Market Data

Regional Outlook

West

San Diego’s Big Deal

The aptly named DiamondView Tower — whose 15th-floor skybox overlooks the San Diego Padres field — sold for $121 million, the area’s largest single office building sale for 2012, according to CBRE, which handled the transaction. San Diego developer Cruzan/Monroe and Cigna Investments purchased the 95 percent leased property for $121 million from The Netherlands-based Wereldhave USA, which paid $161 million for it in 2008. The transaction was a bargain in more ways than one: Although not located in the city’s center, DiamondView pulls in the region’s highest net operating income at $33.70 psf — $10.2 million annually, according to London Group Research.

Midwest

Chicago Multifamily Market Tight

Apartment hunters may not find Chicago their kind of town, as city multifamily vacancy rates have declined for the past 3.5 years to 4.3 percent, with asking rents increasing 2.9 percent for 2012, according to Marcus & Millichap. With only 200 rentals completed last year in the suburbs, those vacancies fell to 3.9 percent as asking rents rose 2.4 percent. Investors are also moving to the suburbs, as multifamily transactions outside of Chicago increased 25 percent last year.

South

West

Denver Offers Total Package

No longer just a winter destination, Denver has morphed into a “year-round, four-sport, convention-oriented, leisure city all connected through a new bus and light rail system,” says Greg Hartmann, executive vice president and national director of valuations of Jones Lang LaSalle Hotels. “It’s a model for noncoastal urban centers such as Houston, Dallas, Salt Lake City, Kansas City, Sacramento, San Jose, Omaha, and Cincinnati.” Hotel investors have discovered Denver as well, Hartmann adds, as upper-scale properties attract around $350,000 per room, with select-service hotels priced at more than $250,000 per room.

East

National

“Increased competition amongst net-leased investors has triggered the 3Q12 national bid-ask spread to compress by 6 basis points on average when compared to last quarter.”

Midwest

CCIM Restores Local Asset

Brent Sears, CCIM, SIOR, of NAI/Bergman in Cincinnati was instrumental in helping revitalize a retail asset in the tertiary market of Hillsboro, Ohio. After purchasing and renovating the 58,127-sf Hillsboro Plaza, property owner Buckeye State Investors retenanted, leasing a portion of the space to retail tenants. HealthSource of Ohio also signed a 10-year lease for 14,000 sf, which it occupies with another medical group. Buckeye then created a deed split and sold the portion of the center occupied by the medical groups to HealthSource for $1.4 million. The remainder of the center, 100 percent occupied, mostly by national tenants, is on the market for $3.5 million. “This revitalization effort created many jobs in a community with 11 percent unemployment,” says Sears. “When these stores opened up, there were hundreds of people in line for a position. CCIMs get things done in small cities as well as large ones.”

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