Eastward Ho! Oakland

2nd Quarter 2016

Eastward Ho! OAKLAND

inside

EAST BAY CREW • WHAT’S NEW IN OAKLAND

INSIDE T HIS IS S U E Report from East Bay CREW

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Angel Profile

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LETTER FROM THE EDITOR

Oakland Urban Escapes

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Oakland’s Impending Impact Fees

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Restaurant Report: Swan’s Market

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Turning our gaze to our boisterous younger sister to the East, the VIEW and CREW SF have joined forces with East Bay CREW to give you a snapshot of commercial real estate in Oakland.

InterVIEW: Holly Neber

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The Oakland Art Scene

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Jeannie O’Connor

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Oakland’s Housing Crisis

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Oakland’s CRE Market is on the Move

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East Bay CREW Port of Oakland Presentation

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Point of View: Oakland Rental Market

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2015 CREW Network Benchmark Study Report

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A Word from Our Sponsors

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the VIEW EDITORIAL STAFF Managing Editor

Donna Schumacher

Associate Editor

Angie Sommer

Angel Editorial Review Contributors

Graphic Designer

Inga Miller Richard Isaac Jill Broadhurst Jennifer Chan Danelle Fox Inga Miller Holly Neber Jeannie O’Connor Daniel Sanders Donna Schumacher Robert Selna Angie Sommer Elizabeth Swift Lori Seaberg Mingus

©2016 CREW SF. All submissions are subject to editing for clarity and brevity, unless otherwise noted.

Cover: Jeannie O’Connor, founder and director of Jeannie O’Connor Studio in West Oakland

CREW SF COMMUNICATIONS TEAM CALL FOR ARTICLES FOR the VIEW UPCOMING ISSUES 2016 Quarter 3: Rising Rents: Keeping Culture Deadline for articles: July 1, Angel: Laurie Gustafson

2016 Quarter 4: Meet The Millennials: Changes in Real Estate to Cater to the New Majority Deadline for articles: October 1, Angel: TBD If you have any ideas for an article pertaining to the subject of one of our upcoming issues, please drop us a line at angies@zfa.com.

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San Francisco may cast a long and rather elegant shadow over much of the sparkling waters of San Francisco Bay, but Oakland is finding a voice of her own, and that voice is garnering some serious national attention. Be it her record-smashing Warriors team, a wildly popular First Friday art scene, a burgeoning center for technology (Uber for one), or an artisan food culture lovingly nicknamed Brooklyn by the Bay, Oakland continues to bask in her recently acquired limelight. Layer this onto a previously established reputation as one of the most culturally diverse cities of the country, a bustling port with one of most well-trafficked container facilities, her consistently sunnier weather, and an attractive affordability (albeit compared to her dolled-up big sister), Oakland is gaining significant heat in the Bay Area’s real estate market.

Explore with us as we take you through Swan’s, a chic new food market that changed a downtown neighborhood with its adaptive reuse of an underutilized historic building. Let Robert Selma explain the upcoming controversy regarding impact fees for Oakland development. Take a tour of the bustling art scene as artists flock from rising rents in San Francisco in search of affordable studio space. Drop in on open spaces scattered through the city to understand differences in policy between the two cities by the Bay. Jill Broadhurst explores city policy from a rent- and evictioncontrol perspective. Jen Chen explains several creative solutions to rising housing prices. Finally, but maybe best of all, meet East Bay CREW, including an interview with CREW Network board member Holly Neber, and a letter from the chapter president, Elizabeth Swift.

A grateful thank-you to our trusty Angel, Inga Miller, who literally “bridges the bay” with her membership in both SF and East Bay CREW chapters. Her enthusiasm bubbled over while she acted as our primary conduit, forging connections and making the introductions needed to make the issue a success. East Bay CREW truly rose to the challenge, contributing one half of our articles. Brava!

And thank you, dear reader, for continuing to spread the word about the VIEW, our mission, and the great contributions of our members to the real estate communities, both east and west!

Warmly, Donna Schumacher Managing Editor, the VIEW Donna Schumacher Architecture

REPORT FROM EAST BAY CREW © 2016 Elizabeth Swift, President, East Bay CREW

Oakland is having its moment. A new restaurant seems to open every week, several apartment projects are in the works, the Dubs are pro basketball’s new golden boys, and several new companies, including Blue Bottle Coffee, Sungevity, Uber, and Pandora, have invested in the employment market here, bringing more jobs and services across the Bay. Even SPUR (the San Francisco Bay Area Planning and Urban Research Association), which, for years, was “San Francisco-centric” in its urban policy and planning efforts, opened an office on Broadway in Oakland last year.

Yet, at the same time, long-time Oakland residents are voicing their concerns about gentrification, rising rents, and the changing appearance of their neighborhoods; developers are moaning about impact fees; and the Dubs may move to San Francisco. If there was ever any truth to Oakland-based

ANG E L PROFILE

INGA M. MILLER Principal | Miller Property Law

Company: Miller Property Law (real property and business law), Orinda, CA, founded 2015.

Background: I was born in Oakland. I graduated from UC Santa Cruz in with a major in politics and a minor in writing in 1999.

My first career was as a newspaper reporter with the Santa Cruz Sentinel and then the Modesto Bee. In 2008 I attended Southwestern Law School’s accelerated, two-year SCALE program and went to work for the women-owned law firm (and East Bay CREW champion) Timken Johnson LLP before starting my own practice in Orinda in August 2015, where I provide assistance to property owners and business owners on both sides of the Bay. My journalism roots prove hard to bury, so I serve as a member of the editorial board of the Contra Costa County Bar Association and love contributing to the VIEW. CREW history: Joined in 2010. I then joined the East Bay CREW Echo Awards Committee in 2013, which blended with CREW Cares in 2014, which I led as co-chair in 2015. In 2016, I joined the East Bay CREW board of directors and also CREW SF as a member.

Charities: CREW Foundation, Youth Homes (which assists young people living in foster homes), and Las Trampas School, Inc. (which supports adults with developmental disabilities).

Extracurricular passions: Cooking and design. There are all kinds of ways to live, and so I love exploring the different foods and home styles that people bring to the Bay Area.

Travel tips: Make time for it—because tomorrow may never come.

Recent travel highlight: The banyan tree in Lahaina (Maui) Courthouse Square. Its roots have grown far from the main trunk and come out of the ground in several places to support some of its flowing limbs. There is something nurturing and comforting about the tree and the people who gather there.

Top Bay Area restaurant picks: Zuni Café, Hog Island Oyster Company, and Zarzuela.

15 minutes of fame: I am still waiting for it.

writer Gertrude Stein’s claim that “there is no there there” in Oakland, there certainly isn’t now. To the contrary, so much is going on in Oakland, it’s hard to keep up.

For the longest time, East Bay CREW was a “680 corridor”focused chapter. But given the increasing number of employers and amount of business now conducted in Oakland, and the ever-increasing number of our members who live or work in Oakland (25% of our members work there, as of February 2016), it’s imperative that East Bay CREW adapt. As a result of these changing demographics, this year, we will host several events west of the Caldecott Tunnel, including three of our seven monthly luncheons, a cocktail party, and our holiday party, all in Oakland.

Our March luncheon featured Pamela Kershaw, the Director of Commercial Real Estate for the Port of Oakland, which encompasses the Oakland Airport, the rail yard, and, of course, its shipping port. Ms. Kershaw reported on a number of exciting topics, including new real estate developments planned for the Port (Brooklyn Basin, Hotel ENA); the effects of politics, trade, and the global economy on the Port; and general facts about the Port of Oakland—for example, the Port controls more than 4,000 acres and its annual revenues exceed $300 million!

