Middle Market Digest: This Week in Southwest

Development activity is soaring in the Southwest markets. While Los Angeles saw the most development activity this week, Phoenix remains a steep competitor for the top spot. Most significantly, Phoenix has its first speculative industrial build, illustrating the increase in demand. Multifamily development continues to dominate new construction throughout the area. This week, there was also significant deal activity and employment news. Here’s a look at this week’s trends, announcements and deals that you may have missed in Southern California, Utah, Arizona and Nevada.

BY THE NUMBERS

ORANGE COUNTY—Based on properties 50,000 square feet and greater, office sales activity in 2017 has set new records based on the first three quarters of a year. From Q1 through Q3, 2017 total sales volume of $1.9 billion broke the previous record set in 2015 of $1.7 billion. Additionally, the 2017 average price per square foot of $286 shattered the 2008 price point of $282. The largest transaction in 2017 saw FivePoint Holdings purchase the 1 million square foot, four building FivePoint Gateway project from Broadcom in a sale-leaseback deal for $443 million ($426 per square foot). Broadcom agreed to lease two of the buildings for 660,690 square feet. Private capital firms are very active in the Orange County market of which they are attracted to the growing local economy and favorable market conditions including low vacancy and rising rents.