In 2022, amid shifts in the local market and larger economy, Southern California readers were hungry for CRE news. Readers were especially interested in stories about the region's powerhouse industrial market, the real estate decisions of Amazon and of life sciences behemoth Alexandria Real Estate Equities, as well as Netflix's about-face from its previously insatiable urge to lease space.
Some of these themes line up with larger nationwide trends that took hold this year, namely the curiosity about Amazon's shift away from its years-long position as a major real estate demand driver, but all are pieces that together form a more comprehensive picture of changes and hiccups the SoCal market weathered over the last year.
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Amazon Backs Out Of Plan To Occupy West Covina Last-Mile Delivery Center
Greenlaw Partners, a frequent Amazon landlord and owner of a former church site in West Covina, thought they could enjoy a 12-year lease with the e-commerce giant for the 177K SF project. But, the project was the subject of a lawsuit against Greenlaw Partners and the city of West Covina by two Teamsters chapters and environmental groups that claimed the project approvals violated the the California Environmental Quality Act. The suit was settled in March, but Amazon backed out of the project anyway.
Alexandria Pulls Out Of 600K SF California Project, Takes $30M Loss
Alexandria acquired a site somewhere in "one of the company's existing submarkets in California" last year with plans to redevelop it. By August, it said the project didn't make economic sense anymore. The move was a sign of the life sciences juggernaut shifting its portfolio and development strategy, shedding some projects while barreling full steam ahead with others.
Alexandria Real Estate Plans Another California Megacampus, This Time In San Diego
Among the projects with which Alexandria is moving forward is the redevelopment of the Costa Verde Center, a mall in San Diego, into a new mixed-use development. The company purchased the mall near the life sciences hub of University Towne Center for $125M and announced plans for development that would include lab space, hotel rooms and more.
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EXCLUSIVE: Blackstone Sells Huge Resort Where ‘The Bachelorette’ Was Filmed To British Firm For $255M
A Palm Springs-area resort that hosted filming of The Bachelorette sold to a private equity firm for a hefty price tag, and more than $84M over what Blackstone paid for the place in 2018. The sale happened in February, but by the end of the year, the tides had turned for institutional real estate deals, largely the result of interest rate increases throwing cold water on borrowers in the form of higher capital costs. In December, Blackstone made another big sale, the $700M sale of its stake in Las Vegas resorts the MGM Grand and Mandalay Bay, but at the same time, started limiting withdrawals from its real estate fund, BREIT.
Netflix Giving Up 180K SF In Burbank Amid Subscriber Loss, Layoffs
After years of aggressive growth in terms of office space, leasing up entire buildings at once, Netflix contracted, giving up a significant chunk of space in Burbank. It's not known if more will be given up, but it took an $80M write-down to exit several leases in the second quarter.
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Amazon Inks Biggest U.S. Lease — 4.1M SF — In Inland Empire
This is Amazon's biggest warehouse in the LA area — and the country. News of the lease came after Amazon had shifted away from leases and toward owning its own properties, especially those with larger square footages, Bisnow reported.
Amazon Buys 120 Acres Near Palm Springs Entitled For 3.4M SF Warehouse
The top story further demonstrates the high level of interest among Bisnow readers in stories about Amazon. The most-read story in Southern California this year was about Amazon's purchase of property about two hours east of Los Angeles that was entitled for a 3.4M SF industrial warehouse. Amazon's second-biggest warehouse space reportedly was set to span 90 acres and rise five stories, with construction expected to complete in September 2023.
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