In the News—Week of June 3, 2024

 In The Title Trove

Deal of the Week

Amerco Real Estate, the Real Estate Division of Uhaul recently acquired a self-storage facility on 3.35 acres with 224 units and 32,800 Net Rentable Square Feet and 57 Parking Spots in Spring Hill, Tennessee. The sales price was $2,250,000. The transaction was closed by Joel Montemayor, Vice President and Commercial Escrow Officer, in our Scottsdale, AZ office

National

Detroit enjoys surge of development in downtown; rest of city languishes

Detroit is seeing a surge in redevelopment, particularly in its downtown area, with the local real estate industry and charitable foundations pushing for a more widespread revitalization. However, the city faces challenges in attracting private capital and dealing with real estate speculators who hold onto vacant lots without developing them, CoStar reports. Major automotive companies, such as General Motors and Ford, are contributing to the city’s rebound through significant investments in large-scale, mixed-use complexes and research facilities. Despite these advancements, the need for a more inclusive revitalization extending beyond the downtown area remains a key concern. “A lot of the redevelopment you’re seeing is downtown and midtown, which is only about 3 square miles,” Wendy Lewis Jackson, managing director of the Kresge Foundation, tells CoStar News. “Our focus is on the other 140 square miles of Detroit.”

National

Real Estate Investment Trusts leave big banks more exposed to CRE debt

A recent study suggests that large U.S. banks might have greater exposure to commercial real estate than previously realized, due to their indirect lending to Real Estate Investment Trusts, Bloomberg reports via Yahoo. Figures from a team of researchers that includes Viral Acharya, a professor of economics at New York University, show banks’ exposure to commercial real estate lending by about 40% because of Real Estate Investment Trusts. The trusts are often cash-poor due to their obligation to make large dividend payouts; they frequently resort to bank credit in times of economic stress. The study’s authors recommend that regulators include a lender’s exposure to property investment trusts when conducting stress tests on bank capital.

National

City of Chicago to give $150 million to developers in help downtown

Chicago plans to offer $150 million in subsidies to encourage the conversion of empty office spaces into apartments and hotels, in a move to revive its downtown area, the New York Post reports. The initiative is part of efforts to address the commercial real estate crisis caused by the pandemic. Under the plan, the funds are expected to create 1,000 apartments in four buildings, with a portion designated as affordable units. This comes at a time when Chicago’s downtown area has been affected by increasing crime and the departure of major companies, alongside weakening demand and higher interest rates for office spaces.

National

Shoe company lease gives vote of confidence for Portland’s downtown

Shoe company Hoka has secured a lease in downtown Portland’s Canvas Building, signaling a boost for the city’s downtown area, which has been experiencing high vacancy rates, Willamette Weekly reports. The Canvas Building is part of the Press Blocks development, which was formerly home to a printing facility for The Oregonian newspaper. Hoka’s parent company, Deckers Outdoor, has seen a significant increase in share prices over the past year. The move to Portland is likely influenced by the city’s reputation as a hub for shoe companies, attracting talent from industry leaders such as Nike and Adidas.

Arizona

Developer breaks ground on $250M industrial and mixed-use project

A $250 million industrial and mixed-use project called Park Algodon broke ground recently in Phoenix, AZ Big Media reports. The development is located on the northwest corner of Loop 101 and Indian School Road and led by real estate firm Creation and Clarion Partners. The project spans 87 acres and will include as much as 1.3 million square feet of space. The project will cater to a variety of tenants and is expected to address the shortage of small-bay industrial space. Additionally, Creation is developing The Shops at Park Algodon, featuring over 14,000 square feet of restaurant and retail space.

Arizona

Fry’s leaving Scottsdale location after nearly 50 years; Whole Foods moves in

A Whole Foods store is set to replace a Fry’s Supermarket in south Scottsdale, which has been in operation for close to 50 years, the Scottsdale Progress reports. The 35,222 square foot space in the Downtown East Shopping Center will house the fifth Whole Foods store in the Valley. Western Retail Advisors, who brokered the deal, revealed they are in discussions with several national tenants for an additional 16,000 square feet of space in the same center. The Whole Foods store will feature full-service seafood and meat counters, a specialty cheese department, a wellness department and a curated grocery department, among other offerings.

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