WSJ reports today that New Jersey Governor Chris Christie is threatening to take back the Xanadu site. The project stands nearly complete but remains under-capitalized and without enough tenants at this point to avoid a flood of “kick out” clauses in tenant leases coming into play. Even in the best of times a mall with an indoor ski slope sounded a bit crazy, eh?
WSJ article here.
My previous post here.
WSJ reports that US Architectural firms are increasingly picking up work in Asia where several large towers are moving forward with construction or design work despite the challenging economic environment. Revenue from Asia now accounts for about 7% of AIA member firm revenues, but overall revenues will still be down by 20-25% this year. WSJ article
The American Association of Architects reports increasing inquiries from clients but few new projects being signed up. Payroll levels are down by 15% from their peak. AIA’s Architectural Billings Index shows some recent improvement but business conditions remain very weak for member firms:
AIA Chief Economist Video Update
Is this the beginning of loosening credit markets? Especially for large deals? Well, maybe for Class A NYC towers. Loan will be at about $600 psf on this 98% occupied building. Some of the proceeds will be used to “Green up” the building. The towers seem to be leading the way with Green renovations on quite a few announced lately.
B of A led the syndicate and retains about half the deal. It took nine months to arrange; that’s a lot of cajoling your fellow bankers.
FDIC took over 5 more banks on Friday, bringing the total number of bank failures for 2009 to 45. Two of the five Friday failures were in Georgia, bringing Georgia’s total number of failures to 14 since the start of ‘08. This is the most failures of any state, and most of Georgia’s failures were in the Atlanta area. Too much land, too little restraint. Hasn’t anyone read “A Man in Full”?
http://www.chicagotribune.com/business/nationworld/wire/sns-ap-us-bank-closures,0,6104596.story
Dubai residential pricing is off 50% from peak according to Deutsche Bank. Some of the largest state controlled firms are merging to save costs and potentially reduce inventory. Among the projects under development is Dubailand, which includes a Tiger Woods golf course. Rumors from a year or so ago that Dubai had half the world’s tower cranes at work seemed far fetched, but surely served as a sign of potential oversupply even without the “Great Recession” we’re in now.
WSJ link:
Massachusetts and Florida already meet the latest energy code guidelines while other states meet earlier standards, according to this map issued by the Building Codes Assistance Project, which is jointly funded by government and advocacy groups.
xanadu – noun, a place of great beauty, luxury, and contentment
The 2.4 million square foot, $2.3 billion Meadowlands Xanadu mall is reportedly not so beautiful (at least from the outisde), lacks luxury (tenants), and certainly is providing its owners little contentment. Amidst the worst leasing retail market ever, this troubled project tries to soldier on, with repeated delays, cost overruns, and lack of tenants. Mills Corp. failed at it. Colony Capital is on the ropes there now. Maybe the third owner will make some money at it?
It is planned to have the first indoor ski slope in the U.S. We’ll see if those lift chairs ever get running.
http://www.nytimes.com/2009/05/20/realestate/commercial/20xanadu.htmlt
Forecasting firm Global Insight predicts an overall 3.7% drop in construction spending for 2009, the steepest decline in 20 years. The firm predicts residential spending to decline by 10% and non-residential by 5%, although infrastructure spending will be up by 5% due to government stimulus.
http://www.globalinsight.com/Highlight/HighlightDetail16605.htm
The 2009 Pulitzer Prize for Public Service has been:
“Awarded to the Las Vegas Sun, and notably the courageous reporting by Alexandra Berzon, for the exposure of the high death rate among construction workers on the Las Vegas Strip amid lax enforcement of regulations, leading to changes in policy and improved safety conditions.”
Unsafe working conditions on the Las Vegas construction sites resulted in 12 fatalities in 18 months.
http://www.lasvegassun.com/news/2009/apr/21/sun-wins-pulitzer-prize/
