Commercial Real Estate & Business News – October 9, 2015

Tempe Mayor Mark Mitchell and Tempe city council members joined representatives of owner Parkway Properties, Inc. (NYSE:PKY), developer Ryan Companies, architect DAVIS, and other community leaders to celebrate the grand opening of Hayden Ferry Lakeside III (HFL III) on the northeast corner of Mill Avenue and Rio Salado Parkway. HFL III, a Class A, 265,000 square foot, 10-story office tower, is the last of three office towers at the Hayden Ferry Lakeside Development on Tempe Town Lake... Read more »
Phoenix-area retailers could be splitting an extra $181 million in sales as early as next year if a proposal being pushed by Maricopa Association of Governments and other business and economic organizations moves through the Homeland Security bureaucracy. “We want to help build retail sales, and the associated boost in the economy, by expanding the border zone with Mexico,”... Read more »
That’s the direction rental rates for retail properties have been going for the past several years. In fact, rates in some core and urban markets have even surpassed the previous cycle’s peak. So now the question is: can landlords continue to increase rents without tenants pushing back? “It has been a landlord’s market with rents increasing, and I think there’s still steam in the engine,”... Read more »
At the Lodging Conference in Phoenix, Bernard Baumohl, the chief economist at the Economic Outlook Group, gave an economic update that got right to the point, immediately addressing the most talked about issue in the global economy: China. “Are we going to see a drag in global economic growth and will it affect the US economy,” he asked. The answer to the former, “Yes, how could it not,” he said, noting that China contributed 25% to global GDP growth last year... Read more »
A vacant parcel of land that once held the promise of a high-rise condo on Central Avenue in Phoenix has sold for $3 million. Phoenix-based Ironline Partners LLC bought just under 2 acres at the northeast corner of Central and Columbus avenues. The seller was MidFirst Bank. Back in 2006, some Los Angeles developers proposed two 37-story condo towers on the same property. The never-built Sky Phoenix was to total 515 condos... Read more »

Commercial Real Estate & Business News – October 8, 2015

Moody’s and Real Capital Analytics (RCA) released their joint Commercial Property Price Indices (CPPI) this week and it shows that the all-property composite index has now surpassed its November 2007 peak for the first time on an inflation-adjusted basis. The all-property composite index is now 14.5 percent above the one for November 2007 on a nominal basis and 1.5 percent above peak on an inflation-adjusted basis... Read more »
Vestar, a privately held retail real estate company, and AEW Capital Management, have partnered to acquire Tempe Marketplace for $367 million. Vestar previously owned the 1.3 million-square-foot, open-air retail center with Rockwood Capital, which is exiting its investment after a five-year hold. AEW acquired the property on behalf of the AEW Core Property Trust. The deal closed Oct. 6... Read more »
The recent purchase of an Old Town Scottsdale office building could beget the development of new building on an adjacent parcel. Phoenix-based Arc Construction and Canada-based MacDonald Development bought the Arizona School of Real Estate building earlier this month for $7.7 million. The property is at 7142 E. First St. near Scottsdale Road and Main Street. There is an adjacent parking lot that could be developed, said Arc President Bill Borders... Read more »
Upscale apartments with luxurious amenities are in high demand near the new Marina Heights office development, where developer Wood Partners is averaging 30 leases a month at its new Alta Tempe complex. The 296-unit community is positioned to serve residents seeking proximity to the state’s largest office park when it’s complete in 2017, as well as easy access to downtown and Arizona State University... Read more »
If building 650,000 square feet that is one hundred percent leased in Chandler’s Price Road Corridor wasn’t enough, the Douglas Allred Company now wants to increase that amount nearly fourfold. To be known as Park Place II, Allred will soon be filing its application with the City of Chandler for up to two million square feet of its business campus, flanking both side of Price Road with high value employers... Read more »

