Market Data
Regional Outlook(19)
WEST
Portland’s Big Deal
Out-of-town institutional
investors have been cherry-picking assets in the City of Roses to the tune of
52 commercial transactions in the last six months, according to the Portland
Business Journal. In March, American Assets Trust of San Diego set a $354 psf
record with the $129.4 million purchase of the newly built, 100-percent-leased
First & Main property shown here. The REIT returned to Portland in May to
pick up a three-office portfolio for $92 million. In addition, investors have
traded about $135 million in Portland multifamily assets in 1H11, a 936 percent
improvement over 1H10, according to Real Capital Analytics.
Land Sale: 8 Cents on the
Dollar
Back at the height of the
boom in 2006, the joint venture MW Housing Partners III, which included Calpers
and Weyerhaeuser Co. as investors, bought a 10,200-acre site in the Arizona
desert, about 60 miles southwest of Phoenix, for $400 million. In 2009, lenders
foreclosed on the property when the planned housing development went bust. In
May, private equity fund Arcus Property Solutions purchased the land for $32.5
million, as a buy and hold strategy.
Source: Bloomberg News
SOUTH
Atlanta Industrial
Snapshot
Two consecutive quarters
of positive absorption sounds like the beginning of a recovery in Atlanta’s industrial market, but the
numbers are slightly misleading, says Jones Lang LaSalle’s 1Q11 report. Clorox’s 1.1 million-sf
build-to-suit distribution center didn’t take any inventory off the market. In fact, the
company is consolidating and will give back space through coming move-outs. The
city’s 1Q11
industrial vacancy rate was 14.1 percent.
EAST
Latte with that Footlong?
Subway has opened 15 Subway Café restaurants and plans to add 10 more as it
tests a new format slightly larger than 1,200 sf. Hoping to appeal to office
buildings and other high-end venues, Subway Cafés offer an expanded menu of coffee
drinks and baked goods. In addition Subway is looking for 2,000 locations
nationwide for its regular sub shops, which range from 100 sf to 5,000 sf.
Along with typical shopping center and free-standing locations, the company is
seeking nontraditional spaces such as hospitals, sports arenas, and colleges.
“Overall,
pricing for commercial real estate in the Northeast remains 15 percent lower
than its pre-recession pricing
levels. The West, Midwest, and Southeast regions remain down 38 percent, 37
percent, and 35 percent respectively.”
— CoStar Group
MIDWEST
Chicago Condo Count
Tumbles
Developers of Chicago’s
downtown condos are resorting to fire sales to rid themselves of unsold units
and pay off construction loans, according to ChicagoRealEstateDaily.com.
Recently an investor paid $5.2 million for 52 unsold units in a downtown
project with the plan to cut prices to individual sellers and still make a
profit. Conversions to rentals to meet a strong demand and lack of construction
during the downturn have brought Chicago’s unsold condo count to its lowest
point since 1997.
“Urban
net-leased properties in top-tier metros remain in high demand for passive real
estate investors. Save-A-Lot is one of the most aggressively expanding tenants
and this transaction represents the demand for grocery tenanted properties.”
— Randy Blankstein,
president of The Boulder Group, which
sold a NNN Save-A-Lot property
in Chicago for nearly $2.3 million.