Sterling Bay has secured $88 million in bonds in partnership with Piper Sandler Special District Group, a specialty financing firm, to begin infrastructure work this spring at Redtail Ridge—a 2.6 million-square-foot mixed-use life science campus in Boulder County, Colo.

Sterling Bay received final approval for the 389-acre Redtail Ridge innovation district in August last year, from the Louisville, Colo., city council. The developer acquired the site more than two years ago. The property had been vacant for more than 20 years and, prior to that, it served as the global headquarters of data storage firm StorageTek.

The first phase of Redtail Ridge’s horizontal infrastructure is set to begin in April. It is being designed in collaboration with architectural firm Perkins & Will and will be constructed by Mortenson. The initial phase is expected to be complete in 18 months, with the first delivery of buildings set to take place in late 2026, according to a Sterling Bay spokesperson.

The developer anticipates constructing two industrial and/or manufacturing buildings—one 95,000 square feet and the second 144,000 square feet—along with a 100,000-square-foot life science building in the first phase, the spokesperson told Commercial Property Executive.

Located along the U.S. 36 corridor between Denver and Boulder, Colo., the campus will also feature a 20,000-square-foot amenity center with a gym, yoga spaces, lounge, conference center and 20 miles of trails and dedicated open spaces. The site will also include a new home for the 160-bed AdventHealth Avista Hospital. The full build out is expected to take six years.

Mixed-use campus breakdown

The mixed-use campus development is designed to meet the growing demand for life science, R&D, biomanufacturing, office and industrial facilities in the region. It is expected to drive economic growth, foster innovation and expand opportunities for the life science sector in Colorado.

READ ALSO: Prism Places, McWhinney Plan Mixed-Use Districts Near Denver

Last year, Sterling Bay estimated that Redtail Ridge’s construction will generate $43 million in taxes and fees. Once complete, the campus is expected to provide $24.4 million annually in tax revenue, while projected annual retail sales might reach $144 million.

Plans call for six districts across the campus with built-to-suit opportunities available:

• Life Sciences District West—294,695 square feet of life science development with 825 parking spaces
• GMP/Industrial District—462,804 square feet of GMP development, 612,400 square feet of industrial development and 2,200 parking spaces
• Life Sciences District East—177,375 square feet of life science development with 492 parking spaces
• R&D District—123,722 square feet of R&D development with 390 parking spaces
• Office District—336,127 square feet of office space with 1,425 parking spaces
• Retail/Life Science—14,000 square feet of retail space, 111,646 square feet of life science development and 460 parking spaces

Proximity to bioscience programs

Redtail Ridge will benefit from its proximity to four bioscience programs at University of Colorado-Boulder, Colorado State University, University of Denver and University of Colorado-Denver. Colorado continues to solidify its reputation as an innovation destination due to the rapidly growing life science ecosystem and record-breaking private and NIH funding that has exceeded $9 billion over the past five years, according to Sterling Bay.

The campus will be within 30 miles of Denver International Airport, downtown Denver and Boulder. Nearby major life science companies include Agilent Technologies, Eli Lilly & Co., KBI Biopharma and Novo Nordisk.

The post Sterling Bay Secures $88M for Denver-Area Mixed-Use appeared first on Commercial Property Executive.

The industrial sector has proven itself to be a highly resilient asset class that has continued to draw investor interest, even over the turbulent past few years for commercial real estate. While transactions remained at nearly a standstill for the majority of 2024, there was steady demand for well-positioned industrial assets.

Industrial is appealing to investors seeking a hedge against inflation to preserve capital. While still elevated slightly from their historic lows, cap rates are compressed, with most transactions closing at sub-5 percent cap rates in prime markets. It was also the only major product type to see a decrease in loan delinquencies in the fourth quarter, a further testament to the sector’s stability through an evolving economic landscape and unprecedented global events.

READ ALSO: Capital Ideas: Gold Card Plan Can’t Trump EB-5

Yes, there have been persistent headlines of oversupply and softening demand in Los Angeles County and the Inland Empire and attention being driven toward emerging markets in the Southeast and Midwest. That said, Southern California and other Western markets remain critical hubs of commerce and logistics that will continue to benefit from the same demand drivers and fundamentals that have historically propelled these regions. In fact, there are emerging submarkets within these regions with strong growth potential that are attracting businesses, developers and investors alike.

Strong outlook for demand drivers

Even in the face of a new administration and geopolitical uncertainty, Western markets in particular remain a key hub for both global and domestic commerce. In 2024’s fourth quarter, year-over-year volume at Southern California’s San Pedro Bay Port Complex (home to the ports of Los Angeles and Long Beach) was up 19.5 percent, according to Freightos data, and costs per container from East Asia to the West Coast declined 13 percent.

While some investors are still hesitant to make moves amid headlines of rising vacancies resulting from significant deliveries, strong absorption rates indicate that these will likely begin to fall again in 2025. In fact, throughout the Inland Empire, average gross and net absorption rates were up in the fourth quarter as a result of stronger demand.

From an overall economic standpoint, higher employment rates and improving sentiments are signs we will see industrial users making moves. This will create ample opportunity, as many tenants are poised to strategically navigate their own growth and invest in their supply chains this year. At DAUM, we’ve assisted several companies, including retailers and distributors, with expansions this past year and expect this kind of activity to continue.

Opportunities in emerging submarkets

We’re even seeing new and planned construction of state-of-the-art distribution centers and mega-warehouses in historically underutilized areas of the Inland Empire and Los Angeles County that still have ample developable land.

One example of this is L.A. County’s Antelope Valley, which is located just an hour from the ports, north of the city of L.A. and just west of the Inland Empire. With growing business and residential populations, an educated workforce and a business-friendly government, it is poised to continue attracting businesses and represents an area of industrial growth and fertile ground for investment.

Industrial users, including logistics firms and manufacturers, are attracted by the region’s affordability, given that rental rates remain high in submarkets near downtown Los Angeles. Additionally, drayage costs to the Antelope Valley are the same as to Beaumont and Banning and lower than the High Desert, Tejon and the Central Valley.

In fact, DAUM agents recently arranged the sale of 68.5 acres of land in Lancaster—fully entitled for a 1.26 million-square-foot distribution center—to Amazon.

Especially as the logistics industry continues to increase its capabilities of next- and same-day delivery, there remains strong demand for quality industrial space near key population and transportation hubs.

Rick John, SIOR, is executive vice president at DAUM Commercial Real Estate Services.

The post Why SoCal Industrial Still Yields Opportunities appeared first on Commercial Property Executive.

Supermicro plans to build a roughly 3 million-square-foot industrial complex in San Jose, Calif., marking its third Silicon Valley campus.

Construction is set to kick off this year on the park’s first building, which will measure more than 300,000 square feet.

Supermicro manufactures liquid coolers for AI factories, which reduce the carbon footprint of data centers and lower operational costs. The tech company is bound to triple its footprint in San Jose, where it owned roughly 1.5 million square feet of office and manufacturing space as of June 2024.

Supermicro’s future campus

The first building of the campus will rise at 550 E. Brokaw Road, on the site of a former Fry’s Electronics store. The San Jose-based firm went out of business in 2021 following a series of store closings.

Supermicro purchased the 20-acre site for $80 million last February. At the time, the property was entitled for the development of a 1.9 million-square-foot office campus.

In October, Supermicro filed the current plans for the manufacturing and office complex., designed by Arc Tec. Pacific Gas & Electric Co. will deliver the campus’ energy requirements, PG&E Vice President Teresa Alvarado said in prepared remarks.

Silicon Valley’s supply-restrained industrial market

Silicon Valley’s industrial pipeline had just 2 million square feet under construction as of December, according to a report by CBRE. The market’s vacancy rate stood at 3.3 percent at the end of 2024, tightening 30 basis points year-over-year.

With no industrial deliveries during 2024’s last quarter, the market is undergoing supply challenges, the same source shows. AI hardware companies drive industrial demand in Silicon Valley as they’re looking for specialized facilities with heavy power. However, only 17.5 percent of the available space in December could provide 4,000 amps or more.

Hines Interests seeks to capitalize on this demand. Last June, the company broke ground on a three-building advanced manufacturing campus in San Jose, which was the largest industrial development in Silicon Valley at the time. Completion is expected this summer.

The post Supermicro Eyes 3 MSF Bay Area Expansion appeared first on Commercial Property Executive.

Put another way, even that conservative estimate of the economic damage adds up to about 4 percent of California’s GDP.

That’s the beginning of the context for Rising from the Ashes: Assessments on the Impacts to CRE Post the LA Wildfires, a new report from JLL Research.

As day after day of news video footage from the fire zones showed, the heaviest property damage was to single-family residences, nearly 11,000 of which were destroyed, representing more than half of the SFR stock in the two fire zones (Palisades and Eaton). In addition, more than 300 multi-housing structures were destroyed.

On one hand, the 11,000-odd housing units destroyed or significantly damaged represent just 0.4 percent of the market’s housing stock, yet the estimated 24,000 families displaced by the fires have to live somewhere.

READ ALSO: 5 Overlooked Insurance Gaps That Could Hit Your Bottom Line

And JLL reminds us that Southern California was already a long-term supply-constrained market. As higher-income families relocate to single-family rentals, others will spill over into the multifamily sector. “Already the exacerbation of Los Angeles’ multi-housing supply shortage will result in elevated rent growth in the medium term,” according to the report.

Impact to retail, office, industrial  

Though less publicized, the region’s retail, office and industrial commercial real estate sectors were also hit. About 200 commercial buildings, predominantly retail properties and food-and-beverage establishments, were destroyed. They represent, JLL stated, nearly half of the retail establishments and about one-third of the total retail space in the fire zones.

In the near term, home centers and hardware retailers could benefit. “Longer term,” JLL added, “mixed-use developments may be a way to address both the housing shortage exacerbated by the fire as well as replace the lost retail space, which has not been growing for a long time.”

The fires’ effects on office space are expected to be indirect, potentially by displacing office workers, especially in the professional and technology services sector and the media and entertainment sector.

The impacts on industrial real estate could be more direct, with rebuilding efforts boosting the demand for warehouse space and IOS properties.

Additionally, JLL reported, home appliances, furnishing and day-to-day necessities must be replaced, further bolstering the need for warehousing. “This will help lower industrial vacancies in and around the affected areas, particularly in the San Fernando Valley and San Gabriel Valley markets where total vacancy currently stands at 4.2 percent and 5.8 percent, respectively.”

Given the efforts by the state government to streamline rebuilding, JLL noted, the real challenges lie in physical construction. “Due to significant demand, labor and materials will be expensive, further complicating rebuilding efforts.”

Finally, those generally higher replacement costs for commercial real estate have the potential to make existing buildings more attractive for investors.

The post How Rebuilding From LA’s Wildfires Is Impacting CRE appeared first on Commercial Property Executive.

Brixton Capital has purchased Washington Square, a 215,506-square-foot shopping center in Petaluma, Calif., for $67.5 million. Paragon Commercial Group sold the asset in a transaction arranged by JLL.

Paragon had acquired the retail center from Fulcrum back in 2021 for $56.2 million, according to CommercialEdge data, with the help of a $34.2 million loan provided by Zions Bank.

Built in 1971 and renovated in 1996, Washington occupies some 20 acres at 301 S. McDowell Blvd. The new owner intends to upgrade the shopping center by improving the parking facilities, replacing the roofs, repainting the exterior and upgrading the HVAC systems. Brixton also plans to enhance the façade, renovate the landscaping and install new signage.

READ ALSO: What’s in Store for Retail in 2025?

The Safeway-anchored center boasts a diverse mix of regional and national tenants such as Staples, Panda Express, Harbor Freight Tools, Planet Fitness, Five Below, GameStop, Bank of America, Marin Health and Hallmark, among others. At the time of the sale, the property was 99 percent leased.

Washington Square is considered to be among the top 3 percent of U.S. neighborhood shopping centers based on annual visits and the busiest center within a 15-mile radius, according to JLL. The firm’s Managing Directors Bryan Ley and Eric Kathrein and Director Warren McClean brokered the transaction on behalf of Paragon.

San Francisco’s retail scene

In the fourth quarter of 2024, San Francisco’s retail sales witnessed a 5.2 percent year-over-year increase, reflecting a strengthening local economy. The metro’s transaction volume for last year reached $190.1 million, up 3.7 percent from 2023’s figure of $183.3 million, according to a recent Cushman & Wakefield report.

In addition, San Francisco’s retail market recorded a positive net absorption of 65,700 square feet in Q4, following eight consecutive quarters of negative absorption, the report also shows. As a result, the metro’s overall retail vacancy rate dropped to 7.7 percent by the end of last year.

The post Brixton Capital Buys San Francisco Shopping Center for $68M appeared first on Commercial Property Executive.

Long Beach-based engineering and technical services provider Mangan Inc. has signed a 37,000-square-foot lease at Kilroy Realty Corp.’s Aero Long Beach office campus in Long Beach, Calif.

Mangan plans to relocate its headquarters from 3901 Via Oro Ave. to the new office space, with move-in scheduled for November 2025. JLL worked on behalf of the ownership in the leasing deal, while Savills represented Mangan.

Owned and managed by Kilroy Realty, Aero Long Beach is a 957,706-square-foot office campus completed between 1986 and 2000. The complex consists of six buildings located at 3750-3900 Kilroy Airport Way on a 50-acre site.

READ ALSO: Strong Deals and High Prices Keep LA Among Top Office Markets

Over the past 12 months, Kilroy Realty landed more than 15 leases at Aero Long Beach, encompassing more than 141,000 square feet. The property’s tenant roster features SCS Engineers, Canon Inc., DeVry University, Blue Shield of California, SCAN Health Plan and Cushman & Wakefield.

Buildings range in size from approximately 96,000 to 220,000 square feet across two to eight floors, according to the same data provider. 3880 and 3900 Kilroy Airport Way received LEED Silver certification, while the 3760 and 3840 properties were awarded the LEED Gold, CommercialEdge data shows. Amenities include open-air gathering spaces, a fitness center and an Everytable café.

The campus is adjacent to the Long Beach Airport, near Interstate 405. Downtown Los Angeles is 25 miles north.

JLL Managing Directors Jason Fine and Monica Enes worked on behalf of Kilroy Realty, while Savills Senior Managing Director Steve Pisarik and Senior Vice President Bruce Schuman represented Mangan Inc. in arranging the deal.

Los Angeles office vacancy and asking rates

The national office vacancy reached 19.7 percent as of January 2025, a recent CommercialEdge report shows. This represents a 180-basis-point increase year-over-year and a 10-basis-point decrease from the previous month. Los Angeles posted a 16.4 percent office vacancy rate in the first month of the year, lower than the U.S. average.

The national full-service equivalent listing rate was $33.38 per square foot in January. Los Angeles ranked forth among Western markets with highest asking rates, at $42.01 per square foot, trailing San Francisco ($70.56), the Bay Area ($54.38) and San Diego ($42.57).

The post Kilroy Inks HQ Lease in Long Beach appeared first on Commercial Property Executive.

LBA Logistics has purchased a 220,240-square-foot, fully occupied Class A industrial facility in Glendale, Ariz. The property changed hands for $39 million, according to CommercialEdge.

Echo Real Estate Capital Inc., in joint venture with Grandview Partners, was the seller. Cushman & Wakefield brokered the deal for the partnership.

The facility, known as Building A, is at 9701 N. 151st Ave. within Echo Park 303, an industrial campus that includes a 455,936-square-foot second building, and is fully occupied by HubStarr Logistics.

READ ALSO: Top 5 Markets for Industrial Transactions

The industrial park is close to Interstate 10 and the Loop 303 industrial corridor, allowing easy access within the Southwest Valley submarket and through the Greater Phoenix area. Phoenix Sky Harbor International Airport is 31 miles from the facility, while Mesa Gateway Airport is within 63 miles.

Echo Park 303’s Building A features 32-foot clear heights, two grade-level doors, 56 dock-high doors and 440 vehicle parking spots. The property, together with the second building at 9501 N. 151st Ave., was designed by LGE Design Build and came online in 2023. Developed by Echo Real Estate Capital Inc., the two-building business park was financed by a $53.6 million loan originated by Pacific Coast Capital Partners, CommercialEdge shows.

Executive Vice Chairman Will Strong, Directors Michael Matchett and Jack Stamets, together with Senior Associate Molly Hunt and Senior Financial Analyst Madeline Warren with Cushman & Wakefield represented the seller.

Phoenix industrial sales

The company recently brokered another deal in Phoenix. In early January, CIP Real Estate picked up a 809,230-square-foot Class A industrial park in Mesa, Ariz., from Canyon Partners Real Estate LLC. The multi-tenant campus known as Broadway 101 Commerce Park traded for $168.3 million, in a transaction that represented the largest single deal for an industrial park in the Southeast Valley of Phoenix.

During the same week, LaSalle Investment Management also made a notable purchase in the metro: the company picked up a 536,122-square-foot, five-building industrial campus in Tempe, Ariz.

The post LBA Pays $39M for Phoenix Industrial Asset appeared first on Commercial Property Executive.

Sunrise Industrial Park One and Two total more than 509,000 square feet. The larger of the two buildings, 3101 Marion Drive, totals more than 271,600 square feet and dates from 1997, based on CommercialEdge data. The other building, the 237,600-square-foot 4601 E. Cheyenne Ave., is of the same vintage. Put together, the buildings are currently 78 percent leased to 10 tenants.

The assets feature 24- to 30-foot clear heights, dock-high loading, ESFR sprinklers and evaporative cooling systems, as is common in this part of the country, though they are banned in new commercial buildings. Floorplans between 20,000 square feet to 89,000 square feet are currently available, with Jerry Doty of Colliers International representing the new owner.

MDH Partners’ James Hwang oversaw the acquisition for the company, with Newmark’s Bret Hardy and Andrew Briner representing Link Logistics.

READ ALSO: Industrial Real Estate’s Future Depends on Adaptability

The company has been on an acquisition roll recently. In 2024, MDH acquired more than 9 million square feet of industrial space in various markets, including a near year-end deal that saw it buy a portfolio of 12 buildings ranging from 140,300 square feet to 1 million square feet.

Supply overshoots industrial demand in Las Vegas

Preleasing on newly completed industrial projects in Las Vegas fell dramatically in the fourth quarter of 2024, bringing the market’s vacancy to 8.6 percent, according to Colliers data. A year earlier, vacancy was roughly 3 percent, and throughout 2022 and much of 2023, the rate hovered around 2 percent.

Net industrial absorption in the fourth quarter of 2024 was 467,260 square feet, Colliers noted. That brought net absorption for the entirety of 2024 to 4.7 million square feet, a decrease of 38.9 percent compared with 2023.

Even so, developers are still quite active in the Las Vegas industrial market, with 5.9 million square feet slated for completion during 2025, Colliers reported. Only 2.5 percent of that space preleased.

The post MDH Partners Enters Las Vegas With $94M Buy appeared first on Commercial Property Executive.

American Assets Trust Inc. has sold Del Monte Shopping Center, a 673,155-square-foot retail destination in Monterey, Calif. Federal Realty Investment Trust purchased the asset for about $123.5 million.

AAT had acquired the asset in April 2004 for $115 million, according to CommercialEdge information. The current sale will allow the company to focus on other markets where it can achieve greater operational efficiency, President & CEO Adam Wyll said in prepared remarks.

Located at 1410 Del Monte Center, the property is at the intersection of Highway 1 and Munras Avenue. It’s the only regional mall within a 24-mile area. Downtown Monterey is less than 2 miles away, while the city’s regional airport is within 5 miles.

READ ALSO: What’s Driving the Retail Sector’s Growth?

Completed in 1967 on almost 47 acres, Del Monte Shopping Center was expanded in 1987 and most recently renovated in 2007. Its roster features more than 65 national retailers, including Apple, Macy’s Whole Foods Market, Lululemon and Sephora, among others. Regional brands are also part of the mix.

The property was 83 percent leased at the time of sale. Laura Tinetti and Molly Morgan of JLL’s 10Twelve boutique lifestyle leasing team will represent FRT in the remerchandising and leasing of Del Monte Shopping Center going forward.

AAT’s retail inventory

American Assets Trust’s retail portfolio comprises approximately 2.4 million rentable square feet. One of its largest properties in California is Carmel Mountain Plaza, a 520,228-square-foot shopping center in San Diego.

The retail sector is expected to adapt to changing consumer preferences, economic challenges and technological advancements. A key trend for 2025 is the focus on necessity-based retail, with grocery-anchored shopping centers proving resilient to evolving demographics. Suburban migration and hybrid work are driving demand for convenience-oriented shopping experiences.

The post Central Coast Shopping Center Sells for $124M appeared first on Commercial Property Executive.

Pacific Tree Capital has purchased 2525 Main, a 143,269-square-foot office property in Irvine, Calif., form J+R Group for $37.6 million. Cushman & Wakefield represented the seller.  

Sold for approximately $262 per square foot, 2525 Main ranks among the highest price-per-square-foot sales for a multi-tenant office building valued over $20 million nationwide post-pandemic. In 2014, J+R Group acquired it from Menlo Equities for $36 million, CommercialEdge data shows.

In 2024, the U.S. office market saw a total of $41 billion in sales, with properties changing hands at an average of $174 per square foot, according to a recent CommercialEdge report. Austin, Miami and Manhattan registered the most expensive deals, prices averaging $396, $365 and $364 per square foot, respectively. Los Angeles ranked sixth, properties in the metro selling for $272 per square foot on average.

A downtown Irvine office building

Completed in 1982 and renovated in 2016, the Class A property at 2525 Main St. is less than 1 mile from Interstate 405 and John Wayne Airport. The five-story asset includes a 41,000-square-foot data center, as well as an on-site cafe, according to CommercialEdge information.

The building’s roster features nine tenants, among which SMS Data Center, Seagra Technology Inc., OSI Digital and Better Tax Relief, the same data provider shows. The property was 98 percent leased at the time of the sale.  

Cushman & Wakefield Vice Chair Jeffrey Cole, Senior Director Nico Napolitano, Managing Director Kevin Nolen, Senior Director Jason Kimmel and Brokerage Specialist Kristen Schottmiller led the team that facilitated the deal for the seller.

The post Orange County Office Asset Trades for $38M appeared first on Commercial Property Executive.

Echo Real Estate Capital Inc. has acquired Rampart Medical Campus, a two-building, 71,000-square-foot property in Denver. Healthcare Realty Trust sold the asset with the assistance of CBRE. 

The property changed hands for $8.6 million, according to Denver Business Journal, less than half of what it sold for in 2019. Back then, the sale price was $18.9 million.

The purchase marked Echo’s return to Colorado, where it previously owned health-care and retail properties. The firm’s portfolio also includes Arizona, Indiana, Illinois and Massachusetts assets.

Rampart Medical Campus, up close

The medical campus consists of two three-story buildings located at 125 and 130 Rampart Way, in the historic Lowry neighborhood. Originally completed in 1942 as a school, the property was converted to office use in 1983, according to CommercialEdge information. 

The asset was 45 percent leased by seven companies at the time of sale. Anchor tenants include Colorado Allergy & Asthma Centers, U.S. Dermatology Partners and Denver Oral & Maxillofacial Surgery. Echo Real Estate Capital took out financing from AGP Capital and Aspen Funds for capital improvements, cosmetic upgrades and spec-suite construction, to grow the property’s occupancy. 

Rampart Medical Campus is 4 miles east of downtown Denver, adjacent to the Lowry Town Center shopping mall. Rose Medical Center, the University of Colorado Anschutz Medical Campus and The Medical Center of Aurora are within a 5-mile radius.

Despite economic uncertainties, the medical office sector remains resilient, with outpatient volumes expected to increase by 26 percent over the next decade. Investors are increasingly interested in such properties due to their stable, long-term tenants. However, challenges such as workforce shortages, rising labor costs and high construction expenses persist.

The post Echo Real Estate Buys Denver Medical Campus at Steep Discount appeared first on Commercial Property Executive.

The 18-acre campus will be located at the intersection of Harvill and Placentia avenues, and is set to feature the county’s first mental health urgent care and crisis residential program for children under 13, addressing a critical gap in health-care service. The facility is also aiming to provide a range of services focused on every level of recovery, including urgent behavioral health treatment, supportive housing and outpatient care. Additionally, the campus will also feature primary and specialty medical care, dental services, substance abuse disorder treatment and a pharmacy that will be open to the public.

READ ALSO: Why the Medical Outpatient Sector Is Poised for Growth in 2025

Those services will be housed in several buildings:

• Building 2: Community Wellness and Education Center—99,200 square feet;
• Building 3: Children and Youth Services—40,800 square feet;
• Building 4: Urgent Care Services—50,900 square feet;
• Building 5: Supportive Transitional Housing—192,500 square feet;
• Building 6: Extended Residential Care—66,700 square feet.

Plans at The Wellness Village also call for amenities that promote community interaction and holistic recovery such as green spaces and gardens for relaxation and mediation; sports courts and lawn for physical activity and recreation; a public market and café for community gatherings.

In addition to PMB as developer, the team includes Boulder Associates as architect; Snyder Langston as design-builder and PMB Real Estate Services as property manager. Morgan Stanley, JLL, Kensington Advisors, P3 Foundation, Advocates for Human Potential Inc. are among the developer’s financial partners. The California Department of Health Care Services awarded more than $80 million in grants to RUHS for the construction of the campus through its Behavioral Health Continuum Infrastructure Program.

More MOBs underway

The Wellness Village is not the only health-care facility that PMB is working on in California. Just last month, the developer and Sharp Rees-Stealy topped out the 75,000-square-foot medical outpatient building at 480 H St. in Chula Vista, Calif., a San Diego submarket. Completion is expected later this year. The three-story facility is set to provide advanced health care, including primary and specialty care, urgent care, physical therapy, radiology, cardiology, neurology and laboratory services. The building will also feature ground-floor retail space, including a pharmacy and a café.

In Arizona, PMB is working alongside Abrazo Health on the Abrazo Health Litchfield Medical Building, a 46,000-square-foot facility in Goodyear. The two-story project is also expected to come online this year. It is the city’s first combination of medical offices and inpatient rehabilitation programs. Abrazo Health committed to 27,000 square feet at the building, while MedCure will occupy 5,000 square feet.

The post PMB Tops Out $580M Inland Empire Campus appeared first on Commercial Property Executive.

Anchored by Macy’s, JCPenney and Dillard’s, the retail asset also has an anchor vacancy where Sears used to be. The property also features a Cinemark movie theater and a number of inline stores.

The sale was a financial play for CBL. The property served as collateral for the firm’s non-recourse term loan, and proceeds from the sale were applied to the term loan principal balance, which was thus reduced to $680.3 million.

“The sale of Imperial Valley Mall demonstrates the demand for stable enclosed malls,” a CBL spokesperson told Commercial Property Executive. Moreover, the deal puts CBL on course to meet the loan principal balance extension test in November 2025, without contributing further capital beyond required amortization.

The firm applied the same debt-reducing strategy two weeks ago, when it sold two retail assets in Monroeville, Pa., for $34 million. CBL used part of the net proceeds to lower the outstanding principal of a $333 million loan. 

READ ALSO: What’s in Store for Retail in 2025?

Chattanooga, Tenn.-based CBL is a major retail owner, with 88 properties totaling 55.4 million square feet in 20 states. Its portfolio includes 53 enclosed malls, outlet centers and lifestyle retail centers, as well as more than 30 open-air centers and other assets.

Portfolio occupancy was 90.3 percent at the end of 2024 for CBL, a 100-basis-point-increase over the quarter, but a 60-basis-point decline compared with portfolio occupancy of 90.9 percent at the end of 2023.

SoCal retail market improves

The demand for retail space in Southern California has seen a recent uptick, according to Avison Young, which reports net absorption of 151,000 square feet for the region in the fourth quarter of 2024, the first positive quarter after three straight quarters of negative absorption.

Meanwhile, retail vacancy decreased across all SoCal markets, coming in at 5.7 percent for the region, the report showed. The retail under-construction pipeline totaled 2.3 million square feet across 56 properties.

The post CBL Sells SoCal Mall appeared first on Commercial Property Executive.

Oceanview Life and Annuity Co., an affiliate of Bayview Asset Management, is the lender. Scheduled to open in phases starting late 2025, West Harbor is currently 80 percent preleased.

Upon completion, the 42-acre area will feature high-end retail, entertainment and dining. Plans call for 117,205 square feet of leasable building space and 204,000 square feet of ground area, along with a 6,200-seat amphitheater. The development represents a $500 million investment into the waterfront community.

The city of Los Angeles and the Port of Los Angeles selected Jerico Development and The Ratkovich Co. through an RFP process. The development will also provide direct waterfront access, including 200,000 square feet of leasable waterside space designated for vessel excursions and other waterfront attractions.

Newmark advised the West Harbor team and arranged the recapitalization by providing an accretive capital solution for the project’s completion and stabilization.

READ ALSO: Why C-PACE Lenders Remain Resolute

The refinancing, structured with a new senior loan and subordinate C-PACE financing, was arranged by Newmark Executive Vice Chairman Bill Fishel, Directors Alethia Halamandaris and Wyatt Strahan, and Associates Anna Sporrong and Broderick Flagg.

This full leverage, non-recourse refinancing of the West Harbor development will provide the time and resources required to bring the experiential retail project to fruition, Fishel told Commercial Property Executive.

Construction financing of this manner of leasehold real estate in any environment is challenging, he added. “The incredible outcome we achieved here belies the decade-plus of work by the Port of San Pedro and the Jerico and Ratkovich teams alongside the thoughtful, differentiated approaches of both Bayview and Petros, pairing existing PACE, bridge and new PACE financings to elegantly effectuate a new waterfront experience for the region.”

In one of South Florida’s largest office deals last year, Bayview Asset Management renewed its 55,071-square-foot office lease at Merrick Park, at 4425 Ponce de Leon Blvd. That deal was led by Colliers Vice Chair Stephen Rutchik and Vice President Tom Farmer, who represented landlord Brookfield Properties.

