In the News—Week of February 24, 2025
Deal of the Week
As the master developer of Cavasson—a 135-acre mixed-use community in North Scottsdale—Columbus, Ohio-based Nationwide Realty Investors sold an 11.27-acre parcel to Toll Brothers, the Pennsylvania-based national homebuilder. At the site, Toll Brothers plans to deliver “Toll at Cavasson,” which will include 136 high-end townhomes, with individual garages and private outdoor spaces. The residential development will complement the existing hotels, restaurants, and office buildings at Cavasson. The $28 million transaction was handled by Senior Commercial Escrow Officer Bryan Selna, Underwriting Counsel Chadwick Campbell, and Director of Commercial Services Kylie Cook in our Scottsdale office.
National
DOGE cutbacks on federal office leases could throw monkey wrench into CRE recovery
The commercial real estate market is showing signs of recovery as major companies and the federal government push for a return to in-person work, with office demand increasing by 40% between 2022 and 2024, CNN reports. However, this recovery faces potential challenges from the Department of Government Efficiency, which aims to significantly reduce federal office space leases. While premium office spaces in cities like New York are seeing strong demand and record-high rents, older buildings continue to struggle with high vacancy rates. The market’s future remains uncertain as DOGE’s actions could flood the market with vacant office space, potentially affecting the sector’s recovery for the next five to 10 years.
National
Largest office-to-residential conversion in nation begins leasing luxury apartments
The largest office-to-residential conversion project in the United States begins leasing at 25 Water St. in New York City’s Financial District, 6sqft.com reports. The $800 million development, named “SoMA” for south Manhattan, has converted a 1960s Brutalist office building into 1,320 luxury apartments, featuring extensive amenities across 100,000 square feet of space. The project required significant structural modifications, including the addition of light wells and windows to the former JPMorgan Chase and New York Daily News building. With units ranging from studios starting at $3,436 to three-bedrooms at approximately $10,000 monthly, and 25% designated as affordable housing, this development represents a significant shift in Manhattan’s real estate landscape. The project is the first to take advantage of a tax incentive program for office-to-residential conversions, potentially setting a precedent for similar transformations across the city.
National
New York, Nashville lead way for planned expansion of hotel rooms
New York City is planning to add over 5,700 rooms in 2025, leading the way for hotel expansion in the United States, Hospitality Net reports. Figures from CoStar show Nashville follows as the second most active market, with nearly 2,850 rooms projected to open, while San Diego (2,818 rooms), Dallas (2,749 ) and Phoenix (2,483) round out the top five markets for hotel room construction. The U.S. hotel industry is expected to see substantial growth in openings over the next few years, with projections showing an increase from about 74,000 rooms in 2024 to over 198,000 rooms by 2026.
National
Fort Worth commercial real estate firm buys historic building for headquarters
Worth Commercial Real Estate has acquired the historic Magnolia Centre, a 31,000-square-foot Class B office building located in Fort Worth’s Near Southside district, Fort Worth Inc. reports. The building, constructed in 1925 as the Southside Masonic Lodge, was added to the National Register of Historic Places in 1985 and underwent renovation in 1986. Worth Commercial, which is celebrating its tenth year in business, plans to establish its headquarters on the building’s fourth floor in 2025. The acquisition represents a significant milestone for the company, which has facilitated over $80 million in commercial real estate transactions, and demonstrates their commitment to preserving historically significant properties while supporting local business development.
Arizona
Tempe OKs zoning change to comply with law designed to expand housing supply
Tempe is implementing a significant zoning change to comply with the state’s “Middle Housing Bill” that will allow construction of duplexes, triplexes, fourplexes and townhomes in single-family zones within one mile of the Central Business Development, AZ Big Media reports. The law, affecting cities with populations over 75,000, aims to expand housing supply and is set to take effect by Jan. 1, and is designed to expand the housing supply. Opponents expressed concerns about neighborhood character changes. The legislation excludes certain areas like nonresidential zones and high-noise areas near the airport.
Arizona
Esplanade office complex in Phoenix completes renovation, adds amenities
The Esplanade office complex in Phoenix’s Camelback Corridor has finished a $45 million renovation project, adding 30,000 square feet of amenity spaces across its four-building campus, AZ Big Media reports. The centerpiece of the project is a 16,000-square-foot, two-story central amenity building featuring Hearsay restaurant, along with an 8,000-square-foot conference center equipped with state-of-the-art facilities. The renovation includes a new fitness center, while the campus will welcome three new restaurant concepts this spring.
