
Rent Survey
Address Type Sq Ft Rent $/Sq Ft Rental Features
3015 Walgrove
San Jose, CA 951282+1 900 $1,500 $1.67
Central AC and Heater. All Tiles fl oor in Kitchen and Bathroom.
Newer Carpet. One car carport and one additional parking
401 Bundy Ave
San Jose, CA 951171+1 $1,075 Water & Garbage Paid. Laundry Room On-Site. Open Parking
3167 Neal Ave
San Jose, CA 951282+1 $1,450
NEWER INTERIOR PAINT. NEWER CARPETING. NEWER
KITCHEN AND BATHROOM FLOORS. DEDICATED ONE SPACE
IN ENCLOSED GARAGE
3779 Blackford Ave
San Jose, CA 951282+2 950 $1,575 $1.66
All Electric Kitchen (No Gas Bill!!!)-Ceiling Fan in Eating Area-
Vertical Blinds-A/C-Dishwasher-Garbage Disposal
3510 Moorpark Ave
San Jose, CA 951282+1 1020 $1,765 $1.73
dishwasher, stove/oven, refrigerator, disposal, ceiling fan, a/c &
heat, private balcony/patio, hardwood fl oors and lots of closet
space.
4850 Hamilton Ave
San Jose, CA 951301+1 650 $1,150 $1.77
Ceiling Fan in kitchen, newer double pane windows, and vertical
blinds. Tile Shower, New main entrance door and second fl oor
walkway. Water and Garbage Included. On-site coin operated
laundry facilities and one parking space provided.
3990 Hamilton Ave
San Jose, CA 951302+1 775 $1,499 $1.93
Fridge, Microwave, Range (No Dishwasher) Water and Garbage
Paid by Complex
4963 Campbell Ave
San Jose, CA 951302+1 750 $1,525 $2.03 New Floors, Fresh Paint
650.320.0241 | [email protected] | Lic #01854270
VINAY BHATIA
San Jose Market ReportThird Quarter 2012
Activity report
Status Address List Price Age DOM # of Units Sq Ft. Lot Size Sale Price COE Date
Active 3189 CADILLAC DRIVE $2,650,000 54 22 20 12,640 18,144 ***** *****
Active 560 SOUTH 7TH STREET $1,750,000 88 114 10 6,418 16,302 ***** *****
Active 2242 CURTNER AVENUE $1,288,000 48 111 7 4,176 10,010 ***** *****
Active 66 SOUTH 22ND STREET $985,000 50 3 5 4,736 7,800 ***** *****
Active 601 SOUTH 9TH STREET $950,000 87 86 9 3,744 2,857 ***** *****
Active 402 NORTH third STREET $750,000 114 72 5 3,192 6,302 ***** *****
Pending 460 SOUTH 4TH STREET $3,695,000 48 11 23 13,818 9,660 ***** *****
Pending1299 EAST JULIAN
STREET$3,600,000 52 18 28 18,636 21,600 ***** *****
Pending 1195 BRACE AVENUE $2,895,000 46 16 14 15,798 21,200 ***** *****
Pending 1060 OAKMONT DRIVE $2,495,000 49 160 15 13,646 20,305 ***** *****
Pending 110 GRAHAM AVENUE $2,495,000 62 154 16 10,300 13,068 ***** *****
Pending 3014 HUFF AVENUE $1,800,000 51 7 12 7,798 11,400 ***** *****
Pending 3217 CADILLAC DRIVE $1,290,000 54 20 10 6,054 9,072 ***** *****
Pending 692 RICHMOND AVENUE $1,200,000 49 54 8 6,580 10,018 ***** *****
Pending3822 7 TREES
BOULEVARD$1,179,000 34 579 7 5,901 18,000 ***** *****
Pending 40 SOUTH 19TH STREET $1,000,000 56 7 8 4,166 7,800 ***** *****
Pending 190 BOSTON AVENUE $869,950 55 105 5 3,120 5,625 ***** *****
Pending 798 DELAND AVENUE $839,000 52 51 6 3,570 6,534 ***** *****
Pending 2201 LUZ AVENUE $810,000 57 57 7 3,168 11,060 ***** *****
650.320.0241 | [email protected] | Lic #01854270
VINAY BHATIA
San Jose Market ReportThird Quarter 2012
Activity report
Status Address List Price Age DOM # of Units Sq Ft. Lot Size Sale Price COE Date
Pending 374 NORTH 5TH STREET $795,000 50 293 6 4,285 6,210 ***** *****
Pending 293 NORTH 3RD STREET $699,900 114 101 8 4,320 4,185 ***** *****
Pending 341 MENKER AVENUE $500,000 71 27 5 1,816 4,791 ***** *****
Sold 2980 HUFF AVENUE $3,671,550 54 30 24 16,768 30,400 $3,671,550 May-12
Sold 255 NORTH 3RD STREET $2,195,000 48 169 16 6,525 7,840 $2,195,000 Jun-12
Sold381 EAST WILLIAM
STREET$2,170,000 51 40 9 13,862 21,710 $2,170,000 Mar-12
Sold 2080 MARLBORO COURT $2,134,519 56 17 16 9,316 18,626 $2,134,519 May-12
Sold 1365 SUNNY COURT $1,852,000 26 27 14 7,260 16,800 $1,852,000 Oct-12
Sold2883 OLD ALMADEN
ROAD$1,705,000 51 169 10 8,987 12,874 $1,705,000 Sep-12
Sold 511 EAST REED STREET $1,690,000 54 29 6 7,116 9,522 $1,690,000 May-12
Sold 751 SOUTH 3RD STREET $1,610,000 52 83 11 7,343 8,625 $1,610,000 Sep-12
