Getting in on the Ground Floor

I’ve been meaning to do this for a while now, but a recent comment to one of my blog posts finally caused me to try to figure out just how occupied (or not) our new downtown housing really is. Here is the original comment:

Greg. I’m curious how many of the downtown apts are rented. I’ve heard they’re only 30 percent full???

My response to the comment indicated my skepticism of the rumor, though admittedly that skepticism was based on little fact. The only data point I had then was one I obtained from my tour of the Franklin 299 project (the 305-unit apartment complex across the tracks from our main library), when I was told that the project was 96% leased and 90% occupied. Prompted by my reader’s comment, I started a spreadsheet with all of the completed projects in and around our downtown, and then began going through their respective websites to see what I could find.

I hadn’t expected much, and thus was both pleased and surprised to discover that all but two of the projects’ sites had availability information: neither Oakwood Redwood City (which was previously known as “The Lane on the Boulevard”) and Locale, the 133-unit apartment building at the corner of Brewster and Winslow seem to list vacancies. But excluding those, here is what I came up with:

  • Indigo (525 Middlefield): 14 units available out of a total of 463
  • Franklin 299 (299 Franklin): 29 units available out of 305
  • Radius (620 Veterans): 3 units available out of 264
  • Marston (601 Main): 11 units available out of 196
  • Township (333 Main): 1 unit available out of 132
  • 201 Marshall: 17 units available out of 116

Adding up those numbers gives 75 apartments for lease out of a total of 1496, or an occupancy rate of 95%.

Of course, this assumes that all of the available apartments are accurately listed on each apartment complex’s website, which may not be entirely true. But whether the real number is 95%, or 90%, or even 85%, there is no way that it is anywhere close to 30%. Thus I feel we can safely assume that this rumor is in no way true, and that our new downtown apartments are in fact proving to be quite popular.

While putting that particular rumor to rest, I decided to look into another aspect of some of these buildings: the retail spaces that a number of them sport on their ground floors. Not limiting myself to residential buildings, I chose to include office buildings that have ground-floor retail since what really interests me is the total amount of ground-floor retail we are gaining or losing as a result of our new construction.

The image of a series of ground-floor shops topped by one or two stories of housing is one that is familiar if you’ve spent much time in Europe: many of their “high streets” are set up just this way. While Redwood City’s mixed-use buildings typically are taller than those you find in smaller European towns, the key is having retail along the sidewalk. Studies have shown that pedestrians are much more inclined to walk along a block if it sports a variety of interesting things to look at. Thus, shops and small businesses—even ones that sell products or services you aren’t necessarily interested in—make for a much more enticing walk than do ground-floor offices, which, even if their windows aren’t blocked by shades, typically present little to attract the eye.

Having said all that, allow me review what we’ve gotten so far, and what we have coming up when it comes to ground-floor retail.

First off, I should make a distinction between a proper retail space, which is suitable for a shop or a restaurant, and a “live/work” unit. A live/work unit is one that is designed to be either a residence, a small business, or a combination of both. Typically live/work units have an individual entrance and are laid out with the main space at the ground level and an upper-level loft which serves as a bedroom. In 201 Marshall (the “orange” building at the corner where Broadway meets the Caltrain tracks) there are three live/work spaces along the Aguello Street side, facing the tracks. Of the three, only one is visibly being used as a work space: Erin Ashford Photography occupies the center unit. I examined the two on either side; one had its blinds closed when I walked by and thus may or may not be occupied, and the other appeared to be set up as a model for the building’s many apartments.

Some of our other new developments have live/work spaces as well. For instance, the ten-story Indigo Apartments appears to contain a number of them, some facing Middlefield Road and some facing Jefferson Avenue. And Marston—the large apartment building on Main between Marshall and Bradford—has eight lofted live/work spaces on the Main Street side, at least one of which I noted is being used as a work space for a small tech firm.

201 Marshall may have live/work spaces, but it doesn’t have any ground-floor retail. Indigo and Marston, on the other hand, do. Indigo has a single large (10,000 square feet) retail space which has been leased to San Mateo Credit Union. And Marston has two separate retail spaces, one on the corner of Middlefield and Main and one on the corner of Main and Bradford:

As yet both of Marston’s retail spaces are empty. The one shown above, at the corner of Main and Bradford, is the larger of the two at 1,656 square feet. The retail space at the corner of Main and Middlefield, although smaller, is a still respectable 1,319 square feet. This latter space does have a somewhat better location, given that it faces towards downtown.

