In the News—Week of January 27, 2025
Deal of the Week
A prominent automotive group in Metro Phoenix successfully closed a $14.2 million construction loan to develop its newest dealership location. The 13-acre site is located in the rapidly growing 303 Corridor in Surprise, Arizona. The lender was a Missouri-based bank with a significant commercial presence in Arizona. This transaction was closed by Senior Commercial Escrow Officer Joel Montemayor and Underwriting Counsel Chadwick Campbell in our Scottsdale, Arizona office.
National
Turning empty offices into homes takes on urgency in the wake of Los Angeles wildfires
In the wake of wildfires, converting empty downtown offices takes on a new urgency, the Los Angeles Times reports. The pandemic has left many office towers largely vacant, with occupancy rates dropping dramatically and building values plummeting. One notable project involves converting a 32-story office tower at 1055 W. 7th St. into 686 apartments, potentially setting a precedent for similar conversions of newer buildings. Thousands of homes were destroyed by fires this month in Los Angeles’ Pacific Palisades neighborhood and outside the city in Malibu and in Altadena. “We have an unprecedented need for housing right now,” landlord and developer Garrett Lee tells the newspaper. “There needs to be an even greater effort than before to build housing of all unit types and rent levels.”
National
Soccer star Lionel Messi decides to list his REIT on stock exchange in Spain
The world’s best soccer player is a sharp real estate investor, Bloomberg reports via benzinga.com. Inter Miami’s Argentine superstar Lionel Messi recently listed his Spanish-based real estate properties on a small stock exchange in that country, valuing them at $232 million. Messi’s company is called Edificio Rostowe Socimi, and his collective properties are being listed on the digital-only Portfolio Stock Exchange as a Real Estate Investment Trust. His holdings comprise seven hotels, shops, offices and houses.
National
NYC’s Third Avenue emerges as alternative as Fifth and Park avenues become too pricey
Third Avenue in New York City is undergoing a significant transformation as commercial investors capitalize on the high occupancy rates of more prestigious avenues like Fifth and Madison, the New York Post reports. Major property owners are investing heavily in renovations and amenities across numerous buildings, making Third Avenue an increasingly attractive alternative for businesses seeking premium office space. “The fact is, all the buildings on Park and Madison that are often more desirable are not only seeing rents that are higher, but availabilities are mostly only on the lower floors,” said Adam Henick of Current Real Estate Advisors. Third Avenue now offers a mix of options from small prebuilt offices to massive multifloor spaces, with some buildings even being converted to residential use.
National
Vacancy rate for commercial real estate in Silicon Valley rises to more than 20%
Silicon Valley is experiencing a notable shift in its commercial real estate landscape, with vacancy rates surpassing 20% across various sectors by late 2024, San Jose Spotlight reports. This trend is primarily driven by changing work patterns as employees continue to resist returning to traditional office settings, preferring remote work arrangements. Despite rising vacancy rates, new commercial development has reached post-pandemic highs with approximately 9 million square feet of new space constructed in 2024.
Arizona
Valley of the Sun multifamily market tightens despite robust building activity
Arizona’s rental market is seeing decreased availability for apartments, AZ Big Media reports. Figures from RentCafe show eight out of nine popular cities in the state saw a decrease in available units. Gilbert emerges as Arizona’s most notable rental market with a 41% reduction in available units from last year. That is the second most in the nation. Chandler’s supply of available units has dropped 24%, Peoria 12% and the City of Phoenix 10% despite an increase in apartment construction.
Arizona
Phoenix-headquartered firm purchases multifamily properties worth $270 million
Phoenix-based Rise48 Equity, has made major investments since early 2024 by acquiring nine multifamily properties worth over $270 million, AZ Big Media reports. The real estate investment firm added nearly 2,000 units to its portfolio. The company plans extensive renovations across these properties, investing more than $20 million in interior and exterior improvements for amenities and modern finishes. These acquisitions, located in the Dallas-Fort Worth and North Carolina markets, are managed by the firm’s integrated property management division, Rise48 Communities. Additionally, the company has expanded its operations by launching Rise48 Residential, a third-party fee management company that already oversees more than 900 units in the Dallas area.
