In the News—Week of April 21, 2023
Deal of the Week
A Missouri-based group purchased the Portillo’s restaurant property at El Con Mall in Tucson. The seller was a Scottsdale-based retail developer that acquired and renovated the building, and secured the tenant. The restaurant opened in February 2023, treating Tucsonans to the famous Chicago-style hot dogs. The $5.7 million sale was closed by Sheila Hunter, Senior Commercial Escrow Officer, in our Scottsdale office.
Government-backed investment in high tech plants echoes through economy
A combination of federal government funding, reshoring and attempts at decarbonization have fueled a boom in advanced manufacturing, Commercial Observer reports. “Everything is happening at the same time,” says Guillermo Martinez, of international business consultancy Turner & Townsend. There has been $200 million in domestic semiconductor plant investment since early 2020 and $128 billion for electric vehicle plants. “There’s a political strategy behind these investments, so I don’t see these changing unless the need or the political strategy changes,” Martinez says.
REI says it is leaving Portland, Oregon because of safety issues for workers
REI, which sells gear for camping and other outdoor activities, would seem like a perfect match for Portland, Oregon. But, alas, the two are parting ways, Willamette Week reports. The main reason is crime. “Last year, REI Portland had its highest number of break-ins and thefts in two decades, despite actions to provide extra security,” REI wrote in an email to members. “The safety of our employees, members and customers is always our No. 1 priority. In recent years, Portland has been dealing with increased crime in our neighborhood and beyond.” The company also said the store had outgrown the space it is leasing in the Pearl District.
Big employers looking to jettison office space in San Francisco area
Indeed, Salesforce, Airbnb, Meta, Dropbox and Uber are among the large companies trying to sublease unneeded office space in the San Francisco area, The San Francisco Standard reports. The area is experiencing a record office vacancy rate and figures from Cresa show San Francisco leads the nation in subleasing availability with 7.2%. Phoenix is a distant second with 5.7%. “San Francisco’s large concentration of technology-related industries and hybrid work options have shrunk demand for tenant space and led to more sublease availabilities,” says Erwin Abidog, research director at Cresa.
Streetcar named development: Backers say project will revitalize downtown
The Omaha City Council is weighing spending $306 million for a streetcar project that backers say would more than pay for itself, RE Journals reports. The Omaha Streetcar Authority has proposed a 3-mile route through the city’s downtown that would be free to ride. The Authority says the line would be financed by taxes payed by new or redeveloped commercial buildings and apartments. Supporters say it would bring $3.2 billion worth of development to downtown. “The streetcar route will connect the convention center and our baseball field, Charles Schwab Field, with the rest of downtown,” says Jay Noddle, who is serving as the Authority’s president. “There is a lot of available land and under-utilized buildings along the route. To say that this streetcar will be a shot in the arm for the urban core is an understatement.”
Trammell Crow, CBRE buy 200 acres for rail-related industrial hub
Trammell Crow and CBRE Investment Management bought land in Mesa and plan for a railroad-related industrial development, Freight Waves reports. The Union Pacific railroad serves the site. The 192-acre site will be divided into shovel-ready lots that will range from 12 acres to the whole site. “Users of that scale typically need specific build-outs and accommodations, making the concept of a shovel-ready development site more appealing than having to source, acquire and prepare land on their own for development,” Trammell Crow said in a statement.
Welcome to the club: ASU starts group for future CRE developers
Arizona State University students who want to go into commercial real estate have formed a club, The State Press reports. Started last year and formally affiliated with the W.P. Carey School of Business this spring, the group is made up of students form the business school and offers networking events and presentations from industry professionals. “(Keegan and I) had gotten our internships just through knowing people. That’s really what the real estate business and most specifically what the commercial real estate business is. It’s based on who you know,” Kyle Duffy, who serves as vice president of The Real Estate Club, tells the student newspaper. (Keegan Schenk is president of the club.)