Blog: San Francisco News & Views

San Francisco's Urban Art

2011-11-25T12:48:00.001-08:00

In 1985 the San Francisco "Downtown Plan” was adopted including Code Section 429, better known as the "1% for Art" program.

In a nutshell, the code requires that the developer of a new building or of the addition of 25,000-plus square feet to an existing building within the downtown commercial district devote at least 1% of the construction budget to public art installations.

The two inspiring pieces you see here are located in the public plaza at Tishman Speyer's 555 Mission Street the back of which fronts the Transbay Transit Center development site.

Since program inception there have been 39 installations and you can visit all of them by clicking here. The Transbay Transit Center development, scheduled for completion in 2017 has a current budget of $1.2 billion - a quick calculation means that after those noisy jackhammers stop we should be looking forward to some $12 million worth of public art installations South of Market in the next few years.

I'm all for that - and speaking of "art" and "noise", why not some Art of Noise?

I'm not whining but....

2011-11-04T10:16:00.001-07:00

it’s going to take time to become accustomed to drinking wine from a carton.

I know it’s in our heads (well, at least mine) that good wine only comes bottled - but it’s really not the case as proven by this refreshing Pinot Grigio I had last night while attending an Urban Fabric Project presentation.

Briefly, this project is a national undertaking that develops case studies proposing successful revitalization strategies for textile manufacturing cities and other cities that need to fill the void left by failing or failed industries. (As this subject matter related to the manufacturing industry SFMade, a local organization I put in a good word for whenever possible, presented as well.)

Getting back to the vague subject at hand, it was hard to ignore the facts printed on the wine bottle…er, I mean carton. A fact such as recycling 1 truckload of crushed cartons is the equivalent of 26 truckloads of bottles!

Environmental consciousness is rapidly spreading, extending not only to what we as individuals can do but to what “big industry” can do as well – like in beverage packaging; or in the real estate industry where the US Green Building Council’s LEED program provides building owners, operators and tenants with a framework for identifying and implementing practical and measurable eco-friendly practices in design, construction, operations and maintenance; and hopefully in the gardening industry to get rid of those deafening gas powered leaf blowers that woke me up from a rare afternoon nap today!.

All this causes me to think about behavioral patterns and how we change them. Shocking as it may seem to younger readers, a few decades ago it was not uncommon to see empty Coca Cola cans tossed out the car window (figuring that’s why we had garbage collectors I suppose).

In the late 1990’s I was on a business trip to Beijing and hired a car to take me for a one-hour drive to the Great Wall. On the return trip, winding down tree-lined mountain road and admiring the countryside all of a sudden a blizzard of soft-drink cans and food wrappers came spewing out of the local tourist bus passenger windows just ahead of us. I've always wondered if the bus driver instructed the passengers to clean up the bus before they got back to town.

Clearly it takes a long time raise social awareness and change human behavior. Let’s hope that change continues to accelerate here, on mountain roads in China and everywhere else.

Speaking of wine, let’s hear it from Jerry Lee Lewis aka “The Killer”!

p.s. and remember – if you drink, don’t drive!

Expressin' in the Central Market District

2011-10-15T13:08:00.001-07:00

Today wrapped up the Central Market Arts collaborative "24 Days of Central Markets Arts" program which featured works of many local artists in this ever developing artist community.

On Friday I had a chance to make it down there to attend non-profit Urban Solutions second annual "2 Blocks of Art" walk which showcased works of artists and performers on 6th Street between Market & Howard.

Lots to see and things to do. Like at Launderland where the two talented chaps in this photo were playing; or the chance to artistically express yourself hosted by Club Six; and the very San Francisco art of Richard L. Perri who I had the pleasure to reminisce with about some of San Francisco’s old java-huts and watering-holes while enjoying his exhibit inside the soon-to-be open Pearl's Deluxe Burgers where owners Sylvia and Young provided a taste of what's to come to 6th Street with their most excellent selection of milkshakes!

So if you didn’t make it down there this year keep your eyes open for next year’s calendar of events. It’s only getting better in the Central Market district. If you want to see more photos of my trip down 6th Street click here – and speaking “expressin'” listen here!

Mid-Market Thoughts

2011-09-24T15:21:00.001-07:00

"The street of broken dreams, of frozen screams, of strangers rubbing elbows...." - Herb Caen (1964)

It wasn't always so. Mid-Market, which runs between 5th and 10th streets, was at one time San Francisco's equivalent of New York's "Great White Way" where you'd go to see first run movies in architecturally grand theaters.

I have a vague memory of going to the Fox Theater with my mom to see the classic "South Pacific". No doubt I was smartly attired (begrudgingly) with hair Brylcreemed in place - and experienced elation as opposed to the apprehension one often feels today being there - but things are changing.

This blog is simply a "tip of the hat" to a few of the many who are have worked hard to change it.

1. Urban Realty for their bold move to develop City Place, a 250,000 square foot retail center which we all hope will come to fruition soon.

2. David Addington, who acquired The Warfield several years ago with the belief that Mid-Market had the potential to be so much more than it has been and worked with great dedication to make it so.

3. My friends Sylvia and Young Yi, owners of Pearl's Deluxe Burgers who have confidence in Mid-Market and will be opening up a new place in the next few days on the corner of 6th & Market.

4. The board and staff of the Central Market Community Benefits District who must be doing what they do for love because it's certainly not for money.

5. The Mayor's Office of Economic & Workforce Development who are lending their muscle to turn Mid-Market into a vibrant "arts district"

San Francisco is one of the world's greatest cities and Market Street should be its Champs-Élysées. Enough said - and now for some Rogers & Hammerstein!

Let's get REAL, shall we?

2011-08-25T17:45:00.000-07:00

Let's get "real time analytics" that is! And what are those? Well,in this case it's real-time pedestrian and vehicle traffic counts.

Through yet another serendipitous instance I have come to know the fellows who recently started a tech-company named Motionloft (and on whose Board of Advisors I am now pleased to serve).

The applications for Motionloft's technology in retail real estate for one (and urban planning for another - but for now I'll just stick to the former as that is the supposed topic of this blog) are significant. Motionloft provides real-time data the likes of which does not currently exist - and you don't just have to take my word for it as I've introduced it to numerous shopping center owners, retailers and developers all of whom understand its significance. It is what you call a disruptive technology.

You see, in selecting real estate sites (which implies placing a value on it) one of the criteria used is the number of vehicles that pass a location. Currently the vehicle traffic data that people rely upon is less than desirable. As an example: you want to know what the vehicle traffic is at Powell St & Post St. You log into your subscription demographic data service, go to the "traffic count" tab, in the "intersection field" you enter "Powell St & Post St", you press "enter", and voila you get the following information:

- Powell St & Ellis St (.2 miles south)
- 12,000 ADT (Average Daily Traffic)
- Year: 1996
- Source: vendor estimate

Another criteria is the "pedestrian-traffic count". Currently, if you want foot traffic counts you take the following steps:

- stand (or hire someone to stand) on the street you are interested in
- note the day, time of day (and if you are really on it, the weather conditions)
- have a clicker-counter in hand (or simply rely on your memory though I'd suggest at least bringing a pen and pad)
- look at your watch to note the time
- start counting the number of people that walk by you
- check your watch occasionally. When 15 minutes have passed stop counting
- check your memory, pad or clicker counter and write down the number of people that were counted.
- multiply that number by 4 and voila again you have foot traffic data!
- repeat the above steps on different days and different times of day and you have the data that you can turn into an acceptable report!

Pretty archaic on both counts, wouldn't you say? But now there is Motionloft. Let me give you some brief highlights:

- the Motionloft "sensor" is something like 4" x 4" x 1"
- with the "object identification" technology it distinguishes people and vehicles from other objects
- you mount it with adhesive on a window looking to the street. It starts "counting" and transmits the data via the "cloud" to the user who looks at the information on their computer
- what you get are real-time counts where you want them and in the NOW (and after a period of time you will be able to compare the NOW to the THEN - and beyond that you can even make predictions about the FUTURE!).
- and you don't get just numbers on a page. You get a brilliant interface that gives you data - think of it like "Google Analytics for traffic counts.

It's really so much more than this but mindful of the traditional blog format (as I understand it) I'll stop for now but feel free to contact me if you want to know more.

p.s. All this talkin 'bout feet got me thinking about this Robert Parker classic!

Earth! Fire! Wind! Water! Heart!

2011-08-13T08:35:00.000-07:00

Retail Real Estate!?

So, what does this title have to do with "retail real estate" which is the supposed topic of my blog? Read on!

"Earth! Fire! Wind! Water! Heart!" refers to the powers bestowed by Gaia, the spirit of the Earth, on five young people, which when combined summon the world's greatest champion, Captain Planet, of the ground breaking '90's animated TV series (which I played a role in promoting around the world during my Turner Broadcasting career).

The other day via Facebook I read a post by my former Turner colleague and still current friend, Barbara Pyle, who produced the series. Barbara was promoting a "San Francisco Green Drinks" event at the popular 111 Minna Gallery so I decided to pop by hoping to find her there. She wasn't. But there were well over 100 people attending this first Tuesday of every month "green networking" get together. I was impressed by just how many of those with whom I chatted had been influenced by the Captain Planet series.

