In the News—Week of November 4, 2024
Deal of the Week
In the largest office transaction in Metro Phoenix over the past two years, a private Nevada-based investor has acquired 24th at Camelback II in Phoenix’s prestigious Biltmore area for $97.9 million. The Class A office asset was sold by a joint venture led by Hines, a global real estate investment manager based in Houston. The building features 307,000 square feet across 11 floors and includes an 8-story parking garage with over 750 spaces. With underwriting support from Underwriting Counsel Chadwick Campbell, Vice President and Senior Commercial Escrow Officer Joel Montemayor completed the transaction through Stewart Title National Commercial Services.
National
Amazon in talks for NYC office space after ordering workers to come back
If you want employees to return to the office, you need an office for them. Amazon is reportedly in discussions to lease a significant amount of office space near its New York City headquarters, the New York Post reports. The company recently mandated a full return to office for its 350,000 employees. The potential NYC expansion involves leasing 350,000 square feet at 452 Fifth Ave., currently occupied by HSBC. This additional space would be adjacent to Amazon’s existing Manhattan headquarters in the former Lord & Taylor Building.
National
Microsoft won’t be following Amazon’s lead on back-to-office
Microsoft, the largest employer in Seattle’s eastern suburbs, is maintaining its flexible work policy, contrasting with Amazon’s recent mandate for full-time office return, The Seattle Times reports via Chronline.com. Microsoft’s headquarters are in Redmond, Washington. Amazon’s headquarters are in Seattle. During an all-hands meeting, Microsoft executive Scott Guthrie affirmed that the company’s remote-friendly approach would remain unchanged unless productivity declines. This stance aligns with Microsoft’s recent financial success, reporting record revenue and profit for fiscal 2024. Unlike Amazon, Microsoft has adapted its office spaces to accommodate hybrid work, even reducing some of its leased office space. The company’s approach reflects a broader trend in the tech industry of embracing flexible work arrangements post-pandemic.
National
DeSantis wants lawmakers to take another look at condo-safety law
Florida’s new condo safety law, aimed at preventing disasters like the Surfside collapse, has led to unintended financial burdens for condo owners across the state, The Gainesville Sun reports. The law mandates structural integrity studies and safety inspections for buildings three stories or higher within 3 miles of the shoreline, resulting in substantial maintenance fees and special assessments. Many condo owners, particularly seniors on fixed incomes, are struggling to afford these costs, with some facing assessments as high as $200,000 per unit. Gov. Ron DeSantis wants the Legislature to meet in a special session to address the problem, but lawmakers are hesitant to act before the regular session in 2025.
National
Dallas area picked as top market for 2025 by Urban Land Institute
Dallas-Fort Worth has been named the top real estate market to watch for 2025 by the Urban Land Institute, climbing from its third-place position last year, The Real Deal reports. This recognition is based on industry experts’ evaluations of various real estate measures, including investment opportunities. The metroplex’s post-pandemic recovery, with over 11% employment growth since February 2020, contributed to its high ranking. Homebuying in the region remains relatively affordable compared to national averages. The report also highlights the increasing presence of major banks establishing headquarters in North Texas, further boosting the area’s economic prospects.
Arizona
Rents for single-family homes rise in Scottsdale, fall in Gilbert, Buckeye
Arizona’s single-family rents were up and down in the third quarter, AZ Big Media reports. Figures from Rentometer show the Southwest region saw a 2.2% increase in rent prices. Scottsdale led with a 9% year-over-year increase, followed by Flagstaff and Tucson at 7% and Phoenix at 5%. Yuma saw a 6% decrease. Gilbert and Buckeye saw a decline of 2%. Scottsdale was the most expensive city for single-family rentals in the Southwest, with an average rent of $3,986 for a three-bedroom home. Phoenix averaged $2,435. San Francisco, Irvine and Los Angeles rank as the most expensive cities for single-family rentals in the country, with average rents exceeding $5,000 for a three-bedroom home.
Arizona
Camelback office building changes hands in biggest deal since 2022
The 11-story 24th at Camelback II office building sold for $97.9 million, the biggest office deal in the Phoenix area since 2022, AZ Big Media reports. Wide Open Excursion acquired the 306,877-square-foot building from Hines. JLL Capital Markets facilitated the sale. The Class A office building has an 87.2% occupancy rate. Tenants include Blue Origin and Lucid. “This sale demonstrates that well-located, quality office properties continue to attract significant investment, highlighting Phoenix’s growing stature as a prime destination for commercial real estate investment,” JLL’s Will Mast says.
