San Jose has been the heart of Silicon Valley’s tech scene for some time now. So it comes as no surprise that Cushman & Wakefield just named San Jose the #1 “tech city” in the country. But what’s interesting about their “TechCities 1.0” report, the first of what will become an annual publication, is the methodology used to make this determination. Here’s what landlords, San Jose property managers and prospective investors need to know about the report.
Based on these metrics, San Jose performs incredibly well.
So, why does any of this matter to San Jose property managers, apartment owners or investors?Simply put: these metrics provide valuable insight as to the strength of San Jose’s economy. Since 2009, real estate markets in the “Tech 25” have outperformed markets across the U.S., and San Jose is leading the way. Employment growth, absorption rates, and rent growth are all higher in San Jose than in other metro areas, including the other tech cities – great news for landlords, San Jose property managers and prospective investors.Technology is present in all cities, “but certain cities stand out,” the report notes. “In these markets, tech plays a larger role in the city’s economic trajectory. It’s also a vibe. Certain cities have the tech feel in the air, on the signage, in the conversations at the bars, in its population’s habits and preoccupations. In certain cities, tech is more deeply woven into the fabric of the city itself, and it’s dramatically shaping those real estate markets.”Indeed, San Jose’s tech sector is driving the local economy (). Companies like Google, Apple, Cisco Systems and Intel have deep roots here in the community. As a result, San Jose property managers and apartment owners are able to command premium rents—something we don’t expect to change for quite some time. The TechCities 1.0 study is just the latest evidence to that effect.Landlords, San Jose property management companies, and prospective investors can find the entire Cushman & Wakefield “TechCities 1.0” report here.
Google is notoriously tight-lipped about its expansion plans, which is why it came as such a surprise this Thursday when the tech company confirmed it has been eyeing San Jose’s Diridon Station district as a possible location for new corporate offices.But even more surprising is the fact that these won’t be any average Google offices. No. Instead, the company has ambitious plans to build a 6 million sq. ft. campus that could accommodate upwards of 20,000 new jobs. When fully built out, this would be the largest Google office complex in the world—twice the size of its “Googleplex” corporate headquarters in Mountain View.“We’re excited to have the support of the San Jose city council as we evaluate our options at Diridon Station,” a Google spokesperson said yesterday.San Jose Mayor Sam Liccardo admitted that his office had been courting Google for years. The city realized there was a tremendous opportunity to add new mixed-use, transit-oriented development around the BART station.Apparently, after further consideration, Google agrees.While the plans are not set in stone, the city has offered to roll out the red carpet to make the deal happen. This includes selling land owned by the city in order to assist Google with the assembly of the entire 240-acre area that would be needed to build the mega-campus ().
To put the scale of this development in perspective, San Jose currently has only 10 million sq. ft. of office space. Adding another 6 million sq. ft. would be transformative for the city’s economy.And it will bring San Jose’s already strong housing market to new heights. The tens of thousands of people who work at Google’s San Jose offices will need somewhere to live. The promise of Google’s high-paying jobs is sure to spark new residential development.“I wouldn’t be surprised to see speculative real estate developers gobbling up San Jose rental property before the details have even been finalized with Google,” says Mynd co-founder Doug Brien. “Investors will be eager to scoop up San Jose rental property before they get priced out.”Investors who break into the market now, or San Jose property managers and landlords who already own local real estate, will benefit from elevated rents in the short-term as supply rushes to keep up with demand. “Since it is notoriously difficult to build in the Bay Area, it could take years for these new rental units to materialize,” Brien explains.Many San Jose officials have called the proposed campus “transformational” for the Diridon district. That’s true. But it will also be transformational for the city’s housing market -- for renters, San Jose, CA property managers, apartment owners and investors alike. We’ll continue to monitor the development as new details become available.
