Weak world markets have put the brakes on rental rates
The United States is not alone in battling sluggish office market conditions. An international survey of 155 metro areas by Los Angeles-based CB Richard Ellis Global Research reveals that rental rate growth among Class-A office product slowed during the first half of 2001.
A corporate retrenchment in response to the decline in the U.S. and Japanese economies, as well as the technology sector meltdown, are cited as reasons for the decline.
As of July 2001, London's West End remains the most expensive office location in the world, with total annual occupancy costs averaging $157.63 per sq. ft. in U.S. currency, up from $156.89 per sq. ft. reported in January 2001, according to the survey.
In the survey's listing of the world's most expensive office spaces, the West End, along with Midtown Manhattan, were the only markets in the Top 10 to post an occupancy cost increase. The Midtown Manhattan market averaged $64.92 per sq. ft. compared with $64.63 per sq. ft. six months ago.
Overall, however, the survey shows a marked downward trend on the heels of a slowdown in the general economy.
TSM, Deutsche Bank to develop 1.2 million sq. ft. office project
New York-based Deutsche Bank is set to become an equity partner in a new 1.2 million sq. ft office complex in São Paulo, Brazil. The $100 million Rochaverá Plaza will progress in three phases, the first of which will consist of two 17-story office towers and 3,500 parking spaces.
Four towers in all will be clustered around a landscaped central plaza, offering public open spaces that are unusual in the São Paulo business district. Construction on the site, located on Nações Unidas Avenue by the Morumbi and Market Place Shopping Malls, two of São Paulo's premier retail centers, is scheduled to begin this fall.
Developers are Tishman Speyer-Método (TSM), a joint venture between New York-based Tishman Speyer and São Paulo-based Método Engenharia. Tishman Speyer also is the owner of the Chrysler Building and Rockefeller Center in New York.
Business, lifestyle together at last in mammoth community
Technology and tradition are preparing to merge in South Orange County, Calif. Shea Properties, a developer based in Aliso Viejo, Calif., has unveiled plans for AXIS, a 5 million sq. ft. community that combines lifestyle amenities with business infrastructure. The project will cost an estimated $500 million.
Located in the Foothill Transportation Corridor at Alton Parkway, AXIS, named for the property's latitude and longitude coordinates, consists of 380 acres that originally were part of the 5,000-acre Baker Ranch, now represented by Baker Ranch Properties. The mixed-use site, in one of the nation's most active new housing markets, also adjoins a 1,000-acre nature preserve.
Completion of the first of six phases is slated for the first quarter of 2002 and will encompass 84 acres. Subsequent phases range in size from 43 acres to 57 acres. Irvine, Calif.-based architectural and design firm LPA developed the site's master plan.
TIAA consolidates ownership of Atlanta development
New York-based Teachers Insurance and Annuity Association of America (TIAA) has added Concourse I and II in Atlanta's Central Perimeter submarket to its holdings. TIAA also is the owner of the signature “King” and “Queen” office towers in the same complex, and the transaction consolidates the company's ownership of the Concourse development's 1.2 million sq. ft. of space.
Concourse I and II, located between Ga. 400 and Interstate 285, were sold by National Office Partners, a partnership between Houston-based Hines and the Sacramento-based California Public Employees Retirement System. TIAA is reported to have paid up to $80 million for the two, 8-story buildings, which total 575,000 sq. ft.
The transaction is Atlanta's second largest of the year behind Atlanta Financial Center, which Hines and General Motors Asset Management acquired for $154 million in April. New York-based Cushman & Wakefield brokered the transaction.
Crescent Resources signs Walter Industries as tenant
Charlotte, N.C.-based Crescent Resources, the real estate subsidiary of Duke Energy Corp., has signed Walter Industries Inc. as anchor tenant for Tampa's Corporate Center Two, a 300,000 sq. ft. Class-A office building at International Plaza. The lease moves Walter Industries headquarters from its current location at the corner of Interstate 275 and Dale Mabry Highway.
Corporate Center Two is adjacent to the new 1.4 million sq. ft. International Plaza, and construction is slated for completion in October. Walter Industries will occupy 77,000 sq. ft. of leased space, becoming the anchor tenant for the building located at the intersection of Boy Scout Boulevard and Lois Avenue.
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|July 2001 Rank||Jan. 2001 Rank||Market||Occupancy cost per sq. ft. July 2001|
|1||1||London (West End), England||$157.63|
|2||2||Tokyo (Inner Central), Japan||$124.07|
|3||4||London (City), England||$112.04|
|4||3||Tokyo (Outer Central), Japan||$109.16|
|7||6||Mumbai (Bombay), India||$79.80|
|8||9||San Francisco (CBD), U.S.||$71.20|
|9||13||Silicon Valley (sub.), U.S.||$68.90|
|10||12||New York (Midtown), U.S.||$64.92|
|Source: CB Richard Ellis Global Research & Consulting, Global Market Rents, July 2001|