Tallying new apartment construction in Silicon Valley: Hope amid the housing crunch?

We’ve got jobs, jobs, jobs in the valley, but no place to put the workers when they clock out at night.

Maybe there’s a ray of hope. A new report from the RENTCafé apartment-search website says that intense renter demand is driving a wave of new construction in booming urban markets, including the San Jose metropolitan area.

RENTCafé compiled a list of the top 20 U.S. metros with the most apartments to be completed in 2016 — and San Jose cracked the list, barely. It sits in the No. 20 spot, but let’s call it progress: 5,866 new units are scheduled for completion this year in the metropolitan area, which includes Santa Clara and San Benito counties.

Compiling data from new large-scale projects (buildings with 50+ units), the report breaks down Silicon Valley construction like this: 4,077 units in San Jose; 445 in Santa Clara; 378 in Milpitas; 378 in Mountain View; 378 in Sunnyvale; 128 in Morgan Hill; and a measly 82 in Palo Alto. For many, Palo Alto still signifies “Silicon Valley,” but the city can’t seem to get off its duff when it comes to making decisions about housing.

Among the top 20 metros, Texas leads the pack with a combined 69,000 units projected for completion in Houston, Dallas-Fort Worth, Austin and San Antonio.

Houston sits in the No. 1 position on the Top 20 list; it has 25,935 units slated to come online in 2016. The rest of the Top 5, in order, is Dallas (23,159), New York (21,177), Los Angeles (20,205) and Washington, D.C. (18,027).

Here’s the full report.

As you can see, San Francisco is No. 12 with 9,362 new units — more than doubling the 4,144 units completed in 2015.

Whether all this construction will be enough to ease further Bay Area rent hikes remains to be seen. The region now has 746,100 technology jobs, according to an analysis by this newspaper published earlier this week. That tops the record set during the dot-com era by 21,000 jobs.

Where will all these people live, and how will they do it affordably? Good question.

A second-quarter report from Novato-based RealFacts showed rents continuing to climb across the region’s nine counties, though at a slower rate than the year before. The average Bay Area apartment rented for $2,526 in the second quarter, up 4.3 percent year over year. The average San Jose rent was $2,503, up 4.0 percent. In Oakland, the average was $2,959 up 5.4 percent, and even far-flung Concord saw a sharp increase of the average rent to $1,760, up 8.3 percent.

Those numbers don’t capture the mom-and-pop landlord rentals that tend to be less costly.

But they still are a good indicator of the region’s entrenched housing predicament — which drives thousands to commute long distances from more affordable communities to their jobs in the valley.

And incidentally, if you’re thinking of finding some relief by moving to Sacramento, think again. Among the top 5 markets for projected rent growth this year, according to RENTCafé, “Sacramento will have the smallest number of new apartments added to its inventory in 2016, an unimpressive 730 units in large-scale developments. This actually represents a 30% decrease compared to 2015 when 1,000 units hit the market.”

Source: Silicon Beat, Richard Scheinin
http://www.siliconbeat.com/2016/08/19/report-tallying-new-apartment-construction-silicon-valley/?_ga=1.22882299.1788795839.1424213200

Citation Homes buys San Jose Toys R Us site for mixed use

Citation Homes, continuing to ramp up its development pipeline in Silicon Valley, has acquired a nearly 4-acre San Jose retail site near Santana Row where it is planning a mixed-use project with apartments and retail.

Santa Clara-based Citation — the company headed by former Oakland A's owner Stephen C. Schott — paid an undisclosed sum for the Toys R Us property at 751 S. Winchester Blvd. this week, according to public records. The seller was the Wayne, N.J.-based retailer.

Toys R Us did not return a phone call seeking comment.

Citation's Stephen Schott Jr., who now runs the company, told me it's still very early in the development process. Citation has not yet turned in a proposal for the site, and it's unclear just how many units and how much retail could be built. But he said the location near the intersection of two major freeways, major jobs and retail centers is ideal.