This week, a 146,901-square-foot grocery-anchored retail center in Los Angeles was financed for $32 million by 21 Alpha Group and Intelligent Design Real Estate through Forbright Bank for Crenshaw Plaza.

The post Los Angeles Retail Project Obtains $62M Refi appeared first on Commercial Property Executive.

The principals of 21 Alpha Group and Intelligent Design Real Estate have obtained $32 million in senior financing through Forbright Bank for Crenshaw Plaza, a 146,901-square-foot grocery-anchored retail center in Los Angeles.

JLL arranged the three-year, floating-rate loan. Proceeds will refinance existing debt, pay for closing costs and support future leasing expenses. 

The property became subject to a $31 million loan in 2020, when the joint venture acquired it in a $33.7 million portfolio deal that also included the retail space at 3540 Slauson Ave., according to CommercialEdge data. Wells Fargo Bank provided the five-year note.

Crenshaw Plaza, up close

Completed in 1967 and renovated in 2004, the five-building Crenshaw Plaza is at 3210 W. Slauson Ave., covering a 5-acre site. The property was 97 percent leased at the time of sale, its tenants having average leases of 9.3 years. 

Vallarta Supermarkets anchors the retail center, occupying 31.5 percent of the gross leasable area under a 15-year lease. The roster also includes Planet Fitness, Foot Locker and AutoZone.

Crenshaw Plaza is at the intersection of West Slauson Avenue and Crenshaw Boulevard, which sees approximately 72,000 vehicles per day. The shopping center is also adjacent to the Hyde Park light rail station, on the Metro K Line. 

JLL Capital Markets Director Spencer Bergthold, Senior Managing Director Charles Halladay and Associate Daniel Skerrett led the company’s Debt Advisory team that brokered the deal on behalf of the joint venture.

Grocery-anchored shopping centers continue to prove their resilience in the market, driven by consistent consumer foot traffic and the demand for convenience-oriented retail experiences. In 2025, the retail sector is expected to undergo significant transformation due to shifting consumer preferences, increasingly oriented toward necessity-based centers.

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Kearny Real Estate Co. and Dune Real Estate Partners have completed Harbor Logistics Center, a 163,000-square-foot Class A industrial facility in Santa Ana, Calif.

The warehouse came online on the site of a former 200,000-square-foot office campus, which was demolished nine months prior. TDA Investment Group provided a $50 million construction loan for this project, with a maturity date set in 2027, according to CommercialEdge. CBRE will oversee the leasing efforts at the industrial property.

Harbor Logistics Center is at 3100 S. Harbor Blvd., close to John Wayne Airport and one mile from Interstate 405. Ports of Los Angeles and Long Beach are both within 30 miles from the property, while Los Angeles International Airport is 37 miles away.

The facility is the only industrial building with 36-foot clear heights within a 4-mile radius. The property features ESFR sprinkler systems, a 7,000-square-foot office component, 17 dock-high doors, two grade-level doors and heavy power capacity, as well as 241 vehicle parking spots and a 185-foot-deep truck court. CBRE Senior Vice President Keith Greer, together with Executive Vice Presidents Ben Seybold and Sean Ward, are its leasing brokers.

Orange County, the tightest industrial market

At the end of 2024, Orange County was the tightest industrial market in the nation for occupancy, a recent CommercialEdge report shows. The region closed the year with a 4.2 percent vacancy rate, way below the national rate of 8 percent. Orange County was also the most expensive market in the U.S. for rent prices, asking rents averaging $16.20 per square foot.

Meanwhile, the county’s under-construction pipeline was the second-smallest in the nation, totaling just 1.5 million square feet. One of the underway projects is Bake Freeway Business Park, a 380,000-square-foot campus in Irvine, Calif., developed by Tishman Speyer and Mitsui Fudosan America.

The post Kearny, Dune Deliver Orange County Project appeared first on Commercial Property Executive.

Landrock LP and Pendulum Property Partners have acquired a 16-story, 329,431-square-foot trophy office tower in Glendale, Calif. The Class A asset changed hands at a significant discount from its previous sale, in a deal arranged by Newmark.

Goldman Sachs Asset Management and Cruzan sold the property at 505 N. Brand Blvd. for $56 million, The Real Deal reported. The partners had purchased the building in 2018 for $93.5 million from Principal Real Estate Advisors.

Built in 1986, the tower recently underwent extensive capital improvements totaling $14 million or approximately $43 per square foot. The LEED Gold-certified building also includes 3,500 square feet of retail, as well as an on-site car wash and dry cleaners. The property features a total of 1,153 parking spaces in a multi-level structure.

READ ALSO: Strong Deals and High Prices Keep LA Among Top Office Markets

The asset is leased to a diverse roster of 19 tenants, with a weighted average remaining lease term of 4.2 years. One of them is Phonexa, a software company that added more than 18,000 square feet to its lease at 505 N. Brand Blvd. in April 2023, bringing the total occupied space to 42,000 square feet across the building’s top three floors.

Other tenants include UnitedHealth Group, CalSTRS, KB Financial Group, Packer, O’Leary & Corson law firm and Martin & Associates, an accounting firm.

The building’s location on North Brand Boulevard provides access to the 134 Freeway. The property is also within walking distance of retail and residential amenities, including The Americana at Brand, a 1 million-square-foot mixed-use property, and Glendale Galleria. Downtown Los Angeles is some 10 miles south.

Newmark team

Newmark Co-Head of U.S. Capital Markets Kevin Shannon, Vice Chairmen Ken White, Rob Hannan, Michael Moll and Laura Stumm, Executive Vice Chairman Kevin Donner, Managing Director Ben Lushing and Director Alex Beaton represented the seller.

Newmark Co-President of Global Debt & Structured Finance Jonathan Firestone, Vice Chairman Blake Thompson and Director Henry Cassiday led market financing alternatives throughout the transaction.

Los Angeles market moves

The sale is another recent example of office assets in the Los Angeles market trading at discounted prices. Earlier this month, a joint venture between Cross Ocean Partners and Palisade Group purchased 4500 Park Granada, a 222,667-square-foot office building in Calabasas, Calif., for $69.4 million from Gemdale USA in a deal also brokered by Newmark. The property previously changed hands in 2021 for $79 million, according to CommercialEdge information.

And late last year, Los Angeles County acquired The Gas Company Tower, a 1.3 million-square-foot office building in the city’s downtown, for $200 million. The property had been sold by Wilmington Trust after a September foreclosure on a $350 million CMBS loan.

In October, Southwest Carpenters Pension Trust acquired Union Bank Plaza, a 40-story, 701,888-square-foot office tower in Los Angeles for $80 million from Waterbridge Capital. The office building had sold for $104 million in April 2023.

The post Landrock, Pendulum Buy LA Office Tower for $56M appeared first on Commercial Property Executive.

Additionally, the metro logged $599 million in office sales last year. This figure represents a considerable increase, nearly doubling the amount registered in 2023, but still the lowest investment volume among gateway markets.

The city also strengthened its position as one of the most active life sciences markets across the country, ranking seventh by its construction activity in the sector. Between 2019 and October 2024, more than 1.8 million square feet of life science space across nine projects broke ground in the metro.

More office projects to come online

Last year, Seattle’s office sector saw the delivery of 11 properties, accounting for 4 million square feet—about 2.2 percent of the metro’s total inventory. Compared to 2023, this figure increased by more than a third.

Among gateway markets, Boston took the lead with almost 6.4 million square feet completed, while Seattle was close behind. Chicago (1.0 million square feet) and Los Angeles (955,510 square feet) were at the opposite pole.

In the second quarter of last year, Office Properties Income Trust completed the renovations of Unison Elliott Bay, a three-building, 300,000-square-foot life science lab, R&D and office space. The project began in March 2022.

In terms of pipeline, more than 5.1 million square feet of office space across 10 projects were under construction at the end of December, which will add about 2.8 percent to the market’s stock. Of them, two developments totaling 691,700 square feet broke ground in 2024.

One of the largest projects under construction that is scheduled to come online this year is Amazon’s Tower 1 at Bellevue 600. The 43-story building will comprise more than 1.1 million square feet and is the first phase of a development that is set to also include a 31-story high-rise.

Government agencies focus on office-to-residential conversions

With the trend of converting office spaces into residential units gaining momentum, CommercialEdge has launched a tool designed to evaluate the feasibility of repurposing properties across different markets. According to its Conversion Feasibility Index, Seattle ranks high, with around 4.7 million square feet of office space demonstrating strong potential for conversion.

Last summer, the Seattle City Council enacted a legislation aimed at removing regulatory obstacles by granting extensive exemptions from dimensional and design development standards. This initiative is intended to address the issue of vacant office spaces across the city, with a particular focus on the downtown area.

In August, Orton Development proposed a conversion plan for the almost 100-year-old Joseph Vance Building. If approved, the project would generate about 155 residential units. The building’s CFI score stands at 92, according to CommercialEdge, making it a strong candidate for repurposing.

Office sales register new heights

Seattle reached $599 million in office investment volume last year, almost double the figure registered in 2023. Although assets traded at an average of $260.45 per square foot, significantly surpassing the national average of $175.97, the market experienced the lowest transaction volume among gateway metros.

Manhattan registered the highest sales nationally, with $3.9 billion in assets changing hands. Washington, D.C. ($2.6 billion) and Los Angeles ($1.9 billion) trailed behind.

In September, Alexandria Real Estate Equities sold 1165 Eastlake Ave. E, a 100,086-square-foot life science building for $150 million. Fred Hutch Cancer Center acquired the asset completed in 2021. The developer also formed a joint venture with the buyer for two adjacent buildings, where it will maintain a 30 percent ownership.

A month earlier, the first skyscraper in Seattle, The Smith Tower, changed hands. A group of local investors led by GT Capital bought the 42-story property from Goldman Sachs. The 268,700-square-foot tower dates from the 1910s and was renovated in 1990s and 2010s.

Completions lead to surge in vacancy rates

Seattle’s office vacancy rate at the end of December clocked in at 26.3 percent, rising 380 basis points year-over-year. During the same month, the national average was 19.8 percent.

Among gateway markets, only San Francisco posted a higher rate, reaching 28.8 percent. Miami (15.2 percent) and Los Angeles (16.0 percent) were at the opposite end.

In one of the largest office leases in the area in recent years, Pokémon signed a 374,000-square-foot lease at Skanska’s The Eight, a 26-story mixed-use development in Bellevue, Wash. The building totals about 729,000 square feet, out of which 541,000 are destined for office use.

In June, TikTok decided to expand its office presence in the market and signed an additional 150,000-square-foot lease in downtown Bellevue, Wash. The tenant will occupy seven floors at Kemper Development’s Lincoln Square North Tower, where it had already committed to 132,000 square feet across six floors in January.

Coworking sector remains on par with national trends

As of December, Seattle’s coworking sector consisted of more than 3 million square feet, accounting for 1.9 percent of the market’s office stock. Among gateway metros, only Boston (1.8 percent) and Washington, D.C. (1.6 percent) had a smaller percentage of shared space out of total inventory, while Miami (3.8 percent) took the spotlight.

In the first quarter of last year, CENTRL Office took over the former WeWork shared space at the Kelly-Springfield Building in Seattle. The firm will operate the 53,365-square-foot space under a management contract with landlord Legacy Cos., after WeWork vacated the offices in February, filing for Chapter 11 bankruptcy.

Regus (445,380 square feet) became the largest flex office provider in the Emerald City as of December, followed by WeWork with 339,476 square feet. These operators were followed by extraSlice (296,437 square feet) and Industrious (189,675 square feet).

The post Seattle Office Maintains Values, But Trades Are Few appeared first on Commercial Property Executive.

Alexandria Real Estate Equities, Uber Technologies and basketball team Golden State Warriors have secured a $500 million refinancing loan for two office buildings in San Francisco that serve as Uber’s headquarters. The trophy duo encompasses 586,208 square feet in the Mission Bay neighborhood.

Goldman Sachs and Barclays provided the five-year, fixed-rate, single-asset, single-borrower CMBS note in a deal arranged by CBRE. To secure the loan, the joint venture made a down payment of $100 million on the existing debt, a $600 million financing package originated by JPMorgan Chase & Co. in 2020, public records show. Wells Fargo served as trustee.

READ ALSO: San Francisco Office Construction Rebounds Amid High Vacancy

Uber and Warriors each have a 45 percent stake in the two office buildings, while Alexandria owns the remaining 10 percent. The duo is at 1655 and 1725 Third St., next to the Chase Center arena and about 3 miles south of downtown San Francisco.

Completed in 2021, the 11-story buildings feature 45,911-square-foot floorplates, as well as LEED Gold certifications. Amenities consist of a café, a smoothie bar, as well as landscaped roof decks, to name a few.

Rounding up Uber’s Mission Bay campus are the office assets at 1455 and 1515 Third St., which measure a combined 486,600 square feet and bring the property’s total square footage to 1 million. Uber subleased these buildings to OpenAI in 2023.

CBRE Executive Vice Presidents Brad Zampa and Michael L. Walker arranged the financing on behalf of the venture. According to the firm’s research, the non-agency loan closings for banks rose to 43 percent in December, up from the 18 percent registered in September.

San Francisco’s office market sees better days

San Francisco’s office scene sees signs of improvement. Although the market’s vacancy rate rose 240 basis points year-over-year, landing at 34.2 percent in December, the last quarter of 2024 marked the first three-month period of positive absorption recorded since 2019, according to a report by Cushman & Wakefield.

This shift toward 2024’s tail-end spurred lending revival in the metro. In January, a joint venture between Bain Capital Real Estate and Phase 3 Real Estate Partners Inc. obtained $484 million to refinance a three-building life science complex totaling 566,661 square feet in Brisbane, Calif.

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Retail Opportunity Investments Corp.’s shareholders have approved the proposed merger with Blackstone Real Estate Partners X. The all-cash deal, valued at about $4 billion, is expected to close this week.

ROIC and Blackstone affiliates had entered the merger agreement back in November, under which Blackstone would acquire all outstanding shares of ROIC’s common stock at $17.50 per share. The transaction represents a 34 percent premium over ROIC’s closing share price in July 2024.

The retail REIT‘s portfolio included 93 grocery-anchored properties totaling around 10.5 million square feet across Los Angeles, San Francisco, Seattle and Portland, Ore., at the end of September.

Blackstone’s interest in ROIC underscores the positive outlook of necessity-based, grocery-anchored retail. This type of assets will continue to draw attention from both investors and developers, according to Commercial Property Executive‘s 2025 retail outlook.

The Blackstone-ROIC merger, up close

Following the merger’s completion, ROIC will become a privately held entity under Blackstone’s management.

The deal will involve a two-phase process. First, Montana Merger Sub II LLC will merge with ROIC’s operating partnership, Retail Opportunity Investments Partnership LP, according to the Trading Calendar. Then, Montana Merger Sub I Inc. will merge with ROIC, which will remain under Blackstone’s control.

The agreement also includes measures for handling ROIC’s restricted stock awards and long-term incentive program units, ensuring that eligible employees receive fair compensation as the company undergoes a change in ownership.

However, the transaction might still be subject to change, the same source shows. Should a superior offer emerge, ROIC’s board has the right to accept the new proposal and pay Blackstone a $78 million termination fee. On the other hand, Blackstone has guaranteed a $239 million reverse termination fee if it fails to complete the deal under the terms of the agreement.

The post Blackstone’s $4B Retail Deal Gets Green Light appeared first on Commercial Property Executive.

A joint venture of Ryan Cos. and Alidade Capital has broken ground on Chandler Freeways Business Park, a 190,475-square-foot industrial development in Chandler, Ariz. The duo will convert a 175,654-square-foot existing office building as part of the project. Completion is scheduled for the fourth quarter this year.

Plans call for the conversion of the two-story office building into an 87,600-square-foot, single-story industrial facility. Additionally, the developers will build a second, 102,875-square-foot industrial asset. Butler Design Group provided design services.

Chandler Freeways Business Park will feature clear heights between 28 and 32 feet, speed bays ranging from 40 to 60 feet, as well as a total of 26 dock-high doors and 11 grade-level doors.

READ ALSO: Phoenix Industrial Development Remains Fast-Paced

The development is taking shape at 6955 W. Morelos Place, less than 1 mile from Highway 202 and about 19 miles southeast of downtown Phoenix. The Phoenix Sky Harbor International Airport operates 12 miles away.

Ryan Cos.’ office-to-industrial ventures

In November 2024, Ryan purchased the office property for $16.8 million from Landwin Management Co. Verizon had leased the asset since 2004. The office building didn’t start out as such. It was originally built as an industrial facility and later converted into an office building. Now, due to its conversion-minded design, it’s slated to go back to its initial usage.

This isn’t the first time Ryan and Alidade partnered to turn office into industrial in metro Phoenix. The duo joined forces last June to redevelop the 128,048-square-foot Red Mountain Corporate Center in Phoenix into Innovate48, a 163,000-square-foot industrial facility. Completion is expected next quarter.

Metro Phoenix industrial completions hit a new record

Industrial completions skyrocketed last year, with 42.9 million square feet brought online across metro Phoenix, setting a new record, according to a Cushman & Wakefield report. The supply glut led to seven consecutive quarters of vacancy increases, bringing it up to 12.7 percent in December.

Several projects wrapped up during the last quarter. Rockefeller Group completed a 418,400-square-foot distribution center in Surprise, Ariz., while Thompson Thrift brought online the 400,000-square-foot first phase of the Germann Commerce Center in Phoenix.

The post Ryan Cos. JV Starts Office-to-Industrial Conversion in Phoenix appeared first on Commercial Property Executive.

The non-profit organization Visit Phoenix has signed a 24,722-square-foot lease at RED Development’s mixed-use CityScape in Phoenix.

Visit Phoenix will relocate its offices from 400 E. Van Buren St., less than one mile from CityScape. The tenant will establish its headquarters at the new space and will move to the location in the fourth quarter of 2025.

JLL represented both parties in the lease negotiations.

The 1.2 million-square-foot property features a 27-story office tower, retail, dining and entertainment spaces, as well as the Kimpton Palomar hotel.

READ ALSO: Phoenix Office Market’s Small Wins Add Up

The office component’s tenant roster includes Alliance Bank, United Healthcare and Gust Rosenfeld and is currently at 6.0 percent vacancy, Phoenix Business Journal reported.

The office tower at CityScape

Located at 1 E. Washington St., the property is in downtown Phoenix, in the city’s central business district. Phoenix Sky Harbor International Airport is some 4 miles southeast.

The 641,718 rentable-square-foot office building came online in 2010 and features 23,600-square-foot floorplates and 33,000 square feet of retail space. Amenities include shared conference rooms, a fitness center and some 2,670 car parking spaces. In 2024, the high-rise became subject to a $170 million loan originated by Western Alliance Bank, according to CommercialEdge information.

JLL Executive Vice President Mike Gordon worked on behalf of Visit Phoenix in the lease negotiations, while Senior Managing Director Ryan Timpani and Senior Vice President Brett Thompson represented the ownership.

The office market in Phoenix had a vacancy rate of 19.4 percent as of December 2024, a 40-basis-point uptick over a 12-month period, but slightly lower than the national average of 19.8 percent, a recent CommercialEdge report shows. The metro’s asking rents reached $28.4 per square foot, up 2.7 percent year-over-year.

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RAF Pacifica Group has completed Escondido Logistics Center, a two-building,147,054-square-foot industrial property in Escondido, Calif. Development costs rose to $60 million.

The San Diego Water Authority acquired one of the buildings upon completion, in a $38.8 million deal brokered by Colliers International. Cushman & Wakefield represented the seller in the transaction and is marketing the second property for lease.

RPG secured a $11.4 million construction loan from City National Bank in 2023, CommercialEdge data shows. The company acquired the development site in 2022 for $4.5 million from JRMC Real Estate, according to San Diego County public records.

READ ALSO: Top 5 Markets for Industrial Deliveries

The 7-acre property is at 1903 and 1943 Citracado Parkway, within Escondido Research and Technology Center, a 22-acre business campus. It is near Interstate 15, which allows for easy access to San Diego and Los Angeles. Montgomery-Gibbs Executive Airport is 25 miles away while San Diego International Airport is within 33 miles.

Escondido Logistics Center’s two buildings measure 88,000 and 58,000 square feet. Features include 28-foot clear heights, grade-level loading doors, dock doors and heavy power. RPG envisioned the property to accommodate manufacturing and distribution users.

Executive Vice Chairman Aric Stark and Senior Director Drew Dodds with Cushman & Wakefield are marketing the remaining 58,000-square-foot facility for lease.

Some 5.5 million square feet planned for San Diego

A few large deliveries took shape in metro toward the end of last year. Among these was Chestnut Properties’ 380,000-square-foot Gillespie Field iPark in El Cajon, Calif. In January 2024, the developer secured $91 million in construction funds for the project, which was already 40 percent preleased to GKN Aerospace.

During the last quarter of 2024, the San Diego industrial market had 2.8 million square feet of space under construction, with an additional 5.5 million square feet in the planning and permitting stages, according to a Cushman & Wakefield report. A significant share of this upcoming space is in the Otay Mesa submarket.

The post RAF Pacifica Group Delivers $60M San Diego Project appeared first on Commercial Property Executive.

The seller was Diversified Healthcare Trust, which reported that at the time of sale, the property was 49 percent leased, with a weighted average lease term of more than eight years. The seller stated that it plans to use the transaction proceeds to pay down its senior secured notes due in January 2026.

DHC is managed by leading U.S. alternative asset management company The RMR Group.

MUSE consists of three buildings totaling 186,000 square feet in the heart of Torrey Pines. The campus was recently repositioned with a new exterior glass façade and enhanced amenities, including a new fitness center, indoor/outdoor conference center, landscaping with outdoor seating and games, as well as a full-service café.

Two of the buildings were recently upgraded to modern labs and are fully leased on a long-term basis, Breakthrough stated. One vacant building will be repositioned to provide flexible wet lab space to accommodate a variety of life science research.

READ ALSO: The Most Active Life Science Markets in the US

As of press time, a Breakthrough Properties spokesperson had not replied to Commercial Property Executive’s request for additional information.

The Class A buildings are at 3030, 3040 and 3050 Science Park Road and are, respectively, three stories, 94,456 square feet, occupied by Surgalign; two stories, 36,418 square feet; and two stories, 55,102 square feet, tenanted by Prometheus Biosciences, according to information provided by CommercialEdge. All three were completed in 1985 and 1986 and completely redeveloped in 2021.

San Diego’s life science market performance

The San Diego life science market has seen direct vacancy rise steadily from a low of about 6 percent in mid-2022 to nearly 18 percent currently, according to a January report from Savills USA. Meanwhile, the construction pipeline has fallen to 4.5 million square feet, Savills reported, “as developers hold off on new projects amid limited preleasing and ongoing tepid demand.”

Torrey Pines and Sorrento Mesa have been the two most active submarkets for leasing activity recently.

In October, Breakthrough Properties opened Torrey Heights (renamed), a 520,000-square-foot life science campus in San Diego’s Del Mar Heights submarket. The 10-acre, three-building property is fully preleased, largely to Pfizer’s oncology division and Becton, Dickinson and Co.

The post Breakthrough Properties Buys Life Science Campus for $159M appeared first on Commercial Property Executive.

A joint venture between Cross Ocean Partners and Palisade Group has acquired 4500 Park Granada, a 222,667-square-foot office building in Calabasas, Calif. Gemdale USA sold the fully-leased asset for $69.4 million or about $312 per square foot, in a deal brokered by Newmark.

The property previously changed hands in 2021 for $79 million when it was acquired from Rising Realty Partners, according to CommercialEdge information. The asset currently traded at a 12 percent discount compared to its last sale price.

The three-story building sits on a 20-acre site located less than a mile from downtown Calabasas. Downtown Los Angeles is some 27 miles away, while the Los Angeles International Airport is 30 miles southeast.

READ ALSO: Strong Deals and High Prices Keep LA Among Top Office Markets

Completed in 1986, the property also known as The Park Calabasas underwent cosmetic renovations in 2019. Initially, the low-rise served as the corporate headquarters of Lockheed Martin and later as headquarters for Countrywide, operating as a single-tenant building for nearly 20 years. It now houses seven tenants across various industries.

The building features floorplates ranging between 16,670 and 93,170 square feet, six passenger elevators and almost 700 parking spaces. Amenities include an on-site cafeteria and jogging trail, as well as an open space for corporate events and outdoor meetings.

The Newmark team representing the seller included Co-Head of U.S. Capital Markets Kevin Shannon, Vice Chairmen Ken White, Rob Hannan, Michael Moll and Laura Stumm, along with Director Alex Beaton.

Los Angeles office sector remains steady

Greater Los Angeles’ office investment volume in the fourth quarter of 2024 reached $870 million, according to a CBRE market report. Additionally, the metro’s overall vacancy rate as of December clocked in at 23.9 percent.

At the end of last year, Los Angeles County acquired The Gas Company Tower, a 1.3 million-square-foot office building in the city’s downtown, for $200 million. Wilmington Trust sold the asset after having foreclosed in September on a $350 million CMBS loan.

Another notable deal in the area was Drawbridge Realty’s $185 million purchase of Arboretum Gateway, a 225,773-square-foot building in Santa Monica, Calif. Clarion Partners sold the property, which is 100 percent triple-net leased to Universal Music Group.

The post Cross Ocean JV Buys LA Asset for $69M appeared first on Commercial Property Executive.

The 226,000-square-foot transaction worth roughly $375 million closed in late December. It is one of the largest biosciences transactions in the Peninsula market and the largest new lease overall in San Mateo County, the San Francisco Business Times reported.

The deal comes at a time when the life science market in the Bay Area is struggling with job cuts and an industry slowdown.

WRNS Studio designed Elco Yards, which sits at the edge of downtown along the Caltrain corridor.

Cushman & Wakefield’s Ben Paul, Mike Courson, with Newmark, and Matt Germino, with CBRE, represented Chan Zuckerberg in lease negotiations. Paul will handle marketing.

CZI is an entity formed by Meta Platforms CEO Mark Zuckerberg and his wife, Priscilla Chan.

READ ALSO: Life Science Trends to Watch in 2025

The asset’s top-quality microscopes were a key reason for CZI’s decision, as they could help the company better understand how cancer cells influence tumor growth.

Lay of the land

IQHQ acquired Elco Yards from Greystar in November 2021. The surroundings include about 670,000 square feet of life science and office space and hundreds of planned residential units within 8 acres.

CZI occupies one of Elco Yards’ four buildings, each averaging over 200,000 square feet. The organization recently completed a 111,000-square-foot expansion at its nearby headquarters. The company’s mission is to study and eradicate human disease.

Redwood City is home to several life science companies.

iO Life Science is a virtual incubator for medtech inventors, early-stage startups and entrepreneurs. It provides resources and expertise to help fast-track innovations from ideation to commercialization.

Redwood LIFE is an innovation-focused environment with lab space and amenities that inspire collaboration and breakthroughs.

180 Life Sciences is dedicated to addressing pathological inflammation and developing therapeutics to treat diseases caused by inflammation.

The post Chan Zuckerberg Institute Lease Boosts Bay Area’s Life Science Sector appeared first on Commercial Property Executive.

TailoredSpace has opened its latest coworking space in Orange County in San Clemente, Calif. This marks the city’s first full-service flex office.

The 10,500-square-foot location provides conference rooms, coffee and snacks, parking space, as well as member events and parties. The interior design represents a combination between a residential living room and a commercial space.

Other tenants at the property include Melin, 24 Hour Fitness and Saddleback Church.

Located at 100 Avenida La Pata, the building is some 3 miles from downtown San Clemente and has access to Interstate 5. John Wayne Airport is 28 miles away.

Lee & Associates Senior Vice President Tim Walker worked on behalf of the landlord in the transaction.

Orange County coworking footprint

Completed in 1999, the two-story, 43,560-square-foot building sits on a 9-acre site. The property has been under Metro Commercial Realty Corp.’s ownership since 2013, when W.P. Carey sold it for $11.3 million, according to CommercialEdge. In 2014, the asset became subject to a $15.5 million loan originated by EquiTrust Life Insurance Co., with a maturity date set for 2034, the same source shows.

The San Clemente office is the 10th TailoredSpace location in Southern California. The company’s coworking landscape includes nine other locations in Brea, Carlsbad, Chino Hills, Corona, Laguna Niguel, Rancho Cucamonga, Riverside, San Juan Capistrano and West Covina and plans to add five more coworking offices in the area this year.

TailoredSpace opened its Laguna Niguel location back in October 2024. The company occupies nearly 12,000 square feet on the entire first floor at a 280,979-square-foot retail campus, owned by Dunhill Partners.

The post TailoredSpace Expands Footprint in Orange County appeared first on Commercial Property Executive.

NVIDIA is expanding its Silicon Valley office holdings. The firm intends to buy from The Sobrato Organization a 500,000-square-foot campus located across the road from its headquarters, according to SiliconValley.com.

NVIDIA has leased the four buildings at 2701, 2711, 2721 and 2731 San Tomas Expressway in Santa Clara since April 2010. The tech company agreed to acquire the assets along with a parking garage at 2741 San Tomas Expressway. The price to be paid was not reported and a closing date was not disclosed.

READ ALSO: Top California Markets for Office Transactions

Completed in 2010, the 19.2-acre campus comprises three-story, 125,000-square-foot buildings with 41,667-square-foot floorplates, according to CommercialEdge. NVIDIA was the sole tenant at the property that’s across from its 2788 San Tomas Expressway corporate offices.

NVIDIA keeps expanding

In May, NVIDIA paid former landlord Preylock Holdings nearly $375 million for several sites also located near its headquarters, according to media reports. That deal included six parcels of land, eight buildings, two parking structures and 2 million square feet of future development rights, the San Francisco Standard reported. Data centers and lab facilities were part of that transaction as well.

In more recent expansion news, the firm leased an office and research building in north San Jose, Calif., from Menlo Equities in December. The 101,600-square-foot property is at 300 Holger Way.

