In the News—Week of May 19, 2025
Deal of the Week
An entity tracing to M&P Transport recently closed on a site in Phoenix, Arizona for $10,000,000. The 9.76 acre piece of land also includes a 2,400 square foot service garage. This deal was purchased with $7,000,000 in debt with UMB Bank and was brokered by Patrick Sheehan, Max Schumacher & Jack Hansen with Rein & Grossoehme Commercial Real Estate. Vice President and Senior Commercial Escrow Officer Joel Montemayor closed this transaction along with help from National Account Executive Justin Wine in our Scottsdale, Arizona Office.
National
Lending for commercial real estate slows to 0.14% growth in final quarter of 2024
The commercial real estate lending sector experienced its slowest quarterly growth in over a decade during Q4 2024, with just a 0.14% increase from the previous quarter, the St. Louis Fed reports. This trend particularly impacts smaller financial institutions, including community and regional banks, where CRE loans constitute a significant portion of their portfolios. The slowdown can be attributed to multiple factors, including increased costs across land, labor and materials, alongside rising interest rates that make borrowing more expensive. Market dynamics also play a crucial role, with some areas facing potential oversaturation in certain property types, leading developers and financial institutions to exercise greater caution in new project approvals.
National
Former JPMorgan Chase building transformed into largest residential conversion in nation
The largest office-to-residential conversion in U.S. history has transformed 25 Water St. in New York City’s Financial District from a brutalist office tower into a luxurious apartment complex called SoMA, the New York Post reports. The massive renovation project converted the former JPMorgan Chase building into 1,320 residential units, ranging from studios to three-bedrooms, with 25% designated as affordable housing. The two-year conversion included replacing brick facades with large windows, adding 10 stories, and incorporating extensive amenities like pools, pickleball courts and a spa.
National
Aging Seattle real estate tycoon parts with two buildings following loan default
Martin Selig Real Estate, a prominent Seattle commercial developer, has surrendered ownership of two major office buildings to lender Acore Capital following a default on a $240 million loan, The Real Deal reports. The transferred properties — the eco-friendly 400 Westlake and the Federal Reserve Building — are both experiencing high vacancy rates of more than 80%. The company’s financial troubles extend beyond these buildings, with seven additional properties now in receivership and nearly $379 million in loans tied to nine other buildings. This crisis has led to 86 employee layoffs and marks a challenging period for Martin Selig, 88, whose company has been developing Seattle properties for 67 years.
National
New park expected to attract commercial development in Detroit’s riverfront area
Detroit’s downtown revival is getting another boost with the upcoming Ralph C. Wilson Jr. Centennial Park, a 22-acre riverfront development set to open in October, CoStar reports. The $75 million park project features a river-connected basin and an artificial hill. Local officials say the project aims to complement the area’s growing commercial development with residential opportunities. Located in the Corktown neighborhood near significant landmarks like Michigan Central Station and Renaissance Center, the park includes recreational facilities designed by well-known architect David Adjaye.
Arizona
Greater Phoenix office market sees small rise in vacancy rate; Chandler submarket shines
Vacancy rates in Greater Phoenix’s office market rose to 15.6% in the first quarter of 2025 from 15.1% a year earlier, Colliers.com reports. The market showed mixed signals with negative overall absorption of 96,714 square feet, though this represented an improvement from 2024’s significant negative absorption. Chandler emerged as a bright spot with absorption of 266,540 square feet, demonstrating strong leasing activity in that submarket. Overall rental rates softened slightly to $29.68 per square foot, but Class A properties showed resilience with a small increase in rates to $33.85 per square foot.
Arizona
Ambitious health care projects projected to make healthy contribution to economy
ASU Health and Mayo Clinic are making significant investments in health care development in Phoenix, with Mayo Clinic committing $1.9 billion for a major campus expansion and ASU establishing its Health headquarters downtown, AZ Big Media reports. The Mayo Clinic project includes substantial facility growth with new operating rooms, patient beds and innovative care neighborhoods designed to enhance patient experience. ASU’s new medical school, part of their Health headquarters, aims to address critical health care workforce shortages in Arizona through an innovative curriculum combining medicine and advanced medical engineering. These developments are expected to generate significant economic impact, with ASU’s project alone projected to contribute $19 billion to the state’s GDP and create 200,000 jobs over the next decade.