Sold 659 SOUTH 9TH STREET $1,600,000 55 37 14 5,561 6,900 $1,600,000 Jun-12
Sold 3206 IMPALA DRIVE $1,600,000 53 -1 12 7,334 13,608 $1,600,000 Jul-12
Sold 2752 KOLLMAR DRIVE $1,535,000 53 8 17 9,735 14,016 $1,535,000 Mar-12
Sold 175 SUTTER STREET $1,516,000 57 23 10 7,038 9,840 $1,516,000 Oct-12
Sold 510 CHIECHI AVENUE $1,510,000 53 24 10 7,564 10,454 $1,510,000 May-12
Sold 5803 EL ZUPARKO DRIVE $1,490,000 42 9 9 8,368 24,828 $1,490,000 Apr-12
Sold 649 SOUTH 9TH STREET $1,300,000 53 3 12 6,364 9,842 $1,300,000 Jun-12
Sold 143 NORTH 8TH STREET $1,200,000 51 225 9 7,167 9,453 $1,200,000 Jul-12
650.320.0241 | [email protected] | Lic #01854270
VINAY BHATIA
San Jose Market ReportThird Quarter 2012
Activity report
Status Address List Price Age DOM # of Units Sq Ft. Lot Size Sale Price COE Date
Sold 1738 VIRGINIA AVENUE $1,200,000 51 145 11 7,144 6,534 $1,200,000 Jul-12
Sold 728 RICHMOND AVENUE $1,085,000 49 14 8 6,580 10,018 $1,085,000 Apr-12
Sold 118 RAINIER STREET $1,025,000 86 73 7 5,856 7,935 $1,025,000 Sep-12
Sold 784 VINE STREET $1,000,000 53 14 8 4,581 6,900 $1,000,000 Aug-12
Sold 3240 CADILLAC DRIVE $945,000 54 268 8 4,912 9,072 $945,000 May-12
Sold 3232 CADILLAC DRIVE $945,000 53 267 8 5,038 10,168 $945,000 May-12
Sold 3136 CADILLAC DRIVE $925,000 52 830 8 5,484 9,072 $925,000 May-12
Sold 3144 CADILLAC DRIVE $925,000 52 830 8 5,484 9,072 $925,000 May-12
Sold 68 TOPEKA AVENUE $900,000 56 56 7 3,458 5,625 $900,000 Jul-12
Sold 3061 DAVID AVENUE $899,000 54 211 6 2,910 6,600 $899,000 Mar-12
Sold 55 BOSTON AVENUE $880,000 59 55 6 3,456 5,625 $880,000 May-12
Sold 545 SOUTH 5TH STREET $870,000 49 26 6 4,275 6,348 $870,000 Feb-12
Sold 3183 IMPALA DRIVE $860,000 53 242 6 3,688 6,800 $860,000 Jun-12
Sold 491 LEIGH AVENUE $835,000 56 184 8 3,480 6,098 $835,000 Mar-12
Sold 831 NORTHRUP STREET $825,000 92 179 5 4,710 11,570 $825,000 Mar-12
Sold 450 NORTH 5TH STREET $775,000 55 308 8 4,134 6,900 $775,000 Jan-12
Sold1061 SOUTH ALMADEN
AVENUE$765,000 52 144 6 3,604 5,880 $765,000 Sep-12
Sold 575 AVALANI AVENUE $760,000 47 89 6 5,276 16,117 $760,000 Jul-12
Sold 569 AVALANI AVENUE $760,000 47 88 6 5,192 8,100 $760,000 Jul-12
650.320.0241 | [email protected] | Lic #01854270
VINAY BHATIA
San Jose Market ReportThird Quarter 2012
Status Address List Price Age DOM # of Units Sq Ft. Lot Size Sale Price COE Date
Sold159 SOUTH MORRISON
AVENUE$750,000 51 192 5 2,990 5,120 $750,000 Mar-12
Sold 581 AVALANI AVENUE $680,000 47 7 6 5,366 8,100 $680,000 Jan-12
Sold 587 AVALANI AVENUE $680,000 47 7 6 5,366 8,100 $680,000 Jan-12
Sold149 SOUTH SUTTER
STREET$675,000 54 0 5 3,948 6,150 $675,000 Jul-12
Sold451 EAST SAN SALVADOR
STREET$665,000 114 5 5 2,548 5,500 $665,000 Jul-12
Sold 255 NORTH 5TH STREET $645,000 114 31 6 2,112 9,453 $645,000 Jun-12
650.320.0241 | [email protected] | Lic #01854270
VINAY BHATIA
San Jose Market ReportThird Quarter 2012
Apartment Market Report
It is no secret that the Bay Area’s multi-family market place has seen booming rental demand over the past three years, with vacancy levels falling and rents skyrocketing. This trend has impacted all classes of apartment buildings and all unit mixes. That being said, while the general trend has been the same across the board there have been variances based upon the type of apartment product.
Since reaching a high of 5.6% in 2009, the vacancy rate for the region’s larger complexes has fallen to today’s reading of just 4.5%. But it is critical to note that the rate of occupancy growth has slowed considerable over the past year. In fact, vacancy actually ticked up slightly this quarter. While the region’s development pipeline has increased substantially, this is not the source of this increase—while the number of multi-family units currently under construction in the region is up substantially, third quarter deliveries actually declined compared against last quarter’s completions. The issue is affordability.