But even more surprising is the fact that these won’t be any average Google offices. No. Instead, the company has ambitious plans to build a 6 million sq. ft. campus that could accommodate upwards of 20,000 new jobs. When fully built out, this would be the largest Google office complex in the world—twice the size of its “Googleplex” corporate headquarters in Mountain View.“We’re excited to have the support of the San Jose city council as we evaluate our options at Diridon Station,” a Google spokesperson said yesterday.San Jose Mayor Sam Liccardo admitted that his office had been courting Google for years. The city realized there was a tremendous opportunity to add new mixed-use, transit-oriented development around the BART station.Apparently, after further consideration, Google agrees.While the plans are not set in stone, the city has offered to roll out the red carpet to make the deal happen. This includes selling land owned by the city in order to assist Google with the assembly of the entire 240-acre area that would be needed to build the mega-campus ().San Jose property managers and apartment owners are already on notice. If Google’s transit-oriented tech village becomes a reality, this would have a tremendous impact on San Jose’s real estate market.To put the scale of this development in perspective, San Jose currently has only 10 million sq. ft. of office space. Adding another 6 million sq. ft. would be transformative for the city’s economy.And it will bring San Jose’s already strong housing market to new heights. The tens of thousands of people who work at Google’s San Jose offices will need somewhere to live. The promise of Google’s high-paying jobs is sure to spark new residential development.“I wouldn’t be surprised to see speculative real estate developers gobbling up San Jose rental property before the details have even been finalized with Google,” says Mynd co-founder Doug Brien. “Investors will be eager to scoop up San Jose rental property before they get priced out.”Investors who break into the market now, or San Jose property managers and landlords who already own local real estate, will benefit from elevated rents in the short-term as supply rushes to keep up with demand. “Since it is notoriously difficult to build in the Bay Area, it could take years for these new rental units to materialize,” Brien explains.Many San Jose officials have called the proposed campus “transformational” for the Diridon district. That’s true. But it will also be transformational for the city’s housing market -- for renters, San Jose, CA property managers, apartment owners and investors alike. We’ll continue to monitor the development as new details become available.
For a long time the idea of self-driving cars was fantastical, something we’d expect to see in an episode of The Jetsons but certainly not here on our own streets. But alas, it’s 2017 and the rapid progression of technology has made self-driving cars a reality. Google and Tesla have each put self-driving cars on the roads in California, nuTonomy is testing its technology on the streets of Boston, and Michigan recently passed new legislation to make the state a haven for companies looking to pilot other self-driving technologies.Self-driving cars are real, and they’re going to become widespread faster than most people expect. Some say that Uber will begin offering its first driverless rides just two years from now, with broad-based adoption within five years.As driverless vehicles become common, the cost of ride-sharing will become substantially lower than the cost of car ownership. The biggest cost of an Uber ride today goes to pay the “salary” of the Uber driver; however, an autonomous car needs no driver, so the market price should be cut by more than 50%. In addition, most cars are parked 96% of the time, which is highly inefficient. Driverless cars can be on the road almost 24 hours per day, further lowering costs.People are already driving less than they used to. According to architectural designer Jeff Speck, in the late 1970s only 8% of 19-year-olds opted out of getting drivers’ licenses, whereas today, that number has tripled to 23%.This combination can only mean one thing: pretty soon, car ownership is going to become a thing of the past for most people. And that’s going to cause a major shakeup in the real estate industry.
As real estate investors, we have to stay ahead of the trends. We can’t be naïve or blind to advances in technology. Driverless cars are coming, and they’re coming fast. Most investors plan to own their investments for 10 years orare more, and things are going to shift dramatically over the next decade. Investors who can anticipate these changes and invest accordingly will be well rewarded in the long-run.
When it came to integration of new technology, real estate always seemed to be a dinosaur. From real estate sales to property management, it was typically business as usual. But what a difference a few years can make. The real estate tech industry has exploded, and now, companies are vying to integrate technology as quickly as possible in order to keep up with their competitors.Consider virtual () and augmented reality (). Its applications in the real estate industry expand far beyond attracting people to your building by offering rewards on Pokemon Go. We believe and will have tremendous impacts on property management, in particular.
Let’s start by understanding the difference between and , as the two terms are often used interchangeably but there are actually stark differences between the two. refers to a 100% virtual, simulated experience. Some form of technology () completely replaces what your eyes can see with something else. As the user moves, screen images also move just as they would in real life. This creates the illusion that the user is actually inside of the other location or world they’re viewing. As a result, has become incredibly popular in the gaming world – people can feel immersed in the action as if they were on the ground in that scenario.Conversely, doesn’t block out the world around you. Instead, virtual images are positioned in front of you in the real world. The user can still see their actual surroundings even as web pages, graphs, maps and models are displaced in front of them.Whereas requires some form of goggles or face mask, can be experienced with just a smartphone. That’s at least partially why Pokemon Go became an instant hit. With just a mobile app, players could wander around their cities and towns trying to catch creatures that seemingly appeared in the real world through their phone’s cameras.
