In the News—Week of May 29, 2023
Deal of the Week
A Washington based group purchased a 124 unit luxury apartment complex for $28.3 million. The transaction was closed by Sheila Hunter, Senior Commercial Escrow Officer, in our Scottsdale office.
Beverly Hills voters say no to plan from the richest man in the world
Bernard Arnault’s status as the world’s richest man apparently wasn’t impressive enough for the people of Beverly Hills to let him build a luxury hotel in their city. The New York Post reports that voters turned down his plan to build an ultra-chic Cheval Blanc hotel, the first in the United States. But instead of seeing the great prestige the 109-room hotel would bring, the majority of voters saw traffic congestion.
Mystery bidder buys Eagle Mountain, a California ghost town, for $22.5 million
When a ghost town is up for sale, doesn’t a mysterious buyer seem appropriate? The Real Deal reports that Ecology Mountain Holdings, a little-known company with an address in Cerritos, California, has purchased the town of Eagle Mountain, California for $22.5 million. The company’s plans for the town are as mysterious as the company itself. Eagle Mountain was a mining town owned by a successor company of Kaiser Steel. Kaiser Steel was once a plethora of enterprises started by Henry J. Kaiser. The best know company that survives is Kaiser Permanente, which began a health care system for Kaiser’s employees. Eagle Mountain, which is about three hours outside Los Angeles, was established in 1948, and the town boasted a high school with about 100 students at its peak. But Kaiser Steel closed in 1983, and the mine closed then, too. The town was the home to a correctional facility for a few years, but that closed, too.
Why won’t owners of commercial buildings in downtowns drop prices?
It’s no secret that office buildings in many downtowns are struggling. Offices are vacant and businesses are looking to reduce their footprints in central business districts. But times are not desperate enough for landlords to slash rents or sell as cheaply as possible, slate.com reports. Nor are bankers eager to foreclose. “Last time this happened, lenders took possession, sold it off, saw people who bought it for 20 cents on the dollar making lots of money,” says Richard Barkham, global chief economist at CBRE. “They’re not in a sufficiently stressed position that they need to initiate that.”
Pickleball is growing quickly, and CRE owners are adding courts
From 2022 to 2023 pickleball — a sort of tennis in miniature — nearly doubled in the number of participants in the United States, and commercial real estate developers are taking notice, Commercial Observer reports. Figures for the Sports & Fitness Industry Association show that the number of pickleball players 6 and older grew from 4.8 million in 2022 to 8.9 million in 2023. Developers are building courts, which take up much less space than tennis courts. You can get four pickleball courts with the same amount of space as a tennis court. “In an urban environment where real estate is scarce, it’s a great way to maximize the value of the land,” one executive says.
The Four Points by Sheraton Phoenix South Mountain hotel is being turned into a luxury high-rise apartment building with more units added on the 8-acre piece of land, reports the Ahwatukee Foothills News. New Caliber Development of Scottsdale will replace the convention center, turning rooms into studio and one-bedroom apartments while building one- and two-bedroom apartments in a series of 18 three-story and two-story buildings. Caliber has not said when construction will begin.
Central Station, among projects reshaping downtown Phoenix
Central Station is scheduled to open in 2024 on the corner of Van Buren Street and Central Avenue in Phoenix and will offer more than 300 luxury apartments along with 600 beds for Arizona State University students, AZ Big Media reports. It’s one of several multifamily projects that are reshaping downtown Phoenix. The others are EcoPhx, which as the name suggests, emphasizes sustainably; Moon Tower, which will feature a rooftop pool and lounge and coworking spaces; Skye on 6th, which will offer a fitness center with a sauna and steam room; PALMTower, which will have a resident’s club and a private dog park; X Phoenix II, which will connect to X Phoenix at the amenities floor; and Saiya, which will include a game room and courtyards.