Market Data
Regional Outlook
Midwest
Chicago’s
Big Deal
Hardly
considered the Second City these days, Chicago has yet to reach the
stratosphere of New York’s office prices where Five Times Square and the Time
Warner Center sold for $1.5 billion and $1.3 billion respectively earlier this
year. But the $850 million sale of 300 N. LaSalle comes within striking
distance. The price tag for the 60-story, 97 percent leased, LEED-certified
building in Chicago’s trendy River North area is the third largest U.S. office
sale this year and sets a new record for Chicago office properties. KBS Real
Estate Investment Trust II sold the riverfront tower to The Irvine Co. for
about $654 psf, a 30 percent increase over the $503 psf it paid in 2010,
according to Chicago Real Estate Daily.com. Investors obviously get more for
their money in Chicago: 1Q14 cap rates averaged 7 percent compared to 4.3
percent in Manhattan and 5.2 percent in San Francisco, according to Real
Capital Analytics.
Cleveland
CBD Comeback
Cleveland’s
downtown population has increased 50 percent in the past 10 years and is
projected to reach 15,000 residents by 2015. That demand has tightened the
multifamily vacancy rate in central Cleveland to a mere 2.3 percent and spawned
a wave of new projects, according to Marcus & Millichap. At the high-end is
the conversion of the East Ohio Gas building to a 223-unit property with rents
topping out at $2,600. Other projects include the second phase of the Flats
East Bank, adding 243 units. More than 1,850 units are under construction in
the Cleveland area and 6,200 units are in the planning stages, both with a heavy
CBD concentration. Attracted by Cleveland’s stabilized economy, institutional
investors are targeting properties $10 million and above for purchase, looking
for a 6 percent return on class A assets.
South
Juan
Valdez Comes to Miami CBD
Procafecol,
the company that represents Colombian coffee growers and manages the Juan
Valdez brand, has opened its first downtown Miami location, the first of 60
planned outlets in Florida over the next five years. Operating the stores as
franchises, Procafecol has plans to expand the brand to Texas and California as
well to capture the growing U.S. Hispanic market. It builds on its
international reputation, with 280 stores worldwide, the majority in Latin
America, as well as outlets in New York and Washington, D.C.
Source:
Bloomberg
National
East
Atlantic
City Losing Casinos
Have
casinos have reached their saturation point in the Northeast? Some 39 states
have casinos, including Massachusetts, Connecticut, Delaware, New York,
Pennsylvania, and Maryland. Atlantic City, which lost its status of second
biggest casino market to Pennsylvania, saw its gambling revenue decline from
more than $5 billion in 2006, when the first Pennsylvania casino opened, to
less than $3 billion last year. The Atlantic Club, Showboat, Trump Plaza, and
the two-year-old Revel will close by this fall. While the market for
repurposing casinos is untested, conversion of the hotel portion is a
possibility, but the large gaming rooms can be a challenge to use. A local
college has suggested converting one casino into a college campus, with
classroom, facilities, and student housing — diversifying the employment base,
attracting another consumer base, and offering much-needed retraining for some
8,000 former casino employees.
Source:
Philadelphia Inquirer
West