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Richmond
heats up for leasing - Affordability and availability attract significant
attention from businesses, including Chevron USA RICHMOND -- City officials say businesses can no longer overlook Marina Bay for Oakland, Emeryville and Berkeley. With scenic coastline, ample manufacturing and office space, easy access to Interstates 80 and 580 -- and all this in an Enterprise Zone -- it has everything businesses fleeing high-rent areas could want. "I would say businesses are locating here because of the location and the value," said Thomas Mills, Richmond's economic development director. "The city is on the brink of real transformation." Richmond has several thriving food manufacturing and distribution companies such as Wine.com and Galaxy Desserts and is now also home to the largest leasing transaction in the East Bay in the third quarter. Chevron USA Inc. leased 95,265 square feet of newer, full-service office space at the Marina Bay Waterfront Business Park. The city's biggest transactions in the third quarter totaled 108,535 square feet. Although at 20.9 percent Richmond has a higher vacancy rate than most of the I-80/I-880 corridor, that rate decreased 6 percent from last year and is the lowest rate since 2002. Rents rose 3.7 percent from last year and have increased 23.9 percent from 2002, according to NAI BT Commercial's third-quarter office report. Richmond's average annual rent of $24.24 per square foot is on par with Oakland City Center and Northern Alameda but still significantly lower than neighbors Emeryville and West Berkeley, which cost $28.08 and $29.64 per square foot, respectively. Galaxy Desserts moved from San Rafael to Marina Bay in February 2005 for a much-needed expansion. "We needed someplace convenient for employees (who live in the area) and Richmond wasn't as high-priced as in other counties," said Paul Levitan, chief executive officer of Galaxy Desserts. Levitan said the company now occupies 36,000 square feet and is in the process of leasing an additional 16,000 square feet in the next six months. Galaxy Desserts makes specialty individual gourmet desserts for hotels, restaurants and stores such as Andronico's, Whole Foods and Safeway. Its wares have been featured on "Oprah." "I probably looked at 50 sites in Richmond, and geographically Marina Bay made a lot of sense," he said. "And here we are, right on the bay and we can walk on the Bay Trail and go to Salute (e Vita Ristorante) for lunch." Levitan said some people questioned his decision to move to Richmond. "Richmond doesn't always have the best reputation, but when most people got here they were pleasantly surprised," he said. Mills agreed that the biggest challenge of attracting business to Richmond is the city's image. "(It's) that the city doesn't have the qualifying employee base and the negative publicity," he said. "It's getting people to come here and see it rather than reading about it in the newspaper." Mills said that with a big marketing push, a new Web site and word of mouth, many businesses will see the benefit of a central location and transportation hubs that guarantee skilled labor from across the East Bay. "We want people to see the bright side rather than the blight side of Richmond," he said. With big-box retailers such as Target and Wal-Mart coming to town, Richmond is also seeing interest across the city. Mills said there is a relatively low amount of retail and office space in Richmond -- industrial and manufacturing are its bread and butter. One of the more recent projects is a 517,000-square-foot waterfront building in Marina Bay, once a Ford assembly plant, being rehabilitated by Orton Development Inc. into offices and small manufacturing businesses. "With Berkeley, it's too expensive or not big enough," Mills said. "We have the combination of available space and not to overemphasize, but we're a little less costly." Despite Richmond's gains this quarter, Emeryville grossed 205,000 square feet and Southern Alameda grossed 166,000 square feet -- the largest gainers in lease transactions for the corridor. Richmond's biggest transactions totaled 108,535 square feet because of an additional 13,270 square feet leased by the Making Waves Foundation. Notable sales transactions took place almost entirely in Oakland and Berkeley. But Richmond was the only city reporting new office construction -- 78,570 square feet -- across the I-80/I-880 corridor. "Richmond benefits from tight markets in Emeryville, Oakland and Marin County," said Jeff Leenhouts, partner with NAI BT Commercial in Oakland. "There's an Enterprise Zone there, it's easy to get to, it's close to a lot of affordable housing and a good work force. That it has relatively low real estate prices helps, too." Marina Bay Waterfront Business Park owner and master developer Richard Poe said the Chevron USA Inc. lease shows that Marina Bay is becoming an attraction. It will join other businesses in Marina Bay such as Galaxy Desserts, Kaiser Optical, California Health Laboratory and Keefe Kaplan Maritime Inc. Poe, who owns about a quarter-million square feet in Marina Bay, built the Class A building in 1998 but said he has been developing property there since 1985, later selling off pieces of land to Toll Brothers and other companies to build hundreds of nearby homes. The building at 1450 Marina Way South was leased by Chevron Business Real Estate Services, according to Camille Priselak, a Chevron spokeswoman. Priselak declined to comment on how the company would use the office building or if any operations would be moved from the company's San Ramon offices. Although Poe declined to give the amount of the current 20-year option lease because of a confidentiality agreement, NAI BT reported that rates for the Richmond area reached $30 per square foot, a number that could make leasing more than 95,000 square feet around $2.9 million a year. "The original draw to Marina Bay was that it was a cost-effective alternative to San Rafael and Emeryville and it was a good reverse-commute from Marin County," Poe said. |
