Tag Archives: Cassidy Turley

Youngs Market, WEB

Young’s Market Company leases 250KSF in Phoenix

Cassidy Turley announced Tuesday that Young’s Market Company of Arizona leased 248,900 square feet at 402 S. 54th Pl. in Phoenix. Young’s Market Company is one of the nation’s largest distributors of wines and spirits with operations in California, Hawaii, Arizona, Oregon, Washington, Alaska, Idaho, Utah, Montana and Wyoming.

Cassidy Turley’s Executive Managing Directors Andy Markham, SIOR, Mike Haenel and Vice President Will Strong represented Young’s Market in the lease negotiations. The team represented Young’s in previous site selections, including a distribution space at 200 S. 49thAvenue that is currently available for lease or sale with the Cassidy Turley team.

The landlord, Barley Equities V, LLC (First Beverage Group) was represented by Anthony Lydon, SIOR, CSCMP, and Marc Hertzberg, SIOR, with JLL. The industrial refrigeration and cold storage building was the former home of Crescent Crown Distributing.

Broadstone Twin Fields

Cassidy Turley closed $71M in multifamily deals on Thursday

Cassidy Turley announced on Thursday the sale of Broadstone Twin Fields, a 314-unit apartment community located at 2505 E. Williams Field Road in Gilbert, Ariz., and  The Club at Coldwater Springs, a 251-unit apartment community located at 105 North Links Drive in Avondale, Ariz.

Broadstone at Twin Fields, LP (Alliance Residential), represented by Cassidy Turley Executive Managing Directors David Fogler and Steven Nicoluzakis, sold the class-A garden-style apartment community for $47.1 million ($150,000 per unit). FRI San Tan, LLC (Farnam Realty, Inc.) acquired the apartment community.

“The buyer was attracted to Broadstone Twin Fields because of the overall quality of the asset and its close proximity to the San Tan Village Regional Mall,” said Fogler.

Built in 2008, Broadstone Twin Fields is located on the southeast corner of Williams Field Road and the Loop 202/San Tan Freeway, directly accessible to the Gilbert Spectrum employment district and the San Tan Village Regional Mall. The complex features one-, two- and three-bedroom units that range in size from 749 to 1,250 square feet and detached garages with private entries. Community amenities include two resort-style swimming pools, a clubhouse with a multimedia billiards room, a theatre room and athletic center, outdoor lounge with fireplace and grills and a children’s playground.

The Club at Coldwater Springs

The Club at Coldwater Springs

PM Club at Coldwater Springs Avondale, LLC (PEM Real Estate Group), represented by Fogler and Nicoluzakis, sold The Club at Coldwater Springs for $24 million ($95,618 per unit). Club at Coldwater Springs SIG, LLC (Shepard Investment Group, LLC) acquired the apartment community.

“The buyer was attracted to The Club at Coldwater Springs because it offered the opportunity to acquire a Class A multi-family community in a recovering submarket viewed as likely to see significant rent growth,” said Fogler.

Built in 2005, The Club at Coldwater Springs is a Class A garden-style apartment complex located in the Coldwater Springs master planned community just south of Interstate 10 at Avondale Boulevard. The complex offers 11 different one-, two- and three-bedroom floor plans, with options for covered parking and attached or detached garages. Community amenities include a clubhouse with kitchen and fireplace, two resort-style swimming pools and spas, a movie theatre, a fitness center, a business center and outdoor barbecue areas. The Club at Coldwater Springs enjoys spectacular views of the Coldwater Golf Club, a Forrest Richardson designed championship public golf course.

Courtesy of Cassidy Turley

Moreland Auto Group buys 22 acres in Avondale

Cassidy Turley* announced the sale of 22.6 acres of commercial land at the northwest corner of Avondale Boulevard and McDowell Road in Avondale, Ariz., for $2.2 million ($2.24 per square foot).