Of course, while much of our new development takes the form of apartments, we have a fair bit of new office space as well, some of which contains ground-floor retail. Although the Crossing 900 (“Box”) building that sits at the corner of Jefferson and Middlefield has none, its next-door sibling has two retail spaces, one of which is currently occupied. Both spaces sit side-by-side and face North Plaza, the triangular plaza that is bordered by the Box building, the Caltrain tracks, and Winslow Street. The space closest to the tracks is the home of Cru Wine Bar & Merchant, a delightful wine bar that serves some food (although not full sit-down meals, really) to go with your glass of wine or beer. (In the mornings Cru serves coffee and pastries, and at lunch they do salads, sandwiches, and pizza.) Cru’s neighboring space, which is currently empty, is slated to be the home of “Maebar Bistro and Lounge,” a drinking-and-dining establishment that will also feature music and dancing. However, Maebar is long overdue and the lack of visible progress makes me wonder if the business is actually going to move in as planned. Hopefully they will: both of these spaces have a generous amount of outdoor seating space alongside North Plaza, making them especially attractive during the early evening hours.

Directly across Winslow Street from North Plaza the 815 Hamilton Street project is rapidly taking shape:

This will be a multi-story office building with a trio of ground-floor retail spaces ranging in size from 2,100 square feet to 2,600 square feet. The smallest of the three will lie mostly along the Hamilton Street side, but will have some frontage along Winslow Street. The other two will face Winslow, with one having some Theatre Way exposure. This arrangement should serve to lure people who are strolling along Theatre Way, and will likely serve to extend Theatre Way’s double-sided shopping/dining corridor to Winslow Street. While there may be an actual store or two in some of the 815 Hamilton building’s retail spaces, I expect that at least one will be a restaurant. Regardless, with these three storefronts on one side of Winslow, and Cru and its next-door neighbor on the other, expect to see a lot more people strolling along Winslow in the near future.

Seeming to keep pace with 815 Hamilton is the building rising at the corner of Marshall and Middlefield (across from the Bank of America): the 601 Marshall Street project. This office building has one ground-floor space on the Marshall Street side that could house a shop of some sort, although it may simply serve as additional office space. For an answer to how that space will be used, we’ll just have to wait and see.

And then there is the building that will soon break ground at the corner of Broadway and Jefferson, replacing the Powerhouse Gym building:

The existing building, which currently sports roughly 25,000 square feet of retail, is being replaced by a four-story building that will be mostly office but will also have more retail space than what it replaces: almost 27,000 square feet of it. Due to construction the existing tenants (those that have not already either relocated or closed up shop) need to move, and the largest—Powerhouse Gym—has already identified a new home: the space currently occupied by the soon-to-be-gone DB Shoes, just across Jefferson. At just over 10,000 square feet the DB Shoes space is quite a bit smaller than Powerhouse Gym’s current location, so it’ll be interesting to see how the gym squeezes into its new home.

Down Jefferson towards Veterans will be the recently approved condominium project at the corner of Jefferson and Bradford. This six-story building, which will replace the Every Woman Health Club, will contain a commensurate amount of ground-floor retail (4,500 square feet) below its 68 condominiums.

Elsewhere in town, the housing projects being built across Jefferson from Sequoia Station—“Greystar II” at 103 Wilson, and “Greystar III” at 1305 El Camino Real, plus the neighboring Franklin 299 apartments—include no space for retail. Because Greystar III was built on the site that formerly housed Redwood Trading Post, here we have to chalk up a net loss of some 15,000 square feet of valuable El Camino Real retail frontage. Greystar IV, if approved, will have a small amount of retail, but in terms of volume it won’t make up for the loss of La Mancha Plaza and the veterinary clinic, both of which will be torn down if this project goes ahead.

It’s good to see that in the areas where it counts—primarily, in our increasingly walkable downtown—the large residential and office buildings that are popping up here and there mostly sport retail spaces on their ground floors, keeping the experience for the pedestrian a comfortable and friendly one. I look forward to seeing who will occupy the spaces that are still available (and are yet to come), considering how important they are in shaping Redwood City.


As of this week we have a new restaurant along Broadway, one that, if their opening week crowds are any indication, is going to be popular. “Nick the Greek” sits next to L V Mar and is hard to miss given its bright blue awning. I have yet to give them a try, but they advertise Souvlaki, Gyros, soups and salads, so if that piques your interest, do give them a try! And then add a comment to this blog, letting us know what you thought.

