Atlanta is experiencing an influx of human capital, corporate relocations and development of distribution networks that are combining to create a robust expansionary cycle in our real estate markets. One of the most positive elements of this expansion is that it appears the underlying structure of the growth is creating stability for our city and state well into the future. It is the structure of the growth that will be a long-term difference maker. CNBC annually conducts a study and ranks the top states for doing business. These rankings are a result of assessing various criteria, including but not limited to the cost of doing business, workforce quality, access to capital and business friendliness. CNBC’s results in 2014 were very telling. Four of the top 10 states are located in the south. The South’s top 10 finalists in CNBC’s study were Georgia (1), Texas (2), North Carolina (5) and Virginia (8). In addition to these empirical studies, major corporations are voting as well. The verdict is that many organizations are choosing to relocate corporate headquarters to Atlanta. Recently, marquee brands such as Mercedes-Benz USA and State Farm all have made plans to open or expand major corporate centers in our …
PHOENIX – A joint venture between True North Management Group and Crown West Realty has purchased three buildings within the Cotton Center business park in Phoenix. The sales price was not disclosed. The acquisition included Corporate Cotton Center I, II and III, located at 4645, 4625 and 4675 E. Cotton Center Parkway. Two of the spaces are flex office buildings, while the third is a corporate office building. Cotton Corporate Center I is a 116,858-square-foot, Class A office property. The building includes a two-story lobby, fitness center, men’s and women’s bathrooms with locker rooms, a cafeteria/restaurant and a break room. The building was constructed in 2001 as a build-to-suit for Aetna, though it’s currently vacant. Cotton Corporate Center II and III is a Class A flex office complex that contains two single-story buildings that were constructed in 2000. The complex totals 147,627 square feet. It was 87 percent occupied at the time of sale.
NEW YORK — Brookfield Property Partners LP (NYSE: BPY) will begin construction on the $2.1 billion One Manhattan West, a 2.1 million-square-foot office tower, following the signing of a 20-year lease with the Skadden, Arps, Slate, Meagher & Flom LLP (Skadden) law firm as anchor tenant. Skadden will move from Times Square to occupy 550,000 square feet of office space on floors 28 to 43 of the tower located at Ninth Avenue and 33rd Street, which is the first of two commercial buildings planned for Brookfield’s five-acre development, Manhattan West. When complete, the $4.5 billion Manhattan West development will include two new Class A office towers, retail, rooftop gardens, restaurants and cafes, and a luxury residential building, comprising 7 million square feet. A two-acre public park will cut through the site. Wells Fargo Bank, N.A., Deutsche Bank AG New York Branch, The Bank of New York Mellon and The Toronto-Dominion Bank are co-leading $1.25 billion in construction financing for the office tower. Brookfield is investing $850 million in the project, bringing the total cost of the project to $2.1 billion. “When this building opens in 2019, it will be home to Skadden and other exceptional companies from New York and …
ATLANTA — During the close of his presentation at the 27th Annual Hunter Hotel Investment Conference on Wednesday, Mark Woodworth of PKF Hospitality Research asked the hundreds of industry professionals in the audience if they were concerned from a competitive standpoint about Airbnb, the online service that lets people rent out their homes to travelers. Only five attendees raised their hand. Woodworth, who is president of Atlanta-based PKF, politely chided the group saying that Airbnb and similar room-sharing ventures are absolutely threatening the hotel industry. The San Francisco-based company is valued at approximately $20 billion, according to the latest report from Bloomberg. By comparison, hospitality giant InterContinental Hotel Group’s valuation currently stands at $9.3 billion. Woodworth reported that 76 percent of Airbnb’s 27,392 room listings in New York City are under $200 per night, a highly competitive rate given the industry’s low vacancy rate. Airbnb travelers don’t have to pay traditional occupancy taxes like hotel users do, although Airbnb travelers do have to pay “transient occupancy taxes” in select cities such as Portland, San Francisco, Amsterdam, Chicago and Washington, D.C. Airbnb has voluntarily rolled out the tax program in those markets and will likely roll out the tax collection initiative …
CHICAGO — Reed Construction has completed two build-outs at 303 E. Wacker Drive for Chicago Venture Partners (CVP) and Smithfield Foods. In the first build-out, CVP, a private equity investment firm, relocated its offices from the 12th floor to the 10th floor of this property. Reed Construction completed the 12,000-square-foot renovation, which included the addition of new open office areas with exposed painted deck ceilings, large meeting rooms, a break room and lounge area. In the Smithfield Foods build-out, the food company is relocating its Chicago offices to the 28-story East Loop property from its previous location at 111 E. Wacker Drive. Reed Construction completed the 6,000-square-foot renovation, which included adding new open office areas, large meeting rooms and perimeter offices. Reed Construction’s Jack Hennessy was the project executive and Jon Zawiski was the project manager for the projects. Eastlake Studio provided architectural services. Hines represented building ownership for both projects.
