The Real Deal New York

National Market Report

November 27, 2007

Atlanta

Commercial
Atlanta’s commercial market this year is on pace to beat the sales record of 57 office buildings that changed hands in 2004, according to the Atlanta Business Journal. Construction of new office space is already ahead of 2004, with 2.4 million square feet under construction as of the end of August, compared with 1.7 million square feet by the end of 2004.

Residential/Commercial
Steady population growth and a proximity to job centers off Interstates 75 and 285 are fueling a construction boom in Marietta, a northwestern suburb of Atlanta. More than $200 million in future mixed-use development has been approved by the city.

Boston

Residential
Boston is expected to add 1,300 new rental apartments in the next 12 months, according to the Boston Globe. The increase comes as rents across the city creep upward, signaling a potential slowdown in Boston’s housing market. The average rent as of the end of August was $1,684, up slightly from $1,654 at the beginning of 2005. Occupancy of Boston’s rentals is up to nearly 98 percent, the Globe reported.

Commercial
The Boston suburbs of Waltham and Watertown are the only ones showing “signs of strength” in the commercial market, according to a market report from Grubb & Ellis. Both areas have seen recent large leases, including one by Athenahealth in Watertown for 133,000 square feet. Other Boston environs continue to struggle commercially, with as much as 9 million square feet of office space vacant along Route 128 alone, the Boston Business Journal reported.

Chicago

Residential
Prairie Avenue, described in an 1893 guidebook as the “most expensive street in America west of Fifth Avenue,” is undergoing a residential resurgence, according to the New York Times. Once teeming with mansions that eventually fell into disrepair, new condo developments near or on Prairie Avenue are making the throughway one of the hottest residential spots in Chicago again. The new developments include a redevelopment of the former Marshall Field mansion into luxury condos and the new Commonwealth luxury condo building next door.

Residential/Commercial
The city is considering a special tax zone to help pay for operating Millennium Park and for beautifying Chicago’s central business district, the Chicago Tribune reported. Downtown property owners would pay additional taxes of about $17.5 million in the first year of operation in the so-called Downtown Special Service area. Residents in the area will have a chance to vote on its creation, but the City Council may have final say.

Houston

Residential/Commercial
High-rise residential developments are springing up throughout the nation’s fourth-largest city. The developments, according to the Houston Business Journal, include the first-ever condo high-rise in Houston’s Clear Lake neighborhood a 29-story building with 88 units ranging in price from $300,000 to $2 million. High-rises are also slated for Downtown, River Oaks, and near the Texas Medical Center, where two luxury condo-hotels with more than 200 units are planned.

Las Vegas

Residential
After five consecutive quarters ranked among the nation’s top 20 metro areas for housing appreciation, Las Vegas dropped off the list maintained by the Office of Federal Housing Enterprise Oversight. The Las Vegas metro area dropped from number two during the first quarter of 2005 to number 21 during the second quarter, the Las Vegas Sun reported. Las Vegas’ housing appreciated 26.91 percent during the second quarter, putting it at number 21 among the nation’s metro areas in housing appreciation.

Residential
But even if Sin City’s housing appreciation has declined, Las Vegas still remains the fastest-growing metropolitan area in the nation. From 2000 through 2004, the Las Vegas Valley’s population grew by 85.5 percent, the largest rate for any metro area, according to a recent report from the Brookings Institution. During the 1990s, the area grew by 18.5 percent, also the nation’s fastest rate.

Los Angeles

Residential
Luxury home prices in the Los Angeles metro area hit all-time highs this summer. The value of a luxury home a house worth more than $1 million increased 21.9 percent from the second quarter of 2004 to the second quarter of 2005, with the average luxury home price hitting a record $2.09 million in the second quarter, according to a recent survey by First Republic Bank. That’s an average $376,000 increase from a year ago.

Commercial
Two of the biggest office leases signed in Los Angeles this summer were in the Century City neighborhood. A law firm took 50,000 square feet at 1800 Century Park East and Comerica Bank committed to 43,000 square feet at the new 2000 Avenue of the Stars building, according to Globest.com. Both leases are for more than a decade.

Miami

Residential
Could the South Florida residential market be cooling? Prices for single-family homes and townhouses in Broward County, for one, were flat in August compared to July, according to the Miami Business Journal. The median price for a single-family home in Broward, north of Miami, was $389,000 in August, up only 1 percent from July. That median was 31.4 percent higher than the $296,000 in August 2004. For townhouses, the August median price was $200,000, the same as the median in July.

Residential/Commercial
The South Florida rental market is tightening. More than 10,700 residential rental units disappeared from the area in 2004, Globest.com reported, most of them making way for condos, including recent high-end additions like architect Richard Meier’s Beach House, a 101-unit project on Collins Avenue. Overall, as of the end of August, the vacancy rate in the South Florida rental market was 5.2 percent, and experts anticipate it will only get tighter.

Philadelphia

Residential
Across the Philadelphia metro area, home prices are rising at double their historic rates, according to a study released in mid- August by the Philadelphia Inquirer. In the past five years, the median price gain for the area averaged 8.1 percent a year, and the median price rose to $177,000 in 2004 from $155,000 in 2003 a 14.5 percent increase. The median price gain varied across the Philadelphia metro area, from 13 percent in Bucks and Camden counties to 17 percent in Philadelphia and Gloucester counties.

San Francisco

Residential
Finding an affordable home in New York is hard but it may be harder in San Francisco. The average home price in San Francisco in 2004 was $641,000, according to the New York Post, but that’s only part of what makes finding a home there difficult. The waiting lists for available spaces have gotten longer recently in San Francisco as the city’s housing inventory has shrunk and as sellers command the market at the expense of even buyers offering cash.

Residential/Commercial
A massive, $400 million mixed-use development on 21.5 acres at the base of San Bruno Mountain could create a new downtown for southern San Francisco. Though still in the planning stages, according to the San Francisco Business Journal, the development has ignited buzz in the Bay Area. Proposed by developer Jack Myers, it would include as many as four new towers of up to 21 stories. Hundreds of thousands of square feet of office space as well as hundreds of new condos would be part of the development.

Washington, DC

Residential/Commercial
Condo construction in Washington is booming, leading real estate experts to ask whether there is a glut. There are some 29,700 condo units in the pipeline for the next 36 months, compared with 13,700 a year ago, Delta Associates reported. But a recent report by the George Mason University Center for Regional Analysis found there is enough demand, with demand expected to outstrip supply by 20,000 units through the end of the decade.

Commercial
The Washington Nationals will soon have a new baseball stadium. Clark Construction Group won the opportunity to build the franchise’s $535 million stadium in the city’s Anacostia neighborhood. The group will get $23.2 million up front to cover initial fees for the stadium, with the remainder coming as the project progresses. The stadium, according to media reports, is supposed to be ready by the 2008 season.

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