San Francisco office building buy to set city record
The San Francisco office market hasn’t claimed as much attention as the city’s housing market, one of the priciest in the nation. But a pending building sale could turn the spotlight on the city’s increasingly strong commercial scene, once hobbled by the dot-com bust, where the overall vacancy rate fell more than 1 percent to 13.9 percent from the first quarter of 2006 through the second quarter. The 665,000-square-foot tower at 560 Mission Street is under contract to be purchased for more than $400 million, or approximately $700 per square foot — what would be the highest price ever paid for a San Francisco office building, according to published reports. The 31-story building includes 5,000 square feet of retail space and a two-level underground parking lot. JP Morgan Chase leases the entire building, but occupies only half and subleases the rest.
—
Atlanta
Commercial
One Atlantic Center in Midtown sold in late July for approximately $305 million to a Houston-based developer. The 50-story tower was for years the most expensive office tower in Atlanta, according to the Atlanta Journal-Constitution. A Japanese conglomerate bought it in 1989 for $300 million — what was then an incredibly high amount.
Commercial
Atlanta is now ranked among the top 10 cities in the world by number of major corporate headquarters. Fortune Magazine, in a survey released last month, said Atlanta is home to six of the world’s 500 biggest corporations — twice as many as in 1992 — tying the city with Houston, Munich and Osaka for ninth place. Home Depot is the highest-ranking Atlanta company on Fortune’s list at number 43, according to the Atlanta Journal-Constitution.
Boston
Residential
Boston housing remains at its highest risk ever for price declines, according to a study by PMI Mortgage Insurance reported in the Boston Herald. There’s a nearly 60 percent chance that home values in Boston will tumble in the next two years. This probability, based on weak local job growth and a general lack of housing affordability, make Boston the third-riskiest city for price declines among the nation’s 50 largest housing markets.
Residential/Commercial
A New York-based REIT has completed an agreement with Federated Department Stores to purchase the Filene’s building in the Downtown Crossing district of Boston for approximately $100 million, Commercial Property News reported. The deal will close in the fourth quarter of this year. The company plans to redevelop and expand the 656,000-square-foot complex to include multiple levels of retail space, an office component, a hotel, a residential tower and a supermarket.
Chicago
Residential
Many rental apartment buildings have been turned into condos in downtown Chicago, sparking a rental shortage. But construction is wrapping up at the Residences at Left Bank, a 37-story luxury rental apartment building at 300 North Canal Street. The tower, located in the Kinzie Station/Fulton River District, includes 451 rental units with 18 different floor plans, including six penthouses, according to GlobeSt.com.
Residential
Some are dubbing the South Loop of Chicago “Crane City” because of how much housing construction is going on there. The South Loop outperformed other parts of downtown last year in new-construction home sales and has increased its share of the downtown condo market to 44 percent, the Chicago Tribune reported. More than 6,100 condo units are proposed for the South Loop in the next two years.
Las Vegas
Residential/Commercial
High-rise condo development in Las Vegas is moving beyond Sin City’s major thoroughfares, the Las Vegas Sun reported. Plans are being pushed forward for the Great Mall of Las Vegas — a combination of a mall and condominium high-rises. But the developer would need a zoning change to allow two 250-foot-tall condominium towers on a property that carries a two-story height limit and doesn’t allow residences. The city Planning Commission recommended that the City Council reject the proposal.
Commercial
Office vacancy jumped 1 percent to 9.4 percent in the second quarter of this year from the second quarter of last year, as record new construction completions pushed the total office inventory to 39.3 million square feet in Las Vegas. According to a second-quarter report from Applied Analysis, absorption came close to keeping up with supply when 900,000 square feet was delivered in the first quarter, but in the second quarter absorption backed off to 669,000 square feet while construction completions rose to 1.2 million square feet. The total amount of space delivered in the first half of the year is higher than any six-month total in the past decade, according to the report.
Los Angeles
Commercial
Developers recently unveiled plans for a 1,000-room hotel complex in downtown Los Angeles, set to include a five-star Ritz-Carlton and a four-star Marriott Marquis, which will be added to the new Convention Center. The $750 million hotel project will rise 54 stories and be one of the largest buildings in Los Angeles at 2 million square feet, according to the Los Angeles Times. The hotel, scheduled to open in 2010, would anchor the 27-acre LA Live sports entertainment complex.
Residential
Los Angeles’ ongoing condo conversion craze has displaced thousands of renters from their apartments. At least 11,000 rental apartments have disappeared from the city’s market in the last five years because of condo conversions, the Los Angeles Times reported.
Myrtle Beach
Commercial
Construction is set to begin on Myrtle Beach’s new $400 million Hard Rock theme park, which will include rides, a concert venue, rock memorabilia and a hotel, the Myrtle Beach Sun reported. According to a source, the park could be an economic boon for the up-and-coming area, creating an estimated 3,000 jobs and thrusting the Myrtle Beach Grand Strand tourism industry into the international spotlight. The 140-acre rock ‘n’ roll theme park could open its gates in spring 2008.
Philadelphia
Residential/Commercial
Philadelphia’s once-struggling Center City continues its resurgence — the latest evidence being a luxury hotel-condo planned at the corner of 12th and Arch streets, the Philadelphia Inquirer reported. The W Hotel will have 250 rooms and 95 condo units, and is expected to open in 2009, the same year the city’s Convention Center expansion is scheduled to be completed.
Residential
While home prices were up in the first half of 2006, sales are down. The median home price in Philadelphia from January through May increased 4.8 percent over the same time period in 2005 to $216,167, USA Today reported. At the same time, however, home sales declined 5.8 percent year over year. Still, Philadelphia was healthier sales-wise than the rest of Pennsylvania, where sales were down 19 percent from the first half of 2005 through the first half of this year.
San Diego
Residential
San Diego, once one of the most reliably hot housing markets in the nation, has seen home price declines recently. In June, the median price of a home in San Diego County dropped year-over-year for the first time in a decade. The price dipped 1 percent from June 2005 to June 2006, drifting to $488,000, the Associated Press reported.
Washington, D.C.
Residential
Apartment rents in Washington, D.C., are rising as many residents decide to rent rather than to buy in what they feel is an inflated real estate market, the Washington Post reported. At least 4,000 condos will be turned into rentals over the next two years. More than 6,500 renters leased units in the past year, which is up 4,400 from the 12 months before. The Washington area has one of the lowest apartment vacancy rates in the nation, down to 1.7 percent from 2.4 percent a year ago. (The nation’s average is 5.7 percent.) Experts say rents are expected to rise 5 to 9 percent annually over the next few years.