In the News—Week of February 3, 2025
Deal of the Week
A private investment group based in Arizona refinanced a retail asset on Scottsdale Road. The 34,000-square foot building houses a national retailer and is located within the bustling Scottsdale Airpark area. The $15.7 million loan facilitated the acquisition of another property for the investor’s portfolio. The loan team at Wells Fargo Middle Market Banking was led by Michael Mule. The transaction was handled by Underwriting Counsel Chadwick Campbell in our Scottsdale office.
National
31-story tower in downtown Minneapolis sells for slightly more than 3% of its 2016 price
The Ameriprise Financial Center in downtown Minneapolis recently sold for a little more than 3% of the price it fetched in 2016, The Minneapolis Star Tribune reports. Onward Investors paid $6.25 million for the 31-story office building. Florida-based Morning Calm Management paid $200 million in 2016 but couldn’t make the payments in 2023, returning the building to the lenders. The 31-story office building, which opened in 2000 as Ameriprise’s headquarters, will soon be vacant as the company consolidates its operations elsewhere. It is the second major purchase in downtown Minneapolis for Onward Investors, which is based in Minnetonka. Onward was part of the venture that bought the downtown Wells Fargo Center in 2024. “We don’t think office is dead forever,” says Jon Lanners, an Onward partner. “I mean frankly, we’re already seeing a pretty substantial uptick in demand across our portfolio from a leasing perspective.”
National
Major projects show New York City emerging from COVID-19 hangover
New York City seems to be emerging from the COVID doldrums, the New York Post reports. There are numerous office-to-residential conversions, but more importantly new projects. Sedesco is planning a 1,100-foot-tall luxury skyscraper on Billionaires’ Row at 41 W. 57th St., and Related plans another, reaching 1,200 feet at 625 Madison. Boston Properties, BRP Cos., the Moinian Group and Urbane Development have been chosen by the state to build a $1.35 billion, 28-story Hilton conference center at 418 11th Ave. across from the Javits Center.
National
Sales of older multifamily buildings in Florida have slowed to a crawl
There’s been a significant decline in Florida’s pre-1992 multifamily property sales, Business Observer reports. Figures from Trepp, a banking and real estate research firm, show a drop from 116 transactions worth $1.14 billion in 2021 to just two transactions totaling $15.7 million in 2024. This dramatic decrease is attributed to evolving building codes following Hurricane Andrew and the Champlain Tower collapse, which have imposed stricter safety requirements on older structures. While these aging properties often lack modern safety features like hurricane straps and impact-resistant windows, they surprisingly maintain higher debt service coverage compared to newer buildings. However, mounting pressures from deferred maintenance, increased inspection requirements and rising compliance costs make properties built after 2002 more attractive to investors due to their adherence to updated building standards.
National
Hearst Corp. to move venerable newspaper to newly acquired San Francisco office building
Hearst Corporation acquired a downtown office building at 450 Sansome St., which will become the new home for the San Francisco Chronicle’s newsroom, The San Francisco Standard reports. This relocation is part of a broader strategy to advance a $1 billion mixed-use development project called 5M, situated at 5th and Natoma streets. The current Chronicle complex, which is largely vacant, consists of two connected buildings that will be partially demolished to make way for new development, including a planned 400-unit condominium tower. The purchase of the Sansome Street property, set to close next month, demonstrates Hearst’s continued commitment to San Francisco despite the city’s recent real estate challenges.
Arizona
Tempe lake area lands headquarters for Norwegian artificial intelligence firm
Norwegian tech company Cognite has announced plans to relocate its global headquarters to Tempe, occupying 30,000 square feet in the Hayden Ferry Lakeside complex, The Tempe Tribune reports. The artificial intelligence company, which specializes in industrial software platforms, expects to create approximately 110 new jobs and transfer 40 senior management positions from Oslo and Austin. The move was influenced by several factors, including the presence of key executives already living in the Valley, proximity to Arizona State University’s talent pool and the region’s growing tech ecosystem.
Arizona
Rents for houses far outpace those for apartments in Phoenix metro area
Single-family rental homes are drawing significantly higher prices than apartments, AZ Big Media reports. Figures from Zillow show single-family rental houses in the Phoenix market are going for 46% more than comparable apartments, far outpacing the 20% gap nationally. “Right now, more multifamily units are hitting the market than at any time in the past 50 years, but detached homes aren’t seeing the same surge in construction,” Zillow’s chief economist, Skylar Olsen, says. “We’ve also got the large millennial generation wanting to move into a larger space. High and unpredictable mortgage rates and hefty down payments are pushing some to rent that lifestyle instead of buying it.”