Doug Moreland of Colorado-based Moreland Auto Group purchased the property under Moreland Arizona Properties, LLC from Rialto Capital Management LLC. Cassidy Turley Vice Presidents Brian Rosella and Will French negotiated the transaction on behalf of the seller, while George Haugen of Haugen Commercial Real Estate Inc. represented the buyer.

“We’re starting to see a lot more activity in the West Valley,” Rosella said. “Investors are seeing end-users’ interest in and around the West Valley freeways of Interstate 10, Loop 101 and Loop 303, and that momentum will continue.”

Doug Moreland plans to hold the land as an investment. The property is well located in the West Valley near Interstate 10, Phoenix Children’s Hospital and Avondale Auto Mall. The property is one mile west of the recently announced Copper Springs Hospital, which is a 72-bed, 52,000 square foot medical facility. The ground breaking is planned for 2015.

*Cassidy Turley announced in a press release on September 22 that it has entered into an agreement with an affiliate of DTZ Investment Holdings, backed by TPG, PAG Asia Capital and Ontario Teachers’ Pension Plan (the Consortium that agreed to acquire DTZ), to sell 100% of the equity interests of Cassidy Turley. The agreement is subject to customary closing conditions and is dependent on Cassidy Turley’s combination with the operations of DTZ Group (DTZ) to create a global, full-service commercial real estate services company. The Consortium’s acquisition of DTZ closed November 5, 2014. The acquisition of Cassidy Turley is expected to close December 31, 2014.

Chandler Piazza, courtesy of Cassidy Turley

Delta Corporation buys 15 acres for mixed-use development

Cassidy Turley, a leading commercial real estate services provider in the U.S., announced Monday the sale of 15.35 acres of commercial land at the southeast corner of Frye Road and Ellis Street in Chandler, Ariz., for $2.75 Million ($4.11 per square foot).

Chandler-based Delta Frye, LLC, dba The Delta Corporation, a private investment and development group, purchased the property from Tulsa, OK-based BOK Financial Corp. Cassidy Turley Senior Managing Directors Rick Danis and Paul Boyle negotiated the transaction on behalf of the buyer and seller.

“The site received a great deal of interest after the initial development stalled,” Mr. Danis said.  “However, there were so many issues with the property; most groups were unable to see past those challenges. This buyer was able to wrap their arms around the site’s nuances and opportunities, and closed the deal in just 12 days.”

The Delta Corporation plans to develop a mixed-use project on the site. The project is well-located in the Southeast Valley near Chandler Regional Hospital, Chandler Fashion Center and adjacent to the Bank of America Campus.

 

Metro Business Park

Stockbridge Capital Group buys Phoenix industrial portfolio

Cassidy Turley* announced Tuesday that San Francisco-based Stockbridge Capital Group, LLC, a fully independent real estate investment management firm, has closed on five of six properties that are part of a multi-tenant industrial portfolio in metro Phoenix for $53.16 million.

Stockbridge is under contract with plans to close on the sixth building located in Tempe in December for $1.24 million. The seller of all six properties is PS Business Parks, LP (NYSE: PSB) of Glendale, CA. The total portfolio includes ±678,887 square feet of multi-tenant industrial space.

Senior Managing Directors Bob Buckley, Tracy Cartledge and Steve Lindley and Associate Ben Geelan with Cassidy Turley’s Capital Markets Group brokered the transaction on behalf of the seller.

“The portfolio represented a rare opportunity to acquire a critical mass of multi-tenant industrial parks in irreplaceable, land-constrained locations” said Lindley, “The buyer will benefit from market-leading properties and significant upside.”

Built between 1980 and 1987, the properties in the portfolio include: Corporate Park, an 18-building, 199,581 square foot project at 2342 W. Peoria Ave. in Phoenix; Metro Business Park, a four-building, 110,004 square foot project at 2320 W. Peoria Ave. in Phoenix; Mesa Station, a four-building, 78,038 square foot project at 1833 W. Main St. in Mesa; University 1, a 12-building, 199,835 square foot project at 1705-1797 W. University Dr. in Tempe; University II, a four-building, 68,574 square foot project at 1605-1635 W. University Dr. in Tempe; and McKellips Business Park, a single-building, 22,855 square foot property at 1733 E. McKellips Rd. in Tempe. The sale of McKellips Business Park is scheduled to close in December. The portfolio was 87% occupied at the time sale.

