The Real Deal New York

Google executes a Silicon Valley land swap, Washington D.C. clears final hurdle for Walter Reed redevelopment, South Boston’s ‘innovation’ boom and more

National market report

August 01, 2016
By Elizabeth Kim

A rendering of the new Google headquarters in Mountain View

A rendering of the new Google headquarters in Mountain View

Mountain View, California

In what has been billed as a mutually beneficial bargain between two tech giants, Google and LinkedIn have brokered a cash-free real estate deal that will pave the way for their respective Silicon Valley expansions. As part of a massive land swap, Google will receive LinkedIn’s 370,000-square-foot headquarters and almost eight acres of land in Mountain View, a city 40 miles south of San Francisco, according to Ars Technica, a tech news website. In return, LinkedIn will get seven buildings from Google in Mountain View and the neighboring city of Sunnyvale. The deal will allow Google to move forward with its much-talked-about, state-of-the-art headquarters designed by Bjarke Ingels and Thomas Heatherwick. LinkedIn also has plans for a new corporate campus, which will allow it to consolidate all 3,700 of its Silicon Valley employees. Not everyone is delighted with the behemoths’ expansion plans, however. Over the years, Google’s growth has led to clashes with Mountain View residents displeased by soaring housing costs and increased traffic congestion. As a result, the city is currently studying a plan to build 10,000 housing units in the area, Bloomberg reported.

Washington, D.C.

The nation’s capital is set to embark on a multi-decade redevelopment project that will bring housing, retail and a hotel to the site of the Walter Reed Army Medical Center, which has been closed since 2011. In a long-talked-about $22.5 million deal that was finalized last month, Washington, D.C., will purchase roughly 66 acres of Walter Reed Army Medical Center’s 110-acre campus from the U.S. Army. The city plans to sign a $25 million ground lease for 30 years with a team of developers led by Hines Interests, Urban Atlantic and Triden Development Group. Their estimated $1 billion plan includes 2,100 housing units, 250,000 square feet of retail anchored by a supermarket, 20 acres of open space, a Hyatt hotel, as well as an “Innovation Core” of offices occupied by George Washington University, MIT, and bioscience and pharmaceutical companies.

Skyline of Portland, Maine

Skyline of Portland, Maine

Portland, Maine

What’s old is new again in Portland. As its economy expands, the largest city in Maine is experiencing a crunch for commercial space that brokers say is driving demand for older industrial buildings. The vacancy rate for commercial properties in greater Portland’s industrial zones fell to 3.4 percent at the end of 2015, down from 4.1 percent the prior year, the Portland Press Herald reported. Justin Lamontagne, a commercial broker with NAI The Dunham Group said that in part because of the higher cost of new construction, underutilized industrial properties have become a hot commodity. In addition to industrial users such as Casco Bay Steel Structure, a large bridge steel fabricator, which has spent more than $6 million over the past two years buying industrial properties in South Portland, retail businesses such as coffee shops and breweries have also been relocating to industrial zones. “We are full, and we need more inventory,” Lamontagne of NAI The Dunham Group told the Press Herald.

Boston

Buoyed by the impending arrival of industrial giant General Electric, South Boston is undergoing rapid redevelopment as the city evolves from a fishing and industrial hub to an “innovation district.” The area along the waterfront known as the Seaport currently has 2,700 residential units and 1.3 million square feet of office space under construction, the New York Times recently reported. “Investors are trying to find yield, and the Seaport, with all that it has to offer, is one of the hottest submarkets in the country,” Glenn Verrette of Cushman & Wakefield’s Boston office told the paper. Construction company Skanska’s commercial development division is building three projects totaling 1.3 million square feet along the harbor — a mix of housing, office and retail. Meanwhile, Tishman Speyer is partnering with two Chinese insurance companies to build a 13-story office tower and nine-story condo that will also include a public park. Both big and small companies have been drawn to the area. PricewaterhouseCoopers took 13 floors of a 17-story office building last year. G.E., which announced in January that it would move its headquarters from Fairfield, Connecticut, is expected this year to start rehabbing two warehouses and constructing a new office building. The company has said it will employ about 800 employees in Boston by 2018.  

Seaport district in South Boston

Seaport district in South Boston

Las Vegas

Illusionist David Copperfield has pulled off a new trick: setting a Las Vegas sales record. The 59-year-old entertainer recently paid $17.55 million for an eight-bedroom estate nestled in a gated community called Summerlin, the Wall Street Journal reported. He had reportedly been looking for a home in the area for years, since he regularly performs at the MGM Grand Hotel & Casino. The mansion features a showstopper entrance with 18-foot front doors weighing 2,000 pounds. Other perks include a nightclub with a bar and dance floor, an infinity pool, a movie theater and a wine cellar. The prior owner, Kevin Hooks, a health-care executive, bought the land for $2.58 million in 2005 and built the house in 2011. The property was not officially on the market, which may account for the princely sum Copperfield paid for it.

Kirkland, Washington

Olympic soccer gold medalist Hope Solo has put her lakeside estate in Kirkland, Washington, up for sale, asking $1.85 million, according to the Seattle Times. “It’s the place I’m happiest,” the soccer star told the WSJ in a story published just four days before she listed the 5,300-square-foot, three-bedroom house. Evidently, she changed her mind. The World Cup champion bought the property, which features a tennis court, a pool and a wine cellar, in 2012, paying $1.2 million. Both she and her husband, Jerramy Stevens, have strong ties to the area. She is the soccer goalie for Seattle Reign FC, a women’s pro soccer team, while Stevens had been a tight end for the Seattle Seahawks. Solo is set to compete as a member of the U.S. women’s Olympic soccer team this month in Rio.

Meeker, Colorado

Golfing legend Greg Norman, a.k.a. the “Great White Shark,” is hoping someone will bite on his 14,000-square-foot Colorado ranch, which is back on the market for $55 million, according to the WSJ. The property, located 130 miles from Aspen, spans 11,600 acres and boasts eight bedrooms. Norman has tried to sell the ranch several times at the same price. He told the paper that he is looking to return to his native Australia. “My blood is there and my family is there.” Along with cabins, a guesthouse and staff quarters, the ranch has a restored 1800s dance hall and skeet-shooting course. The property, which faces the White River, draws fly fishers. This is not the only home Norman is looking to unload: He is also selling his pad on Florida’s Jupiter Island for $55 million. As it turns out, 55 happens to be his lucky number.

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