National Market Briefs

Atlanta

A $150 million project is expected to help revitalize Powder Springs Street south of Marietta Square, an area that one nearby resident claims has resembled a “war zone” for many years. The mixed-use development dubbed the Marietta Mercantile Exchange will include 115 upscale apartments and townhomes, 74,000 square feet of office space and 205,000 square feet of retail, the Atlanta Journal-Constitution reported. The pedestrian-, bicycle- and shopper-friendly project should take at least 18 months to complete after ground is broken next spring.

The growing Asian population in metro Atlanta is playing an important role in driving the area’s residential real estate market. Asian residents, who are projected this year to have $6.7 billion worth of buying power in the city, are lured by affordable home prices, a sunny climate and expanding international air routes, the Atlanta Journal-Constitution reported. The number of Asian residents in metro Atlanta increased 51 percent from 2000 to 2007, according to the Marketing Directors, a condo marketing firm.

Boston

A Boston-based real estate company purchased one of the largest apartment complexes in the state for $181 million, after about 20 years of inactivity in the area. Metropolitan Properties of America, which owns commercial properties and about 8,000 residential units in two dozen cities, acquired Granada Highlands in the Malden neighborhood from Chicago-based Equity Residential Property Trust, the Boston Globe reported. The 97 percent leased complex totals 919 units. The property also has a clubhouse, fitness center, pool and 1,500 parking spaces.

Two owners who had entered into a partnership to develop a mixed-use mini-city in East Cambridge are now selling the project after suing each other and becoming “hopelessly deadlocked” over the development’s future, the Boston Globe reported. Boston and Maine Corp. and minority owner Cambridge North Point LLC are marketing the 44-acre former railyard through Cushman & Wakefield. Plans for the allotted 5 million buildable square feet include a 10-acre park, 2,500 residential units, a possible hotel, office and lab buildings, and a retail component.

Chicago

Boston-based Beacon Capital Partners is selling four downtown Chicago office buildings for $845 million to Behringer Harvard Real Estate Investments of Addison, Texas, the Chicago Tribune reported. The properties might have fetched a price closer to $900 million had the tumultuous debt market, which makes it difficult for highly leveraged investors to close deals, not been a factor. This would not be the first deal between the two companies: Behringer purchased two adjacent downtown Chicago buildings from Beacon for $277 million last year.

Detroit

More than 30 retail projects representing more than $1 billion in investment are in some stage of development in metro Detroit, the Detroit Free Press reported. These include the Universal Mall redevelopment in Warren, a $24.8 million project that will comprise 600,000 square feet of new retail and commercial space, and create about 2,000 jobs; the Pavilions of Troy, a mixed-use development that will include a luxury hotel, upscale condos and an office component; and the Mall at Partridge Creek in Clinton Township, which spans 640,000 square feet and is anchored by Nordstrom and a multiplex theater.

Las Vegas

A 42nd-floor penthouse on the Strip fetched $2.7 million, or a record $905 per square foot for a condominium purchased in a “gray-shell” state, the Las Vegas Review-Journal reported. The 2,985-square-foot penthouse at Sky Las Vegas sold without flooring, wall coverings, appliances or lighting. Most units in the condo tower are going for around $650 per square foot, but the view from the penthouse, said to be one of the best on the Strip, is the reason for the high price. The previous record was held by a three-story suite atop the same tower, which sold for $901 per square foot.

The sale of a custom home in the Promontory at The Ridges subdivision of Summerlin is believed to have set an area single-family home record at more than $1,000 per square foot. The home sold for $7.9 million, or 96 percent of its listed $8.2 million price, to a Washington couple. The seller of the 7,519-square-foot property, which sits on two-thirds of an acre with 2.5 acres of open space behind it, was casino landscaper Charles Norton. The home is fully furnished with custom furniture and artwork, and has a double copper roof and more than $1 million worth of stone on the inside, the Las-Vegas Review Journal reported.

