In the News—Week of June 17, 2024

 In The Title Trove

Deal of the Week

A Phoenix based retail development group recently closed on a commercial refinance in Buckeye, Arizona. The transaction was closed by Joel Montemayor, Vice President and Commercial Escrow Officer, in our Scottsdale, Arizona office.

National

Denver brokers stay positive even as downtown office vacancies hit 32.1%

The office vacancy rate in Downtown Denver has increased to 32.1% in the first quarter of the year. However, real estate brokers remain optimistic as they observe increased building tours and activity in the market, The Real Deal reports. Johns Manville, for instance, has renewed its lease for its global headquarters in Denver, boosting the city’s morale. Despite the current high vacancy rate, certain parts of the city such as Lower Downtown and Union Station remain active with single-digit office vacancy rates. “I just think that statistics lag what’s truly happening on the streets,” Sarajane Goodfellow of the Denver office of CBRE tells the Post. “From a day-to-day perspective and from a boots-on-the-ground perspective, it is feeling a lot better, more lively and active.”

National

Investment fund sells office building in Manhattan for a 67% discount

A New York City office building, which was purchased by Related Fund Management for nearly $153 million in 2018, was recently sold for less than $50 million, MPA magazine reports. This 67% discount sale is a representation of the ongoing office market turmoil, exacerbated by the shift to remote work and rising borrowing costs. Despite the challenging market, Empire Capital Holdings and Namdar Realty Group, which bought the property, have been actively seeking investment opportunities. The 10-story building is currently occupied by tenants including Battery Studios and ad agency AKA.

National

Milwaukee market sees higher demand for commercial spaces

The Milwaukee commercial real estate market is undergoing an adjustment period, with all commercial asset classes seeing changes in demand patterns, RE Journal reports. While the industrial market has slowed, demand for higher-end commercial spaces, especially those in or near downtown, remains strong. Mixed-use developments are performing particularly well as they contribute to the city’s goal of increasing population density. Despite challenges in the office sector due to the work-from-home trend, downtown office space is still attracting companies seeking to retain and attract talent. “There is still demand for higher-end product and the newer product coming into the market,” saysTomás Clasen, an attorney with the real estate practice in the Milwaukee office of law firm Reinhart. “But with respect to industrial, demand has cooled off somewhat. You could say the same thing across different types of asset classes. There is demand for higher-end commercial spaces, especially higher-end spaces located in or near downtown. At the same time, lower-quality product, in all asset classes, is seeing a higher vacancy rate.”

National

Mid-career real estate pros are snapping up discounted properties

Mid-career entrepreneurs in commercial real estate are capitalizing on opportunities to invest in distressed or discounted properties, Urban Land Institute reports. Many professionals with 10 to 25 years of industry experience are starting investment firms, with a focus on acquiring cheap offices and improving them through leasing, capital improvements or conversions to apartments. The current environment presents opportunity by undervaluing certain assets. “Office isn’t going away, and the capital markets are pricing office as if it (is) going away,” says Anthony Chan g, who co-founded Silverline Equities. “The (better) 50%of offices (is) going to do just fine.”

Arizona

West Phoenix submarket tops nation for growth of industrial space

The west Phoenix area has become the leading submarket in the United States for industrial development, AZ Big Media reports. Figures from Commercial Search show that west Phoenix has the largest active industrial pipeline with 7.8 million square feet of space under construction. West Phoenix added 49 million square feet of industrial space between 2014 and 2023 — a 53% increase. About two-thirds (63%) of west Phoenix’s total stock is made of Class A industrial space, giving it the third largest inventory of Class A among the top 100 submarkets.

Arizona

Construction begins on 26-story residential building on Central Ave.

Clayco, a real estate and construction firm, has started the construction process for Ray Phoenix, a 26-story residential building, AZ Big Media reports. The building is on Central Avenue and McKinley. The project, developed by Ray and VeLa, will offer 401 luxury apartments with floor-to-ceiling windows, and the lobby will feature a mural by artist Alex Israel. The ground floor will include about 4,500 square feet for retail. Ray Phoenix is expected to be finished in 2026.

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