Office sales in the Bay Area

The Bay Area ranked third in the U.S. for office sales volume last year, after Manhattan and Washington, D.C., according to a CommercialEdge report. The market witnessed more than $2.1 billion in transactions year-to-date as of November, with assets changing hands, on average, for $293 per square foot.

In one of the largest deals of the period, Microsoft paid $330 million for a five-building campus in Mountain View, Calif. The sale price equated to $513.2 per square foot.

The post NVIDIA Eyes Bay Area Expansion appeared first on Commercial Property Executive.

Tractor Supply Co. will develop an 865,000-square-foot distribution center in Nampa, Idaho, marking a nearly $225 million investment in the local economy. The building targeting LEED certification can be expanded by 150,000 square feet, according to plans filed with the city’s planning and zoning commission.

The development team includes Kimley Horn and H&M Architects/Engineers. Groundbreaking is slated for this spring and completion is expected by late 2026 or early 2027.

Upon delivery, the facility will serve more than 200 Tractor Supply stores throughout the Pacific Northwest. The project’s blueprints also include a hazardous storage facility which is set to stock flammable, combustible and corrosive liquids for commercial distribution.

READ ALSO: Industrial Sector Settles After Supply Surge

The site is at the northeast corner of Midland Boulevard and Ustick Road, about 23 miles west of downtown Boise, Idaho, and roughly 5 miles from Nampa’s city center. The location is also close to U.S. Route 26, Interstate 84 and Caldwell Executive Airport.

This will be Tractor Supply’s first distribution center in the Pacific Northwest region. At a national level, the company operates 10 such centers in New York, Arizona, Maryland, Georgia, Texas and Indiana, among other states.  

Boise’s industrial market sees vacancies spike

Boise had 1.5 million square feet of build-to-suit and 560,000 square feet of speculative industrial space as of December, according to a Cushman & Wakefield fourth-quarter 2024 report. Completions totaled more than 3.6 million square feet.

Meanwhile, the vacancy rate went up for the fourth consecutive quarter at the end of the year, landing at 7.9 percent in December. The index climbed 270 basis points year-over-year as overall absorption was down 54.2 percent from 2024’s quarterly average.

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Nestle USA has opened its new beverage factory and distribution center in Glendale, Ariz., a 630,000-square-foot facility. The company broke ground on the $675 million project in 2022.

Initially, Nestle wanted to construct the facility within the 1,340-acre Woolf Logistics Center masterplan, on a site the company acquired in December 2021. That development was supposed to span 625,000 square feet and cost about $400 million.

The newly completed project is located at 8351 N. 150th Ave. The 139-acre property is less than 26 miles from downtown Phoenix and 29 miles from Phoenix Sky Harbor International Airport.

READ ALSO: Phoenix Industrial Development Remains Fast-Paced

Nestle will use the manufacturing building to produce creamers for several of its go-to brands, including Coffee mate, natural bliss and Starbucks. It plans to employ 300 people.

The facility has 10 drive-in doors and 38 dock-high loading doors, as well as levelers and bumpers, and is equipped with advanced technology and digital tools, allowing it to adapt production to meet evolving consumer needs and trends.

The factory recycles and repurposes as much as 75 percent of its treated water using advanced management tools. It also uses renewable electricity to reduce carbon emissions and is zero waste for disposal.

The new manufacturing facility represents Nestle USA’s 20th food and beverage factory, adding to its over $3 billion investment in upgrading its manufacturing capabilities across the U.S. in recent years.

Phoenix’s industrial pipeline tops the nation

Phoenix’s industrial sector continued to lead nationally for under-construction inventory, with 24 million square feet underway as of November, according to a CommercialEdge industrial report. The metro’s vacancy rate during the month clocked in at 7.2 percent, slightly below the 7.6 percent national average.

In November, Thompson Thrift completed the first phase of Germann Commerce Center, spanning 400,000 square feet. Upon full build-out, the project rising in the southeast Phoenix suburb of Queen Creek will total 1 million square feet.

Other recent notable developments in the area include Rockefeller Group’s completion of a 418,400 square-foot distribution center on 24 acres in Surprise, Ariz.  Surprise Pointe Commerce Center can fit as many as four tenants and has 80 dock doors.

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Office deals in Denver posted a 31.3 percent year-over-year drop, but the metro’s total office investment placed it among the top-performing U.S. markets, outpacing San Francisco. Meanwhile, even if the metro’s vacancy rate became one of the highest ones in the nation, Denver still closed some significant leasing agreements since the start of the year.

As of November, there were 680,961 square feet of office space under construction across seven properties, accounting for 0.4 percent of total stock—below the national rate of 0.8 percent. The figure was on par with that of Detroit’s and Phoenix’s, while it outpaced that of Portland’s (0.1 percent). When adding projects in prospective and planning stages, Denver’s rate reached 2.8 percent of existing stock—still below the national rate of 3.0 percent.

Notable office projects came online

In terms of office supply, Denver’s pipeline outpaced that of Phoenix’s (529,050 square feet), Charlotte (524,657 square feet), while Atlanta led across similar markets, with 1.7 million square feet. One of the largest office developments currently underway in the metro is Beacon Capital Partners’ Steel House, a 309,308-square-foot project in Denver’s Five Points submarkets. Construction on the 12-story project started in February 2023, with $100.2 million in construction financing by Bank OZK. The project is designed to received LEED Gold and WELL certifications.

Another notable development nearing completion is the 134,393-square-foot CV Innovation Campus, a life science project in Louisville, Colo. Developed by Koelbel & Co., the project is an adaptive reuse development of a former 1996-built Lowe’s store into life science and R&D space aimed for biotech and pharmaceutical companies.

Year-to-date through November, developers had broken ground in 690,666 square feet across six properties, while deliveries totaled nearly 1.3 million square feet across seven properties—accounting for 0.7 percent of existing stock and marking a 19.8 percent year-over-year growth.

A recently delivered project is the 726,450-square-foot 1900 Lawrence, a Class A+ high-rise in Denver’s central business district. Completed in August, the 30-story office tower was developed by Riverside Investment & Development and financed by a $242 million loan by Bank OZK. Currently marketed for lease by JLL, the property is considered the largest skyscraper delivered in Denver in four decades.

Denver’s potential for office-to-residential makeovers

As vacancies continue to increase in most markets, office-to-residential conversion emerged as a trend for office owners across the U.S. CommercialEdge launched The Conversion Feasibility Index, a new tool that evaluates which markets show strong office-to-residential repurposing fundamentals, based on a set of property-level scores.

Denver had 18 properties totaling 1.7 million square feet in the Tier I category, with CFI scores between 90 and 100 points. Meanwhile, 212 properties accounting for 22.1million square feet of space made up the Tier II category, with CFI scores between 75 and 89 points.

One example of an office-to-residential project currently underway is the 124,000-square-foot building at 4340 S. Monaco St., that was purchased by Shea Properties. The company started the adaptive reuse project, with plans to add 143 affordable residential units. Originally completed in 2001, the Class A four-story property has been vacant for the past five years.

A drop in office sales

Year-to-date through November, Denver investors traded $768 million in office assets, with 60 properties totaling 8.2 million square feet of space that changed hands at an average sale price of $119 per square foot—below the national average of $179 per square foot. Among similar markets, deals were pricier in Phoenix ($164 per square foot), Portland ($164 per square foot), Atlanta ($148 per square foot), while Denver prices per square foot outpaced the ones from Houston ($107 per square foot) and Dallas ($115 per square foot).

The total sales volume in the metro was 31.3 percent lower on a year-over-year basis and placed Denver 13th among the top 25 U.S. office markets, outpacing San Francisco ($747 million), Seattle ($687 million) and San Diego ($651 million). Among notable deals in Denver is the $45.5 million sale of TeleTech Headquarters, a 271,678-square-foot property in Englewood, Colo. CommonSpirit Health, a Catholic hospital chain, acquired the property at 9197 S. Peoria St. from TeleTech Services, with plans to turn it into a medical campus.

Another significant deal is the $31.2 million sale of Sisters Grove Pavilion, a 116,367-square-foot medical office building in Colorado Springs, Colo. Harrison Street and MedCraft Investment Partners bought the property from CommonSpirit Health in October.

Office vacancy continues to rise

As of November, Denver’s office sector had a 24.6 percent average vacancy rate, one of the highest rates in the nation, and marking a 320-basis-point increase over the same period of last year. While the national rate was set at 19.4 percent, Atlanta and Phoenix were the similar markets with lower vacancy rates, with 17.8 percent and 18.4 percent, respectively.

Significant deals in the metro include Bet365’s 120,000-square-foot lease at One Platte, a 250,000-square-foot building owned by Nichols Partnership and Shorenstein. The U.K.-based sports betting firm opened its new U.S. corporate headquarters at the property in October, with the move expected to bring nearly 1,000 jobs in the area.

In May, Brookfield Properties signed a 121,000-square-foot renewal agreement at 717 17th St., a 693,565-square-foot property in downtown Denver. The tenant is Johns Manville, a Berkshire Hathaway subsidiary that will continue to use the space as its global headquarters through at least 2035.

A high share of flex office space

As of November, Denver’s coworking sector reached 3.7 million square feet of space, representing 2.2 percent of total leasable office space—above the national figure of 1.9 percent.

The largest flex office provider in Denver remained Regus, with operations totaling 694,250 square feet of space. The company was followed by WeWork (307,846 square feet), Expansive (229,867 square feet), Spaces (180,252 square feet) and Office Evolution (155,916 square feet).

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San Francisco-based flex office provider Pacific Workplaces will open in February a 13,000-square-foot coworking space on the seventh floor at 84 W. Santa Clara St. in San Jose, Calif.

The new location was initially scheduled for completion by September 2024. This is the company’s second coworking space in Silicon Valley, after opening another location in 2023 in Cupertino, Calif.

Amenities will include 51 private offices, six fully equipped meeting rooms, workstations, private phone booths and flexible desk options, designed by Workplace Studio and suited to elevate the coworking experience.

Other tenants in the building include TMC Financing, Hann Law Firm, Silicon Valley Accounting-Tax, Power Personnel and Innovar Marketing, according to CommercialEdge information.

Completed in 1976, the eight-story property is a Class B, 110,000-square-foot building. Pestana Properties owns the LEED Gold-certified asset, the same source shows. The mid-rise features 13,338-square-foot floorplates, three passenger elevators, 49 car parking spaces and 12,000 square feet of retail. Amenities include a conference center, tenant lounge and fitness center.

The property is in downtown San Jose, across the street from Blue and Green Line light rail stops and within 1 mile from the San Jose Diridon Station. The San Jose Mineta International Airport is some 3 miles northwest. Major thoroughfares in the area include interstates 280, 680 and 880, as well as State Route 87.  

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The seller was represented by Cushman & Wakefield’s National Industrial Advisory Group, which includes Jeff Chiate, Rick Ellison, Matt Leupold and Aubrie Monahan of the firm’s National IAG—West team, in collaboration with Will Strong, Michael Matchett, Jack Stamets, Molly Hunt and Madeline Warren of the firm’s National IAG—Mountain West team.

Limited industrial inventory in Reno helps to give Nuveen an edge.

The five freestanding buildings at 4681 and 4689 Aircenter Circle and 4745, 4855 and 4980 Longley Lane cover 27 acres. Suites range in size from 19,000 to 153,000 square feet. Features include 24-to-25-foot clear heights, extensive loading capabilities with 68 dock-high and 11 grade-level doors, as well as power to support wide-ranging operational needs.

Nevada’s fast-growing industrial market

Reno’s strong labor pool, industrial demographics and diverse transportation options have made it one of the fastest-growing industrial markets.

“Over the past decade, Tesla and other major companies have transformed Northern Nevada into a hub for e-commerce, logistics and manufacturing,” Bryce Clutts, president & CEO of Reno-based Metcalf Builders, told Commercial Property Executive.

“With large corporations such as Walmart, Google, Apple and Microsoft establishing key operations at the Tahoe Regional Industrial Center—and the many supporting businesses they attract—the demand for industrial and manufacturing development has grown significantly.”

This has become a primary focus for the Economic Development Authority of Western Nevada, as the region works to diversify its economy, he said.

READ ALSO: Industrial Report: Sector Settles After Supply Surge

General contractor Metcalf Builder will break ground next month on its latest industrial development at the Tahoe Regional Industrial Center.

Clutts also highlighted Nevada’s business-friendly economy as a key factor driving companies to relocate or expand to Northern Nevada, particularly in comparison to California.

“The quality of life for employees and the excellent options available in Nevada have been compelling reasons for businesses moving here,” he added.

In July, Barings supplied a $114 million loan to finance Airway Commerce Center, a recently completed warehouse/distribution property in Reno.

Approximately 900,000 square feet, the asset was developed by Tolles Development and its equity partners. Of the four buildings, the largest stands at 435,500 square feet.

Also that month, Clarion Partners acquired the 322,400-square-foot industrial building at 500 Denmark Drive in McCarran, Nev. Pure Development sold the asset for $41.7 million.

The post Nuveen Pays $90M for Industrial Portfolio appeared first on Commercial Property Executive.

Trammell Crow Co. and Diamond Realty Investments have completed Mid I-5, the largest speculative industrial facility ever built in the Pacific Northwest region. Project partners were civil engineer Gibbs & Olson, general contractor Sierra Construction and HPA Architecture. Construction began in August 2023.

The 1,185,327-square-foot building and soon-to-be LEED-certified property is at 2700 Talley Way in Kelso, Wash. The location is adjacent to Interstate 5 and the busy Exit 36, 2 miles north of the Washington-Oregon state line and less than 50 miles from Portland, Ore.

READ ALSO: Industrial Sector Settles After Supply Surge

The single-story, cross-dock facility has 8,000 amps of electrical service, 40-foot clear heights, 650 feet of building depth, 348 trailer parking stalls, 427 auto parking stalls and 219 dock doors.

There’s enough connected land to accommodate 475 additional trailer stalls, a yard area or 225,000 square feet of additional building space. Cara Nolan of CBRE Portland and Andrew Stark of CBRE Seattle handle the marketing and leasing efforts at the property.

“Portland has seen industrial development migrate further north and south along I-5 as developable property has become increasingly hard to find or problematic to develop,” Tyler Sheils, SIOR, senior managing director – Logistics and Industrial at JLL, told Commercial Property Executive.

He added the region has also seen an increase in tenant requirements or owner/user build-to-suits of more than 500,000 square feet over the last 10 or so years.

Low supply for large industrial spaces

In 2024, the wider Portland metro area saw three occupiers commit to spaces of more than 500,000 square feet.

“The Mid I-5 Industrial Park is the only project that could accommodate a 500,000-square-foot tenant in a modern Class A facility that is currently available,” Sheils said. “There is one additional project under construction that will deliver in 2025. Users of this size will have very few options to consider.”

Despite Portland experiencing negative absorption in 2024, direct rents continued to climb largely due to new construction, according to JLL research. They increased modestly in the third quarter to reach $0.87 per square foot on the shell, marking a 3.6 percent year-over-year increase.

After the market saw new sublease space increase by 80 basis points over the past two quarters, JLL reported that sublease availabilities have slowed substantially, adding a marginal 16,000 square feet in Q4.

The post Trammell Crow JV Delivers Northwest’s Largest Industrial Facility appeared first on Commercial Property Executive.

BKM Capital Partners has expanded an existing partnership with StepStone Real Estate, the real estate arm of StepStone Group, for the $154 million recapitalization of Pacific Business Center, a 10-building, 748,813-square-foot industrial campus in the Las Vegas market.

Constructed between 1996 and 1998, Pacific Business Center is comprised of 1045-1175 American Pacific Drive, 160-194 Gallagher Crest Road and 1060-1110 Mary Crest Road in Henderson, Nev. The Class A campus is 90 percent occupied with a diverse mix of high-quality tenants. In-place rents are projected to be 30 percent below market rate, giving BKM an opportunity for immediate value creation. The industrial center is in a designated Foreign-Trade Zone.

BKM, a Newport Beach, Calif.,-based real estate fund manager and operator that focuses exclusively on multi-tenant industrial assets in the Western United States, acquired the industrial center’s properties from Northwestern Mutual Real Estate as a portfolio transaction in July 2019 for $113 million. At that time, it was the firm’s largest deal.

The institutional-grade assets have had more than $12.4 million in capital improvements since 2010. Projects included installing high-quality HVAC and EVAP systems and LED lighting, as well as upgrading office finishes and painting building exteriors. Other features include 24- to 28-foot clear heights, ESFR sprinkler systems and new TPO roofs. BKM has since made other improvements to the facilities, including cosmetic renovations in 2017, according to CommercialEdge. Several of the buildings have two-level office build-out components, CommercialEdge reported.

Partnering with StepStone

In August 2023, BKM formed a partnership with StepStone Real Estate for a GP-led secondary direct transaction that included ownership in Pacific Business Center. SRE acquired interests in two assets, including Backlot Burbank, a light industrial property in Burbank, Calif., leased to entertainment companies. As part of that partnership agreement, SRE would invest in other small- and mid-bay industrial properties across Western U.S. markets.

READ ALSO: Stars Align for CRE Secondary Funds

The recapitalization of Pacific Business Center increases SRE’s ownership in an asset and market that both firms view favorably. BKM notes Las Vegas’s dynamic industrial market fundamentals combined with the asset’s rent growth potential and stable cash flow provide a strong foundation for success.

The Las Vegas industrial market is a versatile market that caters to both big-box tenants and smaller occupiers, with strong demand for spaces under 50,000 square feet, according to Cushman & Wakefield. The market has seen steady leasing activity, but an influx of new supply may give tenants greater leverage in lease negotiations, the firm stated in its third-quarter 2024 report for the Las Vegas industrial market. However, rising vacancy rates – the overall vacancy rate was 8.8 percent, up 180 basis points quarter over quarter in Q3 – may delay new development, which could help balance supply and stabilize vacancy levels, according to Cushman & Wakefield.

BKM’s other activities

The recapitalization of Pacific Business Center represents another milestone for BKM, which has invested more than $4.5 billion in more than 120 small and mid-bay light industrial properties since 2013. The firm has a value-add strategy and targets under-managed and under-capitalized assets. Over the past two years, BKM has acquired high-quality assets at pricing well below replacement cost. It has also undertaken several other recapitalizations.

In December, BKM partnered with Kayne Anderson Real Estate for a $550 million recapitalization of a nine-property light industrial portfolio totaling more than 2.1 million square feet in several urban markets. The largest of the properties is Hughes Airport Center, a 672,424-square-foot asset in Las Vegas. The rest of the portfolio is located in California, Arizona, Colorado and Washington state.

That same month, BKM recapitalized three San Diego business parks from its BKM Industrial Value Fund II LP, with Tokyu Land US Corp. for $76.9 million.

More recently, BKM acquired West Belt Business Park, a five-building industrial park totaling 260,887 square feet for $34.1 million in Houston’s Westchase submarket. Longpoint Realty Partners sold the property, according to CommercialEdge data.

The post BKM Recapitalizes Las Vegas Industrial Center for $154M appeared first on Commercial Property Executive.

PMB and Sharp Rees-Stealy have topped out the 75,000-square-foot medical outpatient building at 480 H St. in Chula Vista, Calif., a San Diego submarket. The development team includes HGW as architect and Pacific Building Group as general contractor. Completion is expected later this year.

Project partners also feature Solaris Community Capital as new market tax credit consultant, Chase New Markets Corp. as civic community partners and Border Communities as new market tax credit lenders.

Located in South San Diego, the facility is taking shape on more than 15 acres within walking distance of downtown Chula Vista, while downtown San Diego is 9 miles northeast. Other medical providers in the area include Scripps Mercy Hospital and the Sharp Chula Vista Medical Center.

READ ALSO: Why the Medical Outpatient Sector Is Poised for Growth in 2025

Upon delivery, the three-story medical facility will provide advanced health care including primary and specialty care, urgent care, physical therapy, radiology, cardiology, neurology and laboratory services. Additionally, the building will comprise ground-floor retail space, including a pharmacy and a café.

The property will also include a 127,000-square-foot parking structure with 375 stalls. The low-rise will have a second-floor pedestrian bridge connected to the parking structure.

San Diego MOB sector holds steady, despite rising vacancies

Only 135,884 square feet of medical office space were under construction in metro San Diego in the third quarter of last year, according to a Cushman & Wakefield report. The figure represented 0.9 percent of the market’s inventory. Meanwhile, the medical office overall vacancy rate clocked in at 7 percent, up 40 basis points year-over-year.

In August, Turner Impact Capital’s Healthcare Facilities Fund received a $29.1 million loan for a 64,231-square-foot medical office building in Chula Vista, Calif. The borrower will use the funds to convert the mid-rise and another one in Costa Mesa, Calif., into modern medical facilities.

The post PMB Tops Out San Diego-Area MOB appeared first on Commercial Property Executive.

JPMorgan Chase has signed a renewal and expansion agreement totaling 280,000 square feet in San Francisco’s Financial District, the San Francisco Chronicle first reported.

The company will expand its footprint at Hines’ 560 Mission St. building by 60,000 square feet for the next five years.

The deal comes as the company is asking its employees to return to the office five days per week. The expansion will also also enable JPMorgan Chase to relocate some of First Republic Bank’s former employees to 560 Mission St.

Following JPMorgan Chase’s takeover of First Republic Bank, which occupied 750,000 square feet of office space in downtown San Francisco until 2023, the company is now focusing on consolidating its workforce from the former bank’s space at 1 Front St. to the expanded office space in the Financial District.

First Republic Bank occupied some 460,000 square feet at Paramount Group’s 1 Front St., of which JPMorgan Chase initially agreed to keep some 300,000 square feet. In 2024, JPMorgan downsized its space there once again, marketing for lease another 244,000 square feet, according to The Real Deal.

The Class A office building at 560 Mission St., also known as the JPMorgan Chase Building, totals 667,782 square feet. Other tenants here include Ernst & Young, which occupies 122,760 square feet, as well as Seyfarth Shaw, Munger, Tolles & Olson and Arup, according to CommercialEdge. It is close to multiple bus and light rail stops that allow easy access to the Union Square area and to downtown San Francisco, while being 13 miles from San Francisco International Airport.

Hines developed the 420-foot-tall office tower in 2002 and has since continued to own and operate the asset. Rising 31 stories, the high-rise includes 21,698-square-foot floorplates, 5,000 square feet of retail space and 117 vehicle parking spots. The amenity package includes on-site food and beverages services, events, access to an outdoor plaza, dry-cleaning services, valet parking and EV charging stations.

San Francisco’s office market shows mixed signals

Despite being among the priciest office markets in the U.S., San Francisco recorded one of the highest vacancy rates in the nation, according to a recent CommercialEdge report. The metro had a 28.2 percent vacancy rate as of November last year, marking a 400-basis-point increase year-over-year, far outpacing the 19.4 percent national average.

The on-going struggles in the office sector have impacted the San Francisco market throughout 2024. In May, Google announced plans to exit its 300,000-square-foot space at One Market Plaza, as its lease will expire this April. The 1.6 million-square-foot office complex is owned by Paramount Group.

However, the market is also seeing notable leasing transactions. In November, Alexandria Real Estate Equities Inc. announced a long-term deal with Vaxcyte Inc. in San Carlos, Calif. The tenant signed a 10-year lease for 258,581 square feet at the company’s two-building Alexandria Center for Life Science.

The post JPMorgan Chase Commits to 280 KSF in San Francisco appeared first on Commercial Property Executive.

DJM Capital Partners has sold its ownership interest in Bella Terra, a lifestyle center of more than 1 million square feet in Huntington Beach, Calif. PGIM Real Estate remains the sole owner of the property.

The partners had purchased the asset back in 2015 for $100 million, according to CommercialEdge data. A loan provided by Metropolitan Life Insurance Co. financed the acquisition.

Originally built in 1966 as the first enclosed mall in Orange County, Bella Terra underwent several modifications over the years. The open-air lifestyle property now includes an 880,000-square-foot retail center, a 467-unit multifamily community and an 1-acre park.

READ ALSO: What’s in Store for Retail in 2025?

Anchored by Kohl’s, Burlington, Barnes & Noble, Cinemark Theaters, Whole Foods and Costco, Bella Terra also features a diverse mix of regional and national tenants such as The Cheesecake Factory, Starbucks, World Market, Ulta, Old Navy and Bank of America, among others. The property was 92 percent leased at the time of closing.

In recent years, DJM pursued a strategy of attracting popular restaurants as tenants at Bella Terra, which which led to visitor traffic increase.

Orange County’s retail scene

Located at 7777 Edinger Ave., the lifestyle center is right off the intersection of Interstate 405 and Beach Boulevard. The daily car traffic amounts to more than 250,000 vehicles in that area.

In the fourth quarter of 2024, Orange County’s retail investment sales totaled $164.7 million, according to a recent CBRE report. The metro ended the year with an availability rate of 3.8 percent, reflecting a slight decrease of 0.4 percent from the previous quarter. Factors such as rising construction costs and reduced land availability contributed to a drop in new space deliveries, which fell from 3,000 square feet in Q3 to none in Q4.

The post PGIM Buys Stake in Orange County Lifestyle Center appeared first on Commercial Property Executive.

Healthcare Realty has sold the West Valley Medical Portfolio, comprising 162,554 square feet across three medical office buildings in West Hills, Calif. University of California acquired the assets on behalf of UCLA Health, according to public records.

CBRE arranged the transaction on behalf of the seller. At the time of sale, the portfolio was 94.1 percent leased, with tenants including UCLA Health, Optum, City of Hope, LabCorp and Providence Health & Services.

The facilities are located at 7301, 7325 and 7345 Medical Center Drive, within walking distance of downtown West Hills. Downtown Los Angeles is within 29 miles. Other medical providers in the area include West Hills Smiles and Kaiser Permanente Woodland Hills Medical Center.

READ ALSO: Challenges Create Opportunities, Says MOB Investor

The properties are also adjacent to UCLA West Valley Medical Center, which UCLA Health acquired in March of 2024. That hospital is about 21 miles northwest of UCLA’s main campus in Westwood and includes 260 beds with seven operating rooms.

The 62,369-square-foot facility at 7345 Medical Center Drive, completed in 1985, rises six stories and went through cosmetic renovations in 2010. Dubbed Oak Hills Medical Plaza, the mid-rise has first-floor retail space, with floorplates averaging 10,536 square feet.

The building at 7325 Medical Center Drive, known as Park Hill Medical Plaza spans 43,000 square feet and was completed in 1991. The facility has two passenger elevators and more than 180 parking spaces.

CBRE Vice Chair Chris Bodnar, Executive Vice President Brannan Knott, Senior Vice President Zack Holderman, Senior Director Trent Jemmett, Vice Presidents Cole Reethof and Jesse Greshin, along with First Vice Presidents Angie Weber and Dana Nialis arranged the sale.

MOB sector continues to grow

The medical office real estate market is expanding, with a Savills report predicting a 26 percent increase in outpatient demand over the next 10 years. This rise is largely attributed to the aging population, despite current economic uncertainties impacting the commercial real estate sector.

Looking ahead, lower interest rates are expected to fuel medical office building investments. However, the medical labor market is struggling to keep up with the expansion, facing a notable shortage of specialists, particularly physicians and nursing staff.

The post UCLA Health Acquires MOB Portfolio appeared first on Commercial Property Executive.

Foxx Development Inc. has signed a 102,099-square-foot, full-building expansion at Britannia Technology Park, a 203,244-square-foot industrial campus in San Diego’s Otay Mesa submarket. Hines owns the two-building property through its Hines U.S. Property Partners investment fund. Cushman & Wakefield represented the landlord.

Foxx initially committed to the 101,145-square-foot warehouse at 7222 Airway Road in mid-2024. The new deal, involving the facility at 7498 Colchester Court, doubled the tenant’s footprint at the campus, which became fully leased.

READ ALSO: SoCal Industrial Market’s Comeback Story

Britannia Technology Park comprises two facilities that were part of the 52-acre Brown Field Technology Park. Hines picked up the assets in late 2023 for $60.9 million from developer Murphy Development Co., according to CommercialEdge.

Completed in 2023, the buildings feature 32- to 34-foot clear heights, heavy power and office build-out components. Additionally, the campus includes rooftop solar capacity, a fenced yard area, outdoor patio spaces, EV charging stations, skylights and a total of 328 vehicle parking spots.

The campus occupies almost 14 acres near State Route 905, interstates 5 and 805 and Brown Field Municipal Airport. The U.S.-Mexico border is neighboring the property, while San Diego International Airport is 21 miles away.

Cushman & Wakefield Vice Chairman Brant Aberg negotiated on behalf of the landlord.

San Diego industrial leasing slows down

San Diego’s industrial vacancy rate reached 6.5 percent during the fourth quarter of last year, up by 50 basis points over the quarter, according to a Cushman & Wakefield report. The was the highest rate recorded in the market since the third quarter of 2014.

New leasing deals totaled 665,000 square feet during the last quarter of 2024, down 46 percent quarter-over-quarter. However, the leasing volume for the full year new deals increased by 8 percent when compared to 2023.

The post Hines’ San Diego Park Reaches Full Occupancy appeared first on Commercial Property Executive.

CapRock Partners has sold West Valley Logistics, a 270,000-square-foot industrial asset in Pomona, Calif. A Southern California-based alternative fashion company acquired the property. Stream Realty Partners and Colliers represented the seller and the buyer, respectively.

The new owner plans to establish its corporate headquarters at the building. CapRock will assist the buyer with interior design and the construction of tenant improvements.

West Valley Logistics came online last month. CapRock broke ground on the project in the second quarter of 2023, financing its construction with a $50 million loan issued by JPMorgan Chase, according to CommercialEdge information.

READ ALSO: SoCal Industrial Market’s Comeback Story

Located on nearly 13 acres at 4200 Valley Blvd., West Valley Logistics is some 30 miles east of downtown Los Angeles. State routes 57 and 60 are less than 4 miles away, while Interstate 10 is about 6 miles from the facility. The Ontario International Airport operates less than 17 miles away.

