![]() Two big storage space companies have announced plans to merge, creating the largest self-storage enterprise in the U.S. The Extra Space Storage company of Cottonwood Heights, Utah, says it is in the process of buying the Life Storage company, which is based in Williamsville, New York, for around $12.7 billion. That acquisition will result in a combined nearly 3,500 storage facilities across the country. In a statement, Joe Margolis, chief executive officer of Extra Space, said he was impressed with Life Storage’s expanding portfolio of recent years, “creating a highly diversified portfolio of quality storage assets in strong growth markets.” Joseph Saffire, chief executive officer of Life Storage, remarked of the historic acquisition: “We expect to accelerate growth while manufacturing our customer-centric focus and commitment to continued innovation.” The transaction is expected to become official by early summer. Launched in 1977, Extra Space Storage today has locations in 41 states. Life Storage began in 1982, with facilities in 37 states. The joining of the two storage companies comes as an industry report published by the market data company Mordor Intelligence is reporting that the self-storage market is expected to reach a healthy compound annual growth rate of 5.7% in the next several years. By Garry Boulard
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Already Enjoying Unprecedented Growth, the Arizona Build-to-Rent Market Continues to Expand4/5/2023 ![]() Arizona remains at the forefront of a booming build-to-rent market that is just beginning to be duplicated across the country. Several weeks ago, the Palm Desert, California-based company Family Development announced plans to build two upper end build-to-rent communities. The Villas Litchfield Park project, 19 miles to the west of Phoenix, is slated to see the construction of 153 residential units, while the Villas Goodyear project will feature 151 homes. The UrbanStreet Group of Schaumburg, Illinois, has just purchased nearly 17 acres of land in Goodyear, Arizona for $14.5 million. That land comes with earlier approved plans to put up a build-to-rent community of just over 300 homes. NexMetro Communities of Phoenix, the industry leader for this kind of construction, as of late last year had around two dozen build-to-rent communities either already completed or in the process of being built. According to the National Association of Home Builders, around 68,000 such homes were completed between the fall of 2021 and September 2022. While that’s a drop in the bucket compared to the nearly 2 million standard homes that are built nationally every year, it nevertheless represents a 68% increase since the covid year of 2020. And those build-to-rent homes can be everything from townhomes to bungalows to high-density detached. Notes U.S. News & World Report: “With so many projects in the pipeline, even more communities are expected to pop up between now and 2030.” This week the New York-based equity firm GTIS Partners announced the launching of Tavalo, described in a press release as a “dedicated build-to-rent community development company.” With work underway on seven built-to-rent communities located in both metro Phoenix and south Florida, GTIS and Tavola, continued the release, “we will have developed approximately 2,100 build-to-rent units.” By Garry Boulard ![]() One of the oldest buildings on the Las Vegas, New Mexico campus of New Mexico Highlands University may soon be subject to a significant renovation. The Sininger Hall is located at 904 National Avenue Street and was built in 1962. The just under 26,400 square foot structure originally served as a dormitory for the school’s male students. In the early 1980s, the brick building underwent a $1.1 million upgrading and expansion, and now houses offices for NMHU’s Department of Business Administration. School officials who have long wanted to upgrade the facility and may get a chance with some $4.5 million in capital outlay spending approved by the New Mexico State Legislature. Last fall voters in New Mexico approved a $156.3 million general obligation bond, with $7 million of that amount also targeting the Sininger Hall work. Several weeks ago, lawmakers also gave a thumbs up to $1 million in additional capital outlay spending for the building of a campus student wellness center at NMHU. Funding for both the Sininger and wellness center projects is contingent upon Governor Michelle Lujan Grisham approving the capital outlay requests. By Garry Boulard ![]() The monthly billing index compiled by the American Institute of Architects may be seen as a cautionary sign that the nation’s construction economy may not be as post-pandemic resilient as previously imagined. With any score above 50 representing an increase in billings from the month before and a score below 50 representing a decline, the latest index came in at 48.0—a drop of 1.3 points over January’s numbers. Project inquiries were also off, if marginally so, coming in at 55.0, down from the 55.2 