Now to the connection between all of the above and retail real estate. In the commercial real estate industry there is an increasing trend for building owners to retrofit buildings to make them more energy efficient (Urban Solutions, a local non-profit, I have been involved with for several years has a program to help small business owners "green" their premises which you can find more about by clicking here ; developers are developing new projects with in mind implementing practical and measurable green building design, construction, operations and maintenance solutions; and tenants, when making decisions as to where they want to locate, more an more pay attention to environmental impact and efficiency issues.

The US Green Building Council, which developed the LEED (Leadership in Energy and Environmental Design) system has even created a LEED standard for retail . So congratulations Captain Planet and Barbara for your contributions in making the world a healthier place to live. And for all you Planeteers - take note that a Captain Planet feature film is in the works. Show your support! Drop a line to Turner Broadcasting System - and remember "the power is YOURS!"

In closing, let me leave you with this!

Is Elvis in your building yet?

2011-06-17T17:00:00.000-07:00

Using Elvis's whereabouts as a metaphor for good and bad times I think it's fair to say that insofar as San Francisco commercial real estate is concerned Elvis is back in the building.

And the following empirical data sourced from industry researchers and journalists backs it up.

San Francisco is on track to see upwards of $4 billion in downtown office building sales this year eclipsing the $3.6 billion posted in 2006 (which was followed by a “bubble-icious” $8+ billion in 2007 and a “drop off the cliff” $340 million in 2009)

Q1 2011 marked the third consecutive quarter of positive net absorption of downtown office space with leases for more than 1.63 million square feet signed. Overall vacancies are down to 14.2% from over 17% a year ago. Rental rates for downtown Class A office space are up 12% and for Class B space up 17% (Q1 2011 v. Q1 2011).

Public real estate investment trusts (REITs) most notably Hudson Pacific Properties and Kilroy Realty Corp. have been leading the new crop of investments with acquisitions of 100 First St., 250 Brannan St. 303 Second St., 1455 Market St and 101 Spear St.

and during the next 12 months we could be seeing new downtown office tower rising as the market has shored up to the point where major developers, the likes of Tishman Speyer, are reported to be out there locking down sites and prospecting for major tenants.

And though I specialize in retail real estate (where empirical data is lacking but anecdotal data abounds) I put forth that the growth in office investment, leasing and development activity relates to growth in retail.

I wanted to cite the "String Theory" to back me up but after reading up on that for the last half hour and still not getting it I think I'll simply rely on the less controversial and more time proven "Dry Bones Theory" which puts forth that ".. the hip bone connected to the back bone, and the back bone connected to the neck bone, and the neck bone connected to the head bone."

p.s. and if Elvis has not come back to your "building" yet keep the faith and enjoy this great song from a great movie - and remember "Elvis is everywhere!"

A cuppa Java (and a burger) anyone?

2011-05-18T18:25:00.001-07:00

The big buzz in San Francisco is the 34th America's Cup. I believe that most American's (including myself) had no idea that the America's Cup is the third biggest global sporting event behind the Olympics and FIFA's World Cup.

But it is ... and the positive potential economic impact to the City is huge - and I am all for that. I won't get into a long essay on the economics of pulling off the America's Cup but they are challenging. So what does this have to do with the iconic Red's Java House which will have it's centennial celebration next year?

The America's Cup requires an extensive renovation and development to the waterfront and that has put Red's Java Hut continued tenancy in question. But just like there is a "lid for every jar" there is a "solution to every problem".

At the end of the day, from what I read in the SF Business Times it seems there will be a place for Red's in the big scheme of things. And perhaps it will be used as the San Francisco icon that it is to bring that additional San Francisco flavor to this event!

And Larry, if you've never hung out there and had a Red's burger and a beer you should. My treat - just remember... the jukebox! belongs to me!

Free Sand ! a good sign of economic recovery!

2011-05-08T18:15:00.000-07:00

Yes, "free sand" is a good sign of an economic recovery. Why? Because what it means is that some property developer is willing to pay some guy to run a big Caterpillar to dig dirt to prepare a site for development.

And lenders won't lend to developers to pay for dirt digging unless they believe that the dirt being dug will lead to a development that will be occupied at a rent rate that will recover the cost of digging the dirt and then some.

It's really quite intuitive! As an Economics undergraduate I know that there is "no such thing as a free lunch" but as a commercial real estate professional I know that there is such thing as "free sand" and if you want to know where this free sand is located I'd be glad to let you know... just e-mail me!

Hail the Turista!

2011-04-23T10:01:00.001-07:00

I remember when the City's economy had more vibrant manufacturing and shipping industries but that's not what this blog is about.

We all know that our economy depends heavily on the "tourist trade" and a recently published survey by the San Francisco Travel Association reports some positive data collected over the course of 2010 which I share with you.

15.92 million people visited the City (up 3.1% from the prior year).

that's an average of 126,931 tourists each day and with a population of just over 800,000 that means on an average day 14% of the people walking around are tourists

75% of those surveyed advised they were here for "leisure" purposes and 7.1% for "conventions"

70.2% were of domestic origin. Top overseas "feeder markets" were Canada (11.9%); UK (11.6%); Australia (8.0%) and Germany (7.0%)

over half the visitors are under 45 years old (average age 41.4 years) and are affluent with an annual HH income of $98,591.

more than 50% stayed four nights or more and the average stay is 4.5 nights

And as for the economic impact:

Tourists spent $8.34 billion (up 6.2% from the prior year)

generating $485 million in City taxes (up 4%)

67,122 jobs were supported by tourism (about 13% of the total daytime workforce)

hotel guests spend an average of $240 per person per day

And what do they like about San Francisco? Of course it's the "ambiance/atmosphere" (18.6%); "scenic beauty" (18.3%); "arts/culture" (12%); and "cuisine" (11.9%)

And what don't they like about San Francisco? By far "homelessness and panhandling" (25.4%) was the number one response followed by "cold and windy weather" (10.1%).

But despite those negatives, thankfully 98.3% say they would return so...

Hail the Turista!

Yes, even commercial real estate brokers need to eat!

2011-04-05T18:21:00.001-07:00

And there's no better city than San Francisco to find great culinary experiences such as I did today at Cotogna in Jackson Square, on the north-east corner of Pacific & Montgomery. Jackson Square is a relaxed and quaint San Francisco sub-district, just south of the better known and more rowdy Broadway/North Beach area, in which you will find some classic San Francisco "Barbary Coast" buildings tenanted by creative types, home decor, antique stores, Oriental rug merchants and galleries - not to mention other food establishments such as the renown Bix and Quince.

Without a reservation I had to sit at the counter and had some refreshing Frutti di Mare - fresh mussels, clams and calamari - while near drooling over the spit-roasted lamb that was being prepared right in front of me. Oh well, next time!

And speaking "experiences", check this one out!

San Francisco Original: West Portal

2011-03-26T17:47:00.001-07:00

I was doing some field work over the weekend which led me to West Portal, one of the twenty-plus distinctly different neighborhood districts in our town.

The West Portal "high street", like several others in San Francisco, only runs 3-4 blocks long and because of its small size and "mom and pop" stores has a village-like atmosphere.

I stopped in to see the owner (and client) of Ambassador Toys. It had been a while since I was in the store and I was immediately struck how this store is a great example of what makes the City unique. Filled with moms, dads and kids exploring and playing around with "world toys". Looked like business was brisk. Unfortunately she wasn't there!

p.s. speaking of "toys", check out this great Small Faces classic "Happy Days Toy Town" from their seminal concept album "Ogden's Nut Gone Flake". That's Stanley Unwin at the end of the clip speaking "goobleydegook"

I just flew in from Monterey and ...

2011-03-19T16:23:00.000-07:00

boy, are my arms tired!* OK, so I didn't fly back from the ICSC "Idea Exchange" conference but "I just drove back from Monterey and boy is my right foot tired" just doesn't have the same zip! Anyway, enough jocularity!

The International Council of Shopping Centers (ICSC) is a trade association dedicated to the the retail industry. An estimated 1,000 retailers, real estate brokers, developers, various industry service providers and vendors convened in lovely Monterey, CA from March 15-17 to get the latest expert updates on what's going on in the retail sector, what legislation might be affecting the industry, an overview of the economy - and of course the opportunity do business with each other.

Heard presentations from several retailers about their expansion plans (yes, expansion, a positive sign!) but most interesting I thought was venerable brands "Tide" and "Mr. Clean" (both from Proctor & Gamble) entry into the dry cleaning and car care businesses.

And while for numerous reasons I don't expect to see "Tide Dry Cleaners" and "Mr Clean Car Wash" popping up all around San Francisco - thus far each has less than a handful of stores open - with backing by powerhouse P&G don't be surprised if you see them popping up in your part of the country.

* and for those of you who don't know or have forgotten the King of One Liners...here's Henny!

Down in Monterey!

2011-03-14T19:57:00.000-07:00

So it's time for the next ICSC (International Council of Shopping Centers) retail real estate convention down in Monterey, CA.

I'll be out of town for the next couple of days meeting with clients and trying to get a better read on what's going on with our economy - retail sales, which are reportedly on the rise, are an important indicator of that - and rising retail sales means more confidence for retailers to expand, which means more job creation, which means a better economy for all of us.

