Atlanta
A record 3,050 residential condominium units were created in Atlanta in the first half of 2007, bumping the number of units currently under construction past 6,000 — another record, and enough to meet housing demand for the next 31 months, according to data. Condo sales in the city fell to 2,239 units from mid-2006 to mid-2007, a steep drop-off from the average of 4,000 sales in each of the previous two years and lower than the historical average of 2,733 units a year. Some developers are offering incentives to lure buyers, and others are abandoning projects, the Atlanta Journal-Constitution reported.
In exchange for a proposed rezoning, Tivoli Properties, developer of a 25-story luxury apartment complex near Piedmont Park, has offered to cut rents by half on 10 percent of the units for Atlanta’s police officers and firefighters. This would bring rates at the high-rise, priced at $1,600 to $3,000 per month for one- and two-bedrooms, to lows of $800 a month for Atlanta’s bravest and finest, the Atlanta Journal-Constitution reported. Such initiatives have boosted the percentage of city-dwelling officers from 19 percent at the end of 2006 to 22 percent in June 2007, according to the Atlanta Police Foundation.
Boston
Wellington Management, an investment giant with more than $550 billion in investments, is in negotiations to lease the 31-story, 550,000-square-foot office tower Boston Properties is building on Russia Wharf. Because of soaring construction costs, asking rents for prime Boston office space jumped to around $65 per square foot in the third quarter from $57 in the second quarter, according to Jones Lang LaSalle. The tower is part of a mixed-use complex being built at the site, which the developer purchased from New York-based Blackstone Group for $104.5 million earlier this year, the Boston Globe reported.
While most of eastern Massachusetts’ residential real estate market is facing declining sales and prices, the Boston suburb of Arlington could be enjoying its own housing bubble, the Boston Globe reported. In early October, houses sat on the market for an average of 83 days before selling, much less than the 146-day average for all of eastern Massachusetts, according to the MLS Property Information Network. Proximity to Boston, desirable housing stock and comparably lower prices are attracting buyers. The median price for a single-family home is $510,000.
Chicago
Chicago residents frightened by the mortgage crisis are turning away from buying homes and are choosing to rent instead, even though rents have been rising throughout the metro area. According to consulting firm Appraisal Research Counselors, the average gross rent in luxury rentals downtown rose 3.6 percent to $2.31 per square foot in the second quarter from a year earlier, while rents in the suburbs rose 4.3 percent to $1.12 per square foot in the same period. Nearly 1,000 new units have been added downtown in the past year, and another 1,800 are slated for 2008, the Chicago Tribune reported.
Macerich Co., a national retail REIT, is negotiating to acquire a 683,000-square-foot mixed-use complex at 520 North Michigan Avenue valued at $515 million. Regarded as the top mall in the region, the seven-year-old North Bridge has 548,000 square feet of retail space, 135,000 square feet of offices and 1,200 parking spaces. It is anchored by a Nordstrom. The seller, a three-way joint venture with a John Buck Co. fund, a Morgan Stanley fund and Australian-based Westfield Group, wants $600 million for the property but is not likely to get that amount, the Chicago Tribune reported.
Las Vegas
After spending $100 million last year on the Golden Nugget’s biggest renovation since 1984, the hotel’s owners are going full speed ahead with additional upgrades. Owner Landry’s Restaurants, which bought the property in 2005, is on the verge of completing a $70 million casino, convention and nightclub addition, the Las Vegas Review-Journal reported. A $150 million, 500-room hotel tower and casino is slated to follow as early as next year. When the tower opens in 2009, the owners will have spent more on upgrades to the property than the $295 million they paid to acquire it two years ago.
Los Angeles
As homes languish unsold in California’s real estate market, angry sellers and buyers are blaming their agents and filing more grievances with the state’s Department of Real Estate. Agent-related complaints investigated by the department in the last five years rose from 6,987 to 9,103, while license denials increased from 659 to 1,382 per year, the Los Angeles Times reported. The number of licensed brokers and agents in the state jumped more than 80 percent to 538,598 in July, from 297,359 a decade ago, prompting some observers to cite low licensing standards during California’s recent housing boom.