Stockbridge has retained Cassidy Turley for the property management [WB1] assignment for the entire six property portfolio.

*Cassidy Turley announced in a press release on September 22 that it has entered into an agreement with an affiliate of DTZ Investment Holdings, backed by TPG, PAG Asia Capital and Ontario Teachers’ Pension Plan (the Consortium that agreed to acquire DTZ), to sell 100% of the equity interests of Cassidy Turley. The agreement is subject to customary closing conditions and is dependent on Cassidy Turley’s combination with the operations of DTZ Group (DTZ) to create a global, full-service commercial real estate services company. The Consortium’s acquisition of DTZ closed November 5, 2014. The acquisition of Cassidy Turley is expected to close December 31, 2014.

90 Mountain View, Cassidy Turley, WEB

LA-based investor buys 90 Mountain View for $34.6M

Cassidy Turley* announced Monday that Los Angeles based Regent Properties, a multi-faceted real estate investment company, has acquired 90 Mountain View, a 183,644 square foot office project located at 9977-9999 N. 90th St. in Scottsdale, Ariz., for $34.6 million ($188.41 per square foot). The seller was Principal Real Estate Investors, one of the largest institutional real estate managers in the United States.

Senior Managing Directors Bob Buckley, Tracy Cartledge and Steve Lindley with Cassidy Turley’s Capital Markets Group and Executive Managing Director Jeff Wentworth and Vice President Sean Spellman with Cassidy Turley’s Office Group brokered the transaction on behalf of the seller.

“The project’s architectural appeal, functional layout and location in Scottsdale, one of Arizona’s most desirable submarkets, ensures the continued track record of success for 90 Mountain View,” said Buckley.

In 2005, Wentworth and Spellman secured eBay as the anchor tenant for 90 Mountain View, and then subsequently sold the property to Principal Financial. They have been retained by Regent for the marketing and leasing assignment.

“We are excited to be working with Regent Properties,” said Wentworth. “They are one of the premier owners of commercial properties in the country with an excellent reputation in the real estate community working effectively with both tenants and brokers.”

Built in 2000 and 2005, 90 Mountain View includes two class-A office buildings ideally located in one of metro Phoenix’s most sought after office markets. The Phase One building is 91,982 square feet, and Phase Two is 92,562 square feet. The building features intricate architectural designs with striking concrete and reflective glass facades. The project includes both covered and underground parking structures. Located at the northeast corner of 90th Street and Mountain View Road, the project is just east of Loop 101 and between two four-diamond interchanges. Current tenants at the property include PayPal, Cardno and Hard Dollar Corporation. The project was 82.3% leased at the time of sale.

*Cassidy Turley announced in a press release on Sept. 22 that it has entered into an agreement with an affiliate of DTZ Investment Holdings, backed by TPG, PAG Asia Capital and Ontario Teachers’ Pension Plan (the Consortium that agreed to acquire DTZ), to sell 100% of the equity interests of Cassidy Turley. The agreement is subject to customary closing conditions and is dependent on Cassidy Turley’s combination with the operations of DTZ Group (DTZ) to create a global, full-service commercial real estate services company. The Consortium’s acquisition of DTZ closed Nov. 5, 2014. The acquisition of Cassidy Turley is expected to close Dec. 31, 2014.

Newport Mesa

Newport Mesa apartments sell for $8.37M

Cassidy Turley*, a leading commercial real estate services provider in the U.S., announced Monday the sale of Newport Mesa, a 156-unit apartment community in Mesa, Ariz. Southern Avenue 156 Community, LLC (Unity Pacific Residential) purchased the property for $8.37 million ($53,686/unit) from Newport Mesa Apartments, LLC (Maxx Properties).

Cassidy Turley Executive Managing Directors David Fogler and Steven Nicoluzakis represented the seller in the transaction.

