Office

Property Owners Recalibrate Expectations Following Financing Challenge, Shifting Vacancy Rates

by Sarah Daniels January 30, 2024

High costs, modulating occupancies and a lack of financing options reshaped the industrial, office, retail and multifamily sectors in the fourth quarter of 2023, signaling the determining factors for 2024, according to Lee & Associates’ 2023 Q4 North America Market Report. The industrial sector saw stabilizing tenant demand — the number of new buildings delivered increased in the fourth quarter, while new construction starts slowed. Meanwhile, the office sector’s struggles deepened as more than half of the office leases signed pre-2020 approach their expiration by 2026. With low-rate loans maturing into a high-rate environment, the factors troubling the office sector seem insurmountable in this decade. In the retail market, low vacancies did not lead to booming construction in that sector in the last quarter of 2023 — financing costs plus land and labor costs have hampered new development in spite of high demand. Finally, the health of multifamily markets is tied closely to geography. Sun Belt multifamily properties and their Midwest and Northeastern market counterparts are seeing reversals from the multifamily trends of 2021: formerly fast-growing Sun Belt markets are experiencing slowed rent growth or rent decline, while rent growth for slower-growing, major North and Midwestern metros has grown steadily. Lee & Associates …

January 30, 2024

Development Georgia Mixed-Use Multifamily Office Southeast

Alliance Residential Opens Broadstone Peachtree Corners Mixed-Use Community in Metro Atlanta

by John Nelson January 29, 2024

PEACHTREE CORNERS, GA. — Alliance Residential Co. has opened Broadstone Peachtree Corners, a mixed-use community located at 5672 Peachtree Parkway in Peachtree Corners, roughly 20 miles outside of downtown Atlanta in Gwinnett County. Situated on 9.2 acres, the property features a five-story residential building with apartments in studio, one- and two-bedroom layouts. The property also features 7,760 square feet of furnished for-rent office space located on the second floor of Broadstone Peachtree Corner’s amenity building. Alliance Residential is branding the office space as Second Story, A Private Office Collective. The space features offices ranging from 90 to 250 square feet, as well as two reservable conference rooms, a coworking lounge with an adjoining private outdoor terrace, a community kitchen and access to on-property electric vehicle charging stations. Amenities at the residential community include a pool, fitness center, game lounge, pet spa and dog run, clubroom, landscaped courtyard, grilling station and a fire pit. Rental rates begin at $1,549 per month for a studio apartment, according to the property website.

January 29, 2024

Acquisitions Office Texas

JLL Arranges Sale of 117,261 SF Office Building in West Houston

by Taylor Williams January 26, 2024

HOUSTON — JLL has arranged the sale of The Westchester, a 117,261-square-foot office building in West Houston. The six-story building was constructed in 1999 and was 74 percent leased at the time of sale. Amenities include a conference center, deli, private courtyard and a putting green. Marty Hogan and Rick Goings of JLL represented the undisclosed seller in the transaction. John Ream led a JLL team that arranged acquisition financing though an undisclosed CMBS lender on behalf of the buyer, Mission Cos.

January 26, 2024

Leasing Activity New York Northeast Office

Mulligan Security Signs 15,788 SF Office Lease Expansion, Renewal in Midtown Manhattan

by Taylor Williams January 26, 2024

NEW YORK CITY — Mulligan Security has signed a 15,788-square-foot office lease renewal and expansion at 7 Penn Plaza in Midtown Manhattan. The private security and fire safety contracting firm now occupies 24,788 square feet across the entire second floor. The renewal term is 12 years. David Hollander and David Katz of CBRE represented the tenant in the lease negotiations. Andrew Wiener, David Turino and Henry Korzec represented the landlord, The Feil Organization, on an internal basis.

January 26, 2024

Development Features Multifamily Office

The Journey from Empty Urban Offices to Residential Solutions Is a Complex Path

by John Nelson January 26, 2024

By Charvi Gupta of Getzler Henrich & Associates LLC Vacancy rates in office buildings in major metropolitan areas like New York City have surged, driven by the widespread adoption of remote work policies as well as the relocation of major corporate headquarters. With housing shortages exacerbating the issue, there is a growing discourse surrounding the conversion of these vacant office spaces into residential units. According to The Wall Street Journal, 1 billion square feet of office space sits vacant across the United States. While the numbers cover only office mortgages packaged into commercial mortgage-backed securities (CMBS), they reflect a broader freeze in the lending market for office buildings. However, the journey from empty office buildings to habitable residences is far from a linear path and comes with considerable challenges. With numerous examples to examine, as well as insights from financial restructuring consultants to consider, it’s clear that office-to-residential conversions are complex to say the least. Conversion Challenges The conversion process is becoming increasingly difficult. Construction loans are far more expensive than they were 18 months ago, and banks continue to be cautious about development lending, with many conversion efforts on hold because of higher interest rates. Although more cities are …

