Thursday, February 04, 2016

301 Capitol Mall Tower Proposal

A few words I have read to describe the proposed CIM/CalPRES 30-story tower at 3rd & Capitol Mall… boring, gross, fugly, and not attractive at all. I have also read positive comments but they seem to be in the minority. I think its design is mundane which is typical with the state influence. Thankfully these are only conceptual drawings. CIM has said that no tenants have signed on, no price tag has been given and no permits or entitlements have been started. This is all an effort to get free publicly, something they have done nearly every year for the last several years but this time they have pretty pictures.

Proposed tower at 301 Capitol Mall by CIM/CalPERS looking west























Maybe this was a rushed effort to show me that there was a proposal in response to my post about it a few weeks ago? Probably not J Even though nothing thus far shows this will even happen, the developer has said it could break ground as early as 2018.

CIM plans for the site include a single 420-foot tower, 1.1 million square feet of space in the structure with 550,000 square feet of total office space, 100 apartment on the upper most floors and creative space and retail on the lower floors. It appears to be built to accommodate the states requirement of large open floor plates. Several weeks ago the Board of Equalization hinted it might relocate to this tower from its current headquarter on N Street, since then they have said they now prefer to move to low and mid-rise buildings instead of a tower. 

Proposed tower at 301 Capitol Mall by CIM/CalPERS looking east























This proposal like the Vanir Tower on J Street are still in the very early stages of development. This proposal will now be competing for tenants against the Vanir Tower to pre-lease. Banks under State/Federal law require that before monies can be lent to build an office building, 50% needs to be pre-leased. Vanir Tower needs to line up about 200,000SF and this tower needs 400,000SF. Occasionally developers will spend their own money to build high-rises like 500 Capitol Mall did and no pre-leasing is required. The Vanir Tower has not started the entitlement process or applied for any permits with the city. This indicates to me that after proposing the tower 15 months ago they have not pre-leased the minimum square footage to move forward. All these proposals emerging right now seem eerily similar to what Sacramento experienced in 2007 before the market collapsed and all but a few were built.

This proposal is far less appealing than I hoped for, but it not usual when the states involved. This site is at the foot of our city's grand entrance as you cross the Tower Bridge on Capitol Mall and deserved something much, much more that this current trendy design which is more awkward than anything else.

Current condition of the proposed CIM/CalPERS tower site















Sources: Sactown Magazine & SacBee

Monday, February 01, 2016

Market Report Q4 Sacramento

Colliers-International Q4 2015 Research & Forecast Report















Locally, 2015 office market ended positively. Colliers-International stated that the Central Business District absorbed 61,156SF of both class A & B space. The overall vacancy rate fell 90 basis points in Q4, from 16.7% to 15.8%. Downtown vacancy decreased slightly to 14.8% in Q4, due mostly to new occupancy in Class A properties. Asking rental rates increased 8 cents, an increase of approximately 3.3% quarter over quarter. Investment volume reached a peak in the 4 quarter with $247.3 million.

The new construction outlook shows no significant spec office developments under construction. Even though rents have shown some growth, they are still not at a level that justifies any new spec development in Sacramento. Colliers-International believes in 2016 the new Downtown Entertainment and Sports Center will remain the big driver. Interest in the ESC as well as growth in Government and the improvement of existing businesses will continue to drive tenant demand Downtown.

What I have observed and stated before, nearly all new construction in the CBD has received subsidies which has been the case for nearly ten years. Although trends are moving upward and rents are rising, they’re not high enough to bring construction cranes according to a local managing & leasing professional.

When it comes to economic growth, the US economy barely grew in the final three months of 2015 as manufacturing sputtered and consumer spending cooled.

Expansion in the world’s most important economy (USA) slowed to an annualized pace of 0.7 per cent in the fourth quarter, sharply down from 2 per cent rate in prior period.

Hang on… the ground might be shifting again and not in a good way.