“The ongoing revitalization of Mesa’s Fiesta District and the quality of the Newport Mesa asset attracted the buyer to the property,” said Mr. Fogler.

Built in 1974, Newport Mesa is a garden-style apartment community located within Mesa’s Fiesta District, which includes Mesa Community College, Banner Desert Medical Center and Fiesta Mall. The community has immediate access to U.S. Highway 60 and the Loop 101 freeways, providing easy access to all parts of the Valley. The complex includes studio, one and two bedroom apartments that range in size from 460 to 960 square feet. The gated community includes a clubhouse/leasing center, two resort style swimming pools and a heated spa, barbecue areas and on-site laundry facilities.

*Cassidy Turley announced in a press release on September 22 that it has entered into an agreement with an affiliate of DTZ Investment Holdings, backed by TPG, PAG Asia Capital and Ontario Teachers’ Pension Plan (the Consortium that agreed to acquire DTZ), to sell 100% of the equity interests of Cassidy Turley. The agreement is subject to customary closing conditions and is dependent on Cassidy Turley’s combination with the operations of DTZ Group (DTZ) to create a global, full-service commercial real estate services company. The Consortium’s acquisition of DTZ closed November 5, 2014. The acquisition of Cassidy Turley is expected to close December 31, 2014.

Hi-Health, Courtesy of Sperry Van Ness

Sperry Van Ness reports 4Q retail, office transactions

RETAIL SALES: 

Mary Ridberg and Rommie Mojahed represented the seller, Jorde Hacienda Inc. in the $1,700,000 sale of a 152,460 SF PAD at Higley Village. Higley Village is located at the SEC of Higley Road and Queen Creek Road in Gilbert. The buyer was ARJ Properties LLC.

Trenton McCullough and Shari A. Tucker represented the buyer, Casa Mirage Properties, LLC in the $3,070,000 purchase of a 20,130 SF multi tenant retail building located at 13915 N. Dysart Road in El Mirage. The seller was El Mirage Partners, LLC and was represented by Cam Stanton and Andrew Fosberg of CBRE.

 

RETAIL LEASES:

Baja Tacos leased 1,800 SF of restaurant retail space at Barkley Center, located at 1437 E. Main Street in Mesa. Beau Flahart represented the landlord.

Fix it Wireless, LLC dba Metro PCS leased 2,000 SF of retail space at Pecan Promenade, located at 9820 W. Lower Buckeye Road in Tolleson.  Beau Flahart represented the tenant and Brad Douglas of Cassidy Turley represented the landlord.

Mary Ridberg, Rommie Mojahed and Beau Flahart represented the landlord at Fiesta Crossing in the 5,116 SF lease to Living by the Word Church.   Fiesta Crossing is located at 1660 S. Alma School Road in Mesa.  Jody Dents of US Preferred Realty represented the tenant.

Kings Ranch Dental leased 3,000 SF of retail space at Apache Trail Plaza. Apache Trail is located at 3061 W. Apache Trail in Apache Junction. Beau Flahart represented the landlord.

Larry Charles leased 1,200 SF of retail space at Plaza 32, located at 2822 N. 32nd Street in Phoenix. Mary Ridberg and Carrick Sears represented the landlord.

Shari A. Tucker-Gasser and Trenton McCullough represented the landlord at Mountain Park Square, located at 4232 E. Chandler Blvd. in Ahwatukee, in the leasing of a 5,012 SF space to Hi Health.  The space was leased to the former Secreto’s restaurant.

Mary Ridberg and Rommie Mojahed represented Potato Barn to lease 22,252 SF of retail space at Scottsdale 101 Retail, located at the NWC of Mayo Blvd. and Scottsdale Road in Scottsdale.

Firehouse Subs opened their newest location at Watson Marketplace, located at 485 S. Watson Rd. in Buckeye. Mary Ridberg and Rommie Mojahed represented Firehouse Subs in the 2,300 SF, 120 month lease.

