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The Esplanade

JLL earns exclusive leasing assignment for Esplanade office towers

After an extensive vetting process, the Phoenix office of JLL has been selected as the exclusive leasing agent for the four Class A office towers at The Esplanade, a 1-million-square-foot landmark mixed-use project located at 24th Street and Camelback Road, in the heart of Phoenix’s prestigious Camelback Corridor.

JLL Managing Director John Bonnell and JLL Vice Presidents Brett Abramson and Greg McMillan will direct all office leasing efforts for The Esplanade’s 10- and 11-story, Class A office towers. The buildings were constructed between 1989 and 2002, and represent a total 906,459 square feet of space at 2425, 2525, 2575 and 2555 E. Camelback Rd. Each tower features high-end finishes, panoramic views of Camelback Mountain and Piestewa Peak, private balconies, 24-hour security, on-site conference and fitness facilities, concierge and abundant covered parking.

JLL is also working with property owner by MetLife, Inc. as it implements extensive, project-wide renovations that are delivering new building lobbies, new corridors, an upgraded amenity package and new speculative office suites.

“The Esplanade represents some of the Valley’s nicest office space in an equally premier location. It is one of those iconic projects that checks virtually every box on the tenant and employee wish list,” said Bonnell. “It also has an owner that recognizes the value of these advantages, and will make the investment necessary to ensure The Esplanade remains a market leader for the long term.”

In addition to its office towers, The Esplanade includes a first-floor retail component, fine and casual dining, a 14-screen AMC Theatre, a 291-room Ritz Carlton Hotel, and a pedestrian-friendly design that links the project to neighboring Biltmore Fashion Park, one of the metro area’s most upscale shopping and dining environments.

The Esplanade is within one mile of Piestewa Freeway/State Route 51 and minutes from the Valley’s Loop freeway system, Interstate 10, Downtown Phoenix and Sky Harbor International Airport. These factors combined to rank Camelback Road as #34 on JLL’s list of Most Expensive U.S. Streets for Office Space in 2013—an overview of the nation’s most premier, in-demand submarkets for office space.

Lincoln Property Company’s Desert West Region manages 6 MSF of commercial space, including the 52-acre, 11-building Broadway 101 Commercial Park in Mesa.

Forever Changed: Since recession, CRE owners drive property management issues

A decade or so ago, commercial real estate property managers might be considered a generic lot.
Not that they didn’t have a full roster of responsibilities. They kept the buildings looking spiffy, made sure the trees were trimmed and the elevators inspected, and they provided standard financial reports of income and expenses to often faceless pension plan accountants or other absentee building owners.
To those investors, the bottom line was the only determinant of how well the property manager was caring for their assets.
Then the recession happened.

John Orsak, Hines

John Orsak, Hines

Tenants foundered and moved out or moved home. New businesses available to snatch up their suites or shop spaces were few, and vacancy rates shot up in all sectors of commercial real estate.
Building owners started paying attention to the detail above the bottom line, and property management changed forever, said John Orsak, director at international real estate firm Hines.
Increasingly, the building owners drive the business, determine how their properties are managed, what kind of reports they receive and when they get them, and have a say in just about every management aspect down to the light bulbs and landscaping — or at least how eco-friendly they are.
Savvy property management companies are meeting the newly involved building owners’ demands and tailoring boutique services for each client, from organizing food truck parties to developing “green” programs to feeding financial data into the owners’ proprietary reporting systems.
“It used to be the property manager had to make sure the trash was taken out, the lights were on, the tenants were comfortable and the owner got the reports,” said Orsak, who has been with Hines for 12 years. “That was enough then.”
Now sophisticated business owners want reports “their way” and on their reporting cycles, he said.
Hines manages 406 properties totaling 148.5 MSF, more than half of that for third-party owners. Among its Arizona properties are US Airways headquarters in Tempe, the Renaissance Square office complex in downtown Phoenix, and 24th and Camelback , two luxury office buildings with a combined 600,000 SF of space in the prestigious Camelback Corridor.

