Commercial Real Estate & Business News – January 23, 2015

Economy Watch: More Evidence of Apartments Still Having Long Runway

Any time a boom lasts more than a short while, the question naturally surfaces: How much longer can this go on? Doesn’t the party have to end sometime? All good times do come to an end, but in the case of the running boom for U.S. apartment properties, demographic data (demand) and development data (supply) are still on the landlords’ side and likely will be for at least another decade, if not longer. In short, there are a whole lot of renters in the market or preparing to enter the market, which is the demand side; but not as much development as one would expect, considering that demand... Read more »

Investors Want Grocery-Anchored Centers, Urban Retail

Although grocery-anchored centers will continue to attract investor interest in 2015, the appetite for urban retail is growing. Additionally, experts expect investors to continue to broaden their horizons beyond primary markets to secondary markets... Read more »

Contractor Survey: Construction Job Growth Could Reach 10-Year High In 2015

Rising demand for private-market development projects should drive construction firm growth in 2015, according to an industry survey released today by the Associated General Contractors of America (AGC)... Read more »

Arizona Gains 63,300 Jobs in Over Last Year

Arizona employment grew 2.6 percent in December with a gain of 63,300 non-farm jobs over a year earlier. The 7,000 job jump over November was better than the typical post-recession month. The state's unemployment rate continues to lag the national 5.6 percent rate, but it dropped to 6.7 percent for the month. That's down from 6.8 percent in November and 7.6 percent a year ago. The state is still short, running about 25 percent fewer jobs than before the recession... Read more »

Arizona Labor Market Finished 2014 on an Upswing

Arizona employers added a net 7,000 jobs in December, ending 2014 with slow, steady growth that economists say might be a good sign for 2015. However, experts cautioned that last year's closing numbers also must be weighed against continuing sluggishness in Arizona's labor and housing markets, making it difficult to predict when the state's economy will boom again... Read more »

Commercial Real Estate & Business News – January 22, 2015

The outlook for the retail industry looks bright, with lower prices at the pump and decreasing unemployment boding well for consumer spending. Retail sales are expected to rise 4.5% in 2015, which is about one percentage point stronger than 2014 growth, according to a report by Kantar Retail, whose analysis excludes automobile dealers, and gas and food service... Read more »
Commercial real estate investors are flocking to secondary and even tertiary markets in search of yield. This is due to a variety of factors, including an overall low yield environment and risk complacency. In addition, similar to the Federal Reserve “crowding” investors out of Treasuries into higher yielding investments, foreign buyers of U.S. commercial real estate are “crowding” domestic investors out of gateway office markets into higher yielding secondary and tertiary markets... Read more »
Raymond Torto, Harvard University lecturer and recently retired CBRE global chief economist, and Douglas Poutasse, executive vice president and head of strategy and research at Bentall Kennedy, cited three positive real estate trends in their remarks at the Counselors of Real Estate annual convention in Boston last fall... Read more »
A company formed by ConAm Group of Cos. paid $33 million ($90,659 per unit) to buy the 364-unit Pointe at South Mountain apartments located at 8809 S. Pointe Parkway East in Phoenix. The seller was CH Pointe at South Mountain Communities LLC, a company formed by ColRich... Read more »
Palisades Capital Realty Advisors LLC has added to its fast growing Valley office portfolio with the purchase of a property in Old Town Scottsdale. A company formed by Palisades Capital Realty Advisors paid $34.5 million ($234.13 per foot) to buy the 147,356-square-foot building, which is at 4141 N. Scottsdale Road... Read more »

Commercial Real Estate & Business News – January 21, 2015

Economy Watch: Low Inflation Generally Positive for CRE

On Friday, the Bureau of Labor Statistics reported that the CPI was down 0.4 percent in December. That’s the steepest drop in that particular metric since 2008, which has seen modest increases during most months, and for most years has been staying under 2 percent, which happens to be the Fed’s target for inflation. There’s some argument about why inflation has been so persistently low, but at least one thing’s certain: the low interest rate policies pursued by central banks in most of the industrialized world haven’t stoked the fires inflation during a period of stagnation. This isn’t the ’70s... Read more »

Top 5 Predictions for Medical Office Real Estate in 2015

The “retailization” of healthcare will continue to increase this year, according to executives at Revista, an Annapolis, Md.-based research firm that focuses on the medical real estate industry... Read more »

Crane Counts Show Multifamily Dominates

If you want to gauge how much construction is really taking place, count the cranes. That’s what Rider Levett Bucknall is doing with the launch of its North American RLB Crane Index. The new report measures construction activity in major cities across North America. The verdict of the inaugural edition: more cranes are on the horizon, and therefore so is the prospect of further growth... Read more »

Lots of Renters Balance Lots of New Apartments

Strong demand for apartments helped keep the percentage of vacant apartments low, even though developers finished many new apartments in 2014. “We are getting to the point where net absorption and construction kind of level,” says Brad Doremus, an associate in the research and economics department at Reis Inc., a data firm based in New York City. The percent of apartments that were vacant stayed at 4.2 percent in the fourth quarter in the top 79 markets tracked by Reis. That’s the same as the vacancy rate in the third quarter and it’s up slightly from 4.1 percent the year before... Read more »