"It's going to take some time, and we're working with the city," Schott told me. "We feel long-term, it's a great project and a great location for mixed use."

This is the latest sign of Citation's resurgence in the region. Citation — once one of the largest homebuilders here — cut back on its new projects several years ago. Now it has about 1,500 units in the pipeline, most of them apartments.

Case in point: Also on Tuesday, Citation closed on a 4.5-acre site in Fremont, where it is considering 76 apartments and 54 townhomes. Citation paid $13.15 million for that land, a former city corporation yard. (I wrote about this deal back in July.)

Citation's biggest project here is in Milpitas, where it has some 1,000 units near the new BART station coming online in three stages. The first, with about 380 units, is under construction.

And Citation is already in lease-up mode at Tuscany, a Santa Clara apartment complex on El Camino Real that includes 133 apartments. "It's doing pretty well so far, and it's not even open yet," Schott said.

While the activity represents a major ramp-up, Schott said the company is not trying to grow just for growth's sake.

"We're just trying to slowly build up an apartment portfolio that makes sense," he said. "And we'll still do townhouse here and there."

As for when the Toys R Us site could get going? The retailer is in the building at least through early 2016, and could extend its lease beyond that, assuming both parties were on the same page.

Source: Silicon Valley Business Journal, Nathan Donato-Weinstein
http://www.bizjournals.com/sanjose/news/2014/10/01/citation-homes-buys-san-jose-toys-r-us-site-for.html

Mass Eviction—San Jose’s Largest—to Displace 670 People

Growing up in New Orleans, where roof-stripping squalls are a matter of course, Tyrone Lockett learned how the force of nature could render anyone a nomad. When Hurricane Katrina tore through frail levees in 2005, he watched the devastation from afar as his family lost everything to the floodwater fury.

“Mother Nature comes calling and takes what she will,” says Lockett, who settled in San Jose a year before the Loma Prieta earthquake shattered the cityscape.

But it was another force entirely that prompted the 49-year-old private school chef and his stroke-stricken wife to leave their longtime home: Silicon Valley’s ascendant economy, which turned his rent-controlled apartment into a goldmine.

Lockett recently moved out of his two-bedroom flat at The Reserve, a 216-unit west San Jose complex slated for the wrecking ball to make way for a market-rate replacement with 640 units and 8,000 square feet of shops and restaurants. It’s the kind of dense, urban architecture the city needs to fix the housing shortage and drive down living costs.

But there’s a hitch. Satisfying demand by supplanting low-density real estate with taller, more populated mixed-use developments casts existing tenants into a brutal market.

Nowhere is that problem more pronounced right now than at The Reserve, where some 670 residents have less than a year to get out. By the city’s count, it appears to be the largest eviction in Silicon Valley history—possibly the state’s—and it caught San Jose completely off guard.

For context, consider that San Francisco called a drawn-out eviction of 100 tenants from 86 rent-controlled units the largest in the city’s history. At The Reserve, nearly seven times as many people got the boot with far less notice.

To make matters worse, the South Bay city of a million has no policy on the books to help tenants pay for the forced move. This was never supposed to happen, says Randi Kinman, who chairs the Metropolitan Transportation Commission’s policy advisory subcommittee, a regional planning body. Evicting 600-plus people from rent-controlled units conflicts with state-set goals to maintain housing stock for all income levels.

“We kind of brush off displacement from four units here or five units there,” Kinman says. “But at no point has there been any idea that we would see this scale of displacement or that it would remove this many rent-controlled units. When I brought this up at our meeting two months ago, people wanted to know how could this possibly be happening? Everybody just kind of looked at each other and said, ‘Holy smokes.’”

