Commercial Real Estate & Business News – October 11, 2017

It's an inexorable fact of human existence that some people can adapt well to change and others struggle. It is no different in the world of real estate. Brick-and-mortar infrastructure has historically evolved based on the needs, utility and technological innovation of the populations it serves. Commercial retail is currently in the midst of a significant downturn...»
Meritage Homes (NYSE: MTH) has paid close to $18 million for 224 acres in Surprise at the Marley Park development, according to Business Real Estate Weekly of Arizona. BREW also reports Meritage could build 950 homes at Marley Park which is located at Cactus Road and the Loop 303. Scottsdale-based DMB Associates - the master developer at the Surprise project - sold the land to Meritage...»
Apartment rents continue to grow more slowly than before. The cities where rents grew the most in 2016 are still top cities for rent growth this year, but their lead is getting smaller. "A year ago there was a pretty big spread between Houston, which had rent growth of about 1 percent, and Sacramento, which was much larger -nearly 12 percent...»
Canopied paths and sidewalks intermingle under lush citrus trees and trellised gardens at The Grove, an aptly named shopping and dining destination set to take shape in Scottsdale's McCormick Ranch.
Inspired by Santa Barbara-style architecture and lifestyle, the 32,000 square foot mixed-use project is the latest from developer DBM Ventures...»
Home affordability in the United States improved in the third quarter of 2017 in 60% of counties but it is still worse than it was a year ago in 79% of them, new research shows. Those seeing an improvement include Los Angeles, Cook County in Chicago, Harris County in Houston, Maricopa County in Phoenix, San Diego...»

Commercial Real Estate & Business News – October 10, 2017

Office vacancies declined 10 basis points during the third quarter to a national average of 12.9%, CBRE said Monday. Driving the improvements were suburban markets, continuing a trend seen over the past few quarters. Specifically, suburban office vacancies shed 20 bps to end Q3 at 14.1%, while for CBDs the quarterly decline was smaller although the 10-bp drop occurred in an office environment where vacancies are already more than 300 bps lower...»

Commercial real estate investors priced out of major U.S. markets have expanded their scope to secondary and tertiary markets to find properties yielding more generous returns, a trend typical of late-inning property cycles. But the robust demand for real estate and the current cycle's longevity set this growth period apart from past ones and suggest that smaller markets will continue to reap investment for some time. ...»

Two new hotels (including one aimed at millennials), a fast-casual Southeast Asian restaurant, Starbucks (Nasdaq: SBUX) and Texas Roadhouse are landing at a new development at the Loop 101 freeway and Via de Ventura. The Block at Pima Center is under construction off the busy freeway on the Salt River Pima Maricopa Indian Community next to Scottsdale....»

Two big box retailers are taking over the former space occupied by Fry's Food and Drug at the southeast corner of Bell Road and Seventh Street. Marshalls, owned by TJX Companies Inc. (NYSE: TJX), will occupy 23,475 square feet of the building, and Michaels (NASDAQ: MIK) will take 25,324 square feet. The Fry's, a subsidiary of Kroger Co. (NYSE: KR), moved further east along Bell Road earlier this year....»

Institutional investors helped the U.S. housing market recovery by purchasing single-family rental (SFR) homes after the Great Recession, buying up at least $33 billion in holdings. Compared with the total value of the single-family housing market, that amount is just a start, and a small one at that. ...»

Commercial Real Estate & Business News – October 9, 2017

Investment in the U.S. data center sector reached record levels in the first half of 2017-$18.2 billion, more than double that for all of 2016, according to a new report from CBRE. At this pace, investment in the data center sector-which includes all single-asset, portfolio, and entity-level/mergers and acquisition transactions-is on track to surpass the total for the three previous years combined....»

Construction is expected to begin this fall on a 43-acre, mixed-use campus at Loop 101 and 90th Street in Scottsdale. Phase I of the project will include luxury assisted living, skilled nursing, medical office, retail, hotel and parking - and cost about $125 million to develop. Smith Development/C.D. Smith Construction will provide construction services, while Plunkett Raysich Architects will provide design services....»

Institutional investors are shelling out significant amounts of capital to take debt and equity positions in affordable and workforce housing as the long U.S. apartment bull market enters its later stages and yields tighten on new upscale apartment supply in major U.S. markets. TruAmerica Multifamily, Beacon Communities and other apartment developers and operators have been expanding their stakes in the affordable and workforce space...»

