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Prop 1A - High Speed Rail Measure Set to Pass
November 5, 2008
Video Rendering of San Jose Diridon Station
With 92% of the precincts reporting, Prop 1A looks set to pass with 52% voting Yes. The ballot measure, officially called the “Safe, Reliable High-Speed Passenger Train Bond Act” essentially authorizes the state to sell up to $10B worth of bonds to finance the construction of a high-speed train linking Southern California and Northern California. It requires at least 50% to vote yes to pass.
The official website of the California High Speed Rail Authority has Bay Area stops located at San Jose’s Diridon station and in San Francisco at the Transbay Terminal. There is also a stop in Redwood City or Palo Alto planned (seems location is TBD) as well as in Millbrae, likely interchanging with BART.
The project won’t be completed for many years, but I suspect the land grab has already begun as cities will look forward to providing very high density to developers of ToD (transit oriented development) projects around the stations planned up and down the state.
Layoffs at Dash Navigation of Sunnyvale
November 4, 2008
Though not a large company, Sunnyvale-based Dash Navigation has laid off 2/3 of its staff (about 50 employees) in a move which is indicative of what is happening with many Silicon Valley startups. Trying to get in front of the curve, both startups and well established Silicon Valley companies are either halting growth or instituting layoffs.
Dash Navigation has raised north of $40 million across several rounds of funding. Interestingly enough, one of the venture capital firms which backs Dash is the notable Sequoia Capital. Sequoia is one of the firms which distributed a PowerPoint presentation a few weeks ago (embedded below) to their portfolio companies urging them to reassess their business plans and make deep cuts if necessary.
Generic Office Tenant Improvement (TI) Construction Costs
November 4, 2008
Sam Burkhouse, the President of TiCon Construction (408-866-1500; sam@ticon.com) has been kind enough to provide some up-to-date pricing for generic office tenant improvement costs in Silicon Valley. It should be noted that the below numbers are “high level” and actual site conditions, the size of the project, and market forces will all have an effect on final pricing. Contact TiCon for specific pricing. Nonetheless, these numbers should provide smaller tenants with some guideline pricing for standard office improvements.
Generic pricing table
| Interior Demolition | |||||
| 1 | Remove walls that are built under Tbar | L.F. |
X |
$22.00 | = |
| 2 | Remove walls built through Tbar | L.F. |
X |
$35.00 | = |
| 3 | Refeed&switch lighting in areas demolished | Room |
X |
$150.00 | = |
| 4 | Repair wall scars where walls removed | Each |
X |
$190.00 | = |
| Cabinets | |||||
| 5 | Base and upper cabinets with top, Formica | L.F. |
X |
$395.00 | = |
| Doors and Glass | |||||
| 6 | Door and Frame, Clear maple, 3′ x 7′ | Each |
X |
$810.00 | = |
| 7 | Door and Frame, Clear maple, 3′ x10′ | Each |
X |
$1,105.00 | = |
| 8 | Sidelight at doors listed above | Each |
X |
$510.00 | = |
| Partitions and Paint | |||||
| 9 | Partition wall, 9-10 feet, skip trowel finish | L.F |
X |
$61.00 | = |
| 10 | Demising wall 16 - 20 feet - average cost | L.F |
X |
$90.00 | = |
| 11 | Flat wall paint | S.F. |
X |
$0.45 | = |
| 12 | Semi-gloss wall paint | S.F. |
X |
$0.60 | = |
| Flooring | |||||
| 13 | Carpet demolition | S.F. |
X |
$.038 | = |
| 14 | Vinyl tile demolition | S.F. |
X |
$0.62 | = |
| 15 | New carpet, direct glue down | S.F. |
X |
$2.37 | = |
| 16 | Rubber base, 2″ or 4″ | L.F. |
X |
$2.00 | = |
| 17 | Vinyl tile installed | S.F. |
X |
$1.80 | = |
| 18 | Static dissipative tile (ESD) | S.F. |
X |
$7.10 | = |
| 19 | Sheet vinyl in single accommodation restroom | Each |
X |
$900.00 | = |
| Acoustic Ceiling | |||||
| 20 | Acoustic ceiling, 2X4, flush panels | S.F. |
X |
$2.50 | = |
| 21 | Acoustic ceiling, 2X4, “2nd Look” tiles | S.F. |
X |
$3.25 | = |
| Electrical | |||||
| 22 | 110 volt convenience outlet | Each |
X |
$150.00 | = |
| 23 | 110 volt dedicated outlet - average cost | Each |
X |
$235.00 | = |
| 24 | 2 X 4 lay in flush prismatic light fixture | Each |
X |
$210.00 | = |
| 25 | 2 x 4 ‘Avante’ style indirect lighting | Each |
X |
$340.00 | = |
| 26 | Switch, light sensor, dual level | Each |
X |
$202.00 | = |
| 27 | 200 amp 240 v. subpanel w/100′ home run | Each |
X |
$3,750.00 | = |
| 28 | Telephone / data ring | Each |
X |
$30.00 | = |
| 29 | Emergency light or lit exit sign | Each |
X |
$310.00 | = |
| 30 | Power pole | Each |
X |
$320.00 | = |
| Air Conditioning | |||||
| 31 | New ‘open area’ system - see adds below | S.F. |
X |
$7.80 | = |
| 32 | Add for each room - Supply and return air | Room |
X |
$605.00 | = |
| 33 | Reconfigure existing AC system - average | S.F. |
X |
$3.50 | = |
| Fire Protection (Sprinklers) | |||||
| 34 | Sprinkler head dropped to new ceiling hgt | Head |
