Welcome to the 6th edition of CompStak Courier, your one-stop shop for interesting CRE news for the week.
NEW YORK CITY: Coworking Space Opens Midtown Location
Knotel is opening their sixth location in Midtown at 22 West 38th Street. The 35,286 SQFT space will span the second to seventh floors in the building, comprising more than half of the building’s total square footage. Knotel is paying $49 PSF, which is $5 lower than the $54 PSF asking rent. The coworking space will get $60 in tenant improvements as part of the 15-year lease.
DC METRO: Ivy Realty Buys Rockville Office Building for $33M From CWCapital
Ivy Realty purchased the Twinbrook Office Center at 1700 Rockville Pike for $33M from CWCapital recently. With over 160K SQFT, the office center has an average starting rent of $27.26. This is comparable to the average starting rent for the competitive set of $27.95, but is well above the submarket average starting rent of $25.45.
SAN FRANCISCO-BAY AREA: Agri-Tech Company Secures Space in Sunnyvale
AEssence, an agri-tech company, closed on a 16,274 SQFT space at 275 Reamwood Avenue in Sunnyvale. This will consolidate their business headquarters and R&D spaces in Mountain View and Sunnyvale into one space. According to CompStak, the NNN lease has a starting rent of $2.15 PSF and $15 PSF in tenant improvements.
CHICAGO: CBD Office Market Looking Good For 2016
New research by MBRE shows that the direct vacancy rate in Chicago CBD has declined 32 bps from 11.97% at the end of the first quarter to 11.65%. According to CompStak, there has been a corresponding increase of 4.6% in starting rent for office space in the market over the past year. CompStak's data also reveals a decline in concessions as a percent of lease value of about 2.5% in the CBD over the past 12 months.
Los Angeles: Hines Sells West LA Office
Hines sold its Class A office at 12100 Wilshire Boulevard for $225M to a JV between Douglas Emmett and Qatar Investment Authority. The building has maintained its value since Hines purchased it nine years ago. According to CompStak, at $3.24 compared to $5.65, the starting rent for this property is well below its competitive set. It is even further below the West Los Angeles submarket average, which has an average starting rent of $6.19. However, many of the leases are expiring in the next 5 years, which could mean there is an opportunity to bring NOI up to market averages.