A Fresh Take on CRE

CompStak Courier 6-9-2016

Welcome to the 3rd edition of CompStak Courier, your one-stop shop for interesting CRE news for the week.

NEW YORK CITY: Brack Capital and Media iQ Digital Sign in 853 Broadway

Brack Capital and Media iQ Digital both signed at 853 Broadway over the last 3 quarters. Brack Capital took the entire 2nd floor, paying $83 PSF while Media iQ took the entire 4th floor, paying $80 PSF. According to CompStak, these rents are relatively high compared to the $67.01 starting rent average for other Class B leases signed over the last 3 quarters in the Union Square submarket.


DC METRO: Jamestown Sells Madison Office Building for $35M

Sidra Capital recently purchased the Madison Office building at 1155 15th St NW. Jamestown sold the 94,153 SF property for $35M. According to CompStak data, tenants in this building are paying an average starting rent of $39.62 PSF. This is lower than the starting rent average for the competitive set ($45.93 PSF) and the DC East End submarket ($48.11).


SAN FRANCISCO-BAY AREA: Hudson Pacific Sells One Bay Plaza in Burlingame for $53.4M

On June 1, Hudson Pacific Properties closed the sale of One Bay Plaza, a 195,739 SF office tower located at 1350 Bayshore Highway in Burlingame, California. Hudson Pacific sold the building for $53.4M (before credits, prorations, and closing costs.) According to CompStak, the average starting rent for active leases at One Bay Plaza is approximately $3 PSF and the average lease term is about 4 years.


CHICAGO: Sabal Financial Sells Evanston Office building for $18M

Distressed property investor, Sabal Financial Group, sold 500 Davis Street in Evanston for $18M recently. Sabal is set to make a 21% ROI on the sale as it purchased the asset for $14.9M in 2014. The buyers, Steelbridge Capital, believe that Evanston rents will continue to rise with its low vacancy. According to CompStak, 500 Davis’s current average starting rent is $25.31, which is well below the comparable properties average starting rent of $35.25. Furthermore, a lease rollover analysis of the asset shows that eight leases are set to expire in the next 3 years, highlighting the NOI increase that is bound to occur if current average starting rents remain in place.


BOSTON: Zagster’s Bigger HQ Testament to Bike-Sharing Popularity

Zagster’s new headquarters at 25 First Street in Cambridge encompasses 11,000 SF, up from 6,800 at the startup’s previous headquarters at 24 Thorndike Street. Other notable tenants in the property include Hubspot who took 84% of the leasable space - $57.00 PSF for a 66,887 SF space and $59.89 PSF for a 118,561 SF space in Q1 2016. CompStak data suggest that these values are lower than the market average rent of $61.79 PSF.


LOS ANGELES: Report: Downtown LA is a 'Boomtown'

A recent report by Realtor.com predicts Downtown Los Angeles will see more growth in the number of households of any city nationwide over the next five years (except for Gilbert, AZ). According to CompStak, office starting rents are ramping up in the submarket, growing 6.7% in the past 12 months, putting the submarket ahead of the city overall.

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