In an effort to highlight national and local trends in real estate, technology, and manufacturing, we recently caught up with Kelly Gray, Vice President of Brokerage and Location Advisory at Jones Lang LaSalle, for her insights on industrial real estate. …
In an effort to highlight national and local trends in real estate, technology, and manufacturing, we recently caught up with Kelly Gray, Vice President of Brokerage and Location Advisory at Jones Lang LaSalle, for her insights on industrial real estate.
1. What dynamics are driving the strong market demand for industrial buildings in Fremont and the East Bay?
KG: There are three main factors playing into the industrial real estate market demand in this area.
2. How can cities in the Silicon Valley area support the continued growth of the industrial sector?
KG: Continue to be open to zoning for industrial use. The concept of rezoning or redeveloping industrial land for a “higher and better use” is prolific in the Bay Area. Over 10 million square feet of space has been taken out of the market in the past five years. This is driving down vacancies and pushing prices within the Bay Area to record levels, for example, the Facebook and Google displacements of industrial users in Menlo Park and Sunnyvale.
Local regulations on truck traffic also curb industrial development, especially for “big box” industrial (250,000 square feet, high clear distribution centers) such as Amazon in Newark. Industrial development is a great way to add economic stability to an area and allow for employment opportunities for a diverse workforce. Historically, office and residential rents commanded higher land costs on a “per square foot” basis and provided higher taxes, but I think recent industrial success stories will prove otherwise.
Often, people do not think about how the goods they buy end up on store shelves or doorsteps. The concept that it takes over 70 million square feet of real estate in the Bay Area to make it happen is unknown. Industrial just isn’t as sexy as office and residential. It’s function over form.
3. Can you provide some insider real estate tips for companies interested in expanding or entering Fremont’s market?
KG: First, do the math. Determine the cost-qualitative trade-offs between Fremont vs. cheaper, further locations like South San Jose or the Central Valley. If you need to be in Fremont, either for the transportation, the diverse workforce, the density of engineers, etc., then ignore the sticker shock and pay the extra rent.
If leasing, take the plunge on longer term rents and negotiate renewal options. If you can get a purchase option, take it. With demand up and supply dwindling, space will only get more difficult to come by and acquire. If you have the opportunity and the capital to purchase, go for it.
4. In the next 24 months, what can we expect in the industrial market in Fremont and the East Bay?
KG: This year in the Bay Area, signs indicate that we may be at the top of a bull market for real estate. A correction can be expected in the next twelve months, but not drastic.
In the next five years, the Bay Area market will continue seeing record rental rates and low vacancies as office and residential demand cannibalize industrial space. The industrial will push out to the Central Valley. Ultra-high volume consumer distribution (Amazon, FedEx, and UPS) will pay the extra money to stay close to the population. If property costs continue to rise, the Bay Area may be the first market to see multi-story industrial in the U.S.
5. When do you predict the City of Fremont will see multi-level industrial space?
KG: It will be a race between ever-increasing land values and autonomous driving technology. If autonomous car and truck fleets free up parking spaces for increased land utilization, then it could delay the multi-story industrial. If not, I could see it happening with the big players, like Amazon, in five years, relatively the same horizon for autonomous cars.
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In May, Startup Grind Fremont celebrated Female Founders month. This vibrant panel of female CEOs represented a diverse array of industries and different stages of start-up-hood. During the panel, the four women shared stories about creating a work/life b…
In May, Startup Grind Fremont celebrated Female Founders month. This vibrant panel of female CEOs represented a diverse array of industries and different stages of start-up-hood. During the panel, the four women shared stories about creating a work/life balance, as well as the ups and downs of their respective startup journeys.
From left to right - Yukte Oberoi, Co-Founder of Yuhmbox; Shilpi Sharma, Director of Fremont Startup Grind; Saylee Raje, CEO of Ethnic Thread;and Niousha Zadeh, CEO of Brite Health
The female founders had the following pieces of advice for the attendees who have launched or are thinking of launching a company.
On July 26, Startup Grind Fremont will be speaking with Andy Pandharikar, founder of Tall Idea Labs at EFI (6700 Dumbarton Circle, Fremont, CA). Pandharikar is an experienced entrepreneur and a self-described “hands on entrepreneur” investor. He has built and sold a fashion-tech startup to India’s leading ecommerce fashion portal, Myntra, which was recently acquired by Flipkart, a multi-billion dollar ecommerce company in India. He will share advice on how to attract funding and what investors are looking for in order to make investment decisions.
Don’t miss out! Get your tickets online here.