Mary Ridberg, Rommie Mojahed and Beau Flahart represented the landlord at Mesa Vista Plaza in the leasing of 1,155 SF of retail space to tenant Nguyen Nail Salon, who was represented by Scott Teerink of MEB Commercial Management Group, LLC.

OFFICE LEASES: 

Justin Horwitz and Nicole Ridberg represented the landlord at Ventura Gateway, located at 8687 E. Via De Ventura in Scottsdale, to lease 990 SF of office space to Developmental & Educational Psychological Services.  The tenant was represented by Gregg Sherman of Cassidy Turley.

Also new to Ventura Gateway, The Law Offices of David Baker.  Justin Horwitz and Nicole Ridberg represented the landlord and Colby Everett of Cassidy Turley represented the tenant.

Justin Horwitz represented Amer-X-Security in the leasing of 4,358 SF of office space at 15841 N. 77th Street in Scottsdale.  Mike Kane of Colliers represented the landlord in the transaction.

Palm Valley Office Park

Canadian investor buys Palm Valley Office Park I, II

Cassidy Turley announced that Kootenay Holdings, a private investor, has acquired Palm Valley Office Park I and II, a 83,575-square-foot office project located at 1616 North Litchfield Road and 1646 North Litchfield Road in Goodyear, for $15.35 million ($183.67 per square foot). The seller was REO Asset Manager, Steve Schrag of Key Bank c/o KeyCorp Real Estate Capital Markets, Inc.

Senior Managing Directors Bob Buckley, Tracy Cartledge and Steve Lindley with Cassidy Turley’s Capital Markets Group brokered the transaction on behalf of the buyer and the seller.

“Palm Valley Office Park is the market leader for class-A office product in the West Valley,” said Cartledge. “The project has an excellent track record of attracting high quality tenants that want an upscale office environment.”

Executive Managing Director Jeffery Hartland and Associate Vice President Scott Boardman of Cassidy Turley’s Office Group have been engaged by Kootenay Holdings for the marketing and leasing assignment of Palm Valley Office Park I & II.

“We are glad to complete this transaction along with our Capital Markets team,” said Mr. Boardman. “Our team is looking forward to the improvements Kootenay has planned for the asset and continued leasing success.”

Built in 2000, Palm Valley Office Park I & II is a class-A office project prominently positioned within the heart of the master planned Palm Valley community in Goodyear. Rising two stories each and comprising a combined total of 83,575 square feet, the buildings are uniquely designed with striking architecture, reflective glass, stone accents and dramatic two-story atrium lobbies. The Office Park is situated amid a wealth of amenities and within one-half mile of Interstate 10, creating a conveniently accessible, premier business environment. The property was 87.8% leased at the time of sale to high quality companies including, Edward Jones, Wells Fargo Home Mortgage, American Family Insurance and a well-diversified group of medical practices and real estate services companies.

Mill & Rio Salado Rendering, DWC

Hayden House Tempe plans $200M mixed-use project

Cassidy Turley has announced that Hayden House Tempe, LLC, a partnership between San Diego-based Douglas Wilson Companies (Douglas Wilson, Chairman and CEO), Hensel Phelps Development LLC, a subsidiary of Hensel Phelps based in Greeley, CO, (Jeff Wenaas, President) and Los Angeles-based Karlin Real Estate closed on 2.51 acres at the southwest corner Mill Avenue and Rio Salado Parkway in Tempe for $16,875,000. Karlin Real Estate also provided the debt in this transaction. The site is home to Hayden House, the oldest continuously occupied structure in Metropolitan Phoenix and Arizona, built 1871-1873.

Cassidy Turley Executive Managing Director Brent Moser, Vice President Mike Sutton and Associate Brooks Griffith negotiated the transaction on behalf of the seller, Michael Monti’s Catering.

The partnership, Hayden House Tempe, LLC plan to develop Mill & Rio Salado, a $200 million mixed-use creative office and lifestyle-hotel development located on the 2.51 acre parcel widely considered to be the gateway to Tempe’s downtown core. This landmark project consists of a two towers: a 15-story 280,000 square foot Class A office building and a 16-story 274-key Kimpton hotel along with 17,000 square feet of complimentary restaurants and retail.

