The Boston Waterfront
Boston
Vertex Pharmaceuticals signed a 15-year, $1.1 billion lease to move its base of operations from Cambridge to the South Boston waterfront, according to the Boston Herald. The biotechnology company announced last month that it had finalized a $72.5 million-per-year lease on 1.1 million square feet of office space at South Boston’s Fan Pier Complex, where developer Joe Fallon is slated to soon begin construction on two 18-story structures for Vertex. Thomas Menino, the mayor of Boston, had angered Cambridge officials in January by offering a $71.8 million package of state and local government incentives to attract Vertex. The deal, however, remains contingent on Vertex gaining necessary approvals for Incivek, a hepatitis C drug.
Miami
Musician Lenny Kravitz is all set to rock Miami as his New York–based Kravitz Design was tapped to redesign the interior and outdoor spaces of the 47-story Paramount Bay condominium. According to the South Florida Business Journal, the firm will be responsible for the spa fitness center, lobby and pool terraces at the 340-unit mixed-use tower, which was taken over through a foreclosure by iStar and ST Residential. Brokerage Fortune International is marketing the building, which has not set an opening date. Kravitz Design previously worked on the Florida Room lounge at the Delano, as well as the penthouse recording studio at the Setai Resort & Residences in South Beach.
Houston
In Houston, commercial property values are stabilizing, the pace of leasing is picking up, and developers have new projects in the works, according to the Houston Chronicle. In one of the biggest sales this quarter, three office buildings connected to the Galleria mall were sold to investment firm Unilev Capital Corp. for $176 million. In 2010, commercial real estate transactions had jumped 44 percent compared with 2009, thanks to the sales of downtown’s Heritage Plaza and a hefty industrial portfolio of more than 1 million square feet; experts now predict that this year will be better than last. A national report by Jones Lang LaSalle recently highlighted Houston as one of several markets seeing the most leasing activity during the first quarter of 2011. However, the citywide vacancy rate was a high 15.9 percent, according to data from CB Richard Ellis. Rental rates averaged $23.17 per square foot, up from $22.82 per square foot in the previous quarter.
Los Angeles
The booming real estate market of the mid–2000s caused millions of people to relocate within Southern California during the last decade, the Los Angeles Times reported. According to the 2010 census, large chunks of the population relocated for construction jobs, moving from Los Angeles and Orange counties to the Inland Empire — the area around the cities of Riverside and San Bernardino. Buyers had also been priced out of coastal regions as home prices soared in communities by the ocean. Recently, however, real estate prices have fallen more sharply inland than in coastal regions — by about half again. In addition, the jobless rate inland is higher than in neighboring counties, with most of the job loss tied to the construction industry.
San Francisco
The San Francisco Planning Commission last month approved a plan to build 1,600 new residential units at Executive Park, a 70-acre triangular parcel of land located between Candlestick Park and Highway 101, according to the San Francisco Chronicle. Developers include Universal Paragon Corporation. The development could ultimately see some 2,800 residential units in towers up to 240 feet tall, as well as a grocery store on-site.
Las Vegas
The developers of Harmon Corner, a $100 million retail and shopping complex on the Las Vegas Strip, broke ground last month. BPS Partners, led by the developer Brett Torino, is constructing the three-level, 110,184-square-foot mall at the corner of Las Vegas Boulevard and Harmon Avenue. BPS had bought the 2.17-acre property last year for $25 million, or $11.57 million per acre; the parcel had been the first piece of vacant land on the Strip to change hands since the recession hit. Walgreens is the anchor tenant of the triangular complex, designed by SH Architecture. The center is seeking other 10-year tenants, with asking rents of around $230 per square foot.
Chicago
The owner of Chicago’s landmarked Allerton Hotel has filed for Chapter 11 bankruptcy protection, according to the Wall Street Journal. Built in 1923, the 443–room hotel was one of the first high-rises along the “Magnificent Mile” on Michigan Avenue. Hollywood stars like Jack Benny and Bob Hope were known to socialize at the Allerton, which was designated a landmark in 1998. ALT Hotel, a group led by Chartres Lodging Group, had purchased the building in 2006 for $98 million. The Journal reported the company had been staving off foreclosure for over a year, defaulting on $79 million in loans. Despite assets of $100 to $500 million, ALT Hotel owes between $50 and $100 million, according to documents filed with the U.S. Bankruptcy Court.
Phoenix
Washington–based investment firm Weidner Apartment Homes spent $68 million to acquire distressed apartment communities in Arizona, bringing the total of apartment complexes it owns in Phoenix and Tucson to 13. The recent $68 million purchase includes four properties: Indigo at the Park, Barossa at the Park, the Arete apartment homes and Biltmore Club. The buy added around 1,160 units to the company’s portfolio in Arizona, where it’s been purchasing apartment properties since early 2010. In early February, a limited liability corporation operated by Weidner had bought the Peaks at Papago Park at 815 N. 52nd Street, in the biggest multifamily housing transaction in Arizona this year.
Seattle
Seattle is measuring its green: Last month, the City of Seattle launched a formal program that will measure and track the energy efficiency of commercial buildings, according to Market Wire. About 800 large commercial property owners received letters informing them of the program, which requires that all commercial and multifamily residential buildings of 10,000 square feet or larger be benchmarked for their energy performance using EPA’s Energy Star program. The energy ratings may be provided to potential tenants, buyers and lenders during real estate transactions. The U.S. Department of Energy estimates that commercial buildings consume more than 70 percent of the total electricity generated in the United States.