Alisa Timm

Alisa Timm, Lincoln Property Company

All have different management criteria and in common only the ultimate goal: to maximize property values by keeping the buildings full of contented tenants, Orsak said.
“In a recession, you focus inward,” he said. “That’s when everybody refocused.”
Alisa Timm, director of management services for Lincoln Property Company, which manages more than 150 MSF nationally, agreed. Lincoln’s Desert West Region, which includes Arizona, manages 6 MSF of commercial space, including the 52-acre, 11-building Broadway 101 Commercial Park in Mesa.
“The recession was a big factor,“ Timm said. The competition for tenants changed the playing field, and building owners, still eyeing the bottom line, saw the need for differentiating their buildings  from the many other nice but too-empty properties in the marketplace.
Instead of providing building owners with a checklist of services it offers, property management providers are sitting down with the owners to listen to their demands and tailor a plan to meet their needs, Timm said,
“There was a growing recognition that a property is nothing but a liability without tenants,” she said.
Before, especially in a desirable market, the issue was “what the landlord would give” in terms of tenant improvements and other incentives to woo a would-be business to the building, Timm said. “Now it’s a much different negotiation. I don’t think we’ll ever go back to that disconnect between landlord and tenant.”
Timm said the emergence of large, experienced building buyers, such as the big national REITs, has also changed the focus.
“Ownership of commercial real estate is different now. Owners are more sophisticated,” said Timm, who has been in the industry since 1986. “Almost anybody going into a building is looking at resale, maybe exiting in seven to 10 years.
“The sophisticated owners understand that property management is the key.”

Andi St. John, CBRE

Andi St. John, CBRE

Andi St. John, senior director of asset services at CBRE, has spent 17 years in property management. CBRE manages 22 MSF in 140 buildings throughout Arizona, including Biltmore Commerce Center in Phoenix and Raintree Corporate Center in Scottsdale.
“I see a change in property management because what a client needs has changed,” St. John said.
She agreed that a client’s goals— that is, whether to hold property for the short- or long-term— is a factor, as is a property’s desirability to tenants based on a host of factors from location to age to technology to sustainability.
“Government leases require sustainability (standards) and certain other tenants have that requirement in their leases,” she said. “Sustainability is critical in the market now. It’s the number one way to reduce expenses, which increases value.”
If an owner doesn’t see a return on investment in upgrades within the time frame they plan to hold a property, that’s a non-starter.
Instead of offering a standard contract for management services, CBRE approaches a building owner first in a consulting capacity to determine what the owner’s goals, budget and needs are, and then, in a collaborative effort, to devise  the sphere and direction of the management services, she said.

Cathy Zoccoli, The Muller Company

Cathy Zoccoli, The Muller Company

Cathy Zoccoli, senior property manager at Phoenix Corporate Tower at 300 N. Central Ave., sees it the same way.
“We have an owner’s perspective,” she said. “If they want X, we give them X. Building owners expect us to understand the building, get our arms around it.”
One owner may be into maximizing efficiency, another not willing to spend the upfront cash, she said.
The property manager’s job is to work with the owner to determine how to re-brand, revitalize and tweak a building’s operation to meet the owner’s goals, said Zoccoli , who has been in the business for 15 years, 11 of them in Arizona, the last five with California-based The Muller Company.
“It’s The Muller Company culture,” she said. “We are more of a boutique company.”

Sheryl Brisbin

Sheryl Brisbin

Not all building owners want to pilot their own portfolio.
Sheryl Brisbin, of Cushman & Wakefield, has spent the last 19 years in property management. She now oversees the Camelback Esplanade’s expansive mixed-use property.
Brisbin said a greater number of building owners want to inject their initiatives, but many still want to tap a solid property management company’s broad experience and expertise to determine standards for everything from budgeting to reporting to marketing.
“It’s very owner specific, depending on the type of asset and the type of owner, from small mom and pop (owners) to large institutional owners,” she said.
Brisbin said recent ups and downs of the economy have made property management issues “increasingly complex.”

Esplanade Ext 37 2

Tiffany & Bosco Leases Two Floors at Camelback Esplanade

Tiffany & Bosco, LLC, a Phoenix-based law firm, has signed a lease to occupy nearly two full floors at Camelback Esplanade II, 2525 E. Camelback Rd., according to Cushman & Wakefield of Arizona, Inc.

“Tiffany & Bosco has been a tenant at the property for 10 years and remains committed to this prestigious location,” says Don Rodie, Senior Director in the Office Properties Division of Cushman & Wakefield. “The firm is expanding its space by approximately 30%, taking the entire seventh floor and nearly all of the sixth floor at the tower.”

The firm, which has been in operation since 1967, operates from four different offices in Arizona, California and Nevada. The Camelback Esplanade serves as the firm’s headquarters.

Tiffany & Bosco signed a lease for 41,770 square feet over a term in excess of 10 years. The company will relocate in early 2014 from its current space on the third floor of the same tower.

Other anchor tenants at Camelback Esplanade II include DLA Piper, Verizon Business and Apogee Physicians.

