In the News—Week of December 2, 2024
Deal of the Week
Amerco, the real estate division of UHAUL recently acquired a new self-storage property in Rocky Mount, North Carolina for $10,250,000. The facility was converted from big box retail to storage in 2023. This acquisition has 457 units totaling 60,569 net rentable square feet and sits on 8.59 acres. This transaction was closed by Vice President and Senior Commercial Escrow Officer, Joel Montemayor, in our Scottsdale, Arizona office.
National
Blackstone agrees to $4 billion deal for firm that owns shopping centers
Blackstone has agreed to purchase Retail Opportunity Investments Corp. for approximately $4 billion ($17.50 per share) in an all-cash deal, Globest reports. The acquisition price represents a 34% premium over ROIC’s stock price from July 2024, when sale rumors emerged. The deal encompasses 93 grocery-anchored retail properties across major West Coast markets, totaling 10.5 million square feet. This move by the hedge fund giant takes advantage of the strong fundamentals in the retail sector.
National
Reversal of form: Dickies clothing moves HQ from Texas to California
Bucking a major trend, the workwear brand Dickies announced its plans to move its headquarters from Fort Worth, Texas to Costa Mesa, California, Fort Worth Report reports. The relocation, affecting approximately 120 employees, is expected to be completed by May. The move marks a departure from a trend during the past decade — companies relocating from California to Texas. The move falls in line with parent company VF Corporation’s business restructuring strategy. Dickies’ headquarters has always been in Fort Worth, where it grew from a small harness business in 1918 to a globally recognized workwear brand. Dickies will maintain ties to Fort Worth through its distribution facilities, warehouses, retail stores and naming rights to major local venues like Dickies Arena.
National
Brooklyn developer ceases giving artists a break on rent for studios
Two Trees, a prominent Brooklyn real estate developer, is ending its decade-long program that provided artists with heavily subsidized studio spaces, Curbed reports. Artists who previously paid $1 per square foot monthly are now facing rent increases of two to three times that amount, forcing many to relocate from their studios at 20 Jay Street. The change comes as Two Trees grapples with challenges in the commercial real estate market, particularly the exodus of tech companies and startups. While the company maintains the building is nearly fully leased, the situation highlights the precarious nature of artist-friendly programs.
National
Artificial intelligence firms lift- office market in San Francisco
Artificial intelligence companies are driving demand for office space, particularly in San Francisco, Commercial Search reports. Major AI firms including Notion, OpenAI, Scale AI, and Anthropic have recently secured substantial office leases in the city, with Notion taking 105,000 square feet in the Monadnock Building. Despite San Francisco’s office vacancy rate of 37% earlier this year, AI-related leasing activity has shown remarkable growth, with the market exceeding 1 million square feet in AI office leasing volume for two consecutive years. This surge in AI company leasing, supported by strong venture capital funding reaching $21.7 billion through Q3, suggests a potential revival of the city’s office sector.
Arizona
Luxury storage condos surge in popularity in Greater Phoenix area
Greater Phoenix is seeing a surge in luxury storage condo developments, a shift from traditional rental storage units, AZ Big Media reports. These high-end facilities, which began gaining traction in Scottsdale with Toy Barn in 2010, offer amenities like climate control, custom cabinetry and 24/7 security, creating a new real estate investment category. The trend is particularly relevant in the Phoenix metropolitan area, where demographic shifts including an influx of snowbirds and residents downsizing to smaller homes are driving demand. This emerging market ranges from millennials living in smaller spaces to high-net-worth individuals seeking secure storage for valuable collections, while offering a more affordable entry point into real estate ownership compared to traditional properties.
Arizona
Arizona companies push workers to return to office, look to upgrade space
Arizona is undergoing a shift in office work culture as major companies push for employees to return to physical workplaces, KJZZ reports. Commercial real estate trends in Phoenix reveal a growing demand for high-quality, amenity-rich office spaces rather than simply larger spaces. The Valley’s commercial real estate market currently has a 25% vacancy rate, with experts suggesting a 15% to 17% rate would be more optimal. Many property owners are investing in upgrading existing spaces to meet the demand for premium facilities. The Sun Belt states, including Arizona, are seeing a faster return-to-office trend compared to major coastal cities like San Francisco and New York.