January 26, 2024

Development Florida Office Southeast

Sterling Bay, Key International Propose 51-Story Office Tower in Miami’s Brickell District

by John Nelson January 25, 2024

MIAMI — Sterling Bay has joined Key International as a co-developer for 848 Brickell, a proposed 51-story mixed-use tower in downtown Miami’s Brickell district. Plans for the Class A tower include 750,000 square feet of creative offices, structured parking for 1,000 vehicles and 7,500 square feet of ground-level retail space. The project is pursuant to zoning approval by Miami-Dade County. Skidmore, Owings & Merrill designed the tower, amenities of which would include tech-enabled conference facilities, a high-end fitness center, outdoor terrace, padel tennis courts and private open-air lounges.

January 25, 2024

Leasing Activity New Jersey Northeast Office

Bank of America Signs 550,000 SF Office Lease at Newport Tower in Jersey City

by Taylor Williams January 25, 2024

JERSEY CITY, N.J. — Bank of America has signed a 550,000-square-foot office lease at Newport Tower in Jersey City. Newport Tower is a 36-story, 1.1 million-square-foot waterfront building that recently underwent a multimillion-dollar renovation and connects via skybridge to the 1 million-square-foot Newport Centre Mall. Building amenities include eight onsite dining options, a fitness center, game room, tenant lounge, coworking spaces and meeting rooms. Robert Rudin, David DeMatteis, Mina Shehata, Dirk Hrobsky, Karl Helgessen, Jan Randall Dausend and Christina Magill of Cushman & Wakefield represented the landlord, BentallGreenOak, in the lease negotiations. Bob Alexander, Ryan Alexander and Taylor Callaghan of CBRE represented Bank of America.

January 25, 2024

Leasing Activity New Jersey Northeast Office

Fennelly Associates Negotiates 19,008 SF Office Lease in Hamilton, New Jersey

by Taylor Williams January 25, 2024

HAMILTON, N.J. — Fennelly Associates has signed a 19,008-square-foot office lease at a 47,464-square-foot building located at 200 Horizon Drive in the Central New Jersey community of Hamilton. The tenant, Micro-Air, a designer and manufacturer of air conditioning control systems for boats and RVs, is relocating from a 7,850-square-foot space in nearby Allentown. Jerry Fennelly of Fennelly Associates represented the landlord, Cammeby’s Management, in the lease negotiations. Micro-Air was self-represented.

January 25, 2024

Acquisitions California Office Retail Western

Anchor Point Capital Negotiates $12.2M Sale of Plaza Diamond Bar Office/Retail Campus in Los Angeles County

by Amy Works January 25, 2024

DIAMOND BAR, CALIF. — Anchor Point Capital has arranged the sale of Plaza Diamond Bar, a two-building office and retail property in Diamond Bar, approximately 30 miles east of Los Angeles. Two separate buyers, both private investors, acquired the assets for a combined total of $12.2 million. The seller of both assets was a partnership led by Metro Properties LLC. The office building, located at 2040 S. Brea Canyon Road, sold as an all-cash deal, and the retail building, at 2020 S. Brea Canyon Road, sold with a creative seller financing structured by Anchor Point Capital. Built in 2007, the two-story, 25,000-square-foot office building was 40 percent occupied by a variety of medical and related tenants. Built in 1980 and renovated in 1992, the single-story, 8,000-square-foot, multi-tenant retail building was 50 percent leased at the time of sale. Eric Vu of Newport Beach-based Anchor Point Capital handled the transactions.

January 25, 2024

Kansas Leasing Activity Midwest Office

Walnut Risk Management Signs 5,640 SF Office Lease at Aspiria Campus in Overland Park, Kansas

by Kristin Harlow January 25, 2024

OVERLAND PARK, KAN. — Walnut Risk Management LLC has signed a 5,640-square-foot office lease at the Aspiria campus in Overland Park. The insurance broker firm specializes in commercial and personal lines insurance brokerage. Construction has begun on the build-out of Walnut Risk Management’s new office, and the company plans to take occupancy in June. Wichita-based Occidental Management owns and manages the Aspiria campus, which is the redevelopment of the former Sprint headquarters.

January 25, 2024

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