ORION Investment Real Estate arranged the sale of the Southern 19 Plaza. Principals Sushil Thukral and Vijay Thukral bought the property for $1.8 million and Paragon Southern Plaza LLC represented the seller. Located in South Phoenix along the major artery of 19th Ave. and Southern Avenue, the retail center is situated in a strong trade area. The asset consists of more than 16,000 square feet, anchored by Family Dollar. Other tenants include Boost Mobile, City Nail & Spa, Sr Ozzy's Tacos Y Mariscos, and a Clearly Water Kiosk....»

The Phoenix data center market continued its steady growth in the first half of 2017. Driven by growth in both hyperscale and enterprise infrastructure deployments, the Phoenix data center market remains one of the most diverse primary markets in the country, and has the potential to become one of the leading data center destinations in the U.S....»

Commercial Real Estate & Business News – October 5, 2017

ORLANDO, FL-Xenia Hotels & Resorts Inc. has acquired two Hyatt Hotel properties in Phoenix and Scottsdale, AZ and the Ritz-Carlton Pentagon City in Arlington, VA in two separate transactions for a total purchase price of $410 million. Xenia announced on Wednesday that it purchased the Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch, a 493-room upper upscale resort...»
Benchmark Electronics (NYSE: BHE) will land a new corporate headquarters in Tempe at the Rio 2100 development. Rio 2100 development sits on 52-acres at the Loop 101 and Loop 202 freeways. Benchmark moved its headquarters from Houston to Arizona earlier this year. It currently has space in Scottsdale with plans to grow its new Tempe base to 500 workers over the next five years...»
Nowadays, a mix of realism and optimism permeates the retail REIT sector, with landlords acknowledging the rocky atmosphere for brick-and-mortar retail while touting the rise of "experience" retailers that don't rely heavily on e-commerce. On one end of the spectrum are retail REITs with a heavy concentration of older regional malls in secondary and tertiary market...»
A Five Guys, Cold Stone Creamery, Rubio's Coastal Grill and Dickey's Barbecue Pit should open by the end of the year in a new shopping area near SanTan Village Mall. A Sandbar Mexican Grill is in the works, but the company is waiting on design approval from the town, according to Stephen Herman, vice president of development and leasing for Capital Asset Management...»
SANTA BARBARA, CA-Continuing a trend of deceleration seen in multifamily over the past several months, US monthly rents were flat in September, remaining at $1,354, according to Yardi Matrix's monthly survey of 121 markets. Rents were up 2.2% year-over-year nationwide in September, representing a 10-basis-point decline from August and the slowest pace of annual growth since April 2011...»

Commercial Real Estate & Business News – October 4, 2017

Property values have surged steadily higher in the prolonged recovery. But that high tide isn't raising all boats as some metros are still falling short of 2007 pricing. The broader commercial real estate market has regained and surpassed values that existed at the prior peak. The major metros have seen the biggest bounce with values that are 52.5 percent higher than a decade ago, while the rebound has been more modest in non-major metros at 10.8 percent...»

Park Central Mall was the first shopping mall in Phoenix back in the 1950s. Now, it looks to be the primary site Phoenix will be pitching to Amazon.comInc. (Nasdaq: AMZN) for its much-coveted second headquarters, according to multiple sources. Amazon is accepting bids this month for a $5 billion, 50,000-employee second headquarters to go along with its Seattle base. Phoenix, Tempe, Mesa and Tucson will all pitch sites along with scores of other cities and regions across North America. ...»

Although lower in velocity than the apartment sector saw a few years ago, rent growth is continuing across the board, RealPage Inc. said Wednesday. However, occupancy has slipped fractionally and the balance of 2017 poses a question mark around this metric. Effective rents for new leases climbed 0.9% in the third quarter and 2.6% year over year, according to data from RealPage and Axiometrics. Annual rent growth has maintained a rate between 2.5% and 3% thus far this year...»

Sprouts Farmers Market, Inc. (NASDAQ: SFM) has plans to open 30 new stores in 2018, including nine in the first quarter. Two of those new locations are in the Phoenix metro, with sites slated for Mesa and Tempe. The Mesa location, at 3150 N. Recker Road near the Loop 202, was initially planned to open this year....»

Cap rates in the net lease market sank to historic lows at various points in the past few years, but after a relatively short period of stability, investors eager to snap up these properties have pushed rates down again. The rates for retail properties now stands at 6.11%, a decrease of 12 bps in the past quarter, according to a new report from the Boulder Group, a net lease firm in the Chicago suburbs. This represented the lowest level in the net lease retail sector since...»

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