In July, we are hosting a cocktail party and tour of the Hive, a new “shopping, gathering, working, and living space” in downtown Oakland, developed by Signature Development.

In September, we hope to collaborate with CREW SF on a joint, Oakland-based event (more details to follow), and in December we will once again host our annual holiday party at Lake Chalet on Lake Merritt.

As more and more residents and companies move out of San Francisco to the East Bay, East Bay CREW is committed to producing programming and events that are informative, timely, and relevant to the concerns of those living and working not just in Oakland but in Berkeley, Hayward, San Leandro, Walnut Creek, and the many other cities in the East Bay market.

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As the Bay Area evolves, so does East Bay CREW! About the Author

Elizabeth Swift began her career as a commercial real estate mortgage broker and investment salesperson in 1995 in Washington, DC, where she was also a member of CREW. In 1999, she moved west, and after earning an MA and PhD, she eventually landed in the Bay Area in 2006. She worked at US Bank in San Francisco in its commercial real estate group, then at Mechanics Bank, and now is a commercial real estate lender with F&M Bank, where her specialty is commercial real estate finance, both construction and permanent loans.

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Oakland Urban Escapes

© 2016 Inga Miller, Miller Property Law

Lake Merritt. Photos by Inga Miller

Every great urban core offers places of reflection. Few are as visible as Oakland’s Lake Merritt. A coveted view from many of the city’s office towers, Lake Merritt serves as a noontime destination for bookworms who dot its grassy banks and power-lunchers who take to its paths. But it is only the most prominent of a dozen or more escapes from computer glare and fluorescent lights.

These include public and private spaces and those that evade labels, like the colorful tables and chairs at the corner of Webster and 21st Streets. The owner of the adjacent office building received the city’s approval to put them there, and passersby transformed the otherwise-vacant corner into a place to eat a sandwich or catch some rays. Whether the impromptu park is a temporary delight or the beginning of a permanent fixture is something with which its patrons seem less concerned. The seating is rumored by those who use it to be the start of more improvements to the older and largely vacant office building: the parking lot next door is slated for a 200,000-square-foot office site.

One of Oakland’s strengths is that it always has embraced change. Nowhere is that change more celebrated than at the Uptown Art Park just beyond the Fox Theater, at the corner of 19th Street and Telegraph Avenue. Surrounded by sculptures of leaders such as César Chavez, Mahatma Gandhi, and Rosa Parks sit park benches and wisteria trees.

Those who enjoy sculptures however, can lose themselves on the way to the picnic tables at the Oakland Museum. Even without a ticket, the public is welcomed to roam the outdoor corridors and enjoy a packed lunch on one of the lacquered benches along the koi pond or at the block wood picnic benches in the Robert C. Rishell Garden Court, an immense (continues on page 5)

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Tables and chairs at Webster and 21st Streets

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Robert C. Rishell Garden Court at the Oakland Museum

lawn punctuated by a bright red stainless steel mobile and a 5,500-pound petrified pine log from Arizona. Stickers identify the paying customers from the casual lunch crowd. Those who want more privacy can find a seat along the outdoor paths and platforms leading to the sculptures. Many are hidden like Easter eggs, some with stunning views, off of the labyrinth-like path.

A tolerance for getting lost is important for those who wish to discover the city’s most famous privately owned open space. The Kaiser Roof Garden boasts being the first major private roof garden in the United States. Since the owners of the building underneath closed access from 20th Street, the Kaiser Roof Garden’s entrance also competes with some of San Francisco’s privately owned open spaces for the title of most difficult to find.

The only public entrances are through the elevators inside Kaiser Center Garage (where the path is relatively well marked once at the elevator well) and on Webster Street at 20th Street (walk through the door to the Kaiser Center Mall and make a direct right into the elevators; upon reaching the third floor, a sign points left through the glass doors and onto the roof deck). Built in 1960, the threeacre garden makes the journey worthwhile. Mid-century patios blend with modern echium, agave, and olive trees. A footbridge over a fountain offers a fanciful feeling between the formidable 28-story mid-century Kaiser Tower and views of the shiny LEEDcertified Center 21. It is both a symbol of Oakland’s perseverance and an ode to its view toward the future, a fitting place for an afternoon escape.

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About the Author Inga M. Miller, principal of Miller Property Law, assists individuals and businesses in navigating and documenting real estate deals.

Kaiser Roof Garden

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OAKLAND’S IMPENDING IMPACT FEES © 2016 Robert Selna, Wendel Rosen Black & Dean, LLP

During the past two years, the demand for housing in Oakland skyrocketed while construction ramped up slowly. The result is a severe housing shortage that has pushed Oakland rents close to the top nationally and attracted strong developer interest. In turn, City officials have concluded that the housing market is now strong enough for Oakland to join other Bay Area cities imposing development fees for affordable housing and capital needs.

On May 3, 2016, after nearly two years of economic studies at a cost of $1.5 million, the Oakland City Council approved two citywide “impact fee” ordinances that boost the price of construction at a time when there are thousands of housing units in Oakland’s development pipeline, but far fewer projects breaking ground (according to recent City staff reports, 2,000 residential units are under construction).

The fees will start on September 1, 2016, and gradually increase during the next several years. They will be adjusted up or down according to three geographic zones. The zones are intended to reflect market realities in different sections of the city and new projects’ ability to absorb fees in each zone and still make an expected profit. For instance, fees imposed on multifamily construction in the most costly zone (including Downtown and North Oakland) would start at $7,000 per unit and increase to $24,000 per unit by July 2018. Fees in the least expensive zone (East Oakland) would be $710 per unit through June 30, 2018, and increase to $10,000 per unit by July 1, 2020.

Support for imposing development fees to help pay for affordable housing and infrastructure has been slowly gaining momentum in Oakland since then-Mayor Jerry Brown announced plans to help facilitate the downtown construction of 7,000 units (and add 10,000 residents) in the late 1990s. At that time, Oakland’s residential inventory already was low, and according to census data, housing was generally becoming too expensive for most of the city’s large working class. But Brown and others, who were seeking tax revenue and blight reduction, rejected the idea of affordable housing fees at the time, believing that additional costs would cool tepid developer interest.

Brown succeeded in adding market-rate units downtown.

Likewise, the historic Fox Theater renovation and new restaurants and bars helped to revitalize the adjacent Uptown area. The changes attracted new residents, but exacerbated the affordability problem. In response, in 2007 city officials considered an inclusionary housing policy that would have required market-rate projects to include a percentage of units affordable to lower-income residents. The recession made the concept moot.

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Until now, Oakland’s absence of development impact fees has separated it from at least 80 other California cities, according to the San Francisco Business Times, including San Francisco, San Jose, Fremont, Emeryville, and Walnut Creek. Oakland has had a handful of fees, but they do not comprehensively account for the effect of new development on the city’s capital needs, such as transportation, sewers, and sidewalks—or affordable housing.

Data show that approximately 14,000 residential units are in the development pipeline in Oakland, meaning that they have at least been proposed to the Oakland Planning Department.

Meanwhile, Oakland rents are going through the roof, and developer interest is at an all-time high. In April 2016, Zumper, a national apartment rental website, listed Oakland as the fourth most expensive rental market in the United States, with median monthly rents for one-bedroom apartments at $2,280.