The project’s developer, Greystar Real Estate Partners, won city approval months ago and gave residents until next spring to clear out of the 45-year-old complex. Tenants challenged the permit, arguing that the environmental review wrongfully deemed the displacement a “less than significant impact” and that scores of them could become homeless. They lost the appeal in a 7-3 City Council vote last week, despite support from council members Ash Kalra, Tam Nguyen and Magdalena Carrasco.

“Honestly, I don’t even know what we’ll do now,” says Tanisha Orozco, 24, a five-year tenant who’s seven months pregnant and lives in a two-bedroom unit with her husband, their toddler and her mom and dad. “We’ll probably have to move to Sacramento.”

Because no city law requires the landlord to compensate tenants for forced relocation, Greystar drummed up its own offer. According to the latest version, only households making less than 80 percent of the region’s median income qualify. The 40 or so units that meet the threshold stand to gain three months’ rent, a refunded security deposit and help from a “relocation specialist” to scout out a new place.

Tenants who are older than 62, disabled or have at least one child who lives with and depends on them get another $3,000. Greystar also urged people to apply at some of the 8,000 apartment units it owns across San Jose.

“This was voluntary on our part,” says Greystar lobbyist Erik Schoennauer. “We wanted to help people who needed it even though there’s no policy requiring us to do so.”

Tenants say they don’t necessarily oppose redevelopment—The Reserve is apparently teeming with cockroaches and silverfish, and rife with code enforcement and health violations. Several tenants say they lived with overflowing sewage, black mold and holes in the dry wall for days before Greystar sent someone to help.

But the relocation benefits, tenants argue, leave most of them out and doesn’t come close to covering the cost of uprooting hundreds of people, many of whom live on fixed incomes and can’t afford market-rate housing in San Jose. They say the bulk of Greystar’s other apartments fall outside their price range. A 386-square-foot studio at The Reserve goes for up to $1,745 a month. Tenants implored the city and Greystar to offer more money to people to no avail.

“I really don’t characterize this as a negotiation,” Schoennauer says. “I would characterize it as a dialogue. We’re volunteering to do this.”

Councilman Chappie Jones, whose district encompasses the South Winchester Boulevard apartment complex, says he can’t do much to help The Reserve tenants. But he says their plight will inform future policy.

“One of the things that we learned from this is that we don’t have any rules to go by for these situation,” Jones says. “I was surprised to learn that. I expected something. That’s why I proposed a displacement ordinance. We’re in the eye of the storm here when it comes to issues of development and displacement.”

San Jose’s housing staff expects to bring a relocation compensation policy proposal back to the council this fall. That’s too late for tenants at The Reserve, who will all enter a rental market with a dearth of affordable housing and a 3-percent vacancy rate.

“Our life revolves around our son, who starts high school this year,” says Angel Milano, a 56-year-old electrical engineer who pays $2,200 a month for a two-bedroom apartment at The Reserve. “It’s going to be hard finding a place by his school. We’ll do what we can.”

Some of Milano’s neighbors expect to move to the Central Valley, pulling their kids out of school and away from family. A nursing student says she’ll have to drop out to move. A single dad says he’ll have to dip into his daughter’s college fund for what will be his sixth move in five years.

“There goes the down payment we were saving for,” says Brandie Locke, 30, who moved into her first-story unit at The Reserve five years ago in the hope that the rent-control cap would help her and her husband save to buy a home. “You have to put your life on hold.”

Sandy Perry, head of Santa Clara County’s Affordable Housing Network, says the city made a mistake in arguing that simply replacing The Reserve’s 216 units with 650 new ones will offset displacement by creating more homes.

“They deny that any real displacement will take place,” Perry says. “Nothing could be further from the truth. When people can’t find a comparable apartment to rent, they don’t disappear into thin air. They relocate to outlying areas and commute for hours. Or they become homeless.”

