The Real Deal New York

National Market Report

October 18, 2007

Atlanta

Residential/Commercial
In the city’s most ambitious mixed-use venture of the year, Cousins Properties purchased 9.9 acres in Buckhead, and plans to develop a two-phased, 31-story development with 1.5 million square feet of office space, at least 60,000 square feet of street-level retail and restaurant space, and 800 residential units. Groundbreaking is scheduled for May. Completion of the first phase is anticipated in April 2007.

Boston

Residential
Roxbury is on the cusp of a revival, real estate agents say. While perceptions of the neighborhood as a crime-ridden area still linger, soaring Boston housing costs are driving first-time buyers to Roxbury as an affordable alternative. The 2004 median sale prices in Boston’s downtown neighborhoods were $1.26 million for a single-family home and $463,000 for a condo, according to the Warren Group. For Roxbury, the medians were $370,000 for a single-family home and $399,000 for a condo, the Boston Globe reported.

Chicago

Residential/Commercial
The Chicago Board of Alderman last month approved zoning for Riverside Park, a $1.5-billion, 62-acre mixed-use community in the South Loop. The project will be located on undeveloped land along the south branch of the Chicago River south of Roosevelt Road. It will eventually include 4,600 units priced from $200,000 to $3 million, with marketing on the first phase to begin this summer, according to Realtor.org.

Commercial
The newest office buildings in the city are getting substantially higher rents than older trophy properties. The average net rent in top-quality office buildings constructed since 1999 is $20.42 per square foot, nearly 20 percent more than their rivals built between 1969 and 1978, according to a report by Torto Wheaton. Trophy towers built between 1969 and 1978 include the city’s best known skyscrapers, the Sears Tower and the John Hancock Center, the Chicago Tribune reported.

Residential/Commercial
After considering a plan that would have made his building the nation’s tallest, Donald Trump scaled back plans for a decorative spire atop his 90-story Trump International Hotel & Tower under construction. Mayor Richard Daley had supported a plan to extend the spire, but Trump eventually decided to go with the original spire because it looked less awkward, he said. The project will be about 90 feet shorter than the 1,450-foot-tall Sears Tower, the Chicago Tribune reported.

Las Vegas

Commercial
If Seattle has Bill Gates as its local tycoon, Las Vegas has Kirk Kerkorian. The MGM Mirage majority shareholder was involved in one of the largest deals in the history of the casino industry recently, with MGM buying out Mandalay Resort Group in a $7.9-billion acquisition expected to close last month. As a developer, Kerkorian three times built the world’s largest hotel in Las Vegas. With the Mandalay acquisition, he’ll control 11 major resorts and the largest share of Strip hotel rooms, casino space and entertainment venues ever assembled by one owner, the Las Vegas Sun reported. Kerkorian has an estimated net worth of $5.8 billion, according to Forbes.

Residential/Commercial
Condo-hotels are the latest real estate concept in Las Vegas, allowing condominium owners to rent out their units by the night. Last month, the Palms resort announced plans to build a 599-unit hotel-condominium tower behind their property. The MGM Mirage, The Aladdin and the Hard Rock Hotel have similar projects underway or on the drawing board, the Las Vegas Sun reported.

Residential
With just under 50 percent appreciation, the Las Vegas market had the strongest price gains in the nation for the first nine months of last year. But such gains are highly unlikely this year, especially given the number of homes on the market, brokers said. The number of single-family homes listed on the area’s MLS in January was 13,800, compared to fewer than 4,000 homes on the market last spring during the run up in prices, according to the Greater Las Vegas Association of Realtors.

Los Angeles

Residential
Baby boomers made three-fourths of all home purchases in California last year and are credited for being the driving force behind the state’s rip-roaring housing market, according to the California Association of Realtors. Purchasers were typically repeat buyers, and those repeat buyers were on average married, 45 years old, and earning $100,000 annually. Meanwhile, the share of first-time buyers dropped to 26 percent in 2004-a record low, according to the survey.