Commercial Real Estate & Business News – October 7, 2015

The Federal Reserve’s recent decision to delay any increase in short-term interest rates appears to have been the correct call in hindsight based on last Friday’s disappointing news that total U.S. nonfarm payroll employment increased by only 142,000 in September, says economist Robert Bach. But the lackluster September jobs report released by the U.S. Bureau of Labor Statistics (BLS) also complicates the Fed’s task of communicating its plans to the financial markets... Read more »
Even the most pessimistic apartment market researchers agree that very few apartments were empty in the third quarter and that the vacancy rate in the multifamily rental sector will remain low in the short-term. “Vacancy expansion will not be dramatic—there is far too much demand,” says Ryan Severino, senior economist and director of research with Reis, Inc., a New York City-based research firm. “Vacancy will marginally drift higher.”...Read more »
The commercial real estate market is set to enjoy mostly favorable conditions through 2017, according to the latest three-year consensus forecast from the Urban Land Institute (ULI) Center for Capital Markets and Real Estate. While the latest semi-annual outlook is slightly less bullish compared with six months ago, the majority of indicators in the forecast signal favorable economic conditions and capital markets in the United States... Read more »
The Huntington Apartments have been sold for $34.6 million, netting Gelt investors a cumulative return of approximately 54% and an annualized return of approximately 36% during the 18-month ownership period. The Huntington, which is located at the intersection of Mill Ave and the 60 freeway, is in close proximity to Arizona State University and numerous high-profile employers... Read more »
Orange Grove Medical Center, a 40,782 total square foot multi-tenant office building, sold for $3,000,000, or $73.56/SF. The property is located on the southeast corner of Orange Grove Road and La Cholla Boulevard in Tucson, Arizona. Constructed in 1988, the medical center sits on fee ground at the Northwest Medical Center Campus and was approximately 51% occupied at close of escrow. The property was sold by a $2.5 billion publicly traded healthcare REIT, HR Acquisition... Read more »

Commercial Real Estate & Business News – October 6, 2015

Although an increase in CMBS delinquencies likely is in the offing, for the moment they’re continuing to improve. Trepp LLC said Monday that the delinquency rate fell 17 basis points in September for the largest single-month improvement in 12 months. September’s rate of CMBS late-pays dipped to 5.28%, while the rate of seriously delinquent loans—those 60-plus days delinquent, in foreclosure, REO or non-performing balloon—declined by 13 bps to 5.15%... Read more »
With a glittering mix of shops, salons, boutique gyms and restaurants on an impeccably landscaped 66 acres, the Mesa sales-tax darling that is Dana Park Village Square isn’t exactly hurting for patrons. But Houston-based developer Whitestone REIT — which bought the high-end “lifestyle center” in 2012 and has since boosted occupancy to 93 percent — believes a handful of improvements will attract more customers and persuade them to stick around longer... Read more »
Phoenix is in a building boom. Cranes dot the downtown skyline as construction crews transform lots on nearly every major street. Housing projects run the gamut from apartments to townhouses, from the central city to the suburbs. Some already are underway. Others will need more planning and approval before they break ground...Read more »
Old Town and south Scottsdale have edged past Tempe and now have the lowest office vacancy rates in the Phoenix market. The Scottsdale areas also have the second-most expensive asking rents in the region at $27.69 per square foot. The Biltmore/Camelback area has the most expensive Phoenix office rents — $29.38 per foot. The south and Old Town Scottsdale areas have a 9.3 percent vacancy rate. That is the only Phoenix submarket below 10 percent... Read more »
Demand for stabilized medical office buildings (MOBs) and new development is on an upswing, according to market experts, with cap rates matching pre-recession record levels. The average cap rate for performing MOBs declined to 6.5 percent in the first half of 2015, almost reaching the record low of 6.2 percent achieved in the third quarter of 2007... Read more »

Commercial Real Estate & Business News – October 5, 2015

Metro Phoenix’s homebuilding recovery didn’t stall in August like it has at least a few times times since the crash – another strong indicator the recovery is finally on. New home permits shot up 78 percent in August from the same month a year ago. That’s a staggering jump in new home construction. Now, before anyone starts worrying about another building boom led by speculators similar to 2005-06’s debacle... Read more »
Property management company P.B. Bell recently announced that a new apartment community called the View at Cascade is expected to open sometime in October. The 187-unit apartment complex is located just below Loop 101 in north Scottsdale and will offer one- and two-bedroom apartments. The apartment complex’s website lays out the various amenities, including 9-foot ceilings, quartz countertops and walk-in closets... Read more »
The Fed’s recent decision not to raise interest rates was a relief for many in the market, while others thought that a raise in rates was necessary.However, according to Chris Macke, managing director of research and strategy at American Realty Advisors, if and when the Fed does raise rates, it will have a nominal impact on the real estate market... Read more »
San Diego-based Douglas Allred Co. is looking at expanding its development footprint on Price Road in Chandler by 2 million square feet. Allred already has a 650,000-square-foot, six-building complex at Price and Willis Roads called Park Place. Infusionsoft is among the tenants at the $215 million Park Place development. The development firm is building a seventh building and will soon put forth more plans with the city of Chandler...Read more »
I’m sure you’ve heard it before: This time is different. No, really, this time is different—at least in the apartment market. And by different, I mean there’s a seemingly infinite and insatiable pool of demand for rental units, because Generation Y is huge, with millions of them living at home just salivating at the prospect of moving out. And they have a preference for renting versus owning... Read more »
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