The LEED-certified, rear-load building features 40-foot clear heights, 28 dock-high doors and two grade-level doors, as well as 240-foot truck courts and 10,000 square feet of office space. There are 130 auto and 45 trailer parking spaces at the property.

Stream Executive Vice Presidents Matt Moore and Wes Hunnicutt, together with Associate Michael Torres, represented the seller. Colliers Senior Executive Vice President Mike Hartel and First Vice President Nick Velasquez brokered the deal on behalf of the buyer.

CapRock’s industrial dealings

CapRock’s industrial portfolio—including its development pipeline—encompasses roughly 19 million square feet across Western markets and Texas, where the company made its first purchase in April.

After a few months, CapRock announced its first ground-up development in the Lone Star State. The three-building campus totaling 518,000 square feet will also rise in the Metroplex.

In the West, the firm marked another premiere in July, with the $81.5 million purchase of a 707,010-square-foot industrial building in Sparks, Nev. This was CapRock’s first acquisition in northern Nevada.

Los Angeles’ sizeable industrial investment scene

Greater Los Angeles’ industrial sales volume totaled some $2.5 billion during the first 11 months of last year, according to a CommercialEdge report. The metro ranked second among the Western markets after the Bay Area ($3 billion), but equaled Phoenix ($2.5 billion) and surpassed the Inland Empire ($1.9 billion).

Although the City of Angels kicked off 2024 with a strong industrial rent growth—being one of the few markets that posted a double-digit increase—the rate in November was 8.1 percent, down from 11 percent in July, the same source shows.

The Southern California industrial real estate market witnessed a resurgence of the owner-user buyer profile, according to prepared remarks by Taylor Arnett, senior vice president at CapRock. One such example was Ardmore Home Design’s October acquisition of the 282,377-square-foot asset it had occupied since 2020. LBA Realty sold the City of Industry property.

The post CapRock Sells Greater Los Angeles Industrial Asset appeared first on Commercial Property Executive.

Remington Nevada has sold Mountain’s Edge Marketplace, a 115,000-square-foot neighborhood shopping center in metro Las Vegas, for $50.3 million. CBRE arranged the transaction.

The buyer, an out-of-state investor, also assumed the existing $33 million CMBS note encumbering the property. The 10-year loan, issued by Morgan Stanley Bank in 2022, features interest-only payments at a rate of 4.51 percent for 60 months, followed by a calculated amortization under a 30-year basis, according to CommercialEdge information.

READ ALSO: What’s Driving the Retail Sector’s Growth?

The sale closed at a 6.3 percent cap rate and a 30-day due diligence period, three weeks after the loan assumption approval. The note’s interest rate, in the low 4 percent range, was one of the better-than-market terms that favored the transaction, CBRE’s Roy Fritz said in prepared remarks. Fritz and Preston Fetrow, both with the firm’s National Retail Investment Partners-West division, represented the seller.

Mountain’s Edge Marketplace, up close

The retail center is at 7975 Blue Diamond Road in Mountain’s Edge, a master-planned community in Enterprise, Nev., an unincorporated town in Clark County, southwest of Las Vegas.

Built in 2016 on about 14.8 acres, Mountain’s Edge Marketplace was 98 percent leased at the time of closing. Its tenant roster includes 40 national and local retailers, among which are Ross, Planet Fitness, Starbucks, Supercuts, The UPS Store, China A Go Go and T-Mobile. The center is shadow-anchored by an Albertsons supermarket, a property that was not included in the sale.

The retail center is some 16 miles from downtown Las Vegas, serving roughly 118,000 residents within a 3-mile radius. Its position on Blue Diamond Road benefits from a daily car traffic of 46,000 vehicles.

Mixed picture for the Las Vegas retail market

The Clark County retail market has been seeing both slower sales activity and decreased deliveries, according to a third-quarter report from CBRE. The latter presumably has helped with pulling average availability down by 10 basis points to 5.1 percent.

Overall absorption was 88,000 square feet in the third quarter, though power centers had 63,000 square feet of negative absorption over the same period, CBRE reported. Meanwhile, total investment sales amounted to $52.3 million.

In one of the quarter’s deals, Aspen Real Estate acquired a 226,000-square-foot foreclosed shopping center in Las Vegas for $24.7 million. The transaction marked Aspen’s second foreclosure purchase from LNR.

The post Las Vegas Shopping Center Sells for $50M appeared first on Commercial Property Executive.

CBRE Investment Management has sold 2600 Michelson, a 310,925-square-foot office building in Irvine, Calif., for $42 million. Southern California-based Gaines Investment Trust bought the property, according to Orange County Business Journal. A CBRE Investment Properties team represented the seller

CBRE IM had acquired the property in 2017 from Dune Real Estate Partners, with the help of a $72.4 million permanent loan originated by PNC Bank, CommercialEdge data shows. At that time, the office building traded for $120 million.

A LEED Gold-certified office property

Located at 2600 Michelson Drive on a 4.6-acre site in the Irvine Business Complex, the property is near Interstate 405 and John Wayne Airport. Tustin train station is 4 miles away.

Completed in 1986, the Class A asset rises 16 stories. The office building underwent recent renovations that focused on upgrading the lobby area, as well as adding EV charging stations, a conferencing facility and a fitness center.

LISTEN TO: CBRE’s Take on Rethinking Office Space and the Future of Flexibility

The LEED Gold-certified property also features an adjacent five-story parking structure with 1,013 spots. Its tenant roster includes Jacobs, Zillow, Staff Group West and Providence Wealth Management Group – Ameriprise Financial Services LLC, according to CommercialEdge information.

CBRE Vice-Chairmen Anthony DeLorenzo and Todd Tydlaska, together with Executive Vice President Sean Sullivan, First Vice President Sammy Cemo, Director Bryan Johnson and Broker Grant Goldman, negotiated on behalf of the seller.

DeLorenzo, Cemo and Johnson were also instrumental in the recent sale of a 185,180-square-foot office property in the nearby Tustin. The asset traded for $27.5 million, 14 percent less than its previous selling price.

The post CBRE IM Sells Orange County Office Asset for $42M appeared first on Commercial Property Executive.

The joint venture had purchased the asset from Nuveen Real Estate for $227.3 million back in 2014, according to Pacific Business News. The Massachusetts Mutual Life Insurance Co. provided a $120.5 million loan for the acquisition.

Completed in 1987 on some 41 acres, Town Center of Mililani underwent a $13 million renovation which was completed in 2017. The retail property is at 95-1249 Meheula Parkway, close to Highway 2.

Times Supermarket, Walmart, Consolidated Theaters, Longs Drugs, UFC Gym and Straub Family Health Center anchor the open-air shopping center. Its roster features a total of 78 tenants which also include AT&T, Bank of Hawaii, Five Guys, Great Heights, Fun Factory, Ninja Sushi, Panda Express, Pizza Hut, Starbucks, Supercuts, Taco Bell and Supercuts, among others.

READ ALSO: Retail Space in Focus: What’s Driving the Sector’s Growth?

With a 140-year history of real estate financing, PGIM Real Estate had $212 billion in assets under management and administration as of September 2024. In November, the firm provided a $171.4 million loan for the refinancing of the Southeast Grocery-Anchored Portfolio, a collection of eight retail properties totaling nearly 1.2 million square feet.

Hawaii’s retail scene

Oahu’s retail market has strong fundamentals due to its dense population and dynamic neighborhood areas, PGIM Managing Director Tom Goodsite said in prepared remarks. However, the state saw a significant drop in investment activity in the third quarter of 2024.

There were no retail investment sales recorded between July and September in Hawaii, according to a CBRE report. The third quarter of last year also witnessed a notable shift in rental trends, with the overall average net asking rent decreasing to $39.66, down $8.68 from the previous quarter. Additionally, the availability rate for retail spaces increased to 4.8 percent, up by 0.3 percent over the quarter.

The post MetLife JV Obtains $120M for Hawaii Shopping Center appeared first on Commercial Property Executive.

King Street Properties has purchased The Esplanade, a 241,963-square-foot life science campus in San Diego. Alexandria Real Estate Equities sold the asset for $120 million, according to public records. The transaction also involved a $166 million seller carry-back loan.

In a deal arranged by Newmark, Alexandria sold the buildings at 4755 Nexus Center Drive, 4757 Nexus Center Drive and 4796 Executive Drive. The agreement also encompasses the sale of a fourth building, which is scheduled to be finalized in late 2025.

Situated in San Diego’s University Town Center submarket, The Esplanade is adjacent to Interstate 805 and some 13 miles north of downtown San Diego.

The new owner intends to enhance the campus by adding shared amenities, upgrading the current lab infrastructure and expanding the available lab space. Planned common-area amenities include a conference room, a fitness center and improved outdoor gathering areas.

READ ALSO: What’s Defining Office in 2025?

The three facilities were built between 1991 and 2006. Back in 1998, Alexandria purchased the 54,540-square-foot 4757 Nexus Center for $16.2 million from Matrix Pharmaceutical, according to CommercialEdge data. In 2011, the company acquired from Arden Realty the 45,000-square-foot 4755 Nexus Center for $7.4 million, according to the same source. Afterward, the two properties were merged and rebranded as Esplanade – 4755 & 4757 Nexus Center Drive.

The Newmark team included Executive Managing Directors Brunson Howard, Rick Reeder and Brad Tecca, Co-Head of U.S. Capital Markets Kevin Shannon and Associate Tanner Harris.

Back in September, King Street Properties completed the first building at The Landing in Burlingame, Calif. At seven stories, the 300,000-square-foot structure at 1699 Bayshore will anchor the 4.5-acre campus. The second building, 1701 Bayshore, is currently under construction. It will be six stories tall and measure 203,500 square feet.

San Diego’s life science sector

Due to a reduction in venture capital investments and an influx of new office spaces entering the market, the life science sector—which had previously driven office development in the years following the pandemic—is now facing an oversupply issue.

Between 2021 and 2023, more than 30 million square feet of lab space commenced construction. However, only 948,000 square feet of new lab space broke ground in 2024, according to a recent CommercialEdge report.

San Diego’s office sector still attracts investment; the metro recorded $651 million in sales through the end of November. Development activity remained strong with around 3.1 million of square feet underway, while the vacancy rate clocked in at 20.5 percent, up 280 basis points over a 12-month period.

The post King Street Buys San Diego Life Science Campus for $120M appeared first on Commercial Property Executive.

Genesis, a joint venture between Bain Capital Real Estate and Phase 3 Real Estate Partners Inc., has obtained $484 million to refinance GENESIS Marina, a three-building life science complex totaling 566,661 square feet in Brisbane, Calif.

Brookfield’s Real Estate Credit group originated the loan, in a deal arranged by JLL Capital Markets.

The partnership had initially secured a $450 million construction loan originated in 2021 by Massachusetts Mutual Life Insurance Co., according to CommercialEdge. The note was to mature this year.

READ ALSO: The Most Active Life Science Markets in the US

Developed on an approximately 9-acre waterfront lot, the campus is close to U.S. Highway 101. The location on the 132-acre Sierra Point peninsula provides access to South San Francisco’s life sciences hub, as well as to the entire San Francisco area.

GENESIS Marina came online in December 2023 and includes three purpose-built facilities:

• 3000 Marina Blvd., a six-story building totaling 194,702 square feet
• 3300 Marina Blvd., a five-story building totaling 197,959 square feet
• 3500 Marina Blvd., a five-story building totaling 174,000 square feet

Including lab and office space, the Class A buildings feature floorplates ranging between 35,000 square feet and 43,500 square feet, passenger elevators, access to an on-site fitness center and a total of 1,037 parking spots spread across two levels. Other amenities feature a conference and event center, an on-site dining space, a cafe and an outdoor terrace, as well as EV stations, among others.

Life science real estate is struggling

According to a recent CommercialEdge report, the U.S. life science sector recorded just 948,000 square feet in construction starts at the end of last year, as opposed to more than 30 million square feet of lab space starting construction between 2021 and 2023. The difference in new projects is due to a record low lab space demand and a high volume of new supply.

San Francisco had 3.8 million square feet of office space under development as of November 2024, the report shows. The market ranked second on a national level after Boston (with 9.3 million square feet in the pipeline).

One notable life science project currently underway is IQHQ’s The Spur, a 330,000-square-foot building in South San Francisco, Calif. The developer topped out the first phase of the project in April 2024 and completion is expected later this year. The construction of the fully-electric life science building is backed by a $275 million loan.

The post Genesis Lands $484M for San Francisco Life Science Campus appeared first on Commercial Property Executive.

Miramar Capital has purchased Serrano Industrial Park, a three-building, Class A campus totaling 332,725 square feet in Jurupa Valley, Calif., for $86 million. CBRE negotiated on behalf of the seller, PreZero.

Completed in 2019, the manufacturing buildings are at 4350, 4388 and 4420 Serrano Drive. Collectively, they feature 28 dock-high and three grade-level doors, 30- to 32-foot clear heights, heavy power and fully secure concrete truck courts.

The industrial park is zoned specifically for manufacturing—not distribution—and has conditional use permits for recycling of various materials and the handling of organic waste, according to listing information from CBRE.

READ ALSO: Inland Empire Industrial Assets Trade Less Often, but Fetch Top Dollar

PreZero originally occupied the entire property, but now occupies just the asset’s largest building at 4420 Serrano Drive, Miramar Managing Partner Peter Eichler told Commercial Property Executive.

The property is in the northwest corner of Riverside County, in the Inland Empire West submarket. The location has easy access to State Route 60, Interstate 15 and the San Pedro Bay Port complex; it also is 7 miles from Ontario International Airport.

Joe Cesta and Darla Longo of CBRE National Partners, along with Erik Wanland, represented PreZero in the transaction. Cesta noted that demand in the Inland Empire is substantial for industrial facilities that can support manufacturing tenants that require heavy power.

Healthy variety

The Inland Empire currently enjoys the nation’s highest five-year asking rent growth forecast, with 28.9 percent growth projected from this year to 2029, according to CBRE Econometric Advisors.

In addition, the Inland Empire West saw 8.7 million square feet of net absorption in 2024, even as total square footage under construction fell by 64 percent year-over-year.

One of the underway projects is Schaefer Logistics Center. Developed by Lovett Industrial, the facility will come online in Chino, Calif., also in the Inland Empire West submarket.

The post Miramar Capital Pays $86M for Inland Empire Industrial Park appeared first on Commercial Property Executive.

Cushman & Wakefield brokered the sale and arranged the $93.8 million acquisition loan from institutional investors advised by J.P. Morgan Asset Management.

Broadway 101 Commerce Park’s sale has achieved multiple local milestones, such as being the biggest industrial transaction in Phoenix last year or the largest single deal for an industrial park in the Southeast Valley of Phoenix.

At the time of the sale, the industrial park was 98 percent leased to a total of 34 tenants. The roster includes Mitel, Stars Healthcare, Branded Bills, Accu-Tech, Factory Motor Parts and Evoqua Water Technologies, among others.

Built between 2005 and 2007, Broadway 101 Commerce Park encompasses 11 warehouse and industrial buildings spread on some 53 acres. The facilities feature 125 grade-level doors, 109 dock-high doors, ESFR fire sprinklers, insulated ceilings, climate control and parking spaces.

READ ALSO: Phoenix Industrial Development Remains Fast-Paced

Executive Vice Chair Will Strong, Director Michael Matchett and Senior Associate Molly Hunt from Cushman & Wakefield’s National Industrial Advisory Group – Mountain West worked on behalf of the seller. Executive Vice Chair Rob Rubano, Executive Managing Director Brian Share and Managing Director Joseph Lieske from the Equity, Debt & Structured Finance team arranged the financing.

Back in August, CIP acquired Tully Business Center, a small-bay, 143,221-square-foot industrial park in San Jose, Calif. Dollinger Properties sold the asset for $40 million.

Phoenix’s strong industrial scene

Located 2140-2360 West Broadway Road, the industrial park is in Phoenix’s Mesa submarket, within a 67.5-acre master-planned park. Broadway 101 Commerce Park is centrally located near the Sky Harbor Airport/Tempe area, providing access to Loop 101, Loop 202 and US-60 freeways, as well as proximity to the light rail.

Phoenix’s industrial market continues to thrive, with the industrial sales volume reaching nearly $2.2 billion in 2024 through October, according to a recent CommercialEdge report. The average price per square foot stood at $162, with more than 15 million square feet of industrial space changing hands.

The metro also led the nation in terms of industrial development, despite a slowdown in construction starts. At the end of October, metro Phoenix had approximately 24.7 million square feet of industrial space under construction.

The post CIP Real Estate Pays $168M for Phoenix Industrial Asset appeared first on Commercial Property Executive.

Montecito Medical Real Estate has acquired Chandler Medical Pavilion, a 65,931-square-foot outpatient facility in Chandler, Ariz., for $30 million.

JLL’s Medical Properties Capital Markets team brokered the transaction and worked on behalf of the seller, a partnership between Unbound Development and Webb Investments.

In early 2022, the property became subject to a 10-year, $22 million permanent loan from First-Citizens Bank & Trust Co., CommercialEdge data shows.

Tailor-made for Banner Health

The Class A medical office building is fully leased, as the property was completed in 2021 to meet the needs of a single tenant, Banner Health. Chandler Medical Pavilion is a three-story ambulatory surgery facility featuring three operating rooms, an imaging center and cardiology department, as well as a Banner Health Clinic with gastroenterology, endocrinology and orthopedics divisions. The property includes grade-level parking with upwards of 300 spots.

Chandler Medical Pavilion is at 1125 S. Alma School Road, just off Arizona State Route 202 and across the road from the Banner Ocotillo Medical Center. Chandler Regional Medical Center and the East Valley Dermatology Center are both less than 2 miles from the property. Downtown Phoenix is some 22 miles northwest.

In a recent interview with Commercial Property Executive, Alliance CGC Founder & CEO Ben Reinberg talked about the factors currently fueling demand for medical outpatient centers across the country.

The post Fully Leased Phoenix Medical Facility Changes Hands appeared first on Commercial Property Executive.

LaSalle Investment Management has acquired Tempe Commerce Park, a five-building industrial complex totaling 536,122 square feet in Tempe, Ariz. The acquisition was made on behalf of LaSalle Property Fund, the company’s U.S. core open-ended fund. An acquisition price was not disclosed.

Located at 7340-7360 S. Kyrene Road and 7333-7343 S. Hardy Drive, Tempe Commerce Park provides accessibility to several major transportation routes, including Interstate 10 and U.S. Route 60.

The property, which totals more than 36.7 acres, features 24-foot clear heights and dock-high as well as grade-level doors. The complex is 92 percent leased to eight tenants, including McKesson, Genuine Cable Group and Rivian.

LaSalle manages $88.2 billion of assets in private and public real estate equity and debt investments as of Q3 2024. The firm’s clients include public and private pension funds, insurance companies, governments, endowments, corporations and high-net-worth individuals worldwide.

READ ALSO: 2024 Industrial Net Lease Sales and Cap Rates

JLL represented the seller, a global investment manager and BKM Capital Partners, in the sale to LaSalle. The JLL effort was led by Senior Managing Director Mark Detmer, Senior Director Greer Oliver and Associate Connor Nebeker-Hay. The local market leasing efforts were handled by CBRE Senior Vice President Jackie Orcutt and First Vice President Jonathan Teeter.

BKM Capital Partners focuses on investing in small and mid-bay light industrial properties in the western U.S. In December, the company undertook a $550 million recapitalization of a nine-property light industrial portfolio totaling more than 2.1 million square feet in the West.

Phoenix industrial supply overshoots demand

Greater Phoenix has been one of the U.S. industrial markets to see a post-pandemic boom in demand that outpaced supply, followed by a more recent ramping up of supply that has outpaced demand. 

In 2019, new supply was ahead of net absorption, but by a relatively small amount, with both figures hovering around 5 million to 6 million square feet that year, according to JLL data.

By 2021, pandemic-era demand for online sales, deliveries and last-mile logistics spurred a spike to nearly 20 million square feet of net industrial absorption, with new supply that year only a bit more than half of that, JLL notes. By 2023, however, new supply shot ahead that year to more than 30 million square feet, or roughly three times the total net absorption. Thus, vacancies are up. Total vacancy was at 12.5 percent as of Q3 2024, reports JLL. However, the report further forecasts that development will soon taper off. The absorption of recently delivered space will thus lead to an anticipated peak in vacancy rates in 2025.

The post LaSalle Acquires Industrial Park in Tempe appeared first on Commercial Property Executive.

Fort Street Partners and Chestnut Healthcare Real Estate have formed a programmatic joint venture to acquire and develop up to $150 million in assets over the next four years. The duo will focus on core and value-add investments in outpatient medical and surgery centers in the Greater Salt Lake City area.

JLL Capital Markets arranged the venture between the two firms, which have previously collaborated on at least two other Utah deals last summer.

In June, Fort Street Partners secured the equity for a 20,399-square-foot medical project in Syracuse, Utah, through Chestnut Healthcare. Located at 3000 W. Antelope Drive, the development is scheduled to come online later this year and is fully preleased to three regional physician groups.

READ ALSO: Challenges Create Opportunities, Says MOB Investor

A month later, the two companies obtained equity placement for the Eagle Mountain Medical Center development, a 24,655-square-foot medical building at 4263 N. Pony Express Parkway in Eagle Mountain, Utah. The two-story facility is expected to come online toward the end of this year.

JLL Capital Markets Director CJ Kodani and Managing Director Mark Root led the team that arranged the joint venture.

MOB sector remains steady

The medical office real estate sector is on an upward trajectory, with a Savills report forecasting a 26 percent rise in outpatient demand over the next decade, primarily due to the aging population, and despite the current economic uncertainties affecting the commercial real estate sector.

Economic incentives, particularly decreasing interest rates, are anticipated to boost MOB investment going forward. However, the medical labor market is far from keeping pace, with the sector facing a significant shortage of specialists, especially physicians and nursing staff.

The post Chestnut Healthcare, Fort Street Form $150M JV appeared first on Commercial Property Executive.

Despite a slow start in early 2024, San Francisco’s office construction activity picked up pace as the year progressed and became one of the largest in the nation. Developers are continuing to break ground on new developments, with most projects belonging to the life science sector, according to CommercialEdge data.

In contrast, the market’s sales activity was low through 2024, on par with 2023’s trend. Nevertheless, San Francisco emerged as the priciest office market in the U.S., surpassing Manhattan in terms of average sale price per square foot.

Second-largest pipeline in the country

As of November, 3.8 million square feet of office space was under construction across 20 properties in San Francisco, representing 2.3 percent of existing stock—above the national figure 0.8 percent. Among similar markets, Boston led the rankings with 3.6 percent, while San Francisco outperformed Los Angeles (0.7 percent), Manhattan (0.6 percent) and Chicago (0.3 percent). When adding office projects in planning stages, San Francisco’s share reached 9 percent, second after Miami (9.4 percent) and surpassing Boston (8.6 percent).

In terms of square feet underway, San Francisco had the second largest pipeline, after Boston’s 9.3 million square feet. The vast majority of the project rising within the market are life science developments.

Kilroy Realty’s Buildings D, E and F at Kilroy Oyster Point, slated to aid 865,000 square feet of space, is one of the largest projects under construction. A trio of life science buildings are part of the developer’s 3 million-square-foot waterfront project in South San Francisco. Construction commenced in 2022 and the delivery date was pushed to the end of 2025.

Another notable project is IQHQ’s The Spur, a 326,000-square-foot high-tech life science building at 580 Dubuque Ave. in the same submarket. Backed by a $275 million construction loan, the development topped out earlier this year and is expected to come online in early 2025.

Year-to-date through November, developers delivered 2.7 million square feet across 13 properties in the metro, representing 1.4 percent of total stock, while construction starts included 911,700 square feet of space across three properties—accounting for 0.5 percent of total stock.

Among notable properties that came online recently is Lane Partners’ Southline Building 1, a 375,000-square-foot life science building at 30 Tanforan Ave. also in South San Francisco. The property, financed by a $373 million construction loan, represents the first phase of Southline, an office and R&D development that will comprise up to 3 million square feet of space.

Office-to-residential conversions in San Francisco

The office sector is still struggling with high vacancies and office-to-residential conversions have emerged as an attractive option. Recently, CommercialEdge launched the Conversion Feasibility Index, a Yardi-powered tool that measures a building’s potential for a residential makeover.

The CFI score has three tiers, with Tier I office properties being the most suitable candidates. San Francisco had 112 properties—totaling 11 million square feet—in the Tier I category. Additionally, the metro had 295 office building in the Tier II category, totaling nearly 36.3 million square feet.

Work has begun on the repurposing of the historic Humboldt Bank Building. In October, Forge Development Partners started the conversion of the 1908-built mid-rise totaling 91,804 square feet. The developer plans to invest $70 million in the reimagining of the office building into a 124-unit residential community. The Seligman Group is the owner of the property that bears a CFI score of 91 points.

Prices high, low investment activity

Year-to-date through November, San Francisco’s office sector saw $747 million in deals, with 29 properties totaling nearly 1.9 million square feet changing hands. The metro continued last year’s limited sales activity: in 2023, transactions amounted to $722 million and 2.3 million square feet.

Among gateway metros, San Francisco’s total sales volume surpassed only Seattle’s ($687 million), while Manhattan led the nation with $3.8 billion in deals.

One of the priciest sales in San Francisco this year was the $222.2 million acquisition of Sand Hill Commons, a 133,000-square-foot, two-building office campus in Menlo Park, Calif. The buyer was Norges Bank Investment Management, that acquired a 97.7 percent ownership stake in the property from Clarion Partners and Invesco Real Estate.

Office properties changed hands at an average sale price of $384 per square foot—significantly above the national average of $179 per square foot. Among gateway markets, San Francisco emerged as the priciest office market, outperforming the usual leader Manhattan ($379 per square foot), that was followed by Miami ($376 per square foot), Los Angeles ($355 per square foot) and Washington, D.C. ($213 per square foot).

San Francisco’s vacancy rate highest in the U.S.

San Francisco’s office vacancy rate clocked in at 27.7 percent as of November—surpassing the national figure of 19.4 percent and marking a 400-basis-point increase. Tech markets are posting some of the highest rates in the country, with San Francisco and Austin ranking first.

In contrast, one of the lowest rates were registered in similar markets, such as Miami (14.4 percent), Los Angeles (15.7 percent), Manhattan (16.7 percent) and Boston (16.8 percent). The only gateway metro with a significant increase in vacancy was Seattle, that recorded a 25.8 percent figure.

In May, Google gave up 300,000 square feet of office space at One Market Plaza, a two-building office complex totaling 1.6 million square feet in San Francisco. Nevertheless, notable office leases transpired recently in the metro. Among them is Alexandria Real Estate Equities Inc.’s 258,581-square-foot, long-term deal with Vaxcyte Inc. The company has been an anchor tenant at Alexandria Center for Life Science, a two-building property in San Carlos, Calif.

Flex office providers increasing operations in the metro

San Francisco’s coworking market comprised 3.7 million square feet of space as of November, more than in Miami and Seattle, that had 2.9 million square feet each. The share of flex office space as percentage of total leasable office space in the metro reached percent 2.2 percent, above the national figure of 1.9 percent.

The flex office provider with the largest footprint in the metro remained WeWork, with operations totaling 736,795 square feet. The companies that followed were Gateway Labs by Lilly (438,339 square feet), Regus (337,544 square feet), Studio by Tishman Speyer (237,947 square feet) and Spaces (186,402 square feet).

The post San Francisco Office Construction Rebounds Amid High Vacancy appeared first on Commercial Property Executive.

The decline in office projects under construction did not avoid Western U.S. markets. The following list shows leading markets for office development underway in the region, while also highlighting projects delivered through the first eleven months of 2024.

The top four markets had a combined office pipeline amounting to only 694,266 square feet, a significant drop from the 1.6 million square feet that broke ground during the same interval in 2023. In terms of office deliveries, developers completed almost 2 million square feet, whilst some 2.9 million square feet had come online in 2023. The difference marks a 31 percent decrease in new office space across the metros in the region. Here are the top markets for office development in the Western U.S., based on CommercialEdge data.

Phoenix

Phoenix had 373,247 square feet of office space spread across seven properties under construction as of November. The metro is still struggling with supply and posted one of the smallest pipelines among Sun Belt metros.

Developers broke ground on all these projects during the same month, while office deliveries totaled 646,629 square feet across 10 properties year-to-date as of November. SunCap Property Group’s Gilbert Spectrum’s Building 3 remains the largest office project under construction in Phoenix. The 119,222-square-foot building is part of the company’s Gilbert Spectrum project, a 64-acre office campus in Gilbert, Ariz., that will include 850,000 square feet of office, tech and flex industrial space.

In contrast, nine properties broke ground during the same period last year, totaling 619,213 square feet, while developers delivered 712,719 square feet across 12 properties.

Denver

In terms of space underway, Denver followed with just under 200,000 square feet across five properties. There were seven office projects totaling 1.3 million square feet that were completed as of November.

One of them is 1900 Lawrence, developed by Riverside Investment & Development, that includes 726,450 square feet of Class A space. Rising 30 stories in Denver’s central business district, the high-rise is one of the largest skyscrapers delivered in the metro over the last 40 years.

When looking at last year’s data, Denver had 776,904 square feet across seven properties under construction, while developers completed 10 other properties, or 1.4 million square feet.

Salt Lake City

Salt Lake City had only two properties totaling 84,655 square feet underway as of November, both starting construction in the same period. There were 91,638 square feet of space across three delivered properties. This amount marks an 84 percent decrease compared to 2023 data, when 574,349 square feet of office space was completed. In terms of space under construction, Salt Lake City had 214,867 square feet across five properties underway at this point in 2023, a 60 percent decrease from the current pipeline.

Boise and other metros with limited activity

Boise, Idaho had only one office project underway as of November, totaling 37,067 square feet, with no significant deliveries recorded this year. In 2023, developers delivered 255,500 square feet of office space across three properties in the capital city of Idaho.