The average rent has climbed from $1,583 in 2009 to today’s average of $1,969—an increase of 24%. In San Francisco, rents have climbed 30% over the past three years. San Mateo County has seen rents climb 50% while Santa Clara County saw rents climb by 41%. Clearly this level of rental rate growth would not be sustainable forever and we are starting to see it slow. Our data indicates that annual growth throughout the fi ve-county region has slowed to a still robust rate approaching 10%. But as affordability has become more of an issue for Class A and B product—particularly in the Highway 101 Corridor markets, it has created a ripple effect throughout the region.
Over the past two years, the vacancy for smaller apartment
complexes has fallen from just 4.4% to today’s reading of just 2.5%. The reason why this segment of the market is so tight is that it includes much of the region’s more affordable Class C apartments. So against this backdrop, it should come as no surprise that rents for this property type have jumped from an average of $1,288 in 3Q 2010 to today’s fi ve-county rate of $1,521 per month. On an individual market, this has translated into a whopping rental rate growth rate of 27.4% over the past two years in San Francisco, 23.9% in San Mateo County and 22.5% in Santa Clara County. This is because affordable housing has become increasingly rare in those markets. It has begun a trend that we saw at the peak of the region’s last growth cycle; out-migration to the East Bay.
Our data shows that East Bay vacancies for all apartment complexes (regardless of Class or size) are falling and rental rate growth is rapidly escalating. While the westernmost markets may be approaching a ceiling on rents for Class A and B projects, this trend is still a long way off in the East Bay. While some of this occupancy growth is due to organic population growth, we are beginning to see a trend of in-migration from renters who have been priced out of other Bay Area markets. So far, this trend is mostly about San Francisco losing tenants to Alameda County, but with rents still going up we anticipate that this trend will only accelerate over the next 12 to 18 months. Likewise, we anticipate that increasing rents in Alameda County will also spur a lesser movement of renters inland to Contra Costa County. This trend has had little impact on the North Bay’s apartment market, which tends to be insular and local in its trending. This is mostly due to its weaker public transit connections to the region, though the smaller size and higher rents of those markets also play a role.
Apartment
Market Report
Cassidy Turley’s San Francisco Bay Area
Third Quarter 2012
A Comprehensive Research Report for
Northern California Apartment Investors
Robust Growth Continues, But Affordability Becoming an Issue
650.320.0241 | [email protected] | Lic #01854270
VINAY BHATIA
San Jose Market ReportThird Quarter 2012
Apartment Market Report
Development Pipeline Remains Strong
A total of 855 new apartment units were delivered to the marketplace during the
third quarter, refl ecting a decrease from last quarter’s total of 911 new units.
But don’t let this decrease fool you. The development pipeline is fi lling rapidly.
Last quarter we were tracking just under 11,000 new multi-family units under
construction throughout the fi ve primary Bay Area counties (these numbers do
not include the North Bay). That metric has increased to over 15,000 units. We
should note that this total does include a number of projects that may not have
an impact on the general marketplace; fi ve of these developments (575 units)
are senior housing, eight are government subsidized housing (about 700 units)
and at least 11 of these projects might go condo instead of rental (nearly 1,300
units). Our tracking indicates over 2,600 new units will be delivered during the
fi nal quarter of this year and should planned delivery dates hold, roughly 7,000
units will come online in 2013 with an additional 6,000+ apartment homes
delivered in 2014.
In terms of recent deliveries, Santa Clara County led the way with two new
projects that added 296 new competitive units to that area’s inventory. San
Francisco followed with a new 173-unit Class A project near the UCSF campus.
The East Bay saw two projects added in Alameda County, boosting that trade
area’s inventory by 173 units. Lastly, one new project was delivered in South
San Francisco, boosting San Mateo County’s inventory levels by 109 units. Santa
Clara County leads all other regions in terms of development, with 30 projects
under construction that will add over 7,700 new apartment homes through 2014.
San Francisco has 33 projects underway with just under 5,400 units slated for
delivery over the next 27 months. The East Bay follows with 13 developments
that will add just over 1,700 new apartments to that area’s inventory over the
next couple of years. We expect all of these markets to see additional projects
entering the development pipeline over the next year, though we anticipate that
the biggest surge will be in the East Bay. Development levels should start to
decline by next year in the South Bay.
Aggressive levels of new development will begin to impact vacancy levels and
rents in Santa Clara County by next year. We anticipate the same within San
Francisco by early 2014, though we don’t anticipate this to occur in the remaining
Bay Area markets anytime soon. Prohibitive land costs and diffi cult development
hurdles in some communities remain an issue in San Mateo County. Meanwhile,
high pricing along the 101 Corridor markets (Santa Clara, San Mateo and San
Francisco Counties) is already pricing many renters out of those markets. Most
are landing in the East Bay. Despite strong development levels there, in-migration
will mean that most of the new projects in the pipeline will be easily absorbed as
they come to market.
San Francisco Bay Area
Multi-Family Development Trends
All Unit Types
Total Units Delivered
Q3-2012
Total Units in Construction
Pipeline
Alameda County 173 1,259
Contra Costa County 0 450
San Francisco County 173 5,394
San Mateo County 109 454
Santa Clara County 400 7,714
Total Region 855 15,271
650.320.0241 | [email protected] | Lic #01854270
VINAY BHATIA
San Jose Market ReportThird Quarter 2012
Apartment Market Report
Bay Area Overview - Vacancy Trends
We track a total of 1,059 apartment
communities the San Francisco Bay Area,
consisting of more than 196,000 units that
break down as follows; 89 Class A, 79 Class
B and 891 Class C complexes. We further
dissect the market by size, dividing the
marketplace into larger (100 units or more)
and smaller (99 units or less) projects.