Perry criticized San Jose’s mayor and council for not doing more to help. When more than 400 people faced eviction at Buena Vista mobile home park in Palo Alto, he says, Santa Clara County Supervisor Joe Simitian led a charge with other agencies that raised $45 million to buy the property and stave off redevelopment. When 100 people lost their home to a fire that torched Twin Pines Manor Apartments in Sunnyvale, the county, the city and a host of nonprofits raised money to find them shelter.

“Why is nobody championing people at The Reserve?” Perry wonders.

Jennifer Loving, executive director of Destination: Home, says the city needs to think about how to prevent displacement if it’s serious about ending homelessness.

“Prevention should be a huge part of the discussion,” she says. “When decisions are made at the policy level, there’s a human cost we have to consider.”

San Jose has provisions for tree displacement but nothing about displaced people, Kinman says. It’s a glaring oversight that’s made a tough situation disastrous, she says, predicting that the crisis at The Reserve will reverberate across the entire region.

“We want more housing and we want this development,” she says. “We just can’t ignore the impacts of the people who already live there. You can’t just count the numbers and say, ‘Well there’s a net gain here.’ If that were the case, we could tear down all the low-income housing and all the rent-controlled housing to make way for more units. But it doesn’t work that way. That destroys people’s lives.”

Lockett likens the lack of policy to account for mass eviction to the defective flood walls that turned Hurricane Katrina into the biggest manmade disaster in the nation’s history.

“This is our broken levee,” he says.

Source: San Jose Inside, Jennifer Wadsworth
http://www.sanjoseinside.com/2016/06/29/mass-eviction-san-joses-largest-to-displace-670-people/

'Micro-ish' units planned for San Jose's West San Carlos corridor

For several years, micro units — efficiency studios as small as 250 square feet — have been touted as a solution for the region’s housing crisis, allowing developers to wring more units from ever dwindling supplies of land.

But the concept has been absent in the South Bay’s market-rate apartment pipeline, despite thousands of units developed during the recovery. Instead, micro units have remained something that happens up in San Francisco, like $4 toast and artisanal pickle boutiques.

Now a developer is proposing something kind of — but not quite — micro for a sliver of land on West San Carlos Street.

Shad Design has turned in preliminary plans for 81 units on a .4-acre lot at 1470 West San Carlos. The developer is in contract on the land, which is currently a car lot.

Units would include 379 square feet of living space on the main level plus a 162-square foot mezzanine/loft and a 32-square-foot closet, for a total of 573 square feet of usable space per unit.

That’s not exactly teeny tiny, but it’s a different kind of product for Silicon Valley, where apartments are traditionally a little roomier than in dense urban cores.

The $25 million project — which would include 7,200 square feet of ground floor retail — is being driven “because of the demand and the scarcity of adequate land for development,” said Michael Shadman, president of San Jose-based Shad Design, an architecture and engineering firm. “San Jose has grown quite a bit and demand for residential has gone through the roof. Oakland has gone the same way, and they’re also looking at micro units. San Jose hasn’t seen it, but the demand is there.”

Mahnaz Khazen is developing the project with Shadman and says shefƒ was attracted to the concept after she developed a student housing project in Oakland.

“After graduating, they really got a rent shock,” she said. “I was looking for something with smaller footprints that can be more accessible to young professionals. Michael really embraced it.”

In addition to young professionals, she said corporations looking for transitional housing for new recruits could also be a market. Shadman estimates that the units could rent for a 30 percent discount compared to traditional apartments. Despite the petite size, units would have full kitchens, bathrooms and washers and dryers.

What makes the design work? Making every square foot count.

“Most people think of horizontal space, and then you have an 8, 9 foot ceiling and I’m done,” Shadman said. “But when you have a site that gives you more density, you have to take advantage of the height.”

Cue the loft-level layout, made possible by 15-foot ceilings, floor to floor. “You have your private space, but if you have a guest downstairs, you won’t see a bedroom," he said. "From the bedroom, you can see below.” Khazen calls the idea "micro plus."