For two bedrooms, Oakland was in third place, ahead of Boston at $2,720, and behind only San Francisco and New York.

Data show that approximately 14,000 residential units are in the development pipeline in Oakland, meaning that they have at least been proposed to the Oakland Planning Department.

But, while high rents and surging project applications have inspired some to describe Oakland as experiencing a building “boom,” about 2,000 units are actually under construction.

Several factors make the transition from pipeline to completed project challenging, including lenders ambivalent about the wherewithal of Oakland’s residential market, high construction costs, perceived political instability, and active community opposition to projects lacking significant affordable housing percentages. Within five months, impact fees will be added to the mix, as the economy and housing market evolve, leaving many to wonder about the outcome.

“There are real fears in the community about gentrification and displacement,” developer Mike Ghielmetti told the Business Times. “I think the leaders have to answer to that. But, if you put a fee in at too high a level, too fast, you potentially kill the golden goose before it lays any eggs.” Ghielmetti, whose firm has several Oakland projects either in the pipeline or under construction, has said he believes that a few major projects will be completed in the current development cycle and that their (continues on page 18)

RESTAURANT

REPORT

Photos provided by EBALDC

SWAN’S MARKET:

A Diverse Gathering Place in Oakland’s Reinvented Downtown © 2016 Angie Sommer, ZFA Structural Engineers

Neighborhood by neighborhood, Oakland has reawakened formerly blighted areas, transforming them into “cool” in a way that only Oakland can. Call it a hipster revolution or just credit the skyrocketing Bay Area economy—Oakland has unarguably exploded in a dozen ways in recent decades, and along the way it has created a culture unlike any of the other booming cities around it.

One of many areas that have recently been revitalized is Old Oakland, which was the city’s original downtown in the late 1800s and is now part of a much larger downtown area.

Swan’s Market was originally established in Old Oakland in 1917 and was a thriving marketplace for many years before a slow decline led to its closing in 1983. After sitting vacant in a deserted neighborhood for 15 years, the property was purchased by the East Bay Asian Local Development Corporation (EBALDC) in 1998 and transformed into a vibrant mixed-use and mixed-income development

containing affordable and market-rate apartments, retail space, and offices.

The strategy to turn Swan’s into a mixed-use development was intentional—it’s what EBALDC does best, in fact.

“Research shows that mixed-income developments are better for neighborhoods,” states Joshua Simon, EBALDC’s executive director. “Having a mixed-income and mixeduse development such as Swan’s Market truly makes for a diverse and healthy community and provides resources to neighborhood residents.”

The success of Swan’s Market is due to the amalgamation of EBALDC’s 40 years of experience developing mixed-use complexes in Oakland and the greater East Bay together with the successful reintegration of this historic marketplace in an evolving neighborhood. (continues on page 8)

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(continued from page 7) or a relationship with Oakland.”

Additionally, they request that each merchant have an item on the menu that costs $5 or less so that there is always an affordable option for patrons, which maintains their commitment to successful mixed-income communities.

EBALDC began its work in 1975 as a group of students and community leaders who saved a deteriorating warehouse in Oakland’s Chinatown and turned it into the Asian Resource Center, which continues to house a number of nonprofits and local businesses that serve the community. Over the years, the members of EBALDC became experts in developing mixed-use complexes that include affordable housing and provide vital social and financial services to residents. The organization has invested over $200 million in assets that have positively impacted the community, including 2,046 homes and more than 300,000 square feet of commercial space serving 4,000 low-income residents annually.

Describing their work in a nutshell, Simon summarizes: “We have built a community in Oakland for the past 40 years and have become a trusted ‘neighborhood development’ organization.”

Continuing in this successful tradition, Swan’s Market is home to 18 affordable housing units, 20 market-rate condos, 18,000 square feet of office space, and 29,000 square feet of retail space. The street-facing retail spaces with which the public is most intimately acquainted include a half-dozen interesting and popular restaurants that serve food ranging from oysters to pork belly tacos to fried chicken.

When asked if there are particular requirements for their restaurant tenants, Simon replied, “We look for local entrepreneurs who share our values in providing access to fresh, affordable, local food and culinary traditions; adopting green practices; and welcoming and hiring within the community. We also look for tenants who have roots

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Between the EBALDC’s selection criteria and tenants vying for a spot in the historic, hip space, Swan’s Market has gathered a deliciously diverse range of culinary offerings. Dominica Rice-Cisneros’s Cosecha (meaning “harvest”) is one of the most popular restaurants, offering fresh and creative Mexican fare from the Chez Panisse alum. Other favorites include Rosamunde Sausage Grill, which serves house-made links from neighboring Taylor’s Sausages; and Miss Ollie’s, which serves Caribbean fare, including the house favorite fried chicken.

But there’s something for everyone at Swan’s: Chikara Ono’s Japanese izakaya, AS B-Dama; casual coastal cuisine (oysters!) at The Cook and Her Farmer; deliciously simple pizzas at Hen House; and wine produced in a WWII submarine repair facility at Periscope Cellars.

With this group of powerhouse restaurants has come a degree of notoriety for Swan’s Market that includes features in such notable publications as the New York Times and Sunset Magazine and on the Food Network. In response to all the hype, Simon notes, “Today, Swan’s Market is a destination spot for many tourists as well . . . We attract not only neighborhood residents but also residents of the surrounding Bay Area to support our popular restaurants, organizations, and businesses.”

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Nearly 100 years after first opening its doors, Swan’s Market is thriving once again.

About the Author Angie Sommer is an associate at ZFA Structural Engineers, a 60-person engineering firm with five Bay Area offices and a broad range of experience in the commercial, educational, residential, retrofit, and hospitality sectors. In her spare time, she volunteers on a variety of industry committees, including those within CREW SF and the Structural Engineers Association of Northern California, and she also helps people write wedding vows, ceremonies, and speeches via her business, Vow Muse (vowmuse.com), which was featured in the New York Times in June 2015.

InterVIEW: Holly Neber

© 2016 Donna Schumacher, Donna Schumacher Architecture

With an unpretentious and generous manner, Holly Neber puts a refreshing face on what it means to be a successful woman in business. I, for one, love to meet people like Holly, role models that prove to me that you can be a high-powered professional in a competitive and predominantly male field and simultaneously be yourself, in her case feminine, smart, genuine, and rigorous in her dedication to her work, with just the right touch of quirkiness.

DS: Holly, it’s great to meet you! Let’s start with how you came to be president of AEI, an engineering consulting company, overseeing the work of 250 employees, with 22 branches across the country. An impressive achievement!

HN: In 1999, I started out at AEI as a project manager doing phase 1 site assessments. At that time, AEI had about 20 people and two offices, so you can see that we have grown tremendously during my tenure here. This has given me opportunities to wear many different hats along the way: opening offices, training employees, and becoming involved in operations in numerous locations.

Then, when the recession hit in 2008, it was a tough time for us, as our work is related to transactions and developments. I became a part of management and was given the opportunity to serve on the team making some tough decisions. I felt as if I were in a real-life MBA class on how to make it through a recession.

We learned to become much more diversified in client type and region, and to provide services before and after acquisition.

DS: Was there one person who mentored you? Where did you turn for support and guidance in the trajectory of your success?

HN: Craig [Hertz], our CEO, has been extremely supportive, obviously, all along the way, and willing to coach me, but he let me make my own mistakes as well—he’s that kind of mentor.

