Two office properties facing new futures, a rock legend who can’t sell his house and a new St. Louis Fed chief. From the wild and wooly world of real estate, here are the hits and misses for the week of Jan. 1-5.
Hit: A New Life for an Old Office Property: The four-story Queen Anne Plaza office building in Seattle has been vacant since 2022, but it is getting a new lease on life as multifamily housing. Stream Real Estate, a Seattle-based developer and investor, has paid $7 million for the property and is planning a renovation that will include 68 one- and two-bedroom apartments, along with a small “urban farm” in the outdoor amenities area and a new fifth floor. This will be the first time that a Seattle office building is being turned into a multifamily housing complex.
Hit: Another New Life for an Old Office Property. The Michigan commercial property firm Friedman Real Estate also made the news this week with its acquisition of two office towers within Detroit’s Renaissance Center complex. One of the towers is fully leased and the other is mostly vacant. While Friedman hasn’t previewed its plans for the property, its interest in this property would suggest there is still some hopeful news to be found in the problem-plagued office sector.
Miss: Is There a Doctor in the House? Medical Properties Trust (NYSE:MPW), the real estate investment trust that invests in health care facilities, announced it will be recording roughly $350 million of write-downs due Dallas-based Stewart Health Care System, which fell behind on its rent. MPT has also hired a restructuring adviser for its “efforts to recover uncollected rents and outstanding loans from Steward.” According to the Wall Street Journal, MPT’s stock has sank by 70% over the past year and its performance on Wall Street today could charitably be described as dismal. This is one REIT that truly needs a “Get Well Soon” card.
Hit: Finding Humor in an Unsold Mansion. Billy Joel has no problems attracting fans to his concerts, but the Grammy winner has been unable to get anyone interested in his Long Island mansion that he’s trying to unload for $49 million. An earlier attempt to sell the property for $32.5 million in 2008 also came to naught. However, the legendary singer-songwriter hasn’t lost his sense of humor over this – he told his audience at a New Year’s Eve concert earlier this week that “nobody” wants to buy his mansion, adding that he was eager for a sale because “I’m just going to spend a little more time in Florida like old Jewish guys from Long Island do.”
Hit: A Tough Act to Follow. Congratulations go out to Alberto G. Musalem, who will become the next president and CEO of the Federal Reserve Bank of St. Louis, effective Apr. 2. Musalem succeeds Jim Bullard, who was among the most provocative and cogent regional Fed leaders in the central bank’s history. Musalem is more than qualified for the position – he was most recently CEO, co-chief investment officer and co-founder of Evince Asset Management, a quantitative investment technology company, and before that he was executive vice president and senior advisor to the president at the Federal Reserve Bank of New York. Whether Musalem will continue Bullard’s high-visibility approach remains to be seen – if anything, the Fed could benefit from more invigorating thought leadership from its regional presidents.
Phil Hall is editor of Weekly Real Estate News. He can be reached at [email protected].