registered in January. Meanwhile, the biggest drop was recorded in the design contracts arena, which showed a healthy 53.4 reading in January, but fell to 51.3 in February. Regionally, firms in the West produced the most buoyant readings, coming in at 50.4, followed by the Midwest at 48.8; the Northeast at 48.4; and the South, at 47.3. Although both the commercial/industrial sector and institutional sector saw billings declines in February, good news was seen in the multifamily residential sector, with an increase of 0.3; and the mixed practice sector, up by 1.0 from January to February. In a statement, Kermit Baker, chief economist for the American Institute of Architects, remarked that the “combination of an unsettled economy and high interest rates is causing investors and property owners to take a closer look at their plans for construction projects.” Ali Wolf, chief economist with the market research company Zonda, remarked to Architect Magazine that the “slowdown in the broader U.S. economy is uneven depending on sector and geography.” But Wolf also saw good news in the architecture billings index, noting that firms in the West are “outperforming elsewhere in the country.” By Garry Boulard ![]() A one-story industrial/commercial building dating back to the days when Denver was a frontier city with a population of just over 200,000 people is up for sale, with an asking price of $2 million. Located at 1513 Boulder Street, the brick structure in a city that now boasts a population of more than 700,000 residents, measures just under 2,500 square feet and has been modernized through the decades to include office space, a kitchen area, and storage rooms. With high exposed ceilings, the property is designated as a Class C building, and sits on a less than half-acre site in the now-trendy, but formerly heavily industrialized Lower Highland neighborhood. Built in 1914, the structure was originally a machine repair shop, and in later years the home of the Colorado Photographic Arts Center. The property is being listed by the realtor Kentwood Commercial of Denver. The Lower Highland neighborhood, dating to the 1850s and once almost entirely populated with warehouses and garages, has emerged in recent decades as a popular section of the city with any number of restaurants, breweries, and coffee shops. By Garry Boulard ![]() Eastern New Mexico University is in line to receive just under $2.2 million in state funding for half a dozen projects at its Roswell campus. The funding is coming in the form of capital outlay spending, given the green light earlier this spring by members of the New Mexico State Legislature, and currently awaiting the final approval of Governor Michelle Lujan-Grisham. The largest ENMU project will receive $1.2 million in capital outlay funding for driveway and sidewalk improvements on the campus. Exactly $350,000 will go for integrated technology equipment and enhancements; while $200,000 is set to fund the creation of a mobile science lab and outreach center. A smaller $163,000 has been approved by lawmakers for a variety of sewer infrastructure improvements; along with $150,000 to pay for technical education program equipment. The smallest ENMU capital outlay is seeing $75,000 for the building of student solar-powered outdoor workstations. Altogether, lawmakers approved just under $24 million in capital outlay spending for more than two dozen infrastructure projects in larger Chaves County. By Garry Boulard ![]() A battle over the permitting process in energy infrastructure construction projects has moved to a new stage with a vote in the House of Representatives. Members have now given their approval by a 225 to 204 margin to the Lower Energy Costs Act, a bill repealing a part of last year’s Inflation Reduction Act. Proponents of the Lower Energy Costs Act, notes the New York Times, argue that it removes “red tape surrounding the construction of energy infrastructure.” That red tape largely applies to gas and oil pipeline construction. The new legislation is particularly designed to reduce some environmental reviews that are currently required to build pipelines. If it becomes law, the bill will also relax requirements for the maintenance and repair of electric grid infrastructure, while imposing deadlines for the environmental review of projects. The Lower Energy Costs Act has won the support of the U.S. Chamber of Commerce, among other industry groups. Marty Durbin, president of the Global Energy Institute, which is a part of the Chamber, said the bill will “advance important policies to improve the permitting process, ensure strong domestic energy production, protect energy exports, and increase production and processing of our own critical materials.” Similarly, Jason Grumet, chief executive officer of the American Clean Power Association, said the Lower Energy Costs Act will “create a predictable and timely federal permitting framework which is critical to the future development of America’s vast clean energy resources.” Opposition to the legislation has