Can’t make next week’s event? Not to worry – Startup Grind Fremont has other events scheduled through September. Stay informed by visiting www.startupgrind.com/fremont, or by following us on Twitter @FremontGrind and Facebook at https://www.facebook.com/StartupGrindFremont/.Read less x
IBank, the California Infrastructure and Economic Development Bank, was created in 1994 with the mission to provide capital for public infrastructure and private development that generates jobs, supports the economy, and promotes a sustainable environment…
IBank, the California Infrastructure and Economic Development Bank, was created in 1994 with the mission to provide capital for public infrastructure and private development that generates jobs, supports the economy, and promotes a sustainable environment.
Unlike a commercial bank, IBank does not receive deposits or make direct loans. Instead, IBank finances projects by issuing tax-exempt and taxable revenue bonds for public agencies, provides credit enhancement, and acquires facilities.
While most of IBank’s products are geared towards public agencies and non-profit corporations for a wide variety of infrastructure and economic development projects, IBank has two programs that can assist small businesses with expansion and retention.
California Small Business Loan Guarantee Program — Small businesses often have difficulty accessing loans due to large commercial banks’ strict requirements. This program encourages lenders to provide small business loans by lowering the requirements for lending. IBank provides a guarantee to the lender for the loan, thus reducing the borrower’s requirements for collateral and credit score.
The program emphasizes lending to small businesses that are expanding, staying, and creating new jobs in California. It can be accessed through a certified Community Development Financial Institutions (CDFI) or a local bank working with CDFI.
Industrial Development Revenue Bonds — There are many demands for specialized buildings and equipment for advanced manufacturing companies. Industrial Development Bonds (IDBs) are tax-exempt securities issued by a governmental entity in order to provide money for the acquisition, construction, rehabilitation, and equipping of manufacturing and processing facilities for private companies. The bonds must be used to finance manufacturing or processing facilities, and equipment worth up to $10 million. IBDs have longer terms and a more competitive interest rate than typical market rate commercial loans.
Interested in learning more? You can listen to a webinar about Small Business Loan Guarantee Program. Or, read up on other manufacturing resources we’ve featured on the blog, including Ex-Im Bank, Foreign Trade Zone, and other great programs and incentives.Read less x
Since the landmark adoption of the Warm Springs Community Plan, huge strides have been made in achieving the vision. And as the Warm Springs story evolves, so too must the marketing collateral! Refreshing the messaging about this unique opportunity is c…
Since the landmark adoption of the Warm Springs Community Plan, huge strides have been made in achieving the vision. And as the Warm Springs story evolves, so too must the marketing collateral! Refreshing the messaging about this unique opportunity is critical to its success. So, today’s post is dedicated to the debut of our newest brochure, which summarizes the strategy and progress to date. New additions include an updated Innovation District Map and renderings of major development proposals, some of which are now underway. Take a look and contact the Fremont Office of Economic Development with any questions.Read less x
Last week, industry publication BioSpace released an article entitled the “Top 5 Bay Area Biomed Hot Spots” based on the data in our new biomedical infographic. Fremont was featured along with Sunnyvale, San Jose, San Francisco, and Berkeley as “hot spot…
Last week, industry publication BioSpace released an article entitled the “Top 5 Bay Area Biomed Hot Spots” based on the data in our new biomedical infographic. Fremont was featured along with Sunnyvale, San Jose, San Francisco, and Berkeley as “hot spots” for biomedical activity due to the clustering of companies in these locations and the trends they represent. Case in point, Fremont is seen as a sweet spot for biomedical manufacturing – an important distinction as the convergence of hardware and software becomes more critical to biomed growth.
Drug pricing might be dominating biomedical headlines these days, but there’s a lot more happening beneath the surface that’s driving innovation—specifically in California’s San Francisco Bay Area. In this region, a vibrant and robust biomedical industry is quickly growing.
Today, the Bay Area is home to more than 1,100 biomedical companies and 140,000 biomedical jobs, according to the Biomedical Manufacturing Network—and within the next two years, an estimated 14,000 more biomed jobs in the Bay Area are expected to surface.
You can read the full article at BioSpace.
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Three years ago, when we started “Takes from Silicon Valley East”, we didn’t realize the sheer amount of dedication, perseverance, and diligence that would be required to create new content twice a week. To celebrate our third anniversary, we want to tak…
Three years ago, when we started “Takes from Silicon Valley East”, we didn’t realize the sheer amount of dedication, perseverance, and diligence that would be required to create new content twice a week. To celebrate our third anniversary, we want to take this opportunity to thank our guest bloggers. Because of your contributions, we’ve made it to 300 posts!
This past year, we are continuing to feature posts from thought leaders like Dr. Jim Morris, Fremont Unified School District Superintendent and Derek Anderson, Founder & CEO of Startup Grind. We also launched new series, including a regular re-cap post about theStartup Grind Fremont monthly fireside chats. These are just a few of the contributors we’ve worked with in the past year.