22 thoughts on “Getting in on the Ground Floor

  1. Pingback: In the Zone | Walking Redwood City

  2. Thanks for the info – very informative! Now – what’s happening with the Apartment complex on Woodside Road that burned down a few years ago – I think it had 75 studio apartments? Repairs and reconstruction have halted – did the developer run out of money – or maybe ran off with the insurance money?

    • I’ve written about the Hallmark House apartments a couple of times, and plan to do another update soon. My last information was that the project would start up again in April, but I’m checking with the city to see if there has been any change in that. Because that building serves low-income tenants the finances were complicated, but last I heard were finally worked out. No malfeasance involved–just good old red tape…

      • Greg’s right. Insurance challenges aside, deed-restricted affordable housing properties have an incredible amount of red tape which ensures a glacial pace. The affordability was and will remain at the very low income limit for the term of the deed restriction that expires in December of 2062.

  3. Hey Greg, yet another stellar effort. I always learn something from your posts and appreciate your dogged research. That said, I have a few questions, comments and an answer or two for you. Keep up the excellent work, Kris

    1. If Greystar told you during your tour that their lease rate was 96% and now they have 35 units available (or more), would you consider asking them why their lease rate is down given the white-hot rental market?

    2. Since you stated “what really interests me is the total amount of ground-floor retail we are gaining or losing as a result of our new construction”, I thought I’d point you to an answer. We have actually LOST more retail than we have gained since the DTPP was adopted in 2011. Below is a handy chart put together by the City which details the loss. As you can see, the chart includes all completed, under construction, approved and proposed projects in the DTPP but does not include the recent loss of Goetz Brothers.

    https://drive.google.com/file/d/0Bwk23E-up8kCdVNCcWRIX3RJTkU/view?usp=sharing

    3. Why no mention of the missed retail opportunity by the bigger of the two Box Buildings? The ground floor is entirely made up of conference rooms. 😦

    4. Why no mention of the non-conforming use of ground floor retail on our beloved Main St to tech start-ups? And what about the the loss of retail on Hamilton and Winslow to tech start-ups?

    5. Regarding Airbnb, I’ve heard from City staff that we haven’t collected a single penny to date because it’s self reported. San Francisco is making Airbnb hosts register their units with the City in order to facilitate the collecting of taxes, with varying degrees of success.

    6. Oakwood (Mel’s Bowl) isn’t reporting their available units because it’s 100% corporate housing. Council has indicated they may be interested in doing something to ensure this doesn’t happen again.

    7. Locale (488 Winslow) isn’t reporting available units due to Stanford pre-leasing and pre-furnishing almost the entire building.

    8. The new apartments downtown can be rented for as little as 30 days. Anything less than that is prohibited but you might find the occasional listing on Airbnb (which City code prohibits).

    https://www.airbnb.com/rooms/16181305?checkin=08%2F05%2F2017&checkout=08%2F07%2F2017&guests=1&adults=1&children=0&infants=0&s=feNblWGK

    9. 603 Jefferson was supposed to have three smaller retail spaces but received an exception to make it a large 4,500 sqft space in order to accommodate a bank. The AAC had misgivings because they said a bank is a poor use for an active ground floor since it’s closed on evenings and most of the weekend.

    • I must confess that I wasn’t able to put in the time on last week’s post that I had wanted for various reasons, so when it went in a slightly different direction than I had originally planned I didn’t manage to update the thesis to match. Thus the mismatch about the retail we lost. And the lack of a link to the charts (thanks for including it), which I was actually using as I wrote the article and indeed served as some of the impetus for what I had originally planned to write.
      Thanks for the info on 603 Jefferson; I hadn’t heard that.
      As for the rest, I’ve just gotten a lengthy reply from Aaron that I plan to include in this week’s post, a reply that amplify or address a lot of your other points, so I’m going to let those serve to answer.
      Judging by when you posted your comment, you must have been up late last night… 😎

  4. @Julie Pardini, for those who want to learn more, would you please post a direct link to the page(s) on the RWC website that you cited about projected TOT increases.

    • I believe she is referring to the city’s 2016-2017 budget, which can be found here: http://redwoodcity.org/home/showdocument?id=8029
      Page 23, bullet point 3, states “Transient occupancy tax is expected to increase 3% to $6.9 million (+ $297,032) in FY 2016-17, and 5% annually thereafter. Revenue estimates include an extra $100,000 in FY 2016-17 and $550,000 in FY 2017- 18 for the new One Marina Hotel.”

      • Ok, thanks. TOT goes up whenever new hotel/motel (and now AirBnB) units come into existence … but also any time occupancy rates and/or room rates increase. So a 5% increase in either occupancy or average room rates increases the city’s TOT by 5%. If they both increase 5%, TOT goes up 10.25%.