The current vacancy rate for larger apartment
complexes stands at just 4.5%, up from the
3.9% mark posted last quarter. We track
a total of 661 larger properties throughout
the fi ve-county San Francisco Bay Area that
account for just under 168,000 total units.
Vacancy for this sector of the market remains
low and in favor of landlords, though it has
ticked up a notch over the past year. While
new development has had a minimal impact,
the real issue has been affordability. Keep in
mind that this sector of the market includes
the lion’s share of the region’s Class A and B
product and these projects have higher rents.
But despite the recent uptick in vacancy,
rental rate growth—though slowing—has
remained at a very strong rate of 9.8% over
the past year.
We track a total of 398 smaller apartment
communities throughout the region, consisting
of approximately 29,000 multi-family units.
They breaks down as; eight Class A, six Class
B and 384 Class C apartment communities.
The vacancy rate for smaller apartment
complexes currently stands at just 2.5%,
the same rate posted last quarter. Demand
remains extremely high for affordable
housing throughout the Bay Area with options
dwindling. That is why this sector of the
market is posting the strongest rental rate
growth right now and will continue to do so in
the near future. Vacancy has remained below
the 3.0% mark for the Bay Area’s smaller
apartment complexes for most of the past year
and hasn’t crept above a reading of 4.0% for
nearly two years. In terms of local vacancy for
this product type, Alameda County boasts the
lowest current vacancy with just 2.0%, but
vacancy is extremely tight throughout all of
the Bay Area’s trade areas.
99 Units or Less Index 100 Units or More Index
County Vacancy Market Rent Vacancy Market Rent
Alameda
Q3-2012 2.0% $1,324 3.0% $1,705
Q2-2012 2.1% $1,286 3.4% $1,643
Contra Costa
Q3-2012 3.8% $1,253 4.8% $1,458
Q2-2012 4.2% $1,239 4.5% $1,412
San Francisco
Q3-2012 2.5% $2,762 4.4% $2,754
Q2-2012 3.6% $2,670 4.6% $2,723
San Mateo
Q3-2012 2.2% $1,728 4.5% $2,220
Q2-2012 1.9% $1,662 4.7% $2,173
Santa Clara
Q3-2012 2.6% $1,645 5.0% $2,031
Q2-2012 2.2% $1,604 3.4% $2,016
Bay Area
Q3-2012 2.5% $1,521 4.5% $1,969
Q2-2012 2.5% $1,481 3.9% $1,934
Bay Area Q3-2011 Q4-2011 Q1-2012 Q2-2012 Q3-2012
Sales Volume $528.1M $1,079.3M $579.3M $831.2M $694.1M
Total Units 3,075 8,496 3,100 4,455 4,018
Price/Unit $164,789 $117,983 $190,028 $188,693 $169,707
Price/SF $218.38 $128.28 $236.27 $239.33 $216.83
Cap Rate 5.90% 5.18% 5.58% 5.80% 5.73%
GRM 10.90 11.80 10.04 10.39 10.89
Q3-2012 Sales by Property Size Segment
(# of units)
Sales Volume vs. Capitalization Rate
Regional Rental Market Summary
71.2%
13.7%%
6.9%2.9% 5.3%
5-15 16-29 30-49 50-99 100+
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VINAY BHATIA
San Jose Market ReportThird Quarter 2012
Apartment Market Report
Sales Activity vs. Capitalization Rate
SF/ Peninsula Q3-2011 Q4-2011 Q1-2012 Q2-2012 Q3-2012
Sales Volume $263.2M $430.7M $221.1M $262.2M $229.9M
Total Units 1,478 4,605 1,120 1,204 1,407
Price/Unit $172,655 $82,632 $203,190 $217,863 $155,849
Price/SF $253.03 $86.42 $242.31 $313.78 $227.19
Cap Rate 5.88% 5.59% 5.37% 5.85% 5.10%
GRM 10.98 12.19 11.80 10.27 12.67
In terms of actual rents, the San Francisco market leads all others
with a current average rate of $2,754 monthly. Rents in San
Francisco have climbed 7.2% over the last twelve months and have
increased by about one third in the past three years. The current
average rent in San Mateo County is $2,031 per month, refl ecting
a 10.3% bump since Q3 2011 and an increase of 27.7% over the
past two years. The current average rent in Santa Clara County is
$2,031 per month, up 10.3% year over year and 25.0% in the past
two years. The current average rent in Alameda County is $1,705
per month. This metric has increased 9.8% over the past year
and 20.1% over the past two years. Contra Costa County has the
region’s lowest current average rent at $1,458 monthly. Rents here
grew by 6.2% last year and 14.0% over the past two years.
Going forward, look for the rental rate growth to remain in place
for all of the region’s markets, but the rate will be slowing for the
region’s larger complexes in San Francisco, San Mateo and Santa
Clara Counties due to affordability issue and the increasing impact
of new construction. Still, we expect above average growth rates of
at least 5.0% or more in these markets through 2013. By 2014,
however, we may begin to see a fl attening of rates. Rental rate
growth for those markets smaller complexes will remain at higher
levels simply because this is where most of the more affordable
housing options remain. East Bay rental rate growth, however,
should not only remain strong but escalate in the coming year.
That being said, a resurgent housing market is going to become
more of a factor impacting rents over the next 24 months as well.
This is to be expected however, the last few years of overall rental
rate growth in the 10.0% annual range wasn’t going to last forever.
Still, the local marketplace is looking at a soft landing back to more
sustainable levels of growth over the next two years.