The real estate industry, as a whole, has started to integrate and into operations. Property management companies, more specifically, have been a bit slower to adopt these new forms of technology. This comes as somewhat of a surprise given how useful and can be. Consider the following uses of and in property management:
And this is just the beginning of what’s to come. The possibilities are endless.Because is still new to property management, there are few statistics on how it will impact a property manager’s bottom line. However, the Huffington Post notes that YouVisit, a company that provides virtual tours of college companies, caused a “30% increase in physical visit requests” for participating schools, resulting in a 12.3% conversion rate. allows users to fine-tune their search without wasting time touring properties that don’t live up to expectations.Ultimately, the goal is to leverage / and other new technology to streamline operations, improve cash flow, and enhance the user experience. and are just the beginning of what’s to come. Property management companies that get on board now will be well positioned to reap the benefits down the road.
Whether you’re a longtime Bay Area property manager or first-time landlord, you’ve probably come to realize how critical communication is to running a smooth operation. Clear, concise and timely communication helps to manage both risk and relationships.Increasingly, that means leveraging mobile communication—particularly in the wake of a building emergency.
The recent tragedy at Grenfeld Tower in London is a perfect example. Grenfeld Tower’s emergency plan asked residents to “stay put” in the event of a fire, unless the fire was affecting their own unit. However, when a fire broke out on June 14, it spread rapidly throughout the building. A new emergency plan was needed. Firefighters wanted residents to self-evacuate where possible. Unfortunately, the property management company had no way to communicate with panicked residents. The 24-story apartment building quickly became engulfed in flames with dozens of residents trapped inside. Some tried to escape by racing upstairs, in the opposite direction of the fire. But the flames continued to spread, floor by floor. An estimated 80 people perished in the blaze.Three people were killed last month after a large fire broke out at a high-rise condo building in Honolulu. The property, built in 1971, did not have a sprinkler system and many residents said they did not hear the fire alarms go off. Some only realized there was an emergency after seeing firefighters enter the building.Landlords and Bay Area property management companies can learn from these tragedies. In both cases, the emergency plan could have been improved by using mobile communication.Integrating mobile communication into your emergency plan has a number of obviously benefits. For one, it allows a property manager to alert residents about the nature and severity of the emergency. We’ve all been in a situation where the fire alarm goes off and we all shrug our shoulders—is there a real fire, or is this just a drill? In either case, the property manager would be able to provide information to residents.Similarly, a real-time communication system allows property managers to notify residents about any diversion from the pre-established emergency plan. In the case of the Grenfeld Tower fire, for instance, the property manager could have told residents to try to evacuate the building instead of “staying put” like the emergency plan stated. Residents could have been alerted as to the best way to evacuate, as well. For instance, racing up the stairs () proved deadly for many because that’s where the fire was spreading before floors began to collapse inward.
Google is on the move again. Just a few weeks ago the tech titan announced its plans to build upwards of 8 million square feet of office and R&D space in downtown San Jose, a move that real estate experts call a “game changer” for the city.
But it seems Google isn’t going to put all of its eggs in that basket.52 Parcels in SunnyvaleLast week, news broke that Google has been silently buying up parcel after parcel in Sunnyvale. Google has locked down 52 Sunnyvale properties, to be exact, for a grand total of $820 million. The properties are located on more than a dozen streets, but all are clustered close together in an area known as Moffett Park. Moffett Park is just four miles south of Google’s corporate headquarters in Mountain View.In total, the Sunnyvale properties consist of at least 2.3 million square feet of space and are spread across a number of property types from office to R&D and industrial buildings.“This is a huge land grab,” says Chad Leiker, a first vice president with Kidder Mathews, a commercial real estate brokerage firm. “It’s a major repositioning of what’s going on in Sunnyvale.”
According to the Silicon Valley Business Journal, acquiring these properties allows Google to fill the gaps between its other Sunnyvale offices—some of which Google leases, some of which it owns.Google was able to fly under the radar in Sunnyvale by purchasing the properties through its real estate brokerage partner, CB Richard Ellis. CBRE began acquiring the parcels through multiple transactions as far back as 2014, according to county records. Google used a similar method to acquire properties in San Jose, in which it partnered with real estate giant Trammell Crow as a conduit to avoid attention being drawn to the deals.Earlier in the week, during an interview with CNBC, an industry insider revealed that Google already has 72,000 employees but needs additional space to grow into. It is estimated that Google could house upwards of 11,000 additional employees at the Sunnyvale properties it has under agreement.Once the sales are finalized, Google will have offices scattered between San Francisco and San Jose, a disaggregated approach that stands in stark contrast to rivals like Apple and Facebook, whose Silicon Valley employees tend to be concentrated closer together.Google has stayed mum about the transactions, suffice to say that it has indeed purchased the properties in question. “That is all the information we have to share at this time,” said Katherine Williams, a Google spokesperson.Although it remains to be seen what Google has in mind for its new Sunnyvale real estate, one thing is evident: Google has no plans of slowing down its expansion efforts in Silicon Valley—another positive signal for multifamily investors that demand for Sunnyvale apartments will only continue to grow.
