Atlanta
The $1 million Atlanta luxury home has become the $2 million-or-more luxury home, according to brokers who sell in the high-end market. There were 165 single-family homes for sale for $2 million to $20 million in Atlanta’s Buckhead neighborhood in early October, the Atlanta Journal-Constitution reported — a supply that could meet buyer demand for three years. Many Atlanta luxury buyers pay all cash, and most prefer new or thoroughly remodeled homes. Many already have several homes and are purchasing homes in Buckhead for proximity to restaurants and the arts. Even in a buyer’s market, the list-price-to-sell-price ratio tends to be 90 to 93 percent.
Absorption in metro Atlanta’s office market — the number of tenants who moved in subtracted from the number who moved out — increased in the third quarter but is still almost two-thirds lower than it was at this time last year. The office market overall had a positive absorption of 38,287 square feet, the Atlanta Journal-Constitution reported, with the most absorption occurring in Midtown, where there was a positive absorption of 168,675 square feet. The suburban submarkets had negative absorption and lower rents than urban submarkets such as Midtown, Downtown and Buckhead.
Boston
Developments around the city have stalled amid the credit crisis as construction costs rise, credit is less available and investors worry about taking risks. The 1.1 million-square-foot retail, hotel and residential project at Waterside Place on the South Boston waterfront; a development at South Station that would include a hotel, condos and retail space; an $800 million complex over the Massachusetts Turnpike; and a $200 million condominium development downtown are four projects that are on hold until the long-term effects of the recent economic turmoil are clearer.
Chicago
Ty Warner of Beanie Baby fame has signed a contract for the Chicago Spire’s duplex penthouse, which was on the market for $40 million. It may be the most expensive residential sale in the Chicago area, the Chicago Sun-Times reported. The 10,000-square-foot penthouse occupies the 141st and 142nd floors of the 150-story building at 400 North Lake Shore Drive, which is slated to be the tallest building in the western hemisphere. A third of the 1,200 units in the Shelbourne Development Group’s building have been sold, and construction is scheduled to be completed in 2012.
The city’s office vacancy rate dropped to 10.7 percent in the third quarter, the lowest rate since 2002, Crain’s Chicago Business reported. There were a number of large downtown office deals in the third quarter — including law firm Baker & McKenzie’s 300,000-square-foot lease in a new tower on West Lake Street and BP’s lease of 225,000 square feet at the Chicago Mercantile Exchange Center — but the deals had been in progress for nine months to a year, and similar deals are not being set in motion today, brokers said.
Las Vegas
Over 9 percent of the households in Las Vegas are in foreclosure, compared to 2 percent nationwide, the Las Vegas Review-Journal reported. Nevada also leads the country in pre-foreclosures, which are the notices and auctions that precede a foreclosure. There were 3,563 foreclosures in Clark County in September, making the year-to-date total 22,543. By September of last year, there had been only 7,704 foreclosures. There have already been more pre-foreclosures in Clark County this year than there were in all of 2007.
The Las Vegas industrial market is struggling in the wake of the economic slowdown. The industrial vacancy rate was 9.2 percent during the third quarter, according to Grubb & Ellis, up from 8.6 percent the previous quarter and 5.9 percent in the third quarter of 2007. For the first time in eight years, industrial construction fell under 1 million square feet, the Las Vegas Review-Journal reported. The total amount of leased space fell to 18,400 square feet during the third quarter, and average monthly lease rates dropped to 73 cents per square foot from 76 cents per square foot in the previous quarter.
Los Angeles
Foreclosures in Los Angeles County rose by 196 percent between the third quarter of 2007 and the third quarter of this year, the Los Angeles Times reported. The third quarter 2008 number — 15,749 foreclosures, according to a report by Propertyshark.com — is a whopping 923 percent increase over the third quarter of 2006. One zip code in Palmdale had the highest number of foreclosures, with one out of every 45 homes falling into foreclosure. Parts of Lancaster, Sylmar and Pacoima also had high numbers of foreclosures.
Phoenix
A real estate investment firm paid $66.24 million for the Shops at Chauncey Ranch on Scottsdale Road and Mayo Boulevard in the region’s second most expensive retail transaction so far this year, the Arizona Republic reported. The buyer was Levine Investments, which bought the development from AV Arizona 1. The 169,000-square-foot space is about 98 percent leased, and the retailers already present include Whole Foods, the Container Store and PetSmart. Levine Investments also owns 700,000 square feet of retail space at the Promenade, on Scottsdale Road and Frank Lloyd Wright Boulevard south of the Shops at Chauncey Ranch, purchased for $123 million in 2005.
San Francisco
The turmoil on Wall Street makes uncertain the future of several million square feet of office space in the Bay Area. Financial firms that have merged or dissolved in recent weeks control 4.2 million square feet of regional real estate and 2.4 million square feet in San Francisco, the San Francisco Chronicle reported. One estimate holds that companies will look to relinquish at least 500,000 square feet of office space in the city and that another 250,000 square feet may open up as a result of the credit crunch.
Construction began at the beginning of last month on Shorenstein Co.’s 601 City Center, a 23-story office tower in downtown Oakland at 12th and Jefferson streets. The $240 million project, with 597,000 square feet of office space, is expected to open in two years and create 1,000 jobs, the San Francisco Chronicle reported. Built mostly from recycled steel and with roofs covered by drought-resistant plants, the tower will be one of the largest green office buildings in the East Bay. Shorenstein and Metropolitan Life Insurance Co. have said they will contribute $2 million from the project to the city’s affordable housing fund.
Seattle
Prices in King County continued to fall in September, but the number of pending sales increased for the first time since last year, the Seattle Times reported. Buyers’ offers were accepted on 1,767 houses, an almost 15 percent increase over the September 2007 numbers. But the number of pending condominium sales declined by over 20 percent in September. The median price of a single-family home fell by 7.8 percent from the September 2007 number, while the median price of a condo fell by 9.3 percent. Brokers said the increase in accepted offers may be a sign of a turnaround in the market, but it will be impossible to tell until the federal bailout takes effect.
Washington, D.C.
Evermay, a historic estate in Georgetown, went on the market for $49 million, a record price for residential property in the area. The listing surprised many real estate agents, who say they can’t believe buyers would want to spend that much money on a house in a down economy. The 22-room, 216-year-old estate on 28th Street NW in Georgetown was last purchased in 1923 (see related story on page 90). Several people have already asked to see the house, the Washington Post reported.
Compiled by Sara Polsky and Linden Lim