Atlanta
More deep-pocketed bidders are expected to attend live real estate auctions in the metro Atlanta area as more discounted luxury homes and investment opportunities become available, the Atlanta Journal-Constitution reported. A 1.7-acre estate in Cherokee County hit the auction block in mid-May with a minimum bid of $2 million; the auctioneer had reported an appraised value of $4 million. A 36-acre development site in north Fulton County, approved for 23 homes, was also available for a minimum bid of $1.5 million; it previously had an asking price of $3.6 million. Sellers are guaranteed quick sales at auction and are protected from bottomless sales in the minimum-bid format.
The owners of Executive Park, an office community in north-central DeKalb County built in the 1960s, are banking on a $312 million redevelopment plan to transform the site into a thriving mixed-use village. Dubbed the Park at Druid Hills, Boston-based HRPT Properties Trust wants 877,600 square feet of new office space, 432,600 square feet of retail, 790 residential units and a 160,000-square-foot hotel, the Atlanta Journal-Constitution reported. Developer Taylor & Mathis would tackle the project, considered one of the highest-profile attempts in metro Atlanta, to retrofit a suburban complex.
Boston
Downtown Boston’s once-booming condo market is finally showing signs of weakness, after having enjoyed brisk sales and ever-higher prices during the peak years from 2004 through 2006. Condo sales in the area’s 12 core markets dropped 22.4 percent in the first quarter from last year, while the median price fell 1 percent, to $475,000, according to an analysis by the Listing Information Network. The first quarter posted just 513 sales, compared to the 700-unit quarterly pace from 2004 through 2006, the Boston Globe reported. Experts attributed the slowdown to tighter lending rules, which have left the core market of young professionals hard-pressed to come up with down payments.
Chicago
Industry observers are bracing for the fallout of the record 5,984 condos slated to come online this year in downtown Chicago in a dramatically slower sales market. Last year, 4,794 condos came to market in the area, and 4,160 units are projected for next year, according to Appraisal Research Counselors. But the demand for these homes has not kept pace with the growing supply: The number of downtown condo sales plunged 83 percent in the first quarter to 201 units, from 1,207 in the year-ago period, the Chicago Tribune reported. The Belgravia Group is developing Quincy 565, an 18-story condo tower slated for completion in 2009, among other downtown projects.
As downtown Chicago’s commercial real estate market continues to struggle with a high office vacancy rate, the city’s suburbs have fared much worse. Downtown’s vacancy rate increased to 12.3 percent in the first quarter of 2008 from 11.7 percent in last year’s final quarter, according to MB Real Estate. Meanwhile, the vacancy rate in the suburbs rose to 17.3 percent, from 16.1 percent in the same period. Global real estate firm UGL Equis pegged the first-quarter vacancy rate for downtown Chicago at an even weaker 12.7 percent and 18.5 percent for the suburbs. Both companies pointed to struggling mortgage and title insurance companies to explain the growing vacancies, the Chicago Tribune reported.
Las Vegas
The Las Vegas housing market showed some positive signs in April: Single-family home sales increased from the same month of the previous year for the first time since September 2005, according to the Greater Las Vegas Association of Realtors. April tallied 1,794 sales, nearly a 30 percent increase from April 2007 and the fourth consecutive monthly increase, the Las Vegas Review-Journal reported. The inventory of single-family homes for sale rose just 3.1 percent from the previous year, stabilizing at 22,942. Meanwhile, the median price was down 3 percent in April from the prior month and 22.7 percent from April 2007.
Los Angeles
The new owners of Burbank’s NBC Studios announced a $750 million redevelopment plan to upgrade the site with four 14-story office towers, strengthening the city’s Media District, where asking rents are high and vacancies low, the Los Angeles Times reported. Construction is under way at the first tower of the rebuilt complex, renamed the Pointe, and is slated for completion by March 2009. Owner M. David Paul & Associates, which has title to half of Burbank’s office space, said the company plans to complete another tower every 30 months or so. Other plans for the complex include two outdoor plazas, underground parking and a health club and spa.