X |
$201.00 | = |
| 35 | Existing heads relocated at new walls | Head |
X |
$185.00 | = |
| 36 | Plans and permits, regardless of head # | Each |
X |
$2,000.00 | = |
| 37 |
Enter subtotal of construction costs above = |
||||
| General Conditions | |||||
| 38 | Insurance, gas, phone, multiply by line 37 |
% |
X |
2 % |
= |
| 39 | Ongoing cleanup |
S.F. |
X |
$0.21 |
= |
| 40 | Final janitorial service |
S.F. |
X |
$0.35 |
= |
| 41 | Onsite and off-site management - average |
% |
X |
3-6% |
= |
| 42 |
Construction total with general conditions = |
||||
| 43 | Contingency % - line 42<$25,000 |
% |
X |
20% |
= |
| 44 | Contingency % - line 42 >25k and < $100K |
% |
X |
10% |
= |
| 45 |
Total cost with contingency = |
||||
| 46 | Contractor’s fee - varies with project size |
% |
X |
5-15% |
= |
| Miscellaneous costs for assemblies when performed with other work - includes all work necessary to provide: | |||||
| 47 | 12 x 12 office contiguous with others | Each | $4,005.00 | ||
| 48 | Single accommodation restroom | Each | 13,150.00 | ||
| 49 | Handicapped shower | Each | $5,800.00 | ||
| 50 | ‘Wet bar’ plumbed - 8 feet long | Each | $4,150.00 | ||
| 51 | Replace roll up door with glass, 10 x 12 | Each | $3,800.00 | ||
About TiCon Construction
TiCon - Tenant Improvement Construction, Inc. is a general contracting firm building commercial, industrial and retail interiors in the San Francisco bay area. We have specialized in “Design/Build” tenant improvements since 1989. For more information, visit http://www.ticon.com.
Delinquency Rates on Construction Loans in Double Digits
November 3, 2008
An article in GlobeSt. discusses numbers from an Oakland, CA research group called Foresight Analytics which indicate that 10% of US construction loans are delinquent. The number was derived from earnings calls and reports. The number is nearly twice as high as it was last year (5.5% in Q4).
Circuit City Announces 155-Store Closure; Palo Alto and Fremont Stores Included
November 3, 2008
After weeks of speculation, Richmond, Virginia-based Circuit City (CC: 0.10 0.00%) today announced it will be closing 155 stores in an effort to shore up its balance sheet. It will also seek to renegotiate its leases on the remaining 550 stores it will have. The company is closing stores which averaged $9M in annual sales, compared to an average of $16M across all of its U.S. stores. These closings will translate into a 17% reduction in the company’s workforce.
The San Francisco Bay Area stores which will be closed are:
- Concord - 2030 Diamond Blvd.
- Dublin - 7153 Amador Plaza Road
- Fremont - 43706 Christy Street
- Morgan Hill - 1007 Cochrane Road
- East Palo Alto - 1731 E Bayshore Road
A full list of the Circuity City stores which are closing is available here for download and is also embedded below.
Symantec Announces Layoffs; 5% Cut Expected
November 1, 2008
Symantec (SYMC: 14.30 -3.38%) is the latest Silicon Valley company to announce layoffs. The Cupertino based software company missed its 3rd quarter earnings and revenue numbers, set the expectation for lower numbers going forward, and announced its intention to scale back headcount expenses by 4.5%.
We have heard that the actual cuts at Symantec will be around 800 employees which would be consistent with that number. The company also announced that it would seek to outsource some of the financial and IT work it currently is handling in-house. Symantec’s stock is hovering at a 5-year low.
Tesla Motors Needs a Charge; No FDIC Insurance
October 31, 2008
Since signing a deal in September with the City of San Jose to build a car factory in North San Jose (which I was critical of), Tesla last week announced that it will be laying off an unknown number of employees, putting its plans for the North San Jose factory on hold, and closing some of its other offices.
Now, there seems to be more trouble under the hood than many have either been told about or led to believe. An employee at Tesla has apparently blown the whistle by sending ValleyWag an email indicating the company is facing trouble and has only $9M in cash remaining, even after taking into consideration that the company has taken a fairly significant amount of deposits from as many as 1200 customers for the company’s first electric car. If the ValleyWag piece is true, people who signed up for the car and put down deposits of $50,000+ should be concerned.
I’m pretty sure founder Elon Musk and his to-date investors have deep enough pockets to continue funding Tesla, but at some point that too will run out. Given what is happening with the capital markets and the concept of opportunity cost not to mention risk, valuations could be headed down significantly, likely causing friction amongst new and existing shareholders as the new equity would likely seek to either wipe out or reduce the value of previous investments.
And all this coming amidst plummeting oil and gas prices, dismal auto sales, and general economic turmoil at the consumer level….