In The Pipeline is a column on significant commercial real estate land sales, transactions and trends affecting office, industrial, flex, multifamily, mixed-use, hotel and public works developers. Send us news leads about your new project — to receive future In the Pipeline columns by e-mail.
Read previous columns and articles.
Construction Indicators Sending Mixed Signals Amid Slowing Recovery
Piecing together current and leading indicators produces a fuzzy picture of the near-term prospects of nonresidential construction activity, and concerns that the U.S. could default on its debt in an already lackluster economic recovery further cloud that picture.
The national Architecture Billings Index (ABI), a leading economic indicator of nonresidential construction activity, declined for the third straight month in June. But the numbers also show that building activity may be picking up in the long-suffering western states, among the regions hurt the worst by the protracted construction slump.
A new report by Moody’s Investor Service this week, meanwhile, shows that U.S. REITs are again initiating development projects as they seek returns that are higher than those available through property acquisitions.
Reed Construction Data reported that the value of nonresidential starts increased 10.5% from May to June, not seasonally adjusted, and 29% from June of 2010. Commercial starts jumped 68% in June from May, a time when starts typically decline seasonally, and the value of construction year-to-date rose 5.3% from the first six months of 2010.
The ABI, compiled month by the American Institute of Architects (AIA), fell nearly a point to 46.3 in June, however. The index predicts construction spending and activity nine to 12 months in the future. Any reading below 50 indicates contraction in demand for architects’ services.
“While a modest turnaround appeared to be on the way earlier in the year, the overall concern about both domestic and global economies is seeping into the design and construction industry and adding yet another element that is preventing recovery,” said AIA Chief Economist Kermit Baker.
“Furthermore, the threat of the federal government failing to resolve the debt ceiling issue is leading to higher borrowing rates for real estate projects, and should there actually be a default, we are likely looking at a catastrophic situation for a sector that accounts for more than 10% of overall GDP.”
Investor Buys Key Development Site Near Staples Center
RPM Investments, Inc. has purchased a parking lot at 12th & Figueroa streets across from Staples Center and LA Live in downtown Los Angeles, a property earmarked for a potential mixed-use residential development.
The 2.73-acre, 118,832-square-foot unimproved lot acquired by RPM from Ektornet U.S. for $31 million is incorporated into the Los Angeles Sports and Entertainment District specific plan and was recently entitled for development of up to 648 units, including 822,000 square feet of residential use and 48,000 square feet of retail/restaurant and other entertainment uses. The site is near a Metro Blue Line light-rail station and the 110 Harbor Freeway.
The property is a key component of the South Park District and one of the few quality high-rise development opportunities in Southern California, allowing RPM Investments to capitalize on the increasing importance of downtown Los Angeles in the region, said Michael Zietsman, managing director for Jones Lang LaSalle Capital Markets, who led the team that closed the sale. Other team members included JLL Executive Vice President Jeff Adkison and vice presidents Javier Rivera and Brendan McArthur.
The development site occupies most of a city block and benefits from extensive frontage along Figueroa, Flower and 12th streets. Adkison said the offering drew significant interest from investors around the world with over a dozen bidders.
Itelligence Taps Duke Realty to Develop HQ
Itelligence Inc., an information technology provider and consultant, has chosen Duke Realty Corp. to build its new U.S. headquarters in Blue Ash, OH at Legacy Pointe at Reed Hartman Highway and Osborne Boulevard.
Itelligence, Inc., a German company, purchased an eight-acre site within the park as CoStar reported in June. Duke will build the new 69,856-square-foot Class A office building along with a 14,742-square-foot data center. Itelligence, now located in smaller space in Sycamore Township, received a $585,250 tax credit from the state of Ohio earlier this year for the estimated $18 million expansion and relocation to the new site.
The project will bring 125 jobs at an average salary of $100,000. The city of Blue Ash is also upgrading infrastructure in and around Legacy Pointe to improve accessibility to the site and enhance its appearance.
KC Airport Intermodal Facility Lands First Tenant, Begins Construction
Blount International will occupy a 350,000-square-feet facility in the first build-to-suit at the 800-acre KCI Intermodal BusinessCentre master-planned business park. Construction has started at Kansas City International Airport and completion is scheduled for January 2012.
The building, LogisticsCentre I, a LEED-certified Class A distribution center on 22.54 acres, will serve as the national distribution operations for the North American business of Blount, which will soon outgrow its current distribution center in Executive Park east of downtown Kansas City.
In addition to retaining the 230 jobs Blount currently maintains in Kansas City, the expansion is expected to generate 89 new jobs for the Kansas City area.
The first phase of KCI Intermodal BusinessCentre includes 182 acres that will support up to 1.8 million square feet of warehouse and distribution centers, offices and light manufacturing facilities. Total construction of all phases will be about 5.4 million square feet and valued at $216 million. The project will include air cargo and freight facilities adjoining two runways at the Kansas City airport.
PwC to Lease 250,000-Square-Foot Build to Suit In Tampa
PricewaterhouseCoopers has signed a long-term lease with MetLife for a 250,000-square-foot build-to-suit office building at MetWest International in the Westshore area of Tampa, FL.
About 2,000 PwC partners and staff from the firm’s Tampa office and Enterprise Solutions Center (ESC) will move to MetWest Two during the second quarter of 2013. The operations are currently in separate locations at 4221 W. Boy Scout Blvd. and 3109 and 3111 W. Dr. Martin Luther King Jr. Blvd.
The new building will be home to PwC’s Tampa-based client service professionals and a number of the firm’s key internal functions such as IT, finance, human resources and learning and development. Taylor & Mathis, the development manager of the project, said construction will begin this week.
$100M First Phase of Emory Point Finally Under Way
The Emory Point project, the first new retail development in Atlanta’s Clifton Corridor trade area in 20 years, has broken ground near Emory University and the Centers for Disease Control and Prevention.
The mixed-use project is also the first partnering between Atlanta-based companies Cousins Properties (NYSE: CUZ) and Gables Residential, and the largest construction start within the metro Atlanta Perimeter in more than three years.
The more-than $100 million first phase, which includes more than 80,000 square feet of retail and 443 apartments, is scheduled to open in fall 2012.
Apts. Near Univ. of Alabama Break Ground
Education Realty Trust Inc.(NYSE:EDR) and joint venture partner Edwards Cos. broke ground on a $41 million multifamily complex near to the University of Alabama campus in Tuscaloosa.
Set to deliver next year, the Edwards Cos. is the developer and designer of the community. Education Realty Trust, the majority owner and managing member of the partnership, will oversee the property when it is completed.
Regions Bank provided the conventional construction financing. (By Laurie Forbes)
Similar Posts:
- MARKET TREND: Austin’s Office Deliveries and Construction in Q2 2011
- In The Pipeline: Construction and Development News for July 17 – 23
- Developer Gets Green Light To Build 1,003-Room Convention Hotel in Austin
- Trumbull Street Buildings In Downtown Hartford Sell For $1 Million, Less Than One-Third Of Assessed 2010 Value
- Former Mortgage Lenders Network Building Gets Another Lease
