By Tim Hunt
The fuzzy future for companies and office campusesUploaded: Mar 4, 2021
Tri-Valley real estate professionals shared their views on the pandemic’s impact on the area during a Zoom presentation Tuesday.
The bottom lines: residential prices will continue to rise as inventory remains very low; For other sectors, such as office and retail—the outlook is fuzzy. Not so for industrial and landlords serving the Tri-Valley’s growing bio/pharma sector. The session was sponsored by the Hoge Fenton law firm and moderated by attorney Catharine Baker, the former assemblywoman.
Gina Piper, who has been selling local homes for more than 25 years, pointed out that the national inventory of homes is at an all-time low. In contrast to the Great Recession 2007-2008 where homeowners were hard hit, this time it’s been primarily renters. Homeowners are not putting their homes on the market unless they’re moving out of the area. One of the striking statistics Piper shared showed one month in COVID-19 times where homes averaged just 17 days on the market—even the slowest months were 30 days or less.
The combination of historically low interest rates and working from home sent urban renters to the suburbs in search of more space and yards. The millennials now are in the prime time of life to stop renting and start buying—the pandemic accelerated the trend.
In contrast, the crystal ball is foggier for representatives of the Tri-Valley’s two largest business parks, Bishop Ranch in San Ramon and Hacienda in Pleasanton. Bishop Ranch is continuing its transition to a mixed-use park that will add 4,500 high-density residential units in place of parking lots at the center of the park. These will complement the CityCenter project that opened in the fall of 2018 and has gradually filled up with restaurants, retail shops, an upscale fitness center and upscale movie theater.
The fuzzy piece for Bishop Ranch and Hacienda is how many companies will bring back their workers and for how much time. Has the five-day in-office work week gone away? Commercial broker Brian Lagomorsino pointed out that companies typically have allocated 125 square feet per employee, but that number could increase as companies spread out workers. And, of course, the impact of widespread vaccinations also is unknown whether that trend will continue.
He expected demand to grow from companies headquartered in the Silicon Valley or San Francisco to develop remote offices in a hub-and-spoke system. That would cut commutes, probably save some money with lower rents and maintain a better quality of life for employees. He said Lockheed Martin, with its major facility in the South Bay, is looking at 17,000 square feet in the Tri-Valley.
Both he and James Paxson, general manager of Hacienda, cited the strength of the bio/pharma sector whether in multi-national companies such as Abbott or Roche to homegrown firms such as Veeva and 10X Genomics.
He said that retail has suffered from the small mom-and-pops to larger retailers such as those in Stoneridge Shopping Center.
All of the speakers emphasized that the important trigger will be when students get back in the classroom. That’s today for younger students in Pleasanton and in the next two weeks for Dublin and Livermore. San Ramon Valley younger students returned two weeks ago.