In the News—Week of June 12, 2023
Deal of the Week
A Texas-based real estate investment group refinanced a hospitality property in Phoenix, Arizona for approximately $5 million. The transaction was closed by Bryan Selna, Vice President and Senior Commercial Escrow Officer, in our Scottsdale office.
Paul, associate of Texas AG, indicted on charges of misleading lenders
Austin real estate investor Nate Paul has been arrested for making false reports and statements to credit unions and mortgage lending companies, KXAN TV reports. As an up and comer, he previously was compared to Bill Gates and Michael Dell. By the time he was in his early 30s, Paul owned a real estate company worth more than $1 billion. Now he is an important figure in the impeachment of Texas Attorney Ken Paxton. When the FBI raided Paul-connected World Class Holdings offices, Paxton agreed to look into improprieties in the federal’s handling of the case. Paul was a contributor to Paxton’s campaign. Aides accused Paxton of acting improperly in the case. He denied all the allegations but now faces 20 articles of impeachment.
Shopping for skyscrapers: NYC is full of bargains in commercial real estate
For wealthy families shopping in New York City used to involve designer clothes, expensive shoes and high-end watches. But now, the Robb Reports reports, it involves large office buildings. With landlords desperate for cash, previously unknown investors, as well as those who made considerable wealth outside of commercial real estate, are snapping up office buildings at bargain prices. “You start to get buy-in from people who aren’t mired with the vagaries of the local market and are just saying ‘Wow, New York is cheap right now, I’ll buy,” Will Silverman, the managing director at the brokerage Eastdil Secured, says. “They don’t have to rationalize anything to an investment committee. They just have to be convinced that it’s the smart thing to do.”
Houston doing better than expected as life sciences, aviation grow
The Houston commercial real estate market is doing better than generally thought, Houston Public Media reports. Research by the Perryman Group, a Waco-based economic analysis firm, shows Houston will add around 318,400 thousand jobs by 2027. Energy, life sciences and aerospace industries are growing in the area. “I’ve been saying for the last eight or nine months I thought there was less than a 40% chance we’d have a recession. I still think that,” says Ray Perryman, President and CEO. “And I think as we get further into the year, people are beginning to realize more and more there was a lot of underlying, blatant strength in the economy.”
Federal workers working from home causes problems for Washington, D.C
Washington, D.C. relies on government workers for any economic activity, and federal employees staying home in droves is hurting business, AFP reports via Yahoo. “The D.C. office market is dying,” a director at CoStar, Chris LeBarton, says. The federal government occupies almost a quarter of the city’s office space. Restaurants are also struggling without federal workers around.
Maricopa County growth threatened by fears over depleted ground water
Arizona no longer will approve housing developments in Maricopa County that depend entirely on groundwater, AZ Big Media reports. This could halt the Phoenix area’s rapid population growth and affect commercial real estate. The effect of the change won’t be felt immediately. Lots approved already can be built — and there are 80,000 of them. “If we do nothing, we would face a 4% shortfall in groundwater supply over the next 100 years,” Gov. Katie Hobbs says.
Nondenominational Christian church buys major piece of mall in Gilbert
A nondenominational church has purchased the site it currently occupies and two other buildings at the Gilbert Town Square for $24 million, the Gilbert Sun News reported. It is uncertain what the Christ Church plans to do with the properties besides the one it is already using. Tenants who have leases said they were surprised by the sale.