I also have to say that I joined CREW the same year that I became president, so CREW has been a huge resource for me. The first thing that I did was to become involved in East Bay CREW, first on what we call CREW Cares, which does the UCREW event, then as chair, and eventually as chapter president in 2013.

CREW Network has also been extremely important for me. I started on the Nominating Committee, which helped me to understand how the Network board is selected. As I reviewed the applications, it was a great source of inspiration. You really see what is possible as you read through all the impressive feats these women have accomplished.

Holly Neber

When I next served on the committee that planned the Seattle national convention, I was involved with putting together the industrial panel, which was really, really fun. It was a wonderful opportunity to give my clients a chance to be on a national stage, and for me to interact with women from the other chapters around the country.

CREW Network’s injection of support and outside confirmation of my leadership skills has been pivotal to my confidence that I am not advancing within AEI just because I have been there forever. People who move around a lot in a corporate environment, from one big corporation to another, are probably always getting a lot of feedback, but for someone who has stayed at a single company for all of these years, it’s nice to get the outside confirmation that I am doing the right things and I am on the right track.

Each time I come back from a Leadership Council meeting or national CREW event, I feel recharged and inspired, confident that I am growing as a leader. For example, in the recent Leadership Council meeting in San Antonio, I heard from their speaker about the three levers that businesses can use to compete: product innovation, client intimacy, and operational excellence. I was able to take that leadership exercise to my management team as we worked to develop our mission for the year.

DS: AEI recently opened an office in downtown Oakland near Jack London Square. Tell us about that decision. What is the relationship between the original Walnut Creek office and the Oakland office? (continues on page 10)

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(continued from page 9) We work both sides: for both lenders and developers. Both their approaches to risk have really evolved over time. There was a time when environmental issues were ignored, followed by a time when lenders would walk away from a property with environmental concerns. I now feel we are finally at a place where people are comfortable dealing with environmental issues and impairments to properties as long as they are able to quantify in dollars what it would take to deal with that issue.

It is now just another item on the pro forma. The comfort level has really changed over time.

DS: What are the projects that AEI is working on in Oakland at this time?

Photo provided by Holly Neber

HN: Our headquarters has been and will remain in Walnut Creek. This suburban office location is centrally located and great for our families, but it’s perhaps a little less exciting for our millennials. The downtown location by Jack London Square provides access to the waterfront for exercise and the great restaurants nearby, as well as the ability to bike to work. It is a nice change for the staff, primarily project staff working on assessments. I love both Walnut Creek and Oakland, but I think it’s been a refreshing change for many. We are hoping this new satellite location will help us retain staff who are looking for more of an urban experience. We already very much enjoy being in the Jack London Square area.

DS: AEI was founded in 1992 and has grown rapidly ever since.

Does this reflect the growth of just AEI, or is there something about the building industry that has changed since the early ’90s to promote the need for your services?

HN: The world we live in—as an environmental and engineering consulting firm—has changed dramatically since the early ’90s. At that time, lenders were just beginning to implement environmental risk policies; since then, those policies have become much more standardized. We have evolved, along with the banking and finance communities, in terms of what type of information lenders want before they consider a loan, or before considering foreclosing on a property.

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HN: Environmental due diligence on the Uptown Station/Uber deal, although we were not aware who we were ultimately working for at the time, due to the top-secret nature of the deal!

We have worked on redevelopment-related work at the Foothill Square center for Jay Phares (foothillsquare.com/history). And we have other projects that must remain confidential but can be described as an industrial site being converted to live-work lofts in the Fruitvale area; a former truck rental facility near the Coliseum; numerous gas station redevelopment projects; assessing seismic risk and the condition of exterior decks at multi-family properties; and a shopping center with a dry cleaner release requiring remediation and on which we are collaborating with fellow CREW member Christine Noma of the Oakland-based law firm Wendel Rosen.

DS: You have recently started rock climbing. As if the challenges of being the president of AEI weren’t enough! What is it that appeals to you about the sport?

HN: Climbing is something I can do with my husband that also gets me outdoors, which is where I really recharge. Beyond the physical challenge, two things that I really enjoy about climbing are the trust I’m building with my husband in a totally new situation, and the confidence I’m gaining from working through the mental challenge of overcoming fear and finishing a route.

It translates well to work situations where you’re beyond your comfort zone but you push through and then look back and say, “I did that!” and also “We did it!” together as a team.

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About the Author Donna Schumacher is the founder and creative director of Donna Schumacher Architecture (DSA), a boutique architecture practice for small-scale commercial and residential work in the Bay Area.

DSA projects range from one-of-a-kind signature elements for architectural interiors, utilizing Donna’s background in fine arts, to complex projects requiring multiple permits, tapping into her 30 years of experience with the San Francisco building department. DSA has recently introduced art consulting to its roster of services. Donna has been the managing editor for the VIEW since 2012.

The Oakland Art Scene

© 2016 Danielle Fox, SLATE Contemporary and SLATE Art Consulting

Luminosity-Lefkowitz and Weaser. Photo by Danielle Fox

Artists have flocked to Oakland for decades, attracted to its low rents, large industrial spaces, and proximity to nationally respected college art programs, such as those at CCA, Mills, and UC Berkeley. Oakland was even touted, for many years, to have more artists per capita than any other American city.

white-walled commercial galleries you might expect to find in New York or Los Angeles. From 2006 to 2013, a time when Oakland was still struggling with its image nationally, the expanding gallery scene played a central role in the city’s social, cultural, and economic resurgence.

With such a wealth of artists and artistic activity already in place, it is not surprising that several galleries started popping up in 2005 and 2006, and when a handful of them, clustered in North Oakland and Uptown, agreed to hold their opening receptions on the same night, on the first Friday of the month, the Oakland Art Murmur was born. Starting as a monthly art-walk event, it is now a nonprofit institution that serves the entire city with its mission to “strengthen Oakland’s diverse visual arts communities, by providing access to resources, programming, and experiences.”

For example, an April 2010 New York Times article titled “Oakland’s Journey from Seedy to Sizzling” observed: “Art Murmur is a bazaar of cultural activity . . . what began as a predominantly hipster local crowd now includes visitors from the Bay Area and beyond. Serious art buyers from as far away as New York, Miami, and Rio de Janeiro have begun turning up . . . Oakland is coming into its own as a cultural destination.” A 2011 Huffington Post article noted that the city was having “a resurgence in civic renewal and the arts and the humanities . . . Oakland’s reincarnation is well underway . . . It now also enjoys the benefits of a hip and thriving art scene, in spite of a souring economy.”

The recession years were a difficult time in Oakland, but the broader economic context had a silver lining, which was that empty storefronts and low rents allowed even more galleries to gain a foothold. These included nonprofits, artist-run collectives, and mixed-use spaces, alongside the kind of

That same year, San Francisco Magazine included Uptown in its annual Best of the Bay issue, lauding it for the highest (continues on page 12)

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OAM walking tour. Photo by Kathy O’Leary

density of galleries per block, writing: “In the past two years alone, 10 noteworthy [art] spaces have opened on 25th Street . . . and they’re drawing eclectic crowds: some look like they can afford a Diebenkorn, while others look like they can barely afford rent . . .” And in January 2013, San Francisco Magazine named Uptown as one of the hottest new neighborhoods to move to in the Bay Area, due in part to what it described as a “non-stop art orgy.”

