The Real Deal New York

National market report

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

December 28, 2011
By Guelda Voien


The Reno skyline


In one of the largest land sales in U.S. history, a 1.28 million-acre Nevada parcel traded hands for $31 million last month, according to the CBRE Group, which represented the seller. The property stretches all the way from Reno to the border of Utah, and is approximately the size of Rhode Island. The buyer, Florida-based Fountain Investments, also purchased mineral rights for 800,000 acres of the parcel. The seller was Pico Holdings, a California-based holding company. Pico’s former chief geologist will join Fountain as an adviser to oversee mineral extraction on the land. “A land sale for more than $30 million is very significant today,” Steve Lehr, senior managing director with CBRE’s Land Services Group, said in a statement.


The world’s largest office lease for 2011 was executed last month at Shell Plaza in downtown Houston, Property Magazine International reported. The renewal by Shell Oil Company, for 804,419 square feet at One Shell and 471,934 square feet at Two Shell, is for 15 years. The company has been a tenant at Shell Plaza — a 2 million-square-foot, Class A office property — for 40 years. The building was developed in 1970 by the international real estate firm Hines, which has continued to own and manage it since then. Shell was represented by the Cushman & Wakefield team of Tim Relyea and Joe Peddie. Hines was represented in-house by Charles Elder and Chrissy Wilson.

Washington, D.C.

The Washington, D.C., metro area saw the highest number of signed contracts for the month of November in six years, according to RBI Pending Home Sales Index data released last month. The region saw 3,781 signed contracts in November — 10.3 percent less than the 4,215 signed in October, but 23.3 percent more than the five-year November average. The report also showed modest month-to-month gains for home prices in the region. The median closed sales price was $335,000, 4.7 percent more than the previous month. There were 2,926 closed sales in November, up 3.9 percent from the previous month, marking only the second time in the past decade where closed sales increased from October to November. There were 348 foreclosed sales, down 35.7 percent from November in 2010.


The Federal Housing Finance Agency sued the city of Chicago last month over a rule that makes mortgage creditors liable for the upkeep of vacant properties, the Wall Street Journal reported. Under an ordinance signed into law by Mayor Rahm Emanuel, lenders face daily fines of up to $1,000 if they don’t mow lawns and provide basic maintenance of unoccupied buildings, even those that haven’t yet been taken back through foreclosure. After lenders threatened to sue, the city revised the law in November by dropping a provision that had defined creditors as property owners. But that didn’t satisfy the FHFA, which said the regulation unfairly imposes all of the costs of ownership without any of the benefits, such as the right to sell or lease the property. “We are looking into the details of the lawsuit, but this type of action demonstrates the need for swift action” by the state “to hold lenders responsible for securing vacant properties,” a spokesperson for Emanuel told the Journal. Chicago has one of the biggest foreclosure backlogs in the country, which has worsened the problem of neglected vacant buildings. Nearly 1,900 vacant properties in Chicago are stuck in the foreclosure process, at a total of $36 million in upkeep costs borne by the city, according to the Journal.

Los Angeles

CIM Group last month paid $47.8 million to buy the former Beverly Hills headquarters of the William Morris Agency from Brickman, a New York City-based developer, according to the Hollywood Reporter. The iconic two-building spread sits on more than an acre of prime real estate at 150 and 151 El Camino Drive, one block from Rodeo Drive. The 116,000-square-foot complex now houses the music division of WME, as William Morris became known after it merged with Endeavor in 2009. The price, about $412 per square foot, is consistent for trophy commercial property in the area, the Hollywood Reporter said. WME said it plans to move out of the space, though there is no timetable for vacating it. In 2008, William Morris sold the two buildings and another at 150 South Rodeo Drive to Cape Horn Group, a Chilean investor, for $143 million, or $783 per square foot. Brickman was Cape Horn’s lender and it acquired the properties from the company prior to a formal foreclosure. Meanwhile, “King of the Hill” creator and star Mike Judge purchased a 3,700-square-foot Santa Monica home last month for $4.45 million, the Los Angeles Times reported. The four-bedroom house features three stone fireplaces, a gym and a guest house. Seller Richard Taite, chief executive of the Cliffside Malibu rehab facility, purchased the house for $3.6 million in 2009. Judge is perhaps best known as the creator of long-running MTV animated sitcom “Beavis and Butthead,” and as director of the cult-favorite film “Office Space.”


Metro Atlanta home values dropped nearly 15 percent year-over-year in October, the Atlanta Business Chronicle reported last month. Data from the real estate website Zillow put Atlanta’s average home value at $109,700 in October, down 1.4 percent from September and 14.7 percent from October 2010. Atlanta’s home values in October were also down 37.6 percent from the market’s peak. Nationally, home values dipped 0.3 percent from September and fell 5.1 percent to $147,900 year-over-year, Zillow said. “As expected, home values continue to fall in the back half of this year due to an abundance of housing supply relative to demand,” Stan Humphries, Zillow’s chief economist, said last month. “Potential buyers remain on the sidelines or doubled up in other households, despite record-high housing affordability and historically low mortgage rates. This crisis of consumer confidence, along with high rates of negative equity, are the biggest factors hindering a housing recovery.”

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