Atlanta
Downtown Atlanta could be poised for resurgence as the number of residences and the average annual household income continue their upward trend. There were 9,101 households downtown in 2000, the year in which residential development began to surge; by 2007, that number ballooned to 15,790. People relocating downtown are more affluent than the area’s longtime dwellers, the Atlanta Journal-Constitution reported. The average annual household income climbed from $25,364 in 2000 to $43,944 in 2007.
Like in other slower markets throughout the U.S., residential property owners in the Atlanta metro area are advertising unique amenities to attract buyers. At Oakland Park in Atlanta, one- to two-bedrooms cost between $190,000 and $450,000; on-site recycling and other green touches are offered to residents. At Blue Valley in Alpharetta, five-bedrooms start at $1.64 million; a three-mile horse-riding trail is available. At Silver Oak in Acworth, four-bedrooms start at $670,000; residents can fish at the 3.8-acre lake.
Boston
The Boston office market was on pace for another record year, with $7.3 billion in sales by the middle of the summer of 2007, until the credit crisis in August brought transaction activity to a standstill. Some properties have sold since for below asking price and others fell through, while many buildings continue to sit on the market or have been withdrawn, the Boston Globe reported. Third-quarter commercial property sales plunged from $2.5 billion in 2006 to under $1 billion in 2007.
A report issued by Boston real estate and publishing firm Warren Group said single-family home sales dropped 15.4 percent statewide in November from the year-ago period. The 3,538 single-family home sales recorded were the lowest for November since the recession of 1991, the Boston Globe reported. Sales had fallen 17.1 percent in October and 18.7 percent in the previous month. The median price for a single-family home in November fell 5.8 percent for the month, to $295,000. Condo sales declined 23.2 percent for the month.
Chicago
A record 8.4 million square feet of new retail space was developed in the Chicago metro area in 2007, according to a Mid-America Real Estate Corp survey. The pace of new construction, however, fell short of the 11.7 million square feet expected when 2007 began, the Chicago Tribune reported. Major projects completed in 2007 include the 350,000-square-foot Southgate Market in the South Loop and the 650,000-square-foot Bolingbrook Promenade. The previous record of 6.8 million square feet was set in 1994.
Foreclosures in the Chicago metro area dropped nearly 22 percent in November from the previous month, the Chicago Tribune reported. The Windy City ranked 59th among the country’s 229 metro areas for foreclosure filings in November, with one filing for every 488 households. Meanwhile, Illinois posted 8,238 foreclosure filings for the month, a 36 percent increase from last November, but a 15 percent decrease from October 2007. The state ranked 10th in the nation, with a foreclosure rate of one for every 624 households.
Las Vegas
The $17.1 billion deal to take American gaming giant Harrah’s Entertainment private went before the Gaming Control Board last month. The $90 per share buyout by a joint venture between Texas Pacific Group and Apollo Management would make it the largest casino buyout in history. Renovation problems forced Harrah’s to close down hundreds of rooms at the Rio and Harrah’s hotel-casinos, but Board members said this should not have any bearing on the deal’s suitability, the Las Vegas Review-Journal reported.
Las Vegas’ foreclosure auctions business is thriving as Nevada leads the nation with a pre-foreclosure rate of 40.5 filings per 1,000 households through October, the Las Vegas Review-Journal reported. Hudson & Marshall real estate auction house recently put 200 foreclosed homes on the auction block, and Real Estate Disposition Corp. advertised over 300 foreclosed homes for auction last month. Nevada is one of four states that together hold more than one-third of the country’s subprime adjustable-rate mortgages.
Los Angeles
The largest office landlord in downtown Los Angeles could soon be on the market for sale, with a corporate battle for control picking up steam and the company’s shares having fallen substantially in 2007. New York-based Brookfield Properties is believed to be the likely frontrunner to buy the firm, the Los Angeles Times reported. Maguire Properties Inc., owner of the US Bank Tower, the tallest building in the West, went public as a real estate investment trust in 2003; its stock has languished ever since.