Based on a review of the ICSC company attendance roster signs are favorable. More to follow. So stay tuned and in the meantime enjoy this classic!

Tweedledee, Tweedledum....Tweet this!

2011-03-06T21:16:00.000-08:00

San Francisco based Twitter is rumored to be considering locating their headquarters at 1355 Market Street (between 9th & 10th) which for years was known as "The Western Furniture Exchange & Merchandise Mart". Built in 1937 this edifice is a magnificent example of Art Deco architecture.

Now repositioned as "Market Square" - a multi-use development which will include almost 900,000 square feet of high tech commercial space and 200,000 square feet of quality retail space to be filled with a variety of shops and restaurants intended to serve the ever increasing residential and workforce community in the mid-Market part of town.

Mid-Market was once a vibrant entertainment and arts district but for reasons not the subject of this blog for decades descended into blighted landscape. But as they say "hope springs eternal" and with the efforts of the Mayor's Office of Economic & Workforce Development, the establishment of a Community Benefits District, plans for business tax breaks and brave souls such as Urban Realty, developers of City Place, the soon to be 250,000 square foot retail center (between 5th & 6th) and one of my favorite clients, Pearl's Deluxe Burgers who will soon open at the corner of 6th & Market there is indeed hope!

With this urban development pincer move, westerly up 6th and easterly down 10th, there's good reason for optimism that our mid-Market will regain the position of urban glory it once held!

p.s. and in case you thought you were going to get away without one of my trips down a musical memory lane, you were wrong!

Get your Forsythia here!

2011-02-12T18:12:00.000-08:00

So I'm walking past 351 California Street and see that there's a new pharmacy called Dressel's getting ready to open. Now being in commercial retail real estate I figure that I should know who Dressel's is.. but I don't.

So with a bit of research I find that it's just a quickly constructed movie set for Steven Soderbergh's new production Contagion - "a bio-threat thriller that examines our generation’s worst fears" - with a stellar cast including Matt Damon, Gwyneth Paltrow, Jude Law, Elliot Gould and Lawrence "Cowboy Curtis/Morpheus" Fishburne who I had the pleasure of sharing a bottle of champagne with at Soho House in London some years ago.

But why do people so often choose San Francisco as the setting for apocalyptic stories? Nevermind, we appreciate the injection of several millions movie-making dollars into our local economy. So thank you Show Biz Kids!

Perfect Day!

2011-02-02T17:47:00.000-08:00

Beautiful weather and morning coffee at The Grove with my friend and business associate, Gia, to brainstorm on an idea that if it comes to fruition will help San Francisco's economic development, business and residents (now there's a novel thought!) - but more on that later.

Chock full of ideas and caffeine we decided to continue brainstorming with a stroll up Fillmore Street where I noticed a new shop getting ready to open at 2123 Fillmore - a few store fronts up from Fillmore & California - "ground zero" of the Upper Fillmore district.

So I popped in to have a look and met proprietor, Amanda Michael (see photo), sleeves rolled up and putting the final touches on "Jane" her new store that will open on Monday.

Bringing the boutique coffee experience to the north side of town, "Jane" will source her beans from Four Barrel and offer house made baked goods in the morning, and then quick service soup, salads and sandwiches for lunch.

So on behalf of myself and Gia (who I speak for without direct authorization but am willing to take that risk), we wish "Jane" great success. It has always been entrepreneurs such as Amanda Michael who have made the City what it is - in good times and not so good times!

p.s. and of course this blog has given me the opportunity yet again to not one but TWO relevant musical citations which if you care to see you can do so here and here...thanks, Lou.

San Francisco's Got a Brand New Bag!

2010-12-04T17:44:00.000-08:00

Had a fun lunch the other day at The Front Porch in Dogpatch with a friend of mine who's on the board of SFMade, a recently established non-profit corporation focused on revitalizing San Francisco’s economic base by developing the local manufacturing sector.

The San Francisco economy has become so skewed towards the tourist business and so an organization with the vision of "a more diverse and sustainable local economy, where companies who design and manufacture products locally thrive, in turn, creating quality jobs for people from all walks of life and contributing to the overall economic and social vibrancy of our City" sure got my attention.

There is so much local talent here - design talent - artisans who make clothes and hats (like House of Nines Design) and bags (like Rickshaw) and you name it... and speaking of brand new bags I leave you with this!

Happy Holidays to all!

and a good Black Friday to you!

2010-11-24T12:28:00.001-08:00

For those of you (particularly my overseas readers) who may not know, "Black Friday" refers to the day following Thanksgiving and signifies the beginning of the Christmas shopping season.

The importance of a strong holiday shopping season is not to be underestimated as it will set the tone (and hopefully a confident one) for retail growth - and hence manufacturing and economic growth - for the coming year.

According to a National Retail Federation survey:

across the nation 138 million shoppers will be hitting the stores this weekend.

2010 holiday sales are projected to rise 2.3% from 2009. (for some context, 2009 sales were up a mere 0.4% over 2008; 2008 sales were down 3.9% from 2007; on average over the last ten years holiday sales have increased 2.45% per year)

For some retailers, the holiday season can represent anywhere between 25-40% of annual sales. In 2009, holiday sales represented 19.1% of total retail industry sales. Jewelry stores have the most at stake; last year, holiday sales represented 29.5% of jewelry stores’ annual sales.

So get out there! Do some shopping, support the economy and above all, stay safe!

p.s. Oh by Dickens! I almost forgot - Happy Holidays to all!

On "inverse relationships"

2010-11-11T16:49:00.000-08:00

It's been a long time since I've blogged and maybe that's a good thing. Because there is an "inverse relationship" between the amount of time I have to blog and the state of the economy. In a nutshell, the better the economy gets, the busier I am, the less time I have to blog!

And in case that was not clear enough, let me borrow a definition from Wikipedia:

"The inverse and the converse of a conditional are logically equivalent to each other, just as the conditional and its contra positive are logically equivalent to each other. But the inverse of a conditional is not inferable from the conditional. For example, "If it's not raining, then Sam will not meet Jack at the movies." cannot be inferred from "If it's raining, then Sam will meet Jack at the movies.". It could easily be the case that Sam and Jack are attending the movies no matter the weather."

And if you are still having difficulty with this concept maybe this will help.... or maybe not!

Gettin' au fait

2010-09-20T19:19:00.001-07:00

There was a time when I was on top of new technology - not because I have any interest in how it works (I only care about what it can do) but rather because I had to be in order to swim in the deep end of the media business pool.

In the twilight of that phase of my life, I was in a strategy session and this young fellow, clutching firmly in his hand what would now be considered a Flintstone's mobile phone with a tiny screen, raised it high and with great solemnity announced, "One day everyone will be watching TV on one of these".

After flashing back to that great scene from The Graduate and then this one from 2001: A Space Odyssey I heard a little voice in my head saying "You're not really into this anymore.... time to move on." And so I did - eventually landing in the commercial real estate where increasingly we rely upon technology. The other day I was in a meeting, maps strewn all over the conference table, making it flustering for everyone to locate the site we were discussing. And then this guy pulls out an IPad and within seconds pulls up an satellite street view image of the site - Voila!

So impressed, I purchased one. Interestingly the IPad does not come with a user's manual. I suppose the thought is that the interface is so intuitive you don't need one. On the other hand it could be because there are no less than three paperback publications devoted to the subject. I chose this one.

p.s. for those of you who might be disappointed a different great scene from The Graduate maybe you will find it here.

I read the news today, oh boy!

2010-09-17T16:52:00.001-07:00

Well, according to today's reports the recession ended in some 14 months ago. Thanks for that timely breaking news!

Don't believe me? Just check the screen shot on the right from CNBC or read this blog excerpt below.

Wall Street surges as US recession declared over

(AFP) – 5 hours ago

NEW YORK — US stock markets jumped to four-month highs Monday, propelled by news that the world's biggest economy exited recession in June 2009. The markets began their upward drive in late morning trade after the National Bureau of Economic Research said the US economy had ended the most sustained downturn since World War II.

Okay everyone, the recession is officially over. Go out and let go of some of that cash you squirreled away... even though their still may be 4,000 holes in Blackburn, Lancashire and equally as many if not more in the Albert Hall!

Getting out the vote!

2010-08-24T18:11:00.001-07:00

The November elections are nigh and it's time to "get out the vote" as were these two committed citizens who leisurely strolled Market Street today on behalf of their District 6 candidate of choice.

In San Francisco, we have 11 Supervisors each representing a geographic area of this this 49 square mile city. It wasn't always such. At one time - in fact, at more than one time - Supervisors were elected "at large" meaning that whoever got the most votes City-wide was elected.

The problem with that was that it left many communities without a voice as to the issues that affected them. The current construct of San Francisco districts has certainly served a purpose. However, it occurs to me that it has led to a less than holistic view of what it will take for the City to thrive and prosper in this new and challenging economic era.

I have been thinking that a "compromise solution" is in order. That would be a hybrid model, where for example, there would be five elected "at large" Supervisors who would be thinking about San Francisco in the context of a competitor in the global economy - and six district Supervisors who would be more focused on retaining the unique character of the City - the character which has and will continue to maintain San Francisco's "world-class city" status. But again, that's just me.

