By Jon Peterson
Englewood, Colo., apartment owner and developer Archstone Inc. has started construction on Archstone Parkside in Emeryville where it expects to invest $65.5 million to develop 175 apartments as part of broader plans to expand its Bay Area footprint.
The Emeryville project is owned in a joint venture with Atlanta-based Prudential Real Estate Investors and is located at the southeast corner of Powell and Hollis streets in the tiny East Bay enclave, putting it at the foot of the Bay Bridge and proximate to the professional workers who populate Emeryville’s substantial life science and biotech cluster
Large employers situated less than a mile from the complex include Pixar Animation Studios, Novartis, Amyris Biotech, Bayer and Kaiser Oakland.
Renters in the complex also will be within a mile of the MacArthur BART Station and within easy commute distances of San Francisco’s Financial District and teeming South of Market neighborhood as well as Oakland.
“We have been aware of what Archstone has been planning for some time. I know that they had held onto this site through the economic downturn, and I’m happy for them that the project is moving forward,” said Geoffrey Sears, a partner with San Rafael-based Wareham Development.
Wareham is the largest workplace developer in Emeryville and Berkeley and one of the largest in Richmond. It focuses on laboratory and other specialized space needed by the biotech and life science industry. In aggregate it owns 4.5 million square feet of property in the Bay Area, 2.5 million of it in the EmeryStation campus in Emeryville and Aquatic Park Center in neighboring Berkeley.
“I know that some of the employees in our buildings would be prime candidates for renters in the project. Many of the workers in our buildings would prefer to have a short or no commute to a long one. This project will enable them to accomplish this goal,” Sears said.
Wareham recently completed the 99,000-square-foot EmeryStation Greenway Building at 5800 Hollis St. in Emeryville, a stone’s throw from the new Archstone complex.
Archstone declined comment for the story. On Aug. 10, the company filed a prospectus with the Securities and Exchange Commission to sell stock to the public and is in a quiet period.
Archstone identifies the San Francisco Bay Area as one of its seven core U.S. markets nationwide, all of them coastal. Besides the Emeryville development, in July it began construction on the $34.2 million Archstone Berkeley on Addison project, another mid- to high-rise development with 94 units, and in San Francisco, the Archstone Potrero, a $220.1 million, 467-unit development in San Francisco that is anticipated to start development in mid-2013.
The company also is redeveloping the 84-unit garden-style complex known as Oakwood San Jose, where it expects to invest $21 million, and Archstone Mountain View, where it plans to invest $116.6 million, beginning work in 2015.
Beyond that, the company has extensive new development plans in San Francisco. In its S-11 filing with the SEC, it identifies five sites in the city where it owns or controls property and seeks to develop, including 435 apartments at 801 Brannan St. at a cost of $246.4 million; 401 apartments at 8th and Harrison streets at a cost of $261 million; 329 units at the Opera Warehouse site where it estimates the investment at $167.7 million.
The Emeryville apartment occupancy rate was 96.8 percent at the beginning of September, according to RealFacts LLC, a Bay Area-based apartment research firm. In Alameda County, Berkeley rents are the highest at $2,191 a month on average followed by Emeryville, where they are an average of $1,998 a month.
Emeryville rents rose only 2.4 percent in the last year, making rents there the slowest growing of the 13 cities where RealFacts tracks activities. Oakland rents rose fastest at 14.4 percent year over year.
Archstone owns 8,270 apartments in the Bay Area and not quite 65,000 square feet of retail. The company recorded total revenue of more than $45 million on its Bay Area holdings in the first quarter alone. Seven communities are in the East Bay, nine in San Francisco including the Peninsula and seven in Silicon Valley.
Through March of this year it owned or had ownership interests in 181 apartment complexes around the country. These properties were operating and under construction and total 59,419 units.
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