San Francisco Bay Area
Rental Rate Growth Trends
All Unit Types
Current Ave. Rent
(Larger Complexes)
% Growth Over
Past 12 Months
% Growth Over
Past 24 Months
Alameda County $1,705 9.8% 20.1%
Contra Costa County $1,458 6.2% 14.0%
San Francisco County $2,754 7.2% 24.7%
San Mateo County $2,220 14.8% 27.7%
Santa Clara County $2,031 10.3% 25.0%
Total Region $1,969 9.8% 22.5%
Rental Rate Growth Slows From Frenzied to
Robust
The current average apartment rent for larger complexes in the fi ve-
county Bay Area is $1,969 per month. This fi gure is up by 9.8%
over the past 12 months and has increased by 22.5% over the past
two years. Despite the fact that a 9.8% rate of growth is extremely
robust, this metric has slowed in recent months. Affordability is
part of the problem. Larger complex vacancy has actually increased
from 3.9% to 4.5% over the past year. But while this sector of
the market has seen occupancy fall slightly, the region’s smaller
complexes (99 units or less) have seen vacancy fall from an
already extremely low rate of 2.8% last year to just 2.5%. Keep
in mind that this sector of the market is overwhelmingly comprised
of Class C product with lower rents and the trend is clear. After
three consecutive years of sharp rental rate growth, affordability is
becoming a real factor. Not only are we seeing many renters being
priced out of Class A and B projects, we are starting to see a trend
of migration from the Bay Area’s more expensive markets along the
101 Highway Corridor (San Francisco, San Mateo and Santa Clara
Counties) to the less expensive East Bay (Alameda and Contra Costa
Counties) marketplaces.
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San Jose Market ReportThird Quarter 2012
Apartment Market Report
Bay Area Investment Trends
Deal activity throughout the Bay Area increased slightly
during the third quarter. We tracked 183 deals that closed
over the past three months, compared to 168 transactions
during the second quarter. But despite this, overall deal
volume actually fell. Just over $694 million in multi-family
product traded this quarter, compared to over $831 million in
deals booked last quarter. The difference was in the type of
product that moved. The Bay Area recorded over $2.1 billion
in transactions over the fi rst nine months of 2012. While
this marks a substantial improvement over the sales levels
recorded at the height of the recession, it does not appear that
the market will manage to match last year’s performance. The
region closed over $3.1 billion in deals last year, but sales
activity continues to be hampered by a shortage of available
quality product. This trend has particularly impacted Class
A and B projects, with much of the ongoing sales activity
focused on the region’s Class C inventory.
Investor demand remains high across the board, but
institutional-grade projects remain at the top of most wish
lists. This won’t change anytime soon. Though our forecast
is for rental rate growth to slow in some markets and for
some product types, it will still far exceed national averages.
Because rental rate growth will remain in place through (at
least) the next couple of years, many landlords are reluctant to
sell. Others aren’t bringing their projects to the marketplace
because of the limited options to trade into. Because of
this, we have actually seen an emerging trend among multi-
family landlords selling their projects and trading into other
property types that are less management intensive like
single-tenant net leased investments. Until more apartments
become available, we will see this trend intensify. However,
while we still believe that the market is another 12 to 24
months off from peak rents (depending upon the product type
and location); we anticipate that more product will become
available as a greater sense of an impending peak takes hold
in the marketplace. Our anticipation is that there may be
more options for buyers in the marketplace by mid-2013.
The regional price per unit fell from last quarter’s reading of
$189,000 to the current average of $170,000. We continue
to see top Class A and B projects throughout the region
selling at pricing above the $300,000 per unit mark—with
a few projects moving at $400,000 per unit or more. But
with deal activity overwhelmingly focused on older, Class C
projects, overall averages have been skewed downward.
Despite this trend, cap rates remained steady and low. The
average for deals transacted this quarter was 5.7%, down
slightly from last quarter’s posting of 5.8%. Typically, we are
now seeing Class A product trading with caps of 5.0% or less,
while most Class B and properties are selling with caps below
the 6.5% mark. San Francisco led all other trade areas this
quarter with an average cap rate of just 4.9%. Santa Clara
County followed with 5.2%, while San Mateo County recorded
an average of 5.3%. Caps remain slightly elevated in the East
Bay; the average rate posted in Alameda County was 6.2%,
while Contra Costa County logged an average of 7.0% this
quarter. Though we anticipate further pricing gains, cap rate
compression is not likely outside of the East Bay markets.
The fact is that with some top projects in the Highway 101
Corridor markets already trading with capitalization rates in
the 4% range, they simply cannot go lower.
Bay Area Sales Volume vs. CAP RateBay Area Sales Volume vs. CAP Rate
4.5%
5.0%
5.5%
6.0%
6.5%
7.0%
0
2000
4000
6000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Mill
ions
Sales Volume CAP Rate
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VINAY BHATIA
San Jose Market ReportThird Quarter 2012
Apartment Market Report
San Clara County Multi-Family
Investment Trends
Sales activity fell slightly during the third
quarter of this year. We tracked 44 deals
that closed for a total deal volume of just
over $238 million. Last quarter 49 deals
closed, refl ecting total transactional volume
of $304 million. But while this metric
decreased in Q3, year-to-date sales volume
in excess of $836 million has already
surpassed the annual sales levels that had
been posted over the past three years.
Still, the marketplace remains challenged
by a lack of institutional-grade product for
sale. This quarter’s 44 sales break down
as 31 deals (70%) including complexes of
15 units or less (most of which is Class C
product). Meanwhile, there were only fi ve
trades of projects with 50 units or more
(most of which are Class A or B properties).