Philadelphia
Existing home sales in the eight-county region around Philadelphia fell 32 percent in the first quarter of 2008 from the prior quarter, according to Trend Multiple Listing Service data compiled by Prudential Fox & Roach. The company found that the median sales price of existing single-family homes, condos and co-ops declined just 0.5 percent in Philadelphia, Bucks, Montgomery, Chester and Delaware counties in the same period. Kevin Gillen, an economist at the Wharton School at the University of Pennsylvania, concluded that the median sales price of a Philadelphia single-family home dropped 8 percent in the nine months since spring 2007, the Philadelphia Inquirer reported.
Phoenix
A Colliers International report estimated that 24 million square feet of new commercial and warehouse space could be developed in the West Valley by 2010, spurred on by improved transportation infrastructure in the region. Most of that build-out would likely occur in Buckeye, Goodyear and Surprise, where the BNSF Ennis railroad spur has generated about 900 acres of commercial development to date, the Arizona Republic reported. Commercial developers have also been drawn to the low property taxes and still competitive prices of the southwest Valley, where the per-square-foot price of ready-to-build commercial properties reached $8 in 2008, up from $2.10 in 2001.
The retail vacancy rate in the Valley reached its highest level in more than a decade in the first quarter of 2008, according to local commercial real estate analyst Bob Kammrath of Kammrath & Associates. He concluded that the vacancy rate for retail space of 30,000 or more square feet was 11.3 percent as of March, compared to 9.6 percent in March 2007. The rate is the highest since 1996, when vacancies reached 11.8 percent, the Arizona Republic reported. Kammrath predicted that local retailers and unanchored specialty outlets would fare the worst in the coming year.
San Francisco
Commercial tenants in San Francisco put a combined 436,933 square feet of office space back on the market in the first quarter of 2008, the greatest negative net absorption in the area’s office market since the third quarter of 2002, according to CB Richard Ellis. Some experts said the grim findings could just be a blip in an otherwise healthy office market, but others noted that companies might be scaling back expansion plans amid an uncertain economic climate. The slowdown comes as about 1.5 million square feet of office space is in the pipeline, including projects at 500 Terry Francois Boulevard, One Kearny Street and 555 Mission Street, the San Francisco Chronicle reported.
Seattle
Bellevue city officials hope to remedy the lack of affordable housing in the Eastside region by converting a portion of the Bel-Red corridor, a 900-acre warehouse district, into low-cost residences. If successful, the project would create the largest number of affordable units in the city in more than a decade. The City Council wants to overhaul its incentive program, which has been taken up by only one developer over the past 12 years. The influx of thousands of people to the city and the growth of companies like Microsoft and Yahoo are boosting home prices and rents, and teachers, police officers and other workers are getting priced out, the Seattle Times reported.
Microsoft announced last month that it would lease 561,000 square feet of new space at downtown Bellevue’s City Center Plaza, currently under construction at Northeast Sixth Street and 110th Avenue Northeast, the Seattle Times reported. The software giant will occupy 25 of the 26 floors at the building and expand its Bellevue presence to 1.6 million square feet, greater than the region’s biggest office tower, Seattle’s Columbia Center. Microsoft plans to move 2,000 employees into the new space next year. The announcement bodes well for the area’s retailers, condo developers and office landlords, but office tenants are likely to contend with lower vacancies and higher asking rents.
Washington, D.C.
The high foreclosure rate in the outlying areas of Washington has caused home prices to drop in recent months, attracting first-time home buyers looking for affordable options, the Washington Post reported. Home sales in Manassas increased 33 percent, to 52 in March 2008, from 39 the previous year; there were 86 pending sales as of early May. Prince William County, located 30 miles west of Washington, posted a 20 percent jump in year-over-year home sales: A total 502 units sold in March 2008, compared to 418 in March 2007.