Historic Hayden House

Historic Hayden House

“Tempe is experiencing tremendous investment and revitalization. This environment combined with the Partnership’s ability to deliver a high-quality, urban mixed-use development will ensure this is a landmark project for downtown Tempe,” stated Douglas Wilson, Chairman/CEO of Douglas Wilson Companies.

Hensel Phelps has been selected as the contractor for Mill & Rio Salado. Construction is expected to start in mid-2015 with completion in 2017. Jerry Noble, Patrick Devine and Greg Mayer with Cushman & Wakefield have been awarded the leasing assignment for the office space at Mill & Rio Salado.

The historic Hayden House, one of Arizona’s original homesteads, will be preserved and repurposed as a destination restaurant to serve the Valley and the surrounding office and hotel guests. The building evolved from a typical Sonoran row house that was Charles Hayden’s family home until 1889, to a boarding house and eventually a restaurant that has been operating continuously in the building since 1924.

Carl Hayden, an Arizona Representative and Senator, was born in the home in 1877. Historians have labeled Carl Hayden “the most important person in Arizona history.” Leonard Monti purchased the property in 1954, and the restaurant, at the time known as La Casa Vieja, was renamed Monti’s La Casa Vieja. The restaurant underwent several additions to the original historic structure.

“The sale and subsequent development of the Mill & Rio Salado site is symbolic of the Tempe transformation into a destination for both corporate and high-tech companies as well as a vibrant lifestyle and entertainment district,” said Mr. Moser with Cassidy Turley.

North Tempe has emerged as one of the most desirable submarkets in the Valley.  It boasts the lowest vacancy rates in Metro Phoenix, with a Class A Vacancy rate under 5%.  It is home to several large office users in multiple industries.  Real estate leaders cite access to ASU, Light rail, freeways, walk able amenities, and true Class A office space as the leading reasons Tempe is experiencing such dynamic attention from office tenants.

The Mill & Rio Salado site is located less than a block from Phoenix’s acclaimed light rail system, across the street from Tempe Beach Park and Tempe Town Lake.  The development will compliment the core of over 3 million square feet of Class A office in Downtown Tempe that has become a magnet for the technology industry due to its central location within the Phoenix Valley and its close proximity to Phoenix Sky Harbor Airport and Arizona State University.

Denver-based Shear Adkins Rockmore Architects (SARA) and historic preservation specialist Nore Winter of Boulder, Co. have been chosen as designers and architects on the project. Both have worked with DWC previously on other projects, including the Symphony Towers in San Diego that also had a historic preservation aspect to the property.

“Because of Hayden House and the requirements with the historic preservation, both SARA and Winter have been working with DWC and their partners as their input was important to putting the sale together and getting all city/municipal approvals,” says a Cassidy Turley spokeswoman.

Gateway Office Center, Cassidy Turley, WEB

Canadian investor buys Gateway Office Center

Cassidy Turley announced the $3 million ($95.06/psf) sale of Gateway Office Center located at 4130 E. Van Buren Ave. in Phoenix. Garnett Capital Corporate from Victoria, British Columbia, purchased the ±31,557 square foot property from Brentwood Gateway Center (Victorville, CA.).

Cassidy Turley Executive Managing Director Eric Wichterman and Senior Vice Presidents Mike Coover and Gordon Raguse represented the seller.

Built in 1987, Gateway Office Center is a three-story multi-tenant office building located within the prestigious Phoenix Gateway Center Office Park and just west of the intersection of 44th Street and Van Buren and one mile north of Sky Harbor International Airport. The building’s location offers exceptional access with two major freeways, Loop 202 and State Route 143, and the Valley Metro Light Rail system all within one-half mile of the property. Gateway Office Center was fully leased at the time of sale.