Demand remains high for all apartment
classes, but Class A and B projects remain
at the top of most investor wish lists. With
rental rate growth expected to remain in
place through at least the next year, many
landlords are reluctant to sell. Meanwhile,
the lack of available properties to trade into
is a daunting issue for would-be sellers.
That being said, we are increasingly seeing
private investors selling their multifamily
projects and trading into other property
types that are less management intensive
like single-tenant net leased investments.
The average price per unit of the multifamily
projects that changed hands during this
quarter was just over $218,000. But while
this refl ects a sharp decrease from the
$270,000 reading posted last quarter, it
is more refl ective of what actually traded
than it is of any decline in pricing. Class
A and B projects continue to see sharp
increases in pricing. This quarter we saw
four projects selling with a per unit price
of $350,000 or more and 17 deals that
crossed the $200,000 per unit threshold.
Not surprisingly, the highest cap rate on
these deals was one project that moved
at a 6.5% rate. Eight of these complexes
traded with cap rates in the 4.0% range,
with the remainder in the fi ves. But the
top quality projects are not the only ones
trading hands with low capitalization rates.
The metro average in Q3 was just 5.2%, the
same rate posted last quarter.
Apartment Market Report Santa Clara County
Third Quarter 2012
Santa Clara Q3-2011 Q4-2011 Q1-2012 Q2-2012 Q3-2012
Sales Volume $80.5M $418.1M $294.3 $303.9M $238.2M
Total Units 605 2,005 1,204 1,127 1,091
Price/Unit $133,107 $208,505 $244,469 $269,730 $218,290
Price/SF $173.31 $228.66 $270.80 $300.89 $248.68
CAP Rate 5.63% 4.41% 4.84% 5.17% 5.15%
GRM 11.38 11.35 10.43 11.22 10.81
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San Jose Market ReportThird Quarter 2012
Apartment Market Report
Larger Complexes—100 Units or More
As of the close of the third quarter, the vacancy rate for larger multifamily complexes
throughout Santa Clara County was 5.0%, refl ecting a sharp increase over the 3.4% rate
posted last quarter. New construction was a minor factor behind this, but with only two
major projects (and less than 300 new units) added to the local inventory it was not the
primary cause. Instead, with occupancy at the region’s smaller complexes now above
97%, we think this is more a refl ection on local affordability than anything else.
The average monthly rent for all unit mixes in Santa Clara’s larger complexes now stands at
$2,031 per month. This number has increased by a robust 10.3% over the past year and
a whopping 25.0% over the past two years. The issue of affordability has already begun
to show itself as a trend of renters being priced out of the Bay Area’s westernmost markets
(particularly San Francisco and Santa Clara County) and heading towards cheaper rents
in the East Bay (where the current average now stands at just $1,604 per month). This
is, of course, if they cannot fi nd cheaper rents in the region’s older, smaller complexes
fi rst—which account for the lion’s share of local Class C properties. That is not to say that
local rental rate growth is over. But it will slow in the coming year, especially as we begin
to see more of an impact from the region’s rapidly swelling development pipeline. Lastly,
a resurgent housing market will also increasingly compete with the Bay Area’s multifamily
projects over the next 24 months. As it becomes clearer to the general public that the SFR
market has turned, many would-be buyers who have remained in rental units as they wait
for the housing market to hit bottom, will be purchasing homes. As a result, we anticipate
that rental rate growth will slow to between 5.0% and 7.0% over the next year—still well
above national averages. By 2014, however, rents may begin to fl atten.
Smaller Complexes—99 Units or Less
The current vacancy rate for smaller multifamily complexes throughout Santa Clara
County is now just 2.6%. While this is up slightly from the 2.2% rate posted last quarter,
it is critical that we point out that last quarter’s reading was the lowest we have ever
reported for this segment of the Santa Clara market. This rate refl ects a level so tight
as to discourage growth. That being said, with rents having increased by 25% over the
last two years in the region’s larger (predominately Class A and B) properties, demand
for more affordable units has only gone through the roof. This isn’t changing anytime
soon. In fact, while we see a full development pipeline, a resurgent housing market
and the issue of affordability slowing rental rate growth for that sector of the market, all
of these trends will only play out as extremely tight vacancy and even stronger rental
rate growth for Santa Clara’s smaller complexes (primarily Class C buildings).
Q3-2012 Top Deals
100 Units or More Index Average Rental Rate
Santa Clara Vacancy Average Studio 1+1 2+1 2+2 3+2
Q3-2012 5.0% $2,031 $1,414 $1,823 $1,962 $2,299 $2,736
Q2-2012 3.4% $2,016 $1,338 $1,805 $1,921 $2,308 $2,728
Q1-2012 3.7% $1,908 $1,282 $1,712 $1,816 $2,176 $2,570
Q4-2011 4.2% $1,829 $1,251 $1,643 $1,753 $2,075 $2,465
Q3-2011 4.1% $1,842 $1,247 $1,634 $1,763 $2,108 $2,524
Q2-2011 3.3% $1,813 $1,215 $1,610 $1,727 $2,095 $2,447
Q1-2011 3.5% $1,695 $1,133 $1,511 $1,642 $1,938 $2,321
Q4-2010 4.3% $1,629 $1,118 $1,445 $1,545 $1,867 $2,262
Q3-2010 4.1% $1,625 $1,098 $1,440 $1,551 $1,866 $2,234
Rental Market Data - Apartment Complexes 100 Units or More
Kimberly Woods
San Jose, CA
208 Units
$58,650,000
Waterstone Santa Clara
Santa Clara, CA
156 Units
$38,250,000
Highland Garden
Mountain View, CA
127 Units
$29,800,000
Park Square Apartments
Mountain View, CA
58 Units
$12,455,000
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San Jose Market ReportThird Quarter 2012
Apartment Market Report
The current average rent for all unit mixes in the region’s smaller projects is $1,645 per
month. This metric has increased by 11.8% over the past year and has jumped 22.5%
over the past 24 months. The average rent for studio apartments currently stands at
$1,226, up 16% YoY. One bedroom/one bath units are currently commanding $1,510
monthly, refl ecting an increase of 11.4% since Q3 2011. Two bedroom/one bath units
currently average rents of $1,716 per month, a 12.0% bump over the past 12 months.
