Swinerton In the News

Swinerton Builders: November 01, 2013

Short on Labor, High on Demand

About 200 industry players gathered for Bisnow's Multifamily Summit at the Intercontinental San Francisco on Halloween morning, dressed up as suit-wearing developers, investors, engineers, and architects.

General contractors are worried the labor force isn't big enough to handle San Francisco's massive pipeline of housing. (For one, when the economy tanked in 2008, many workers fled the construction profession; few have returned.)

Some $25B worth of construction in the Bay Area is underway or ready to start—with some happening side by side. "That's really not typical," says Swinerton Builders VP Steve Johnson. As a result of the crane wars (between 30 and 40 are swinging in the sky), more coordination needs to happen between general contractors to make sure neighboring projects go smoothly. One construction-heavy cluster is 10th and Market, the site of Swinerton's four-tower, 754-unit complex.

Oz Erickson, chairman of the Emerald Fund, was happy to report that no 18,000-pound panels at his 100 Van Ness office-turned-apartments conversion project dropped on its neighbor. Oz also just finished 326 units at 333 Harrison next to the Bay Bridge. Don't expect Emerald to expand in other markets—San Francisco is its sweet spot. "We've been working here 30 years. It makes it easier when you know people in the town." Those longstanding relationships helped him vastly improve the community project approval process. "It used to be warfare. Every project was a bloody fight—it's much better now," he says.

With the high number of projects getting the green light, the president of the planning commission is concerned about whether the city's already-congested roads and public transit infrastructure can keep up, according to HKS' associate principal Brendan Dunnigan (a neighbor and friend of the prez). In the commission's mind, "we are maybe doing too much," he says. HKS has two big residential projects underway, one in Rincon Hill and another in Mission Bay, and is looking south for future work. Housing in San Jose is coming back, he points out.

Allen Matkins' partner Lee Gotshall-Maxon moderated the panel and gave kudos to Oz for his success in the city, noting the entitlements issue has vastly improved in the past 10 to 15 years. Lee asked panelists to share which amenities younger renters want. Steve's installing more cell phone enhancers so residents never drop a call with mom, and Oz says 20-somethings want large athletic facilities. Brendan offered the raciest answer: Roommates in two-bedroom units are demanding "acoustical privacy" at night. Think about it.

Land here is cheap, relative to its closest comp of NYC, says Maximus Real Estate Partners CEO Robert Rosania. If San Francisco remains a city where growth happens—meaning, you can "actually build buildings" and an anti-development stance doesn't return—prices of land will increase. He thinks lots of existing housing in San Francisco isn't pleasing, from an architectural and design standpoint. Today that's changing, and amenities and community spaces are more important than a unit having lots of square footage. "People put a much higher value on the feel and energy of a building and community it's created than maybe they did five years ago," he says.

To read the full article, click on link below:

http://www.bisnow.com/commercial-real-estate/san-francisco/short-on-labor-high-on-demand/