The Real Deal New York

National market report

Commercial and residential real estate news from around the U.S.

December 01, 2012
By Zachary Kussin

Minneapolis

Minneapolis

In a deal that would mark the priciest Minneapolis office building sale since 2007, San Francisco–based Shorenstein Properties is set to acquire one of the city’s tallest skyscrapers for just over $200 million, the Wall Street Journal reported. Shorenstein is on track to acquire 33 South Sixth Street City Center from Brookfield Office Properties. The 50-story City Center building is 94 percent occupied, with much of its office space leased to Target. Built in 1983, the tower was designed by Skidmore, Owings & Merrill and is centrally located on the Nicollet Mall, a popular shopping area. The base of the tower contains about 382,000 square feet of retail space, which has struggled to compete with suburban malls, the Journal said. Vacancy in the Minneapolis office market in the third quarter was 18.2 percent, down from 19.8 percent in the same period two years ago. Effective annual office rents, which include landlord concessions, rose 1.9 percent in the third quarter to $16.86 per square foot from the same period of last year.

 

San Francisco

The San Francisco Planning Commission gave developers permission to move forward with a 61-story, 1.4 million-square-foot office building, which would be the tallest building on the West Coast, Commercial Property Executive reported. A joint venture of Hines and Boston Properties is expected to finalize a $190 million acquisition of the land, located in downtown San Francisco, in the first quarter of 2013. Hines is also developing the nearby $4 billion, 1.3 million-square-foot Transbay Transit Center. Christopher Roeder, international director at Jones Lang LaSalle, told CPE that San Francisco’s commercial market has absorbed nearly 3.5 million square feet in the past two years.

 

Los Angeles

Los Angeles’s famed El Royale apartment building, which is known for its celebrity tenants, has traded hands for $29.5 million, the Wall Street Journal reported last month. New York–based landlord Kamran Hakim and California real estate attorney Farhad Eshaghpour bought the 56-unit rental building from a family trust after winning a bidding war. Current renters in the 83-year-old Art Deco building include “Girls” creator Lena Dunham and talk show star Kathie Lee Gifford. Previous residents have included Uma Thurman, Katie Holmes and Clark Gable. Since the former owner, Martha Scott, died in 2009, the El Royale has reportedly fallen into some disrepair and faced staff shortfalls. The new owners told the Journal they aim to make the building “a better place to live” and plan a roof deck face-lift, new paint for the lobby and landscaping the grounds. “We don’t have any plans to sell it, ever,” Hakim told the Journal. Rents in the building range from $2,350 for an 830-square-foot one-bedroom to $8,800 for a duplex penthouse. The median asking rent in Los Angeles is $1,900 per month, according to Zillow.

 

Phoenix

A Frank Lloyd Wright–designed house seems to have narrowly avoided demolition, the New York Times reported. Wright built the four-bedroom Phoenix home for his son David in 1952, and it was sold by Wright’s great-granddaughters for $2.8 million in 2009. This spring, Steve Sells and John Hoffman, partners at the development company 8081 Meridian, purchased the house for $1.8 million. They obtained a permit to demolish it, with plans to split the lot and build two new homes. In response, the Chicago-based Frank Lloyd Wright Building Conservancy asked the city of Phoenix to landmark the home, preventing its demolition. Meanwhile, an anonymous buyer stepped in, agreeing to purchase the house for $2.4 million in cash, though the deal hasn’t yet closed. The city is set to vote on the landmark designation Dec. 5, according to the Phoenix Business Journal.

 

Las Vegas

In the largest sale of a Las Vegas multi-family development since 2007, the 840-unit Renaissance Villas Apartment Community complex traded hands last month for $74.75 million, or about $89,000 per unit, GlobeSt reported. The owner, Southern Nevada Income Properties, sold the 95 percent-occupied property to Riverview Development XVIII LLC. The 281,744-square-foot property was built in 1989, CoStar reported. The 200 one-bedroom and 640 two-bedroom units command asking rents between $650 and $935 per month. Lloyd Sauter and Patrick Sauter of NAI Sauter Companies, a Las Vegas investment real estate brokerage, represented both the buyer and seller in the transaction. According to GlobeSt, Las Vegas saw 40 apartment complexes sell in the first six months of 2012, totaling 4,561 units, a total of $153.5 million. That’s an 81 percent increase in transactions over the second half of 2011. The average price per unit also increased about 32 percent during the same period, from $25,500 to $33,654.

 

Usher’s Georgia mansion

Atlanta

The musician Usher listed his 12,544-square-foot Georgia mansion for $3.2 million last month, the Huffington Post reported. In 2007, Usher paid $3 million for the six-bedroom home, which is located in the Atlanta suburb of Roswell. It has been occupied by his ex-wife Tameka Raymond since their 2009 divorce.

 

Leonardo DiCaprio

Malibu 

Actor Leonardo DiCaprio listed his beachfront Malibu estate last month for $23 million, the Los Angeles Times reported. The oceanfront estate had been listed for rent this summer at $75,000 per month. It contains a four-bedroom main house overlooking the ocean, a two-bedroom guest house and a loft space with an office and a gym.

 

The Naples home of Jack Connors

Naples 

Advertising executive Jack Connors put his Naples, Fla., compound on the market for $22.9 million, Curbed reported last month. The five-bedroom home comes with a tennis court and sits atop 1.6 acres in the Port Royal neighborhood. Connors purchased the home in 2006 for $16 million.

 

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