National Market Review
ATLANTA
Residential/Commercial
Four of the 10 fastest-growing counties in America are in Atlanta's suburbs, according to a Census Bureau report released last month. Job opportunities and affordable housing are drawing people from around the nation to the four counties, which form a semicircle around Atlanta. The populations of Forsyth, Henry, Newton and Paulding counties have each grown by about 25 percent from April 2000 to July 2003. The area has also experienced some of the worst traffic congestion in the country as a result.
Commercial
Capital City Plaza, a 410,000-square-foot building in the Buckhead district, was sold last month for the largest price per square foot for an office property in the city. Parkway Properties paid $78.6 million, or $192 per square foot, for the 92 percent-leased Peachtree Road building. The building also lays claim to signing the largest office lease of the year to date. Blue Cross/Blue Shield of Georgia renewed its lease on 265,000 square feet for 10 years at an estimated aggregate rent of $53 million, by far the biggest deal of its kind in metro Atlanta in the last five years, according to local brokers.
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BOSTON
Commercial
Washington Street, South End's main drag, has seen considerable revitalization in recent years. This past month, construction got underway on the street for Gateway Terrace, a $60 million condominium loft project to be completed by the end of 2005. Seventy of the 133 units sold before the first brick was laid. A major redevelopment push over the last six years has led to about $500 million in public and private investment in housing, parking, retail, streetscape, parks, and an elementary school along a 1.4-mile stretch from the Massachusetts Turnpike to Melnea Cass Boulevard. Except for the South Boston Waterfront, the city has directed the highest amount of development money into this corridor, according to experts.
Residential
Massachusetts has experienced robust growth in high-end home sales, despite the state's slow economic recovery and steadily declining employment rate. Fifty single-family homes sold for $2.5 million or more before the end of the first quarter, representing a significant increase from the 20 luxury units sold during the same three months of last year, according to MLS Property Information Network.
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CHICAGO
Commercial
The far southwest suburbs have emerged in the past two years as the hottest retail development corridor around Chicago. By the U.S. Census Bureau's reckoning, the three fastest-growing towns in Illinois are southwest suburban Romeoville, Oswego and Plainfield. In Oswego, the population has grown six-fold, to 19,000 since 1990. Retailers such as Home Depot, Target, Wal-Mart and Ikea are already there or arriving. Land suitable for retail can still be had for $3 to $5 a square foot, compared with $4 to $6 in the northwest suburbs. The lower price can add an extra 10 percent to profits on a finished project, developers say.
Residential
Low mortgage rates have home prices rising swiftly - and fears are multiplying that the housing market will crash when rates rise. But the typical Chicago-area homeowner needn't worry. While the median home price in the San Diego area rose 94 percent between 1998 and 2003, for example, the median price in Chicago gained just 39 percent. The median home price in the city, $229,470, will keep climbing - albeit at a slower rate - even if the local 30-year mortgage rate rises to 7% from its current 5.4%, according to a forecast by Fidelity National Financial.
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DETROIT
Commercial
A pair of high-profile business closings in Sterling Heights has the city's leaders taking a closer look at how they can keep retail spaces filled - and even whether some of those buildings should continue to be used for commercial purposes. But city planner Don Mendes said Detroit has a 13 percent commercial vacancy rate, calling it one of the lowest in the area. It is substantially below the national average of 16.3 percent cited in a third-quarter survey by Colliers International.
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MIAMI
Commercial/Residential
The Related Group plans to build a 1,000-unit condominium project on Miami's Brickell Avenue, a venture that could test both the draw of downtown living and the endurance of South Florida's frenzied real estate market. All 1,000 units would come to market at the same time, and analysts are warning of a potential glut from the crush of condo projects. Miami's Downtown Development Authority said there are about 10,000 residential units planned for Brickell, downtown Miami and the area near the new performing arts center, with most slated to open by 2006.
Residential
One Florida county is among the top 10 fastest-growing counties in the nation: Flagler County, where one in five people are a new resident since 2000. The tiny beachfront county, sandwiched between Jacksonville and Daytona Beach, saw its population mushroom by 12,374 to 62,206 - a 24 percent increase from 2000 to 2003.
Commercial
The scarcity of developable land has forced developers in South Florida to turn to mixed-use designs in order to justify exorbitant land costs. Developers are finding that residential components drive up a project's value, as well as allow residents to live, work and play in one location. Recent projects include K-Group Holdings' Metropica in Sunrise and WestCity Partners' Villages of Plantation.
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LOS ANGELES
Commercial
Culver Studios, where such films as "Citizen Kane" and television classics such as "Lassie" were filmed, has been sold to a private investment group for $125 million. Sony Pictures Entertainment has owned the 17 acres of back-lot sets and soundstages since 1991, and will continue to own its nearby lot. The buyers, known as Studio City Los Angeles, include Lehman Brothers, Pacific Coast Capital partners and Pacifica Ventures.
Residential
About a quarter of California's housing stock currently consists of developments ruled by private homeowners associations, according to the Public Policy Institute of California. The number of these developments has risen exponentially over the last 40 years, with more than three million housing units now belonging to such communities, with a high concentration in the Sacramento and San Diego area.
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PHILADELPHIA
Commercial
In a city that has a reputation as a difficult, pricey place for doing business, the Keystone Opportunity Zone program has won some big fans. The tax-incentive program has been credited with saving or creating thousands of jobs in the state since 1999. This year, the agency administering the program attributed 17,614 jobs statewide to the program.
Commercial/Residential
A Santa Rosa lender has set its sights on turning the cavernous Mission Armory into a 207-unit condominium complex. Bar K LLC, the lender and owner of the Armory, is about to submit plans to the city for a residential project that would include a striking doughnut-shaped structure within the huge brick edifice. During San Francisco's dot-com boom, developer Eikon of Dallas ran into some of the fiercest neighborhood opposition anywhere in the city when the company proposed creating 300,000 square feet of office space at the Armory, which was built in 1912 and has been empty since 1970. It was defeated on grounds that the working-class Mission neighborhood would be instantly gentrified by hundreds of well-paid tech workers.
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SEATTLE
Residential
Single-family property sales rose 23.5 percent in King County during the year-over-year period ended in March. In Seattle, the metropolitan center of the county, first-time buyers must fork over close to $350,000 for an entry-level home or look elsewhere, according to brokers. Active listings slipped during the year-on-year period from 28,708 to 23,971.
Commercial
Seattle area retail appears to be healthy compared to the weak office sector. At the end of 2003, about 1.1 million square feet of retail space was under construction in the Puget Sound area. Nearly half of that space - 453,000 square feet - consisted of the expansion of the Alderwood and Everett malls north of Seattle. At year's end, the retail vacancy rate was at 6.2 percent.
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WASHINGTON D.C.
Residential
Thanks to housing shortages brought on by increasingly severe development restrictions in central and northern Virginia, many people who work in Washington, D.C., are moving to West Virginia. As a result, there's a market boom in West Virginia's "panhandle," the narrow area sandwiched between Virginia and Maryland. Prices there continue to skyrocket. The average home price in Jefferson County, the county closest to Washington, D.C., has risen from $123,000 in 1999 to $215,000 in 2003, a 75 percent increase, according to brokers. During 2003, the average home price increased by 12.5 percent. In Berkley County, the next county over, the average price has risen 56 percent, from $94,900 in 1999 to $147,795 in 2003. In 2003, the average price increased by 16.5 percent. In addition to the absence of no-growth restrictions, homebuyers are attracted to West Virginia by the fact that the state's property taxes are one-third of those in Virginia and Maryland. The panhandle is a 90-minute commute from both Washington, D.C. and Baltimore.
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