been spirited, with New York Representative Alexandria Ocasio-Cortez remarking that “the central argument and logic of this bill is that if you give Big Oil everything they want, then perhaps they will lower our gas prices.” Ocasio-Cortez added: “It’s a form of trickle-down fantasy that will just not make life easier for everyday Americans.” In a statement, the National Parks Conservation Association, said the Lower Energy Costs Act is “anti-conservation at its core, prioritizing drilling and mining on public lands above all other recreation and natural and cultural resource protection by fast-tracking these extraction activities.” While the legislation has already been introduced in the Senate, its chances of passage there currently appear dim. By Garry Boulard ![]() A two-day auction is scheduled to begin on May 15 for a massive and modern 14-story office building in downtown Phoenix. Located at 3030 N. Central Avenue, the nearly 181,000 square foot building has for years been the home to a Bank of America outlet. It has also housed the offices of the Bureau of Indian Affairs and the Arizona Board of Regents, among other agencies, as well as the Spanish language radio station Unica. The property is being listed by the Phoenix offices of realtor Cushman & Wakefield and sits on a 1.5-acre site in the heart of a cluster a modern high-rise office buildings. Built in 1975, the structure is categorized as a Class B building, and is known for its 12-foot-high ceilings, spacious ground floor lobby, and glass-window walls. The building underwent some renovation around 10 years ago. The 3030 N. Central Avenue auction will have a starting bid of $5.2 million. By Garry Boulard ![]() A long-standing plan to build a modern forensic unit that will be operated by the New Mexico Behavioral Health Institute may be a step closer to reality with significant funding from state lawmakers. The Institute, located at 3695 Hot Springs Boulevard in Las Vegas, is the only state-operated and owned psychiatric hospital in New Mexico. Opened in 1889 and originally called the Territorial Insane Asylum, the Institute treats sometimes violent offenders who have been arrested for a felony-level crime to determine whether they’re competent to stand trial. Those patients are typically held for a 90-day period before a determination is made regarding their competency. Members of the New Mexico State Legislature have given their approval to a big $68 million capital outlay allowing for the planning, design, and construction of a forensic unit, which will be located near the Institute’s main campus. The funding will also pay for the furnishing and equipping of the new facility. The $68 million capital outlay for the new forensic unit is the largest such outlay for a series of proposed projects in San Miguel County approved by lawmakers and comprising a total of just over $90 million. By Garry Boulard ![]() With labor negotiations appearing to stall, the Associated Builders and Contractors has asked the Biden Administration to play a greater role in an effort prevent a possible work stoppage at the ports of Los Angeles and Long Beach. Officials with the International Longshoreman and Warehouse Union and the Pacific Maritime Association, which represents ocean carriers and port employers, have been engaged in talks since last spring, but with only marginal progress. In a letter to Biden, the ABC, joined by a wide range of industry groups including the Associated General Contractors of America and the U.S. Chamber of Commerce, said that it was “imperative that the administration work with the parties to quickly reach a new agreement and ensure there is no disruption to port operations and fluidity.” A central concern for builders remains the possibility that a complete breakdown in negotiations will lead to a work stoppage, which will then impact the delivery of building materials. The ongoing impasse, notes the Wall Street Journal, has led to increased tensions, with “employers accusing unionized dockworkers of slowing cargo handling.” As recently as the last week of February both the Pacific Maritime Association and International Longshoreman and Warehouse Union announced that they had reached a “tentative agreement on certain key issues, including health benefits.” In a joint statement, the two groups said they remained “committed to resolving remaining issues as expeditiously as possible.” But tensions have risen in the last several weeks, especially as dockworkers, according to reports, are no longer spreading out lunch breaks, resulting in a complete and costly work stoppage on the docks for one hour. In urging a greater federal role in the negotiations, the Associated Builders and Contractors, along with the other organizations petitioning Biden, observed that “significant issues remain for both parties to resolve. However, the only way to resolve these issues is for the parties to remain at the bargaining table and actually negotiate.” By Garry Boulard |
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