This is just the latest proposal on the fast-changing West San Carlos corridor, where Republic Urban Properties recently completed Meridian at Midtown, a 218-unit complex. Republic is also working to develop the Ohlone, which at full buildout could include up to 800 units. Next door to that, Fairfield Residential is working on a 315-unit project on a former lumber yard.

Still, the 1470 West San Carlos project faces some challenges, including parking. The city’s parking requirements mandate 1.25 parking spaces per unit, or 102 stalls in total, plus another 18 for the retail. San Jose allows a 50-percent reduction in the parking requirement, if a developer includes an acceptable transportation demand management program that will cut down on car use. But so far, the project is proposing only 50 stalls, so it’s still a few short. Khazen said she’s interested in parking systems that allow cars to be stacked on top of each other — kind of like the loft design, but for autos.

Also: Residential uses are actually not permitted on the parcel under current planning guidelines. That is expected to change when the San Jose City Council approves the West San Carlos Urban Village Plan, likely sometime later this year. (The plan will allow more than 1,200 units to be built in the village plan area.)

“As soon as it’s approved, then the possibility of residential is activated,” said Matthew VanOosten in the city’s planning department. “At least in the draft plan, which is still not approved, a project like this is something we’d kind of want to see for that space. The parking is the main factor right now, as well as a few other things.”

The proposal is in the early stages, and is likely to be adjusted before the developer submits a formal application. Meanwhile, Khazen said she’s already lining up financing. About $2 million will likely come through EB-5 investors, the federal program that streamlines green cards for immigrant investors. But the majority will come from traditional financing.

“Our market is very strong, interest rates are low and demand for EB5 is not as much,” she said. “And this is a low risk investment. Because of that we don’t have issues raising funds locally.”

Source: Silicon Valley Business Journal, Nathan Donato-Weinstein
http://www.bizjournals.com/sanjose/news/2016/03/22/micro-ish-units-planned-for-san-joses-west-san.html

$250,000 a night hotel stay for Superbowl Sunday?!!

Super Bowl 50 is finally here in the Silicon Valley. It has been truly amazing watching the stadium and the surrounding area somewhat transform. There is allot of excitement in the air for us locals as we see not only the rest of American, but the world, focusing its eyes on Santa Clara, a key silicon valley city, for the big game. It is also nice to see added revenue coming into this valley with hotel rooms being booked up and restaurants full. Who knows, maybe some of the game day visitors may consider buying a permanent resident here? Just the Realtor in me talking.



Can I Rent an Apartment in Santa Clara Before the Super Bowl?

My desire to go to Super Bowl 50 in Santa Clara is strong. However, it’s not strong enough to pay for a hotel stay.

When I saw the Fairmont Hotel in San Jose offer a $150,000 package for a three-night stay, I shrugged my shoulders and figured market forces were hard at work. But when I saw the Fairmont in San Francisco offer a $1 million package for a four-night stay, I was stunned and left with questions: How many mints will they leave on my pillow for $250,000 a night? Are there enough mints in the world? Most important, where else could I stay in the San Francisco Bay Area?

I didn’t get an answer on the mints, but I did find five possibilities in Santa Clara. I set out to see if it was possible to score an apartment close to Levi’s Stadium before Sunday’s kickoff. While signing a last-minute lease to bunk down for one big weekend might be cuckoo, it’s no more crazy than spending seven figures to stay at a hotel 45 miles away.

I started at the Estancia at Santa Clara, which is only about a mile away from the stadium, according to leasing consultant Claudio Cordero. A brisk 20-minute walk on game day sounds great. Cordero said I could move in immediately to a one-bedroom unit with a private garage for $2,494 a month. Sweet!

But that comes with a 12-month lease. I explained to Cordero that I needed a place for a shorter term. He offered great news: There’s also an option for a three-month lease at $2,994 a month. So for a little less than nine grand (plus security deposit), I’d have a party palace for 12 weekends beyond the Super Bowl. Take that, Fairmont!

