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CB Richard Ellis Research | Phoenix
10 Stories from Last Week's Market
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- Investors Buzzing Over State Leaseback Plan
The Arizona Republic - October 25, 2009
Phone calls have been pouring in to Arizona state government in recent weeks from investors inquiring about the state's plan to sell nearly three dozen buildings and facilities as it tries to generate some fast cash.
Thirty-two buildings were on the initial list of those to be offered for sale, including the Arizona State Hospital, the fairgrounds complex and the House and Senate buildings at the Capitol. That list is still being finalized, but the state's basic plan remains the same: Sell the facilities and immediately lease them back for a period as long as 20 years, raising up to $735 million for the Arizona Treasury while allowing state services and programs to continue unaffected. The financial gimmick is a key part of the state's plan to close a budget shortfall for this fiscal year that was estimated at $2 billion last week.
"There's been a lot of interest," said Alan Ecker, spokesman for the Arizona Department of Administration. "Some of them are real-estate firms, some of them are securities investors."
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- Valley Freeway Projects Shelved - But South Mountain Plan Still on Despite Revenue Woes
The Arizona Republic - October 29, 2009
Billions of dollars in voter-approved Valley freeway-expansion work will be postponed and scaled back after plummeting tax revenue forced a regional transportation panel to slash spending Wednesday night.
The Regional Council of the Maricopa Association of Governments voted to cut a $16 billion freeway-improvement program to just $9.4 billion.
The projects are funded by Proposition 400, a countywide measure that created a half-percent sales tax and was passed by voters in 2004.
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- LDS Church Could Play Role in West Valley Development
Phoenix Business Journal - October 31, 2009
As Luke Air Force Base fights to be named a training hub for the new F-35 Joint Strike Fighter, an unlikely player could have a significant impact on the long-term viability of the base and the Loop 303 corridor west of Phoenix.
The Church of Jesus Christ of Latter-day Saints owns about 3,000 acres near Loop 303 and Peoria Avenue — some within Surprise city limits and some unincorporated county land, according to Glendale Planning Director Jon Froke.
But some West Valley officials and real estate experts say the Mormon church has no plans to develop the land and probably will sell it to developers and home builders, which would change the dynamic of the area.
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- Trust Will Buy Medical Offices Near 2 Hospitals
The Arizona Republic - October 28, 2009
A Scottsdale-based real-estate investment trust will spend $107 million to acquire 17 medical buildings on or near the campus of Banner Boswell and Banner Del E. Webb hospitals.
Healthcare Trust of America's deal with Roskamp Management Co. includes an option to purchase two more medical properties totaling about 60,000 square feet. The transaction is expected to close within 40 to 50 days.
The portfolio of medical-office buildings includes about 641,000 square feet of rentable space, according to Healthcare Trust's financial filings.
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- Cave Creek to Vote on Walmart - Tuesday's Election to Decide Fate of Proposed Supercenter
The Arizona Republic - October 31, 2009
Should Walmart be allowed to build in Cave Creek? Voters will decide on Tuesday in an election that will seal the fate of the retail giant in the far northeast Valley.
A "yes" vote supports rezoning that would allow the Bentonville, Ark., company to build a supercenter at Cave Creek Road and Carefree Highway.
The decision will mark the end of a months-long campaign to keep Walmart out of the rural town.
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- Solar Roadmap Lights the Way
The Arizona Republic - October 29, 2009
If you want to be sure of reaching a destination, you need a map. It's the same with an ambitious goal like ramping up solar energy in America.
Last Thursday, the U.S. House approved a bill to create a "Solar Technology Roadmap" that would provide much-needed focus and resources.
A committee, including representatives of the solar-power industry, would lay out the research-and-development needs for the next 15 years. The roadmap would be updated and revised regularly. The bill would authorize funding for R&D and demonstration projects, ramping up from $350 million in fiscal 2011 to $550 million in 2015.
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- Wilbur Ross Sees ‘Huge’ Commercial Real Estate Crash
Bloomberg - October 30, 2009
Billionaire investor Wilbur L. Ross Jr., said today the U.S. is in the beginning of a “huge crash in commercial real estate.”
“All of the components of real estate value are going in the wrong direction simultaneously,” said Ross, one of nine money managers participating in a government program to remove toxic assets from bank balance sheets. “Occupancy rates are going down. Rent rates are going down and the capitalization rate -- the return that investors are demanding to buy a property -- are going up.”
U.S. commercial property sales are forecast to fall to the lowest in almost two decades as the industry endures its worst slump since the savings and loan crisis of the early 1990s, according to property research firm Real Capital Analytics Inc. The Moody’s/REAL Commercial Property Price Indices already have fallen almost 41 percent since October 2007, Moody’s Investors Service said Oct. 19.
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- Geithner Says Commercial Real Estate Woes Won’t Spark Crisis
Bloomberg - October 30, 2009
U.S. Treasury Secretary Timothy Geithner said commercial real estate woes won’t set off a new banking crisis, in remarks to the Economic Club of Chicago.
“I don’t think so,” Geithner said, when asked whether commercial real estate could set off another banking meltdown. “That’s a problem the economy can manage through even though it’s going to be still exceptionally difficult.”
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- German Firms Scour U.S. for Deals
The Wall Street Journal - October 28, 2009
More than 25 years ago, when the U.S. commercial real-estate industry began to emerge from its last collapse, German investors were among the first to snap up properties at discount prices.
History may be repeating itself. While numerous foreign investors have begun to scout the U.S. market in recent months, German investors have been among the few that have actually done deals.
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- U.S. Consumer Spending Slipped in September
The New York Times - October 30, 2009
Consumer spending in the United States fell in September for the first time in five months as the increase from the cash-for-clunkers auto rebate program faded, data showed on Friday, adding to fears that consumers may be pulling back as they head into the last quarter of the year.
The Commerce Department said spending fell 0.5 percent, the largest decline since December, after an upwardly revised 1.4 percent increase in August. Consumer spending in August was previously reported to have advanced 1.3 percent.
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