Commercial Real Estate & Business News – January 29, 2016

For almost everyone involved in commercial real estate, 2015 was a very good year. The impressive recovery in commercial property values is apparent in the year-end release of the CoStar Commercial Repeat-Sale Indices (CCRSI), which delineate the broad price gains across property types and regions amidst record investment transaction volume in 2015. Both the value-weighted and the equal-weighted segments... Read more »
A 523,673-square-foot institutional-grade office park located at the intersection of Highways 101 and 202 has just received refinancing to the tune of $93 million. The property, developed and owned by the Douglas Allred Company, is comprised of six, two-story, class-A office buildings located in a master-planned business park with office, hospitality and restaurant uses. The office park is 100% leased to six tenants including... Read more »
Two Phoenix apartment complexes near Washington and 12th Streets will have a public grand opening on Feb. 25. Phoenix Mayor Greg Stanton will commemorate the grand opening of Capital Place, a $57 million 292-unit apartment complex. The open house event will showcase the new project and highlight downtown living. In partnership with neighboring businesses, the evening will include hors d’oeuvres and signature martinis from new local lounge Dirty Martini... Read more »
An Anthem property, that Valley Child Care leases, sold to Ira Stegner for $3,090,000 by Anthem Heritage, LLC. The building is located near Daisy Mountain Drive and Anthem Way, and is a 10,014 square-foot freestanding building. Valley Child Care & Learning Center is the sole-tenant of the property, and is in an absolute lease until 2022 with three percent annual rent increases for the first ten years, and two percent increases for the remaining term... Read more »
Metro Phoenix’s housing market recovery has been long and slow. But it’s on track. And this year is poised to be the best year for home sales and prices in the Valley in nearly a decade. Last year, home prices, sales and new construction rebounded from 2014’s disappointing results. Foreclosures continue to shrink. Arizona housing analyst Tom Ruff calls 2015 an “average year” for housing and that’s with some double-digit gains... Read more »

Commercial Real Estate & Business News – January 28, 2016

U.S. bankers haven't taken their foot off the gas yet but they are watching their CRE loan portfolios carefully following a recent warning from the FDIC and say they are prepared to hit the brakes and slow down their commercial real estate lending vehicles should conditions warrant. Through the third quarter of 2015, U.S. banks had steadily increased their total CRE loans outstanding to $1.8 trillion -- exceeding the previous lending peak at the end of the second quarter of 2007 by some $170 billion... Read more »
Consulting firm Ernst & Young recently published its Global Market Outlook 2016 report, which highlights key trends in private equity real estate. NREI talked with Mark Grinis, global real estate fund services leader at Ernst & Young to get more insight into the top 10 issues to watch in the coming year... Read more »
One of the Valley's top resorts is considered to be one of the 10 best hotels in the country, according to U.S. News & World Report. The Canyon Suites at the Phoenician in Scottsdale was named the eighth-best hotel in the country, according to the publication's 10 Best Hotels in the U.S.A... Read more »
ULI’s Trends Day, The Next 10 Years, featured discussions on the region’s newest economic development initiative, Velocity, millennials and light rail. Panelists explored the economy, creative turbulence, education, water and healthcare development while quick hit perspectives shared the latest on creative office, state land and retail. Approximately 1,000 real estate professionals were in attendance at the all-day event... Read more »
The Phoenix retail big box market continues to hold back real improvement in shopping center vacancy. In the year-end 2015 National CoStar Retail Report, Phoenix ranked as having one of the worst retail vacancy rates in the U.S. Out of the 125 MSA’s the report tracks, Phoenix finished near the bottom ranking 123. With nearly 34 percent of the total vacant space in Phoenix being in the big box sector, this segment of the market is critical to the overall health and stability of Phoenix retail... Read more »

Commercial Real Estate & Business News – January 27, 2016

Fannie Mae and Freddie Mac expect to break more records this year in their lending on multifamily properties. That means both agencies will have to keep up the tremendously busy pace they set in 2015. “I think our activity is going to be higher in 2016 than last year,” says John Cannon, senior vice president of multifamily production, sales and marketing for Freddie Mac... Read more »
Metro Phoenix office market posted its strongest quarter of absorption in since 2005 with 1.5 million square feet during fourth quarter 2015. The year closed with a total 2015 absorption of 3.3 million square feet and occupancy growth in 17 of the 22 metropolitan submarkets during the fourth quarter. Vacancy in Phoenix closed the year at 18.7%, down 20 basis points from the previous quarter and down from 19.1% at year-end 2014... Read more »
The company behind Cold Beers and Cheeseburgers and Wasted Grain is opening two restaurants in Old Town Scottsdale. Scottsdale-based Square One Concepts is planning to open Crab + Mermaid Fish House at 4218 N. Scottsdale Road. Shortly after, sometime in the second quarter of 2016, Bourbon & Bones Chophouse & Bar will open next to the seafood restaurant at 4200 N. Scottsdale Road... Read more »
Three cities west of the Mississippi have reached new all-time highs for home prices, S&P Dow Jones Indices saidTuesday. Dallas, Denver and Portland, OR reached new peaks as home prices in all 20 cities measured by the S&P/Case-Shiller Home Price Indices increased this past November after seasonal adjustment. The 5.3% annual increase in the US National Home Price Index was the highest since July 2014... Read more »
A $50 million, exclusive condominium project, Easy Street, is coming to Carefree with plans to break ground in June to be finished by the Fall of 2017. Easy Street will feature 44 luxurious, amenity-stocked condos ranging in price from $600,000 to $2,500,000. The project features some of Arizona’s most scenic mountain views and a resort-level lifestyle that’s completely new to the Desert Foothills north of Scottsdale... Read more »

