Neighborhood Spotlight - Appreciation Potential in Redwood CityNovember 1, 2015
The reputation of Redwood City is rising as rapidly as the many cranes dotting the downtown skyline. Once viewed as on the periphery of Silicon Valley, Redwood City’s vibrant downtown and thriving start-up scene is making this formerly sleepy town one of the Valley’s hot spots, both for economic growth and social enjoyment.
While Redwood City is the Peninsula’s oldest town thanks to its incorporation in 1867, it has in many ways become one of the youngest and most vibrant downtowns due to all of the new construction that has occurred, along with approved plans for additional development. With the city approving a master plan in 2012 for redevelopment of the downtown, developers have since applied for over 500,000 square feet of commercial space development and 1,400 residential units just in the downtown area alone, making this one of the best downtowns to actively balance both living and working.
The attractiveness of Redwood City and its thriving downtown has drawn start-ups as well as established companies. With office space in Palo Alto, Mountain View, and Menlo Park being both expensive and rare, the central location of Redwood City and its Caltrain stop make this city the new go-to area for leasing commercial property. Examples abound, including Box, Inc., which is leasing 334,000 square feet and moving its headquarters from Palo Alto to a new downtown building. Stanford has a long-term development plan for its 35-acre site that will result in constructing 1.5 million square feet of new administrative offices, freeing the main campus for the university’s academic needs. Google recently purchased nearly a million square feet of commercial space in Redwood City’s Pacific Shores office park as office space near its Mountain View campus has already been purchased.
Similar to Mountain View a decade ago, this explosive growth in commercial space and a resulting boost in tax revenue for schools will lead to an increase in API scores and a resultant rise in residential real estate prices. The increase in home prices has accelerated and will continue to appreciate in value as the secret of Redwood City’s revitalization gets out. To illustrate, just in 2015 alone, the median home price has leaped to well over a million dollars, jumping 21.8 percent to $1,125,000. Yet even with this surge, we project continued appreciation as much of this redevelopment is still just beginning, and more prestige and more property tax dollars will be coming to Redwood City. A lot of my clients, as do I, now view Redwood City as a strong and stable market for investment.
Once the economic center of San Mateo County, Redwood City has reinvented itself, and its burgeoning skyline and home prices are rising as rapidly as only a young redwood tree can.