SAN FRANCISCO—RiverRock’s Anne Hinz and Mike Meyer recently talked tech, office, adaptive reuse, urban infill projects and must-have amenities in this EXCLUSIVE.
RiverRock Real Estate Group Inc., a privately owned property and asset management firm with offices throughout California and Arizona, has announced the appointments of Mike Meyer to the position of executive managing director, and Calvin Meeder to the position of regional vice president of construction management in Northern California. Meyer and executive vice president, Anne Hinz, recently discussed CRE activity, rising tenant demand in the East Bay, hot product types and must-have tenant amenities in this exclusive.
GlobeSt.com: What activity is RiverRock seeing in the Northern California commercial real estate market?
Anne Hinz: Northern California still one of the hottest markets in the country. The entire region is a thriving market with a growing population. For RiverRock, some of the most the exciting opportunities are in the East Bay Area. Oakland is getting an influx of occupants who are fleeing the very high costs of office space in San Francisco.
GlobeSt.com: What are the results of rising tenant demand in Oakland and the East Bay?
Mike Meyer: As a result of the labor force migration to the East Bay, both tenant demand and new construction costs are soaring. The Oakland office sector is a hot spot, with numerous trades taking place and a lot of demand for leased space from tech tenants. In the first quarter of 2016, vacancy in the Oakland CBD was down to 3.1% from 3.9% in the previous quarter. Shopping center vacancy is also down from 2015, at 4.3%. In retail, we are seeing the highest growth in the restaurant sector.
GlobeSt.com: What types of projects are the hottest in San Francisco and Oakland?
Hinz: The technology sector drives tenant demand in the region, and tech tenants are completely transforming the way in which space is used. Employees can complete job functions from virtually anywhere in the world, so the office is no longer a place to simply perform tasks. The office is now a place to collaborate, create and participate in the corporate culture. RiverRock sees tremendous opportunity for growth in this vibrant, always-evolving market.
GlobeSt.com: What will guide RiverRock’s strategy for further expansion in Northern California?
Meyer: We’re seeing a surge in adaptive reuse and urban infill redevelopment projects in order to deliver space to the market throughout the urban area, and the East Bay is experiencing the majority of the action. These are exciting, market-making projects.
GlobeSt.com: What do owners demand from property managers today?
Hinz: A significant challenge for us today is how to balance the changing needs of today’s tenants with the investment objectives of institutional investors, CRE equity funds and private owners. Landlords and property managers are no longer merely providers and caretakers of leased space, but facilitators and directors of amenity programs. Not every tech tenant can have an amenity-rich dedicated campus like giants such as Google or Microsoft, but many of our tenants must compete with those firms for top talent. Owners and property managers now must align with tenants’ goals of attracting and retaining talent by offering appealing amenities and programs.
One valuable tool for RiverRock is to continually test and implement new ideas in service, technology, training and pricing to maintain our competitive edge in our markets. We strive to meet our clients’ changing needs with flexibility and customized services geared toward each unique asset. Cost and value delivery are also major considerations for our clients.
GlobeSt.com: What are the must-have amenities for tenants today? How do they differ from three to five years ago?
Meyer: “Change” is the byword, as tenants today operate at a higher density and during more hours than ever before. Compared to just a few years ago, we observe this having a significant impact on building systems, infrastructure and operating expenses. WiFi and adequate technical capacity are indispensable.
Longer hours at work and the collaborative work styles of millennial employees demand more open and collaborative space. These tenants want indoor and outdoor spaces, whether roof decks in urban locations or landscaped common areas in suburban locations. They want soft seating areas, tables, a variety of food options, bike rooms, showers, etc. Many tenants are also looking for easy access to public transportation, which is available in the Bay Area.
RiverRock has Bay Area offices in San Francisco, Oakland, Santa Clara/Silicon Valley, Dublin, Pleasanton and Walnut Creek.