A three-year, $80 million overhaul revamped the star-studded Beverly Hilton, which now has a new lobby, redecorated rooms, a redesigned restaurant and bar and high-end shops — but more improvements are on the way. The hotel’s owner, Beny Alagem of Oasis West Realty, is planning a $500 million project that would add an adjacent 120-room Waldorf-Astoria, which would be the first in Southern California, according to the Los Angeles Times. The proposal would also shrink the Hilton from 570 rooms to 402 and add luxury residences. Discounted rates for two nights at the Hilton start at $750.
Philadelphia
Inventory and the number of days residential properties spend on the market may be high in Philadelphia, but the median sales price is rising — albeit at a slower pace than in recent years. And residential construction in Center City, the city’s downtown district, has not slowed down, the Philadelphia Inquirer reported. About half of the 270 luxury units have been sold at the Ritz-Carlton at 10 Avenue of the Arts, where residences go for up to $12 million. At Symphony House at Broad and Pine streets, where homes are asking between $500,000 and $5 million, 25 of the 163 units have sold.
Phoenix
The office vacancy rate in metro Phoenix increased slightly from the year-ago quarter, but asking rents for office space are rising, according to a third-quarter report by Cushman & Wakefield. The vacancy rate increased to 13.1 percent from 11.9 percent in the third quarter of 2006, while the average asking rent rose to $25 from $22.55 in the same period, the Arizona Republic reported. Meanwhile, a Colliers International report found that 2 million square feet of new space came online in the latest quarter, and that 6.4 million square feet were under construction and 12.9 million square feet were proposed.
San Francisco
California home prices and sales volume are expected to drop even lower next year compared to 2007 because of tighter lending standards, unrealistic prices and a standoff between buyers and sellers, the San Francisco Chronicle reported. According to the California Association of Realtors, the median price for resales of single-family homes is likely to fall to $553,000 in 2008, 4 percent less than this year’s estimate of $576,000 and the largest drop-off since 1993. The number of deals is projected to decline 9 percent to 334,500, which represents a 46 percent plunge from the high of 625,000 recorded two years ago.
Seattle
The supply of for-sale homes on the market in King County has continued to rise, as the median sales price of a house dropped for two months in a row and total sales declined, the Seattle Times reported. Since May, the year-over-year supply has been up by 40 percent from last year. The median sales price of a single-family home in September was $450,000 — almost $32,000 less than this year’s high of $481,750 in July — though house prices were up 5.9 percent from a year earlier. A total of 1,541 King County houses sold in September, a 32 percent drop-off from the same month last year.
Washington, D.C.
Federal officials are planning a giant new headquarters for the Department of Homeland Security in a historic section of Anacostia, with an estimated cost of $3 billion for the 4.5-million-square-foot project. The complex, which would hold 14,000 employees, is one of the largest developments proposed for the Washington area since the Pentagon was built in the 1940s, the Washington Post reported. A leading design calls for 25 of the 62 on-site buildings to be demolished, but preservationists want to limit demolition to 18 buildings. President Bush has allotted $318 million to begin construction in 2008, but Congress has yet to approve the expense.
Office building sales volume in the Washington, D.C., area plummeted in the third quarter to its lowest level in five years, according to Cushman & Wakefield. Total sales dropped to $398.7 million from $740.8 million in the same period last year. The D.C. area’s suburbs had mixed outcomes, with total Maryland office sales rising in the latest quarter to $429.7 million from $324.1 million a year ago, while sales in Virginia fell 28 percent to $717.4 million in the same period. Still, that market posted a record year to the tune of $9.4 billion in sales to date, powered by several large deals in the first half of 2007, the Washington Post reported.