Commercial Real Estate & Business News – January 26, 2016

Nearly 1,000 attendees packed the Grand Canyon Ballroom at the J.W. Marriot Phoenix Desert Ridge Resort to hear insights from top-tier presenters at the Urban Land Institute Arizona 11th Annual Trends Day on Wednesday. Experts and leaders in economics, social trends, education, politics and other disciplines kept a brisk pace across a range of topics... Read more »
There seems to be no end in sight for hotel renovations in the greater Phoenix area, especially in Scottsdale. The Hotel Valley Ho is going through a $4 million renovation, the Fairmont Scottsdale Princess has spent $60 million on upgrades and the Chaparral Suites in Scottsdale will have the largest hotel renovation in the city, with $22 million spent on transforming the space into an Embassy Suites by Hilton... Read more »
Hamlet could have been speaking to us. We live in strange times, good times for all aspects of commercial real estate. But the up cycle we’re enjoying is unlike any we’ve ever experienced. There are forces at play that are unique to the times, and challenge each of us to respond in different ways. Indeed, these are good times, redefined, brought into high-definition, so to speak, in three areas directly impacting our business... Read more »
Rent growth has been a big story in the housing recovery. Multifamily rental starts and completions have concentrated on higher-end market segments in big cities, while development in the mid- and lower tiers of the rent spectrum has been scarce. So, the benchmarks and metrics for measuring prospective rent growth now suggest a massive slow-down in rent payment power, since the demand pool among higher-end tenants can be expected to "level out" vs. development... Read more »
Leading up to the economic downturn in 2008, retail was the only property type to experience a significant inventory increase. Between 2000 and 2008, total retail stock increased by 14.2 percent, more than double the inventory increase observed in the apartment and office sectors. Almost eight years later, we are left with a sector that has been overbuilt and under-demolished. Speculative construction has not returned to the market...Read more »

Commercial Real Estate & Business News – January 25, 2016

Arizona recorded a strong year for job growth in 2015, according to data from the Arizona Department of Administration. The state added 65,700 jobs last year, good for a strong 2.5 percent growth. Total employment in Arizona hit 2.71 million last month. In year-over-year hiring, professional and business services led the way adding 18,100 new jobs, with education and health services adding 11,700. ADOA reports a net job gain of 65,800 jobs in December 2015 over the previous year... Read more »
After a record-setting 2014, apartment transactions hit new, lofty highs in 2015 as volume jumped 32%, to $150 billion, according to a new report from New York–based Real Capital Analytics (RCA). Strong sales of individual assets drove the increase in volume for the apartment sector as a whole in 2015, according to the report. The $5.3 billion Stuyvesant Town transaction was counted as an individual sale. But even without the mammoth deal, individual volume would still be up 22%... Read more »
GoDaddy founder, billionaire businessman and philanthropist Bob Parsons has one of the largest, most technologically advanced, full-service production studios under construction in Scottsdale. The 15,000-square-foot production studio, dubbed Sneaky Big Studios, will have the ability to film live broadcasts, commercials, website video content and TV/radio shows for Parsons’ many companies, as well as other agencies and companies interested in renting the space out... Read more »
“The upward trend in student enrollment we’ve witnessed in America’s colleges and universities for the past decade is expected to continue in 2016 and beyond.” That is according to Brice Willis, vice president of capital markets at Stonemont Financial Group. According to Willis, the National Center for Education Statistics projects steady growth in postsecondary enrollment through 2021. Additionally, he says, “there is apparent political motivation to make secondary education more affordable... Read more »
Predicting if and when Millennials will buy homes is a big money question for the real estate industry. A group of up-and-coming Millennial leaders from metro Phoenix shared their opinions Wednesday on how they and their peers view housing with more than 1,000 of Arizona’s top real estate executives at Urban Land Institute Arizona’s annual Trends Day conference... Read more »
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