By David M. Greenwald
I keep seeing people projecting that COVID will have a permanent impact on things like student housing and UC Davis enrollment. All of this of course is subject to change, but right now I’m just not seeing it in terms of long-term changes.
It will be interesting if we can get any kind of accurate analysis of what the actual picture looks like this fall. What I’m seeing around town right now is students coming back. It’s not normal levels for sure. But this doesn’t look like the ghost town that it was back in March either.
In general, people have kind of adapted. They will wear masks and social distance, and some activities have gone to Zoom. But you also see a lot of people eating outside and around town, whereas a few months ago, you couldn’t find anyone.
And of course around the country, the concern is that students are not being nearly careful enough and COVID cases are exploding on campuses.
Combine the fact that UC Davis has huge portions of its students in STEM fields that will require lab and other hands-on work with the general desire of students to get the full college experience, and my take is that those thinking this is going to be a game-changer in terms of housing needs in town is more wishful thinking than evidence-based.
That gets me to other big issue—economic development and commercial space.
My interview with Leanna Sweha (full disclosure: Leanna was a former board member of the Vanguard) was very interesting in that it once again was confirmation on the lack of wet lab space. This is not a Davis issue per se, as Davis has recently added space through the HM Clause – UC Davis Innovation Center partnership.
The problem as Leanna Sweha told the Vanguard is that space is scarce but it is also very expensive—and so for startups that is a huge barrier.
The AgStart project which is creating a public-private partnership could be the key to creating more wet lab space that is also affordable for startups and small companies looking to come to the region and expand.
“Over the last few years, there has been a couple of wet labs that have come on-line,” Sweha stated. One is at UC Davis—the UC Davis-HM Clause Innovation Center. That came on line in the last few years and created a 3100 square-foot off-campus facility that is administered and owned by HM Clause, one of the leaders in seed production.
There is also the Bayer Collaborator, which opened in West Sacramento a few years ago.
But, despite these spaces, Sweha said that “basically it’s full.” She said, “We just talked to somebody who’s interested in the lab at AgStart and he said before he learned about the lab at AgStart, he was concluding that there’s no lab space left in the state.”
While a slight exaggeration, Sweha noted “that’s how bad it is.”
That led us to a broader discussion on commercial space in Davis. I have been concerned here that the discussion has been largely uninformed by those familiar with the actual market.
Having Jim Gray weigh in is important, as he not only has decades of experience as a commercial real estate broker here in Davis, but he is not connected with current proposals at DISC (Davis Innovation & Sustainability Campus).
So, after points were raised about possible vacancies, he stepped in to largely debunk them.
First he noted that a number of the photos posted appeared to be dated as they referred the DTZ, his former real estate company that has not existed for over three years.
He said, “I am not sure of the status of those particular properties without studying them.”
From his perspective, having been in the business space for decades, “It is a wild misstatement to say that we have a large available supply of commercial space.”
He argued, “Our vacancy rate is amongst the lowest and the age of our properties is amongst the oldest. We are not innovating or adapting at a pace that will allow us to be globally competitive.”
Gray also argued, “With regards to commercial space and stating that there will likely be a need for less because of the Covid Pandemic — I think you are failing to see what is going on in the economy at large. There is growing demand for life science space.”
Here’s the kicker—of the 64,400 feet that is reported as under construction, half of it will be the New Nugget headquarters and 16,200 is going to be a new Seed and Molecular Biology Lab for a company moving in next quarter.
He said, “ That leaves a 16,200 square foot building that is available, actively on the market, and it is our understanding that it has had much interest in leasing it.”
His bottom line: “We need more supply! We need more ‘planned’ and ‘under construction.'”
Hey look—I’m not asking people to necessarily buy into his bottom line that we need more supply. That’s definitely a subjective assessment. But I do think that we need a fact-based and evidence-based approach here, and that needs to start by laying the facts on the table and understanding the data first—and then feel free to draw your own conclusions.
You may come to the conclusion that we lack sufficient space and yet still believe that DISC, for example, is not the right answer to that problem. That’s a fair point.
—David M. Greenwald reporting