Connect Media had a chance to catch up with Case Swenson, president of San Jose, CA-based development and construction services firm Swenson, to get a quick read on his take on early trends shaping the Silicon Valley development landscape moving into 2020.
Q: What trend do you see being relevant to today and into the future for Bay Area development?
A: Due to the lack of labor in the market, the future of construction in the Bay Area is going to have to use hybrid construction techniques using modular and traditional construction. This will provide challenges, but also offer opportunity for new and innovative methods to evolve.
Q: Who are the real power players in the market?
A: In my mind, the power players are the developers that have been in the Bay Area for the long haul. They will be the ones who understand values of all things real estate—land values, construction costs, best-suited product types, locations, and most importantly, a feel for the markets.
Q: Interesting, because some would say legacy developers are not jumping into this development frenzy, especially in San Jose, with an influx of new developers coming into Silicon Valley in a large way.
A: The two major development forces coming to San Jose, BART and Google, are clearly a driving force for some of the new investors in the market. Legacy developers, who have been through the ups and downs of the market over the years will cautiously proceed when the deal works and not jump in without looking at the whole picture.
Q: What are the issues people aren’t talking about, but should be?
A: The lack of transportation is at a level where it is an emergency. Like PG&E, we have a lack of infrastructure already and as the Bay Area population continues to grow at an alarming rate, the situation is only going to get worse unless we do something about it.
Q: What are your thoughts on opportunity zones?
A: Opportunity zones provide equity the equivalent of a 400-basis-point tax break. That kind of incentive is going to get projects off the ground that might not otherwise be financeable and hopefully help revitalize our community.
For comments, questions or concerns, please contact Chris Egger
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