Below you’ll find a list of our most-read posts from the last twelve months. If you haven’t already subscribed to our blog and followed us on Twitter, sign up today! As always, we appreciate your feedback and comments on our posts.
Top Three Posts of 2015-2016
Economic Development Director and Chief Innovation Officer Kelly Kline shares her insights and opinions on innovative economic development programs that are transforming older American cities.
Assistant to the City Manager and Deputy Director for Economic Development Christina Briggs shares her thoughts on the ingredients for a 21st century “smart city.”
As part of our Q&A series, we interviewed Erik Steeb, VP of Programs for LACI, to learn more about LACI’s investments in the Bay Area.Read less x
Fremont has a history of achieving economic success through proactive planning. With development activity well underway in both Downtown and Warm Springs, it’s validating to see that smart planning during the last economic down cycle is now allowing th…
Fremont has a history of achieving economic success through proactive planning. With development activity well underway in both Downtown and Warm Springs, it’s validating to see that smart planning during the last economic down cycle is now allowing the City to capitalize on today’s strong economy. Both of these development areas will provide significant employment opportunities, new housing options, and additional urban amenities for the community.
So, what’s next? Look north to Ardenwood, where Fremont connects most closely to the peninsula and actually shares a city limit with Menlo Park. (See graphic below.) A variety of dynamics, including the tightest peninsula real estate market on record, Fremont’s growing prominence in high-tech, and worsening commutes have resulted in extremely strong demand for space and development opportunities in Ardenwood over the last few years. A diverse mix of Silicon Valley tech tenants has already migrated eastward to Ardenwood, which has expanded the makeup of this historically biotech business park. These companies include EFI, TE Connectivity, and Atieva, just to name a few. And let’s not forget the recent announcement that French coding university, Ecole 42, is launching its U.S. operation within the district, too.
The yellow outline is Ardenwood.
Given the strong market fundamentals, last week, Fremont’s City Council approved the re-zoning of 148 acres in Ardenwood to allow for higher-intensity corporate office operations, while continuing to allow the advanced manufacturing and R&D operations which exist there today. The action sets the stage to transition this 1980s business park into a 21st century employment district that encourages high-image development and leverages the Ardenwood’s gateway location at the base of the Dumbarton Bridge.
Many of Silicon Valley’s largest anchor companies are actively expanding their footprints broadly throughout the region to address employee retention and improve commutes. By priming Ardenwood to be competitive with new, high quality buildings, Fremont is once again positioning itself for success and creating an environment where it can capture a greater share of the region’s high tech employment.
Rendering of Ecole 42Read less x
While Fremont’s historic districts each have a unique identity, what they have in common are successful, family-owned, small businesses adding to the districts’ economic vibrancy of the city. Recently, we spoke with three of small-business entrepreneurs …
While Fremont’s historic districts each have a unique identity, what they have in common are successful, family-owned, small businesses adding to the districts’ economic vibrancy of the city.
Recently, we spoke with three of small-business entrepreneurs to hear their insights on what it takes to run a successful business.
Inkies Tattoo Studio Located in the Irvington District, owner, Robert Arquero works with a team of tattoo artists to provide skin art design services. When asked about the most important element of starting or running a successful business, Robert said it takes “great product, great service, and great environment.”
Schmartboard Located in the Centerville District, Schmartboard’s Neal Greenberg, VP of Sales & Marketing, shared that they work with startups and multi-billion dollar corporations to design, fabricate, and assemble electronic circuits. Neal’s favorite marketing technique is to “entice potential customers to request a free sample (Schmartboard). Giving them a taste of something that solves a significant problem, with a reason to act now, is good marketing.”
Iron Dog Antiques Located in the Niles District, owner Rae Steckler is passionate about the antique business. According to Rae, “locally made, locally sourced, made in USA, upcyle, reuse, and recycle are the trends that my customers want.” Keeping a pulse on these trends allows classic business concepts to stay fresh and current.
In general, these entrepreneurs identify the following tips as keys to their success:
Not only is starting a new business is daunting, but it’s also extremely rewarding. Our experts suggest speaking with other business owners in the industry in order to learn from them as best practice before setting out to start your own business. Then pay it forward by passing on your hard-earned knowledge to the next startup entrepreneur.Read less x
After years of planning, Downtown Fremont is going vertical! On Friday, June 17, 2016, the City of Fremont celebrated the groundbreaking of Locale @ State Street, Downtown’s first mixed-use project, which was made possible through a public/private partner…
After years of planning, Downtown Fremont is going vertical! On Friday, June 17, 2016, the City of Fremont celebrated the groundbreaking of Locale @ State Street, Downtown’s first mixed-use project, which was made possible through a public/private partnership between the City of Fremont, TMG Partners, Sares Regis and SummerHill Homes.
