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Amazon HQ may start Corporate Office's $1B project; Howard Hughes leases to ESPN

Commercial real estate

* Corporate Office Properties Trust CEO Stephen Budorick said his company's planned $1 billion mixed-use project in Baltimore, Md.'s Canton neighborhood could "jumpstart" if Amazon.com Inc. chooses Maryland for its second headquarters, the Baltimore Business Journal reported.

The 10-acre waterfont project would include 1.1 million square feet of class A office space, retail and restaurants, along with a potential 400-foot apartment tower, a 300-room hotel and a marina, according to the report.

* On a related note, The Wall Street Journal featured a report on the expected ramifications of Amazon's second headquarters plans on Seattle, where the online retail giant is based.

The publication cited a Green Street Advisors report titled "Sleepless in Seattle" that said future growth projections for Seattle's office sector would have to be adjusted, since it was previously assumed that Amazon's rapid growth would be concentrated in the city. Green Street lowered its 2018-2021 growth estimate for Seattle's office sector by an average of 1.5 percentage points and also said growth in the apartment, industrial and strip-center segments is expected to be "modestly" slower in the near-term.

Before announcing its second headquarters plans, Amazon said it expected to add two million square feet of office space to its present 8.1 million square feet in Seattle across 33 buildings, the report noted. Amazon has not said how its second headquarters plans will affect its growth plans in the Seattle area, according to the report.

* ESPN has secured space for its first studio in New York City at Howard Hughes Corp.'s Pier 17 development at the South Street Seaport, the New York Post reported. The lease was signed with ESPN's studio partner NEP Group, according to the report. The studio complex, part of a $1.7 billion project, is slated to open in March or April 2018.

* A study from Colliers International indicates that the average asking rent for office space in Manhattan, N.Y., which came in at $72.87 per square foot in the third quarter, is actually 11% lower than in 2008 when adjusted for inflation, despite being "slightly above" the pre-recession peak, Crain's New York Business reported. The Midtown submarket is dragging the average down for the entire borough, the report noted.

The average Midtown asking rent was more than 20% lower in the quarter compared to pre-recession highs when adjusted for inflation, whereas inflation-adjusted average asking rents in Lower Manhattan and Midtown South logged double-digit percentage growth. The report pointed out that Midtown's class A buildings alone make up about 40% of Manhattan's commercial space.

* Meanwhile, The Real Deal reported, also citing Colliers, that foreign owners of New York City office space are offering fewer concessions to tenants compared to other ownership types. Overseas owners offered an average of 4.5 months of free rent and an average of $42.81 per square foot in cash contributions during the third quarter.

By contrast, private equity owners were offering an average 11.9 months of free rent and an average of $88.06 per square foot in cash incentives, a 307.9% increase from the third quarter of 2008. The report noted that concession packages by real estate investment trusts, institutional owners and private landlords have more than doubled since the recession.

* The New York Times reported on hurricane-inflicted damages on Puerto Rico real estate, which has been seeing increased interest from big-name Wall Street hedge funds like Paulson & Co., Blackstone, Lone Star Funds and others who have mainly been investing in hotels, condominiums, office buildings and distressed real estate loans.

Hurricane Maria hit the island Sept. 20, causing massive property damage and knocking out the power grid.

* Lincoln Property Co. is renaming its planned Tremont Plaza project in downtown Orlando, Fla., as Church Street Plaza, the Orlando Business Journal reported, citing the company's Florida region director Austin Stahley. The $100 million, 26-story property will span 217,000 square feet of office space, 50% of which is preleased, the report noted, citing Stahley. Completion is expected in the third quarter of 2019.

* Hillwood is teaming up with T5 Data Centers to develop a data center campus at the AllianceTexas master-planned community in north Fort Worth, Texas, the Dallas Business Journal reported. The campus, dubbed T5@Alliance, is also being financially backed by IPI Data Center Partners Management LLC.

Hillwood has set aside up to 400 acres at the 18,000-acre community for data center uses.

The Dallas Morning News also reported on the team-up, noting that the proposed project would be one of the largest of its kind in the U.S.

Housing

* The median home price in North Texas increased 8% year over year in September to $242,000, while sales increased 3% year over year, The Dallas Morning News reported, citing the Real Estate Center at Texas A&M University and the North Texas Real Estate Information Systems.

* For the 12 months ending in September, the Dallas-Fort Worth area recorded permits for 32,234 houses, reflecting the highest total for the area in a decade, The Dallas Morning News reported, citing Residential Strategies Inc. Builders commenced work on 8,583 single-family homes in the area during the third quarter, and new home sales were up 14% year over year, according to the report.

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng rose 0.58% to 28,490.83, while the Nikkei 225 jumped 0.64% to 20,823.51.

In Europe, around midday, the FTSE 100 was up 0.20% at 7,522.78 and the Euronext 100 was 0.07% higher at 1,046.02.

On the macro front

The NFIB Small Business Optimism Index and Redbook are due out today.

Now featured on S&P Global Market Intelligence

Research Roundup: Monday, North American real estate edition: A handful of initiations, a downgrade and a reiteration are featured in this roundup of recent research reports.

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