        Interestingly (or amazingly), Burlingame receives nearly 40% ($26m) of its $66.2m budget just from TOT!

        The San Mateo County/Silicon Valley Convention and Visitors Bureau reports that for 55 straight months, the average daily rate for a hotel room has gone up in SF and San Mateo counties and those rates are expected to climb 5% this year and another 5% next year; Redwood City’s hotel tax has increased by 7% this year.

  5. Hi Greg,
    In reference to your statement here:

    “Adding up those numbers gives 75 apartments for lease out of a total of 1496, or an occupancy rate of 95%.”

    There has been an increase in TOT (transient occupied tenancy) in Redwood City and a +5% projected increase in TOT for 2016, 2017, 2018, according to the RWC website.

    Do you know if the 95% Occupancy you quoted includes any percentages of TOT. You say “leased”, so I assume that means yearly lease contracts?

    Thanks. I want to understand clearly what the situation is.

    • Actually, TOT stands for Transient Occupancy Tax, and is the revenue the city gets from hotels and short-term stays (such as AirBNB). [https://en.wikipedia.org/wiki/Transient_occupancy_tax]
      My understanding is that the increases the city expects to get are due to the new Courtyard by Marriott hotel on the bay side of 101, and due to the fact that the city is now requiring AirBNB to pay hotel taxes (and possibly also from the Holiday Inn Express and Suites proposed for 1690 Broadway: see http://www.redwoodcity.org/city-hall/current-projects/development-projects?id=66).
      As for whether the 95% occupancy contributes to the TOT, unless those apartments are being rented out on AirBNB, I don’t believe that they do. While I haven’t inquired as to the length of each building’s leases, I do believe that they are indeed typically one-year leases (although there may be exceptions; as I say, I haven’t inquired as to lease terms). I believe that the Oakwood Apartments (where Mel’s Bowl was) is one such exception: that place does seem to have become a long-term stay place, where you can get 30-day (minimum) leases. Oakwood seems to specialize in corporate housing. But I believe that the city clamped down on that kind of thing in other buildings, so I don’t think that corporate housing is all that prevalent in the Indigo, Marston, 201 Marshall, etc. buildings. Although just to be sure I have a query in with City Staff and will let you know what I find out.

  6. Yes, and who can afford $200,000 to $400,000 for a new car from Redwood City Ferarri? People that have and/or make a lot more money than most other people … and so while not the Redwood City I’ve seen for the better part of 50 years … as long as there are still ordinary priced cars available, it’s no skin off my back.

  7. I’m curious as to who all these people are that can afford to live in these new buildings. Most of them begin at $3000 for a one bedroom. Not the Redwood City I’ve called home for 38 years.

    • Indeed, these are very high-end tenants who are apparently making quite a bit of money. I’ve written about the what I consider to be shockingly high prices for some of these units, but if the high occupancy rates are indeed accurate, then the developers, who set those high prices, have a much better sense of the market than I… While many of us cannot afford to live in these new buildings, apparently there are enough people in our area who can.

  8. Thank you for bringing us up to date. I’ve been wondering what’s going on. I second Frankie’s request, although it may be considerably harder information to discover. The rental companies may well not want to share just how many units are for short stays by company employees coming from out of town for meetings.

  9. Hi, Greg, as for the new building on the corner of Broadway and Jefferson (Powerhouse Gym), I’ve heard that the Chan Zuckerberg Initiative will be based there.

  10. Hi Greg. I’m a new reader to your blog and have really enjoyed it. Thank you for all the information. The rumor I have heard (and yes, it’s a rumor) is that the new high-rise apartments downtown have been leased to some companies (i.e. Facebook) so technically they are leased but people are not necessarily living in the spaces. That’s why they still seem so empty. Any digging on this would be greatly appreciated. Thanks again, I really enjoy the blog.

    • Thanks for the comment and the (sort-of) question. The city has already addressed this issue somewhat (they clamped down on turning these into corporate housing some months ago), but I’ll see if they have an official statement and, if so, will pass it on.

      • The City clamped down on the rental of these new units for less than 30 days. Right now, some of these new apartments (not all) have a minimum less term of 30 days. Our Housing, and Human Concerns Committee (HHCC) is exploring options for possibly increasing the minimum lease term.

        Every one of these new apartment projects has a certain % of their units set aside for corporate housing. Oakwood (Mel’s Bowl) is the only project that is 100% corporate housing.

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