In the News—Week of October 7, 2024
Deal of the Week
Adding to its portfolio of Class A multifamily projects in Arizona, a Texas-based developer acquired a 4.1-acre parcel in the heart of the sports district in Surprise, Arizona. Within walking distance of the spring training homes of the Texas Rangers and Kansas City Royals, the site will feature a 4-story building with 161 units over 48,000 square feet. The construction loan was provided by an Iowa-based bank, whose Phoenix operation boasts over $1 billion in assets. Tracy Glass of Insight Land & Investments brokered the property for the seller, an Arizona-based partnership. The $53 million transaction was closed by Vice President and Senior Commercial Escrow Officer Sheila Hunter.
National
Arts center in Newark bets heavily on development to transform area
The New Jersey Performing Arts Center in Newark is embarking on an ambitious $336 million real estate project called ArtSide, The New York Times reports. The idea is to revitalize the area surrounding the center with a complex with apartments, retail spaces and cultural facilities. The project was delayed by the pandemic but accelerated by favorable market conditions and tax incentives. Proponents expect the development to transform Newark’s skyline and economy. ArtSide will feature 350 apartments, including affordable units, along with ground-floor retail spaces and a new headquarters for a local jazz station. This initiative is part of a larger effort to bring 24-hour vitality to a historically underserved area of Newark, while also generating revenue to support the center’s arts programming.
National
Single-tenant industrial sees big pump in second quarter
The single-tenant industrial market experienced a unique uptick in sales volume from Q1 to Q2, showing a 17% increase, Commercial Search reports. However, overall transaction activity remains subdued compared to recent years, with $4.95 billion closed in the last quarter. Despite this growth, the sector is not expected to match last year’s performance due to persistently high interest rates. Investors continue to be attracted to industrial properties, particularly in markets with low vacancy rates and limited new construction, as these conditions drive up rents and potential yields.
National
OpenAI signs large lease as AI firms dominate San Francisco office scene
OpenAI, the artificial intelligence company, recently signed a significant office lease in San Francisco, marking the city’s largest such deal of the year, The San Francisco Standard reports. This expansion comes in addition to OpenAI’s substantial lease from the previous year, bringing their total office space to nearly 1 million square feet. The new lease involves 350,000 square feet at 550 Terry A. Francois Blvd., formerly occupied by Old Navy. Despite San Francisco’s office market experiencing record-high vacancy rates, OpenAI’s expansion demonstrates the growing influence of AI companies in the city’s real estate landscape. AI companies now accounted for approximately 15% of all office deals in San Francisco this year.
National
Detroit newspapers’ lease ends early at Federal Reserve building
The Detroit Free Press, Michigan’s largest media organization, has been informed that it must vacate its current newsroom space in the former Federal Reserve building by year-end, The Free Press reports. This unexpected development comes as the newspaper was anticipating a 14-month lease extension. The Free Press, along with The Detroit News, had recently relocated within the building in preparation for a new short-term lease. Despite the challenges posed by this sudden move, those journalists are used to working remotely. In fact, we have it on good authority that for several years the finishing touches on some Free Press sports pages were completed in a space shared by the Trove.
Arizona
Most apartment renters in Valley renewed leases rather than moving
There are more apartments available in the Phoenix area, but most renters are staying put, AZ Big Media reports. Figures from RentCafe show the Valley of the Sun experienced a significant increase in rental supply, ranking 5th highest in the nation with a 1.64% increase in apartments in recent months. Despite this growth, 57.1% of Phoenix-area renters chose to renew their leases rather than move, representing a 1.8% increase compared to the previous moving season. The influx of new units helped reduce competition, with the number of applications per vacant apartment dropping from 10 to eight, and rental vacancies lasting three days longer than the previous year.
Arizona
Arizona State’s Tempe campus will be home to a different kind of senior
Now usually when you think of seniors, you think of students who are in their final year of undergraduate studies. But at Arizona State University in Tempe there is a different kind of senior. A senior living community on the Arizona State University campus, Mirabella at ASU, has received the nation’s first certification as a “university-based retirement community,” KJZZ reports. This certification, established by UniversityRetirementCommunities.com sets Mirabella apart from other retirement communities associated with academic institutions. To qualify, Mirabella met several criteria, including its proximity to core campus facilities, offering various housing options and providing residents with formalized access to ASU. Residents of Mirabella at ASU receive student ID cards, allowing them to fully integrate into campus life, attend classes and access university facilities. This arrangement offers seniors an opportunity to live and learn in a vibrant academic environment, bridging the gap between generations and fostering lifelong learning. Maybe teach these young whippersnappers a thing or two.