The Phoenix office market ended the fourth quarter of 2014 on a healthier note, registering a vacancy rate of just less than 17 percent and a positive net absorption 1.2 million square feet. The market saw four buildings totaling 354,798 square feet completed in the past quarter. This compares to an additional six buildings totaling 459,461 square feet that were completed in the third quarter of 2014; two buildings totaling 160,622 square feet completed in the second quarter; and 117,710 square feet in one building completed in the first quarter of 2014. Some of the larger leases included Wells Fargo Home Mortgage in the East Valley for 200,000 square feet; Progrexion in Deer Valley for 66,000 square feet; and Verizon Wireless near Phoenix Sky Harbor International Airport at 170,000 square feet. More than 2,898 million square feet of office space remained under construction at year-end 2014. Some of the notable deliveries to market last year included 2800 W. Geronimo Place in Chandler, as well as a 170,000-square-foot facility that was delivered in the third quarter and is fully leased by GM Information Technology Innovation Center. A 154,081-square-foot building in Tempe that was delivered in the fourth quarter is now 49 …
LOS ANGELES — In two separate financings, Karlin Real Estate has funded $96 million in first mortgage debt to refinance resort properties in Arizona and Colorado. Los Angeles-based Karlin has provided Grand Heritage Hotel Group (GHHG) with a $46 million senior loan secured by The Historic Stanley Hotel, a 140-room resort property in Estes Park, Colorado. Built in 1909 by Freelan Oscar Stanley, co-inventor of the Stanley Steamer — a steam-driven automobile popular early in the 20th century — The Stanley is listed on the National Register of Historic Places and is a member of Historic Hotels of America. In 2010, GHHG completed a multimillion-dollar renovation and restoration program that included restoration of the concert hall and manor house referred to as The Lodge. In addition to refinancing the existing debt on the hotel, Karlin’s five-year interest-only financing features a delayed-draw component, which will be used by GHHG to fund the completion of a new 50,000-square-foot luxury lodging building adjacent to The Stanley Hotel under a new brand called Aspire Hotels and Resorts. The 50-room building will provide a luxury hospitality component to a proposed 15,000-square-foot, state-of-the-art wellness center being developed by Estes Park Medical Center and the University of …
OMAHA, NEB. — Darland Construction has completed the five-story Jones 13 Apartments in downtown Omaha. Darland’s second project with America First Real Estate Group, the property includes 100 units. Apartments range from studios to two-bedroom units, which are built around a central courtyard. The property features a 57-stall parking garage. Additional amenities include a fitness center with a street view; a courtyard with outdoor kitchen, fire pit, and pergola, water feature and planters. Jones 13 is the second multifamily construction project that Darland has completed for America First Real Estate Group.
The Kansas City industrial market continues to be an incredibly strong performer. At the end of the third quarter of 2014, the industrial vacancy rate stood at a tight 6.1 percent. Absorption totaled more than 2.5 million square feet during the first nine months of the year, while new deliveries were slightly over 2.6 million square feet in the same period. Let’s examine some contributing factors that are encouraging new deliveries while still driving vacancy rates down and absorption up. Spec Is King The biggest story in the Kansas City industrial real estate market during the first three quarters of 2014 was the delivery of over 2.5 million square feet of Class A distribution facilities on a speculative basis. It can be argued that, in the past, many prospective tenants considered locating a distribution center in Kansas City, but they ultimately selected a different market based on a lack of available inventory and the inability of some companies to wait on the extended timetable for a build-to-suit project. Developers that took notice of this trend and reacted by delivering space to the local market are currently being rewarded for their actions. Much of the speculative development in 2014 centered around …
BRIDGEPORT, CONN. — Bridgeport Landing Development LLC, a subsidiary of The RCI Group, has added Starbucks and Chipotle to the tenant roster for Steelpointe Harbor. The two retail stores will open with the first phase of the 2 million-square-foot, waterfront development in fall 2015. Situated on 82 acres, the mixed-use project will feature more than 750,000 square feet of retail, restaurant and entertainment space, with a 12-screen premium theater. Additionally, the development will feature two hotels, 1,100 residential units, 30,000 square feet of office space and a 200-slip, full-service deep-water marina. In addition to Starbucks and Chipotle, Bass Pro Shops has signed on to open its first-and-only Connecticut store at the project. The $50 million first phase of Steelpointe Harbor is slated for completion in fall 2015.