Los Angeles

Office vacancy rates in Los Angeles County continued to decline in the second quarter, while average asking rents saw a steady increase. The county had a vacancy rate of 9.2 percent, down from 11 percent a year ago, and the average asking rent climbed 14 percent to $2.53 per square foot. Rents in hot spots such as Santa Monica and Westwood, however, reached upwards of $4.32 per square foot, the Los Angeles Times reported. Vacancy in downtown Los Angeles dropped from 16.3 percent a year earlier to 15.5 percent, and rents appreciated from a per-square-foot price of $2.41 to $2.65.

One of the largest communications hubs in the country, the One Wilshire building in downtown Los Angeles, sold for $287 million to a Texas investment firm. Hines Real Estate Investment Trust acquired the 31-story switching center, which is responsible for most electronic communications between Asia and the United States, the Los Angeles Times reported. The hub typically routes billions of phone calls, e-mails and Web pages per week, with more than 300 communication service providers renting space in the building. The seller, the Carlyle Group, bought the building for $119 million in 2001 and spent $30 million on upgrades.

Philadelphia

An estimated 1,100 residential units in high-rise structures have been proposed or are in some stage of development in the northern Philadelphia neighborhood of Fishtown. The area is believed to have ample room for development, unlike other nearby hot spots such as Old City and Northern Liberties. Projects currently under way along the Delaware River include the 35-story, 168-unit Penn Treaty Tower condo and the 15-story, 67-unit Penn’s Point building. An additional 275 smaller projects have also been approved, the Philadelphia Business Journal reported.

Phoenix

The city of Chandler is entering a partnership with a local developer to bring a $300 million mixed-use project to its historic downtown district. Desert Viking Cos. has collaborated with city planners to expand initial plans for a five-acre parcel to a development spanning 15 acres. Desert Viking’s first proposal included a variety of residential, office and retail components in addition to a 25,000-square-foot city museum and a parking garage. A revised version is likely to add plans for a 200-room hotel, a total of 600 residential units and a 40,000-square-foot conference center, the Phoenix Business Journal reported.

San Francisco

Foreclosures in the affluent Bay Area are on the rise thanks to a combination of na ve consumers, aggressive mortgage brokers and voracious lenders, the San Francisco Chronicle reported. The second-quarter foreclosure total for the region’s nine counties was 2,206, nearly nine times the 258 recorded in the same period last year. According to DataQuick Information Systems, this represents the highest number for the region since the firm began tracking foreclosures in 1988. The amount of default notices in the second quarter also more than doubled to 7,696 from 2,910 in the same period in 2006.

Seattle

Prices for King County homes in July increased 9 percent from a year earlier, even as the supply of properties on the market ballooned by 51 percent. In a trend that has lasted for several months, single-family home prices in the county rose from a median of $429,495 in January to $481,000 in July. Meanwhile, King County had 335 foreclosure auctions in July, which represents a per-capita foreclosure rate far below the national average.

New York-based real estate investment firm Tishman Speyer Properties sold two office buildings for an area record of $665 per square foot. The Marketplace I and II buildings commanded $83 million from an investment fund managed by BlackRock, nearly 50 percent more than what Tishman Speyer had paid for the properties just a year earlier. The 125,000-square-foot complex has four- and seven-story buildings and a 426-space parking garage. The previous record was set when Brickman Associates purchased downtown Bellevue’s Civica Office Commons for $575 per square foot, the Seattle Times reported.

Washington, D.C.

Condo owners trying to resell their units in the Washington, D.C. metro area are competing with condo developers who may be luring potential buyers away with compelling incentives. Contract cancellations and excess inventory have paved the way for perks like closing cost subsidies and no condo fees for one year, which in turn have led private sellers to retaliate by slashing prices, the Washington Post reported. The market is glutted with 20,217 new condos, and another 18,867 could be on the way over the next three years, according to real estate research firm Delta Associates.

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