New & Noteworthy
By: Julie D. Stern
The $40 billion, 170-mile Nicaragua canal project is scheduled to break ground in December 2014. The new canal is expected to rival the Panama Canal when it is completed five years later. A Chinese consortium, HK Nicaragua Development, led by Chinese entrepreneur Wang Jing, won the license to develop the canal last summer. The canal is expected to capture 4.5 percent of world maritime freight traffic and double the country’s per capita GDP. It is being designed to serve the world’s largest (post-Panamax) ships and to be the shortest passage between Asia and the eastern U.S.
U.S. and European retailers aren’t the only ones thinking omnichannel. Chinese e-commerce giant Alibaba spent US$692 million (part of a $3 billion acquisition spree) for a 10 percent stake in Chinese department store and supermarket owner Intime Retail Group. The deal will enable Alibaba customers to pick up online orders at Intime’s stores.
Google Capital has purchased a $50 million minority stake in Auction.com, the world’s largest online real estate auction firm. Auction.com, which sold more than $7 billion of commercial and residential real estate online last year, uses countdown clocks like those on eBay Inc.’s website to broker the sale of properties and nonperforming loans. Since it was founded in 2008, it has sold nearly $20 billion in assets.
“Auction.com has quietly built one of the largest marketplaces on the web,” said David Lawee, partner at Google Capital, a growth equity fund backed by Google, in a March announcement. “We think Auction.com can fundamentally change how real estate, and particularly commercial real estate, can be bought and sold, leveraging the playing field for smaller investors.”
714,000 sq. ft.
Salesforce.com has signed a record-breaking lease — the largest in San Francisco history — to occupy about half of the skyscraper now rising at 415 Mission Street. The transaction, which will put the city’s largest tech employer’s offices inside what is slated to be the tallest building on the West Coast when it is completed in 2017, will result in the renaming of Transbay Tower as Salesforce Tower, thanks to a naming rights agreement.
The cloud-computing company will pay $560 million over 15 1/2 years to occupy the top and bottom floors (as well as floors 3-30) of the Cesar Pelli-designed tower being built by Boston Properties and Hines. Cushman & Wakefield negotiated the lease, which was signed in only five months.
Photo courtesy Gotham Greens
20,000 sq. ft.
Gotham Greens, a builder and operator of commercial-scale greenhouses, has built a 20,000-square-foot, high-tech climate-controlled greenhouse on the roof of a Brooklyn, New York, Whole Foods Market. The hydroponic greenhouse requires no soil and can grow high-quality vegetables year round. A sophisticated computer control system continually measures sunlight, heat, wind, humidity and other features and adjusts them to ensure optimal growing conditions. The facility is expected to produce 150 tons of pesticide-free vegetables and herbs a year. And shoppers will be able to purchase produce that was harvested and packaged that same day.
225 and 1,100
Staples has announced plans to close 225 stores in North America (about 12 percent of its stores) by the end of 2014, while Radio Shack plans to shut down more than 1,100 U.S. stores (about one-fifth of its locations). Both are fighting competition from e-commerce as consumers purchase more office supplies and electronics online; Staples — which now does almost half its business online — also faces increased competition from Office Depot, which bought Office Max last year.
The ports of Los Angeles and Long Beach — the two largest container ports in the U.S. — together handled 42 percent of imports, exports and empties (incoming and outgoing empty containers) at major U.S. ports in 2013. But their market share has dropped more than five percentage points in the past decade, a fact that led the Los Angeles 2020 Commission to urge the rival ports to merge.
“Los Angeles and Long Beach should parlay their individual successes into a combined port to enhance their overall competitive position — a one-two punch, if you will,” the commission stated in its April 2014 report, “A Time for Action.” The cities of Long Beach and Los Angeles, however, have no interest in merging their ports. Long Beach city leaders called the commission’s proposal “condescending and disrespectful” and the Los Angeles City Council rebuffed the proposal in early May by declining to act on it.