Arizona Economy: Elliott D. Pollack & Company

The good news continues. The CPI (even before food and energy prices) is below the Fed target and consumer confidence is strong. Despite this, retail sales were weaker than expected. That simply doesn't fit. It is also possible that more consumer spending is going to services which isn’t included in the retail sales report. Other than that, everything else fits the picture of a healthy economy that would be in the boom portion of the cycle were it not for weakness in the construction (mainly housing) sector. That weakness will turn into strength only slowly. Enjoy what is going on. It is likely to be as good as it gets for the foreseeable future... Read more »

Commercial Real Estate & Business News – January 20, 2015

Improving Job Market Leads to Office Sector Success

With businesses finally embracing expansion in 2014, the office sector posted its best performance in years, according to fourth quarter statistics. And the outlook for 2015 remains bright. Office vacancy averaged 13.9 percent nationally in the fourth quarter, 100 basis points lower than at year-end 2013, marking the sector’s best performance since 2007. San Francisco had the lowest vacancy rate in the country, at 7.3 percent... Read more »

Signs of Paradise Valley Resort Revitalization Take Shape

The first step toward rebirth of the popular Mountain Shadows Golf Resort is underway as workers begin renovating a portion of 56th Street running alongside the central resort property. Crown Realty and Development is making good on its promise of dedicating $1.6M to allow the Town of Paradise Valley to completely renovate a rundown stretch of road at 56th Street at Lincoln Drive... Read more »

Top of the Phoenix lists: LEED-Certified Buildings

Intel's Ocotillo Campus, the 14-building collection of LEED (Leadership in Energy and Environmental Design) Silver-level advancements in water saving and waste recycling, captured the No. 1 ranking in the Phoenix Business Journal's LEED-Certified Buildings list, published today. The list was ranked by square footage. At 3.9 million square feet, the Intel facility was easily the largest on the list. Second on the list was One & Two Renaissance Square, a pair of office towers comprising 965,508... Read more »

6 Most Troubled Retail Chains

Department store chains Macy’s and J.C. Penney may have gotten the lion’s share of attention when they announced store closings at the beginning of the year, but both retailers remain viable as operating concerns. The chains landlords should be really worried about are those in the specialty sectors—apparel, electronics, toys. With the help of retail consultants, we took a look at the companies that face the greatest danger of bankruptcy, liquidation or massive store closings... Read more »

Seniors Housing Stacks Up

Seniors housing generated solid returns for investors in 2014. By many measures, the returns were well above those of other investment opportunities. The sector has attracted growing attention from seasoned veterans in the sector as well as new entrants who find the fundamentals compelling and the investment thesis reasonable. A look at the sector’s 2014 performance helps explain the factors that will shape this year’s investment potential... Read more »

Commercial Real Estate & Business News – January 19, 2015

Martin Luther King, Jr. in a speech titled "Beyond Vietnam," delivered April 4, 1967, in New York, he showed he didn't see anything through rose-colored glasses, and admitted that he wasn't super hopeful about the US's prospects in Southeast Asia:  "The world now demands a maturity of America that we may not be able to achieve."

 

Developers are being sought for 200 acres earmarked for apartments, offices, retail and restaurants along Williams Field and Recker roads in Gilbert. The site is part of the 775-acre Cooley Station development, for which all of the home sites have been sold. Once Cooley Station is built out, an estimated 20,000 people will live within a mile of the intersection of Williams Field and Recker... Read more »
A tenant-in-common entity led by TM Equities Inc. in Salt Lake City, Utah (Roger Thompson, James Michie, partners) paid $42.5 million ($145,548 per unit) to buy the 292-unit Trillium Cave Creek apartments at 20050 N. Cave Creek Road in Phoenix. The seller was Cave Creek & Beardsley LLC, formed by Trillium Residential LLC in Phoenix (Jamie Dawson, Ken Losch, principals)... Read more »
The December jobs report capped a banner year for the US labor market. As compared to a year earlier, public and private employers added just short of 3 million net new jobs, the best showing since 1999. Private sector employment accounted for a disproportionate 97 percent of the net increase for the year and 95 percent of the increase over the last month... Read more »
The city of Tempe has terminated a development deal with a Chinese-backed Scottsdale company that wanted to build a $1 billion project on Tempe Town Lake. TrendEx Holdings LLC and Tempe entered into a development and land sale pact last year. The developer was supposed to buy 11 acres of city-owned land on the south side of Tempe Town Lake. TrendEx was to purchase the land for $17.6 million... Read more »
CBRE has negotiated the sale of Kierland II located at 16260 N 71st Street in Scottsdale, Ariz. The 237,875-square-foot office building commanded a sale price of $49.15 million. The property was approximately 80 percent leased at time of sale... Read more »
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