Oh well, I will end this post with another great song - this time by Alvin Lee and Ten Years After. I hope you enjoy.

A heartfelt blog post!

2010-07-24T18:01:00.000-07:00

Truthfully all my blog posts have been heartfelt so I don't want anyone to think because I captioned this one "A heartfelt blog post" that my other blog posts have been less so!

I recall a rather untrustworthy fellow I worked with in my media business days who would sometimes preface his comment with "Ross, I'm going to be perfectly honest with you this time" (suggesting that he was not "perfectly honest" with me all the times he did not preface his comment with that). But that's another story.

Last night I went to Beale Street Bar & Grill's final night at their location next to the Transbay Transit Center where for nearly a quarter century they have hosted generations of San Franciscans.

Not of their own choosing, BSBG had to abandon this location to make way for the Transbay Terminal project - San Francisco's biggest real estate development in decades if not of all time. Progress, I suppose.

The place was packed with people who had been coming there for years - and in the conversations I overhead people talking about how their parents came there before them. Beale Street Bar & Grill is authentic San Francisco - the type of place that has contributed to the unique flavor of the City.

It has been my pleasure to find BSBG a new location at 142 Minna Street - between New Montgomery and Third - just behind SFMOMA. And it has been my pleasure to come to know BSBG proprietors Gloria and her son Tony during the course of the assignment.

Progress on the opening of the new Beale Street Bar & Grill has run into a couple of hitches but I'm confident that these will be overcome and that when they do open it will be a smashing success - and I'll keep working to help them! Especially because Tony promised me that I will have my own dedicated bar stool - bronze plaque and all!

And in closing let me leave you with another great song - this time by Sly & The Family Stone - I remember seeing Sly at a high school football rally when he was a DJ for KSOL. But that's another story.

Cap Rates ?

2010-06-18T19:26:00.001-07:00

Well, you've got your French Foreign Legionnaire cap, your nurse's cap, your painter's cap, baseball caps and lots of other caps but that's not what this particular post is all about.

This is about capitalization rates - aka the CAP RATE - which is a metric commercial real estate owners use to determine the value of their property. Here is one definition randomly taken off the Internet:

"Capitalization rate defines the percentage number used to determine the current value of a property based on estimated future operating income. In other words, taking the net operating income from a commercial property and dividing it by the capitalization rate would yield the approximate current value of the property".

That was fun reading! For the sophisticated commercial property owner the above will make sense. For many prospective tenants it means naught. And so with that in mind I will try and give it some context.

Recently I have been negotiating a lease agreement on behalf of a Landlord client whose property has been vacant for quite a while. Naturally the prospective Tenant feels that their low ball offer should be gratefully received and accepted by my client. In their mind, "isn't $10,000 a month better than no rent at all?"

The answer is "maybe, maybe not". It depends upon lots of things a few of which considerations include:

a) how much debt the Landlord has on the property and if they need immediate cash flow to make mortgage payments

b) what the Landlord's strategy is for holding the property - long term or short term.

c) how long a lease term is being contemplated and what type of rent escalations are in the proposed lease.

d) how this property asset value affects Landlord's ability to borrow money off it, make capital improvements, leverage it to buy other properties or even to purchase hundreds of thousands of caps to launch a new business venture!

OK. So let me try to illustrate how rent affects property value. Let's say it a building has potential rental income of $1,000,000/year. And let's say that it costs $150,000/year to run the building. Though it's more complex and detailed than this, for the sake of this blog let's assume that means this building generates $850,000 in Net Operating Income (NOI). And now let's apply a CAP RATE to determine value. The cap rate is not a fixed number - it's a range based upon market analysis. One could argue that it should be 8% - or 6% - but let's assume for the purpose of this exercise that the cap rate is set 7.5%.

$850,000/.075 = $11,333.333 would be the value of the property if it could generate this NOI with a 7.5% cap rate.

Now getting back to the case in point where there is a prospective retail tenant offering rent much less than my client believes their property to be worth. Let's say this prospective tenant's offer would reduce the NOI to $750,000/yr and that the operating costs and the cap rate (7.5%) remains the same.

$700,000/.075 = $9,333,333 would be the value of the property. So by accepting this offer the Landlord has in essence accepted that their property is worth $9.3 million instead of $11.3 million!

In conclusion, the above has been intended only to provide a conceptual framework as to what CAP RATES are all about - it's more detailed of course. I often try to end my blog with a song that has some relationship to the topic of the blog - and this one proves a tough challenge. Cap rates? Caps? Well this is the best I could do.. lots of caps in this one

The Beige Report

2010-06-13T13:34:00.000-07:00

Eight times a year each of the twelve Federal Reserve Bank districts gather anecdotal information on current economic conditions in its district through reports from bank branch directors and interviews with key business contacts, economists, market experts and other sources.

They report their findings in what is known as The Beige Book. San Francisco is the 12th District and here are some excerpts from the June 9, 2010 report:

"Retail sales remained somewhat lackluster on net but continued to improve modestly"

"Both traditional department stores and discount chains reported increases in sales, and although consumers remained focused on necessities, contacts noted further increases in demand for some nonessential items and higher priced options".

"Sales remained strong for grocers and and continue to improve for sellers of furniture and household appliances. Similarly, retailers of home remodeling supplies and equipment saw robust levels of activity"

"Conditions continued to improve for the tourism and leisure sector"

My company's national director of research also recently provided me with an extensive Same Store Sales Tracker report which tracks sales figures (on a national basis) of key retailers in various sectors and the facts were awesomely brilliant* in the sense they are remarkably striking as to the extent to which the economy got hit.

Note the following examples which compare same store sales for these retailers from the quarter noted to the same quarter for the prior year:

Ann Taylor
Q1 2009: - 42.70%
Q1 2010: + 15.10%

Guess
Q1 2009: -12.50%
Q1 2010: +9.70%

Juicy Couture
Q1 2009: -22.10%
Q1 2010: +4.00%

Urban Outfitters
Q1 2009: -6.20%
Q1 2010: +9.00%

Pottery Barn
Q1 2009: -22.60%
Q1 2010: +22.30%

Borders
Q1 2009: - 13.50%
Q1 2010: - 11.40%

Office Depot
Q1 2009: - 17.00%
Q1 2010: - 1.00%

Tiffany
Q1 2009: -34.00%
Q1 2010: +15.00%

* it's much more fun to see brilliance as the very funny Paul Whitehouse does though. Hope you enjoy!

"Cautiously Optimistic"

2010-05-31T18:27:00.000-07:00

That was the buzz-phrase bandied about in the halls of this year's global retail real estate ICSC (International Council of Shopping Centers, not to be confused with the International Civil Service Commission) convention that took place last week in Las Vegas.

I'm just plain-out optimistic (as opposed to the poor chap in this convention photo who it appears would be my polar opposite) because it's the best way to be.

Take it from Winston Churchill who said "A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty."

And indeed these have been difficult times. While I haven't found confirmed figures, I've heard that this year's convention attendance was between 33,000-35,000 as compared to last year's attendance of around 30,000.

Ever the researcher, I checked out Las Vegas Convention Bureau statistics to see how the convention business in general has fared over the past couple of years.

Year End 2008 reports show that overall convention attendance was down 5.0% over the prior year, precipitously dropping sharply in August 2008.

Year End 2009 reports show that overall convention attendance was down a whopping 22%.

So reported double-digit growth sure sounds like progress to me. Sing it Elvis!

Three Days in Vegas

2010-05-26T20:50:00.000-07:00

Sounds like a great title for a movie. It's all yours, Quentin.

I just flew in from Vegas and boy are my arms tired! (I have always wondered who first told that joke and not even on Wikipedia could I find the answer!)

For the last three days I was at the ICSC/Recon Convention - which is the annual commercial retail real estate industry trade show. I will later put forth my reflections on that and tie it into what is supposed to be the theme of this blog.

But for now I think I'll just think about the nearly 17 million square foot $11 billion City Center as an architectural marvel and, for better or worse, as a metaphor for 21st century living. But for now I think I'll just think about the Cirque du Soleil "Viva Elvis" show which I saw last night - a very impressive production.

Goin to Las Vegas

2010-05-19T19:55:00.000-07:00

So it's off to Vegas once again, this time for the the annual Global Retail Real Estate Convention taking place between May 23-25 where tens of thousands of retailers, brokers, developers and those who sell their products and services to retailers, brokers and developers will gather to gain some collective intelligence on where the economy is headed and try to make some deals.

I've been going to Las Vegas for years - first for fun - when you could have steak and eggs all day long for $4.95 and now where you can have a steak dinner for $49.95 (if you don't have wine).

See you in a week or so with a report on the collective intelligence I gathered ! In the meantime enjoy Steely Dan's paen to Las Vegas and those Show Business Kids.

A la mode !

2010-04-21T16:41:00.001-07:00

I'm not talking ice cream here. I'm talking Chictopia whose CEO/co-founder, Helen Zhu, was the inspiration for my creating this blog.

Last night at the swank W Hotel in SOMA, Chictopia put on an event to showcase current collections from local and international designers. A good time was had by all!

