National market report

Cox Enterprises, the parent company of the Atlanta Journal-Constitution, has agreed to donate the newspaper’s former downtown headquarters to the city of Atlanta, the Associated Press reported last month. The Atlanta Journal-Constitution moved to a new office in suburban Atlanta eight months ago. The donation includes both the office building and the former printing-press building behind it, which occupy nearly six acres of land. Atlanta mayor Kasim Reed plans to use the buildings for the police and fire training academies, public meetings and a gallery space. Cox estimates the buildings to be worth $50 million.

All 11 residences put up for auction at the 50-unit Bryant Back Bay luxury condo in downtown Boston sold last month. After the auction, a 12th unit sold, for a gross sales price of over $19 million. At last year’s auction for the same building, $20 million of homes sold in less than one hour, making Bryant Back Bay one of the first new developments in the Northeast to have two auctions in just over a year almost sell out.

Condo prices in downtown Boston have hit a decade high, while sales volume dropped to a 10-year low, according to the Boston Globe. Compared to the third quarter in 2009, downtown condo prices increased 9.2 percent, to a median selling price of $475,000. Yet with only 677 condos sold, total transactions in the third quarter dropped 24.5 percent compared to the same time last year. While the downtown Boston real estate market may be slow overall, the high condo prices indicate a renewed strength in the luxury market. Michael DiMella, a managing partner at Charlesgate Realty Group, told the Boston Globe, “The higher end has picked back up, which drags the median prices a bit higher. Buyers are being real choosy.”

The Heritage Plaza building in Houston.

The number of Chicago-area homeowners who owe more in loans than their property is worth has increased to 32.9 percent over the third quarter, according to Chicago Breaking Business. A report from real estate website found the number of homes with negative equity has continued to rise over the past year, from 27.2 percent last September and 30.9 percent in June, not including condos. The number of Chicago-area homes with negative equity is well above the national number, at 23.2 percent. “Negative equity is going to continue to cast a pall over the housing market for the next several years,” Stan Humphries, Zillow’s chief economist, told Chicago Breaking Business. “All these people are trapped in their homes and can’t move on to another one.”

Denver’s commercial real estate market is being saved by medical marijuana, the Denver Post reported last month. Industrial brokers estimate that more than 1 million square feet of warehouse space has been leased to medical marijuana growers over the past year. A law signed in June mandated that medical marijuana dispensaries grow 70 percent of what they sell, forcing owners to find large warehouse spaces to plant cannabis. “Growers have saved numerous warehouse owners from going under in this economy,” Nick King, co-owner of a medical-marijuana dispensary, told the Denver Post. “Without the influx of cannabis growers, many of these warehouses would be forced into short sale or foreclosure.” The numbers indicate that grow houses are significantly supporting Denver’s commercial real estate market. The third-quarter industrial vacancy rate dropped to 8.3 percent, the lowest it’s been since 2008, according to Grubb & Ellis. The overall vacancy rate for the U.S. industrial market was 10.5 percent.

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In one of the city’s biggest real estate deals ever, the Heritage Plaza building in downtown Houston is being sold for $325 million, according to the Houston Chronicle. New York-based Brookfield Office Properties bought the 53-story, 1.2 million-square-foot building from Goddard Investment after a deal with USAA Real Estate fell through. USAA initially won the bid at $333 million against Brookfield, Tishman Speyer and others, but was unable to line up financing agreeable to the seller. The deal could set a new standard for investors thinking about buying skyscrapers in downtown Houston, real estate investment expert Mary Carolan told CultureMap Houston. “It’s going to set a watermark for the expectations of pricing for other Houston office owners,” Carolan said. Only a few other office spaces in the country have traded as of late at larger sums than the Heritage Plaza deal. KBS Realty holds the record for this year’s priciest closed single-property transaction, for the $655 million it paid for a 1.3 million-square-foot office building in Chicago.

Nicolas Cage

Los Angeles
Nicolas Cage’s Bel Air home sold for $10.5 million, after the actor lost it to foreclosure earlier this year, the Los Angeles Times reported last month. The 11,817-square-foot, 1940 Tudor sold for less than one-third of the price it had been on the market for three years ago. The home, featuring a custom wine cellar, a 35-seat home theater and an Olympic-size pool, did not secure any foreclosure bids when it was up for auction on the courthouse steps in April. Cage, who also lost two New Orleans mansions two years ago to foreclosure, had listed the home in 2007 for $35 million. The difference reflects the continued drop in sales prices for Los Angeles luxury property. Last year, a slightly smaller home on the same street sold for $22 million.

The waterfront mansion of bankrupt real estate tycoon Michael Mastro has been scooped up in a $9.1 million cash deal, the Seattle Times reported last month. The unnamed buyer paid $5.9 million less than Mastro did in 2006. Mastro, a real estate developer and lender, filed for bankruptcy in July 2009, with over $570 million in debt. The home, which includes 176 feet of Lake Washington waterfront, a pool and a sauna, reflects a continued interest in high-end Seattle waterfront real estate, according to the Seattle Post-Intelligencer. In October, six waterfront properties sold, ranging in price from a $700,000 floating home to a $6.7 million Lake Washington estate.