TempeWarehousePortfolio_BCL, WEB

DCT Industrial Trust acquires Tempe portfolio

Cassidy Turley announced that DCT Industrial Trust has acquired a three property warehouse portfolio from a Chicago-based global investment manager for $26.44 million.

 

Located in Tempe, the 355,371 SF portfolio includes: Roosevelt Center, 2405 and 2415 S. Roosevelt Street; Parkland Center, 7245 and 7307 S. Harl Ave.; and Wilson Center, 2636 South Wilson Street for $26.44 million ($74.42 per square foot).

 

Senior Managing Directors Bob Buckley, Tracy Cartledge and Steve Lindley with Cassidy Turley’s Capital Markets Group brokered the transaction on behalf of the buyer and the seller.

“The portfolio represented an opportunity to acquire traditional warehouse product in the well-established Tempe market from a long-term owner and stable occupancy” said Mr. Buckley.

Roosevelt and Wilson Centers consist of three high-quality warehouse/manufacturing buildings totaling 292,605 square feet in one of Tempe’s best locations, the Broadway Industrial Park. Parkland Center consists of two multi-tenant industrial buildings totaling 62,766 square feet in the highly desired south Tempe submarket. The warehouse portfolio was 98%% leased at the time of sale. DCT Industrial Trust plans to hold and continue to lease up the property.

 

 

Sundance Lots_LGI Homes, Cassidy Turley, WEB

LGI Homes Arizona buys 151 lots in Buckeye

Cassidy Turley announced the sale of 40 finished and 111 platted lots in the master-planned subdivision of Sundance, located in Buckeye, AZ. LGI Homes Arizona, LLC (NASDAQ: LGIH) purchased the lots for $3.9 million. The seller was Kaufman Capital Sundance, LLC.

Cassidy Turley Vice Presidents Brian Rosella and Will French negotiated the transaction on behalf of the seller.

The Sundance master-planned community, located just south of Interstate 10 at Watson Road, includes an 18-hole championship golf course, outdoor swimming pools and a 15,000 square foot community recreation center. Located just west of Downtown Phoenix, Sundance residents have panoramic views of the White Tank and Estrella Mountains and easy access to a variety of amenities including shopping, restaurants, medical facilities and Estrella Community College.

The C3 office building, in Los Angeles, was re-imagined by Gensler to include more "front doors" for suites, which are depicted by the colorful stairways on the building's exterior.

Office Mate: The creative endgame for functional obsolescence

Forget the corner office. These days, it’s about the coffee shop around the corner, the food trucks outside the lobby, the light rail that passes an office building every 15 minutes.

The work place is all about the worker. Employee and entrepreneur are synonymous. Human resource departments are working in concert with building owners, managers, developers and brokers.

Employee demographics are spanning radically different generations with equally varied needs for a work-life balance. These are all observations shared by industry experts, from international architecture, design and planning firm Gensler, to brokerage houses and developers in the Phoenix Metro.

About a decade ago, traditional offices began to open up for collaborative space. Since then, office environments have contracted around the remote worker and many other trends that ultimately call for very specific, versatile influenced by a company’s DNA. A demand for trendy, compact work environments that encourage collaboration, focus, creativity and accommodates mobility has led to many new speculative and build-to-suit office developments tailored to an end-user’s needs. This is all while vacancy rates in the market hover around 25 percent.

However, many experts say this statistic is misleading. It’s weighed down by the many office buildings constructed in the ’80s or earlier that are structurally — and aesthetically — outdated.

Courtesy of Cassidy Turley

Courtesy of Cassidy Turley

THE OBSOLETE
As Cassidy Turley’s head of research, Zach Aulick, puts it: “functional obsolescence” are the buzzwords of 2014.

Aulick cites Rockefeller Group Vice President and Regional Director Mark Singerman’s assessment at a Bisnow event that vacancy rates in the market were much lower, by about 5 to 7 percent, without including obsolete buildings. Aulick, prompted by such buzzings and the news that speculative and build-to-suit development was happening despite vacancy rates higher than 20 percent, looked into the functional obsolescence among office properties in the Phoenix Metro and found that Singerman was right.