Chictopia has something like 120,000 members now (Helen, correct me if I am wrong) and I am proudly #112. What's so fascinating are the advances in technology that have enabled all of this. As I think back on my lengthy, but now distant, media career, in the dinosaur era when AOL was Tyrannosaurus Rex (and that was not too long ago) the whole notion, though not very well thought out or articulated, was to congregate a mass of people with like-minded interests.

Congratulations Helen, Corrine and Ricky on your Chictopia success!

p.s. I cannot close without a musical reference which has some relevance to my blog - as obscure as they might be! The intended connection here is the relationship between music and fashion which was brought much closer together by groups the likes of Roxy Music. Enjoy!

It's a DONE DEAL !

2010-04-02T16:18:00.001-07:00

That's right - after a tri-party negotiation that took the better part of a year, in a few months the 25 year young San Francisco institution Beale Street Bar & Grill will be relocating. In the picture below that's me and Tony, proprietor of BSBG, celebrating the turn over of the lease.

Why move? Well, BSBG has to relocate to make way for the Transbay Transit Center project, San Francisco's most ambitious development plan in decades if not for all time.

With a loyal clientele it was important for BSBG to relocate somewhere close-by and 142 Minna Street, about a half mile away, was as close as it got.

For those of you who don't know Minna Street you should. Not only is one of the world's best museums (SFMOMA) around the corner but Minna Street is also home to Catherine Clark Gallery, Baer Ridgway Exhibitions and John Colins (another displaced business as a result of the Transbay project) which has been open for a couple of months and doing great.

Places like Beale Street Bar & Grill are authentic San Francisco and I know that at their new location they will not only bring their old clientele with them but gain a whole new clientele.

p.s. In my attempt to link a song that has some relevance to my blog post - and I know that sometimes (well, probably more often than not I stretch it) - I came up with this great song by the Easybeats. Enjoy!

Happy St Patrick's Day

2010-03-17T20:03:00.000-07:00

San Francisco is known for it's cultural diversity which is great because with all the different cultures there are that many more reasons for celebration!

According to one internet source the first Irish contingent to arrive in the West Coast was not as most imagine during the great famine of 1740-41 but during the late seventeenth century and early eighteenth century when many left Ireland due to the Penal laws.

By 1870 the population of San Francisco had grown to 100,000, one third of whom were Irish and one in every three Irishmen at this time owned real estate. Today, according to another internet source, the San Francisco area boasts around 100,000 Irish expatriates.

And today t'is St. Patrick's Day on which it's long been a tradition to close off Front Street between California & Sacramento for a spirited celebration of the patron saint of Ireland or whatever it is you want to celebrate.

And the luckiest of us get to celebrate the festivities from the vantage point and the comfort of the Peacock Construction offices from which this photo was taken. In addition to performing great tenant improvement work in the San Francisco area for more than a quarter century, Peacock knows how to throw a smashing party!

In addition to luminous Irish literary contributions the likes of Oscar Wilde, James Joyce, George Bernard Shaw, Samuel Beckett and William Butler Yeats, the Irish have contributed greatly to the musical arts as evidenced in this video feature the Corrs and The Chieftains.

Sláinte!

You will pay tomorrow! (maybe)

2010-03-13T21:26:00.000-08:00

Today I'm reflecting on the many deals I have helped negotiate - whether a licensing agreement, purchase/sale agreement or a lease. So what does the topic of this blog have to do with that?

The following several loosely connected thoughts, that's what!

1. Understandably, I have often seen clients blanch at the prospect of paying a lawyer $400-$500/hour for a lease review. While indeed a hefty fee, the rent commitment for even a smallish space can run in the hundreds of thousands of dollars to a couple of million dollars over the life of the term. Add to that the the significant investment that will be made beyond rent (e.g. construction, FF&E, staff, marketing, advertising, inventory) and several thousand dollars for a lease review would seem to me to provide some peace of mind in knowing that you have obtained qualified legal advice that could protect you against some potentially costly pitfalls.

2. How many lawyer hours will it take to negotiate the lease? How long is a piece of string? It's impossible to say. Depends on how many back and forth rounds there are between the parties. And that's where many tenants can do themselves a favor by recognizing the extent to which they have leverage. If you are an anchor tenant (e.g. a large grocery store) or an Apple store you've got a good deal of leverage. But if you are looking to lease 1,500 sf in a 750,000 sf shopping center, you probably don't as much as you would like. So in those circumstances you shouldn't spend inordinate legal fees trying to rewrite the lease. Choose the several things that are most important to you and go for them. If you are going to be the sole tenant in a freestanding building, that would be another story.

3. Most leases are written by the Landlord so don't be surprised that the lease is seemingly written in the Landlord's favor. If you wrote the lease you'd probably write it in your favor too. Indeed some leases are Draconian (another reason to have a lawyer look at it) but most are not.

4. While leases are intended to clarify and remove ambiguities you will most likely end up with some ambiguous terms and both sides will let it go at that, hoping that the ambiguities will never become an issue.

I used to do a lot of contract negotiation in Asia. I remember one time in South Korea presenting a 50 page CNN contact to the Korean Broadcasting System negotiating team. I could see the shock on their faces. Through their translator they told me they were really expecting something more like a 5 page document.

Contracts can grow in length over time based on the experiences of using that contract form many times over, finding new things to address based on things that have become issues in the past. That's the American way - anticipate all problems and try to address them in the contract.

There is an old Chinese saying which I've always liked - "the negotiation begins once the contract has been signed". Now I'm not advocating signing a lease as cavalierly as that might suggest. However, at the same time recognize that (a) there will end up being some ambiguities in the lease (b) you should perform ample due diligence about the party with whom you are signing the lease and (c) the relationship you establish with the Lessor can be as important as the effort you put in trying to nail down every point of the lease to your satisfaction.

p.s. I thought about entitling this blog "Penny-wise, pound-foolish" but thankfully I was hard pressed to find a song with that phrase in the lyrics - opening the door for me to use this classic Karl Wallinger tune which is what I wanted to do all along!

Hope you enjoy!

Lazy Sunday Afternoon!

2010-02-28T14:38:00.000-08:00

What I like most about my job is that it gets me out on the street and in the mix where I can meet all sorts of interesting people.

One day it's two Anime convention gals (see blog below) and today it was Noah Alper, serial entrepreneur and founder of Noah's Bagels and Bread & Circus.

The missus wanted to go to our local hardware store and combine it with a dog-walk, so I went along. While she went to buy a few things I strolled the pooch and a few storefronts up where there is a Noah's Bagels, I met Noah and his son enjoying a nice rain-free day promoting his new book "Business Mensch: Timeless Wisdom for Today's Entrepreneur"

It's always fun to talk to entrepreneurs. Many of my clients are young entrepreneurs and so it was especially interesting to share some of their experiences with an experienced entrepreneur.

One of the things Noah reflected upon about starting Noah's Bagels was that when he started it people didn't really understand "bagels". Now I know that something is getting lost in translation here but the point he was trying to make (and Noah feel free to jump in if I am wrong) is that when a product or concept is being introduced to the market it is essential that the entrepreneur focuses on educating the consumer as to the benefits of his/her product. The other point made was that you better love what you are doing because you are going to live-and-breathe it if you want it to be successful.

I am sure "Business Mensch" will be an enjoyable read. I've thumbed through the pages found a picture of Noah's father and mentor who is attributed with such notable quotes as "Retail is detail" .. truer words never spoken.

p.s. In my blog I have gotten into the habit of posting songs I like very much.. I always try to make them related to the subject of the blog... sometimes I stretch it... perhaps with this one.. a tribute to the very early Small Faces fronted by Steve Marriott the "Artful Dodger"

There are conventions....

2010-01-31T16:07:00.001-08:00

and then there are conventions!

This afternoon the missus asked me to drive her to "J-Town" (aka Japan Town - one of the more than one hundred neighborhoods in the City) to pick up some ingredients from Nijiya Market, the best Japanese grocery store in town, for the sukiyaki I will have for dinner tonight.

San Francisco is very much economically reliant on the tourist trade and conventions. It wasn't always this way, but it is now and we are playing the cards we are dealt - and it isn't necessarily bad.

According to the San Francisco Convention & Visitors Bureau, which by the way is a good resource for out of town companies that want to open up in San Francisco, in 2008 the City hosted 16.4 million visitors who spent $8.52 billion during their stay.

Today was the wrap for Anime-on-Display convention now in its 8th year. According to the young lady in the photo above with her finger pointed in the air there were about 1,000 attendees at this two day event.

The focal point of Japan Town is Post Street between Webster and Buchanan, one block east of the better known Fillmore Street and is the site of three Japanese-oriented shopping centers and home to a large number of Japanese (and some Korean and Chinese) restaurants, supermarkets, indoor shopping malls, hotels, banks and other shops.

While I can't profess to know a great deal about the Anime sub-culture, my limited research into it has led me to a Japanese jazz-rock-fusion artist, Yoko Kanno, who has scored many a soundtrack for video games, TV series, movies and ads, I can profess to liking this song from her Seatbelts Live concert.

Sukiyaki's ready. Sayonara!

Ereway inhay the oneymay!

2010-01-24T09:40:00.001-08:00

For those of you who don't speak Pig Latin let me translate....in simple English the title of this post reads "We're in the Money"

Well, maybe not quite yet, but economic indicators indicate that we have reached the bottom - and insofar as San Francisco commercial real estate is concerned I believe we have.

