S&P Global Market Intelligence offers our top picks of real estate news stories published throughout the week.
Across the U.S., cities and states are planning incentives for converting offices to homes to alleviate a housing shortage and address rising office vacancies, Axios reported.
The state of California is allocating $400 million of its 2023 budget to incentive grants for office conversions to residences. New York, Chicago and Los Angeles are proposing regulatory changes, tax credits and financial incentives to encourage such conversions, according to the report.
Washington, D.C., has a pending proposal for a 20-year tax abatement related to similar projects. Among the big ticket office-to-residential projects in the city are the conversion of Universal North and South buildings at 1875 and 1825 Connecticut Ave. NW, according to Green Street's Real Estate Alert. Office landlord JBG Smith Properties sold the property to multifamily developer Post Brothers in April for $228 million.
Daily occupancy for leased office space has fallen to less than half of the pre-pandemic level, Axios said, citing Kastle swipe-in data covering 10 metro areas.
The office is unlikely to go away, but the space requirement by companies will likely be less than what they needed before the pandemic, according to Colliers' The Future of the Office in the Age of Hybrid Work report.
CHART OF THE WEEK: Over 37,000 REIT-owned properties in Florida face risk from Hurricane Ian
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Property buy and sell
* Beijing-based Dajia Insurance Group Co. Ltd. seeks to sell three resort hotels in the U.S. totaling $1.3 billion, The Wall Street Journal reported, citing people familiar with the matter. The properties are the Montage in Laguna Beach, Calif.; the Four Seasons resort in Jackson Hole, Wyo.; and the Four Seasons in Scottsdale, Ariz.
* CBRE Investment Management LLC, on behalf of a client, acquired a life sciences campus in Durham, N.C., from Starwood Capital Group Management LLC for $288.1 million, Commercial Property Executive reported, citing public records. The Park Point property spans 662,607 square feet across five buildings.
Construction financing
* QTS Realty Trust secured $1.28 billion in financing from SMBC for the construction of a data center campus.
* Hotel operator citizenM obtained a $210 million financing facility arranged by Newmark for the building of four hotels. The citizenM hotels are undergoing construction and will total 904 rooms.
* MG Developer and Baron Property Group scored a $148 million loan from Post Road Group for the construction of a rental apartment property in Hialeah, Fla., The Real Deal reported. The 559-unit Metro Parc project is expected to break ground in December and be completed in the second quarter of 2024.
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REIT Replay: REIT share prices continue to fall during week ended Sept. 23