Meanwhile, two bedroom/two bath units are currently commanding an average rent of
$2,062 per month, up 10.7% annually. Lastly, three bedroom/two bath units are now
averaging $2,311 monthly, up 8.1% over the past year.
Development Trends
This quarter saw two new projects come online in the Santa Clara County market.
De Anza Properties delivered their 246-unit Fruitdale Station Phase II project to the
San Jose Central marketplace. Meanwhile, a new 46-unit complex was completed
in San Jose’s IBP East submarket at 2388 Madden Avenue. While this accounts for
just 292 units being delivered to market (compared to 492 units coming online in Q2
2012), make no mistake about it, the Santa Clara County market is in the midst of an
apartment building boom.
We are now tracking 30 total projects under way that could add as many as 7,714
new multifamily units to the local inventory over the next couple of years. The Irvine
Company’s Crescent Village project could single handedly add over a thousand new
apartment homes in phases over the next couple of years. That being said, about 1,000
of these units will either be in the form of new subsidized housing or senior housing
projects that will not have as much of an impact on the general marketplace. Likewise,
we are tracking a few projects that may even end up landing as condominiums, but
this trade area leads all others in the Bay Area in terms of multifamily development.
Though rental demand remains high, these levels of development will have an impact
upon local vacancy and rental rate growth fundamentals by late 2013.
The largest single complex currently under construction in the region is Fairfi eld
Residential Properties’ 670-unit Verdant Apartments project in the Oak Creek
submarket, which is slated for late 2013 delivery. The next large project scheduled to
drop is Equity Residential’s 444-unit Domain project (also in the Oak Creek submarket).
This complex is scheduled to be complete during the fourth quarter. That being said,
current development (assuming slated delivery dates hold) should result in about 800
new units coming to market over the fi nal three months of 2012. Total deliveries in
2013 could exceed 3,800 units while new construction will add at least another 3,000
units by 2014.
Q3-2012 Recent Deliveries
Rental Market Data - Apartment Complexes 99 Units or Less
99 Units or Less Index Average Rental Rate
Santa Clara Vacancy Average Studio 1+1 2+1 2+2 3+2
Q3-2012 2.6% $1,645 $1,226 $1,510 $1,716 $2,062 $2,311
Q2-2012 2.2% $1,604 $1,188 $1,471 $1,664 $2,027 $2,273
Q1-2012 2.7% $1,531 $1,143 $1,406 $1,574 $1,928 $2,215
Q4-2011 3.2% $1,494 $1,110 $1,370 $1,540 $1,882 $2,163
Q3-2011 2.8% $1,472 $1,057 $1,355 $1,532 $1,863 $2,138
Q2-2011 2.3% $1,432 $1,040 $1,310 $1,498 $1,813 $2,073
Q1-2011 3.4% $1,369 $991 $1,246 $1,433 $1,744 $1,972
Q4-2010 4.5% $1,339 $976 $1,211 $1,400 $1,714 $1,938
Q3-2010 4.8% $1,343 $972 $1,217 $1,396 $1,734 $1,923
Fruitdale Station Phase II
San Jose, CA
264 Units
September 2012 Delivery
Verdant Apartments
San Jose, CA
670 Units
December 2013 Delivery
Northpointe
San Jose, CA
514 Units
March 2014 Delivery
2388 Madden Ave Apartments
San Jose, CA
46 Units
Under Construction
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San Jose Market ReportThird Quarter 2012
Offi ce Market Snapshot
BAY AREA OFFICE
Vacancy
12.9%
Net Absorption
1,224,631 SF
Deliveries
1,016,006 SF
Asking Rent
$2.80 FSMarket Tracker*Arrows = Current Qtr Trend
Peninsula Taps Brakes; Silicon Valley Still Going Strong
As of the close of the third quarter, office vacancy stood at 12.9%, down from the 13.1%
mark posted just three months ago. More than 1.2 million square feet of space was
absorbed over the past three months, reflecting an overall growth rate of 0.48%. This is the
tenth consecutive quarter of expansion—year-to-date occupancy growth now stands at over
3.7 million square feet of space. Meanwhile, the average asking rent for office space in the
Bay Area currently stands at $2.80 per square foot (on a monthly full service basis). While
this number has increased by roughly 14% since the current growth cycle began (it stood at
$2.49 in first quarter 2010), this is the first quarter since then in which rents have not
increased. This is notable not because we think it is the beginning of a new trend—our
forecast is for asking rents to resume growth—but because it mirrors the pause in activity
that we saw this quarter in what had been some of the region’s strongest producing office
markets.
