“Millennials are the reason we are active in suburban downtown infill markets,” Blake said. “We have 1,200 units under development in the East Bay but are not developing retail independently of housing. Mixed-use projects with retail are successful because of a good retail site. Ground-floor retail is often mandated but it must be well thought out.”

Firstenberg concurred that projects must be led by retail.

“The site must be workable,” she stated. “We must push back against cities. These projects can't be vacant for the next 10 years.”

With regard to the coupling of retail with housing, Firstenberg said these types of projects work in Oakland, but not in every market.

“In some markets, either retail or multifamily tenants don't pay enough rent,” she indicated.

Homs pointed to 27^th and Broadway along with MacArthur BART developments, which are not entirely mixed use but yet successful, and added the HIVE project in Uptown as a key success story component.

“HIVE opened up a new segment of product use,” he said. “There is a lot of growth still to come although there is a caution to not overbuild retail. It must add flavor.”

With regard to the recent changes in the retail landscape, Homs indicated urban centers are not in as dire straits as the suburban mall. Firstenberg pointed out there were only eight ground-up retail centers in the last five years where there used to be that many in one year.

“If you are a shopping center without grocery, you are in trouble,” Blake asserted. “However, most mixed-use sites aren't large enough to support large anchor tenants like grocery stores, along with the surrounding space for parking, delivery, trash, etc.”

For grocery, 20,000 square feet is minimum, Blake said, so a 10,000-square-foot urban market is too small for most to pull off.

“We say having Whole Foods in your project is a boost, but even better is having them across the street,” Blake mused.

Firstenberg said the Amazon announcement about buying Whole Foods took “us by surprise and we work with them.” The acquisition will enable Whole Foods' pricing to be brought down, she predicted.

With regard to the question of density, there can be too much retail and there is a caution to not overbuild, Flynn said.

“A grocer on every corner isn't going to work,” she said. “It's not Mayberry anymore.”

Blake said cities such as Walnut Creek and Fremont want to maximize densities around BART. However, the prospect of density alarms many.

“Anything more than a single-family home on a half-acre lot is density,” he pointed out tongue in cheek. “If a city is getting taller and adding traffic, people don't like it. Unlike retail, residential is a cost center with fire protection, mail delivery, etc., unless it is affordable, but that requires density.”

Retailers are getting smaller, more adaptive and nimble to accommodate businesses that didn't survive the recession, said Homs. As for the online threat to retail, he said restaurants, fitness centers and personal services businesses will survive because they can't be ordered online.

The big question on everyone's minds is where we are in the cycle. Blake said East Bay multifamily is in the sixth or seventh inning, with affordability remaining in Walnut Creek, Fremont and Berkeley near transit.

“The average income was $140,000 in a survey we did,” Blake said. “However, affordability requirements, construction costs and city fees are going up, and rents can't keep up in order to provide a decent return.”

Firstenberg pointed to a softening of rents in all East Bay markets.

“There is strong sustainability in rents in all of the East Bay markets, Walnut Creek, Berkeley and Oakland,” she said. “I don't think we will see a huge correction, just a slight/soft one.”