In the News—Week of August 14, 2023
Deal of the Week
Amerco Real Estate, Uhaul’s real estate entity, recently acquired a newly constructed storage facility in Grovetown, GA for $7.2mm. The storage hotel is a 47,220 NRSF Class A facility containing 422 units with room for expansion. The transaction was closed by Joel Montemayor, Assistant Vice President and Commercial Escrow Officer, in our Scottsdale office.
National
Japanese investors are finding the Big Apple appealing again
Japanese investors, many of whom took a bath in New York City real estate in the early 1990s, are returning to the Big Apple, The Real Deal reports. One difference: In the 1980s, Japanese investors went after trophy buildings. This time they are seeking storefronts and rentals built before World War II. “There’s a broad sense that, coming out of the pandemic, Japan is also finally coming out of the deflation that has plagued the country for decades,” Yale assistant professor Cameron LaPoint says. “But this time things aren’t looking as bubbly.”
National
WeWork competitor IWG sees profit rise 48% in first half of year
Maybe the business model isn’t the problem. WeWork rival IWG posted a 48% surge in half-year profit, Reuters reports. WeWork has warned that it might not survive its current crisis, but IWG expressed a brighter outlook. “Our outlook for the full year remains cautiously optimistic given the growing demand for hybrid working solutions tempered by FX headwinds and a challenging economic and competitive environment,” the company said in a statement.
National
Seattle’s historic Smith Tower placed on the market gain
For more than 100 years, the Smith Tower has been an iconic building in Seattle. For many years, the 38-story building was the tallest building west of the Mississippi. Now the structure, which opened in 1914, is up for sale again, Seattle Refined reports. Unico Properties and Goldman Sachs bought the building just four years ago for $137.8 million. “I think Goldman bought the building right before COVID, peak market. Seattle’s growing Amazon, Microsoft hiring,” says Mike McSherry, who is the CEO of Xealth, a small startup that has been a tenant for five years. “It’ll be a real test for the commercial real estate market to see something was essentially bought at the peak of the market and what price it might command trying to sell it right now.”
National
Office rents in Jacksonville still high despite sluggish market
Office vacancy rates in Jacksonville, Florida are flat or may have dipped a bit, but rents remain high, the Jacksonville Daily Record reports. Figures from CBRE, Cushman & Wakefield, NAI Hallmark and Ciminelli Real Estate show the overall office vacancy rate to be in a range of about 14% to about 19% for the second quarter. Tenants are “looking for readily available turn-key options as a result of having immediate space needs or delaying long-term strategies due to the residual effects of the work from home movement,” says Patrick Carney, NAI Hallmark vice president.
Arizona
Tempe to spend $20 million to spruce up Mill Avenue
In the late 1970s and early 1980s, the City of Tempe was able to revitalize Mill Avenue, a stretch that was filled with seedy bars and head shops. Tempe has decided to spend $20 million to spruce it up again, adding lighting, furnishings, public art and trees, AZ Family reports. “The street hasn’t had a significant reinvestment in its infrastructure for over 40 years so that’s a big motivation for what we’re doing right now,” says Eric Iwersen, who is with the City of Tempe. “We want to kind of restart, reset or refresh Mill Avenue.” The city is gathering input from the public on what trees and plants should be put in. Work is expected to start next spring.
Arizona
Data center and business park planned for Turf Paradise race track
The new owners of Turf Paradise want to build a data center and business park on the site of the race track, Data Center Dynamics reports. California-based CT Realty will call the property Winner’s Circle Business Park and has filed plans with the City of Phoenix. The site is close to a Taiwan Semiconductor Manufacturing Co. (TSMC) chip fab complex that is being built. “We’re talking to quite a few Taiwanese and other companies that would hope to locate on the Turf Paradise property to support TSMC,” says James Watson, a managing partner at CT Realty. “Phoenix is also the second-largest data center market in the United States, so we’ve had a considerable amount of interest and inquiries from data center developers and operators.”