The "market" is finally taking on the characteristics of what makes a "market" (i.e. activity). For the past year and a half there was near to none activity.

About six months ago local retailers/entrepreneurs started to surface. In the past three weeks I have received inquiries from three national retailers looking for opportunities in San Francisco.

In closing and in tribute to the glory days of Hollywood where for more than twenty years I spent what I hope will only be the first half of my so-called career I pay tribute to Busby Berkeley, the great choreographer/director responsible for visual extravaganzas such as this, and if you hang in there you can watch just how bi-lingual was Ginger Rogers.

Note the lyric

"and when we see the Landlord, we can look that guy right in the eye"

If you're going to San Francisco....

2010-01-20T19:26:00.000-08:00

Yesterday, doing some location scouting for a client, I found myself the Haight-Ashbury (aka "the Haight"), one of San Francisco's many neighborhood districts and it took me back to when I grew up in the City.

I was a bit too young to fully participate in what is known as "the Summer of Love" (for better or worse). Between school and my Saturday job at Transvision, a local shop in Laurel Village that sold Magnavox TV's, transistor radios and vinyl albums, I explored the "scene" going down to the Haight and watching tourists sealed in Greyhound tour buses taking pictures of "hippies" while the "hippies" took pictures of busloads of tourists.

A few years later, in the early '70's when I first moved to London on a whim, I met many locals who were seemingly in awe of meeting someone who was actually from San Francisco - questions like "do people really wear flowers in their hair?" (in reference to this well-known song by Scott Mac Kenzie). Then, as now, San Francisco has some almost mythological quality.

Today "the Haight" which is now bisected into "the Upper Haight" (the original Haight) and the "lower Haight" still has vestiges of the '60's (for better or worse) and a good collection of restaurants, bars, cafes, boutiques, "head shops" and the great Haight-Ashbury Music Center in business since 1972.

Peace!

p.s. "formula retailers" beware the Haight!

p.p.s. this post is dedicated to my terrific son and daughter, who were raised in London - one of the world's great cities - and who I brought back - or dragged back as they might see it - to San Francisco several years ago hoping they would develop a great appreciation for this city. I believe they have.

You've come a long way, baby!

2010-01-11T18:47:00.001-08:00

On my weekday downtown commute I read the San Francisco Examiner (a local paper which does a great job covering local news).

Last week there was an article about the growing "street-food scene" and Roaming Hunger, a website that tracks the movement of street-food vendors.

According to Roaming Hunger there are now more than 58 mobile food vendors in the San Francisco Bay Area, planted in neighborhoods all over the City and Peninsula, offering a variety of epicurean edibles, including gumbo, waffles, curry, and even escargot dipped in butter.

I forwarded the article to my friend Sylvia , proprietress of Pearl's Deluxe Burgers a San Francisco cult-status burger spot from whose response I excerpt the following comments:

"Yes, the roach coach has come a long way. This new fascination with food carts started with a New York Times article a year or so ago that featured a Korean-Mexican-fusion taco truck.....they Twitter their nightly location, which is usually outside of a trendy nightclub or bar for the after-hours crowd"

Is this the New World Order of which I have heard so much about for years?

from the Fillmore

2010-01-09T18:16:00.001-08:00

San Francisco's Fillmore District has played, does play and will continue to play a vital role in the City's rich fabric. I'm on the board of Urban Solutions, a non-profit that does a lot of work in the district, supporting entrepreneurs in achieving their dreams.

The other night, at 1300 on Fillmore, a way cool restaurant/entertainment venue that pays tribute to the heritage of the district, way cool sisters Melonie and Melorra Green received the Urban Solutions Social Entrepreneurship Award for launching Infin8 Sync, a production and creative events company supporting indie filmmakers and artists.

The 1300 block of Fillmore swings big time. In addition to 1300 on Fillmore, you can find Yoshi's Jazz Club and the Jazz Heritage Center, a part jazz museum, part jazz cultural center, and part jazz art gallery.

I have many fond memories of the Fillmore - aka "The Harlem of the West" - especially going to concerts at Bill Graham's Fillmore Auditorium in the '60's seeing such great acts as Cream, B.B. King, Chambers Brothers, Quicksilver, Big Brother & the Holding Company, Jefferson Airplane and the great Jimi Hendrix who blended rock, blues and jazz - very "Fillmore" was he.

Auld Lange Syne

2010-01-02T15:49:00.001-08:00

I honestly hadn't been out on New Year's Eve in several years but in defiance of 2009 and with an invitation to the opening of the new art gallery - 12 Gallagher Lane: A Hunt Slonem Gallery - where master chef Gary Danko's birthday was being celebrated as well as New Year's Eve I said "sod it. I'm going!"

The gallery owners have turned a disused space into a wonderfully ethereal environment and of course the food was fantastic. A good time was had by all as I believe you will see.

I'm predicting 12 Gallagher Lane will be a great success. If you want to know more about it contact info@12gallagherlane.com

And though at the time of this blog post it is past midnight New Year's Eve, why not sing Auld Lange Syne just one more time!

Take your pick.... The Scottish Parliament version where if you will look closely you will see Sean Connery or the Red Hot Chili Peppers..

And a one-and-a-two-and-a-three

Should auld acquaintance be forgot,
and never brought to mind ?
Should auld acquaintance be forgot,
and auld lang syne ?

CHORUS:
For auld lang syne, my jo,
for auld lang syne,
we’ll tak a cup o’ kindness yet,
for auld lang syne.

And surely ye’ll be your pint-stowp !
and surely I’ll be mine !
And we’ll tak a cup o’ kindness yet,
for auld lang syne.

CHORUS

We twa hae run about the braes,
and pu’d the gowans fine ;
But we’ve wander’d mony a weary foot,
sin auld lang syne.

CHORUS

We twa hae paidl’d i' the burn,
frae morning sun till dine ;
But seas between us braid hae roar’d
sin auld lang syne.

CHORUS

And there’s a hand, my trusty fiere !
and gie's a hand o’ thine !
And we’ll tak a right gude-willy waught,
for auld lang syne.

Happy Piroshki!

2009-12-19T12:17:00.000-08:00

On Saturday I was doing some "location scouting" for one of my clients which led me to the Outer Richmond District, just one of the more than 100 San Francisco neighborhoods.

I actually grew up not far from the Outer Richmond (to tell you the truth San Francisco is so small that where ever you are is not that far from somewhere else). Like many parts of San Francisco, the Outer Richmond or "the avenues" as it is also called, is a hodgepodge of people from many cultures.

But what is distinctly noticeable, or audible I should say, about the Outer Richmond is its significant Russian population which means of course there are a good number of Russian restaurants and bakeries. Today the Bay Area's Russian population is estimated to be around 80,000. The photo you see on the right is the Holy Virgin Cathedral an imposing Byzantine-style structure is crowned with five onion domes, each covered in 24-karat gold leaf

On the left, in front of the Moscow & Tblisi Bakery is an elderly gentleman, playing "Jingle Bells" on the accordion. Unfortunately I did not have an audio recording device with me... but if you want a different Chinese twist on Jingle Bells check out this version by 女子十二乐坊 which means "The 12 Girls Band" for those of you who can't read Chinese!

Again, happy holidays to all!

p.s. oh.. I almost forgot.. this blog is supposed to be about retail real estate... Asking rents in this part of town typically range in the $2 - $3 sf/month range.

For the trends, they are a-changin'

2009-12-18T18:23:00.000-08:00

OK! So once again I have taken some literary license!

Last Friday, a colleague and I decided to take a stroll down the Embarcadero thinking we would celebrate the close of 2009 with a fine meal at Boulevard, one of San Francisco's top restaurants; but no surprise - no reservation = no chance.

Being a clear, brisk day we kept on strolling - right past Chaya Brasserie, right past Perry's, right past Ozumo, the Palomino and Gordon Biersch not agreeing on where to eat until we spotted across the street Red's Java House, a San Francisco icon since the 1920's. (If you have never been to Red's you can read Yelp reviews here to help you decide if it's right for you.)

I can't remember the last time I ate at Red's but the thought of "comfort food" was appealing. Enjoying my cheeseburger on the bay-side patio it brought me back to thinking about trends and changes in consumer habits.

So where's it all headed? Let's look at some consumer feedback taken from the ICSC (International Council of Shopping Centers) on-line survey as published in their "2009 Shopping Habits Report":

Over three-fourths of the shoppers report that they have cut back in some way over the past 12 months.

Over half reported cutting back on fine dining, casual dining, movie theater attendance and salon/spa services.

Between 40%-50% reported cutting back in most retail categories. The categories least likely to be affected were visits to discount stores and grocery stores, and purchases of necessities.

Consumers are somewhat optimistic regarding the next 12 months. Over 40% believe their financial situation will improve over the next 12 months, while 47% believe it will stay the same and only 11% say their situation will get worse.

While 80% of consumers reported cutting back over the last 12 months, only 40% report that they expect to increase their shopping behavior when the economy improves. The areas with the greatest likelihood of increased use were shopping trips in general, department store visits and purchase of discretionary goods.