Other large Western markets on the list include Las Vegas, Reno, Nev., Albuquerque, N.M., and Tucson, Ariz. These posted either a too limited pipeline or barely any development underway as of November, showcasing the overarching slowdown in office development, not only in the region but in the country at large. This year’s numbers show that only Las Vegas and Albuquerque saw any significant office completions, with 458,810 square feet across six properties, and 95,000 square feet across a single property.

When looking at 2023 data, three properties totaling 402,042 square feet of office space came online in Las Vegas. The only metro where developers delivered significant properties was Albuquerque, with these buildings totaling 110,915 square feet.

The post Top Markets for Office Development in the West appeared first on Commercial Property Executive.

A joint venture of George Oliver Cos. and Ascentris has acquired 7272 E Indian School, a 165,220-square-foot office building in Scottsdale, Ariz., for $42.3 million. Seller Goldman Sachs Asset Management LP bought the asset in 2016 from Lowe for $40 million, according to CommercialEdge information. JLL arranged the current deal for the seller.

7272 E Indian School, along with two other similar assets the partnership purchased this year—4167 and 4141 N. Scottsdale Road—will be renovated and transformed into an office campus carrying the George Oliver trademark.

Located 12 miles east of downtown Phoenix, the three adjacent properties are at the corner of Scottsdale Road and Indian School Road, totaling over 350,000 square feet on a 6-acre site. With George Oliver Design in charge of design and architecture, the campus, soon to be dubbed Old Town Scottsdale, is scheduled to begin renovations in 2025.

The last piece of the puzzle

Completed in 1988, the five-story office building at 7272 E Indian School Road previously underwent renovations in 1998 and 2012. On-site amenities include conference rooms, individual pods for teleconferencing and podcasting, as well as a fitness center, dining and bar areas and EV charging stations. The tenant roster comprises Cornerstone Advisors of Arizona LLC, Crest Insurance Group LLC, Puritan Life Insurance Company of America, along with Grossman Company Properties.

JLL’s Senior Managing Director Ben Geelan and Senior Director Will Mast, together with Jack Miller and Real Estate Analyst Virginia Martin, worked on behalf of the seller in the present transaction.

The post George Oliver, Ascentris Buy Last Piece of Phoenix Office Campus appeared first on Commercial Property Executive.

Bridge Industrial has purchased a two-building industrial portfolio totaling 315,422 square feet in Kent, Wash. An entity affiliated with Link Logistics sold the assets for $64.2 million, according to King County public records.

The buyer also secured a $46.7 million originated by PGIM Real Estate, the same source shows. CBRE brokered the deal on behalf of the seller.

The portfolio includes two industrial buildings dubbed Kent Valley DC II and Kent Valley DC IV, at 6111 S. 228th St. and 6205 S. 231st St. Built between 1995 and 1997, the two properties feature clear heights between 24 and 30 feet, ample column spacing, sky lights, ESFR sprinkler systems, office build-out components, dock levers and bumpers and a total of 397 vehicle parking spots, according to CommercialEdge.

Located some 18 miles from downtown Seattle, Kent Valley DC II and Kent Valley DC IV occupy approximately 15 acres close to Interstate 5, as well as to state routes 167 and 516. Seattle-Tacoma International Airport is 5 miles away, while King County International Airport is 14 miles away.

CBRE Executive Vice Presidents Paige Morgan, Andrew Stark and Andrew Hitchcock, together with Vice Chairman Brett Hartzell, represented the seller.

Seattle attracting significant deals

As of November, Western industrial markets continued to occupy top positions for industrial investment volume, six of them recording year-to-date figures above $1 billion, according to a recent CommercialEdge report.

Sales in Seattle totaled $1 billion—more than double the 2023 amount. The market also posted one of the highest sale prices per square foot in the nation, at $208 per square foot, ranking sixth among the most priciest metros in the U.S.

Recent industrial deals in the area include EQT Exeter’s $81.5 million purchase of a 202,464-square-foot building in Tukwila, Wash. Amazon fully occupies the metro Seattle property.

The post Bridge Industrial Makes $64M Purchase in Seattle appeared first on Commercial Property Executive.

The seller, Regent Properties, had acquired the property from FCA Partners for $58.6 million back in 2014. The campus is subject to a 78-year unsubordinated net ground lease held by the State of Arizona, according to CommercialEdge data.

Discount Tire has been a tenant at Desert Ridge Corporate Center since 2019, where it occupies an entire floor. The location is 4.7 miles from the retailer’s main headquarters. Additionally, it’s just a mile away from the 35-acre site it purchased in December 2022 for the construction of a new corporate campus.

READ ALSO: Office Sector Decline Continues Amid Flexibility Shift

The 12-acre Desert Ridge comprises two four-story office buildings, measuring 137,983 square feet and 137,225 square feet, that were completed in 2005 and 2007, respectively. The property features electric vehicle charging stations, elevators, controlled access and a three-level parking structure.

Located at 20830 and 20860 N. Tatum Blvd., the office campus is near major routes including the Loop 101 and Squaw Peak Parkway. The buildings are directly opposite The Marketplace at Desert Ridge, a 1 million-square-foot retail hub.

A top 10 best-performing market for office investment

Phoenix remained one of the top 10 best-performing markets for office investment, according to recent CommercialEdge data. However, the Valley’s development activity slowed this year, the under-construction pipeline being one of the smallest among the major U.S. metros at the end of October.

The market’s office sales volume totaled $1 billion year-to-date through October, comprising 7.2 million square feet across 82 assets. The dollar value was up by 18.5 percent on a year-over-year basis.

The post Discount Tire Buys Phoenix Office Campus appeared first on Commercial Property Executive.

Los Angeles’ office sector is ending the year with a new supply struggle, while investment activity picked up, placing the market among the most active metros in the country in terms of transactions, CommercialEdge data shows. The increase is paired with one of the highest prices in the nation, as Los Angeles was the third-priciest office metro in the country as of October.

With the rise of office vacancies across gateway markets, Los Angeles has fluctuated throughout the year, showing a slight improvement in September. Despite the difficult office landscape, there were some notable office leases that closed in the metro, with one of them dubbed the largest new office lease signed so far in 2024.

As of October, the metro had 1.5 million square feet of space under construction across 13 properties, representing 0.5 percent of the existing stock—nearly half the national rate of 0.9 percent. The metro only outperformed Chicago’s 0.3 percent among gateway markets. Boston led the fold with 4.3 percent, followed by Miami (2.9 percent), San Francisco (2.3 percent), Seattle (1.3 percent) and Manhattan (0.6 percent).

L.A. office development continues on large-scale projects

When it comes to square footage, the City of Angels’ pipeline outperformed Chicago in absolute numbers, too (1.9 million square feet under construction), as well as Washington, D.C. (2.3 million square feet), while Boston led the nation in this regard also, with 10.4 million square feet underway.

The largest office development currently underway remains the 731,250-square-foot Century City Center, developed by JMB Realty. Rising 37 stories at 1950 Avenue of The Stars, the Class A high-rise’s construction started in August 2023, with completion scheduled for early 2026. The project is financed by a $575 million construction loan provided by Crestbridge.

Another notable project is Echelon Studios’ 388,000-square-foot office component at 5601 Santa Monica Blvd. Developed by BARDAS Investment Group, in partnership with Bain Capital, the creative office and studio will be part of the companies’ two-building, 600,000-square-foot campus project. The development, backed by a $300 million construction financing, commenced construction last month and is expected to come online in April 2026.

Developers started construction on eight projects in the first 10 months of the year, totaling 419,000 square feet. With planned and prospective projects added, the metro’s pipeline reached 2.8 percent of total stock—still below the national figure of 3.2 percent but higher than Manhattan’s 2.5 percent.

Meanwhile, developers delivered 1.2 million square feet of space across 15 properties, with one of the largest being the 331,000-square-foot office building at 444 Universal Hollywood Drive in Studio City, Calif. Developed by NBC Universal, the 11-story Class A+ building was completed in September. The amount of office space delivered in the metro marked a 28.6 percent drop in year-over-year completions.

Los Angeles’ office inventory shows strong candidates for office-to-residential conversions

As developers and office investors struggle with high office vacancy rates and shifting market conditions, the interest in office conversions is picking up across the nation. The Conversion Feasibility Index is a new tool developed by CommercialEdge that shows property-level scores based on a comprehensive list of building features, assessing the building’s potential for residential conversion.

The index showed that in July, Los Angeles had more than 20 percent of its existing office inventory as solid candidates for residential conversions, above the national average of 14.8 percent of total stock.

Some examples of planned office-to-residential conversions include the makeover of 6380 Wilshire Blvd., a 150,246-square-foot office building in the metro’s Wilshire Corridor submarket. Jamison Services, a prolific developer of office to apartment projects in Los Angeles, filed plans last year to convert the 1967-built property intro a 210-unit residential community. CommercialEdge data shows a CFI score of 79 points, making it a Tier II candidate.

Jamison Services is now converting the 18-story South Tower of The Towers on Wilshire office campus, with plans to add 255 residential units and an extra 19th floor. The 217,406-square-foot office property originally came online in 1961 at 695 S. Vermont Ave. CommercialEdge shows a CFI score of 81 points, making it a Tier II property.

Pricey deals put LA among best-performing metros

More than 10 million square feet across 53 office properties changed hands in the metro for a total of $1.8 billion through the first 10 months of this year, with Los Angeles ranking fourth among the best-performing metros in the U.S. The investment volume marked a 30.6 percent year-over-year increase—way above the national average of 4.1 percent but almost the same as last year’s data.

Across peer markets, the metro’s investment activity outperformed those of Boston ($1.1 billion), Chicago ($987 million), Miami ($983 million), San Francisco ($722 million) and Seattle ($668 million), while Manhattan led the rankings with $3.3 billion in sales.

Significant sales included the $185 million acquisition of 2220 Colorado Ave., a 201,006-square-foot office building in Santa Monica, Calif., occupied by Universal Music Group. The property was acquired by Drawbridge Realty from Clarion Partners, after 20 years of ownership.

Another notable deal was the $141.5 million sale of 9536 Wilshire Blvd., a 178,174-square-foot office property in Beverly Hills, Calif. The property is part of Wilshire Rodeo Plaza, a 300,000-square-foot office-and-retail asset spanning an entire city block. The Mateen Brothers, including Tinder founder Justin Mateen, acquired the asset from Nuveen as part of a $211 million deal, marking the largest property deal in this submarket since 2019.

Office assets in Los Angeles traded at an average sale price of $354 per square foot—above the national average of $177 per square foot and higher than the prices recorded in Manhattan ($344 per square foot), Seattle ($263 per square foot) and Washington, D.C. ($225 per square foot). Los Angeles ranked third across the priciest office markets in the U.S., with San Francisco leading ($392 per square foot) and Miami following ($369 per square foot).

Vacancy still on the rise, despite large leases

Los Angeles’ office vacancy fluctuated in 2024, but as of September it stood at 16.3 percent. One significant deal that closed recently is CIM Group’s 198,553-square-foot lease in downtown Los Angeles, at its City National 2CAL, a 1.4 million-square-foot skyscraper. The tenant is Southern California Gas Co., which will use the space at the property as its new headquarters. The deal is the largest new office lease signed so far in 2024.

Cruzan signed a 32,241-square-foot deal at its Wilshire & Pal, a creative office building totaling 110,000 square feet in Beverly Hills. The tenant is global music company Concord, which will move its Los Angeles office to the redeveloped property.

The largest lease extension in the metro remains Snap Inc.’s 467,000-square-foot deal at Santa Monica Business Park. The tenant signed a 10-year commitment at the 1.2 million-square-foot creative office campus, owned by BXP, where it was a tenant since 2017.

Los Angeles is still a coworking hotspot

As of October, the coworking sector in the City of Angels consisted of 6.5 million square feet, ranking as the fourth-largest flex office hub in the country after Manhattan (11.2 million square feet), Chicago (6.8 million square feet) and Washington, D.C. (6.7 million square feet). Other gateway markets with significant coworking footprints included Boston and San Francisco, with 4.8 million square feet and 3.6 million square feet, respectively.

Year-to-date through October, the flex office provider with the largest footprint in the metro was Regus (735,656 square feet), followed by WeWork (709,408 square feet), Spaces (594,194 square feet), Premier Workspaces (517,623 square feet) and Industrious (427,407 square feet).

The latter signed a 19,000-square-foot lease in Century City, Calif., in April at Watt Cos.’ North Tower of Watt Plaza, a 476,120-square-foot office property. The flex office provider entered into a 10-year agreement for a full floor of the property. During the same month, Industrious also opened a new 20,752-square-foot coworking location in Westwood, Calif. The flex office space is at Douglas Emmett’s Westwood Center, a 333,830-square-foot property.

The post Strong Deals and High Prices Keep LA Among Top Office Markets appeared first on Commercial Property Executive.

One to four tenants can fit within the Surprise Pointe Commerce Center, which features 80 dock doors, a 190-foot truck yard, a 36-foot clear height, 103 truck trailer parking stalls, 466 auto-parking stalls and custom-designed office space.

Rockefeller Group was excited about the opportunity to develop in Surprise, Noah Goldstein, development associate for Rockefeller Group’s West Region, told Commercial Property Executive.

“We were attracted by its perfect blend of strategic location, business-friendly environment and proximity to TSMC,” he said. “Given the rise in emerging industries calling Surprise home, we saw a chance to contribute to the city’s growth during such a formative time.”

Rockefeller Group has been active in developing industrial buildings in the Phoenix and Arizona market for decades, including projects in Chandler, Gilbert and Tucson. Further, Rockefeller Group has developed multifamily projects in Goodyear, Gilbert and North Phoenix, with several projects under construction in the Laveen area of Phoenix.

The Phoenix-area market continues to thrive

As for distribution center demand, Goldstein said the past two years have been slower compared to the exciting run-up seen during the COVID-19 era, but the future of Phoenix is as exciting as ever.

“We expect demand to continue pushing up as the state sees more job, labor and housing growth. Every week, we read about new companies moving their regional or corporate headquarters to the city, and we expect this trend to continue.”

READ ALSO: How Automation and AI Shape Industrial Demand

Interstate 10 and Loop 303 are easily accessible to the site, which is also near U.S. 60, Interstate 17 and Loop 101. Therefore, the facility can also serve Tucson, Las Vegas, all of Texas and Albuquerque, N.M.

Cooper Fratt and John Werstler of CBRE are marketing the project for lease or sale.

Layton Construction was its general contractor, Ware Malcomb the designer and Rockefeller Group’s civil engineer was Hunter Engineering.

In September, a joint venture of Matan Cos, Mitsubishi Estate New York, Chuo Nittochi and Taisei USA LLC, along with Rockefeller Group, began construction on the first phase of Port 460 Logistics Center in Suffolk, Va. The plan is for it to comprise about 5 million square feet.

The first phase of the 540-acre campus will consist of 2.4 million square feet across five buildings. The second phase will comprise four facilities totaling 2.6 million square feet.

In May, construction began on the Rockefeller Group Logistics Center at Carneys Point, a two-building, more than 1.1 million-square-foot campus in Carneys Point, N.J. This is Rockefeller’s second such project in Southern Jersey. Rockefeller built a 345,600-square-foot warehouse in Mount Holly, N.J.

The post Rockefeller Group Wraps Phoenix-Area Project appeared first on Commercial Property Executive.

Investment & Development Ventures has sold IDV Speedway, a 349,875-square-foot industrial building in Las Vegas. AEW Capital Management paid $54.3 million for the Class A property, according to Clark County public records. JLL worked on behalf of the seller.

IDV Speedway came online in the first quarter of this year at 5150 N. Sloan Lane. Investment & Development Ventures had acquired the 19-acre development site in 2022 for $12.4 million, according to CommercialEdge.

Currently vacant, the facility features 36-foot clear heights, ESFR sprinkler systems, two grade-level doors, 52 dock-high doors, 179 vehicle parking spots and 67 trailer parking spots. The one-story building also includes an approximately 4,200-square-foot office component, as well as evaporative cooling and LED lighting in the warehouse area. Furthermore, the property features an additional 1.5-acre site for extra parking spaces.

IDV Speedway provides easy access to interstates 15 and 11, while being 12 miles from North Las Vegas Airport, 17 miles Harry Reid International Airport and 12 miles from downtown Las Vegas. The industrial asset is in the North Las Vegas submarket, in an area with tenants such as FedEx, Amazon, Prologis, DHL and Lowe’s.

JLL Senior Managing Director Mark Detmer with the Capital Markets team, together with Senior Managing Directors Rob Lujan and Jason Simon with the firm’s Las Vegas Markets Team, led negotiations on behalf of the seller.

Recent significant delas in Las Vegas

Las Vegas’ industrial sales volume totaled $242.3 million during the third quarter of this year, according to a CBRE report. The amount marked a 28.9 percent increase year-over-year.

In one of the largest deals of the quarter, Ares Management paid $78.9 million for AirPark Heights, a six-building, 339,000-square-foot industrial campus in Henderson, Nev. TA Realty sold the asset purchased for $53.5 million two years ago.

Earlier this year, CapRock Partners and Ares Management sold a 230,889-square-foot industrial campus in Las Vegas. EastGroup Properties acquired the asset for $54.8 million.

The post AEW Makes $54M Purchase in Las Vegas appeared first on Commercial Property Executive.

International private equity firm Cabot Properties has selected Kidder Mathews Asset Services to manage an industrial portfolio of eight properties totaling 984,218 square feet in the Greater Seattle area.

The portfolio is a key assignment for Kidder Mathews because of its quality assets and scale and the fact that large portfolios in the 1 million-square-foot range rarely come to market for third-party management. The selection of Kidder Mathews expands the commercial real estate firm’s footprint in the market and its reputation for managing high-profile properties in the Western U.S. like Starbucks’ Seattle headquarters.  

According to a company statement, Kidder Mathews has built a strong relationship with Boston-based Cabot Properties through its brokerage division. Extending the collaboration into property management highlights the synergy between the firm’s divisions.

READ ALSO: Industrial Demand Slips, But Avoids a Slump

Kidder Mathews Senior Vice President & Market Leader Shelley Ryan will oversee the portfolio with Senior Property Manager Lorna Faxon.

The properties in the portfolio are:

• 4156 B Place NW, Auburn, Wash., 17,630 square feet;
• 875 A St. Auburn, 31,210 square feet;
• 25811 74th Ave. S., Kent, Wash., 32,064 square feet;
• 4620 B St. NW, Auburn, 65,555 square feet;
• 2606 16th St. NW, Puyallup, Wash., 170,592 square feet;
• 4417 192nd E., Tacoma, Wash., 281,181 square feet;
• 3941 and 3703 I St., Auburn, Wash., 385,986 square feet.

More management roles

Kidder Mathews Asset Services had its highest revenue to date in the last year and now manages more than 57 million square feet of space across 800 assets. In July, Lift Partners appointed Kidder Mathews to manage 530,384 square feet of property in Northern California. Kidder Mathews now manages about 1.2 million square feet of industrial space for the San Francisco-based company. That assignment added four assets in San Francisco and one each in Menlo Park, Calif., Mountain View, Calif., and Burlingame, Calif.

Logistics-focused fund

The management deal comes nearly a year after Cabot closed Value Fund VII with a total of $1.57 billion in equity commitments. The vehicle, including leverage, is being used to acquire, develop and redevelop $3.5 billion of logistics assets in the U.S., Europe and Asia Pacific, with most of the capital being deployed in the U.S.

Fund VII focuses on acquiring, developing and redeveloping high-quality infill industrial assets in dynamic supply-constrained markets across top logistics markets. The fund will target investments mainly in multi-tenant buildings between 50,000 and 250,000 square feet. When the fund closed in February, it had already closed or committed $1.2 billion of capital across 30 markets, including Seattle, Chicago, Atlanta, Amsterdam and Sydney.

The post Kidder Mathews to Manage 1 MSF Industrial Portfolio appeared first on Commercial Property Executive.

A group of private investors have acquired 501 Gateway, a 102,305-square-foot, recently renovated office building in Phoenix, for $18 million. Irgens previously owned the asset, according to CommercialEdge information. Cushman & Wakefield represented the seller.

The property was 82 percent leased to a diverse tenant mix at the time of sale, including Knight Management and the County of Maricopa.

Irgens had purchased the asset for $17 million in 2016, the same source shows. A $16.1 million loan from Western Alliance Bank financed the acquisition.

READ ALSO: Phoenix Office Market’s Small Wins Add Up

That same year, the 1997-completed property at 501 N. 44th St. underwent cosmetic renovations. The four-story building features floorplates averaging 25,500 square feet and structured parking with a parking ratio of 5 spaces per 1,000 square feet. Amenities include a contemporary lobby and a café with indoor and outdoor patio seating.

The transit-oriented property is some 2 miles from Phoenix Sky Harbor International Airport. Downtown Phoenix is roughly 6 miles southwest.

Cushman & Wakefield Executive Managing Directors Eric Wichterman and Chris Toci, along with Managing Director Mike Coover, brokered the deal on behalf of Irgens.

Phoenix office sales remain steady

Phoenix’s office investment volume year-to-date as of November reached $1.1 billion, according to a recent CommercialEdge report. Assets traded for $164 per square foot on average, slightly below the $179 national figure.

In the metro’s largest transaction of the year so far, Wide Open Excursions acquired 24th at Camelback II for $97.9 million. Hines sold the 306,877-square-foot Class A asset.

More recently, U-Haul paid $23.7 million for 20 E. Thomas Road, Arizona’s third tallest office tower. The deal marked the largest owner/occupier office sale in the Southwest since early in the pandemic.

The post Irgens Sells Phoenix Office Asset appeared first on Commercial Property Executive.

Meridian has signed a 23,000-square-foot lease at Broadway Medical Plaza, an approximately 60,000-square-foot recently converted medical office building in Oakland, Calif. Center for Elders’ Independence will occupy the space accounting for 38 percent of the building’s overall leasing footprint.

This will be the sixth Bay Area location for CEI, a Program of All-Inclusive Care for the Elderly provider. Tenant fit-out is already underway, with completion expected next spring.

Colliers worked on behalf of the landlord, while Sabre Real Estate group represented the tenant.

READ ALSO: Outpatient Facilities Step Into the Spotlight

Originally completed in 1966 as an assembly hall, the three-story building is at 3901 Broadway, less than 2 miles from downtown Oakland. Other medical providers in the area include UCSF Benioff Children’s Hospital, Sutter Health and Kaiser Permanente.

Meridian acquired the 1.3-acre property in March 2022 for $13.5 million, according to CommercialEdge information, and redeveloped it into a medical facility. A $35.2 million permanent loan from MidCap Financial financed this endeavor.

Broadway Medical Plaza has now two elevators, a modern HVAC system and new base building systems. The property also includes a redeveloped, 220-stall parking structure.

Colliers Senior Vice President Sid Ewing worked on behalf of Meridian. Sabre Real Estate Group Founders Douglas Hubert and Steve Polito represented the tenant.

Resilient MOB sector still subject to hurdles

Despite numerous challenges and ongoing economic volatility, the medical office market and the broader health-care sector have demonstrated remarkable resilience. This stability is largely driven by the increasing demand for medical properties, fueled by the growing elderly population, particularly Baby Boomers who are now reaching retirement age and require more health-care services.

However, the sector still faces significant hurdles, including workforce shortages and rising labor costs, which affect both profitability and patient experience. Additionally, the slow pace of new construction, due to higher costs of capital and materials, remains a critical issue.

The post Meridian Inks 23 KSF Bay Area Lease appeared first on Commercial Property Executive.

A joint venture between Trammell Crow Co. and Realty Income Corp. has broken ground on a 655,200-square-foot, build-to-suit industrial facility for The Home Depot in Stockton, Calif. The $100 million project is slated for completion in 2026.

The development has been in the works for several years, according to prepared remarks by Trammell Crow Principal Will Parker. As of 2023, plans called for five bulk docks and 22 flatbed docks, as well as parking spaces for 180 trailers, 235 vehicles and 70 trucks.

READ ALSO: Automation and AI Shape Future Industrial Demand

Located at 320 McCloy Ave., the site is less than 3 miles the Port of Stockton, which moved some 4.3 million metric tons of cargo in 2023. Interstate 5 and the Stockton Metropolitan Airport are roughly 3 and 9 miles away, respectively.

The project is slated to add four rail tracks to the Port’s existing infrastructure and feature a solar renewable energy component. The property will also include 350,000 square feet of outside storage space.

The Port of Stockton issued a 50-year ground lease to Trammell Crow for the 58.7-acre site. Construction also includes remediation of the contaminated land previously utilized by the U.S. Navy.

Cushman & Wakefield Executive Managing Director Tyson Vallenari represented the Port of Stockton in the ground lease negotiations, while CBRE Vice Chairman Tom Davis worked on behalf of Trammell Crow Co.

Home Depot warehouses’ state of play

This isn’t the first time Trammell Crow and The Home Depot collaborated on a build-to-suit facility. In 2021, Trammell delivered a 614,676-square-foot building in Lithonia, Ga., roughly 22 miles east of downtown Atlanta.

Home Depot’s warehouse and distribution center assets nearly doubled between 2018 and 2023, growing from 56 to 111 million square feet. But the retailer started downsizing this footprint this year, vacating 879,000 square feet near Chicago and another 480,000 square feet in the Inland Empire. Furthermore, the company began looking to sublease a 1.3 million-square-foot facility in Goodyear, Ariz., and a 1.1 million-square-foot warehouse near Columbus, Ohio.

Central Valley’s industrial pipeline loses steam

The industrial supply pipeline of California’s Central Valley thinned out throughout the year, reaching 900,000 square feet underway in September, down from 4.1 million square feet in March, according to a report by Colliers.

Meanwhile, the market’s industrial vacancy rate reached 7.8 percent, marking a 40-basis-point increase over the quarter. The hike resulted from the speculative industrial deliveries throughout the third quarter, which added 1.1 million square feet of vacant space to inventory.

One of the industrial projects currently underway in the Central Valley is Walmart’s 900,000-square-foot warehouse, also in Stockton. That fulfillment center is slated for delivery in 2026 as well.

The post Trammell Crow JV Kicks Off $100M Home Depot Facility appeared first on Commercial Property Executive.

The five-year, interest-only loan was provided by Goldman Sachs. The refinancing offers the borrower extended flexibility, enabling a strategic exit from the investment under more favorable market conditions, according to JLL.

The two-building complex was completed in 1981 and comprehensively renovated in 2019. Its amenities include shared outdoor spaces, lounge space and a conference center, as well as ample parking. Currently, it’s 95 percent occupied with a diverse tenant mix, including the California State Lands Commission and Mutual of Omaha.

100 Howe is between Sacramento’s Campus Commons, Highway 50 and Sierra Oaks office submarkets. This location provides ready access to University Village, Howe Avenue and East and Midtown Sacramento, as well as to major freeways, public transportation and the American River Bike Trail.

READ ALSO: When Office Meets Hospitality

The JLL Capital Markets Debt Advisory team that represented Fenway Capital Advisors was led by Director Olga Walsh and Vice President Bharat Madan.

Fenway acquired the property from KBS Realty Advisors in late 2017 for $11.5 million, according to information provided by CommercialEdge, which rates the property as Class B.

Smaller government

Ongoing consolidation and relocation of offices by the state government has been a big factor in occupancy losses in the Sacramento office market, which have now gone on for 16 straight quarters, according to a third-quarter report from JLL. Overall office vacancy is now 21.2 percent, and although Class A direct asking rent continues to rise, so too are concessions, as overall direct asking rent declines.

Just two months ago, Manulife US Real Estate Investment Trust sold 400 Capitol Mall, a 501,308-square-foot office tower in downtown Sacramento. The asset traded for $117 million. The buyer was an entity related to Buzz Oates Real Estate, a Sacramento-based privately held commercial real estate investment management company.

The post Fenway Capital Secures Refi for Sacramento Office Property appeared first on Commercial Property Executive.

Stockdale Capital Partners has paid $32.8 million for The MarinHealth Medical Plaza, an 83,789-square-foot medical outpatient building in Novato, Calif., a San Francisco submarket. Vukota Capital Management previously owned the asset, according to CommercialEdge.

This deal marks Stockdale Capital’s sixth purchase through its recently formed, U.S.-focused Healthcare Real Estate Investment Fund. The investment vehicle’s previous buy was Frisco Medical Village, a Class A, 37,943-square-foot medical facility in Frisco, Texas.

READ ALSO: These Markets Top MOB Investment Activity

The MarinHealth Medical Plaza is part of Rowland Plaza, a two-building, 142,856-square-foot complex. Vukota had acquired it for $36.8 million—or $257.3 per square foot—from Buchanan Street Partners, the same source shows.

Completed in 1997, the three-story building underwent renovations in 2017. Its anchor tenant is MarinHealth, which leases 72,888 square feet or 90 percent of the property. Services provided include primary care, OBGYN, laboratory, imaging, cardiovascular and dermatology.

Located at 75 Rowland Way near Sutter Health’s community hospital, the medical facility is 2 miles from downtown Novato and some 27 miles from downtown San Francisco. Other medical providers in the area include UCSF, Common Spirit and Stanford Health Care.

MOB investment activity expected to increase

The medical office real estate sector is flourishing. A recent Savills report forecasted a 26 percent rise in outpatient demand over the next decade, primarily due to the aging population.

Despite economic uncertainties affecting the broader commercial real estate sector, outpatient facilities continue to be in high demand. In addition, reduced interest rates are anticipated to enhance investment in this asset type.

However, this increased demand is straining the medical labor market, which is already facing a shortage of specialists, including physicians and nursing staff.

The post Stockdale Capital Buys San Francisco MOB appeared first on Commercial Property Executive.

The holiday shopping season is in full swing and managing the increased foot traffic in shopping malls around this time of the year can be challenging, but Nick LeMasters knows exactly how to maximize success. He’s the CEO of Cherry Creek North, a walkable open-air shopping and lifestyle district close to downtown Denver, and has decades of experience in the retail real estate industry.

