Commercial and residential real estate news briefs from the most active U.S. markets
Detroit
Chicago
Chicago-based developer and shopping mall owner General Growth Properties got a big boost last month when the Texas teacher pension fund announced that it was investing $500 million in the company. This purchase of shares could be a boon to General Growth, which filed its Chapter 11 bankruptcy reorganization plan last month following its bankruptcy in April 2009, the largest such case in U.S. history. The Teacher Retirement System of Texas bought at $10.25 per share, according to the Associated Press. General Growth currently owns 200 malls across the country, making it one of the largest shopping-mall owners in the nation.
Detroit
While the greater Detroit metro area may have built a reputation as one of the nation’s worst housing markets, recently released home price and sales data may indicate a turnaround, the Detroit News reported. The median home price there increased 50 percent in June, compared to the same month a year earlier, to $75,000, according to data from real estate tracking firm Realcomp II. While sales stayed relatively flat, increasing just 0.3 percent year-over-year, inventory fell 23.6 percent and foreclosure sales dropped 35.4 percent.
Fort Lauderdale
Fort Lauderdale office vacancies declined to 18.9 percent during the second quarter, from 20.4 percent in the first quarter, making it one of the most improved central business districts in the country, according to Cushman & Wakefield. Meanwhile, in Miami’s central business district, rents rose quarter-over-quarter to $36.91, up $0.74 over the first quarter. Overall, the U.S. office market is showing signs of improvement, Cushman said. At midyear, the vacancy rate for the 31 business districts tracked by the firm stood at 14.8 percent, down 0.2 percent from the end of the first quarter. That figure had been increasing steadily since the fourth quarter of 2007. Maria Sicola, executive managing director at Cushman, said that it is becoming “strongly apparent that the national vacancy rate for [central business districts] has peaked” because of a significant uptick in leasing activity, which has risen by 51.6 percent year-over-year nationwide.
Los Angeles
Lenders and servicers on foreclosed properties in Los Angeles could face a whopping $100,000 fine for failing to keep their assets in good repair, thanks to a city ordinance passed last month aimed at preserving forsaken real estate. The measure was taken to keep communities with high concentrations of foreclosed homes from falling into widespread decay, according to HousingWire. L.A. saw new foreclosure filings climb by 3,000 properties in May, RealtyTrac reported. The city has 72,030 properties in default, 15,946 of which have already been transferred back to their lenders.
Miami
South Florida banks repossessed an average of around 4,000 properties per month in the tri-county region during the first two quarters of 2010, according to a new report from real estate tracking website Condo Vultures.com. Miami-Dade County saw the biggest year-over-year increase in real estate-owned — or REO — properties, with a 125 percent increase over the first half of 2009. Palm Beach county came in at a close second, showing a 112 percent increase compared to the same time period a year earlier, while Broward county trailed with a 42 percent year-over-year climb. If this pace continues through the end of the year, South Florida could see as many as 50,000 repossessed properties by the end of 2010, compared to last year’s 30,400 REOs.
Minneapolis
A solid economy and family-friendly amenities shot Minneapolis suburb Eden Prairie to the top of Money magazine’s list of the top places to live last month. The publication’s annual list uses criteria like crime, employment and schools to rank towns across the country. Eden Prairie stood out for, among other things, its fiscal stability — the town’s 5.1 percent unemployment rate is well below the national average of 9.5 percent. Eden Prairie also impressed Moody’s rating system, which gave the town an AAA bond score in its most recent rating.
San Francisco
Bay Area housing is showing a moderate comeback, according to the brokerage Paragon Real Estate’s midyear market report. Median home and condo prices in San Francisco were at their highest level since 2008, although they failed to climb more than 1 percent from prices seen in late 2009, and are still within 3 to 4 percent of median prices seen 19 months ago. Home sales were strong through June, despite the expiration of the first-time homebuyer tax credit in April.
Seattle
The $310 million sale of an office tower in the Seattle “edge city” of Bellevue is shaping up to be one of the biggest real estate deals in the nation so far this year, according to new website Citybiz Real Estate. Phoenix-based Cole Real Estate Investments purchased the 583,179-square-foot City Center Plaza from Boston-based Beacon Capital Partners in the all-cash deal. In addition to being one of the tallest buildings in Bellevue, the tower boasts some big-name tenants, including Microsoft’s Bing division. Among the new owner’s plans for the building is a multimillion-dollar effort to enhance the tower’s high-tech capabilities, sources told CityBiz.
Washington, D.C.
The nation’s capital is turning into something of a hot spot for distressed asset sales, according to a report released last month from real estate tracking group CoStar. The firm found that, since January 2009, the district has seen $3.05 billion in distressed commercial property sales, putting it in second place behind the New York metro area, which saw $4.17 billion in sales during the same time period. The Washington market was one of five major office regions with the lion’s share of distressed sales nationwide. The other three markets making the list were the San Francisco Bay area, Southern California and Boston, which came in third, fourth and fifth, respectively. Stephanie Hession, a real estate economist for CoStar, said that Washington has become an increasingly attractive option for investors in recent months. “There’s already year-over-year job growth in this metro area, asking rents have held up pretty well, and absorption has been positive recently thanks to federal government and related expansions,” Hession said. “As a result, investors see Washington, D.C. as a safe haven.”
Compiled by Amy Tennery