Commercial
A controversial proposal to build a $200- million hotel in downtown Beverly Hills won approval in a ballot measure brought to voters last month. The eight-story Montage project has dominated civic discourse for more than a year and prompted a bigmoney campaign pitting the developers of the resort, the Athens Group, against the posh Peninsula Beverly Hills hotel, which invested heavily to defeat the project. The resort hotel will be built between Beverly and Canon drives, just north of Wilshire Boulevard, according to the Los Angeles Times.

Residential
While no one anticipates a return to the frenzied market of last spring, after a bloated summer and fall, low inventory could trigger a spring season of price increases after six months of relative flatness. In Huntington Beach, for example, there were 323 active listings at the end of February, compared with 481 in June and 117 in February 2004, the Times reported. Last spring, intense bidding wars drove up the median price in Los Angeles and Orange counties about 20 percent in less than six months.

Miami

Residential/Commercial
Roy Stillman, who recently developed the Metropolitan on East 90th Street in Manhattan, is partnering with Donald Trump on a 24-story, 298-unit condo hotel in Fort Lauderdale. The Trump International Hotel and Tower, which is being designed by Michael Graves & Associates, is scheduled to break ground this month, Globest.com reported.

Residential
The median price for a home in the Sunshine State has soared 17 percent in the last year to $182,400, from $155,800. Six of the nation’s fastest-appreciating metropolitan areas are in Florida, including number three West Palm Beach/Boca Raton, at 34 percent in the last year, and number four Bradenton, with a 32-percent jump, according to published reports.

Philadelphia

Commercial
A third major office tower is slated to break ground in Philadelphia after a nearly 15- year drought of new office construction. Developer Don Pulver plans to put up a building as high as 17 stories at 15th and Arch streets. Viacom is looking at taking space, the Philadelphia Business Journal reported. Other office projects underway include Brandywine Realty Trust’s 28-story, 728,000-square-foot Cira Centre, which broke ground last year and Liberty Property Trust’s 57-story, 1.2-million-squarefoot Comcast Center, which just got under way.

San Francisco

Residential/Commercial
Small apartments are creating controversy in San Francisco. Dubbed SROs, or single room occupancy units, studios with 350 square feet or less of living space have become popular with developers, the San Francisco Business Times reported. Nine complexes totaling nearly 500 units are either now under construction or seeking city approvals, but market-rate SROs are being opposed by some government officials and activists who say all SROs should be for low income residents.

Residential
The benchmark for what is considered a “luxury home” keeps rising in the San Francisco Bay area. Alain Pinel Realtors, which recently launched a market index, says the starting point is $1.5 million, according to the East Bay Business Times. Even that figure might be too low. First Republic Bank, which publishes the quarterly First Republic Prestige Home Index, said in February that the average luxury home in the Bay Area costs $2.55 million.

Seattle

Commercial
The Bill and Melinda Gates Foundation plans to build a new headquarters downtown. Last month, The Seattle City Council approved the $50.4-million sale of a 12.3- acre parking lot adjacent to the Seattle Center for the building. Construction will begin in 2007, according to Globest.com.

Washington, D.C.

Residential
A mansion believed to have set a Georgetown record for the highest-priced sale four years ago is back on the market. The 11,000-square-foot, four-story mansion is being listed for $8.5 million, $2.2 million more than what it sold for in 2001, according to the Washington Post. That translates into roughly $775 a square foot for the 29th Street NW home.

Commercial
The Baltimore office market is healthier than other U.S. markets struggling to recover from a downturn, and construction of office buildings is expected to heat up this year, with nearly three dozen projects likely to start rising by late summer, the Baltimore Sun reported. The Baltimore area ranked seventh nationally in the amount of office space built last year, completing a little more than 2 million square feet. Washington topped the list, building 6 million square feet of office space. Baltimore’s vacancy rate of 13 percent is better than the 13.7 percent national average.

Residential
While single-family homes remain the option of choice among buyers in the Washington, D.C., metropolitan area, more prospective buyers are looking at condos as a way to afford a home. While the D.C. area’s existing condo price of about $250,000 tops the nationwide median of $203,200, it still is significantly less than the market’s single-family home price, which was $371,000 for the last quarter of 2004, according to the Washington Times.


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