Commercial Property Executive talked to LeMasters about shopping mall safety during the busiest time of the year, what it takes to manage the influx of shoppers, as well as trends he’s seeing in the retail real estate space.

Beyond special deals and offers, what matters most to shoppers and how are retail managers responding?

LeMasters: Let’s begin with the basics: the blocking and tackling of retail real estate. Owners and property managers have an obligation to ensure the safety and convenience of the retail shopper and their tenants. Without these two fundamental conditions in place, it will be very difficult to attract customers. Properties that carry negative perceptions regarding personal safety will be challenged. Convenience takes the form of abundant parking and pedestrian access.

READ ALSO: Shopping Changed Dramatically. Retail Design Is One Step Ahead.

How have retailers and landlords prepared for the increase in foot traffic across their physical stores? 

LeMasters: Preparations for increased foot traffic are centered on two primary activities: inventory and sales help. Both activities need to be carefully balanced. Inventory levels should reflect current purchasing trends that customers have exhibited. Are there specific fashions, brands, colors, or other factors that will help to increase gross margins and minimize seasonal markdowns? No one wants to see a customer walk away disappointed that they were unable to secure the item(s) that they had intended to purchase.

In this current economic environment, workforce issues are a significant concern for retailers. Locating and hiring qualified staff has long been a priority for the retail community but the challenge has become greater given a limited supply of qualified applicants.

Are there any lessons from previous holiday seasons that retailers can successfully apply this year? What common pitfalls should they avoid?

LeMasters: Experienced retailers are constantly learning from previous holiday seasons. Those that are successful have learned to refine their offering and stay in touch with their customers’ wants and needs. The most common pitfall that retailers must be aware of is to ensure the proper training of their sales staff. The holiday season becomes all-consuming for retail managers. Despite the demands of the season, managers must make time to train staff members and provide guidance and clear expectations. A well-trained staff will go a long way to ensuring a successful and profitable holiday season.

In-store versus online shopping this holiday season—what will be the balance?

LeMasters: Despite the perceived threat that online shopping has become, one thing has proven to be true: The death of brick-and-mortar retail has been highly exaggerated. In today’s retail environment, online and brick-and-mortar retail have seamlessly coexisted. Online shopping will continue to grow but not at the expense of the physical retail store.

Customers have proven to be resilient and loyal to their favorite retail store. The social engagement and touch and feel of the merchandise cannot be replicated online. The best and brightest of retailers have learned that they no longer must choose between these two formats. They have adopted both and have found ways to satisfy the customers’ needs regardless of the format that they have chosen.

How much will experiential retail drive business success this holiday season?

LeMasters: Experiential retail—while growing in its importance—should not be expected to drive retail success in 2024. Landlords will continue to identify and place attractive experiential concepts in their properties—and they should. Apparel, jewelry, electronics, toys and other traditional gift items should be expected to carry the day for most retailers.

What are your expectations for retail real estate performance when it comes to urban versus suburban assets?

LeMasters: Landlords evaluate performance on a property by property level in every market in which they have a presence. Many central business districts throughout the country continue to experience challenges related to slow return-to-office policies thus reducing daytime foot traffic. Additionally, many of these same CBDs continue to be challenged with vagrancy, homelessness and perceived safety concerns. Urban centers that have effectively addressed these societal issues should be fine. Those that have not or have been unsuccessful may see continued challenges. In those markets, customers may prefer the suburban experience even though it may require a longer drive.

How can retailers leverage data analytics to improve their holiday season strategies?

LeMasters: Data analytics can be a useful tool in evaluating holiday season strategies. Analytics—when properly applied—can inform retailers on several levels. For example, the use of technologies like Placer.ai can reveal demographic information that is useful in targeting customers in specific zip codes and neighborhoods that fit the profile of those the retailer believes can be attractive and potentially profitable.

To what extent could shopping trends this holiday season impact retail real estate in 2025?

LeMasters: Shopping trends that emerge from the 2024 holiday season will undoubtedly affect retail real estate decisions in the coming year. Owners, managers and brokers will maintain a keen eye on emerging and existing retail concepts that are performing well. These concepts will be targeted for expansion into new markets or additional store locations within an existing metro area.

What final advice would you give to retailers looking to maximize their success during this holiday season and beyond?

LeMasters: To maximize success during this holiday season, retailers should focus on a few key actions. Hiring and training qualified staff is essential. Consider bringing on regular customers who already trust the brand and can speak from experience. Effective communication with customers is also crucial, leveraging social media platforms with engaging content, especially videos.

Creating a welcoming store environment with friendly staff, refreshments, music and activities can help engage customers for longer periods. Beyond the season, retailers should continue to evaluate their location and determine if it best fits their needs and that of their customer.

The post Unwrapping Holiday Retail Trends: Insights From a Denver Mall CEO appeared first on Commercial Property Executive.

Consolidated Investment Group has secured a five-year, fixed-rate note amounting to $17.5 million for two Class A industrial assets in Aurora, Colo., totaling 235,987 square feet. JLL arranged the loan.

Dubbed Building 5 and 6, the properties are within Consolidated’s Eastpark 70, a six-building industrial campus encompassing 1.1 million square feet. The two facilities were the park’s latest addition, having made their debut in 2022, while the other four structures opened between 2016 and 2019. A seventh 116,550-square-foot build-to-suit facility is in the planning stages.

Building 5 and 6 feature 32-foot clear heights, dock-high and drive-in doors, as well as 120 parking spaces combined. The former’s truck court reaches a depth between 130 and 185 feet.

READ ALSO: You’ve Survived Till 2025. Now What?

Performance Contracting’s deal to occupy the entire 77,140-square-foot Building 6 and Empire Today’s lease for 60,350 square feet inside Building 5 brought Eastpark 70 to full occupancy. The deals closed last year.

Carrying the addresses 19722 & 19922 E. 22nd Ave., the two facilities are less than 3 miles from Interstate 70 about 16 miles east of downtown Denver. The Colorado Air and Space Port, as well as The Denver International Airport, are within roughly 15 miles.

JLL Directors Rob Bova and William Haass represented Consolidated Investment Group in the financing proceedings.

Denver International Airport attracts investors

Industrial investment skyrocketed throughout Greater Denver, with deals amounting to north of $1.1 billion during the first 10 months of the year, according to a CommercialEdge report. By comparison, in 2023 investment volume only reached $485 million. Other Western markets fared significantly better this year, such as the Bay Area ($3.0 billion) and Los Angeles ($2.4 billion).

The markets’ heightened investor interest is closely linked to the Denver International Airport, which plays a key role in the region’s logistics and distribution operations. Investcorp’s 1.3 million-square-foot portfolio acquisition is one such example. The collection traded for $200 million, and its 31 assets are located within Denver and South Florida.

Greater Denver’s industrial vacancy rate stood at 9.6 percent in October, above the national average of 7.2 percent and higher than all other Western Markets, the same source shows. The metro’s industrial pipeline reached 6.8 million square feet in October, a figure outshined only by Phoenix (28.1 million) and the Inland Empire (10.2 million).

The post Consolidated Secures $18M for Denver-Area Industrial Assets appeared first on Commercial Property Executive.

BentallGreenOak and Urban Renaissance Group LLC have secured a refinancing loan for Plaza 600, a 209,256-square-foot office building in downtown Seattle. The ownership secured a committed capital of over $10 million and will reposition the property.

Urban Renaissance Group has owned Plaza 600 since 2012, when it acquired the property from The Vance Corp. for $54.8 million, with the help of a 10-year $68.9 million loan originated by CIBC Bank USA. URG recapitalized the tower in partnership with BGO in 2019.

Completed in 1969, the office building at 600 Stewart St. rises 20 stories and features 5,063 square feet of retail space. The property underwent renovations multiple times, with the latest completed in 2023. These last upgrades focused on the main lobby area, as well as the amenity spaces, adding a bike room with showers and a conference center for the tenants. The building’s roster comprises Regus, Hoffman Construction Co., Washington Council for Behavioral Health, MBI Seattle and HKM Employment Attorneys LLP.

JLL Managing Director Cleita Harvey, Director Tim Jones and Associate Broker Charlotte Evans are handling leasing at the property.

A well-positioned property in downtown Seattle

Plaza 600 is between the Retail Core and the South Lake Union neighborhood. The Amazon Headquarters campus and The Spheres corporate offices are adjacent to the property. The office tower is near metro, bus and light rail stops, as well as Interstate 5. Plaza 600 also holds a walk score of 100.

The office sector is still struggling, with the national vacancy rate hitting 19.4 percent at the end of October, up 160 basis points year-over-year, according to a recent CommercialEdge report. Tech markets hold the highest rates, including Seattle, which registered a 390-basis-point jump since October 2023, hitting a 25.8 percent vacancy rate.

The post BGO JV Secures Refi for Seattle Office Tower appeared first on Commercial Property Executive.

It is the first joint venture between BKM and Tokyu Land US Corporation, a real estate investment and operating company owned by Japan-based Tokyu Fudosan Holdings Group.

These small-bay facilities, aggregating 342,073 square feet, are in the active industrial submarket corridor of Otay Mesa. BKM acquired them five years ago and invested $1.4 million in upgrades.

Otay’s strategic location along the U.S.-Mexico border positions it as a critical hub for cross-border trade, nearshoring and warehouse distribution.

Borderpoint Business Park at 6754, 6774 and 6794 Calle de Linea comprises 16 units totaling 173,330 square feet across three buildings. It features 22- to 24-foot-clear ceiling heights, 104 dock-high loading doors and 14 grade-level loading doors.

READ ALSO: Why Light Industrial Properties Will Continue to Shine

Otay Crossing Business Park has three units within two buildings at 2340 Enrico Fermi Drive and 10025 Siempre Viva Road. The 64,833-square-foot property features 24-foot warehouse clearance, 27 dock-high loading doors and three grade-level loading doors.

Otay Distribution Center includes eight units totaling 103,910 square feet in two buildings at 6987 and 6995 Calle de Linea. The park features 24-foot-clear ceilings, 63 dock-high loading doors and a single grade-level loading door.

The assets are all that’s left of BKM’s Otay Mesa industrial portfolio, a six-park package that BKM acquired from Stockbridge Capital Group in 2018 for $71.6 million.

These properties were also individually reorganized to create better functionality and efficiency. The efforts resulted in an 86 percent increase in the portfolio’s weighted average in-place rental rate.

The three parks are leased to 21 tenants with 2.2 years of WALT and rents approximately 17 percent below current market rates. BKM, which will serve as the joint venture’s domestic operating partner, is leveraging upcoming expirations to implement improvements and secure market rental rates in early 2025.

Light industrial space market remains tight

The South County San Diego small bay, multi-tenant industrial leasing market will remain robust through 2024, according to Jackson Childers, JLL associate.

“Unlike the 10 million square feet of larger block product (50,000+ square feet) delivered in Chula Vista and Otay Mesa in the past five years, the supply of multi-tenant industrial space has been stagnant,” Childers told Commercial Property Executive.

“While developers have focused on maximizing coverage and thus built larger warehouse units, the robust tenant mix in the 5,000 to 15,000 square foot range has been neglected. Thus, 25-year-old buildings offering smaller suites achieve rents 25 percent higher than brand-new ‘big box’ construction.”

As warehouse vacancy climbs toward 15 percent in South County, for owners of small bay, Childers said multi-tenant projects are largely insulated from the difficulties of competing against a set of five, and sometimes 10, similar spaces.

“Looking toward 2025, we expect resiliency within this product type, as the pipeline for new multi-tenant industrial is empty as usual,” he said.

READ ALSO: Are Co-Warehousing Solutions a Game-Changer for Industrial?

Recently, the San Diego industrial/flex market has seen increases in vacancy at 10-year highs, according to Eli Randel, Crexi COO, told CPE.

“Those rates could potentially increase from new deliveries and from proposed tariffs and their impact on trade,” Randel said. “However, the San Diego industrial/flex market generally remains healthy and tight, even at these higher vacancy levels, and had previously experienced good rental rate growth.”

Given the relative health of this market, it’s unlikely there was severe asset-level distress associated with the recap, Randel explained.

The post BKM Recapitalizes San Diego Light Industrial Assets appeared first on Commercial Property Executive.

Phoenix continues to lead the nation in terms of industrial development, despite a slowdown in construction starts. At the end of October, the metro had 24.7 million square feet of industrial space under construction across 95 projects. Nevertheless, construction starts for industrial projects have decreased sharply since the same period last year.

When it comes to sales, the Phoenix industrial market is thriving, with nearly $2.2 billion in transactions recorded year-to-date through October. The average price per square foot stood at $162, with over 15 million square feet of industrial space changing hands.

A slowdown in construction starts

At the end of October, Phoenix had 24.7 million square feet of industrial space under construction across 95 projects. The pipeline accounted for 5.9 percent of existing stock, significantly surpassing the national average of 1.8 percent.

Among peer markets, Kansas City (4.1 percent) also recorded higher numbers than the national average, while New Jersey (1 percent), Indianapolis (1.1 percent) and the Inland Empire (1.5 percent) had the lower numbers.

In the first 10 months of the year 10.7 million square feet of space broke ground in the metro across 55 properties, showing a significant decrease compared to an average of 32.5 million square feet annually over the previous three years. This represents 2.4 percent of total stock, higher than the 0.9 percent national average, according to CommercialEdge data.

Taiwan Semiconductor Manufacturing Co.’s 3.8-million-square-foot project remains the largest industrial property under construction within the metro. Spanning 805 acres at 5088 W. Innovation Circle—within the metro’s North Gateway submarket—the facility will be the most advanced semiconductor fabrication plant in the country. TSMC’s project, expected to be completed in the beginning of next year, is supported by $6.6 billion in direct U.S. funding provided under the CHIPS and Science Act. 

Lincoln Property Co.’s 1.3 million-square-foot Building C at the Luke Field campus in Glendale ranks fifth among the metro’s largest industrial projects under construction. Totaling 2.4 million square feet, the $515 million Class A industrial project will also include the 695,750-square-foot Building A and the 454,761-square-foot Building B.

Still leading industrial development

Year-to-date through October, 142 projects totaling almost 29 million square feet of industrial space came online in Phoenix. Deliveries accounted for 6.9 percent of the market’s total stock, much higher than the national average of 1.6 percent.

Pheonix ranked first, with Dallas (27 million square feet) following closely. Metros such as New Jersey (7.8 million square feet), Atlanta (7 million square feet) and Indianapolis (6.1 million square feet) lagged behind.

Prologis has completed the 1.2 million-square-foot Building 1 at Prologis 303 Business Park in Goodyear, Ariz. At full build-out, the 113-acre campus will comprise two buildings totaling some 1.6 million square feet. Continuing to expand its presence in Phoenix, Amazon signed a 1.2-million-square-foot lease at the facility, committing to a 10-year tenancy.

Ross Stores has delivered Ross Distribution Center, a 1.7 million-square-foot distribution hub in Buckeye. Covering 125 acres at 23255 W. Southern Ave., the site is near Interstate 10, at the intersection of Southern Avenue and Watson Road. The developer purchased the site back in 2022 for $28.3 million.

READ ALSO: Industrial Demand Slips, But Avoids a Slump

Industrial deal volume increased in Phoenix

Phoenix’s industrial sector registered almost $2.2 billion in sales year-to-date through October, surpassing the $1.6 billion recorded at this point in 2023. Involving 171 properties, more than 15 million square feet of industrial space changed hands across the metro, according to CommercialEdge data. Assets traded at an average price of $162 per square foot.

Among peer markets, The Inland Empire ($263 per square foot) and New Jersey ($218 per square foot) were the priciest metros and surpassed the national average of $113 per square foot, while Indianapolis ($70 per square foot) and Kansas City ($40 per square foot) recorded the lowest average sale prices nationwide. 

Cohen Asset Management has recently sold a 400,000-square-foot Class A cross-dock industrial building in Phoenix for $69.6 million. Karney Properties purchased the facility located at 7200 W. Buckeye Road. The Home Depot fully leases the property and uses it as a return center.

Phoenix industrial vacancy grows year-over-year

Phoenix’ industrial vacancy rate at the end of October reached 6.4 percent, lower than the national average of 7.2 percent, but much higher than the 2.4 percent recorded in the metro in October 2023. Other markets with vacancy rates above the national average were Indianapolis (9.1 percent), Dallas (8.3 percent), New Jersey (7.8 percent) and the Inland Empire (7.3 percent).

Gateway Classic Cars has recently signed to become Greystar’s first tenant at the Class A three-building Caliber by Greystar industrial development in Peoria, Ariz. The company will occupy 43,809 square feet in Caliber’s 122,863-square-foot Building B.

Additionally, GTI signed a full-building lease for a 530,307-square-foot facility at Lakin Park in Goodyear, as part of its expansion in the Phoenix industrial market. The newly completed building at 17505 W. MC 85, within the 400-acre master-planned logistics campus, will be used for light manufacturing and battery casings assembly.

The post Phoenix Industrial Development Remains Fast-Paced appeared first on Commercial Property Executive.

Alterra IOS has acquired three industrial outdoor storage sites totaling 23 usable acres in metro Portland, Ore. With this acquisition, the company’s regional footprint comprises six such assets, while its national portfolio features more than 280 sites spread across 30 states as of September.

The current sale included properties in Milwaukie, Ore., Portland and Hubbard, Ore.

The facility at 6433 SE Lake Road in Milwaukie is a 20,965-square-foot warehouse that includes a driver’s lounge on an 11-acre site. The property is fully occupied by a regional building materials suppliers and allows easy access to Oregon routes 224 and 99, while being 15 miles from Portland International Airport.

The second asset at 4000 NE Columbia Blvd. in Portland features a 9,189-square-foot warehouse and paved parking area on 4.4 usable acres. A large equipment rental company has occupied the property for the past two decades. The asset allows easy access throughout the Portland metro area via interstates 5 and 205.

The third property is at 17804 Shank Road NE in Hubbard and features a 31,000-square-foot industrial building on nearly 8 usable acres, leased to multiple tenants. The asset is close to Oregon State Routes 99E and 551N.

Capacity Commercial Group provided assistance on the first acquisition, while Collier’s Vice President Tom Knecht was in charge of the second deal and Macadam Forbes’ Broker Zach Reichle facilitated the third one.

Steady demand in the IOS sector

The traditionally niche IOS market is continuing to evolve, characterized by a continued growth in demand from institutional investors, according to a June report from American Realty Advisors. The rise of e-commerce sales, that accounted for 15.9 percent of all sales by the end of the first quarter of 2024, is one factor that fuels the demand for more IOS space.

Alterra IOS’s recent acquisitions include the purchase of a seven-property portfolio with assets in Dallas, Minneapolis, Indianapolis, Chicago, Nashville, Tenn., Cleveland and St. Louis metro areas. The portfolio comprises 23 acres and is fully leased.

In September, the company picked up four properties in the Greater Houston area, in a deal brokered by Lee & Associates and Partners Real Estate. The assets totaled 17 acres.

The post Alterra IOS Buys Oregon Outdoor Storage Properties appeared first on Commercial Property Executive.

Los Angeles County has completed the acquisition of The Gas Company Tower, a Class A, 1.3 million-square-foot office building in downtown Los Angeles, for $200 million.

Wilmington Trust sold the asset after having foreclosed in September on a $350 million CMBS loan encumbering the property, according to CommercialEdge information. Brookfield Properties had defaulted on the loan last year.

The county’s board of supervisors approved the purchase in November. The buyer plans to relocate its employees, currently based at the dated Kenneth Hahn Hall of Administration, to the newly acquired tower, Los Angeles Times reported.

READ ALSO: Top California Markets for Office Transactions

JLL Senior Managing Directors Jeffrey Bramson, Sean Ryan and Tom Hall, together with Managing Director Andrew Harper and Director Will Poulsen, led the Investment Sales and Advisory team that arranged the deal on behalf of the seller.

Greater Los Angeles witnessed an office investment volume totaling more than $1.7 billion year-to-date through October, according to a recent CommercialEdge office report. Properties traded at $354 per square foot on average, double the national figure. The market was the second most expensive in California after San Francisco, where assets changed hands for $392 per square foot in October.

Towering over downtown L.A.

The Gas Company Tower is at 555 W. Fifth St., in the Bunker Hill neighborhood, one block from Pershing Square. Completed in 1991, the 54-story building features 27,000-square-foot floorplates, first-floor retail and a five-story underground parking garage. Designed by Skidmore, Owings and Merrill, the office tower most recently underwent renovations in 2018.

At the time of the sale, the LEED Gold-certified asset was 53 percent leased. Major tenants include Southern California Gas Company, Deloitte, Knoll, ArentFox Schiff LLP and Latham & Watkins LLP, among others.

The 1.4-acre property has a transit score of 100, as Pershing Square Metro station and Bunker Hill Station are less than 1 mile away.

The post Downtown LA Tower Trades for $200M appeared first on Commercial Property Executive.

SENTRE has purchased a 322,070-square-foot industrial asset in Tolleson, Ariz., for $48.8 million. Brennan Investment Group sold the metro Phoenix property with representation from Cushman & Wakefield.

The asset came online in 1988 and was expanded in 2010. Brennan acquired it two years later in a $178 million portfolio deal encompassing 3.8 million square feet, CommercialEdge data shows. AIC Ventures sold that collection.

Specifications include clear heights of nearly 35 feet, 29 dock and six grade-level doors, roughly 26,000 square feet of office space and truck courts with depths between 110 and 140 feet. Additionally, the property features 110 parking stalls.

READ ALSO: These CRE Transactions Typify an Interesting 2024

WinCup—a manufacturer of foodservice products which had owned the building between 1999 and 2008, according to CommercialEdge data—fully leases the facility. The triple-net deal is set to expire in 2039.

Located on more than 15 acres at 7980-7990 W. Buckeye Road in Phoenix’s Southwest Valley submarket, the facility is less than 3 miles south of Interstate 10. The area has witnessed a boost in warehouse and logistics space demand as it provides access to a nearby railroad and thoroughfares such as interstates 10 and 17, Loop 101 and 202, according to Cushman & Wakefield.

The Cushman & Wakefield team that represented Brennan included Executive Vice Chair Will Strong, Vice Chair Phil Haenel, Director Foster Bundy and Associate Katie Repine.

Industrial investment shines in The Valley

Greater Phoenix’s industrial sale volume totaled more than $2.2 billion in the first 10 months of the year, according to a CommercialEdge report. Only two western markets fared better—the Bay Area ($3 billion) and Los Angeles ($2.4 billion).

Assets traded on average for $159 per square foot year-to-date through October, above the national average of $129 per square foot, the same source reveals.

The Southwest Valley in particular witnessed heightened sales activity. Just last month, BGO paid $118.3 million for an Ares Management property in Buckeye, Ariz. Amazon is the sole tenant of the 1 million-square-foot facility.

In July, BlackRock-managed funds acquired CRG’s 1.2 million-square-foot asset in Glendale, Ariz., for $128.1 million. Amazon leased that facility as well. The building is part of a 335-acre industrial park set to comprise 5.5 million square feet upon full build-out.

The post SENTRE Buys Phoenix Industrial Asset for $49M appeared first on Commercial Property Executive.

McGee Business Center I and II are two fully leased Class B shallow-bay business parks totaling 231,696 square feet, in San Bernardino County. The seller was ‘C’ McGee Electric, according to CommercialEdge data.

Business Park I is at 2300 S. Reservoir St. in Pomona and was completed in 1981. It consists of four buildings totaling 129,800 square feet. Business Park II is at 12301–12395 Mills Avenue in Chino and was delivered in 1987. It comprises five buildings totaling 101,896 square feet.

The two properties total 71 industrial suites averaging 3,263 square feet. The buildings have minimal office buildouts, about 5 percent each, a JLL spokesperson told Commercial Property Executive. Tenant uses include traditional warehousing/distribution and light manufacturing space for small businesses.

READ ALSO: Inland Empire Industrial Assets Trade Less Often, but Fetch Top Dollar

McGee Business Center is less than a mile from CA-60 (Pomona Freeway) and has convenient access to CA-71 (Chino Valley Freeway) and I-10.

The JLL Capital Markets team was led by Senior Director Peter Thompson and analysts Kyle White and Nick Englhard.

Deep demand for shallow-bay

In early November, Cabot Properties acquired a four-building, 669,000-square-foot industrial portfolio in the Inland Empire from Link Logistics for $202 million. In an unusual angle, Cabot was actually repurchasing three of the four properties, having developed and built them between 2018 and 2021.

This past summer, Matthews Real Estate Investment Services reviewed the reasons for increasing interest in shallow-bay, multi-tenant industrial properties. These include the assets’ appeal to a large number of users, shorter lease terms that allow timelier ability to mark rents to market, and a relative shortage of shallow-bay spaces, as developers focus primarily on larger industrial projects.

The post Proficiency Capital Secures Loan for Inland Empire Buy appeared first on Commercial Property Executive.

The largest owner/occupier office sale in the Southwest since early in the pandemic has closed.

U-Haul has paid $23.7 million for 20 E. Thomas Road in Phoenix, Arizona’s third tallest office tower. An entity controlled by Bank of America sold the 548,938-square-foot asset in a deal brokered by Cushman & Wakefield and Kidder Mathews. The sale also included a 1.1-acre land parcel for additional parking.

The previous owner, LBA Realty, had purchased the high-rise in 2006 for $76.3 million, according to CommercialEdge information. This June, several months after leases comprising more than two thirds of the building expired, the Bank of America entity foreclosed on the property that was encumbered by a $62 million loan originated in 2016.

READ ALSO: Phoenix Office Market’s Small Wins Add Up

U-Haul will use the building to expand its corporate campus in Midtown. About 16 percent of the tower will remain leased to existing tenants, while the moving and self-storage company will occupy the rest.

The 25-story high-rise came online in 1988 and includes about 1,500 square feet of first-floor retail space. The building has floorplates averaging 23,000 square feet, a conference and training center, along with about 1,230 parking spaces.

The transit-oriented tower is some 2 miles from downtown Phoenix and less than 1 mile from U-Haul’s headquarters at 2727 N. Central Ave. The property is part of the 11-acre mixed-use development dubbed Phoenix Plaza, comprising 1.5 million square feet of office space, 30,500 square feet of retail, a 242-key hotel and an 11-story parking garage.

Cushman & Wakefield Executive Managing Directors Eric Wichterman and Chris Toci, as well as Managing Director Mike Coover, represented the seller, while Executive Managing Director Jerry Roberts and Managing Director Pat Boyle provided leasing advisory. Kidder Mathews Senior Vice President Ryan Eustice worked on behalf of U-Haul.

Phoenix office sales remain steady

Phoenix’s office investment volume year-to-date as of October reached $1 billion, according to a recent CommercialEdge office report. Assets in the metro traded for $164 per square foot on average, below the $177 national figure. Meanwhile, the Valley’s vacancy rate registered a 60-basis-point decrease year-over-year, clocking in at 18.4 percent in October.

In the metro’s largest office deal of the year, Wide Open Excursions acquired a 306,877-square-foot tower for $97.9 million. Hines sold the Class A asset that came online in 2009.

Other notable transactions included Net Lease Office Properties’ sale of a 354,000-square-foot office building for $71.5 million. The property had previously changed for nearly $40 million in 2000.

The post U-Haul Acquires Phoenix Office Tower appeared first on Commercial Property Executive.

Unico Properties has secured a $35 million refinancing loan for 1201 Pacific, a 305,000-square-foot Class A office tower in Tacoma, Wash. Gantry’s insurance-arm Genworth Life Insurance Co. provided the 10-year, fixed-rate, non-recourse note, which replaces the previous 10-year loan that expired in September.

Gantry Principal Mike Taylor and Senior Director Jeff Ballaine arranged the deal on behalf of the borrower.

Unico acquired the property in 1997 from WPAS for $28.8 million, with the help of a $36 million loan originated by Genworth Financial, according to CommercialEdge information. The building’s current assessed value is at $39 million, the Puget Sound Business Journal reported.

Completed in 1969, the LEED Gold-certified office tower rises 25 stories, making it the tallest building in Tacoma. The tenant roster includes Regus, Merrill Lynch, WSP, Vandeberg Johnson & Gandara, RBC Wealth Management and Panattoni Development, CommercialEdge data shows. The property had a 15 percent vacancy rate at the time of the transaction.

Seattle office vacancy rate climbs

Located at 1201 Pacific Ave., the building is across the street from a T Line light rail stop and 1 mile from Tacoma train station, which connects the city to downtown Seattle, some 33 miles north.

Seattle’s office market has been facing significant challenges this year, according to a recent CommercialEdge report. The metro, along with the Bay Area, Austin and San Francisco, had one of the highest vacancy rates across all U.S. markets as of October. Climbing 390 basis points year-over-year, Seattle’s rate reached 25.8 percent that month. This significant increase was in part due to a number of large projects being delivered.

The post Unico Lands $35M Refi for Tacoma High-Rise appeared first on Commercial Property Executive.

Prism Places and McWhinney are teaming up to create two separate mixed-use commercial districts totaling about 676,000 square feet across 213 acres in growing master-planned communities developed by McWhinney in the Denver suburbs. The retail and commercial space will be built in Broomfield and Loveland in northern Colorado starting next year.

Leases with an organic grocer have been signed for both developments. The stores will be 37,000 square feet each. The firms are not identifying the grocer at this time. All components of each project will be built concurrently.

Designed by AO, the first project to break ground will be Avenue South, a 364,000-square-foot district that will be the business and commercial hub for Centerra, a 3,000-acre master-planned community in Loveland. Construction is expected to begin in November 2025 and finish by March 2028. In addition to the organic grocery store, it will feature 128,000 square feet of retail, 72,000 square feet of restaurant space, 127,000 square feet of Class A office space and more than 1,750 new residential units.

