In the News—Week of August 22, 2022
Deal of the Week
FSO Capital Partners, a real estate private equity firm based in Phoenix, acquired Sonoma Valley Apartments in Apache Junction, AZ for $44,500,000. The transaction was handled by Sheila Hunter, Vice President and Senior Commercial Escrow Officer, from Thomas Title’s Scottsdale office.
Average rent for apartments in Manhattan rockets past $5,000 mark
The average monthly rent for a one-bedroom apartment in Manhattan has passed $5,000 a month, CBS2 in New York reports. Figures from Douglas Elliman show rent for a one-bedroom reached a record average of $5,058 in June and rose to a record $5,113 in July. That’s a jump of about $1,000 since last summer. The vacancy rate has dropped under 2%. “I’ve never seen these prices, and also the desperation for people to really find somewhere to live,” Douglas Elliman agent Melinda Sicari tells the TV station.
Energy & Efficiency
German economy minister says nuke plants need to close as scheduled
Germany’s economy minister, Robert Habeck, said he is against extending the lifespan of the country’s three remaining nuclear power plants in order to save gas, Reuters reports. Habeck, a member of the Greens party, said it would save at most 2% of gas use and would not be worth reopening a debate about nuclear power. Former Chancellor Angela Merkel proposed legislation to end the use of nuclear power by the end of this year after the Fukushima nuclear disaster of 2011. In recent weeks there has been talk of keeping the nuclear plant open as Germans face possible power shortages this winter. German Chancellor Olaf Scholz said the stress test on the electric system should come in the next few weeks. Scholz said only then would a decision be made.
Baker Hughes to move HQ from north Houston to Energy Corridor
Energy technology company Baker Hughes is moving its corporate headquarters offices from north Houston to the city’s Energy Corridor and cutting down on office space, the Houston Chronicle reports. Baker Hughes has signed a lease for 130,000 square feet at Energy Center II, at 575 Dairy Ashford Road. With more employees working at least some from home, the company decided to cut about 350,000 square feet of office space. It’s leaving its headquarters building on Aldine Westfield Road and an adjacent building and vacating two buildings in the Spring Branch area. Around 1,400 employees — about a fifth of Bakers Hughes’ Houston-based workers — will be affected by the relocation. “We are always looking for the ability to create efficiency and cost-effectiveness in our real estate footprint,” Deanna Jones, chief human resources office, tells the newspaper. “This is going to be a cost reduction for us to be able to consolidate these offices.”
D-FW metroplex is No. 1 in the nation in several ways
When it comes to buying apartments, Dallas-Fort Worth leads the country, The Dallas Morning News reports. When it comes to building apartments, Dallas-Fort Worth leads the country. Same with building industrial facilities and investing in commercial property. Figures from Newmark Group show D-FW is leaving the rest of the country in its dust. Now the market is not leading in every CRE category. But it is in the top 5 in office and retail property transactions.
Phoenix office market enjoys strong quarter; sublease space still a problem
The Phoenix metro area office market saw more than half a million feet of net absorption in the second quarter, AZ Big Media reports. Figures from Colliers, show the 100 Mill project in Tempe led the way, adding more than 287,000 square feet, which is more than 90% leased. The market clocked in 517,623 square feet of net absorption. For the year, the total net absorption is 364,044 square feet. Subleasing is still a drag on the market — 740,568 square feet went on the market in the second quarter. The market now has 6.2 million square feet available for sublease. The rental rate rose 3.7% from the previous year.
Government says plans for investing in infrastructure will solve water crisis
Nuevo Leon has been in a severe water crisis this summer as drought pummels northern Mexico, and the federal government says it has the answers, Mexico Business News reports. On a visit to the state, President Andrés Manuel López Obrador announced investments in infrastructure he says will make sure water is supplied to Monterrey’s metropolitan area. The federal and local government will spilt the cost of a $523 million aqueduct. “We are here to find a way to solve the water supply problem for Monterrey’s metropolitan area. Technicians forecast there is enough water for the next 10 years without any problems,” López Obrador says.