![]() The nation’s commercial real estate sector may see business prospects getting worse before they get better within the next year. That is one of the take-aways of a NAIOP CRE Sentiment Index looking at overall conditions as of late September. The current index has a reading of 47, down significantly from where things stood earlier this spring. Last fall, with respondents indicating a more buoyant mood, the index had a 56 reading. The NAIOP CRE Sentiment Index is designed to both get a feel for where things in the industry currently stand, while also forecasting where things are likely to be in the next year. The survey did reveal some latent optimism regarding individual projects. In a statement, Marc Selvitelli, chief executive officer of NAIOP, noted that “uncertainty with respect to the interest rates and inflation certainly contribute to the current index.” Selvitelli added: “However, we do see signs of longterm strength in our industry.” By Garry Boulard
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![]() Up to $100 million in funding is being committed to the expansion Arizona’s nationally known semiconductor industry. In a statement, Governor Doug Ducey noted that the Grand Canyon State has “earned a place as one of the world’s leading destinations for chip design, manufacturing, and innovation.” The Governor added that the $100 million is in keeping with Arizona’s efforts in recent year to work with the private sector to build out the state’s semiconductor ecosystem. In a statement, Sandra Watson, chief executive officer of the Arizona Commerce Authority, noted that Arizona has taken strides in investing in both an advanced manufacturing workforce as well as the state’s research capabilities, and adding: “Thus funding promises to take that transformation even further.” Arizona’s predominance in pushing for an expansive semiconductor industry has prompted Forbes magazine to call the state “Semiconductor Central.” Some of the most significant projects has seen the Taiwan Semiconductor Manufacturing Company announcement to build a $12 billion new plant in Phoenix. Early last year, Intel announced plans to build two new production facilities in the state. By Garry Boulard ![]() Nearly 300 one-, two-, and three-bedrooms units are planned for construction in the San Tan Valley area of Pinal County, Arizona as part of an innovative project called the Village at Borgata. The Empire Group of Scottsdale has purchased the land for the project, located at the southwest corner of Thompson Road and Hunt Highway, for a reported $13.8 million. As planned, the homes will range in size from 680 square feet to 1,300 square feet. A gated community, the Village Borgata will also include a community clubhouse, fitness center, barbeque and fire pit areas, as well as walking paths. The project is part of a larger master-planned development called Borgata at San Tan, a 100-acre project that will also include commercial space, apartments, and condominiums. Rezoning approval for the project site was secured earlier this summer by the Pinal County Board of Supervisors. By Garry Boulard ![]() The share of first of first-time home buyers has dropped to a new low, according to the National Association of Realtors just-released Profile of Home Buyers and Sellers. The report, which has been issued annually since 1981, provides a comprehensive view of the preferences of both buyers and sellers, noting that first-time buyers currently make up only 26% of the market, down from 34% in 2021. In a statement, Jessica Lautz, vice-president of demographics and behavioral insights for the NAR, said, “It’s not surprising that the share of first-time buyers shrank to the lowest level ever recorded, given the housing market’s combination of historically low inventory, persistently high home prices and rapidly escalating interest rates.” Lautz added that in today’s market, “those who have housing equity hold the cards and they’ve fared very well in the current real estate market.” The report additionally noted that the share of buyers who purchased homes in small towns and rural areas, at 29% and 19% respectively, were at the highest levels ever recorded. At the same time, home purchases in suburban and urban areas, at 39% and 10% respectively, had declined since late 2021. By Garry Boulard ![]() Design work is underway on a unique two-tower mixed-use multifamily residential project set to go up in Denver’s Arapahoe Square District. The project, which is called the Evolve Towers, will measure just under 400,000 square feet, and is expected to cost around $122 million to complete. Targeting a “net zero” goal, the project is emphasizing a combination of energy efficient technologies as well as sustainable construction methods. The two towers in the project are set to include ground-level retail space, and above-grade parking. Altogether, the project, developed by eVolve Development Holdings LLC/Ubuntu Partners, is expected to see the construction of 331 residential units. The design work is being spearheaded by the Denver-based Oz Architecture in collaboration with Sanzpont Arquitectura of Barcelona, Mexico. In the talking stage for several years, the Evolve Towers will go up just to the south of the Historic Cutis Park Neighborhood. If all goes well with the permitting process, work could begin on the project by no later than next summer. The project, which earlier won the approval of Arapahoe’s Downtown Design Advisory Board, has been advertised as balancing smart design with compelling aesthetics in a move to attract “conscientious consumers.” Upon completion, the Evolve Towers will mark the city’s largest residential/condo project in more than a decade. By Garry Boulard ![]() Up to $759 million is being made available through the federal Department of Agriculture to fund a series of broadband infrastructure projects across the country. In announcing the historic funding, Tom Vilsack, Agriculture Department Secretary, noted that “people living in rural towns across the nation need high-speed internet to run their businesses, go to school and connect with loved ones.” The funding is coming out of the Department of Agriculture’s ReConnect Program and is designed to work with local entities to build needed broadband infrastructure in even the most remote places. In Colorado, by way of example, the Reconnect Program is sending an $18.7 million grant to the Eastern Slope Rural Telephone Association to connect “thousands of people, 898 farms, 110 businesses, and 17 educational facilities” in some nine Colorado counties. Additional awards have been announced for similar efforts in some 25 states, including Arizona and New Mexico. The Navajo Tribal Utility Authority in