While occupancy growth of more than 1.2 million square feet cant be considered anything
less than robust (the average quarterly figure between 2003 and 2007 was 977,000 square
feet), the overwhelming majority of it came from just one trade area. The Silicon Valley
office market posted over 1.4 million square feet of growth this quarter as its vacancy rate
fell from 14.2% to 13.3%. It was joined in growth by the region’s East Bay markets. The
East Bay Pleasanton trade area experienced 230,000 square feet of positive net absorption
as its vacancy rate fell from 14.9% to 13.9%. East Bay Oakland gained 208,000 square feet
of occupancy sending its vacancy rate downward from 17.9% to 17.2%. Meanwhile, office
vacancy in the East Bay Walnut Creek area decreased from 15.4% to 14.8% thanks to
92,000 square feet of occupancy growth. The East Bay, which has mostly been sidestepped
by the tech boom at the heart of the region’s explosive office growth, is finally showing true
signs of recovery. Oakland has posted growth three of the past five quarters, while both the
Pleasanton and Walnut Creek markets have seen expansion four of the past five quarters.
But while the South and East Bay were the big winners this quarter, the big surprise was who
lost ground this quarter. For the past two years, growth has been driven by tech users looking
to expand along the Highway 101 Corridor. While the region’s other markets struggled to
keep numbers in the black at all, the Santa Clara, San Mateo and San Francisco markets
absorbed a combined total of more than 13 million square feet of space. Two out of three of
those markets posted occupancy declines this quarter. The San Francisco market recorded
over 361,000 square feet of occupancy losses as its vacancy increased from 9.4% to 9.8%.
San Mateo posted 340,000 square feet of declines as vacancy here climbed from 12.8% to
13.9%. This has begged the question; is the new tech boom going bust?
The answer is no. This slowdown can be attributed to a mix of factors, market timing being
the biggest one, though deal activity did slow in both markets. In San Francisco, half the
space returned to the market came from the back end of earlier user relocations that typically
involved expansion. But at least 170,000 square feet was due to consolidation, mostly from
financial and business services users. In San Mateo County, a number of large subleases
came on the market, but we are aware of at least 240,000 square feet in new deals likely to
close in the first few weeks of fourth quarter 2012 alone. While we are closely watching the
market for more signs of consolidation, we anticipate a return to growth. We are currently
tracking a robust 7.6 million square feet of active user space requirements in the San
Francisco and San Mateo markets. But while we expect a return to growth (both in terms of
overall occupancy and rental rates), it is unclear if it will be at the same breakneck pace as
before.
www.cassidyturley.com
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2008 2009 2010 2011 YTD-12
Square
Feet
(00
0,0
00s)
10%
12%
14%
16%
18%
2008 2009 2010 2011 2012
Net Absorption
Vacancy
10-Year Average
East BayWalnut Creek
East Bay Pleasanton
East Bay Oakland
Santa Clara Co.
SanMateo Co.
SF
Marin Co.
Economic Indicators
Q3 12 Q3 11
Bay Area Employment 3.463M 3.331M
Bay Area Unemployment* 8.5% 9.3%
U.S. Unemployment 8.2% 9.7%
U.S. CCI 65.6 50.7
*Bay Area includes Alameda, Contra Costa, Marin, Napa,
San Francisco, San Mateo, Santa Clara, Solano, & Sonoma Counties
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San Jose Market ReportThird Quarter 2012
Offi ce Market Snapshot
Cassidy Turley Office Market SnapshotBay Area • Third Quarter 2012
INVENTORY SUBLET VACANT DIRECT VACANTVACANCY
RATE
CURRENT NET
ABSORPTION
YTD NET
ABSORPTION
UNDER
CONSTRUC-
TION
AVERAGE
ASKING RENT (ALL Classes)
AVERAGE
ASKING RENT (CLASS A)
Submarket
Marin County 9,841,338 412,542 1,109,571 15.47% (14,231) (180,610) 0 $2.52 $2.52
San Francisco County 83,588,988 1,200,603 6,996,333 9.81% (361,255) 1,437,154 0 $3.62 $3.82
San Mateo County 31,154,384 754,687 3,563,943 13.86% (339,936) (240,300) 0 $3.33 $3.61
East Bay Oakland 29,547,216 313,492 4,776,292 17.23% 207,632 36,671 0 $2.16 $2.40
East Bay Walnut Creek 16,778,154 169,130 2,317,811 14.82% 92,024 194,854 0 $2.07 $2.26
East Bay Pleasanton 21,897,643 240,834 2,794,155 13.86% 230,360 715,975 0 $1.83 $2.01
Santa Clara County 60,479,728 677,817 7,360,416 13.29% 1,410,037 1,759,555 0 $2.74 $3.28
Office Class Breakdown
Class A 144,189,788 2,878,422 16,449,366 13.40% 926,625 926,625 0 $3.10
Class B 78,430,391 713,989 9,102,670 12.52% 285,383 285,383 0 $2.39
TOTAL 253,287,451 3,769,105 28,918,521 12.91% 1,224,631 3,723,299 0 $2.80 $3.10
*Office asking rates converted to Full Service
Key Lease Transactions Q3 12
PROPERTY SF TENANT TRANSACTION TYPE CITY
Moffett Towers 581,973 Lab 126 Relocation/Expansion Sunnyvale
555 Mathilda Ave 557,143 LinkedIn Relocation/Expansion Sunnyvale
625 Clyde Ave 385,000 Samsung Info Systems Relocation/Expansion Mountain View
4301-4401 Great America Pkwy 299,784 Palo Alto Networks Relocation/Expansion Santa Clara
1301-1355 Market St 164,051 Twitter Relocation/Expansion San Francisco
Santa Clara Gateway 149,051 Arista Corp. Relocation/Expansion Santa Clara
Bishop Ranch 1 80,000 PG&E Relocation San Ramon
655 Montgomery St 58,000 Hotwire Renewal San Francisco
808 Brannan St 55,006 New Relic Relocation/Expansion San Francisco
Office SubmarketsBay Area