In the News—Week of October 10, 2022
Deal of the Week
An Oregon-based utilities company purchased the assets of a water company in Yuma, Arizona for $88 million. The transaction included 25 real estate parcels. The transaction was handled by Joel Montemayor, Assistant Vice President and Commercial Escrow Officer, in the Scottsdale office.
If the work-from-home trend continues it could knock billions off the valuation of office buildings, the Observer reports. A New York University and Columbia University working paper recently published in the National Bureau of Economic Research says office buildings could lose $453 billion in valuations. No place would feel it as much as New York City. The researchers estimate these offices will lose 39% of their value — about $50 billion — in the next decade. Figures from workplace security firm Kastle Systems show that fewer than half of offices were occupied at the end of September. Though it has been published, the paper has not been peer-reviewed.
Energy & Efficiency
Tech can read energy efficiency of building from its exterior
Comcast says with Google street view and artificial intelligence, scientists can detect if a building is energy efficient, New Scientist reports. And it can work on private homes. Kevin Mayer led colleagues at Stanford in looking at 40,000 buildings in the United Kingdom. They also used aerial images and satellite-based measurements to detect heat loss. “The benefit of using these images is you will be able to extend (the AI analysis) to a global level…You get street view images in most countries,” Qunshan Zhao of the University of Glasgow tells New Scientist.
Volkswagen plans $114 million, 120-acre distribution center in Freeport
Volkswagen Group of America plans to build a $114 million, 120-acre distribution hub in Freeport near Houston to service nearly all its 300 U.S. dealers, The Real Deal reports. The facility will replace operations in Houston and Midlothian, Texas. This hub will be built as part of a joint venture, and Volkswagen will lease the space from Port Freeport for 20 years. The hub gives the carmaker easy access its factories in Mexico and Europe.
Industrial building may slow, but D-FW area still leads nation
The Dallas-Fort Worth area has almost doubled its industrial space in recent years and needs more, The Dallas Morning News reports. The metroplex leads the country in both industrial building construction and sales. Only about 5% is vacant. So the rush is on to build even more. Figures from Cushman & Wakefield show that more than 76 million square feet is being built in the metroplex. But this trend may be slowing. “While the current development pipeline remains elevated, we expect new construction will start to temper over the next couple of quarters until the market figures out when the Federal Reserve is done raising rates,” Nathan Orbin, executive managing director of Cushman & Wakefield’s Dallas office, tells the newspaper.
Four Seasons in Scottsdale among properties China firm wants to sell
The Four Seasons in Scottsdale is among three high-profile properties that Dajia Insurance Group Co. has put on the market, Fox Business News reports. The Chinese company is looking to sell the properties for $1.3 billion. The other properties on the market are the Montage in Laguna Beach, California, and the Four Seasons resort in Jackson Hole, Wyoming. Dajia Insurance owns a portfolio of 15 luxury resorts and hotels in the United States. It planned to sell the entire portfolio to a South Korean group in late 2019 but the deal fell apart as the COVID-19 pandemic began. Now the travel and resort sector is surging again, and Dajia Insurance wants to sell.
Mexico to build $5 billion LNG plant to help Europe as continent shivers
With Europeans facing an energy shortage and a cold winter, Mexico plans to spend as much as $5 billion on a liquefied natural gas hub on the Caribbean coast, Mexico Business News reports via Global Construction Review. President Andrés Manuel López Obrador says the facility would be in Coatzacoalcos in the state of Veracruz. “We’re about to promote private sector involvement; it’s going to be an investment of between $4 billion and $5 billion,” López Obrador says. Germany, which is trying to set up a series LNG facilities after the Russians limited gas exports to countries that backed Ukraine, is working with the Mexican government.