San Jose property managers and investors were in a frenzy when Google announced its ambitious plans to build a 6 to 8 million square foot office and R&D complex near Diridon Station. The scale of development far surpasses anything San Jose has seen before.But as it turns out, it’s not just investors or San Jose property management companies who are excited by the news. Since Google announced its plans last month, a number of other companies have announced their intention to relocate to or expand their presence in San Jose.Just last week, Adobe Systems joined the fray.
On Thursday, Adobe announced it was planning to buy a property near its main offices in order to expand its already massive, 3-building headquarters in downtown San Jose. By adding a fourth tower, Adobe would be able to more than double its downtown workforce from 2,500 employees to an estimated 5,500.“It’s an exciting time for Adobe, and we continue to thrive and grow as a company,”said Jonathan Francom, Adobe’s vice president of employee and workplace solutions. “We are doubling down on San Jose with .”Adobe will be purchasing the parcel, located at 333 W. San Fernando Street, from Wolff Urban Development and JP DiNapoli Cos. The purchase price has not yet been disclosed, but real estate experts suspect it will be steep. Earlier this month, Boston-based AEW Capital Management purchased a downtown San Jose office building for more than $80 million, a record $509 price per square foot for the area—a number that shattered the previous record by about $90 per square foot.Francom acknowledges how hot the San Jose market is, but says it’s worth it.“As we know, land in the Valley is at a premium, but there’s a reason,” he says. “It’s a great place for us to continue to invest in our growing population in a great place that has a deep talent pool that we can leverage for our future needs at Adobe.”In many ways, Adobe is considered a pioneer among downtown San Jose office tenants. Adobe was one of the first major tech companies to buy real estate in San Jose when it built the first portion of its 900,000 square foot headquarters at 345 Park Ave. more than two decades ago. Their latest expansion plans just reaffirm the company’s commitment to San Jose.The news has San Jose property management companies, landlords and investors buzzing. Google’s expansion plans are exciting, to be sure, but its San Jose mega-campus could take years to construct. The parcel that Adobe plans to buy has already gone through the entitlement process; an 18-story mixed-use tower has already been approved by the City. This should allow Adobe to break ground much faster than Google, meaning more jobs in downtown San Jose on an even shorter timeline.“We were thrilled to hear about Adobe’s expansion plans,” says Mynd co-founder Colin Wiel. “Although Adobe’s plans to purchase the parcel at 333 W. San Fernando have been in the works since early this year, the announcement last week is simply further validation of the San Jose office market. And for San Jose property managers, landlords and investors – further validation of the local rental market. Just as investors are willing to pay a premium for office space, we’re seeing more people pay a premium for San Jose homes and rental properties.”Just how far prices will climb remains to be seen.“The growth of downtown San Jose has some investors thinking the sky’s the limit,” says Wiel. Markets always ebb and flow, but if these corporate expansion plans come to fruition, demand for rental housing will continue to grow for the foreseeable future.”
San Jose was already buzzing with news that Google is in talks with the City to build a 6 million square foot “mega-campus” near Diridon Station. Landlords and San Jose property management companies instantly speculated on the impact this would have on the local real estate market.Then, just a few days after the initial plans were leaked, City officials dropped another bomb: the mega-campus Google has in mind could actually swell to closer to 8 million square feet.A staff memo prepared in advance of a City Council meeting this week indicated that the massive development could actually be one-third larger than previously indicated. “Preliminary discussions with Google indicate interest in planning and building a master-planned transit-oriented development that includes between 6 and 8 million square feet of office/R&D space and retail/commercial amenities,” the staff report states.
To put it in perspective, that would be about the same size as five major regional shopping centers the size of Westfield Valley Fair mall in San Jose. Or, roughly the same size as the rest of downtown San Jose’s office market combined. It would be more than two and a half times the size of Google’s headquarters in Mountain View.Google envisions the campus as a way to combat gridlocked traffic and needlessly long commutes. Unlike the corporate campuses of yesteryear, which were located in sprawling suburbs, this mega-campus would be a new model of sustainable, transit-oriented campus design. Rather than the campus being walled-off from the rest of the community, Google’s San Jose campus would be integrated into the heart of the city.Already, local officials are speculating that the project could create upwards of 20,000 new jobs. This would be a game-changer for the city, agree San Jose property managers and real estate investors.“The scale of development Google has proposed is unlike any that San Jose has seen before,” says Mynd co-founder Colin Wiel. “And it is perfectly aligned with the other live/work trends we’ve been seeing in recent years. Young, creative people want to live in areas chock-full of amenities so they’re choosing to live in urban areas. Employers are responding. Google’s plans for a mega-campus in San Jose are indicative of the tech industry’s desire to locate as close to their workforce as possible.”Key to Google’s redevelopment of approximately 240-acres is the City’s willingness to sell 16 city-owned parcels to the tech giant. Tomorrow night, the San Jose City Council will vote on whether to open negotiations with Google to that end. Local landlords, developers and San Jose property management companies will be watching closely.Stay tuned as plans for the area continue to unfold. We’ll keep San Jose property managers, apartment owners and investors updated as we learn more along the way.