In the last year, however, Oakland’s art scene has started to become a victim of its own success. As the city—and the Uptown and Downtown neighborhoods in particular—has seen rising property values, gentrification, and plans for major development, many of the smaller exhibition spaces (often responsible for some of the most creative programming) have been unable to renew their leases and sadly have had to shut their doors. More closures are anticipated in the coming months and years.

Despite uncertainty about the future, however, there is still a wealth of creative expression to celebrate. With spring and summer weather on its way, now is a great time to get out and explore what Oakland’s art scene has to offer.

Visiting Oakland’s Galleries WHEN: For a festive party scene, visit Uptown Oakland on a First Friday, when galleries stay open until 9 p.m. During the summer months, the Koreatown Northgate Central Business District, or KONO CBD, sponsors a First Friday street festival on Telegraph Avenue between 23rd and 27th, closing down the street for vendors, food trucks, and performances.

Alternately, if you don’t like crowds and prefer to walk in daylight, most galleries are open on Saturday afternoons from 1 p.m. to 5 p.m. Check the Art Murmur web site for a list of Saturday receptions, workshops, artist talks, and free monthly walking tours. (Note: Many galleries are closed early in the week, so Thursday through Saturday tends to be

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a better time to visit if you want to see several exhibitions.

Check the web or call to confirm individual gallery hours.)

WHERE: Uptown, conveniently served by the 19th Street BART station, has the highest concentration of visual art venues, especially in the area between Telegraph and Broadway on 23rd, 25th, and 26th. There are, however, exhibition spaces with wonderful shows all over Oakland, from Downtown to Jack London, and from West Oakland and Jingletown. To find them, grab one of Oakland Art Murmur’s printed brochures or download a map to plan a day of discovery. (Also, don’t forget as you are walking or driving through Oakland to look around at the world-class collection of murals and street art!)

HOW: Give yourself plenty of time, as there is a lot to see.

Make sure to engage gallery staff or artists in conversation, and don’t be shy about asking questions. If you like a venue or exhibition, make sure you sign up for their mailing list to receive information about future events.

Finally, if you like mixing art with coffee, drinks, or a little shopping, keep an eye out for the “Affiliated Retailers” listed on the Oakland Art Murmur site—these are bars, cafes, and boutiques that also have rotating art exhibits to enjoy.

For more information, visit oaklandartmurmur.org

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About the Author Danielle Fox has been interested in art and business for most of her life, leading her to a PhD in art history, followed by four years as Deputy Director of Business Development for Sotheby’s in London. She also served for four years as a founding board member and then executive director for Oakland Art Murmur. Today she and Shelley Barry co-direct SLATE Contemporary, a brick-andmortar contemporary art gallery opened in 2009 and located in Oakland’s Uptown gallery district; and SLATE Art Consulting, a full-service art consulting agency providing custom fine-art solutions for private collectors, as well as office, hospitality, and healthcare environments.

JEANNIE O’CONNOR Jeannie O’Connor is a Bay Area artist who has incorporated architecture into both her fine art and commercial work. Jeannie’s fine art work has been recognized with the SECA Art Award from SFMOMA and the Phelan Award in photography, and her work is in collections worldwide. She is founder and director of Jeannie O’Connor Studio in West Oakland, which handles both fine art and architectural commissions.

http://www.jeannieoconnor.com • http://www.jeannieoconnor.com/architecture

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OAKLAND’S HOUSING CRISIS DEMANDS

CREATIVE SOLUTIONS © 2016 Jen Chan, White Tiger Condo Conversion

“There is no there there.”

That’s how Gertrude Stein famously described her hometown of Oakland back in 1937. But times have changed. Oakland is in the midst of an economic revival that is turning the once hard-luck town into one of the fastest-growing and most dynamic cities in the Bay Area.

The main impetus for Oakland’s economic resurgence is the influx of people and companies that have been priced out of the San Francisco market. As tech companies like Uber and Twitter have flocked to San Francisco, they have pushed the cost of housing and office space to record levels.

The average rent for a one-bedroom apartment in San Francisco last year was about $3,500, making the city the most expensive rental market in the United States, ahead of both New York and Boston. San Francisco is also the most expensive city in the nation to purchase a home or rent office space: the median sales price of a home last year was an astronomical $1.1 million, and the cost of office space recently eclipsed that of Manhattan.

The tech boom and the resulting skyrocketing cost of housing in San Francisco have forced many people and companies to look eastward, toward Oakland. More than 200 technology firms now call Oakland home, including music-streaming service Pandora and search engine Ask.com, and Uber is planning to move its headquarters into the old Sears building in downtown Oakland next year.

But Oakland’s economic revival has not come without a price.

The city is now struggling to cope with the same pressures San Francisco has been contending with: surging housing costs, rampant gentrification, and widening income inequality.

Last year Oakland ranked No. 1 among the 50 largest U.S. metropolitan areas in terms of the annual increase in average rental costs—a whopping 15.3%. In December, the median home price rose by $60,500, or 14%, to $550,000, compared with the previous year, making Oakland one of the most expensive housing markets in the nation. While $550,000 is about half the median cost of a house in San Francisco, it is still beyond the means of most working-class families.

Oakland has long been known as one of the nation’s most diverse cities, boasting a large and vibrant mix of AfricanAmerican, Hispanic, and Asian residents. But as housing prices rise and gentrification increases, many residents are struggling with limited options and are finding the American dream of

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home ownership beyond their reach. Indeed, a growing number of low-income and working-class families are being forced out of the city altogether in search of more affordable housing options.

Oakland’s African-American population declined by 10% between 2004 and 2014, according to the U.S. Census Bureau, and many experts fear the exodus will accelerate as housing prices continue to climb. Some observers believe the city has reached a “pivot point.” Unless new solutions are found to create more market-affordable housing, the city’s blue-collar character may be swept away by the rising tide of gentrification.

“Home ownership creates stability of tenure and is one of the major ways that Americans build wealth and financial security...”

So what can be done to solve Oakland’s growing housing crisis?

How can the city preserve its distinctive character and ethnic diversity while at the same time continuing to grow and prosper?

One answer might be found across the bay in San Francisco, which has pioneered two creative responses to its housing shortage: tenancies in common (TICs) and condo conversions.

In the 1960s, San Francisco had only two viable housing options: owning a house or renting an apartment. Those limitations created the demand for a third option— condominiums—which gave people the opportunity to own their own apartment in a multi-unit building while sharing ownership of the common areas.

In 1985, San Francisco further expanded its housing options with the creation of tenancy in common agreements, which gave residents who could not afford to buy either a singlefamily home or a condo the opportunity to share ownership in a multi-unit building.

TICs and condo conversions offer many advantages. Not only do they provide residents with a vehicle for home ownership, they can also increase property values and strengthen the economic vitality of the entire neighborhood. They provide residents with greater control over their property, increased equity, lower mortgage costs, and greater financial security.

They also create many new jobs and opportunities for the entire community, from business and real estate professionals (continues on page 20)

OAKLAND’S CRE MARKET IS ON THE MOVE: Quick Hits from the Experts © 2016 Daniel Sanders, Proforma Construction; Claudia Fernandez, Valva Realty

Hive Oakland, Photo courtesy of Proforma Construction

The commercial real estate market in Oakland is certainly expanding, with growth in all market segments, including commercial, multifamily, hospitality, condominiums, and industrial. Here’s a survey of some of the most exciting recent projects, with comments from the principals involved.