READ ALSO: Why Mixed-Use Developments Are All About the Right Synergies

Center Street will total approximately 312,000 square feet and will serve as the business district for Baseline, a 1,100-acre master-planned community in Broomfield. Prism Places and McWhinney are expected to break ground on Center Street in September 2026. It is slated for completion by August 2028. The walkable commercial center will have 80,000 square feet of office space, 116,000 square feet of retail, 78,500 square feet of restaurant space and the 37,000-square-foot organic grocery store.  Michael Hsu Office of Architecture will design Center Street, which is also expected to have more than 400 residential units.

The partners want to offer a curated collection of sought-after brands, culinary talent, breweries, coffee shops, fast-casual favorites, wellness, fitness and other services. They listened to each of the communities to create dynamic yet distinct commercial spaces that reflect the DNAs of both Loveland and Broomfield, Stenn Parton, founder & CEO of Prism Places said in a company statement.

“We know that being walkable to amenities, restaurants, office and retail is a huge draw for residents, so creating these thoughtfully curated mixed-use commercial centers was always part of our plan for both Centerra and Baseline,” Chad McWhinney, co-founder, chairman & CEO of Denver- and Loveland-based McWhinney, told Commercial Property Executive.

“These projects are part of creating dynamic, complete communities, fostering economic resilience and encouraging community connection. With the growth in Loveland and Broomfield, these developments will provide essential hubs in support of local economies,” he added.

Earlier partnership

McWhinney and Prism Places have previously worked together. In June 2021, the companies acquired the Foothills Mall and several single- and multi-tenant buildings in Fort Collins, Colo., for $45 million after the previous owner defaulted on a $46.6 million loan and the 63-acre property was placed in receivership, according to The Coloradoan newspaper. The group that defaulted on the mall property was comprised of affiliates of Walton Street Capital and Alberta Development Partners, the newspaper reported.

In April 2023, the partners unveiled a mixed-use redevelopment proposal for the mall. Estimated at more than $300 million, the plan includes demolishing part of the enclosed mall to construct a walkable community center featuring a 70,000-square-foot office building, at least 750 residential units with a mix of for-sale and rental options and 440,000 square feet of open-air retail and restaurant space. The proposal includes a potential brewery and a large outdoor area for community gatherings.

The post Prism Places, McWhinney Plan Mixed-Use Districts Near Denver appeared first on Commercial Property Executive.

Construction on the 22-acre first phase of the business park in Pittsburg, Calif., is expected to begin in the second quarter of 2025. The data center should be ready for energization in 2027. It will be capable of supporting cloud, high-performance computing, artificial intelligence, government and enterprise workloads.

The Perseus Data Center project will be on the site of the former municipal Delta View Golf Course in Pittsburg in Contra Costa County. Plans call for a three-story, 347,740-square-foot data center building, a substation and switching station to be erected north of the Contra Costa Canal. The site is located on Golf Club Road, south of West Leland Road. It is situated 45 miles from San Francisco and 60 miles from Santa Clara, Calif.

READ ALSO: The Dizzying Pace of Data Center Investment

The Pittsburg City Council signed off on the Pittsburg Technology Park Specific Plan, which will guide implementation of the three-phase development, on Nov. 18. The City Council approved the sale of part of the 175-acre golf course to Pittsburg Land Holdings, a subsidiary of Stamford, Conn.,-based ADP, for $16.7 million in July 2022. The remainder of the golf course, which was closed in 2018, will be used for recreation, including sports fields.

Details for the ADP’s plans for the subsequent two phases were not released at this time. However, documents filed with the City of Pittsburg noted Phases II and III will cover land south of the canal and “allow for the further development of the plan area as a dynamic employment hub and light industrial uses.”

Perseus highlights

According to ADP, a data center business managed by AVAIO Capital, the Perseus facility will exemplify the company’s focus on sustainability. It is situated in an area where more than 90 percent of the grid power is from zero carbon sources, wind and solar supplied by Pittsburg Power Co. ADP has secured commitments for recycled water that will cover all of its cooling and non-potable water needs and will also incorporate on-site solar. The facility has been designed to use biofuels for its back-up generators.

The company has also secured a commitment from Pacific Gas & Electric, with access to seven different 230 kV power lines. Through a partnership with Pittsburg Power Co., the project will save companies money by offering power rates competitive with Silicon Valley Power in Santa Clara, a non-for-profit municipal electric utility owned and operated by the City of Santa Clara. The Pittsburg Power Co. is a municipal joint powers agency established between the City of Pittsburg and the city’s Redevelopment Agency that performs as a municipal utility with the authority to provide wholesale and electric and gas services.

The post $800M Data Center Campus Gets Green Light appeared first on Commercial Property Executive.

In the Bay Area’s largest office lease so far since the pandemic, Snowflake Inc. has committed to 773,000 square feet in Menlo Park, Calif., according to the San Francisco Chronicle. The data storage firm subleased the space from Meta and will occupy the office buildings within Menlo Gateway, a campus owned by Bohannon Cos. and Brookfield Asset Management.

JLL worked on behalf of Meta, which had preleased the space when it was still under construction, The San Francisco Standard reported. CBRE represented Snowflake. The leasing agreement is set to expire in 2033.

The Menlo Park location will be Snowflake’s largest North American office. Currently employing 7,000 people worldwide, the firm gave up its previous headquarters at 450 Concar Drive in San Mateo, Calif., in 2021 and indicated a Bozeman, Mont., address as its main executive office. The company, however, still occupies roughly 200,000 square feet in San Mateo under a lease that will expire in eight years.

Menlo Gateway, up close

Menlo Gateway came online in two phases between 2017 and 2019. The mixed-use campus comprises four office buildings rising eight stories, along with three parking garages and a 230-key hotel. Bohannon completed the complex using funds from two loans totaling $302.3 million, CommercialEdge shows.

The office facilities are LEED Gold-certified and have floorplates averaging between 26,000 ad 33,000 square feet. Amenities include a fitness center, a business training facility, indoor and outdoor café seating, meeting rooms and a restaurant.

READ ALSO: How AI Firms Are Reviving Office Space Demand

Located at 100-190 Independence Drive and 101-155 Constitution Drive, Menlo Gateway is within 22 miles from downtown San Jose. The 16-acre property is also 18 miles from San Jose Mineta International Airport.

JLL Senior Managing Directors Mark Bodie and Toss Vallentine, as well as Vice President Clarissa Richardson, represented Meta in the deal. CBRE Executive Vice Presidents Luke Ogelsby and George Fax, along with Vice President Nick DeMartini, worked on behalf of Snowflake.

Bay Area office vacancy rate on the rise

The Bay Area’s office vacancy rate clocked in at 26.4 percent as of October, registering a 630-basis-point increase year-over-year according to a CommercialEdge office report. The index was the second largest in the West, surpassed only by San Francisco (27.7 percent), However, the area remained one of the priciest, with listing rates averaging $54.2 that month, well above the $32.8 national figure.

One recent notable deal was Vaxcyte Inc.’s renewal and expansion to 258,581 square feet at Alexandria Real Estate Equities’ campus in San Carlos, Calif. The property is expected to measure 1.4 million square feet at full build-out.

And, earlier this year, Intermolecular signed a 146,159-square-foot lease extension at an R&D building in San Jose, Calif. Cannae Partners and Blue Vista Capital Management own the facility that came online in 1980.

The post Data Storage Giant Subleases 773 KSF From Meta appeared first on Commercial Property Executive.

IDEC Corp. has purchased Studio 2200, a 233,194-square-foot flex office asset in Carlsbad, Calif., from Hill Cos. for $49.5 million.

Cushman & Wakefield represented both parties. In addition, a CBRE team negotiated on behalf of the buyer.

Japan-based IDEC—which operates within the robotics and semiconductor industries, among others—will relocate its U.S. headquarters from a 83,600-square-foot property in Silicon Valley’s Sunnyvale, Calif. The new owner plans to occupy a large portion of Studio 2200 and continue leasing the remaining space to the facility’s existing tenants.

The current roster includes cloud infrastructure operator Arlo and Rubio’s Restaurant Group, the property serving as head office for both companies, according to CommercialEdge data. The duo occupies 63,650 square feet combined.

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Completed in 1990, Studio 2200 underwent renovations in 2007 and 2014. The facility can accommodate various uses including office, R&D and industrial. Moreover, the property has planned unit development rights to construct new product on the current parking lot.

The two-story building features 15-foot, 6-inch and 17-foot, 5-inch ceiling heights, but also a freight elevator, one loading dock—expandable to seven—and one grade loading position. Amenities include a gym, lounge areas and EV charging.

Located at 2200 Faraday Ave., the facility is the largest single asset at Carlsbad Research Center, a 560-acre high-tech park. The McClellan-Palomar Airport is some 2 miles away, while the Port of San Diego is roughly 32 miles southeast.

Cushman & Wakefield Executive Vice Chairman Aric Starck together with Senior Associate Drew Dodds represented the seller, while Executive Director Peter Curry negotiated on behalf of the buyer. CBRE Senior Vice President Dennis Visser and Vice President Weston Yahn also advised IDEC on the purchase.

San Diego office sales rebound

Year-to-date through September, 2.4 million square feet of office space traded in greater San Diego, marking an 82.7 percent spike year-over-year, according to a report by Kidder Mathews. What’s more, the third quarter figure clocked in at 1.1 million square feet—the first time it surpassed the 1 million mark since September 2022.

Meanwhile, office cap rates have been steadily climbing since 2022, nearly reaching 8 percent as of September, the report shows. Just two years ago, the cap rates hovered below the 6 percent point.

The metro’s office leasing activity totaled 3.5 million square feet during the first nine months of the year, down 31 percent year-over-year, Kidder Mathews shows. The tepid activity led to a 90-basis-point increase in vacancy year-over-year. The index reached 13 percent in September.

The post San Diego Flex Office Asset Trades for $50M appeared first on Commercial Property Executive.

On par with ongoing national trends, the Phoenix office sector’s construction activity slowed this year, with developers breaking ground on only nine projects, according to CommercialEdge data. The metro’s under-construction pipeline was one of the smallest among major U.S. metros as of the end of October.

However, the Valley of the Sun remained one of the top 10 best-performing markets for investment in the office sector. Meanwhile, coworking space in Phoenix was on par with the national figure, while conversion of office space into residential is a growing option to deal with the sector’s woes.

Development activity trails peer markets

As of October, Phoenix had 555,850 square feet of office space under construction, accounting for 0.4 percent of existing stock—below the national figure of 0.9 percent. When factoring in projects in the prospective and planning stages, the rate reached 1.9 percent of existing stock—still below the national rate of 3.2 percent.

The metro is still struggling with office supply and had one of the smallest pipelines among high-volume secondary markets. Austin led, with 3.5 million square feet underway, followed by San Diego (3.1 million square feet), Dallas (3 million square feet), Nashville (2.1 million square feet) and the Bay Area (1.8 million square feet). Markets with smaller pipelines were Detroit (524,000 square feet) and the Twin Cities (435,666 square feet).

The largest project currently under construction remains SunCap Property Group’s Gilbert Spectrum’s Building 3, a 119,222-square-foot office building that broke ground in July 2023. Its completion date was pushed to the end of the year.

Another notable office development is HonorHealth Medical Campus at Peoria, a 100,000-square-foot health-care facility. Developed by Anchor Health Properties, HonorHealth and SMIL, the project topped out in April this year is expected to come online in early 2025.

Construction starts totaled 561,845 square feet across nine properties year-to-date through October, while developers delivered 646,629 square feet in 10 properties.

One project that came online in 2024 is Levine Investments’ office campus at 8240 S. River Parkway in Tempe, Ariz., totaling 135,000 square feet. The property is part of Arizona State University’s Research Park.

Office-to-residential conversion an option for Phoenix

While the office landscape struggles with rising vacancy rates and owners are offloading properties, office-to-residential conversions pose an increasingly attractive option. A new tool developed by CommercialEdge, the Conversion Feasibility Index, evaluates and lists the potential of office properties for residential makeovers, based on building features and property-level scores.

There are currently 41 office properties in metro Phoenix with a score between 75 and 100, placing them as Tier I and II candidates for future residential redevelopment. Of the total, 35 are in Phoenix, while the Mesa and Scottsdale submarkets each have three candidates.

Transaction activity increased year-over-year

Year-to-date through October, Phoenix office properties traded for a total of $1 billion, comprising 7.2 million square feet across 82 assets. The deal volume increased by 18.5 percent on a year-over-year basis. The metro ranked eighth among the best-performing markets, with Manhattan leading with $3.3 billion. Across Sun Belt markets, the Bay Area came first with $2.1 billion and was followed by Dallas ($1.1 billion), while Phoenix outperformed Austin ($881 million).

One of the biggest transactions closed in the metro was the $97.9 million sale of 24th at Camelback II, a 302,209-square-foot Class A building. Hines sold the 11-story property at the end of October to Wide Open Excursions, in one of the largest office deals since 2022.

The second largest office transaction was the sale of 24th at Camelback I, an asset with the same square footage. The 2000-completed building changed hands from New York Real Estate Investors to Columbus Properties in a $86.1 million deal.

The average sale price for office properties in Phoenix was $164 per square foot—below the national figure of $177 per square foot. Among similar markets, deals were pricier in the Valley when compared to Dallas ($130 per square foot) and Houston ($104 per square foot).

Phoenix office vacancy rate below the national figure

As of October, Phoenix’s office vacancy rate reached 18.4 percent, down 60 basis points over a 12-month period and below the national rate of 19.4 percent. The index was one of the lowest among similar markets, such as Austin (27.7 percent), the Bay Area (26.4 percent), Houston (24.3 percent) and Dallas (23 percent).

Earlier this year, a fund managed by Cousins Properties inked a 26,042-square-foot lease at Hayden Ferry Lakeside II, a 318,240-square-foot office building in Tempe, Ariz. The in-home care provider previously occupied 25,000 square feet at the LEED Gold-certified property, under a sublease agreement.

An expansion in the coworking sector

As of October, coworking spaces in Phoenix totaled 2.8 million square feet, more than in the Bay Area (2.6 million square feet) and Austin (1.7 million square feet). Manhattan led all rankings with 11.2 million square feet. The share of flex office space as percentage of total leasable office space reached 1.9 percent, on par with the national figure, but higher than Austin’s (1.7 percent) and the Bay Area’s (1.2 percent).

Providers with the largest footprints in the metro remained unchanged—Regus led with 567,688 square feet, followed by Expansive (207,095 square feet), Industrious (201,712 square feet), Spaces (171,460 square feet) and Bellagio Executive Plaza (140,393 square feet).

The post Phoenix Office Market’s Small Wins Add Up appeared first on Commercial Property Executive.

In December 2023, the partners acquired a 32-acre lot within the Great Park Neighborhoods mixed-use community in Irvine for the ground-up development. According to The Real Deal, the parcel traded for $145.9 million.

The project encompasses four industrial buildings ranging from 73,000 square feet to 203,000 square feet.

The first two buildings will be financed through an $84.8 million construction loan from JPMorgan Chase. Bake Freeway has direct access to the I-5 freeway and Greater Orange County.

READ ALSO: 2025 CRE Outlook: The Year Ahead

The Class A properties will feature 36-foot clear warehouse space, 25 dock-high doors and two ground-level doors. The building at 15700 Bake Parkway will span 176,337 square feet across 9.5 acres and feature 186 parking spaces, while 15800 Bake Parkway will cover 202,831 square feet on 10 acres with 287 parking stalls.

Orange County’s strong industrial market

In the third quarter of 2024, Orange County’s overall industrial vacancy rate was 5 percent, with total availability at 7.6 percent, according to JLL Senior Managing Director Steve Wagner.

Recent deliveries of industrial facilities contribute to county-wide availability, he told Commercial Property Executive.

“South County and West County have demonstrated robust absorption, with newly delivered buildings largely leased by Aerospace/Defense and third-party logistics tenants,” he said. “In contrast, the Airport Area and North County are experiencing prolonged lease-up periods for new developments.”

Given the tenant profile in Orange County, properties featuring heavy power, abundant parking and an elevated office-to-warehouse ratio are garnering the most significant interest and activity, Wagner added. Although Orange County has experienced subdued leasing velocity in 2024, he anticipates a potential market rebound in 2025, boosted by an uptick in active requirements.

“This optimism is underpinned by strong market fundamentals, including its infill characteristics, high barriers to entry for new development and a diverse, skilled labor pool,” Wagner said. He added that the new development pipeline has also decelerated considerably, which may help balance supply and demand dynamics.

In June, the joint venture acquired a 60-acre, fully entitled development site in Peabody, Mass., where it has plans to create a four-warehouse building development. In August 2023, the joint venture also acquired a last-mile warehouse and distribution facility in San Francisco’s Bayview submarket.

The post Tishman Speyer, Mitsui Fudosan Launch SoCal Project appeared first on Commercial Property Executive.

Lena Centers, a Longpoint Realty Partners division, has acquired El Monte Shopping Plaza, a 101,269-square-foot retail center in Phoenix. Primestor Development sold the asset for $17 million, according to CommercialEdge information. The property was 99 percent leased at the time of closing. 

El Monte Shopping Plaza came online in 1962 and has since been continuously serving more than 160,000 people living within a 3-mile radius. Covering an 8.8-acre site, the property is anchored by El Rancho Market IGA, a Mexican and Hispanic specialty grocery store. Its tenant roster comprises 15 tenants, including Baskin-Robbins, Shoe Palace, ArchWell Health and USA Cash Services. 

El Monte Shopping Plaza is at 8917 N. 19th Ave., just south of the Valley light rail and 12 miles from downtown Phoenix. Interstate 17 is also nearby.

Colliers Executive Vice President Mindy Korth and Vice President JK Jackson together with Vice Chair El Warner and Vice President Caitlin Zirpolo arranged the transaction. 

Earlier this month, Longpoint purchased a slightly smaller retail center in Katy, Texas. JLL Capital Markets brokered the sale of the 96,486-square-foot asset that was completed in 1978.

The post Longpoint Acquires Phoenix Shopping Center appeared first on Commercial Property Executive.

Both investment volume and average sale price per square foot saw decreases at the end of the third quarter. Meanwhile, some significant office leases closed through the first nine months of the year, despite the heightened vacancy rate, as has been the case in most markets.

With office-to-residential conversions emerging as a trend across the country, CommercialEdge’s new tool, The Conversion Feasibility Index, is designed to highlight and evaluate which markets have strong repurposing fundamentals. While San Diego is not among the nation’s top markets for residential transformations, multiple Western markets have a percentage conversion potential between 15 to 20 percent and higher.

San Diego’s pipeline on the national podium

San Diego’s office sector had nearly 4.1 million square feet of space under construction spread across properties—the third largest pipeline among the best-performing markets in the U.S., only trailing San Francisco (4.7 million square feet) and Boston (11.6 million square feet).

The figure represents 4.2 percent of total stock, well above the national average of 1.0 percent and second after Boston’s 4.6 percent rate. When adding office projects in planning stages, San Diego’s share reached 6.8 percent.

Notable office projects underway include a 426,927-square-foot development at 4135 Campus Point Court, in the metro’s Torrey Pines submarket. Scheduled to come online by the end of 2025, the life science project is developed by Alexandria Real Estate Equities as part of its 2 million-square-foot Alexandria Point campus and is fully preleased by Bristol-Myers Squibb Co.

Another notable development is Bioterra, a 315,997-square-foot life science project at 5889 Oberlin Drive, within the University City submarket. With Longfellow Real Estate Partners as developer, the project broke ground in 2022 and is financed by a $165 million construction loan held by Bank OZK.

Developers delivered approximately 2.7 million square feet of office space across 12 properties, while construction starts included 1.2 million square feet across nine office projects. One of the significant completions in the metro was IQHQ’s Research and Development District, the first urban life science waterfront development in San Diego. RaDD’s The Rise (729,903 square feet), The Vida (396,154 square feet) and The Core (269,341 square feet) all came online in March.

Investment activity follows national pattern

Year-to-date through September, San Diego’s office sector saw $447 million in investments, with 26 properties totaling 2.1 million square feet having changed hands.

Significant office deals in San Diego included the $45.7 million sale of Symphony Towers, a 530,000-square-foot office asset in East San Diego. Originally completed in 1990, the Class A high-rise was purchased in September by Formosa. Irvine Co. sold the property, the second tallest skyscraper in the city, after more than 21 years of ownership.

The Hazard Center Office Tower also changed hands. The 268,645-square-foot office mid-rise was purchased by BH Properties for $40.3 million. Principal Real Estate Investors sold the 15-story building that previously traded in 2003.

Office properties traded at an average sale price of $196 per square foot, above the national average of $171 per square foot. The figure saw a significant drop since the $422 per square foot recorded at the end of May.

Across Western markets, Los Angeles led ($320 per square foot) and was followed by the Bay Area ($279 per square foot) and San Francisco ($268 per square foot). Only Phoenix ($174 per square foot), Portland ($132 per square foot) and Denver ($103 per square foot) recorded lower average sale prices when compared to San Diego.

Office vacancy rate keeps climbing

San Diego’s office vacancy rate reached 18.5 percent in September, below the national rate of 19.5 percent. The figure fluctuated from the 17.2 percent recorded in January, showing a consistent increase at 18.5 percent in May and at 19.1 percent in August. However, across similar markets, San Diego fared better than Austin (27.8 percent), Houston (25.2 percent), Denver (24.7 percent) and Portland (19.9 percent).

The asking rent prices in the metro averaged at $43.04 per square foot, on par with Los Angeles and outperforming the national average of $32.89 per square foot. Across similar markets, the Bay Area led with $54.74 per square foot, while San Diego was pricier than Denver ($30.79 per square foot), Houston ($30.14 per square foot) and Phoenix ($28.17 per square foot).

Significant office leases closed since the start of the year included Pfizer Oncology’s 230,000-square-foot deal at Torrey View, a life science project developed by Breakthrough Properties, a joint venture of Tishman Speyer and Bellco Capital. The tenant will occupy two of the three buildings at the 520,000-square-foot campus.

In June, Alexandria Real Estate Equities landed a 127,300-square-foot long-term agreement at its SD Tech by Alexandria Mega Campus in the Sorrento Mesa submarket. The tenant is a top-20 pharmaceutical company which signed a 10-year commitment at a 253,000-square-foot life science building, currently underway.

One month later, Lincoln Property Co. renewed the 134,000-square-foot, full-building lease with Charter Communications at Pacific Corporate Center, a two-story office property in the same submarket.

Coworking sector keeps steady

There were 2.1 million square feet of shared office space in San Diego as of September, on par with Nashville but more than in Austin (1.7 million square feet), Charlotte (1.5 million square feet) and Orlando (1.3 million square feet).

The rate of coworking space as percentage of total leasable office space stood at 2.1 percent, higher than the national average of 1.9 percent and outperforming Houston and Phoenix, both with 1.8 percent.

The flex office provider with the largest coworking footprint in San Diego remained Regus, leading with 299,162 square feet of space. The company was followed by Gateway Labs by Lilly (218,742 square feet), Premier Workspaces (122,948 square feet) and WeWork (105,282 square feet).

The post San Diego’s Office Sales, Prices Decelerate appeared first on Commercial Property Executive.

Originally scheduled for delivery in August 2024, the BLVD project still has unfinished retail spaces. The grand opening event is now slated for 2025, as reported by Las Vegas Review Journal.

Considered to be the largest standalone retail destination on The Strip, BLVD is developed by Gindi Capital. The company purchased the 9.5-acre site for $172 million back in 2019, with the help of a $97 million loan provided by JPMorgan Chase.

BWA Architects, 5+design and 3 Egg Studio provided architectural services for the three-story building, while Schimenti Construction, Colkitt Architecture and the internal PUMA team spearheaded the tenant fit-out.

READ ALSO: Retail’s Post-Pandemic Recovery

PUMA’s three-story retail space with Las Vegas-inspired apparel features a professional F1 simulator and an interactive arcade. Other retailers at the development include In-N-Out, H&M and Adidas. JLL Vice Chairman Michael Hirschfeld leads the leasing efforts at the property.

BLVD is in the middle of The Strip at 3743-3759 Las Vegas Blvd., east of Interstate 15. The location is surrounded by hotels and within walking distance of major sporting venues.

The retail scene in Las Vegas

The Las Vegas metropolitan area has recorded some positive retail metrics in the third quarter of this year, according to a recent Colliers report. Around 11,695 square feet of retail space came online, bringing year-to-date completions as of September to 109,109 square feet.

Meanwhile, the vacancy rate clocked in at 4.0 percent, 0.3 points lower than in the same period last year. The average asking rental rate for retail space increased to $1.71 per square foot, while the average sale price was $708.39 per square foot.

The post PUMA Opens Flagship Store in Las Vegas appeared first on Commercial Property Executive.

Amazon fully occupies the property, CommercialEdge data shows. Located at 18900 W. McDowell Road in Phoenix’s flourishing Southwest Valley submarket, the project was completed in March and covers more than 60 acres.

The property is near Interstate 10 and the AZ 303 Freeway, within six hours of the Los Angeles and Long Beach Ports. It includes a 40-foot clear height, multiple points of ingress/egress and 190-foot maneuverability, among other features.

READ ALSO: Industrial Demand Slips, But Avoids a Slump

Will Strong, Michael Matchett and Molly Hunt of Cushman & Wakefield’s National Industrial Advisory Group represented all parties in the transaction. Andy Markham, SIOR, Mike Haenel and Phil Haenel provided leasing advisory and will continue to handle the project’s leasing services.

Phoenix has benefited from its strategic location, pro-business attitude and continued population growth, Josh Tracy, senior vice president of real estate development at Ryan Cos., told Commercial Property Executive.

“These factors, combined with the tailwinds from onshoring and nearshoring, have allowed Phoenix to rise to the top of the list for large domestic and industrial companies,” Tracy said.

Cushman & Wakefield’s third-quarter 2024 report reveals a rise in occupancy of more than 7 million square feet year-to-date in the Southwest Valley. That growth outpaces every submarket in the metro area by a significant margin.

The Paloma Vista Center is part of a master-planned industrial park. A recently completed 423,000-square-foot building is adjacent to the property, and a 1.2 million-square-foot project is planned for the second phase. Upon completion, the industrial park is set to include a combined 2.7 million square feet.

An active industrial market

In September, LaSalle Investment Management acquired Buckeye85, an industrial building in Phoenix, on behalf of LaSalle Property Fund. The sellers were Lincoln Property Co. and Goldman Sachs, according to CommercialEdge data. The 321,892-square-foot warehouse was completed in 2023 and is fully leased to Tempur-Pedic, which uses it as a distribution center.

In October, Logistics Property Co. finished constructing its first industrial development in metro Phoenix. Palm Gateway Logistics Center is a 615,000-square-foot, four-building spec project in Mesa, Ariz.

The post BGO Buys 1 MSF Logistics Center for $118M appeared first on Commercial Property Executive.

SKB, in joint venture with Arc Capital Partners, has acquired Fiesta Tech Center, a two-building industrial campus totaling 243,370 square feet of space in Gilbert, Ariz., for $19.1 million.

Cushman & Wakefield worked on behalf of both parties. The seller was Nearon Enterprises, that owned the properties since 2019, according to CommercialEdge. The industrial campus previously changed hands for approximately $18.1 million.

Fiesta Center is 100 percent leased to Kaiser Garage Doors & Gates—fully occupying the first building—and MKB Construction and Symage.

READ ALSO: Top 5 Markets for Industrial Transactions

The two industrial buildings came online between 1987 and 1997 and are within the Southeast Valley submarket of Phoenix. Situated at 1250 and 1300 N. Fiesta Blvd., they feature 16-foot clear heights, dock levelers and bumpers, grade-level loading doors, eight dock-high loading doors each, office space and a total of 523 vehicle parking spots, according to CommercialEdge.

The some 16-acre industrial campus provides easy access to loops 101 and 202, while being 13 miles from Phoenix Sky Harbor International Airport, 19 miles from Phoenix-Mesa Gateway Airport and within 28 miles of Glendale, Ariz.

Vice Chairman Phil Haenel, Executive Vice Chairman Will Strong, Director Foster Bundy and Associate Katie Repine with Cushman & Wakefield’s Private Capital Group brokered the deal on behalf of both parties.

Pricy Phoenix among best-performing metros

Industrial deals in metro Phoenix totaled $1.9 billion as of September, according to a recent CommercialEdge report. Assets traded at an average sale price of $159 per square foot, above the national average of $130. Across Western markets, Phoenix outperformed Denver ($142 per square foot) and Central Valley ($129 per square foot).

One significant industrial transactions that closed earlier this year include EQT Exeter’s $60 million acquisition of a 641,906-square-foot asset in Buckeye, Ariz. The vacant property is part of a 145-acre master-planned project that will include 1.2 million square feet.

Earlier this month, Indus Realty Trust marked its first industrial acquisition in Phoenix with a $72.4 million purchase. The company picked up a 393,484-square-foot, fully leased distribution center from CBRE Investment Management.

The post Arc Capital, SKB Buy Phoenix Industrial Campus appeared first on Commercial Property Executive.

Gateway Classic Cars has signed to become Greystar’s first tenant at the Class A three-building Caliber by Greystar industrial development in Peoria, Ariz.

Reportedly the world’s largest classic car sales company, Gateway currently operates 20 U.S. sales showrooms, as well as an online sales platform, all focused on classic, exotic, muscle, vintage and antique cars.

The company will occupy 43,809 square feet in Caliber’s 122,863-square-foot Building B. The 411,918-square-foot industrial campus also includes the 114,446-square-foot Building A and the 174,609-square-foot Building C.

Anthony Lydon, John Lydon, Hagen Hyatt and Kelly Royle of JLL represent Greystar as the exclusive leasing brokers for Caliber. Hyatt and Sam Wetherby, also of JLL, represented the tenant.

The industrial component of a mixed-use development

Caliber is the industrial component of Greystar’s $500 million, 88-acre Peoria Place master-planned development. At full build-out, the mixed-use property will include luxury apartments, build-for-rent homes and ground-floor retail in Peoria’s historic downtown.