Price ranked as the single most important attribute, with merchandise selection and good customer service ranking second. Convenience factors such as location and parking ranked third, with availability of dining or entertainment deemed as being least important.

In addition, per USA Today, "Buckling to the budget-conscious, the Ritz Carlton (Sarasota, Fla) has opened a hot dog and hamburger shop" and Hummer holiday sales are down 85% from 2008 (shocking!)

Anyway, things have clearly changed. Like some guy said "you don't need weatherman to know which way the wind blows". Like some other person said "The one thing you can count on is change". Like it or not, that's the way it is. So you better get busy thinking the next trend(s).

Happy Holidays!

p.s. if you are interested in trends let me share with you a book by futurist Watts Wacker, whom I am have the pleasure of meeting, called "The Deviant's Advantage: How Fringe Ideas Create Mass Markets"

Pretty Vacant

2009-12-08T20:56:00.000-08:00

So, let's make the best of a bad situation, shall we? It's true that the economy has been battered and bruised (but it is coming back) and it's true that vacancy rates in Union Square, one of the world's most favored retail districts, have crept up....

But kudos to the Union Square Association, who partnering with four internationally acclaimed architecture firms, dressed up empty storefront windows including the one you see here at 400 Post Street (formerly The Disney Store) which honors the history of the upcoming centennial celebration of the American Conservatory Theater.

Happy Holidays to all! Even and especially to you, Johnny Rotten, from whom I lifted the title of your song for this blog... never mind the bollocks, okay?

Just the facts, M'am

2009-11-29T12:12:00.000-08:00

Alright, already! I know that by and large my blog posts have been more opinion than fact. So you want some facts, Sgt. Friday?*

No need the bring out the rubber hose! The commercial real estate industry is abundant with research publications including quarterly Reis reports from which the following facts regarding the San Francisco commercial retail market (at the end of Q2 09) are excerpted:

"Neighborhood and community center rents were flat in the second quarter after alternating small gains and losses over the prior four quarters"

"Vacancy rates were at sub-3.0% in most retail neighborhood corridors, but major commercial areas are flooded with available space as many national chains have gone dark.... a 16.5% percent availability rate in pricey Union Square"

"...rents continue to increase in Union Square despite rising availability... average asking rents increased 9% from year end 2008 (to $166 sf from $152 sf)"

"San Francisco retail space investment sales were limited in the second quarter of 2009 with just three properties changing hands for $9.4 million.... (as compared to a quarterly average of $155 million from the start of 2005 to the third quarter 2007"

Them's the facts, Sgt. Friday, I swear!

* for those of you who never knew or just can't recall, Sgt. Joe Friday (played by Jack Webb) was the hard-boiled Los Angeles detective in the classic TV series Dragnet and is credited with the phrase "Just the facts, M'am". They had a cool theme song and intro too which you can see here

a three hour tour... a three hour tour

2009-11-09T12:15:00.000-08:00

Aaarghhhh ! The Gilligan's Island theme song is stuck in my head. Today I went on a multiple site tour with an ambitious client who wanted to see as many places as he could in one session.

A three hour tour.. a three hour tour... The point I want to make is that if you look at more than 4 or 5 prospective locations in one session it all sort of becomes a blur and you'll end up looking bewildered just like old Gilligan...

It's hard to clearly remember one space/location vis-a-vis the next when you see so many. And so the recommendation I make is (a) due diligence regarding trade areas, demographics, rates, complementary tenant adjacency and the like is a time saver; or (b) schedule more than one tour session.

Anyway, it reminded me of the Gilligan's Island theme song - catchy for sure - but I like this version better. Enjoy!

http://www.youtube.com/watch?v=KTCYLbFxTpI&feature=related

You're FIRED !

2009-11-01T15:08:00.000-08:00

No, I'm not having that recurring nightmare of Le Donald firing me from "The Apprentice".

In fact, it was I who did the firing this time (and much more graciously I might add!). Yes, real estate brokers sometimes have to "fire" a client. Odd you might think; but let me explain why.

It was nothing personal because personally I quite like the guy, his product and business plan. The difficulty was that he is a very "hands-on" guy and during lease negotiations he could not resist the impulse to directly negotiate with the Landlord.

Why is that a problem? I have previously written about how brokers play an effective role as a "buffer" between principals. And in this case a buffer would have been helpful as my former client's start/stop/start/stop/start/stop negotiation style has done nothing but make the landlord think he is neither motivated or credible.

Think of the beginning of a negotiation as "big box of issues". The end-game is to reduce the size of the box by resolving issues to end up with a nicely gift-wrapped box (i.e. the lease).

Effectively following the issues, understanding their implications, strategizing how to prioritize them, present them and resolve them is where good brokers provide real value to their clients.

At the end of the day, my former client wouldn't let me do my job and so I had to let him go!

Mission: not Impossible

2009-10-24T15:00:00.000-07:00

"Your mission, Ross, should you decide to accept it, is to find some retail space for Bike and Roll. As usual, should you or any member of your Retail Force be captured or killed, the Secretary will disavow any knowledge of your existence. This tape will self-destruct in five seconds. Good luck, Ross."

You know, I really wish he'd stop saying that !

Anyway, I checked out the Bike and Roll website (www.bikeandroll.com) and liked what they were all about - adventure, health, environment - and so I set up a meeting with owner, Darryl White.

We discussed his roll-out strategy. With twenty-five locations in San Francisco, New York, Miami, Chicago, Washington D.C. I liked the vision and the mission. Very specifically, Darryl wanted a new location in San Francisco's Embarcadero district near the Ferry Building.

We walked around and surveyed possible sites but there was just nothing available that met the requirement. Undaunted, the mental-wheels began to churn. A Bike and Roll store at the Hyatt Embarcadero would not only benefit Bike and Roll but also the Hyatt who would be able to promote to their clientele an association with this "green" health-conscious enterprise.

Business is full of barriers these days. I contacted the Hyatt. I contacted the property owner. I wasn't gaining traction. The light-bulb went off. PKF Consulting, a pre-eminent hospitality industry consulting and brokerage firm is under the same corporate umbrella as Colliers International. So I walked down the hall and had a word with my colleague, Henry Bose.

Henry knows virtually everyone in real estate in the hospitality industry and he was glad to help. Through his relationship with the property owner, I got connected to the right person at the Hyatt. Darryl and I met with the person in charge of guest amenities and on Friday October 23, 2oo9 Bike and Roll opened their outdoor store in front of the Hyatt Embarcadero.

Bufferin' that Headache

2009-10-07T10:00:00.000-07:00

" I thought about my space and I really got me down...Got me so down, I got me a headache. My heart is crammed in my cranium and it still knows how to pound"

Frank Black - "Headache"

So what percentage of business negotiations do you think have the probability of being contentious at some point?

50% - 62% - 78% ?

From my experience, as one who has been involved in countless negotiations, I figure it's closer to 100%. It's only natural and should be no surprise to anyone.

And that is why some "bufferin" is important. Intermediaries, in this case brokers, can play a valuable role . Once the lease is done, the Tenant and Landlord set sail on a long term relationship - maybe 5 to 10 years - during which there is likely to be many instances of seeking understanding, help and cooperation.

For each side of the equation, why run the risk of carrying unwanted and unnecessary baggage into a "marriage"? Yet, I have also seen countless instances when the principals (Landlords and Tenants) want to negotiate directly between themselves.

The reasons for this are many and perhaps I will speak to them later... but for now, enjoy the song!

http://www.youtube.com/watch?v=TpGD1ZATcuA

Sign sign everywhere a sign

2009-09-18T18:51:00.000-07:00

" Blocking out the scenery breaking my mind. Do this, don't do that, can't you read the sign?"

Oops... I got sidetracked once again... what was actually on my mind, prior to this latest musical diversion, was Proposition D, a measure on the 2009 San Francisco ballot.

If successful it could lead to revitalizing the two block stretch of Market Street between 5th and 7th Streets from the blighted area (politely put) it has become over the past couple of decades into a vibrant urban entertainment, residential and retail district.

Everybody would win... property owners... retail business owners...the local economy... and the community who would have one more place in which to live and to go for that unique San Francisco-experience.

A bit of background... In 1997, the San Francisco Board of Supervisors nixed a plan to allow electronic signs in Union Square. Five years later, the majority of San Francisco voters approved Proposition G, which prohibited any more general advertising outdoor billboards.

Most people think of outdoor advertising billboards as static images doomed to dinginess ... but technology has changed and created new opportunities. Case in point is the NASDAQ building in New York (see blog photo). Think of electronic billboards that can be programmed to communicate different messages at different times to different audiences.... public service, promotion of the arts, communication of events.

Kudos to David Addington "the Mid-Market impresario" who purchased the famed Warfield Theater and Carolyn Diamond, Executive Director of the Market Street Association who are working hard to turn this "sow's ear into a silk purse".

And now back to our regular programming, the Five Man Electrical Band...

http://www.youtube.com/watch?v=OQTJF7y9nn4&feature=related

Chain, chain, chain...

2009-08-02T14:56:00.000-07:00

No, I'm not singing Aretha Franklin, though I would rather be. I'm thinking about the "formula retail" ordinance that was passed into law in the November 2006 general election. Called the "Small Business Protection Act", in a nutshell it put additional requirements on "chain stores" before they can open in Neighborhood Commercial zoned districts.

