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 Trends: Demand For Architects Jumps After Months of Decline
In a surprising turn upward, the Architecture Billings Index (ABI), a leading indicator of nonresidential construction, rose sharply into growth mode in August following four months of decline in demand for architecture services.
The August index rebounded to 51.4 following a very weak score of 45.1 in July, according to the American Institute of Architects (AIA), which produces the monthly report. Any score above 50 indicates an increase in billings, reflecting increased demand for design services.
The index reflects a lag of about nine to 12 months between billings and actual construction spending. August’s score also showed an increase in inquiries about new projects, up sharply to 56.9 from 53.7 the previous month.
AIA Chief Economist Kermit Baker said the turnaround is a surprise based on the poor economic conditions of the last several months.
"Many firms are still struggling and continue to report that clients are having difficulty getting financing for viable projects, but it’s possible we’ve reached the bottom of the down cycle," Baker said.
In July, the fourth straight month of demand decline, the score fell to 45.1, down from 46.3 in June in the steepest monthly drop in the billings index since February 2010.
A survey of Colorado’s commercial real estate, construction and architectural sectors released this week by the Everitt Real Estate Center at Colorado State University reflected a dearth of optimism about the future for new construction. The first-ever statewide survey found a high level of pessimism among real estate professionals and "wishful optimism" among architectural and construction leaders.
All three sectors saw dismal prospects for private funding for new development projects in 2012. Architects believe demand for residential-oriented projects are most likely to increase next year, and real estate respondents believe such property types will most likely see modest value appreciation.
Opus Group to Build 33-Story Apartment Building Downtown
Opus Development Corp. announced plans to build a high-rise apartment building at the corner of Nicollet Mall and South 5th Street in downtown Minneapolis.
The 33-story Nicollet Residences luxury building at the site of the old Powers department store, designed to achieve Leadership in Energy and Environmental Design (LEED) certification, will be the first new high-rise rental building in downtown Minneapolis in nearly 30 years. The project will include ground- and skyway-level retail, restaurant and skyway connections to Neiman Marcus and the Fifth Street Towers.
The project near the light-rail station will offer "a San Francisco or New York-type luxury high-rise apartment living experience," said Tom Lund, vice president, real estate development of Opus Development. Project amenities will include an around the clock door attendant and concierge service, outdoor roof terrace with pool and spa, fitness center and yoga studio.
Executives planning the Nicollet Residences led the team that developed the 39-story Carlyle and 27-story Grant Park condominium projects, the first new high-rise condos in downtown Minneapolis in nearly three decades.
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Developer Breaks Ground On San Antonio Nursing Facility
Trisun Healthcare and Suntex Development LLC have begun work on Trisun Care Center Lakeside, a skilled nursing and rehabilitation facility expected to open in the summer of 2012.
The nearly 42,000-square-foot senior community at 8707 Lakeside Parkway will include 120 skilled nursing and rehab beds. The community will employ approximately 115 staff.
Austin-based Trisun Healthcare manages skilled nursing, rehab and assisted living centers throughout Texas.
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Taubman Announces 20 New Tenants for City Creek Center
Taubman Centers Inc. (NYSE:
TCO) announced the first 20 retailers at its City Creek Center, the 700,000-square-foot retail center scheduled to open next March at the City Creek Center mixed-use project in Salt Lake City.
The retailers, all new to the market and most new to Utah, include 77kids by American Eagle, BCBG MaxAzria, Bose, Brooks Brothers/Brooks Brothers Women, Coach, Cotton On, The Limited, L’Occitane, Love Culture, LUSH, Michael Kors, N3L Optics, Pandora, Papyrus, Porsche Design, Swarovski, Texas de Brazil Churrascaria, Tiffany & Co., Tumi and Yankee Candle Company.
Along with anchor department stores Macy's and Nordstrom, the shopping center will feature about 80 stores and restaurants, according to Bloomfield Hills, MI-based Taubman.
The retailers join Blue Lemon, Deseret Book and several food court restaurants, including Bocata, Chang Chun, Great Steak, McDonald's, Roxberry Juice Co., Sbarro, Subway, Suki Hana and Taste of Red Iguana that are already open for business.
City Creek Center opens in March 2012 at South Temple, 100 South, West Temple and State streets in downtown Salt Lake City. The sustainably designed project includes a retractable roof, an interior creek.
Biomedical Research Firm Breaks Ground on $100M Expansion
The Wistar Institute, a biomedical research company specializing in cancer research and vaccine development, has broken ground on a new, seven-story, 89,700-square-foot research tower which will rise above its current facility at 36th and Spruce streets in University City, PA.
The expansion will enable Wistar, currently constrained by aging facilities that its president and CEO Russel E. Kaufman said were "designed for 19th and 20th century science," to expand its research operations, recruit new scientific faculty and pursue collaborative biomedical research in emerging areas of science.
Scheduled for completion in spring 2014, the $100 million expansion project will support 380 construction jobs and is expected to create 100 new research and administrative jobs.
Ballinger is serving as project architect and engineer and L. F. Driscoll, LLC is handling construction management.
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