Hive Oakland Let’s start by taking a look at the commercial market, with the now-completed (and award-winning) Hive Oakland project developed by Signature Development Group under the direction of Michael Ghielmetti, CEO. This repurposed project was the home of several car dealerships in the ’60s and ’70s. Now, through an assemblage of parcels, it houses Impact Hub Oakland, Calavera Restaurant, Drake’s Dealership, Firebrand Artisan Breads, and Truve Fitness, as well as offices for Numi Tea, Flynn Architecture, Balfour Beatty, Zarsion Holdings, Signature Development Group, and several others. (See hiveoakland.com for more details.)

Asked about the origination of the project from its early conception until now, Signature Development’s executive vice president, Paul Nieto, said, “The Hive originally was approved as phase two of the Broadway Grand condominium project. Through several events, we began to rethink the possibility of salvaging the old brick buildings.

We thought we had a good vision for the project when we were contacted by the Oakland-based Numi Tea team, which was looking for a brick-and-timber office setting.

Numi was the first of the group of Oakland entrepreneurs to sign up for the Hive concept.”

Furthermore, Nieto said, “Oakland is now widely recognized for its unique, diverse, and thriving economy; its transportation infrastructure; and its community-oriented businesses and residents. We are gratified to contribute to Oakland’s authentic fabric and are committed to invest in its future.” (continues on page 16)

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(continued from page 15)

Juniper Lofts, Photo courtesy of Baran Studio Architecture

James Heilbronner, CEO of the firm Architectural Dimensions and the project’s program manager, says, “It’s a tall order to spend $240 million in three years.... We completed a master plan in 2012 that is still viable for the future of the base.... This redevelopment project is visionary in its design to transform an 80-year-old complex into an import-export mecca that increases business and employment.” (Get more information at portofoakland.com/maritime/oab.aspx.)

Condominiums

528 THOMAS L. Way, BERKELEY WAY 528 Thomas L. Berkley Image courtesy of Kotas/Pantaleoni Architects OAKLAND Proforma Construction’s president, Jeff Antrim, commented on the challenges of building such a project: “Combining historical renovation from the time of Julia Morgan, a seismic retrofit, adding usable and rentable square footage, and the challenges of old construction containing asbestos made for one of our most fun and challenging projects.”

Brooklyn Basin In addition to Hive, Signature has several other projects in Oakland, including apartments and commercial space. One of the most notable of these is the Brooklyn Basin project.

This project consists of 3,100 housing units and 200,000 square feet of office space. Sitting on approximately 65 acres along the waterfront of the Oakland estuary, the project will contribute 30 acres of open space and parks to the city as well. (See more at brooklynbasin.com.)

Oakland Army Base On the waterfront, the $1 billion Oakland Army Base renovation project is moving along. Cal Trans has set aside $240 million in funding for the proposal, which would transform the site into a warehousing and logistics center to be used by the Port of Oakland, and the city is now charged to match the state’s spend on private, vertical development.

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Another project currently undergoing construction is a 25-unit condominium project by CRC Development. Located at 528 Thomas L. Berkley Way, it sits along alongside the old Great Western Power Company building. John Cappiello of CRC commented, “We have always been big believers in Oakland.

We think now is a great time for Oakland, as evidenced by the influx of new businesses, restaurants, and jobs. Travel & Leisure Magazine just listed Oakland on its April cover as one of six ‘where to go next’ destinations, along with Cuba and a few others. We feel our project’s site is attractive due to its central Uptown location half a block from BART and Uber’s future headquarters, and one block from the Fox Theater. We expect that upon completion our project will deliver the first new condominiums in the area this economic cycle.” (The project builder, Proforma Construction, says the project will be online and ready for occupancy by the fourth quarter of this year.)

Multifamily In the multifamily sector, apartment construction couldn’t be stronger. Longtime Oakland investor John Protopappas said, “Apartment demand continues to outpace supply, which has resulted in higher occupancies and increasing monthly rents.

Our newest community at 3900 Adeline Street is renting at about 15% higher than our original projections of about three years ago.... Many new companies have decided to locate in 24-hour communities like Oakland; therefore, job (continues on page 18)

EAST BAY CREW PORT OF OAKLAND PRESENTATION © 2016 Holly Neber, AEI Consultants

Pamela Kershaw, Director of Commercial Real Estate for the Port of Oakland, gave East Bay CREW and guests a broad overview of the Port, as well as the latest in Port news, at a recent luncheon held at Scott’s in Jack London Square.

The Port of Oakland is a public agency established in 1927 as a state tidelands trust grantee. As such, it is an enterprise agency of the City of Oakland. The Port employs 470 people and has 4,700 acres of property holdings. The Port’s footprint extends along the Oakland estuary from the shipping terminal to the Oakland International Airport, and it serves as an economic engine in three core business units: aviation, commercial real estate (Jack London Square), and maritime enterprises (the Oakland seaport).

In some cases, the Port has sold property to help finance waterfront projects, and in other cases, the Commercial Real Estate Division has entered into agreements with development teams to ground-lease and develop the projects using private funds. Current projects include airport improvements such as Terminal 1 renovations and runway safety projects, and maritime improvements such as an integrated logistics facility, additional warehouse space, and cold storage facilities.

In the commercial real estate realm, Port properties include Jack London Square and Embarcadero Cove. Jack London Square is home to innovative businesses, including Sungevity; a thriving restaurant scene, including Haven and Bocanova; and entertainment venues, like Plank. Ms. Kershaw indicated that the commercial properties are 99% leased.

The Port is proud of its commitment to the community through local-hire and living wage requirements for its contracts; hosting popular community events in Jack London Square, such as Pedal Fest, Waterfront Flicks, Eat Real, and Dancing Under the Stars; providing tour opportunities throughout the summer months; and a live-chat “meet the port” portal on their website.

Although the news was issued after Ms. Kershaw’s presentation, it was recently announced that Jack London Square has been sold to CIM Group by Jack London Square Ventures, which consists of Ellis Partners, Transbay Holdings, and DivcoWest.

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About the Author Holly Neber, president of AEI Consultants, is responsible for its day-to-day operations, building on the company’s reputation for responsiveness and quality consulting. Holly provides client training and seminars on ASTM standards and managing environmental risk. Holly is a board member of CREW Network, past president (2014) and current board member of East Bay CREW, vice president of the National Engineering and Environmental Due Diligence Association (NEEDDA), and chair of the News Task Group as an affiliate member of the Environmental Bankers Association (EBA). Holly was named one of RealShare’s California Women of Influence in 2015.

Slides from Pamela Kershaw’s presentation.

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(continued from page 16) says, “Oakland is a fantastic market for us to be in. We have a number of projects in Uptown Oakland and look forward to contributing to the growth of a prosperous community....

Oakland has seen an uptick in in institutional investment and we expect to see this trend continue.”

Industrial

creation has moved north and east of Silicon Valley. We believe this structural change of job creation in the Oakland/ East Bay area will continue for many years.”

Multifamily construction activity abounds also in the NOBE area (North Oakland-Berkeley-Emeryville). Jennifer Daly Griffo of Daly Partners had this to say: “We like this area of Oakland because of its strong need for additional units and its central location to three employment and educational hubs: Oakland, Berkeley, and San Francisco. We’ve developed units perfect for small families and working roommates. Before completion, we will have one unit as a model to show prospective tenants, which our market research suggests will help with the absorption of all or nearly all of the units before the building is completed. Oakland continues to be a hot market, and analysis of the market and units coming online in Oakland suggests this trend isn’t going anywhere.”

