CoStar Development and Construction News and Notes on Trends, New Projects and Construction In the Commercial Real Estate Development Pipeline Around the U.S.
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Construction Outlook: Looking Better, But Don’t Call It A Rebound Yet
Momentum for an increase in construction has been building for months, and the fiscal cliff agreement by Congress should unleash more private construction investment in 2013, analysts said.
Leading indicators such as the Architecture Billings Index (ABI) indicate the brightest conditions in years are ahead for new construction. Work at architecture firms across the country continues to increase in November, according to a monthly survey.
The Architecture Billings Index (ABI), a leading indicator of construction spending and activity nine to 12 months in the future, posted an increase for the fourth straight month in November. The monthly survey was released late last month by the American Institute of Architects (AIA), before the passage of the tax legislation.
"These are the strongest business conditions we have seen since the end of 2007, before the construction market collapse," said AIA Chief Economist Kermit Baker, who predicted that the resolution of the federal budget will likely lead to the green lighting of numerous projects currently on hold.
That said, the path to recovery for the long suffering construction industry is paved with uncertainty and littered with potential landmines like the unresolved need to raise the debt ceiling and the uncertain future of publicly funded construction projects due to cuts in federal spending.
Construction spending dipped 0.3% from October to November after seven months of steady gains, according to preliminary data from the Census Bureau for November analyzed by the Associated General Contractors of America (AGC). However, a more relevant comparison is with year-ago levels, and the November report shows a respectable 7.7% gain over the past 12 months, said Ken Simonson, chief economist for the association.
Dollar Tree to Expand Oklahoma Distribution Center
In a move underscoring the explosion in discount variety stores in recent years, Chesapeake, VA-based Dollar Tree, Inc. announced that it plans to expand its distribution center in Marietta, OK, by an additional 400,000 square feet to over 1 million square feet.
The move will create more than 100 full time positions at the facility in Marietta, which opened in 2003 and is currently 603,000 square feet. This facility supplies products to our stores across 11 states, including Oklahoma, Kansas, Colorado, New Mexico and Texas, and portions of Louisiana, Arkansas, Missouri, Nebraska, South Dakota, Wyoming and Montana.
Construction on the expansion is scheduled to start in February and should be completed in the autumn of 2013. The total cost of the expansion is expected to be approximately $25 million, financed by Dollar Tree using available cash.
"The expansion of our Marietta Distribution Center is consistent with our long-standing practice of building infrastructure to support future growth of our business," said Bob Sasser, president and CEO of Dollar Tree, Inc. The additional capacity will allow Dollar Tree to continue to expand its reach and provide more value to more customers throughout the region."
Dollar Tree, a Fortune 500 Company, operated 4,630 stores in 48 states and 5 Canadian Provinces as of Oct. 27.
Midtown Development Site Sold to Toll Brothers
Toll Brothers acquired a residential development site at 953-961 First Ave., in Midtown East approved for construction of a 30-story, 161-unit building.
The 8,822-square-foot land parcel will allow construction of 156,135-square-foot building. The site includes acquired development air rights and "bonus" square footage through the inclusionary housing program, according to Cushman & Wakefield, which arranged the sale.
The site on First Avenue between 52nd and 53rd Streets is development ready with an existing foundation and approved plans for a 30-story, 161-unit luxury residential tower. The property can also be developed as luxury condominiums.
A Cushman & Wakefield New York capital markets team of Helen Hwang, Nat Rockett, Karen Wiedenmann, and Sujohn Sarkar represented the seller in the transaction.
The property is the United Nations headquarters at 44th Street and First Avenue and Midtown Manhattan’s commercial epicenter. More than 75 foreign consulate offices and permanent missions to the United Nations are within walking distance of the site.
Please see CoStar Comps #2634357 for more information.
Investor Completes Assemblage of Mesa Property
Private investor Buckeye Casa Grande LP has assembled and purchased about 610 acres in Mesa, AZ, along Ellsworth and Pecos Road, where the investor is planning build-to-suit industrial projects.
The $25 million sale included three parcels that were part of an original assemblage of four properties totaling more than 900 acres put together between 2005 and 2007 by Paragon. A majority of the land,located in the Gateway submarket, eventually went back to lenders.
Brent Moser, Mike Sutton and Brooks Griffith with Cassidy Turley Arizona’s Land Group represented the buyer.
The purchase by Buckeye Casa Grande LP included 310 acres on the southeast corner of Pecos and Ellsworth that was sold by Enterprise Bank; 229 acres on the northwest corner of Pecos and Ellsworth sold by GKK Williams Gateway and 72 acres on the southwest corner of Pecos and Ellsworth. The sale closed Dec. 31. The seller on the final parcel is a private land owner.
The property has foreign trade zone designation and Buckeye Casa Grande LP has retained Cassidy Turley as the marketing agent for the properties. Mike Haenel and Andy Markham of Cassidy Turley’s Industrial Group is working on the marketing in conjunction with Moser, Sutton and Griffith.