About us at Woodmont Real Estate Services in Belmont, California

Woodmont Real Estate Services


Return To Blog



A Message from the CEO

Last year was an interesting year for Northern California real estate. The anticipated recession never materialized—even if it remains to be seen if the economy will have a soft landing from the hyperinflation we experienced. The single-family housing market stumbled but did not collapse. The investment real estate market saw some serious challenges. The substantial increase in interest rates lead to a challenging environment for property valuations and greatly reduced sale transaction volumes. Investors, both buyers and sellers are working to understand where interest rates, capitalization rates and demand will settle. As is always true, location has a major impact on the investment market and the operational rental market for properties. Overall, office properties have been the most challenged as the continuance of remote work adversely impacted demand, but all property types have been impacted by the changed market conditions. In many ways the rental demand for multifamily properties in Northern California has come back well. Occupancy is strong and, in many submarkets, rent rates are back to pre-pandemic levels. However, market rent growth cooled in the second half of 2023. Our company had one of its better growth years. We added ten new multifamily properties. We also added twenty-three new commercial properties totaling nearly 900,000 square feet. Further, we fully integrated two recent new hires into our senior management team – Michelle Widjaja as Vice President of Marketing and Education and Simone Robinson as Vice Preside of Human Resources, and they are excelling in their roles. The immediate future is not without its challenges. Bay Area layoffs continue to pop up in the news, interest rates remain high which will challenge many commercial and multifamily properties that will require financing in the next 24 months, and it is an election year. We thank each of our clients for their continued confidence in our firm and we continue to strive for excellence in providing service to our clients, fellow employees and those who live and work in the properties that we manage.

Leadership Summit

Photo: CEO Ron Granville, CPM®, Jeff Bosshard, CPM® President Multifamily Operations

This year’s Leadership Summit was based on the theme of Breaking Silos, meaning that the immediate and long-term success for Woodmont (and subsequently, ALL of its clients) requires the highest levels of interaction, collaboration and service solutions between Woodmont’s operating departments – and there are six of them plus Facilities Services for commercial properties. There were approximately 100 Woodmont employees at the Summit, all of whom are in leadership roles from the corporate office, plus regional managers, property managers and others in key leadership roles within the organization. The event was produced by the Marketing and Education Team and the Fireside Chat was moderated by Christian Virtusio, VP of Education. Event sponsors were ProFloors, Apartments.com, Varsity Painting, Ferguson Facilities Supply and Benchmark.

The following will cover some of the comments made by CEO Ron Granville, CPM® and Jeff Bosshard, CPM® President Multifamily Operations and Scott Pritchett, CPM® President Commercial Operations, yet the real takeaway from the day was the inclusivity of management responsibility across many layers of the company, and not just the senior-most executives at Woodmont. A spirit of leadership empowerment emerged from the Summit, with everyone expected to step up and be leaders in their own right.

These comments were made by Ron and Jeff, without specific attribution to either one of them:

  • The main idea for today’s theme is that we all want to enhance the way we work together as a team.
  • The worst reason to do something is ‘that we’ve always done it that way.’
  • Understand how, and what we do affects others.
  • Communication is key to breaking down silos. When we improve communication, the better we serve our clients, residents and commercial tenants.
  • Our primary service to our clients is building relationships, and overall mission is to provide superior service and performance.
  • In terms of corporate goals, growth is number one, as well as to increase levels and quality of communication, use and adapt to new technologies to become more efficient, bolster the company’s reputation, and use training and tools to create exceptional customer experiences.

Here’s a brief list of department accomplishments for 2023 and goals for 2024.

Multifamily: Added 10 new properties in multiple Bay Area cities (in the East Bay and San Francisco Peninsula). One goal is to revamp and enhance the property transition process.

Commercial: Added 23 new properties totaling nearly 900,000 square feet. One goal is to create mixed-use asset commercial protocols to better collaborate with Multifamily Regional Management teams.

Financial: 2023 focus was on improving financial processes including further evolution in replacing legacy procedures with more efficient electronic procedures. This included procedures related to commercial tenant statements and payment processing, expense reimbursements, and invoice payments. Goals for 2024 focus on continuing that evolution so that improved efficiency creates more time to focus on higher level tasks.

Marketing: Launched new corporate website (www.wres.com) and Woodmont Rentals (www.woodmontrentals.com).  Goals include enhance Internal Communications, enhance Training and Education Program and build Property and Corporate Reputations.

Human Resources: Regarding technology, implemented and rolled out an automated performance review and compensation module, and for cost savings, identified several cost-saving measures (valued in excess of $100,000 annually) while concurrently improving technology and services to the company. Goals include evaluating current benefits broker’s performance and services provided, and update the WRES Employee Handbook.

Building Services: Launched electronic due diligence reports, and created a new and more detailed master document structure, cut contract request time by 40% and contract invoice processing time by 50%. Goals include updating and modifying Multifamily Property Construction Management Fee with up-to-date monthly cashflow projects for CM fees and project costs, and implement and online contract request and change order form.