Los Angeles office properties are being sold less frequently, and prices are declining, but the local commercial real estate market is fairing better than the housing market, the Los Angeles Times reported. Office vacancy rates are low, and rents are reportedly hitting record levels on the west side of Los Angeles County. Average sales prices for office buildings are back to last January’s levels; an additional drop-off of 5 percent will return prices to levels from the third quarter of 2006, according to CBRE Torto Wheaton Research.
Philadelphia
Asking rents for Class A office space in Philadelphia have increased at roughly the rate of inflation in 2007 and are lower than rents for comparable space in other major cities on the east coast. The city’s marquee office properties are asking $32 per square foot, compared to $50 in Washington, $60 in Boston and $90 in New York, according to Grubb & Ellis. Office space in Philadelphia’s suburbs has expanded from 60 million square feet in 2001 to nearly 90 million today, the Philadelphia Inquirer reported.
Phoenix
The fall Phoenix Commercial Real Estate Trends newsletter said investors paid more for area office properties in 2007 than they had in recent years. The quarterly report, issued by real estate analyst Bob Kammrath, said the average sales price for office buildings through the first three quarters of 2007 was $201 per square foot, up from $174 per square foot in 2006. The average sales price in 2005 was $157 per square foot. The report said rent growth may slow in 2008, the Arizona Republic reported.
San Francisco
A sizeable portion of the Bay Area’s foreclosed homes through the first three quarters of 2007 were owned by real estate investors, the San Francisco Chronicle reported. Public records compiled by DataQuick Information Systems show that among the 6,557 homes that went into foreclosure from January through September, one-fifth belonged to local investors. One out of six properties repossessed by lenders were reportedly owned by investors who had at least two foreclosures in their names.
San Francisco’s newest luxury residential developments are bringing in renowned chefs to open in-house restaurants – and their cachet is attracting buyers, the San Francisco Chronicle reported. At the 419-unit Millennium Tower, restaurateur Michael Mina is opening RN74, a restaurant and wine bar; $100 million worth of condos have reportedly sold there already. The Fairmont Heritage in Ghirardelli Square boasts the famed Danko, while the 246-unit Soma Grand could soon be home to the Slanted Door’s Charles Phan.
Seattle
A joint venture between two West Coast developers announced plans for a $1.5 billion mixed-use development in Bellevue’s Bel-Red Corridor. The 36-acre Spring District would bring 800 apartments, more than 3 million square feet of office space and 16 acres of open space. Seattle developer Wright Runstad and San Francisco’s Shorenstein Properties hope to convert the 900-acre aging warehouse center into a dense urban center, the Seattle Times reported. The developers paid $68 million for the land in early 2007.
Rents for Class A office space in downtown Seattle are expected to continue climbing in 2008, while low apartment vacancy rates could also lead to rent hikes, the Seattle Times reported. Seattle developer Martin Selig predicted that top-end office properties could ask $65 per square foot by late 2008, nearly double the rates from previous years. In the local housing market, the number of apartments available for rent is expected to fall this year, since new construction is reportedly falling behind the rate of condominium conversions.
Washington, D.C.
A study by the National Center for Smart Growth Research and Education and the University of Maryland found that the federal government allocates only 4 percent of its office leasing dollars for Prince George’s County, even though it holds 33 percent of the Washington area’s land mass and 23 percent of its population. Arlington County, by comparison, has 5 percent of the area’s population and 2 percent of its land mass but gets 19 percent of the government’s leasing money, the Washington Post reported.
Mayor Adrian Fenty announced an $850 million mixed-use project, to be spearheaded by Archstone-Smith and Hines Interests, that could become the District’s big new retail center. The complex would be built on two-thirds of a 10-acre parcel where the city’s former convention center stood, one of the District’s largest undeveloped properties, the Washington Post reported. The development would include two office buildings, four residential buildings and 250,000 square feet of retail space.