When it comes to leasing an apartment, the process usually isn’t fun for anyone. Not for the property owner. Not for the listing agent. Not for prospective residents. Too much time goes into coordinating schedules, lining up property tours, and then travelling to and from the actual showings. It might take two or three hours to manage the logistics of a showing that only lasts 15 minutes!3D Tours have already made it easier for residents to narrow down the number of units they want to check out. Now, if only there was a way to let prospects tour those units at their own leisure. That would really be something!https://www.youtube.com/watch?v=YrbBmaL4Tw8Thanks to new technology, now they can. Progressive landlords and property management companies are using smart lockboxes to make self-showing units easier than ever.The process is simple: Landlords pay for a smart lockbox at each vacant unit they’re trying to rent. The lockbox is controlled remotely by the property owner (). The owner can then send a unique access code to anyone interested in viewing the apartment. The process can even be automated to allow prospects to select a two-hour window in which to view the property, and they’ll be automatically sent a code that is only valid during that period.You might be wondering: is this safe?It’s a reasonable concern, but landlords experienced in self-showings are quick to point out all of the built-in safety features. Prospective renters are required to put in personal information to confirm they are who they say they are. A verification code is sent to the person’s cell phone via SMS text message, and that code is used to authenticate the person’s account. Some smart lockbox software companies also require prospects to submit their credit card information and then charge a $0.99 fee to ensure the credit card is valid. Credit card information is kept on file in case of any damage caused during the self-guided tour of a rental.https://youtu.be/-6L9IY9OIdgStill not convinced self-showings are safe? Consider this: Waypoint Homes (), co-founded by the same co-founders as Mynd and an early pioneer in the single-family rental space, relied on self-showings to rent thousands of units and reported only one security issue. One. Single. Issue. Not a bad track record in the grand scheme of things.Once authentication is complete, a prospective resident can specify the date/time they’d like to see a property. Showings can take place between 7 am and 8 pm, seven days a week, 365 days per year. This makes it easy to visit and tour properties at their convenience, without having to juggle schedules with an owner or property manager.On the day/time of the appointment, the person planning to tour the unit simply arrives at the apartment. The owner or property manager will send over a unique 6-digit code to unlock the smart lockbox. That code is only valid for a short period of time () and can only be used by the person who received it. Plugin the code and the lockbox opens, where you’ll find a key to get inside the property. Potential tenants never feel pressured to hurry through a tour; they can explore the unit at their own pace without a pushy salesperson breathing down their neck.When the tour is complete, potential renters just pop the key back into the lockbox and go on their way. Piece of cake.The landlord or property manager then follows up to see how the tour went, whether the person has questions about the apartment or whether they’re interested in moving forward to sign a lease. They also check in to verify that the key was put back in the lockbox properly, making it readily available for future prospects.In today’s day and age, renters are looking for instant gratification. That’s why they love self-showings. They can tour a unit quickly and easily. They can even tour a unit multiple times without feeling like a burden. If they like the unit the first time around, they can easily schedule a follow-up showing for their family, roommates or significant other. Maybe they even schedule a third or fourth tour to pop in and take some measurements when buying furniture. In the past, this would have been a huge time suck for listing agents. Nowadays, it’s no big deal.It’s easy to see why renters love self-showings. But the benefits for landlords and property managers are even more dramatic.
With technology moving at lightning speed, we suspect it’s only a matter of time before smart lockbox technology is integrated into property management software. Eventually, apartment hunters will be able to schedule self-showings using the same app they’d use to message a landlord about resigning a lease or to request a service repair. After all, the goal is to provide a more streamlined process for all of those involved!As real estate tech evolves, the way landlords and property managers do business must evolve too. By some estimates, 80% of tenants prefer to schedule showings online and 60% want to schedule showings outside of normal business hours. In order to remain competitive, landlords and property managers must be responsive to residents’ demands. A willingness to schedule self-showings indicates a tech-savvy owner eager to stay ahead of the pack.