In the News—Week of January 8, 2024
Deal of the Week
A leading multifamily developer refinanced a 253 Unit Apartment Complex with a national life insurance company. The $27,777,440.00 transaction was closed by Sheila Hunter, Vice President and Senior commercial Escrow Officer.
Expert predicts office conversion will take years to solve SF housing woes
With more than a third of San Francisco’s office space empty and a serious housing shortage, converting unused office space to condos or apartments is clearly the answer. Not so fast, Oz Erickson, who is with a San Francisco real estate development company, Emerald Fund, tells ABC7. First the city and the state must provide tax incentives, he says. And then, if 2 million square feet per year are converted — a solid pace — it would take a decade to make a real impact.
Empty commercial space in Des Moines tower will be turned into apartments
The Lyon Apartments in the East Village area of Des Moines plans to convert vacant commercial space on the first floor into apartments, the Des Moines Register reports. The plan is to create seven units by April. The 11-story tower opened in 1970 as senior housing and became a mixed-use project with apartments and commercial space in 2015. It has only one commercial tenant, a restaurant and bar. The future of that tenant is not known. VareCo, a Denver-based private investment group, acquired the tower in 2022. “When we acquired (the tower), our intention was to fill it with more affordable housing,” VareCo’s Daniel Doyle says. “We feel like that’s a big opportunity in Des Moines.”
University of California appears ready to buy once trendy Los Angeles mall
The University of California appears to have set its sights on buying the former Westside Pavilion, once a trendy shopping mall in Los Angeles, to expand the UCLA campus, the Los Angeles Times reports. The mall was renamed One Westside and converted to a 584,000-square-foot office complex. Tenants included Google. One Westside is about two miles from the UCLA campus. UCLA receives more applications than any of the other nine campuses in the UC system. But UCLA’s campus is among the smallest in the system. UCLA spokeswoman Mary Osako declined to confirm or deny reports about the potential transaction.
Whole Foods buys building that houses its store in downtown Miami for $21M
Is this the beginning of a trend? Once again, instead of a company selling the building where it does business and leasing it back, we have a company that leases a building where it does business buying the space. Commercial Observer reports Whole Foods paid $21 million to buy its downtown Miami store. The Amazon-owned grocer bought the ground-floor commercial condo and basement at 299 SE Third Street — a total of almost 97,000 square feet. Whole Foods has operated the store there since the building opened in 2014. Another Miami retailer, Alo Yoga, which peddles a trendy brand of “athleisure” clothes, bought its store in the Design District.
Prep work continues on historic Hayden Flour Mill in Tempe
Tempe has approved plans to restore the historic Hayden Flour Mill and is currently conducting an environmental investigation and an inventory of the equipment that was left behind in the building, KJZZ radio reports. Construction will likely begin in the next two to three years, and within five years, the majority of the project will be complete, says Josh Rutherford, economic development administrator for the mill project. The mill was originally built in 1874, but it burned down twice. The existing version was built in 1906 and used fire-proofing techniques learned in the wake of the 1906 earthquake that leveled San Francisco. The silos were built in 1951.
Phoenix City Council approves revised project for Steele Indian School Park
The Phoenix City Council approved a plan to develop a vacant lot adjacent to Steele Indian School Park that some residents say is worse than the previously approved plan, The Arizona Republic reports. In 2019, The council approved a development called Central Park that was mostly office. But the plans had to be revised when COVID-19 hit and dealt a body blow to the office market. “We had been moving full steam ahead in 2019, but COVID changed everyone’s plans,” says Benjamin Tate, a lawyer who represents Phoenix-based Pivotal Group. The revised project includes a 21-story apartment tower, a 21-story condominium tower and two eight-story apartment towers. Ken Waters, a nearby resident, says the changes between the 2019 proposal and the new plan have made the project less walkable and less compatible with the park.