The three industrial buildings were the first to get underway at Peoria Place, in May 2023. The mixed-use master plan is intended in part to revitalize downtown infill land and started rolling forward meaningfully back in 2020, when the city government approved rezoning.

READ ALSO: Phoenix Industrial Development Leads the US

The buildings are at 9303, 9451 and 9595 N. 79th Ave. and feature 32-foot clear height, 50- by 52-foot column spacing, LED lighting, ESFR sprinklers and 190-foot truck courts. The warehouses also include speculative office space with conference rooms, break rooms, open and private offices.

In addition, the electrical infrastructure of each facility offers tenants the opportunity to double their power capacity from 3,000 to 6,000 amps, supporting such capabilities as roof-mounted solar systems and EV charging stations.

Caliber is at the southwest corner of 79th and Grand avenues, directly along U.S. Route 60, 2 miles from Loop 101. The location has quick access to the Westgate Entertainment District, State Farm Stadium and Pioneer Community Park, an 83-acre public space with dog parks, an urban lake, public art and more than 10 lighted fields for various sports.

Desert emptiness

The metro Phoenix industrial space market saw 36 buildings totaling 9.6 million square feet delivered in the third quarter, according to a recent report from JLL. The 7 million square feet of this new supply that came onto the market vacant pushed overall vacancy up by 160 basis points quarter-over-quarter.

“Notably, properties built since 2023 account for nearly 75 percent of total availability, highlighting the rapid transformation of Phoenix’s industrial stock,” JLL reported. “Infill submarkets with older inventory and limited land availability have seen less speculative development and continued to maintain lower vacancy rates.”

The post Greystar Lands 1st Industrial Tenant at $500M Phoenix Mixed-Use appeared first on Commercial Property Executive.

Alexandria Real Estate Equities Inc. has signed a 10-year, 258,581-square-foot lease with Vaxcyte Inc. at 825 Industrial Road, within the Alexandria Center for Life Science – San Carlos. The deal included both new space and an extension of the clinical-stage biopharmaceutical company’s current lease at the property.

Vaxcyte has been an anchor tenant at the two-building life science center since the property came online in 2021. The tenant roster also includes Cargo Therapeutics and Allakos Inc., according to CommercialEdge information.

Amenities at the six-story Class AAA campus in San Carlos, Calif., comprises a pair of buildings at 825 Industrial Road and 835 Industrial Road. The existing campus is 97.4 percent occupied and is slated for a future expansion of 1.4 million square feet. Amenities include conference and meeting spaces, a courtyard, an eatery, a coffee bar, as well as a fitness and wellness center.

The Alexandria Center for Life Science is just off Highway 101 and across the road from San Carlos Airport. The campus is also less than 1 mile away from light rail and bus stops. Downtown San Francisco is 25 miles north.

In April, Alexandria also signed a lease renewal and extension at its Alexandria Center for Advanced Technologies – South San Francisco campus. A machine learning–powered drug discovery and development company committed to 143,188 rentable square feet.

The post Alexandria Inks 259 KSF Bay Area Life Science Lease appeared first on Commercial Property Executive.

The market’s under-construction pipeline at the end of September reached 10.3 million square feet. A total of 32 projects were underway, accounting for 1.5 percent of existing inventory.

The Inland Empire also ranked as the fourth most expensive market in the nation, with an average price per square foot of $265, surpassed only by the Bay Area ($476 per square foot), Orange County ($319 per square foot) and Los Angeles ($297 per square foot). The total investment volume, however, clocked in at $1.5 billion year-to-date as of September, less than half the $3.8 billion registered during the same time frame in 2023.

Inland Empire’s pipeline still in the spotlight

At the end of September, the Inland Empire’s industrial sector had about 10.3 million square feet of space underway. The 32 developments under construction account for 1.5 percent of the metro’s total stock, slightly below the 1.8 percent U.S. average.

The market ranked fifth nationally in terms of pipeline, while Phoenix held onto first place, with 33.8 million square feet. Among other major industrial markets, the metro fared better than Chicago (8.9 million square feet), New Jersey (6.8 million square feet) and Indianapolis (2.3 million square feet).

Year-over-year, the Inland Empire’s industrial deliveries increased significantly, showing that the market is still a hotbed for activity. In September, a joint venture between Wildcat Capital Management and DECA Cos. obtained $135 million to finance the construction and lease-up of Perris Gateway, an 850,000-square-foot industrial property in Perris, Calif. The already underway facility is expected to be available for lease in 2025.

Another notable project in the metro is Shopoff Realty Investments’ 1 million-square-foot facility. The company acquired a 55-acre site back in June and plans to complete the distribution and warehouse space by the end of next year.

Industrial completions rise year-over-year

The Inland Empire’s industrial sector saw roughly 19.2 million square feet of space being delivered year-to-date as of September. A total of 57 properties came online, accounting for 2.9 percent of existing stock, more than double the 1.4 percent national average.

Additionally, the metro’s completion pipeline slightly grew compared to a year ago, when about 18.4 million square feet of space were delivered. Among peer markets, the metro fared better than Indianapolis (6.1 million square feet) and New Jersey (7.1 million square feet), but was surpassed by Phoenix (23.5 million square feet) and Dallas (25.2 million square feet).

Earlier this year, Affinius Capital completed the almost 1.9 million-square-foot Building 1 at Beaumont Crossroads Logistics Park II in Beaumont Capital, Calif. The developer took out a $152 million construction loan last year, originated by Citizens Bank, CommercialEdge data shows.

Inland Empire remains one of the priciest markets

The Inland Empire’s industrial investment volume year-to-date as of September reached north of $1.5 billion. Peer markets such as Dallas ($3.4 billion), the Bay Area ($2.8 billion) and Houston ($2.1 billion) surpassed the metro, while Orange County ($803 million) and Philadelphia ($687 million) were at the opposite pole.

Assets in the Inland Empire traded for $265 per square foot on average, well above the $130 U.S. index. The metro ranked as the fourth most expensive market, with only the Bay Area ($476 per square foot), Orange County ($319 per square foot) and Los Angeles ($297 per square foot) surpassing it.

Following national trends, sales in the metro more than halved year-over-year, however. The Inland Empire registered $3.8 billion in transactions volume during 2023’s first nine months. Despite this significant decline, the average price per square foot rose about $13.

In one of the most notable deals of the year, Clarion Partners sold the 184,654-square foot North San Bernardino Business Park to Stockbridge Capital Group for $168.3 million, CommercialEdge data shows. The two-building campus traded for $911.43 per square foot.

Rent growth tops national figures

As of September, the metro kept its position as national leader in terms of rent growth, with a 12.1 percent increase over the last twelve months, reaching $10.72. Peer markets such as Los Angeles ($14.98) and Orange County ($15.73) were some of the priciest, while Phoenix ($9.12) and Chicago ($6.17) were at the opposite end of the spectrum.

The Inland Empire’s industrial vacancy rate during the same month clocked in at 7.3 percent, slightly above the 7.0 percent national average and 290 basis points higher compared to year-ago figures. Among peer markets, Indianapolis (8.3 percent) and New Jersey (8.6 percent) fared worse, while Atlanta (6.1 percent) and Phoenix (5.6 percent) had less space available.

In June, Logistar Inc. inked a 146,816-square-foot leasing agreement at Airport Distribution Center, a 250,248-square-foot business park in Ontario, Calif. The company will occupy a full building at Alere Property Group’s campus.

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These firms are delaying commitments while gradually expanding their footprints, to avoid significant swings in rapid expansions and subsequent downsizings.

Since the beginning of 2023, AI companies accounted for 20 percent of all leases signed in the Greater Bay Area and, together with other tech sectors, nearly 44 percent of all leasing activity.

AI firms’ lease terms generally lean toward three years rather than the average of approximately five years or more for non-AI tenants. Since the start of 2023, most AI leases (61 percent) in San Francisco were signed for sublease space. In Silicon Valley, 25 percent were subleases.

Newmark also reported that since the beginning of 2023, San Francisco AI firms signed on for an average of 4,700 square feet in the early stage, increasing to 9,200 square feet during their growth phase. As these companies hired more employees, their space needs jumped to an average of 28,500 square feet.

However, earlier this month, AI-powered company Notion signed a 105,000-square-foot, 10-year lease at The Monadnock Building. The 204,625-square-foot office building in San Francisco’s South Financial District submarket is owned by Brookfield Properties. Notion will occupy five floors at the 10-story property, with the option to expand.

Tech firms coming and going

San Francisco has now experienced flat or declining rents for eight consecutive quarters, Moody’s Data Scientist David Caputo told Commercial Property Executive. Among the 15 traditional tech markets, rents only declined in San Francisco (by 0.3 percent), according to Moody’s third-quarter data.

X’s San Francisco headquarters is relocating to Austin, Texas. Legal and financial disputes have surfaced, including a lawsuit against X for unpaid rent on its San Francisco headquarters and controversy over unauthorized modifications to its office space, Caputo said.

“This departure exemplifies a broader trend of tech companies scaling back their presence in downtown San Francisco,” Caputo added. “However, there is optimism for reversing this trend, fueled by the number of AI companies in the Bay Area.”

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These entities attract significant venture capital investment and show a marked preference for maintaining office-based work environments, according to Caputo. “Consequently, leasing activity has witnessed a 40 percent increase, with tenant demand surging. Over 25 AI companies have sought 1 million square feet of office space this year alone.”

He added that efforts by local officials and community organizations to revitalize downtown areas are noteworthy. Initiatives such as cultural events and pop-ups aim to rebuild office demand. These measures, with the growth of AI companies, are anticipated to reduce San Francisco’s vacancy rate by 2025.

The capital of AI

Not only have AI companies been responsible for leasing larger blocks of space in San Francisco over the past couple of years, but their rapid growth means that this activity has translated into positive absorption and occupancy growth, according to Robert Sammons, Cushman & Wakefield’s research director in Northern California.

San Francisco and the Bay Area have become the “capital of AI” not only because of the number of companies located there (730 at last count at the end of the third quarter of 2024 in the Bay Area, with 440 of those residing in San Francisco—out of 3,344 globally) but also because of the venture capital being pumped into them.

According to PitchBook, through the third quarter of this year, Bay Area companies have absorbed 67.8 percent of global generative AI funding and 31 percent of global funding into San Francisco-based companies alone. Over that time, 23 of the top 50 VC funding transactions went into Bay Area companies, with 10 in San Francisco proper.

“Something to be aware of going forward—there will undoubtedly be M&A activity among some of these AI companies, which could either create further expansion among the winners or a decline in leasing and hiring as well; it’s just too soon to tell,” Sammons said.

AI talent is concentrated in the Bay Area

AI companies have nearly doubled their footprint since 2021, occupying close to 11.6 million square feet in the Bay Area, according to Chris Pham, senior research analyst for JLL.

“AI talent is primarily concentrated in the Bay Area, which will remain an AI superhub,” Pham said.

AI companies have been growing at roughly 37 percent on a compound annual growth rate since 2013, Pham added. The Bay Area AI footprint this year stands at 1.1 million square feet in the East Bay, 1.9 million square feet in the Mid-Peninsula, 3.8 million square feet in Silicon Valley and 4.8 million square feet in San Francisco.

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New-to-market AI deals, primarily from new startups, make up close to 40 percent of the AI count this year in the Bay Area, Pham said.

OpenAI, Notion, Anthropic and many other AI firms generated leasing activity of well over 1 million square feet in 2024 alone, according to Markus Shayeb, senior vice president & San Francisco managing director of TRI Commercial Real Estate Services/CORFAC International.

“Numerous AI-related companies are searching for spaces exceeding 50,000 square feet, making up the majority of predicted office leasing activity in 2025 in San Francisco alone,” Shayeb said. “As many as 100 companies with less than 50 employees are searching for space.”

A struggle with gentrification and displacement

The Bay Area had seen a significant drop in office space occupancy since COVID-19, but now we’re seeing a surge in demand, particularly from companies focused on AI, said Mahalakshmi Balachandran, senior associate in the Northern California Office of McCullough Landscape Architecture.

This shift is driving a need for different types of spaces, such as those with a larger footprint for data centers. “At the same time, there’s a growing preference for sustainable building practices and adaptive reuse of existing structures. However, while AI brings new opportunities, it raises concerns about equity and accessibility.”

The Bay Area real estate market has long struggled with gentrification and displacement, Balachandran added. “Without careful oversight, AI could worsen these issues, making it harder for low-income and marginalized communities to own homes. When working with existing data, AI tools can reinforce existing patterns of exclusion within neighborhoods. There needs to be a cautious integration and approach to inferring the results of such analysis.”

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Lightstone intends to invest $10 million in capital improvements and tenant upgrades, as reported by Shopping Center Business. FFO Real Estate Advisors will oversee outlet leasing, while Spinoso Real Estate Group will handle leasing for big-box stores and mall tenants.

WPG had acquired the property back in 1995, according to CommercialEdge data. Formerly known as SuperMall of the Great Northwest, the shopping center came online in 1995 and was rebranded as The Outlet Collection Seattle in 2012.

Anchored by Burlington, Nordstrom Rack, Dave & Busters and FieldhouseUSA, the mall features a diverse mix of regional and national retailers such as Adidas Outlet Store, Ashley HomeStore, American Eagle, Best Buy Outlet, Claire’s, Coach, Columbia’s, H&M, GAP, Famous Footwear, Nike and Vans, among others. At the time of sale, the property was 98 percent leased.

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The Outlet Collection Seattle occupies some 90 acres at 1101 Outlet Collection Way, near the intersection of highways 18 and 167. The mall has roughly 4.9 million visits per year.

CBRE Senior Vice President Dino Christophilis and Senior Associate Daniel Tibeau, together with Executive Vice Presidents Richard Frolik and George Good, led the team that brokered the transaction on behalf of the seller.

Last month, WPG sold Waterford Lakes Town Center, a 976,000-square-foot grocery-anchored lifestyle center in Orlando, Fla., for $322 million. Kimco Realty purchased the signature asset.

Seattle’s stable retail market

Seattle’s retail market has seen a significant investment uptick in 2024, with nearly $1 billion in transactions across 215 sales year-to-date through September, according to a Kidder Mathews report. This marks a 40 percent increase compared to the first three quarters of last year. Additionally, more neighborhood centers changed hands this year.

The market’s vacancy rates remained low and stable, with a direct vacancy rate of 3.0 percent at the end of September. The value was the lowest on the West Coast and among the lowest in the nation, the report showed.

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EQT Exeter has purchased two industrial assets totaling roughly 1.3 million square feet in American Canyon, Calif. DWS sold the properties for $202 million, according to The Registry. JLL represented the seller.

The deal involved two facilities within Napa Logistics Park, namely the 646,000-square-foot 1 Middleton Way, as well as 400 Boone Drive comprising 702,000 square feet. DWS acquired the former for $90.5 million in 2018 and the latter for $123.4 million in 2022, CommercialEdge shows.

Spanning more than 41 acres, the 2017-completed facility at 1 Middleton Way was 100 percent, triple-net leased to IKEA at the time of the deal. The property features 32-foot clear heights, 150 dock doors and four grade-level doors, as well as a 135-foot truck court, among others.

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Situated on some 37 acres, the building at 400 Boone Drive debuted in 2020. At the time of the sale, Biagi Bros was leasing approximately 336,960 square feet at the property. It encompasses 130 dock-high doors and four grade-level doors, as well as 60-foot speed bays and 40-foot clear heights.

The 218-acre Napa Logistics Park is roughly 41 miles northeast of downtown San Francisco. A Union Pacific Railroad line services the industrial campus, providing access to the Port of Oakland, some 37 miles away.

EQT Exeter’s Western market purchase complemented its latest industrial shopping spree, which focused mainly on the Southeast and Midwest markets. Just days ago, the company acquired 33 assets totaling 4.5 million square feet through its Value Fund VI.

JLL Managing Director Ryan Sitov, Director Melinda Marino and Chris Neeb, alongside Senior Managing Directors Glen Dowling and Matt Bracco, represented DWS in the transaction proceedings.

San Francisco industrial pipeline shrinks

During 2024’s first three quarters, Greater San Francisco’s industrial sale volume clocked in at roughly $53 million, according to CommercialEdge data. Assets traded for an average of approximately $299 per square foot—more than double the national average of $130 per square foot.

As of November, there were no significant industrial projects underway in metro San Francisco, the same source shows. Additionally, more than 22 percent of the inventory is clustered within Napa County’s borders.

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AEW Capital Management has purchased Vista Commons, a 98,716-square-foot retail center in Las Vegas. MIG Real Estate sold the asset for $56.1 million, according to CommercialEdge information. JLL represented the seller.

MIG had acquired the retail center in January 2011 for $24.3 million from GGP, according to CommercialEdge information. In 2018, the property became subject to a 10-year, $26.2 million loan originated by Truist Bank.

Completed in 2007 on a 10.3-acre site, Vista Commons was 100 percent leased at the time of sale. A 56,000-square-foot Albertsons store anchors the property. The tenant roster also includes Bank of America, Wells Fargo and Dunkin’ Donuts.

The retail center is at 11700-11770 W. Charleston Blvd. in the Summerlin area of Las Vegas, in an area where the daily car traffic reaches more than 40,000 vehicles. The average household income within a 3-mile area exceeds $155,000. Downtown Vegas is some 15 miles east.

JLL Managing Director Gleb Lvovich and Senior Director Dan Tyner led the Capital Market’s Investment and Sales Advisory team that secured the deal.

AEW Capital Management occupies the third position in Commercial Property Executive‘s 2024 top commercial real estate owners, after CBRE Investment Management and Clarion Partners. The firm’s $63.4 billion portfolio, totaling 212 million square feet, comprises office, industrial, retail, health-care and hospitality assets.

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Back in 2014, the property became subject to two CMBS loans totaling $145 million from Wells Fargo Bank, with Wilmington Trust as a trustee, according to CommercialEdge data.

Crossings at Corona came online in 2005 on some 103 acres. Shadow-anchored by Target, the property is home to a diverse mix of regional and national retailers such as Marshall’s, Kohl’s, Barnes & Noble, Ross, HomeGoods, Best Buy, Sportsman’s Warehouse, Famous Footwear, Burlington, Bath & Body Works, Michaels, Edward’s Theatre, Game Stop, Petco, Sephora, Ulta Beauty and Victoria’s Secret, among others.

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Located at 3615 Grand Oaks, the shopping center is at the northeast corner of Interstate 15 and Cajalco Road, in an area where the daily traffic count reaches more than 200,000 vehicles, according to JLL. The average household income within a 3-mile radius is approximately $157,625.

JLL Managing Director John Marshall, Director Spencer Seibring and Analyst Nick Englhard led the Debt Advisory team in arranging the financing for the borrower.

Inland Empire’s retail scene

Inland Empire’s retail market saw a slight contraction in the third quarter of this year, according to a recent CBRE report. The vacancy rate clocked in at 6.6 percent, up 20 basis points from the previous quarter. Approximately 41,000 square feet of retail space came online in the region.

Meanwhile, retail investment sales totaled $145.8 million in the third quarter of this year. The second-largest transaction of the interval involved a 273,424-square-foot retail center in Fontana, Calif. A joint venture between MCB Real Estate and a fund managed by DRA Advisors purchased the asset for $64.7 million.

The post Castle & Cooke Lands $140M for Inland Empire Retail Center appeared first on Commercial Property Executive.

Woodside Health has paid $20.9 million for Paradise Valley Plaza, a three-building, multi-tenant office and medical complex spanning 100,203 square feet in Scottsdale, Ariz., a Phoenix submarket. Cloud Peak Development LLC sold the asset in a deal brokered by Cushman & Wakefield.

The asset previously traded in September 2020, when Cloud Peak acquired it from Fenway Capital Advisors for $16.7 million—about $172.6 per square foot—according to CommercialEdge information.

The Class B campus came online in two phases in 1985 and 2000 and underwent cosmetic renovations in 2014. Its two-story buildings have floorplates of 30,000 square feet, CommercialEdge shows. Amenities include interior and outdoor courtyards, exterior loading suites and about 388 parking spaces.

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The property was 95 percent leased at the time of sale, with the tenant roster including office and medical/wellness companies such as HonorHealth, Next Level Physical Therapy and Forma Plastic Surgery.

Located at 5010, 5020 and 5040 E. Shea Blvd., the 6-acre complex is some 15 miles from downtown Phoenix and 14 miles from the Phoenix Sky Harbor International Airport. Medical providers in the surrounding area include Mountain View Medical Center, HonorHealth Medical Group and Dickerson Orthodontics.

Cushman & Wakefield’s Private Capital Markets Executive Managing Directors Eric Wichterman and Chris Toci, along with Managing Director Mike Coover, represented the seller.

MOB sector in the spotlight, despite some challenges

With an ever larger aging population driving demand, the U.S. medical office real estate market is projected to see further expansion in the coming years. Investors expect capital market activity to pick up as interest rates fall and the bid/ask spread narrows. However, the sector also faces challenges, such as a national shortage of medical specialists, which may impact growth despite the generally positive outlook.

Phoenix registered 31 medical office building sales over $1 million in the third quarter of this year, according to a CBRE report. Out of them, more than a quarter were part of portfolio transactions. Assets traded for $328.2 per square foot on average.

In October, Meridian purchased a 94,569-square-foot medical office building in Tucson, Ariz., from an affiliate of Tenet Health. The property will undergo a capex program slated for completion in early 2026 and will be fully occupied by El Rio Health.

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Law Firm Snell & Wilmer has signed a 57,326-square-foot renewal and expansion at Plaza Tower, a 460,000-square-foot office building in Costa Mesa, Calif., within the South Coast submarket of Orange County. JLL and CBRE negotiated on behalf of the tenant, while Cushman & Wakefield worked on behalf of the landlord.

The property is part of South Coast Plaza, a three-building office collection totaling nearly 1.3 million square feet of space. The ensemble is owned by C.J. Segerstrom & Sons, CommercialEdge shows.

The deal represents one of the largest law firm leases signed in Orange County this year. Snell & Wilmer’s expansion will accommodate more than 70 lawyers, marking the company’s 35th anniversary in the metro. The firm will upgrade its office space, spread across three floors, at the 21-story office building.

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Other tenants at Plaza Tower includes Ducommun Inc., IBM, CONTAX SAP Partner, Edelman Financial Engines and Porsche Design of America Inc., among others, according to CommercialEdge. The same source shows that the law firm has been a tenant here since 2014 and it previously occupied 53,000 square feet.

JLL Managing Director Kevin Bender and CBRE Executive Vice President Charles Nixon represented the tenant during leasing negotiations. Cushman & Wakefield’s Executive Director Robert Lambert and Executive Vice Chairman Rick Kaplan assisted the landlord.

Prime office space in Orange County

Plaza Tower is at 600 Anton Blvd. and features floorplates between 20,624 and 22,802 square feet, eight passenger elevators, 1,500 square feet of first-floor retail space and 1,874 parking spots. Completed in 1992, the landmark property was designed by architect César Pelli, and its amenities include a fitness center with locker rooms, on-site dining options.

The building offers access to the South Coast Plaza’s more than 250 boutiques and restaurants, as well as to Segerstrom Center for the Arts. The 5-acre property allows easy access to Interstate 405 and is 2 miles from John Wayne Airport, 5 miles from downtown Santa Ana, Calif. and 10 miles from downtown Orange, Calif.

According to JLL’s third-quarter office report for Orange County, the leasing volume in the metro increased by 5 percent on a quarter-over-quarter basis, with the largest deals being renewals. At the end of the third quarter, the metro’s total office vacancy stood at 17.4 percent, below the national figure of 19.5 percent.

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Capstone Advisors has purchased Beachwalk Shopping Center, a 55,580-square-foot retail center in Solana Beach, Calif., for $32.1 million. The buyer also took out a $25.8 million loan from LoanCore Capital for this property, according to CommercialEdge information.

JLL represented the seller, identified by the same source as GEM Realty Capital. The firm had acquired the asset in 2017 for $33.3 million.

Completed in 1993 on a 3-acre site, Beachwalk consists of eight buildings housing a mix of retail, restaurants, medical and creative office spaces. Its tenants include food, beverage and wellness vendors.

The new owner intends to revitalize the center through physical improvements and tenant roster additions. Pure Infrared Sauna and Lana Restaurant, currently under construction, will be the first of many new businesses to open soon at the property.

The shopping center is at 437 S. Highway 101, across from the Coaster commuter rail which connects Solana Beach to Encinitas, Calif., and San Diego. Del Mar, Calif., is less than 2 miles south, while Interstate 5 is 2 miles east. 

JLL Managing Directors Geoff Tranchina and Gleb Lvovich, together with Senior Director Daniel Tyner, led the Investment Sales and Advisory team that completed the transaction. Tranchina and Lvovich were also instrumental in another recent retail center sale in California, a free-standing Whole Foods store that traded for $44.4 million.  

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Real Estate Development Associates and Clarion Partners have completed construction on Union Commerce Center, a Class A distribution facility in central Los Angeles.

Located at 3690 E. Union Pacific Ave., the property covers 11 acres and has direct access to key logistical freeways, including Interstate 5 and Interstate 710. Union Commerce Center is convenient to the Ports of Los Angeles and Long Beach, and Union Pacific Railroad. It is also 100 miles or less from all Southern California points.

READ ALSO: Industrial Demand Slips, But Avoids a Slump

Cushman & Wakefield’s John Minervini, Erik Larson, Chris Tolles, and Paul Sims with Cushman & Wakefield are leading the facility’s leasing efforts.

The development comprises a single 253,318-square-foot industrial building with a 36-foot clear height, 35 dock-high doors (with levelers on all docks), a pair of oversized grade-level doors, 41 trailer stalls, an ESFR K-25 sprinkler system, skylights, wide column spacing and ample expandable power. Rail access loading is possible at the location.

Cushman & Wakefield also represented Archer Daniels Midland Co. when the site was sold to REDA in late 2020. Quaker Oats was the previous site owner.

Tribute murals stand out

The Union Commerce Center also includes a recently finished, hand-painted mural. It wraps around a 500,000-gallon, 35-foot tall, 170-foot round water tower, honoring Los Angeles’ cityscape and heritage. The mural also serves the property’s fire sprinkler system.

Local artist Downtown Daniel (Daniel Antelo) produced the mural. Antelo’s artwork has been featured on walls and canvases nationwide. He has also worked for Nike, Kobe Bryant’s family, Marathon Clothing, the LA Rams, Clippers and Dodgers, among other projects.

Including tribute murals in commercial real estate projects is trending. For example, to honor her son, Akesh Yelavarthy, who died from Covid in 2020 at age 30, GI Stone President Sandya Dandamudi commissioned Cinque Smith and Gabriel Moskolis of Lymelite Studio to create a vibrant mural on the side of the leading stone supplier/fabricator’s new building, which is located next door to its longtime headquarters in a largely industrial area near downtown Chicago.

Completed in October, the graphic mural depicting Yelavarthy with his beloved pooch, Chance, enlivens the building, which the firm acquired last year, with plans to redevelop it as an innovative showroom and event space slated to open in late 2025.

“Akesh loved urban art, so this mural reflecting his joy of life and love for his friends is a fitting tribute,” Dandamudi told Commercial Property Executive.

A wall-to-wall, floor-to-ceiling abstract mural pulls all the colors together at Oklahoma City’s BancFirst Tower.

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Built in 1963, Biltmore Fashion Park was Arizona’s first luxury outdoor shopping and dining center. The iconic property is known for its architecture, high-end retailers and restaurants and community events.

RED, a Phoenix-based commercial real estate company with a mixed-use and retail portfolio, acquired the remaining 50 percent ownership of the property from Macerich for $110 million in July, according to the Arizona Republic newspaper.

Earlier in the year, Macerich had filed plans with the city of Phoenix to build a mixed-use high-rise at the corner of 24th Street and Camelback ranging from 140 to 165 feet tall. The proposal is still under review but is expected to include residential offerings, upscale hotel accommodations and office space. Further details about RED’s plans for the mixed-use destination were not released at this time.

READ ALSO: How Dining Trends Are Reshaping Shopping Centers

However, RED is planning a strategic revitalization of Biltmore Fashion Park, including making improvements to landscaping and upgrading lighting. The company, which recently relocated its headquarters to the center, has also signed several new retail tenants. They will join anchors Macy’s, Saks Fifth Avenue and Life Time Fitness, and more than 65 specialty retailers including Anthropologie, J. Crew, Gorjana, Ralph Lauren, Lululemon, Pottery Barn and Sephora. The center’s dining options include Capital Grille, Blanco Cocina + Cantina, Zinburger, Ambrogio15 and True Food Kitchen.

Rye 51, a high-end menswear retailer offering custom suits, slacks, shirts and styling services, has relocated to a new 2,400-square-foot space between Tumi and Soma. Warby Parker eyewear company is slated to open in March 2025 in a more than 2,000-square-foot store next to Soma and Cornelia Park. Apex Tailoring, a luxury tailoring and custom suit boutique with a focus on menswear, will open in December in an 894-square-foot pop-up spot next to Macy’s. Another pop-up, PILLAR, an activewear and leisurewear retailer, is opening its first brick-and-mortar location in a 1,068-square-foot space next to Life Time Fitness this week.

More RED projects

RED Development, which is celebrating its 30th anniversary this year, is known for its mixed-use and retail properties across the Southwest and Midwest. Among its high-profile developments in the Phoenix area include PV, the $2 billion redevelopment of the former Paradise Valley Mall, and The Grove, a $500 million development on the Camelback Corridor. Last year, RED formed a joint venture with Globe Corp. to build a 150-acre mixed-use development in Goodyear, Ariz., that will create an upscale entertainment hub called GSQ with dining, retail, multifamily, office and hotel offerings.

In Dallas, RED and joint venture partner KB Asset Management Co. Ltd. refinanced the office and retail component of The Union, an 800,000-square-foot mixed-use property in the Uptown submarket, last month with a $227 million loan from Goldman Sachs.

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