So what is the criteria to be deemed "formula retail"? Basically if a business has more than ten stores in the entire United States before they can open another store in San Francisco they will have to apply for a Conditional Use Permit which requires them to notify everyone within a 300 foot radius of the site and go through the public hearing process at the Planning Commission.

Sounds pretty simple, right? What's the big deal? Well, the big deal is that that this more stringent regulation adds considerable uncertainty and risk for the formula retail tenant and the landlord who are negotiating a lease.

If the parties are very lucky, the conditional use permit process will take 60 days to get approval. If the parties are not so lucky multiply that time line by two or three. And if the parties are unlucky, after months and months of trying to get the permit, it would be denied, the lease agreement won't get concluded, the property remain vacant and go back on the market - very possibly only to go through the same process with it's inherent uncertainty and risk once again.

As a native San Franciscan - and small business person myself - I am all for supporting and protecting the small businesses that give our city the great character and unique reputation it has - but I was dead against this particular piece of legislation.

Why? Because economies work in cycles and love or hate "big business" it has a significant role to play in the economic well being of every community. The other day I got a call from a reporter at the SF Examiner who wanted to know my opinion about what would go on at the City Center (that's the shopping complex at the corner of Geary & Masonic) that used to be home to Mervyn's before it went bankrupt.

Zoning in this district is Neighborhood Commercial, so whoever wants to take over the Mervyn's space is going to have to go through the Conditional Use Permit process. Doubtful any small business will want to lease a space the size of a Mervyn's.

The reporter asked me if I thought the formula retail regulations would present problems for filling up this space to which I replied "it would be sheer lunacy if that happened... you can quote me on that!"; however, that little voice in the back of my head said "...this is San Francisco"

Enough venting..... it's time for some "Queen of Soul" time!

May you live in interesting times!

2009-07-10T16:48:00.001-07:00

Curse or blessing? The traditional school of thought regarding the origins of this phrase is that it is an ancient Chinese curse implying "may you experience much upheaval and trouble in your life".

But I have always held that "amidst chaos there is opportunity" and I seem to be backed up by people much more noteworthy than myself.

"The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty" - Winston Churchill

"In the middle of every difficulty lies opportunity" - Albert Einstein

"There is no security on this earth. Only opportunity" - General Douglas Mac Arthur

How does this relate to retail real estate? Well, clearly we are in chaotic economic times and for retailers who have the financial resources now is a good time to negotiate a long term lease. Most of the retail leasing business in San Francisco these days is from local retailers and that makes sense. They are "on the ground" and are nimble enough to make decisions (as opposed to national retailers who have to go through layers of corporate filtering to make decisions)

In what you will hopefully accept this as somewhat related, I leave you with one of my favorite axioms - "No matter where you go, there you are". The debate of the origins of that phrase is heated. One school of thought credits it to Thomas a Kempis' "Imitation of Christ" (ca A.D. 1440) and another to the movie The Adventures of Buckaroo Banzai (ca AD 1984) .

So what's 500 years? Like they say "the more things change the more things stay the same" or as per David Byrne and the Talking Heads "same as it ever was".

Meus Urbs , Meus Professio

2009-06-28T09:23:00.000-07:00

"My City, My Art" (thank you Babel Fish). Last night I attended a reception at the wonderful Catherine Clark Gallery and it got me thinking about the relationship I have with my city and how, even though in a very small way, by being in retail real estate I am contributing to "painting the canvas" that is San Francisco.

Cities are living, evolving organisms and Minna Street continues to undergo metamorphosis. For years a dowdy transit/freight alley, Catherine made a bold move and opened her gallery in mid-2007 converting what was a garage into a gallery. And last year, Baer-Ridgway opened shop two doors down in a space that I represented.

Minna Street will continue to morph - and soon - as a result of the City exercising its right of eminent domain forcing several businesses to relocate for the Transbay Terminal development. A popular Natoma Street bar will open later this year. And next to that location a long time vacant space will very likely be the new home to one of two restaurant/bars in the same situation.

Last night I attended the reception not only because I wanted to have some fun but also to meet someone and continue the conversation we have been engaged in over the past several weeks regarding the possibility of his leasing space to open a gallery for a very well known artist.

I hope he makes the decision to take the space - not only because leasing retail space is now my livelihood - but also because the aggregation of these businesses will truly turn Minna Street into a vibrant cultural destination.

Meus Urbs , Meus Professio !

Where's the beef?

2009-06-20T11:10:00.001-07:00

If you are a retailer looking for space, make sure that your broker is a good story teller. Why?

Because San Francisco landlords can be very particular about who occupies theirs. Reasons range from personal preference to whether the retail business will complement or conflict with other retail tenants to whether your business will add luster that will enhance the amenities, value and prestige of their property to whether the landlord feels that the prospective tenant's business plan will be successful.

Effective presentation based on a clear understanding of your business can make the difference between securing a desirable retail space or not.

Obviously to tell a good story your broker has to take a sincere interest in understanding your business. So if your broker doesn't seem that interested in your business and doesn't articulate well, you should find a broker who is and who can.

Oh, where's the beef? At my client's, Pearl's Deluxe Burgers who was awarded first prize by none other than Food Network celebrity chef, Bobby Flay, at the "Best Burger Cook-off" at the Great American Food and Music Festival last weekend.

Currently with two locations (Mill Valley and downtown San Francisco) look out for a Pearl's Deluxe Burgers coming to your area!

p.s. If you go to Pearl's I highly recommend the buffalo burger, sweet potato fries and a fresh banana milkshake!

So, how's business?

2009-06-13T17:33:00.000-07:00

So today I did my bit to jump-start the economy by going to Union Square to buy a few things. Whenever I shop I ask the sales associates "How's business?". You can read all you want in the Wall Street Journal and trade papers about the "macro" picture but if you want to know what's happening on a "micro" level, sales associates are a good source.

Here's the report:

1. Charly of Origins at Macy's (purchase: cosmetics for the missus - $48) "Weekend business is picking up.. weekdays... (a "so-so" hand gesture).

2. Todd of Verizon (purchase: new Blackberry Curve $149 with $100 rebate) "Much better than two months ago".

3. Bruce of a New York retailer at the former CompUSA site which is being leased for four months to sell off inventory at steep discounts (purchase: Joseph Abboud suit. Retail - $695. Discount $149!) "Look for yourself, it's flying off the racks!"

My personal observation was that there were lots of people having a good time, darting in and out of shops. The economic fear that gripped us for so many months seems to have abated.

How Green Was My Shop?

2009-06-07T17:39:00.000-07:00

Last week I attended the annual retreat for Urban Solutions, a non profit economic development company, on whose board I proudly serve. Urban Solutions has done a fantastic job helping small business owners develop business plans, obtain financing and receive grants.

As a result of Urban Solutions efforts many a dilapidated building facade down 6th Street from Market to Howard has metamorphasized into an attractive retail storefront. Similarly, in the Western Addition (think Fillmore Jazz District) they have helped many entrepreneurs open businesses or receive funding and grants to improve operations.

Urban Solutions contributes greatly towards preserving and enhancing the unique neighborhood characteristics that make San Francisco. Their GREEN BUSINESS PROGRAM provides reasonably priced consulting services to help shop owners "go green" - revenues from the program will be used to provide these services to businesses who could otherwise not afford them and that's a good thing for everyone.

To learn more about the Urban Solutions GREEN BUSINESS PROGRAM follow this link: www.urbansolutionssf.org/green/index.html

Because there is something in the air..

2009-06-01T20:25:00.000-07:00

No, I am not singing Thunderclap Newman (well, maybe just a little) but as the song says "there's something in the air".

A recent survey by the San Francisco Chamber of Commerce indicates that 87% of respondents said that revenues were flat or down for the first five months of the year as compared to 2008.

But..

36% expect revenue to increase by August
51% expect revenue to increase by November
70% expect revenue to increase by the Q1 10

"and the wheel in the sky keep on turning". No, I'm not singing Journey (well, maybe just a little)

A silver lining for every cloud?

2009-05-25T16:44:00.000-07:00

Last week I attended Recon 09, the International Council of Shopping Centers, annual convention in Las Vegas. Not surprisingly, given the economy, attendance was down significantly - just over 20,000 as compared to 50,000 last year.

So where's the "silver lining"?

national retailers were seriously talking about expansion plans
the security line at Mc Carran Airport took less than five minutes

But seriously folks, while the mood was reflective and bit somber, my sense is that retailers are "teeing up", cautiously perhaps, but nonetheless getting ready to play the next round.

There was a time....

2009-05-23T15:10:00.001-07:00

No, I am not singing James Brown. There was a time when I was pretty darn current with technology given my television business career. But I lost interest in it when my colleagues were saying (while pointing to their cell phone screen) "One day everyone will be watching TV on a 2" screen!"

They were right and I moved on. Anyway, I'm back exploring all the things that technology can do to enhance communication and connections. And so I'm starting this blog.

Since coming back to the City I have met many cool people doing many cool things. One of these people is Helen Zhu, who founded and is head of a "fashion for the people by the people" website called Chictopia. Check it out www.chictopia.com