National market report

Commercial and residential real estate news briefs from around the U.S.

Atlanta

The Atlanta residential market took a major tumble toward the end of 2010, according to Atlanta Public Broadcasting. Home values in the metro area dropped 15 percent in the final three months of the year. According to data from Zillow.com, that drop in values led to more than half of single-family homeowners being underwater. Indeed, 51 percent of homes sold in December closed for less than the previous owner’s closing price, Zillow found. Stan Humphries, chief economist with Zillow, said that the data doesn’t bode well for the future. “Home values are now pushed back more than a decade to prices that prevailed really in the late 1990s, early 2000[s],” Humphries told the news outlet. “That’s a pretty sobering metric in that homeowners are usually loath to sell at a loss.”

Boston

Beantown is set to begin construction on a $53.7 million railway station, according to the Boston Globe. The new Assembly Square “T” station, as public rail service is referred to in the city, is a key component to a redevelopment project along the riverfront in nearby Somerville, which is part of the greater Boston metro area. It will bring 2,100 residential units, along with 1.75 million square feet of office space, to the area. Local officials say they plan to begin accepting construction bids on the rail station this spring and hope to complete the project in roughly three years. Between 4,800 and 5,400 riders are expected to use the station daily, following its completion.

Chicago

Commercial real estate in Chicago may be headed toward stabilization. According to Crain’s, the rate of commercial delinquencies dropped to 5.3 percent in 2010 — two percentage points below the national average. Climbing property values are also helping matters in the Windy City: Class A multifamily buildings in Downtown Chicago saw rents climb an average of 7.2 percent in 2010, and are expected to climb upwards of 7 percent in the coming year. Bob Bach, a senior vice president with Grubb & Ellis, told Crain’s he believes the tide may have turned for Chicago. “Eighteen to 24 months ago, people were saying commercial real estate was the next shoe to drop,” Bach said. “We’ve come a long way from there, where the worst seems to have passed.”

Fort Lauderdale

A Miami entity has purchased 22 ocean-view units in the Sonata Beach Club condo in Pompano Beach just north of Fort Lauderdale, according to a report from Condo Vultures, a South Florida real estate database and blog. The buyer, Sonata Grand LLC, paid around $9.7 million for a total of 56,000 square feet in the 14-story project. “Bulk buyers are scouring the South Florida condo market searching for oceanfront condos that can be purchased in blocks,” said Peter Zalewski, founder of Condo Vultures. “[But] the lack of available product combined with the number of all-cash buyers is prompting prices to increase to levels many groups are uncomfortable paying.” Sonata Grand paid an average of $173 a square foot. Meanwhile, according to Forbes’ new list of America’s most miserable cities, nearby Miami checks in at second — after Stockton, Calif. The publication looked at 10 factors, including unemployment, crime and taxes, along with weather, commute times and even how the local sports team is doing. Home values were also factored in. Miami’s not-so-desirable ranking was due (at least partly) to its dubious distinction as the national leader in number of foreclosure filings. Forbes said only the city’s good weather and lack of a state income tax kept it from the top spot.

Honolulu

While Hawaii will officially welcome the busy season this month with the start of college spring break, news out of Honolulu and nearby destinations already indicates an improving hotel market. Hotels on Oahu, the island that Honolulu is located on, reported an 85 percent average occupancy rate during the last week of January, marking a 14 percent improvement over the same week in 2010, according to Hawaii News Now, a website affiliated with local news channels for NBC and CBS. Average hotel rates in the greater Honolulu area, meanwhile, also climbed 14 percent during that time, reaching $161 per night in late January. Oahu has seen the biggest hotel market improvement of all the Hawaii islands, with other popular Hawaiian destinations, like Maui and Kauai, posting 1 and 2 percent improvements in year-over-year occupancy, respectively.

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Houston

A state agency in Texas is taking aim at the Federal Emergency Management Agency for allegedly denying temporary housing requests “unfairly and erroneously” following 2008’s Hurricane Ike, which devastated the greater Houston area. The report from the Texas Department of Housing and Community Affairs claims that FEMA wrongly denied upwards of 85 percent of relief requests. The report also alleges that FEMA accused claimants of having existing damage on their homes before the hurricane and says FEMA declared condemned homes livable, despite claims to the contrary, according to the Houston Chronicle. Buddy Grantham, a representative on the Hurricane Ike Recovery Committee, which was formed by a local advocacy group, argues that FEMA was grossly negligent in its granting of aid. “We had people who had a tree through their homes or roof that FEMA thought was a habitable house,” Grantham said.

Las Vegas

Former “Baywatch” star Pamela Anderson, also known for her headline-grabbing romances, is now making waves in the real estate industry. The actress sued Las Vegas developer Laurence Hallier, according to celebrity news outlet TMZ. In a lawsuit seeking $1 million, Anderson is accusing Hallier, her ex-boyfriend, of failing to pay her for promoting one of his condos. Hallier had agreed to give Anderson the condo unit inside Panorama Towers, Anderson claims. But when the building wasn’t completed on time, Hallier didn’t pay up, which Anderson believes is a violation of their contract.

Palm Beach

Boynton Beach’s Canyon Isles neighborhood has nearly 67 of its 500 homes in foreclosure, or more than one in eight, according to property information company CoreLogic. Closings in the Palm Beach County neighborhood, which was developed by GL Homes, began in 2005. CoreLogic found that 33 homes purchased there (the larger ones in the neighborhood) went for at least $1 million. Almost all of those homes closed in 2007. The median sale price last year in the neighborhood was $385,000 — a 45.2 percent drop from the 2007 median price of $702,287.

Philadelphia

The Philadelphia Housing Authority is in hot water after federal housing officials announced they would cut off funding on any contracts related to “labor and employment legal services,” pending an investigation into the agency’s allegedly shady practices, according to ABC News. The Philadelphia Housing Authority, the fourth-largest of its kind in the nation, is accused of using public funds to buy over-the-top presents for its managers and host pricey parties, complete with belly dancers. At the center of the conflict is Carl Greene, the former head of the city’s housing authority, who allegedly used upwards of half a million dollars in agency funds to settle sexual harassment claims made against him during his tenure. The board of commissioners ultimately ejected Greene from his post late last year, after determining that he was a “true serial sexual harasser.” The federal funding cutoff will cost the Philadelphia Housing Authority millions of dollars.

San Francisco

Two San Francisco hotels have gone into contract in recent weeks, spurring optimism that the area’s hotel investment market may be on its way to a rebound, according to Real Estate Alert, an online real estate news site. Thayer Lodging has inked a deal to buy the JW Marriott in San Francisco’s Union Square neighborhood. It paid roughly $100 million for the 338-room hotel. Meanwhile, the Walnut Hill Group is set to close on Fisherman’s Wharf’s 221-room Best Western Tuscan Inn for $36.5 million. The sales come on the heels of several hotel purchases at the end of 2010, experts say. That was after a dearth of activity in 2008 and 2009, when just one hotel sale of $25 million or higher occurred.

Compiled by Amy Tennery