Uber On another front, Lane Partners’ Sears Building project—and subsequent sale to Uber—has drawn a positive response from the community. The project will consist of 66,000 square feet to house the tech company’s staff. Built in 1925, the building sits atop the 19th Street BART station. It will provide retail business to the community on the ground floor. Drew Haydel, one of the principals of Lane Partners,

Brennan Carpenter, industrial and warehouse specialist at Cushman and Wakefield, had this to say: “The Oakland industrial market continues to benefit from the vibrancy of the Bay Area region, further bolstered in recent years by San Francisco’s emergence as a global technology hub. The Port of Oakland, Oakland Airport, its location along major freeway arteries, and central situation within the region make Oakland a choice, strategic location for a variety of industrial and warehouse users. These factors, coupled with a booming economy, have significantly boosted activity in the market, whittling vacancy down to a scant 1.9% (as of the end of 2015). Despite businesses taking down a large amount of industrial space over the past five years, demand remains strong. With available space in such short supply, growth in the rental rate has accelerated notably.”

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About the Authors Daniel Sanders is the Director of Business Development for Proforma Construction.

During his 30-year career in commercial real estate, Dan has held positions in brokerage and mortgages and as a loan officer for two commercial banks. During his off hours, you can find Dan at the golf links, trying to improve his handicap.

Claudia Fernandez was raised in the family construction business and has been involved in real estate deals since she was a teenager. She is an investment sales and leasing specialist at Valva Realty in Oakland and has been mentored by the best in the industry.

(continued from page 6)

“Residential development in Oakland absolutely makes sense.” success will provide investors and lenders with confidence in Oakland going forward.

“Residential development in Oakland absolutely makes sense,” Ghielmetti said as part of a recent panel discussion. “We just need more evidence of that to show those who are looking at the city from the outside and who have other options to consider.”

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About the Author Robert Selna is a real estate attorney with Wendel Rosen Black & Dean, founded in Oakland in 1909.

He advises clients on everything from development entitlements to property disputes. Prior to practicing law, Robert enjoyed an extensive career as a newspaper reporter for publications such as the San Francisco Chronicle. He also served as the chief of staff to a San Francisco supervisor, assisting in the approval of citywide legislation on a range of zoning and environmental issues.

POINT OF VIEW: Oakland Rental Market

© 2016 Jill Broadhurst, East Bay Rental Housing Association

In the Bay Area, we have seen the sale of real estate move at a consistent, strong, rapid pace, with all-cash financing and foreign money deals an everyday occurrence. Oakland, welllocated just east of the epicenter of this exploding market, has received much of the benefit of these circumstances, with valuation increases catapulting a market that was perhaps not quite ready for this newfound status.

All neighborhoods in Oakland have seen homes increase in value. Sales of apartment buildings have turned at an unbelievable pace, with new owners gambling that at some point, in the future, the low rental income will somehow justify the purchase price. But let’s pause for a moment to consider the factors that influence the rental market in Oakland. What factors might be important to consider?

Oakland has seen very little in the way of new inventory in the last 10 years. The city has approximately 90,000 units, of which approximately 68,000 are older construction, built mostly from 1910 to 1960. The newer construction is located primarily around Jack London Square, West Oakland, and the downtown corridor, all popular neighborhoods that each provide BART access.

Just what is the relevance of old vs. new construction anyway?

A whole lot. There is state law, known as Costa-Hawkins, that creates separate rules governing old and new construction. For cities that have a rent ordinance, like Oakland, “rent control” affects whatever is outside of the state mandate, meaning older construction. Anything built after the magic year of 1983 is deemed “new construction” and is decontrolled, meaning no rent caps.

However, in a city like Oakland, where “old construction” is the bulk of the inventory, a unique and critical set of circumstances determine what will be charged and who will be able to afford the rental unit. In addition to local ordinances, which dictate annual allowable rent increases for established residents, there may be more enforcement in other areas likes annual fees, and “new solution” ordinances that seem intent on not allowing owners to share upgrade improvement increases with renters.

Bay Area media outlets have released the latest rental rates, tabulated by the likes of Zillow, Real Facts, and Zumper. These real estate “research” sites, which provide rental comparisons, cite double-digit increases that vary month to month. What is not shared, though, is that these websites only pull from currently vacant apartments, and these are generally in decontrolled buildings that usually have 40+ units. In Oakland, there are maybe 45 buildings with that many units and of a decontrolled status, so we are talking about a very small sample of buildings feeding the market impression of current rents.

Photos by Alicia Ostarello

During times of low supply, who moves within the same town when they can’t afford what is currently on the market? No one. Those that can not afford a higher rent stay in their rent controlled apartment, paying a below market rate. Therefore the vacant, decontrolled units are at the top end in price, and these units consistently rotate out renters who, being at the market ceiling, don’t lose anything if they find another unit that may be less expensive or comparable.

To give a few present-day examples: In the downtown Broadway area, a vacant, new-construction, one-bedroom unit (Mason at Hive) with 837 square feet is currently on the market for $3,100. The potential rent increase for the owner is 10 percent for every 30 days or over 10 percent every 60 days with notice. However, for pre-1983 construction, a residentoccupied, 850-square-foot, one-bedroom unit is renting for $985 with an annual allowable increase of 1.7%. It simply does not make economic sense to move no matter what your income bracket might be or even if you don’t like the color of your carpet. Rent restrictions benefit a few for no other reason than the length of time they have been in their unit. Shouldn’t an honest look be given to helping those that truly need it? (continues on page 20)

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(continued from page 19) Where is $985 in the data, headlines, and news coverage? It’s not—because currently no media outlet reports on 85% of the housing in Oakland.

So, to extrapolate this example citywide, what does this mean in terms of policy?

As of April 5th, Oakland City Council voted in a 90day moratorium on all rent increases on already controlled units. No increases, except that of the CPI, which is 1.7%. Denying rental owners the financial ability to make improvements to their older-construction properties, and punishing owners who did not elect to give their renters an annual increase every year is poor judgement and cowardly on the part of the council. Hardest hit will be the two- and three-unit owner-occupied buildings—moms and pops who have raised their children, maybe supporting their kids who have moved back home, and span the ethnic demographic wheel of all that is cultural preservation. Will more restriction ease the burden of a lack of supply? No, in

fact, it may hinder the supply chain by forcing owners to (a) push hard for the maximum price when indeed a unit becomes vacant, (b) choose to simply leave the unit vacant or (c) look for alternative occupancies for their properties.

Oakland, like Berkeley and San Francisco—rent-controlled cities with high rents—hopes that it can control the overall market with the implementation of a tighter set of rent control rules that pit rental owners against residents. But the answer to the complex question of how to provide enough housing units for reasonable rates cannot be solved with a simple answer. Restricting the profit margins of pre-1983 units is not a magic wand. Instead, we need to roll up our sleeves and do the challenging work of paving a positive system of local government interaction and education that will grow the city for everyone.

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About the Author At a very young age, Jill was introduced to rental property management and ownership through her immigrant parents. She is Executive Director of East Bay Rental Housing Association, based in Oakland, representing Alameda and Contra Costa County rental property owners. Additionally, she holds her brokers license, owns and manages her own properties, and is a member of the Oakland Berkeley Association of Realtors, East Bay Crew, and Oakland Rotary 3.

(continued from page 14) to attorneys, financiers, project managers, planners, tradespeople, title companies, brokers, insurance specialists, and many others.

