In the News—Week of March 25, 2024

 In The Title Trove

Deal of the Week

FSO Capital Partners, an Arizona based real estate investment firm recently acquired a multifamily asset in Glendale, Arizona for $8,800,000. Sheila Hunter, Vice President and Senior Commercial Escrow Officer, in our Scottsdale office added this closing to the list of successful transactions with this exceptional client.

National

Grocer won’t renew lease downtown, shifts workers to Cincinnati suburbs

Cincinnati-based grocer Kroger decided to let a lease in downtown Cincinnati lapse and move employees outside the central business district, LOCAL12 reports. The lease was for nearly 75,000 square feet for its “digital HQ” in Atrium Two at 221 E. Fourth St. An undisclosed number of employees will move to the company’s Blue Ash Technology Center about 25 minutes away. Kroger is the parent of QFC, Food 4 Less, Fred Meyer, Fry’s and other stores and is attempting to complete the acquisition of Albertsons.

National

SoCal office building demolished to make way for industrial space

The times they are a changing. Office space has traditionally been at the top of the pyramid when it comes to commercial real estate. But in Santa Ana, California, a company that owns a rather spiffy office building known as Elevate@Harbor is tearing it down for a warehouse, the Los Angeles Times reports. “We had to make a strategic shift,” says Dan Broder, who is in charge of the redevelopment by Kearny Real Estate Co. And there will be others. “There are a lot of office owners looking at their properties and wondering if those properties still make sense as offices,” says Michael Soto, Southern California research director for real estate brokerage Savills.

National

CBRE analyst sees hope for office market in SF despite vacancy rate

Office vacancy rates in San Francisco hit a new high, but there are signs the market may be turning, SF Gate reports. Figures from CBRE show the vacancy rate hit 36.6% in the first quarter of 2024, up from 35.6% in the fourth quarter last year. But CBRE Tech Insights Center executive director Colin Yasukochi sees light ahead. Potential tenants are in the market for 6 million square feet of office space, up from 4.2 million last quarter and 3.4 million a year ago. “Market activity in 2024 could reach its highest level since 2019,” Yasukochi says.

National

Portland landlord looks to fill Rose City’s oldest building

John Russell has taken his time and spent plenty of money. But he says he is no hurry to rent out the Hallock-McMillan Building in Portland, The Oregonian reports. “This is a labor of love,” he says. Built in 1857, the 5,000-square-foot building is Portland’s oldest surviving commercial structure. Recreating cast-iron adornments on the front facade alone cost more than $1 million. “It looks exactly like it did in 1857,” Russell says. Russell has hung a “for lease” banner on the building, but he hasn’t listed a price on any commercial real estate listing site.

Arizona

Angels finish spring training; work to start on upgrading Tempe facility

The Los Angeles Angels finished up their spring training operations in Arizona and are set to open the MLB season this week. Improvements to Diablo Stadium, their spring home in Tempe, are about to begin Ballpark Digest reports. The city approved $10.9 million for the $23 million first phase of improvements. This will include a 46,000-square-foot building featuring clubhouses, performance lab, dining and meeting areas, and offices. To secure the funds, the Angels committed to staying in Tempe for spring training through 2035, with options that could extend the stay through 2045.

Arizona

Baker Development working on repurposing former Motorola site

Baker Development is in the final phase of demolishing a Motorola semiconductor plant and salvaging equipment with the goal of repurposing the property, AZ Big Media reports. The plant, at 52nd Street and McDowell Road, was one of the first semiconductor manufacturing facilities in the United States. More than 3,000 employees worked there in the 1960s, and it was Phoenix’s largest nongovernment employer. In 1999, Motorola spun off ON Semiconductor and the plant was part of the new entity. Baker has been working on the project for three years. “We recently delivered one of the four parcels to a data center user,” Baker President and COO Daniel J. Slack says. “We are in discussions with other well-known companies attracted to the site’s substation-level power, its Foreign Trade Zone potential, as well as access to nearby housing, diverse labor pool and recreational amenities that is unique to Phoenix’s quality-of-life.”

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