In the News—Week of December 11, 2023
Deal of the Week
A Utah-based investment group closed a construction loan for a $148,000,000 multifamily asset in Goodyear, Arizona. The lender is a Missouri-based bank with a longstanding presence in Arizona. The project will be directed by an Arizona developer, and will feature 408 units over the 21-acre parcel. The title team in Thomas Title’s Scottsdale office handled all of the title production, as part of Stewart Title’s National Commercial Services network.
NYC architects adding floors to office buildings in conversion to residences
You can’t just snap your fingers and turn office space into living space. Architects in New York City are finding that office high rises must be altered substantially to become viable residential towers, the New York Post reports. Floors must be added or reconfigured. “We couldn’t just wall it off. We had to physically reshape the building, remove floor slabs and reinforce the structure for the additional floors,” says Robert Fuller, principal at Gensler, a global design and architecture firm that is involved in a major conversion.
Apartments rents in Colorado could come down, economist says
Like everywhere else, Colorado has a glut of vacant office space. But there’s another problem — at least for investors, CBS News reports. The Denver metro area probably needs on average 8,000 to 10,000 rental units a year. “And we’ve been producing about 15,000 for the last several years,” says Marcel Arsenault, CEO of real estate investment firm Real Capital Solutions. “If you’re a renter, I’ve got great news. In about a year from now, you’re going to be able to get two months free rent, maybe even three months free rent on your apartment.” Arsenault adds: “I wouldn’t build an apartment unless you put a gun to my head.” It also means that converting office space to apartments, a popular idea throughout the country, is not going to rescue the commercial real estate industry in Colorado.
Dallas leads the way for Texas cities converting office to residential
The Lone Star State still is bogged down with vacant office space, and it has a severe shortage of housing. Dallas appears to be leading the way in Texas for converting office space to residential, The Real Deal reports. The Santander Tower, a 50-story building, is one of the most prominent projects being converted to housing. The tower’s owner, Pacific Elm Properties, is converting about a quarter of its 6.5 million square feet of office to residential. “It’s going to support the long-term viability of our downtown market,” Pacific Elms’ Sara Terry says.
Vertical infill project bringing more density to East Atlanta Village
The densification of East Atlanta Village continues despite challenges such as increasing interest rates, Urbanize Atlanta reports. Led by Atlanta-based Pellerin Real Estate, the project is expected to be completed in fall 2024 and marks the company’s sixth venture in East Atlanta Village. Plans include 37 apartments ranging from studios to two-bedrooms, accompanied by approximately 5,000 square feet of retail space.
Company formerly known as Facebook picks builder for $1B data center Mesa
Meta, the parent company of Facebook, has chosen California-based contractor DPR Construction to build its $1 billion data center in Mesa, Construction Dive reports. The project was first announced in August 2021. Plans call for a five-building campus encompassing over 2.5 million square feet. Meta claims the facility will be among the most advanced and energy- and water-efficient data centers in the world. The campus is expected to be completed in 2026.
Abrazo Health ready to start work on 27-acre medical campus in Buckeye
Abrazo Health is about to break ground on a medical campus in Buckeye at I-10 and Verrado Way, AZ Big Media reports. The 27-acre campus will include medical offices and an acute care hospital. Abrazo has five other major medical facilities in the Phoenix area. “We are excited to see the continued strong interest in our new medical campus. As a long-term partner of Buckeye, we have seen and felt the rapid growth of this area, as well as clearly heard the needs of residents, physicians and our civic partners,” says Hans Driessnack, CEO of Abrazo West Campus.