Sares Regis’ Bay Area Strategy: Remain Conservative and Patient

By Dennis Kaiser

Sares Regis Group of Northern California’s Yayu Lin, LEED AP, SVP, Commercial Development, will be speaking at Connect Bay Area today. In our final 3 CRE Q&A before the conference, Lin shares a few insights about the trends she sees driving the market, what a developer’s approach should be today, given market conditions, and what projects and markets are hot in the Bay Area.

Q: What are some of the overarching trends you see driving the Bay Area market as the year progresses?
A: Housing supply remains far behind job growth, but land costs, construction costs, and city demands will limit new supply in the Bay Area. Currently, new development is not financeable in most locations. The best opportunities are near transit, where it is still possible for density to grow.

Office development shows no signs of slowing down given the continuing strong employment throughout the Bay Area. Office development near transit is in short supply and will continue to be in high demand moving forward. Both public and private transportation management programs will continue to develop on a regional basis in the Bay Area, rather than city-by-city. Public-private partnerships to address transportation solutions, such as the Dumbarton Rail Corridor, will be needed to fix the current commuter problems the area is facing.

The El Camino corridor remains full of opportunities but requires complicated land assemblages, in most cases.

For-sale housing is very undersupplied in our markets along the Peninsula. Thankfully, Sares Regis Group’s business allows us to pivot from rental to for-sale, which we intend to invest in more moving forward.

Q: How can and should developers approach their decisions today, given the length of the cycle, interest rates and overall economic conditions?
A: Conservatively and patiently. Our business at Sares Regis Group focuses on working for both fees and at-risk, which allows us to be opportunistic and invest when it makes sense and also hold back when opportunities aren’t there. Ideally, you never need to make a transaction in order to bring in fees!

It’s also essential that a company focus on developing its team. This includes professional training and development, which prepares them for the next wave of opportunities.

We also put a big priority on staying involved in our local communities. Opportunities come from relationships—we secure most of our business off-market, from people we know within the communities we live and work in.

Q: What are some examples of the types of assets or deals you are looking at and why? What are the hot Bay Area markets attractive to you?
A: Corporate campus work — Building the best work environments throughout the peninsula and San Jose.

Sunnyvale – Residential and office near downtown and transit options.

South San Francisco – Re-inventing downtown SSF while building off of what is currently there, and providing housing that’s near thousands of life science jobs.

For comments, questions or concerns, please contact Dennis Kaiser