Metropolitan Life Insurance Company, based in Los Angeles, owns the Camelback Esplanade II tower. Rodie, Sam Murik and Blaine Black of Cushman & Wakefield represented Tiffany & Bosco in the lease negotiations. Cushman & Wakefield’s Jerry Jacobs, Larry Downey, Michael Crystal and Reid Tussing serve as exclusive leasing agents for the property and represented MetLife separately in the transaction.


New Phoenix Restaurant Wins ‘Hot Concept’ Designation

Mark S. Mednansky, CEO of Del Frisco’s Restaurant Group, is pleased to announce that the company’s newest offering, Del Frisco’s Grille (which opened locally June 9th at the Camelback Esplanade) has been named one of this year’s “Hot Concepts” by Nation’s Restaurant News.  Del Frisco’s Grille serves contemporary American cuisine and features an approachable menu, a vibrant atmosphere, an expansive wine list, hand-crafted cocktails and genuine hospitality.  Nation’s Restaurant News’ 18th annual Hot Concepts Awards recognize four emerging companies showing innovation, bold tactics and tremendous potential for growth.  Local favorite True Food Kitchen took home the award in 2011.

“We are thrilled to be honored as a Hot Concept by Nation’s Restaurant News, an award we deem very prestigious in the foodservice industry,” said Mednansky.  “We built Del Frisco’s Grille to feel modern, inviting, stylish and fun for our guests, and I think the editors at Nation’s Restaurant News saw those qualities come together in a unique way at our restaurant.  This award is a tremendous honor and a strong validation of the Del Frisco’s Grille concept, and we look forward to continuing to build on this momentum.”

Del Frisco’s Grille is rapidly expanding, opening at The Esplanade in Phoenix on June 9, preceded by the first two Grilles last year in Manhattan at Rockefeller Center and in Dallas’ Uptown neighborhood.  Hot on the heels of the success in Phoenix, the Grille also opened July 14 on Pennsylvania Avenue in Washington, D.C. and the next Grille will open in October in Atlanta’s upscale Buckhead neighborhood.    At approximately 7,500 square feet, Del Frisco’s Grille works well as a stand-alone restaurant and also has potential as a restaurant within a hotel.

Del Frisco’s Restaurant Group — the leading steakhouse company in the country — owns and operates more than 30 restaurants across the country, including the Del Frisco’s Double Eagle Steak House and Sullivan’s Steakhouse brands.  The Del Frisco’s team created Del Frisco’s Grille as a nimble third brand for the company, presenting a varied menu of easy-to-share dishes such as wood oven-baked flatbreads and hearty salads, while carrying over the Del Frisco’s hallmarks of quality foods, excellent preparations and a lively, fun environment marked by genuine hospitality.

For guests, the varied menu means digging into signature dishes such as Ahi Tacos and Cheesesteak Egg Rolls.  For traditionalists, the Grille serves prime steak, and the diverse, 500-selection wine list is much more extensive than those found in the typical bar and grill.  Other favorites at the Grille include imaginative and memorable cocktails like The Kilt Lifter, Apt. 5D, and shots on tap.  Guests can enjoy these at the restaurant’s energetic bar, a destination its own right.

Camelack Esplanade

Camelback Esplanade Signs Aon And Apogee

Camelback Esplanade has signed leases with both Aon and Apogee, according to  Cushman & Wakefield.

Camelback Esplanade is a mixed-use project at 24th St. and Camelback Rd.

Jerry Jacobs, Larry Downey and Michael Crystal of Cushman & Wakefield of Arizona represented MetLife, the landlord, in the lease negotiations. Vince Femiano of Transwestern represented both of the tenants.

Aon is a global provider of risk management, insurance brokerage and human resource services. Aon has leased 10,800 square feet of space at 2555 E. Camelback Rd. on the seventh floor. Currently, the company has an office at 1850 N. Central Ave. The company will relocate to Camelback Esplanade in the second quarter of this year to begin its 11-year lease at the property.

Apogee Physicians currently occupies suites 1100 and 950 at 2525 E. Camelback Rd. and has expanded its presence at Camelback Esplanade from 10,843 square feet to 15,400 square feet. Apogee Physicians has been a tenant at Camelback Esplanade since 2004.

“These transactions demonstrate the continued interest of top tier tenants in occupying the Camelback Esplanade,” says Jacobs, executive director with Cushman & Wakefield of Arizona. “Vacancies at the intersection continue to drop. However, the upcoming opening of Del Frisco’s Grille at the Esplanade will only add more value to the tenants at the property.”

For leasing and property information, visit Camelback Esplanade’s website at camelbackesplanade3.com.