In the News—Week of April 1, 2024

 In The Title Trove

Deal of the Week

A Wisconsin company recently sold a 60,000 square foot Industrial Building for $11,750,000.00 in the Phoenix area. The deal was closed by Commercial Escrow Officer Joel Montemayor in our Scottsdale, Arizona office.

National

Amazon is ready to invest $150 billion on data centers

Amazon plans to spend almost $150 billion over 15 years on data centers as the company prepares for increased use of artificial intelligence, Bloomberg reports via The Columbian. The company wants to keep its dominance in cloud services, where it has about twice the share of second-place Microsoft. Amazon plans to expand existing server facilities in northern Virginia and Oregon and build new ones in Mississippi, Saudi Arabia, Malaysia and other locales.

National

New York, Dallas, Los Angeles appeal to real estate investors

Los Angeles, Dallas, New York and London were the top cities for global investment over the past three years, CoStar News reports. Figures from JLL show that from 2021 through 2023 Los Angeles saw $96 billion of commercial property transactions valued at $5 million or more. Commercial property deals totaled nearly $91.2 billion in Dallas, $80.7 billion in New York and $77.9 billion in London. “The cities have emerged as top global markets for direct investments due to factors such as thriving industries, strategic locations, favorable business environments and economic growth, attracting significant investments,” JLL wrote in an email to CoStar News.

National

Work-from-home shift is proving hard to reverse, puts pressure on urban CRE

Work-from-home practices have persisted in the United States, putting office space and central business districts in danger, the BBC reports. An estimated 44% of office mortgages are troubled, which causes concern about the banks that hold their loans. “That’s the last part of this story that is going to play out in the next six to nine months — which is when and how much distress do we actually get,” says Thomas LaSalvia, head of commercial real estate economics for Moody’s Analytics. “The office market… is going to have to rightsize itself, and it’s not done yet.”

National

Superstar architect designs building to replace Miami Beach Burger King

A Burger King proved to be a little down market for developers in Miami Beach, the Miami Herald reports. Amit Khurana partnered with existing owners of the site, Roslyn and Norton Nesis and Robert and Miriam Weiss of Weiss Properties, on the joint venture in the South of Fifth neighborhood. They brought in Eduardo Souta de Moura, a Pritzker prize-winning architect to design a five-story building with 101,381 square feet. The plans go before Miami Beach’s Planning Board in late April. “A lot of our clients were moving to Miami Beach and some of our investors. We heard the same complaints about (the lack of) quality office projects,” Khurana said. “What we see as being a unique offering is in Miami Beach there’s a certain depth in the market and the market has interest in architecturally-distinguished office buildings that cater to family offices and hedge funds.”

Arizona

Scottsdale Airpark continues to attract high-profile companies

The Greater Scottsdale Airpark area in Arizona continues to grow and attract businesses, Colliers reports. “We have been tracking the Scottsdale Airpark submarket since 1980 when the area had just 268 companies and approximately 1.5 million square feet of space,” says Jim Keeley, founding partner of the Scottsdale office of Colliers. “As we wrapped up our report for 2023, the area boasts approximately 3,339 companies and nearly 48 million square feet of buildings. This trajectory promises to continue as the metropolitan area grows and people remain attracted to this live-work-play submarket.” Nationwide Realty Investors is building a campus just west of Hayden Road and north of the Loop 101. Axon started construction of its headquarters on the south side of the Loop 101 diagonal. HonorHealth acquired 50 acres and Banner Health 48 acres with plans for facilities in the area. DraftKings opened a 13,000-square-foot facility in 2023 in the area.

Arizona

Phoenix ranks behind only northern Virginia as a top data center market

The Phoenix metro area was the second biggest for data centers in 2023, AZ Big Media reports. Figures from JLL’s North American Data Center Report show the Phoenix market completed leases for 748MW of data capacity and has 2.8 million square feet (703MW) of capacity under construction. Northern Virginia is the top market with 1.6GW of transactions completed and more than 13 million square feet (1,339MW) under construction. “The availability of power and land remain primary factors in data center market success, and Phoenix fares extremely well in both of these categories,” said Mark Bauer, Senior Managing Director and Data Center Solutions Group Co-Leader, JLL. “That has kept local demand on a steady uptick, creating exponential absorption and positioning Phoenix top-of-mind for a wide spectrum of users as they continue to search for capacity.”

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