In late January, first-year students in the Baker Program in Real Estate attended the first annual domestic real estate trek as part of the program’s newly revised curriculum. For this inaugural trip, students visited San Francisco and Silicon Valley, two of the nation’s most active real estate markets. This article is the third part in a three-part series highlighting the trip.
The related Companies are known for some of the most ambitious mixed use projects in the world. Related California partner Matt Witte has been responsible for a few ambitious projects himself. One of the highlights for Baker Student’s on their first annual trip was the exclusive chance to meet with Mr. Witte at 1 Front Street, in the offices of SOM (Skidmore, Owings and Merrill), to discuss some of Related California’s recent developments.
Mr. Witte talked about a number of projects, including his 1500 Mission Street development, an Urban mixed use development east of San Francisco. The site, which is the former home to a Goodwill store, complete with a receiving area and warehouse, was part of a development slated to be occupied by the City of San Francisco offices. Students had a first-hand account of the site from Mr. Witte himself, as he discussed the intricacies of completing a mixed use development on the edge of San Francisco. Throughout the discussion, students had the opportunity to hear about some of the challenges a developer faces when taking on a large development.
Aspects of the development process such as permitting, parking, and aerodynamic requirements, were all topics of discussion. The architects of the project, SOM, also gave insight into the design. They noted how attention to detail, like designing large glass walls for the city offices meant to symbolize the City of San Francisco’s transparency, were helpful in securing their bid for the City of San Francisco.
This level of detail was further demonstrated in a Q&A session with Mr. Witte, as students were able to hear about a number of Related California’s projects. The students highly enjoyed this opportunity to discuss different aspects of development with a world class developer like Mr. Witte. Witte took the time to answer questions and initiated a lively discussion on the state of the San Francisco Real Estate Market. He also discussed Related California’s massive Santa Clara project, which students would visit the following day.
The next day, as promised, students took a bus from San Francisco to the Santa Clara police station, where our tour began. The Related Santa Clara project, known as City Place, sits on a massive 239-acre parcel, located next to the new Levi’s Stadium, home of the 49ers. The City Place development is expected to house 9.2 million square feet of mixed use product, including a mix of retail, office, and residential.
At the Santa Clara police station, we were greeted by Related Consultant, Art May, and the Assistant City Manager for Santa Clara, Ruth Shikada. Ruth discussed how the project was a slam dunk for the city, because they are currently losing money on the former dump site. Mr. May showed students how the 240-acre development was going to be built on top of a landfill, creating some profound challenges for his client, the Related Companies.
Many of the students were surprised by this. Baker student Tej Reddy shared this sentiment, saying “It’s an incredible project, when you think about the massive undertaking that they will need to complete before they even begin the actual development of buildings.” The size and scope of this project creates many complexities, but also has tremendous potential.
Students were eager to explore the different aspects of the deal and discuss the projects complexities at length, via a Q&A session with our hosts. We learned about the 650-million-dollar raised platform that Related intends to build across the entire site. The platform will consist of double layered slab, built on pylons drilled through the garbage, and will serve to protect the development from the settling which will occur in the landfill over time. Of particular interest was the agreement between Related and the City regarding the original RFP for the site. Related bid on the project and won, but the deal is still dependent on tax benefits from the city, which are still under negotiation.
Once the Q&A session was done, we took a bus and drove through the development on our way to eat lunch at Levi Stadium. Mr. May took questions as we drove through the site, pointing out where different assets would be positioned, as students looked on in amazement at the immensity of the project. For reference, and entire 18-hole golf course covers part of the 239-acre landfill, all of which will be covered by the raised slab.
This exclusive experience, and further discussion with Mr. May over lunch, was a treat for all students interested development. The students of the Baker program are lucky to have had such inviting hosts who were ready to share their knowledge and expertise. Related California provided incredible experiences for all involved, and served to make the first annual domestic Baker trip a resounding success.