Cordero did warn me that subletting isn’t allowed at the Estancia, so I wouldn’t be able to cash in on the days when I wouldn’t be at my personal Super Bowl HQ. He also added that I could move in “ASAP” to my third-floor unit at the “simple and elegant” complex.

Sticking close to the stadium, I spoke with Alexis Calvillo at River Terrace. Also about a mile from the Super Bowl site, the complex is running at about 97% occupancy. Calvillo said I could move in today to a one-bedroom on a three-month lease at $3,771 a month. A bit pricier than the Estancia, River Terrace promises a “Mediterranean-styled swimming pool and rejuvenating hydro-massage spa” for residents. No subletting is available, but it’s a fine choice if you don’t mind spending $11,313 for a walkable spot to the Super Bowl.

Venturing farther afield, I looked at apartments in the Village Green complex, about six miles from Levi’s. A long walk to be sure, but totally worth it if I could score a deal. Nancy Sandberg, senior resident manager, said the location is “not walkable” to the Super Bowl. When I asked if you could see the stadium from the apartment, she helpfully added “not unless you got up in an airplane.” Sandberg said only two units are available out of the 98 in the building, and both of those won’t be ready until at least Feb. 10.

Sad to say, I was tackled for a loss at the Village Green. I tried two more apartment complexes—neither of which is walkable to Levi’s—and found workable options at each location.

At the Flora Vista apartments, property manager Amanda Blackketter said she had a one-bedroom unit available. It would be $2,150 per month for a six-month lease and about a 15-minute drive to the stadium (sans traffic!). Almost thirteen large, but it’s available for immediate move-in. Blackketter added that while the stadium wasn’t within walking distance, the neighborhood around the complex is great for strolling—she said the building has a walk score of 87.

At the Lawrence Road apartments, community manager Adel Robles said she wouldn’t suggest trying to walk to the game from her location. She did have units available immediately, but added that an applicant would need to get a credit check, which could take three days. That would be cutting it close. If you don’t mind sweating it out, a one-bedroom unit is $1,895 and available only on a 12-month lease. I couldn’t see myself locking into a year at $22,740 for a unit without in-room laundry, but the monthly cost was the cheapest of the options I found.

While I wouldn’t recommend last-minute apartment rentals as a solution to a Super problem, it is possible to find a place to stay in Santa Clara for the big game. Now where’s my mint?

Source: Realtor.com, Erik Gunther
http://www.realtor.com/news/trends/santa-clara-apartment-rentals-can-it-be-done/

San Jose: Neighbors say six-story apartment proposed for Almaden Road is too big

A trend I've been seeing a lot of here in the Silicon Valley is developers coming in and building mega apartment buildings and then charging as much as they can for the rent on those units. Well now it seems at least some local residents in the Almaden Valley neighborhood are fed up with it.


A developer's proposal to build a six-story apartment complex on Almaden Road has drawn the ire of some Willow Glen residents who say it's too big and dense for their neighborhood.

However, city staff said during an Oct. 13 public meeting hosted by the developer, Cypress Group, that the project is needed to help ease San Jose's housing shortage.

Cypress Group wants a one-acre parcel at 1777 Almaden Road rezoned from multi-family/single-family residential to planned development so that 92 market-rate units could be built there. The new zoning would enable more units than allowed by the lot's current zoning, which limits apartment buildings to three stories or less.

Staff said the parcel was designated in the city's general plan for high-density residential use. That dismayed some of the residents, who questioned why such a use in their largely single-family neighborhood can't be revisited.

Willow Glen resident David Lasich said in an interview he was frustrated at being told that work done on the city's general plan 10 or 20 years ago can't be undone at this point. He said he doubts that such a plan would fly in other areas, such as Dry Creek Road.

"The fact of the matter is, it's poorly designed," Lasich said.