Condo conversions offer several additional advantages compared to TICs. Condo owners have access to a variety of financing options and lower interest rates. The interest rate on a condo mortgage, for example, can be as much as two points lower than the rate on a TIC loan. Condo owners are also eligible for conventional 30-year fixed-rate loans; TIC loans are generally fixed for no more than seven years.

Condos also offer greater financial security and flexibility than TICs. Condo owners do not have to share a mortgage or a property tax bill, and they have more flexibility to sell or refinance their property at the most opportune time—when property values are on the rise.

“Home ownership creates stability of tenure and is one of the major ways that Americans build wealth and financial security,” the San Francisco Planning and Urban Research Association (SPUR) has stated. “Given the limited land supply in San Francisco, condominium conversion is viewed as an easier way to expand home ownership opportunities than through new

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construction.” While Oakland is nearly twice as large as San Francisco, the same principle applies.

A thriving city depends on the availability of market-affordable, entry-level homes that can attract upwardly mobile residents.

A city that lacks such housing will eventually wither and die. To put it another way, housing is like money: it must circulate and continually change hands to be effective.

Oakland’s housing crisis demands creative solutions. It is imperative that the city begin to forge new pathways to home ownership while at the same time protecting the rights of renters and preserving the city’s rich cultural heritage. TICs and condo conversions, by creating more market-affordable, entrylevel homes, can play a key role in achieving this goal.

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About the Author Jen Chan is the founder and president of White Tiger Condo Conversion, a pioneering San Francisco-based company specializing in smallscale residential condo conversions. She has more than 25 years of experience in business, residential, and commercial real estate. A longtime Bay Area resident, she champions home ownership and its ability to transform people’s lives, as well as building a more diverse and vibrant community. For additional information, visit WhiteTiger.us.

2015 CREW Network Benchmark Study Report © 2016 CREW Network

Respondent Career Aspirations (2015)

inform companies and managers about the values and priorities of their employees, and enhance the research and program agenda for CREW Network and other like-minded organizations striving for equality.

With the release of its third comprehensive benchmark study, CREW Network has now measured progress for women in commercial real estate over an unprecedented 10-year span, tracking and analyzing specialization, compensation, and career achievement by gender.

This long-term project has been made possible by the support of CBRE, premier underwriter of the 2005, 2010, and 2015 reports.

CREW Network’s 10-year research span reflects a remarkable diversity of positions and specializations within the commercial real estate industry. Respondents spanned entry-level to C-suite positions and represent all major specializations within the field—asset and property management, brokerage and sales, and development and financial services.

The 2015 study included the same questions as the 2005 and 2010 studies to guarantee data integrity and consistency.

Survey respondents revealed important gains made by women in the industry, as well as areas where inequalities persist.

The latest CREW Network study data can help guide women striving to advance their careers in the industry,

HIGHLIGHTS AND KEY FINDINGS OF THE 2015 STUDY: Compensation Though the income differences between men and women are shrinking, a significant income gap still exists. In 2015, the median total annual compensation, including bonuses, compensation, and profit sharing, was $150,000 for men and $115,000 for women in commercial real estate. This income gap of 23.3% demonstrates that North America still has a long way to go to achieve gender wage parity.

The income gap widens with years of experience and position, with the most pronounced difference between women and men occurring in the C-suite and in the brokerage and development specializations.

The 2008-09 recession resulted in a decline in the willingness of both men and women to accept commission-based work. In 2015, men have become more open to commissioned positions, while women have remained primarily in salaried positions.

Experience and Position Women in commercial real estate are closer to the C-suite than ever. Men continue to outnumber women in C-suite positions (17% of men surveyed vs. 9% of women), but this relative difference is shrinking. More senior-level roles were filled by women in 2015, with the exception of brokerage, sales, and leasing.

Across the board, when respondents take jobs with new companies, it is largely for economic or professional reasons— (continues on page 22)

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(continued from page 21)

most notably because a position offers better compensation or opportunity for advancement. But when offered a new opportunity with their current employer, women respondents are more likely than men to accept lateral moves.

In a notable improvement from prior CREW Network studies, in 2015 the percentage of women with direct reports was equal to that of men. On the other hand, while men’s direct reports were evenly split by gender, 62% of the direct reports to women managers were also women.

Success and Satisfaction Women’s satisfaction with their career success is now—for the first time in CREW Network’s surveys—exactly equivalent to men’s. (The 2010 results showed that women tended to report higher levels of satisfaction at earlier phases of their careers.)

To better understand this trend, we asked respondents which position they aspired to at the peak of their career. Women were most likely to choose senior vice president (47%), while the most common answer for men was the C-suite (40%).

Between 2010 and 2015, gains were also reported for women in their satisfaction with the work/life balance in their lives. For men, responses regarding work/life balance have generally remained constant since 2005.

Overall, women are less satisfied than men with the job factors they consider most important, including job enjoyment, time spent with family, and maximizing earning potential. (Men and women both scored time spent with family as equally important to them.)

In 2010, both men and women identified stagnating promotional opportunities as critical barriers to career success.

The latest study data show that more persistent issues, like lack of mentorship and concern regarding work/life balance,

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continue to be ranked highly as barriers to success across genders today—and increasingly so among men.

In 2015, women respondents viewed relationships with internal senior executives as the #1 factor supporting future advancement; they listed the lack of a company mentor or sponsor as the #1 barrier to career success.

Setting the Agenda The 2015 benchmark survey findings indicate that women in commercial real estate have achieved equal or close-toequal standing as men in many aspects. However, consistent with the two previous benchmark studies, these results also point to areas where there is room for progress.

The largest inequalities observed are in the income gap and the low numbers of women in C-suite positions. Negotiation skills continue to be important, but this year’s results and other studies published in the past five years suggest that there is a need to take action at the corporate management level to address the persistent bias against female advancement.

Additionally, while women recognize the importance of mentors and sponsors, finding them within their companies continues to be a challenge.

As a consequence of these barriers, our survey found that women are less likely to aspire to C-suite positions. While women continue to strive for parity, the industry itself—organizations, companies, and decision-makers—will also benefit from proactively acknowledging, supporting, promoting, recognizing, and rewarding women’s full potential.

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For more information, download the full Benchmark Study Report 1 and view the press release 2 1

https://crewnetwork.org/crew-network-benchmark-study-reportwomen-in-commercial-real-estate-2015.aspx

2

https://crewnetwork.org/2015-benchmark-study-report-released.aspx

A WORD FROM OUR SPONSORS

AND THAT WORD IS...

Transparency It’s been reported that the average person spends 90% of his or her life indoors. With this understanding of just how much of our lives are lived inside walls, there has been a natural migration toward using healthier building products.

And just like the ingredients on the side of your cereal box, you have a right to know about the products you are spending your valuable time around.

With this in mind, transparency will definitely be 2016’s word of the year for the flooring industry.

Mohawk Group has taken a strong stand when it comes to letting clients and end users know what’s in our products and leads the

industry in the disclosure of product ingredients. We offer “Declare” labels—“nutrition” labels for the building industry—that explain what’s in our flooring materials. And even better, what’s not in our products: “Declare” labels contain “Red List–free” information, meaning that there are no chemicals that can cause hazardous impacts on humans or the work environment.

We have seen the impact of providing this valuable classification on how designers, architects, and commercial real estate professionals approach selecting materials, building, and selling in the Bay Area, and we are proud to provide this service to our clients.

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