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National Market Report

<i>Commercial and residential real estate news briefs from the most active U.S. markets</i>

Atlanta
The number of foreclosure notices in Gwinnett County, part of the metro Atlanta area, spiked to a monthly record in early September, according to mortgage loan tracking firm Equity Depot/Notivus. The 1,357 notices recorded by the second week of the month already nearly doubled the total for the same month last year and tripled the number from September 2006. Equity Depot/Notivus also noted that the number of foreclosure notices posted in the county in the first nine months of the year was almost equal to the combined total from the same period in 2006 and 2007, the Atlanta Journal-Constitution reported.

Boston
More companies are choosing to look beyond metro Boston to meet their expansion needs, and developers are responding to the growing demand by building more office parks and complexes in the suburbs. Nearly 30 office complexes are currently under development along Route 128 and the Massachusetts Turnpike, with seven in Waltham alone, the Boston Globe reported. Boston developer Dean Stratouly recently acquired three plots of land in Framingham along the turnpike with plans for a 350,000-square-foot office park. The gap is closing between total office space in Boston and its suburbs: Boston now has 3.8 million square feet more space than communities along Route 128, compared to 10.4 million square feet in 2000, according to Cushman & Wakefield.

New England Patriots star quarterback Tom Brady recently closed a real estate deal in Boston’s Back Bay neighborhood that earned him more than he paid for the property in 2006 — and netted him a free duplex penthouse. Brady gut-renovated a Beacon Street building, which he purchased for $6.24 million, and sold three of the four units for $7.95 million to South American banking executive Andrónico Luksic. The sale of the last unit closed in late August, the Boston Globe reported. Brady’s other real estate ventures include investments in Los Angeles and New York, where he last listed his Time Warner Center condo for more than $18 million.

Chicago
Consulting firm Ernst & Young was reportedly close to a deal last month that would relocate its offices from the Sears Tower, where it has been a tenant since 1974. Sources said the company could be looking at a new 1.1 million-square-foot office building currently being developed by the John Buck Co. at 155 North Wacker Drive, the Chicago Sun-Times reported. Ernst & Young’s current lease for 387,000 square feet at the Sears Tower doesn’t expire until 2012, but Buck could be willing to complete a deal years in advance to secure a large tenant. Ernst & Young is reportedly in the market for around 300,000 square feet. The Sears Tower is owned by a partnership that includes New York-based developers Joseph Chetrit and Joseph Moinian.

Las Vegas
After seven straight months of increasing home sales in Las Vegas, the streak finally ended in August with a 1.9 percent drop-off from the prior month, according to the Greater Las Vegas Association of Realtors. There were 2,545 single-family home sales in August, compared to 2,592 in July. Even though the numbers fell slightly, August was still a relatively healthy month for sales — they skyrocketed 93.4 percent from 1,316 in August 2007, the Las Vegas Review-Journal reported. The median sales price, however, continued the downward trend of previous months, falling 4.5 percent from July and 30 percent from the year-ago period.

Los Angeles
A single-tenant retail property at 8727 West Pico Boulevard in Los Angeles reportedly sold for a record price per square foot for that street, a major commercial corridor with landmarks such as the Staples Center, the Westside Pavilion Mall and Fox Studios. The 11,761-square-foot building was purchased for $3.6 million, or around $700 per square foot. The buyer was Coco’s Bakery Restaurant, which had been occupying 5,173 square feet on site prior to the sale. Jonathan Ahron and David Aschkenasy of Charles Dunn Co., a partner of GVA Worldwide, brokered the deal.

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Philadelphia
At least four major companies based in metro Philadelphia have been acquired in recent months or will be acquired by corporations from out of town, leading some observers to worry about what might happen to the city’s economy and real estate market if this trend continues and multiple corporate headquarters are relocated. Between April and August, chemical maker Rohm and Haas Co. received a bid worth $18 billion; insurer Philadelphia Consolidated was offered $4.7 billion for a buyout; office equipment distributor Ikon Office Solutions agreed to be taken over for $1.6 billion; and CollaGenex Pharmaceuticals was purchased for $420 million. All four deals are expected to be consummated, the Philadelphia Business Journal reported.

Phoenix
The number of foreclosure sales in the greater Phoenix area increased in August to represent nearly half of all residential transactions for the month, the Phoenix Business Journal reported. More than 3,300 foreclosure sales were recorded out of a total 7,505 deals, according to the Realty Studies division of the Morrison School of Management and Agribusiness at Arizona State University. But some submarkets fared better than others: In Tempe, 23 percent of recorded home sales in August came from foreclosures, while 56 percent of recorded residential deals in Avondale resulted from foreclosures.

Hospitality and entertainment firm Gaylord Entertainment has agreed to purchase 100 acres within the 3,200-acre Mesa Proving Grounds in Mesa, with plans to develop a $1 billion anchor resort and convention center. The proposal for the site, located about 30 miles from downtown Phoenix, also calls for a retail complex and an 18-hole golf course designed by renowned golf course architect Tom Fazio. Gaylord acquired the land from national real estate development firm DMB Associates, which has the remaining 3,100 acres to build out or sell over the long term. Gaylord could break ground on its project as early as 2010 if everything goes as planned.

San Francisco
What was billed last year as the most successful housing raffle in U.S. history is back in the San Francisco Bay Area, giving homebuyers another chance at acquiring their dream home even as the housing market and economic outlook enter a more turbulent period. The raffle is being held by nonprofit Community Action Marin, which sold 34,000 tickets last year at $150 each. Last year’s winner of a four-bedroom San Rafael mansion, dubbed the “Dream House,” opted for a cash prize, so the same home is being offered this year, the San Francisco Chronicle reported. The Craftsman-style home, valued at $2 million today compared to $2.1 million last year, sits on a quarter-acre lot with bay views, a pool, a chef’s kitchen and a library. The drawing will be held in February, and proceeds will be used to help local social services.

Seattle

More homeowners in Seattle and surrounding King County are lowering their asking prices to move properties, a trend that last month led the area to its lowest median sales price for single-family homes since April 2006. Numbers from the Northwest Multiple Listing Service showed that the median price of homes sold in King County in August declined by more than $53,000 from the same month last year, to less than $424,000. That represents an 11 percent drop, the first double-digit decline year over year for the county in more than two years, the Seattle Times reported.

Washington, D.C.
After having signed a flurry of leases for office space earlier this year, the U.S. federal government recently inked three more leases totaling nearly 200,000 square feet of space in Washington, D.C. The Secret Service renewed its lease for the 70,000 square feet the agency occupies at 110 L Street. Also, the Department of Homeland Security and the Department of Veterans Affairs both signed 10-year leases at 1717 H Street NW to split 120,000 square feet of space. The Homeland Security deal comes even as the department has been looking to consolidate its offices — it occupies 70 buildings in 40 locations in the region — at its planned headquarters on the former St. Elizabeths west campus in Southeast D.C., the Washington Business Journal reported.

Compiled by Linden Lim

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