At one point during the meeting Lasich turned to Councilman Pierluigi Oliverio, who represents Willow Glen, and challenged some of his earlier comments that he had never seen a project on residential land rejected by the city.

"High density, that's never revisited?" Lasich said.

"No, in fact the densities only get higher," Oliverio said. "We just approved 144 units to the acre on The Alameda."

Oliverio told The Resident that the project is coming at a time when the city is experiencing a housing crisis and expects to see about 250,000 more residents by 2040. He said more high-density market-rate projects are needed to help the city make up a $100 million loss in park fees and to retain as much land as possible for commercial and industrial use.

According to Oliverio, similar developments pay six figures in road paving fees and annual property taxes, and seven figures in park fees. He said developers of the five-story mixed use building on West San Carlos Street and Meridian Avenue paid $2.8 million in park fees.

"If we're not going to convert industrial-commercial areas to housing when it comes to land already zoned residential, the city council will look to maximize those parcels so we can maintain land for jobs," Oliverio said.

"When you build single-family homes, you lose money," he added. "The higher the density, the more revenue it brings the city."

City planners told residents also worried about congestion that a traffic study was done and is under review. They said that segment of Almaden Road is envisioned as a multi-modal corridor because of its proximity to the Tamien and Curtner light rail stops and is slated to have bike lanes on both sides leading to those stops.

Lasich said he was still disappointed at the end of the meeting but recognized that the project is inevitable.

"You can't stop progress," he said.

The plan will go to the planning director and city council for hearings, although the dates are still undetermined.

Source: Mercury News, Julia Baum
http://www.mercurynews.com/san-jose-neighborhoods/ci_29004735/san-jose-neighbors-say-six-story-apartment-proposed

Apple sets stage for San Jose campus with 15,000 workers

Everybody in this valley, unless they are living under a rock, knows Apple is building a super campus in Cupertino on Wolf Rd and Homestead, but now it seem Apple will be building another, smaller campus in North San Jose. This a good thing for San Jose because it will bring more jobs and help this area to develop even faster. In recent years this area of San Jose has seen unprecedented growth with new shopping centers, apartment blocks being built and now with Apple's new campus on the way, this area will experience even more growth which will eventually be a good thing for the real estate market.



Apple sets stage for San Jose campus with 15,000 workers
SAN JOSE -- Apple has bought a large parcel in North San Jose along First Street, enough land for an office and research campus where the technology titan could eventually have up to 15,000 workers, public records show.

Cupertino-based Apple paid $138.2 million in cash on July 31 for the 40-acre site near North First Street and Component Drive, according to county records. The land sale represents a healthy profit for the seller, an affiliate of Connecticut-based Five Mile Capital Partners, which paid $40 million for the property in 2010.

"Apple definitely could grow that much," said Tim Bajarin, principal analyst with Campbell-based Creative Strategies, a market research firm. "This land purchase represents a strong belief in Apple's future growth."

The North San Jose land, which is approved for construction of a total of 2.8 million square feet of offices rivals the size of the "spaceship" complex now under construction in Cupertino. Apple intends to move 13,000 workers to the spaceship site, which will become its world headquarters.

The newly acquired land is adjacent to a 290,000-square-foot building that Apple recently agreed to lease from Ellis Partners. Together, the land and the building form the early makings of a major San Jose campus for the iPhone maker.

"It's mind-boggling what Apple is doing," said Terry Bell, a senior vice president with Colliers International, a commercial realty firm. "Nothing surprises me any more with Apple's growth. It's tough to get your arms around the scope of Apple's appetite to expand."

The purchased land and the leased building could accommodate 15,000 workers if the empty lot is fully built out and Apple occupies the entire building it rented.

"You look at what Apple is doing with their current platforms, plus the rumors of an Apple TV, (and) something to do with the automotive industry to change the way vehicles operate," Bajarin said. "Apple clearly believes it is on a strong growth path and will need a lot more workers and skilled talent in Silicon Valley."