Commercial Corner -- BOMA Silicon Valley Outlook 2024

Group Photo: Kent Goetz L-R: Gene Williams, MAI, CCIM, Mark Christierson, James Chung, Scott Pritchett, CPM®

Quip of the Event: “James is the Brad Pitt of retail. I’m the Adam Sandler of office.” So said Mark Christierson, Executive Vice President of CBRE, as he took the stage for his office and R&D market presentation, when James Chung, Founder, The Econic Company, had completed his retail presentation, which was excellent and a tough act to follow. Christierson politely asked Scott Pritchett if he could speak first or third next year, or in any slot that didn’t follow Chung, who’s charisma and stage presence were abundantly evident to the audience.

Woodmont’s President of Commercial Operations Scott Pritchett once again moderated the broker panel for the early March BOMA meeting in San Jose.

Photo: Scott Pritchett, CPM® President Commercial Operations

James Chung presented market statistics and trends on retail real estate for both the South Bay and Peninsula, saying that the vacancy rate (at 4.5% and 6.7% respectfully) is the lowest since 2007. He also pointed out that consumer spending remains “unimpeded” and that job growth is outweighing layoffs. If there is weakness in the sector, Chung said it was in urban core environments, where downtown retailers are negatively affected by hybrid and remote working standards. However, he is bullish on regional retail conditions and expects retail real estate to remain very healthy over the next 18-24 months.

Mark Christierson launched into his office and R&D presentation by issuing the bad news first, which is that the Silicon Valley vacancy rate for offices has reached 18.6%, or “numbers approaching the tech wreck of 2001-2003” and that for 2024, he expects continued negative net absorption, meaning it will get worse before it gets better. R&D sector is healthier, said Christierson, because people still have to go to buildings to build things, test things, conduct lab work.

Looking ahead, the leading trends for driving office and R&D occupancy will include the slow return to office and continued hybrid working styles, companies taking less space, yet some of them seeking value and quality leases while others will pay premium rents to secure amenity rich offices. Lastly, and as industry sectors go, AI will be the leading source of office space expansion and follow in the footstep of previous occupancy drivers in the Valley, starting with defense contractors in the early days, then computer (hardware, 1970s and 1980s)), computer software (1990s), and most recently networking systems and of course, the Internet (since 1996).

Gene Williams, Managing Director, Valbridge Property Advisors, was the third presenter at the luncheon and offered insights on capital markets and valuation trends affecting office, industrial, multifamily and retail real estate. With the Fed raising its Federal Funds rate, that essentially doubled borrowing costs, with interest rates for property loans currently in the mid-6% range. He said the only loans available now are full recourse loans. Williams doesn’t think much of this is going to change this year, though the situation seems to be stabilizing and, as other market watchers have said, “there is a wall of capital waiting to invest in commercial property” once there is greater clarity and certainty in the market.

Of note, and with all the loan maturities coming due across the country for all property sectors – and the accompanying gloom in terms of distress in the system, Williams reminded the audience that a similar situation played out from 2010-2012 and on the heels of the Great Financial Crisis. At the time, the market expected waves-upon-waves of loan defaults, yet it never materialized. Why? Because owners and lenders were largely able to work things out using extend and blend, and extend and pretend loan adjustments and capital infusions to keep the lights on. He thinks we could be in the same situation as we go deeper into 2024 and into 2025.

Words of Wisdom: Scott Pritchett relayed these to conclude the BOMA luncheon, citing his source and life coach, Ted Lasso.

  • Believe – in yourself
  • Be a goldfish – by having a short-term memory about your setbacks
  • Doing the right thing – is never doing the wrong thing
  • Change – stop trying to be perfect
  • Success – is not the result but the journey that matters
  • Own it – take responsibility for all of it
  • Pay-it-Forward – lend a hand, offer a smile, improve someone else’s day

Multifamily Market Roundup

The chronically under-supplied housing market in Northern California is, unfortunately, likely to get worse before it gets better, if we are reading between the lines correctly. For the 21 months beginning in mid-2022 until now, pencils were down on new projects for many developers and investors. By now, we all know the reasons for this: the mercurial rise in interest rates coupled with stubbornly high construction costs that made it difficult to profit from new apartment communities. One builder quipped in a story, “I can build an apartment building for $6 million and at completion, it’s worth $5 million.”

Given the timeline it takes to line up financing and build even a mid-size apartment community – three years or so, and that doesn’t take into consideration acquiring and entitling the land, one can easily anticipate a severe supply shortage in most of our submarkets by 2026-2028. The Fed has conveyed that it would lower interest rates this year, with the most recent projection that it will likely do so later this year, and there will be fewer cuts than previously hoped. That sentiment was reflected by panelists at the late-January National Multifamily Housing Council (NMHC) Conference in San Diego, and mostly because they had the sense that the worst was over after the Fed paused on interest rate increases.

The nearly frozen capital markets segment of the multifamily industry may see some thawing as we go deeper into the year. At the NMHC conference, RealPage Chief Economist Jay Parsons said that he could see apartment valuations bottoming and cap rates settling in the mid-5% range. He added that buyers seem more resigned to the reality that anything priced more favorably is likely to be older, more challenged assets in less-desirable submarkets.

Others at the conference estimated that there is a much as $240 billion in capital that is waiting to be deployed, once the Fed meaningfully cuts rates and investors return to the multifamily market in force.

On multifamily distress, Parsons thinks that much of it will get worked out behind the scenes or extended, while other situations could turn into ‘loan-to-own’ ownership changes where debt funds take over assets and wait it out for better pricing and market recovery.