The Locale @ State Street mixed-use project will span six acres and include 157 residential units, consisting of stacked flats and rowhomes. The community’s amenities will include outdoor spaces with barbecues, lush landscaping and seating areas for residents to gather, as well as a fitness studio and bike share program. The development will also include nearly 21,000 square feet of ground floor, street-front retail and restaurant space along Capitol Avenue.
The State Street groundbreaking ceremony was held on the new section of Capitol Avenue between Fremont Boulevard and State Street as residents and City staff alike gathered to witness history in the making. City Manager Fred Diaz kicked things off with a welcome speech, highlighting that since Fremont’s incorporation in 1956, the City has been seeking a central place to serve as its civic heart. Now, with construction on Locale @ State Street soon underway, we’re one step closer to giving Fremont residents the Downtown they’ve been waiting for.
Next, Fremont Mayor Bill Harrison and Katia Kamangar, executive vice president and managing director of SummerHill Homes, shared a few thoughts on how this project represents a giant leap forward for Fremont and its plans to build a strategically urban community. According to the Mayor, the City is envisioning a smart, sustainable Downtown, complete with electric vehicle charging stations, wide sidewalks for street side cafes, bike lanes, diagonal parking, solar-powered street lighting for outdoor events, and a whole lot more.
Ms. Kamanger noted that 20% of Summerhill’s portfolio is in Fremont, citing its strategic location and excellent schools.
After lots of cheers and applause, the celebrations continued into the evening with Fremont Street Eats, a gourmet food truck event produced by the Fremont Chamber of Commerce and Food Truck Mafia.
The State Street groundbreaking is a catalytic occasion for the City of Fremont, and a continuation in the development of a Downtown that will serve as the City’s social heartbeat - where people can live, work and shop, all in one central place.
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Last month, the Brookings Institution published a report written by Scott Andes titled How Firms Learn. In the report, Andes examined how companies innovate and what cities can do to foster greater innovation. He analyzed the manufacturing sector and th…
Last month, the Brookings Institution published a report written by Scott Andes titled How Firms Learn. In the report, Andes examined how companies innovate and what cities can do to foster greater innovation. He analyzed the manufacturing sector and the software industry, which accounts for a large portion of the technology-based economy. The report provided some interesting data. For example, did you know that over two-thirds of America’s R&D companies are focused on manufacturing and software?
The report identifies three models of industry innovation:
1. Classic – The traditional, “classic” model is dependent on scientific breakthroughs and scientific expertise for advancement. Companies are reliant on large institutions such as national laboratories, universities, military, and private investors for research and development. In this model, scientific advancement on the higher-level creates opportunities for commercialization of the technology.
2. Unconventional – In the more atypical “unconventional” model, companies are both consumers and producers, and work collaboratively. Innovation occurs through cooperation among suppliers, manufacturers, and customers for technology breakthroughs. Although innovation happens independent of scientific breakthroughs, in the unconventional model, the innovations are “less linear and sequential” and are “more incremental and adaptive.”
3. Mixed - This model combines both classic and unconventional innovation to advance innovation.
Fremont is home to a variety of industries, including advanced manufacturing, life sciences, and cleantech. Many of the companies in Fremont are in the classic and mixed innovation models. For example, Lycean and Applied Spectra are companies that have spun out of the federal labs and universities. In the mixed innovation model, contract manufacturers such as AsteelFlash are actively using a design build process to actualize new R&D concepts. Additionally, the proximity of software companies to manufacturers allows for organic, active cross-fertilization of ideas, resulting in novel hardware products. For these reasons, Fremont represents the software and hardware convergence in Silicon Valley.
How can the City nurture further collaboration? In addition to the city’s rich network of suppliers, customers, and investors to support advanced manufacturers, Fremont is working with regional partners such as the Manufacturing Roundtable, Silicon Valley Manufacturing Engineers (SME98) and the Silicon Valley Chamber (REDI) to provide a social network for innovation. Additionally, the city promotes StartupGrind, a monthly networking group for entrepreneurs, to connect and learn from each other.
Finally, innovation does not happen in isolation. Clustering of innovative companies is essential for long-term growth. Fremont’s Warm Springs Community plan ensures that the Innovation District is set up to succeed.
Future models may continue to evolve, so Fremont is committed to an innovation agenda that will help it to change and grow at the pace of business.
A mixed innovation model.
Source: Brookings.comRead less x
Welcome to our blog – Takes from Silicon Valley East! Our view is slightly different here on the east side of the bay – from the Mission Peak backdrop to the advanced manufacturing companies that dot our boulevards. As we become more urban and strive to interpret the business issues affecting our innovation economy, we want to share with you our observations, insights, photos, arguments, agreements, inspirations and CEO interviews – and here on our blog is exactly where we plan to do this.