Last month, Apple leased 318,000 square feet in Santa Clara through two transactions that will enable the company to move 1,600 workers to a site near Great America Parkway and Highway 237.

A few years ago, Apple had leased a couple of big buildings in Santa Clara on Stevens Creek Boulevard and also has been busy renting offices in Sunnyvale as it paves the way for a huge expansion of its operations.

Apple is far from the only technology company to wolf down big servings of land or buildings in Silicon Valley.

Google has been expanding in Mountain View, Sunnyvale, Palo Alto and Redwood City. LinkedIn is laying major growth plans for Mountain View and Sunnyvale. Facebook is expanding an already big footprint in Menlo Park. And Palo Alto Networks has committed to nearly 1 million square feet in Santa Clara. Samsung is building a huge regional headquarters in North San Jose.

"We have never seen growth activity like this from so many major companies," Bell said. "This expansion has staying power."

Source: San Jose Mercury News, George Avalos
http://www.mercurynews.com/business/ci_28578891/apple-sets-stage-san-jose-campus-15-000

Baby boomers will drive demand for apartments, U.S. Fed study shows

(Reuters) - The volatile U.S. multifamily housing market has returned to pre-recession investment levels, driven largely by millennials putting off home-buying and settling for rentals, but in the long term it will be baby boomers that will drive the market as they downsize, according to the Kansas City Federal Reserve.

Millennials, those born between 1980 and 2000, have shown strong interest in apartments as the economy has recovered, partly because of a preference for city living but also because they are delaying marrying and having children due to debt and unemployment.

Kansas City Fed senior economist Jordan Rappaport wrote in a report that the share of young-adult households renting apartments in multifamily units decreased from 2000 to 2007 when looser mortgage credit standards and expectations of rising house prices made home ownership more attractive, but the share has since returned to normal levels.

Older Americans, meanwhile, are "increasingly downsizing" to apartments, generally beginning around age 70 and doing so more often by age 75, Rappaport wrote.

The oldest baby boomers will turn 70 next year, and the number of Americans aged 70 and older will increase by more than 20 million in the next 15 years, the Census Bureau projects.

"In consequence, multifamily home construction is likely to continue to grow at a healthy rate through the end of the decade and thereafter remain well above its level prior to the housing crisis," the report said.

Building permits for the multifamily segment soared 24.9 percent in May, and permits for buildings with five or more units reached their highest level since January 1990.

The report said that builders would need to adapt to the changing trends because while millenials lived in compact city spaces, older buyers tended to want more space and amenities.

Source" Reuters, Megan Cassella
http://mobile.reuters.com/article/idUSKBN0P321F20150623?irpc=932

Micro Apartment Units Getting Macro Attention From Urban Developers

Uh, No! I wouldn't live in one. But here in the silicon valley, there seems to be more people looking for a place to live and not enough apartments, condos and houses to put them in. Rents are super high here in the valley, due in part because of job growth and lack of housing. But according to a the article, micro apartments might become more and more popular in crowed urban areas such as Los Angels, New York City and maybe here in the San Jose/Santa Clara/Silicon Valley area. These tiny units may not be such a bad idea if you are single with no kids and you just need a place to stay for a year or two until you can purchase or rent a larger apartment, but not everyone will agree.

Micro Apartment Units Getting Macro Attention From Urban Developers

San Pedro Square in line for 200 apartments in McEnery, Mill Creek plan

San Pedro Square in line for 200 apartments in McEnery, Mill Creek plan



There has been allot of new development in and around downtown San Jose in recent years. There is a push by the city council, developers and others to make area just as vibrant and viable as any other location in the Silicon Valley.

Former San Jose mayor Tom McEnery is working with Mill Creek Residential Trust to hopefully develop the 204 unit apartment complex on a 1-acre parcel. You can read more at The Silicon Valley Business Journal.

San Pedro Square in line for 200 apartments in McEnery, Mill Creek plan