In the News—Week of June 5, 2023
Deal of the Week
A Scottsdale, Arizona-based multifamily developer, investor, and property manager closed a $53 million construction loan for a project in Gilbert, Arizona. Two regionals banks (in Utah and Kansas) joined as co-lenders on the deal. The developer acquired the former-agricultural property in January for $9.2 million, and plans to construct a 236-unit luxury apartment complex. The transaction was closed by Sheila Hunter, Senior Commercial Escrow Officer, in Thomas Title’s Scottsdale office.
Commercial real estate adapting to the coming of electric automobiles
Electric car sales are growing throughout the world and commercial real estate landlords and developers are getting on board, JLL.com reports. Industrial developer Clarion Partners now offers almost 350 chargers for electric vehicles (EVs) in its properties across the United States. “By building EV charging infrastructure, we’re not only meeting growing demand, but also creating a whole new source of power-grid support because the grid can also draw or store power from EV batteries,” says Renae Gasmier, Australia-JLL head of sustainability consulting. It can be good business. Studies show that “green” buildings have higher occupancies and retain more tenants.
Chicago Bears are weighing other locations for new stadium
The Chicago Bears hunt for a new stadium has gotten off track, Fox News reports. The NFL team says they are rethinking their plan to build a stadium in Arlington Heights despite paying almost $200 million for a shuttered horse racing track. The land is valued too high for tax purposes, the team says, “It is our responsibility to listen to other municipalities in Chicagoland about potential locations that can deliver on this transformational opportunity for our fans, our club and the State of Illinois,” the team says.
San Francisco no longer tops list for highest rents in Bay Area
San Francisco has slipped from its perch as the priciest city in the Bay Area for renters, The San Francisco Standard reports. Figures from Zumper, an apartment listings firm, show San Francisco is merely tied for fourth with Menlo Park with a median monthly rent of $3,000. Mountain View is now king of the hill at $3,450. Cupertino ($3,110) is second, followed by Santa Clara ($3,050). “These three cities house some of the biggest tech companies, including Apple, Google and Intel, so many employees are returning to these areas to be close to the office, which is driving up demand and competition for rentals,” Zumper’s Crystal Chen says.
Denver high-rise building sees its value plummet
The 56-story Republic Plaza in Denver has been cut down to size, CRE Connect reports. Data for bondholders show that the building, which is nearly 40 years old, is estimated at $298.1 million in 2023. When it was financed a decade ago, it was valued at $535 million. Brookfield and MetLife own the building. The Denver Business Journal reports that Brookfield took out $280 million in debt on the building when it bought a 50% interest. Brookfield missed a payment in November. Management of the property was turned over to a special server.
Phoenix ranks second in nation for built-to-rent single-family homes
With renters who desire a single-family home unable to pay for a mortgage, built-to-rent construction has soared, AZ Big Media reports. Figures from Rent Cafe show that the Phoenix area was the No. 2 market in the U.S. for built-to-rent homes in 2022. Phoenix had 1,527 build-to-rent homes in professionally managed communities. Dallas led the way with 2,773 new houses. Nationally that was 14,541. But that figure will more than triple in 2023. Phoenix is top for built-to-rent with nearly 5,500 expected to be finished by the end of this year.
Medical construction continues booming in Greater Phoenix area
Health care facility construction in Metro Phoenix is thriving, with an increase in both on-campus health care facility projects and off-campus ambulatory clinics and facilities, AZ Big Media reports. “There has been an uptick in both on-campus health care facility projects as well as off-campus ambulatory clinics and facilities,” says Jaime Northam, vice president of health care development for Ryan Companies US. “Most of the health systems in this market have recently announced plans for new hospitals and/or extensive renovation and expansion projects at existing hospital facilities.” Several trends are shaping the health care sector in Phoenix. There is a growing emphasis on both patient and caregiver experience and well-being, with hospitals prioritizing staff retention.