In the News—Week of August 26, 2024
Deal of the Week
An Arizona based land investment company led by Anita Verma-Lallian with Arizona Land Consulting, sold over 2000 acres of land for over $136mm to a Colorado based Data Center Developer in one of the largest land closings for the State of Arizona. The Transaction was closed by Bryan Selna Senior Escrow Officer with the Scottsdale office of Thomas Title & Escrow.
National
Century-old office building in NYC shows updates can make a difference
A century-old New York City office building at 498 7th Ave. is defying the trend toward newer towers by securing two significant lease deals, the New York Post reports. These agreements, totaling 104,000 square feet, have brought the 960,000-square-foot building to 95% occupancy. PubMatic, Inc. signed a 60,000 square-foot direct lease, doubling its space, while Hazen and Sawyer extended its 44,000-square-foot lease until at least 2035. The 25-story tower was built in 1920. The building’s success is attributed to its modernization in 2021, which included upgrades to the lobby and other features. The property’s high occupancy rate stands in contrast to some older buildings struggling in Manhattan’s commercial market.
National
Biden Administration sues RealPage, claims software led to inflated rents
The U.S. Department of Justice has filed a lawsuit against RealPage, alleging that the company’s software enables landlords to artificially inflate rent prices across the country, the Los Angeles Times reports. The lawsuit, joined by several states including California, claims that RealPage’s software allows landlords to share nonpublic information and coordinate on setting rents, which goes against the principles of a competitive market. The Justice Department says RealPage’s tools are described as a means to maximize rent and outperform the market, making it difficult for landlords to reject its recommendations. The company did not comment but previously called similar allegations false and misleading, saying clients can decline its recommendations, which at times include dropping rent.
National
Brickell area of downtown Miami enjoys record rents for office space
The Brickell area in downtown Miami has experienced a surge in office rental prices, reaching a record high of nearly $200 per square foot, The World Property Journal reports. That nearly double what landlords were asking two years ago. The dramatic increase is driven by high demand from blue-chip companies relocating from major cities like New York, Chicago and Los Angeles, attracted by Florida’s favorable tax environment. The 830 Brickell building, completed in 2023, has become a prime example of this trend, attracting prestigious tenants such as Microsoft, Citadel and Kirkland & Ellis. About 90% of 830 Brickell’s tenants relocated from other major markets. This boom has spurred new developments, including Citadel’s planned $1 billion waterfront project in Brickell.
National
EFC Gases investing $210 million in facility to supply chip-makers
EFC Gases and Advanced Materials is investing $210 million in a new plant in McGregor, Texas, to produce specialty gases and chemicals for the semiconductor industry, Chemical & Engineering News reports. The facility will create about 120 permanent jobs and marks EFC’s expansion into chemical synthesis. Construction is set to begin in early 2025.This investment aligns with the growing North American market for semiconductor fabrication gases, which is expected to reach $570 million by 2028. McGregor is about 20 miles from Waco, and the plant is near major chip manufacturers and easily accessible for rail and truck transporting.
Arizona
Phoenix area ranks fourth in nation for building multifamily units
Metro Phoenix is experiencing an apartment construction boom, AZ Big Media reports. Figures from RentCafe show the Phoenix area ranking as the fourth busiest in the United States. The Valley is expected to see 20,141 apartments completed by the end of 2024. Only the New York metro area (with 32,395), Dallas area (32,393) and Austin, Texas, area (21,506) are ahead of the Valley. The Phoenix metro area is preparing for an even more substantial growth between 2024 and 2028, with plans to build 60,833 units. The surge in Phoenix’s apartment construction aligns with a nationwide trend. This is set to be a record-breaking year for apartment completions in the U.S., with over 500,000 units expected to be finished.
Arizona
Valley of the Sun lands 5 of top 100 largest leases for industrial space
The Phoenix area has been landing some of the big industrial leases in the nation, AZ Big Media reports. Figures from CBR show the Valley secured five of the top 100 largest industrial leases in the first half of 2024. That ranks sixth among U.S. metro areas, tied with Atlanta. The five large leases in the Valley totaled 4.6 million square feet. Three of them were to e-commerce businesses. “Phoenix continues to be a significant player in the industrial sector,” says Cooper Fratt, senior vice president at CBRE. “In addition to the three major e-commerce leases this year, manufacturing and 3PLs (third-party logistics) reflect our city’s growing economic dynamism.”