Arizona is receiving $7.1 million for the building of internet infrastructure in Navajo County. A second grant of just under $10 million is going to the Tohono O’odham Utility Authority for broadband infrastructure construction in three counties, as well as the Tohono O’odham National Reservation. Funding in New Mexico is going to four separate projects: the Kit Carson Electric Cooperative is receiving $23.6 million to build high-speed internet infrastructure in Rio Arriba County; while the Leaco Rural Telephone Cooperative is receiving $24.9 million for infrastructure work in Chaves and Lea counties. Additional New Mexico projects: $34.8 million for the Western New Mexico Telephone Company to build high speed internet in Catron, Grant, and Hidalgo counties; along with $24.9 million to the WNM Communication Corporation for infrastructure work in Grant and Luna counties. By Garry Boulard ![]() A 7,000 square foot addition to the Colorado Springs City Auditorium in downtown Colorado Springs is one of the initiatives being looked at by city officials to upgrade the historic building. Located at 221 E. Kiowa Street, the auditorium was built in 1923 and for years has been regarded as an impressive example of Classical Revival design. The structure was placed on the National Register of Historic Places in 1995. City officials have long wanted to bring the structure up to date, with members of the Colorado Springs Downtown Review Board just recently giving its approval to that effort. Spearheaded by a non-profit group called the Community Cultural Collective, renovation could expand the usual floor space in the building from its current 40,000 square feet to around 90,000 square feet. A reconfigured basement will see the construction of an orchestra pit, with a two new floor levers replacing current arena seating. It is thought that it will cost at least $53 million to begin work on the project, with a rough 2023 construction launch. Although that funding has yet be secured by backers of the project, city officials have said they would like to see the upgrade completed by the fall of 2024. By Garry Boulard ![]() A 2,334 square foot building reminiscent of the days when Mesa, Arizona was a major grain producer is up for $3 million. The F.P. Nielson & Sons Tower was built in 1938 and is, at 100 feet in height, one of the most identifiable historic industry structures in southern Arizona. The building for decades functioned as a grain elevator before being sold to an out of state interest and eventually closed. Listed with the Scottsdale offices of Sotheby’s International Realty, the structure is regarded as a Class C building and sits within a defined Opportunity Zone. Cities throughout the West with still-existing flour mills and grain silos have taken steps to preserve and repurpose them, with the most notable example being the Hayden Flour Mill in Tempe, dating to 1918. Earlier this year the City of Tempe entered negotiations with a private entity to redevelop that structure and site. By Garry Boulard If Voters Approve Big Bond, New Mexico State University is Poised for Important Facility Projects11/3/2022 ![]() A series of big-ticket construction and upgrade projects may soon be in the offing for the Las Cruces campus of New Mexico State University, depending upon the results of a bond election scheduled for next week. Altogether, NMSU is asking voters to approve a total of $51.1 million in 2022 General Obligation Bond funding. The largest project will see $22.5 million dedicated to the replacement of the school’s 50-year-old Thomas & Brown Hall. New construction will see multi-disciplinary lab space designed to encourage both student and faculty project collaborations. Renovations to both the Health and Social Sciences Building, as well as the O’Donnell Hall, will reconfigure spaces in those two structures, and see the creation of more smart classrooms, with $13.5 million in bond funding set for the two projects. Exactly $10.5 million will target the Phase 3 renovation work at the New Mexico Department of Agriculture’s NMSU campus headquarters. The project will see the building of new office space, and comprehensive infrastructure upgrades. Finally, bond funding to the tune of $2 million will be dedicated to the modernization and expansion of the school’s Nursing Skills and Simulation Center. Altogether, voters in New Mexico next week will decide on just under $216 million in bond funding for a variety of higher education facility projects across the state. By Garry Boulard ![]() While reports are plentiful regarding a declining national economy and the possibility of a recession by early next year, U.S. businesses are displaying a level of confidence not normally associated with down times. So says a report published by the U.S. Chamber of Commerce in which the group’s chief economist, Curtis Dubay, notes that “businesses of all sizes, sectors, and industries report feeling pessimistic about the future of the economy.” Yet, adds Dubay, those same businesses “continue to hire, raise wages, and make new investments, and they expect to continue to do so.” This same duality also applies to consumer behavior: “Usually, when consumers feel badly about the economy, they pull back on spending,” writes Dubay, before noting data showing that total spending increased faster than inflation in August. Moreover, in September, retail sales “grew at the same pace as our stubbornly high inflation, which remains near a 40-year high at 8.2%. For businesses, according to a U.S. Chamber Middle Market Index, 48% of middle market executives surveyed said they expected to see an increase in revenue. The numbers are similarly bullish in the small business community: “The number of small business owners and decision makers saying the economy is in poor health is now more than twice as much as those saying it’s in good health.” Yet, continues Dubay: “Small businesses generally report positive sentiment about the overall health of their businesses, contributing to secondhand pessimism.” That “secondhand pessimism” comes when respondents have been following reports in the media centering on a national economic decline but may not be seeing it in their own businesses. In fact, according to a recently released Conference Board Survey of chief executive officers, some 44% said they expected to increase their workforce in the next 12 months, with a substantial 85% saying they expect to increase wages by 3% of more. Noting that the fortunes of both large and small businesses can “change quickly,” Dubay adds that “for now, it’s a good sign that the pessimism is secondhand where it can cause much less trouble.” By Garry Boulard |
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