Friday, January 29, 2016

Q Street Apartment Proposal

This week D&S Development submitted plans for an eight-story complex with 73 units at the southwest corner of 15th and Q streets.
Rendering of 1430 Q apartment building - HR Group Architects 

The project called 1430 Q will have 9,000 square feet of retail space on the ground level and 97 parking spaces underground and on the second level according to the SacramentoBee. Other characteristics the building will feature include colorful porcelain tile accents on the building’s exterior, a rooftop patio, a third-floor courtyard, a double-deck bike barn and individual residential storage units. Construction could begin by the end of the year and be completed by the end of 2017
Rendering of 1430 Q apartment building - HR Group Architects 

Thursday, January 14, 2016

There's No Proposal

As if this was real news, the Sacramento Bee is teasing the idea that the former site of two 53-story towers at Third Street and Capitol Mall could be the site of a mixed-use tower. The state Board of Equalization has meet with CIM Group who manages the site for CalPERS about relocating to a new tower that could be built at the Third & Capitol site. CIM officials showed conceptual drawings of a mixed-use project to BOE that would include condominium units on the upper floors, office space in the middle and retail on the ground floor. The preliminary plans call for a tower in the 20- to 30-story range.

The Bee then goes on to report that for this deal to work for BOE, the BOE wants the developer of the new site to assume the bond debt on the agency’s current headquarters, debt to ease the burden on the state. The debt would probably total around $20 million or $30 million by the time the Capitol Mall tower gets built and the agency is ready to move.

Therefore, this whole discussion seems crazy be begin with. How can the CIM Group stay in business if they are taking on other people’s debt? It’s safe to say unless the State gives CIM something really unique that has value in return for the debt. this deal won’t go anywhere. I have been in contact with CalPERS for 8 years, and their plans for the site have not changed. Their biggest problem is they can’t find long-term tenants for the proposal to make it feasible. If BOC wants to try another proposed tower in downtown, they should call the Vanir Tower Group who has been teasing that they could build their tower taller because of unexpected interest, but no paper work has been filled with the Planning Dept. to show this is true. 

Thursday, December 31, 2015

Golden 1 Center & Plaza Tower Construction Photos

Downtown Sacramento with 100 mile visibility behind to the Sierras panoramic


Tower Plaza construction cranes on J Street


Tower Plaza construction cranes on J Street

Tower Plaza construction crane and foundation work

Tower Plaza construction crane and Golden 1 Center.

Tower Plaza construction cranes on J Street

Golden 1 Center Construction off 5th Street

Tower Plaza construction

Tower Plaza construction cranes off 5th Street

Tower Plaza construction cranes off 5th Street

Tower Plaza construction site.

Golden 1 Center exterior panels

Golden 1 Center at corner of L & 5th Streets

Golden 1 Center exterior panels

Golden 1 Center exterior panels

Plaza Tower cranes over downtown Sacramento from West Sacramento

Plaza Tower cranes over downtown Sacramento from West Sacramento

Plaza Tower cranes over downtown Sacramento from Natomas

Plaza Tower cranes over downtown Sacramento from Natomas


Plaza Tower cranes over downtown Sacramento from Natomas panoramic

Plaza Tower cranes over downtown Sacramento from Park Tower parking garage

Wednesday, December 02, 2015

Boutique Hotel Planned By Paragary

Paragary's proposed hotel at 28th and Capitol Ave.













Randy Paragary is planning to build a six-story hotel at current site of Cafe Bernardo at 28th & Capitol Ave. with an opening date in early 2018. According to the Sacramento Bee, this will be midtown's first upscale hotel. Before the $20 million 107-room hotel project  can proceed, demolition of two structures, the Capitol Physical Therapy office and the 90 year old Cafe Bernardo building will have to be approved. The application is expected to be submitted to the city today.
Paragary's proposed hotel at 28th and Capitol Ave.


Read more here: http://www.sacbee.com/news/business/biz-columns-blogs/bob-shallit/article47449790.html#storylink=cp

Paragary's proposed hotel at 28th and Capitol Ave.

Tuesday, December 01, 2015

$180 million Soccer Stadium Revealed

Tonight before the City Council the Republic FC requested and received approval of a preliminary term sheet outlining the high-level details of the stadium construction in the Sacramento Railyards. Team officials said they would privately finance the construction budget but they are crediting public agencies with an additional $46 million on top of the $180 million number in infrastructure improvements made throughout the railyard site.
Proposed $180 million Sacramento Soccer Stadium









The planned $180 million Major League Soccer stadium in Sacramento’s downtown railyard would seat 25,000. If Sacramento was awarded a MLS expansion team next year, the stadium could be opened by March 2018. The Republic FC has said they are not seeking a subsidy from the city, the City Council is being asked for $100,000 in hotel tax revenue to fund consulting work for the project and to split revenue with the city on a parking structure that may be built on city property near the stadium. 
Proposed $180 million Sacramento Soccer Stadium

Proposed $180 million Sacramento Soccer Stadium

Proposed $180 million Sacramento Soccer Stadium