National Market Report

Atlanta

Residential/Commercial
Construction or conversion of more than 2,300 condo units worth $1 billion have either started or are now breaking ground as that market sizzles, according to a report by Central Atlanta Progress, a local business group. In the Buckhead neighborhood, Regent Partners recently announced it is dropping an office project in favor of a mixed-use project with luxury condos on its top floors, according to the Atlanta Journal-Constitution.

Commercial
The expected scant increase in new office space is expected to drive down the vacancy rate in 2005, according to commercial real estate firm Richard Bowers & Co. Only three new buildings, totaling 640,000 square feet were delivered in 2004, including the SouthTrust building at Atlanta Station, which accounted for 500,000 square feet. About 320,000 square feet of new construction will be available this year, according to Globest.com.

Boston

Residential
The average rent for a new apartment is $90 a month lower than two years ago, a sign of continuing softness in the rental market, according to a recent study. The average asking rent for Boston apartments of all sizes was $1,775 a month at the end of 2004, down from $1,865 in October 2002, according to Northeast Apartment Advisors Inc.

Residential
After dropping for two months, the number of single-family homes changing hands in Massachusetts jumped in November. There were 4,063 sales, with some brokers attributing the earlier declines to the presidential election and the Red Sox’s World Series win. The median home price surged to $345,950, up 14.6 percent over the same time a year earlier, the Boston Globe reported.

Commercial
Downtown Boston’s office vacancy rate hit a 25-year high of nearly 20 percent in 2004 at a time when the national economy was supposed to be in recovery. About 11.9 million of the city’s 58 million square feet of office space is now vacant, according to Spaulding & Slye Colliers International. The acquisition of FleetBoston Financial Corp. by Bank of America, insurer John Hancock Financial Services purchase by Canadian giant Manulife Financial Corp. and cutbacks by State Street Corp. contributed to the rise.

Chicago

Residential/Commercial
A massive 28-acre mixed-use complex Downtown is nearing completion under the auspices of the Magellan Development Group. The centerpiece of the project is a six-acre public park, called Lakeshore East, which will include a dog park, sports fields and sitting areas. The complex will include four residential towers, including a 549-unit rental building and a 29-story, 209-unit condo high-rise, Realtor.org reported.

Residential
For years, the development community would recirculate buzz about Uptown as a district poised for revival, and it seems to be happening this year. While the North Side neighborhood has seen considerable gentrification over the last 10 years, there is a critical mass of expensive projects developing in the area, one of the most racially and economically mixed Chicago communities. There are at least 21 new-construction projects and 26 conversions underway, with new construction selling from $250 to $290 a square foot, according to a story in the Chicago Tribune.

Las Vegas

Residential
The length of time it is taking to sell homes in Las Vegas continues to increase as supply surpasses demand. Of the 2,522 homes listed in the area’s Multiple Listing Service that sold in December, 15 percent of them had been on the market for three months or more, up from 10 percent in November, the Greater Las Vegas Association of Realtors reported.

Residential/Commercial
About 3,700 apartment units are expected to be built in Las Vegas in 2005, compared with 3,500 built in 2004, according to CB Richard Ellis. Around 12,000 apartment units are in the process of being converted to condos. Sales are expected to be robust in 2005, but not on the volume that was experienced in 2004.

Commercial
Small office buildings, the hot product of 2004, are on the verge of being overbuilt, local brokers say. There is 7.1 million square feet of office space planned or under construction in the Las Vegas Valley, of which 2.3 million square feet is small office buildings for sale, according to In Business Las Vegas.

Los Angeles

Residential
Nearly three-quarters, or 74 percent, of home sales in California last year involved baby boomers, according to a California Association of Realtors report. Of those buyers, 50 percent were upgrading to larger dwellings. A typical California home seller was married, 47 years old, earned nearly $135,000 annually and had sold a home at least once before, the survey found.

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Residential
While final numbers aren’t in yet, the California Association of Realtors forecasted a 3 percent increase in home sales in 2004 over 2003’s record 601,800 sales. For the year, the median price of a single-family dwelling was expected to rise 22 percent over the previous year to more than $450,000 which would represent a new high.

Miami

Residential/Commercial
Downtown Orlando had four condominium communities prior to a building frenzy that began in 2000. Since that year, 3,596 new and converted units in 19 projects have been announced. Some attribute the downtown condo boom to rising land costs and lengthy commutes, according to the Orlando Business Journal.

Philadelphia

Commercial
After considerable controversy, a 57-story, 1.2 millon-square-foot office tower that will serve as the headquarters of the Comcast Corp. broke ground last month at 17th Street and JFK Boulevard. Developer Liberty Property Trust had sought to have the building, One Pennsylvania Plaza, designated as part of a Keystone Opportunity Improvement Zone, but existing landlords said the project would have had an unfair competitive advantage by giving all tenants who moved in tax abatements. The measure was eventually defeated by the state’s General Assembly in November, though the project is getting $30 million through a separate program.

San Francisco

Commercial
In what is believed to be the largest single lease deal ever in the Bay Area, biotech company Genentech signed a 780,000-square-foot lease with Slough Estates in South San Francisco in late December. Three buildings will be built by Slough for the biotech company on East Grand Avenue over the next four years. The largest previous deal in the history of San Francisco was done in 2000 when JP Morgan H & Q leased 665,000 square feet at 560 Mission Street.

Residential
An estimated 135,000 Bay Area homes and condos changed hands in 2004, the highest number ever, according to DataQuick Information Systems. The price for a single-family home in the region hit a record $560,000. In November. In Marin County, the median price for a single-family home was a staggering $837,500.

Seattle

Residential
Sales of homes worth more than $1 million in King County, where Seattle is located, increased 48 percent in 2004, according to Windermere Real Estate. King County saw 709 single-family homes worth more than $1 million sold in 2004, compared with 479 in 2003, according to the Puget Sound Business Journal.

Commercial
Pension and investment manager TIAA-CREF nabbed one of Seattle’s newest office buildings, the IDX Tower, for a record $411 per square foot. The fund manager bought the 845,533-square-foot, three-year-old Downtown office building, which is 96 percent leased, for $348 million as part of a five-building package worth $1.47 billion, Globest.com reported.

Washington, D.C.

Commercial
Pension and investment fund manager TIAA-CREF bought a package of five buildings for $1.47 billion in the final days of 2004 (mentioned above), an acquisition that included the highest price paid for a single Washington D.C. building last year. The investment fund paid $461 million for 1001 Pennsylvania Ave. NW. The 802,000-square-foot office property was sold for $575 per square foot. The average sales price for office buildings was $364 per square foot in the District last year, compared with $323 per square foot the year before.

Residential/Commercial
The 2004 third-quarter average home price in the D.C. metropolitan area surged 24 percent from the same period in 2003, according to the Office of Federal Housing Enterprise Oversight. That is considerably higher than the nationwide quarterly increase of 13 percent. While similar gains aren’t expected in 2005, experts predict tens of thousands of jobs will be created in the area this year, mostly by the federal government and federal contractors, which will keep the market strong, according to the Washington Post.


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