In the News—Week of December 23, 2024
Deal of the Week
Papago Plaza, a 10,000-square-foot, three-unit retail center located in Maricopa, Arizona, was sold in a transaction between Arizona-based investors. With an existing lease to a licensed cannabis dispensary, the parties relied on Thomas Title’s Cannabis Practice Group to insure the $1,975,000 deal. The transaction was financed by a community bank with extensive experience in the regulated cannabis industry. Vice President Sheila Hunter and Underwriting Counsel Chadwick Campbell coordinated the transaction.
National
Blackstone makes unprecedented investment in downtown Tokyo
In what is believed to be the largest real estate investment by a foreign entity in Japan, Blackstone has entered into an agreement to acquire a complex in Tokyo’s downtown, CoStar reports. Blackstone will pay $2.6 billion for the Tokyo Garden Terrace Kioicho development, which encompasses office space with full occupancy, luxury residences, a high-end hotel and retail establishments. This investment aligns with Japan’s recent initiative to attract foreign capital, targeting 100 trillion yen in foreign direct investment by 2030.
National
Financial advisors warming up to commercial real estate investment
Despite widespread predictions of a commercial real estate market collapse following COVID-19’s impact on office occupancy, the sector has shown remarkable resilience. Some advisors are warming to CRE as an investment, Investment News reports. While many office buildings remain partially vacant due to remote work, certain segments of commercial real estate, including student housing, industrial spaces and multifamily properties, are performing well. Financial advisors are increasingly optimistic about the market’s prospects for 2025, particularly as interest rates are expected to decrease.
National
Austin office towers unoccupied as vacancy rate reaches 27.7%
Austin, Texas, is experiencing a significant commercial real estate challenge, with one of the highest office vacancy rates in the nation at 27.7%, matching San Francisco, MySA.com reports. Several newly constructed towers in the city’s skyline remain unoccupied, including prominent buildings intended for major tech companies. The situation is particularly notable given Austin’s high asking rents and its position as a leader in office development, with substantial ongoing construction projects representing 3.7% of its existing inventory. Despite these challenges, there are some positive indicators, including interest from major companies seeking office space and recent property acquisitions, though often at discounted prices.
National
Acquisition of skyscraper sets off fight over LA County admin building
Shortly after Los Angeles County completed a $200-million acquisition of the Gas Co. Tower a controversy erupted over a proposal to demolish the county’s aging headquarters, the Los Angeles Times reports via aol.com. The Kenneth Hahn Hall of Administration, a 1960s building in downtown’s Civic Center, faces potential demolition as county workers prepare to relocate to the newly purchased skyscraper. Supervisor Janice Hahn, daughter of the building’s namesake, strongly opposes the demolition plan, criticizing the process as secretive and questioning the necessity of abandoning the historic structure.
Arizona
Tohono O’odham open $450M casino in Phoenix’s West Valley
A $450 million casino development opened in the Phoenix area’s West Valley, AZ Big Media reports. Tohono O’odham Gaming Enterprise’s Desert Diamond Casino White Tanks features an 184,000-square-foot gaming floor complete with slots, table games and the state’s only Morton’s The Steakhouse. The facility, located near Loop 303 and Northern Parkway, will create over 1,000 permanent jobs and generated more than 5,500 construction positions. This marks the tribe’s fifth casino property in Arizona, with plans including additions of a hotel, conference center and amphitheater.
Arizona
Pita Jungle introduces new concept, changes strategy for real estate
Pita Jungle’s founders have a new concept and new real estate strategy, the Phoenix Business Journal reports via ABC 15. The group is launching Feta Cowboy, a new fast-casual Mediterranean-Southwest fusion restaurant concept in Tempe, targeting younger diners. Pita Jungle is moving from a traditional model of leasing locations. The company is teaming with Capital Asset Management to pursue property ownership for future locations. Their expansion strategy involves developing retail centers around Feta Cowboy locations, with plans to incorporate various layouts, including drive-thrus and standalone buildings.