Net absorption of office buildings constructed after 1990, Aulick reports, accounted for 4.4MSF in 1Q 2014. In that same period of time, buildings completed prior to 1990 were reportedly declining in about 320KSF and 200KSF in 1Q and 2Q, respectively. The major contributors or obsolete space is parking ratios and floor plate size.

Midtown, Aulick says, is perhaps one of the hardest hit areas with 10MSF of office and an average age falling pre-‘90s. That area’s options are limited by available space. It takes entrepreneurship, says Cassidy Turley’s Vice President of Marketing Alison Melnychenko, to recognize the highest and best use for the land on which an obsolete building sits.

GETTING IN THE GAME
If an owner isn’t going to sit back on 80 percent occupancy, there are a few options that could raise the appeal of an outdated building. The first move is to retrofit a space — tear out floors or half floors to make higher ceilings. That can be costly and reduces overall volume. The other option is to add to the building’s function. For instance, the Freeport McMoran Center in downtown Phoenix had high user demand for parking. It was turned into a Westin hotel. Buildings along Central Avenue have been converted into apartments and condos — a trend CBRE Senior Vice President of Office Services Bryan Taute says will likely continue.

Retail and industrial buildings are sometimes flipped into office spaces, given the parking issue can be solved. This is more popular in areas such as Midtown or near the airport.
“I think Midtown has the potential to figure a way out of (obsolescence),” says Taute. “If building owners are willing to sell them to new owners with capital to give creative funky ideas. I’m a big believer in mass transit and infill.”

The general idea among people is that Phoenix won’t pay for that kind of re-activated space. But there is more enthusiasm than meets the eye, says Gensler Principal Beth Harmon-Vaughan. Brokers, developers, business owners, she says, see the potential and there are a handful of undisclosed projects in the pipeline on which Gensler is already working.

This call center space features a blue webbing on the beiling as a navigational tool that unites a uniuqe 75KSF floorplate.

This call center space features a blue webbing on the beiling as a navigational tool that unites a uniuqe 75KSF floorplate.

On a local level, a call center space built in an old Motorola manufacturing facility was designed by Gensler to “control the churn” of the company’s employees who go through 12 weeks of extensive training. The existing building’s unique floor plate led Gensler to use a blue webbing on the ceiling as a navigational tool that brings the 75KSF area together.

The call center is proof that these trendy spaces aren’t just for software and video gaming companies either. Real estate offices such as CBRE in Los Angeles have adopted these new space use trends, and Gensler says more professional and traditionally staunch companies such as law firms are coming onboard.

CBRE’s office in L.A., co-developed with Gensler, has a “free-address” system of office space use, often called “hot desking,” which can be reserved for individual use during certain times.

Despite the increase in remote work, companies still want employees to come to the office. Whether its the highly crafted informality of a Quicksilver office’s mix-matched meeting chairs in a windowless warehouse or the raw floors, pet amenities and employee-generated wall art at Facebook’s Menlo Park campus, the younger generation is revolutionizing office space.

Other trends include authenticity – designing the DNA of a company into its office spaces – and having a “front door” instead of anonymous-feeling lobbies. Gensler’s design of Los Angeles’ C3, for example, achieves a “front door” feel through colorful exterior stairwells to upper-story suites.

Phoenix may not be on that level, but change is coming — even to the ’80s-heavy areas of Midtown.

Mod turned a re-purposed Midtown lobby constructed in 1985 into a co-op office space that helps keep the building's outdated features from making it obsolete.

Mod turned a re-purposed Midtown lobby constructed in 1985 into a co-op office space that helps keep the building’s outdated features from making it obsolete.

It just takes a drive down Central Avenue to see the buildings in need of change. The Class-B high-rise at 2828 N. Central Avenue was built in 1985 and offers the typical functionally obsolete issues, parking ratios and small floor plates, explains Aulick. However, it was a building that — with a little renovation — could be turned into the headquarters for the co-op workspace known as “mod on Central.” It’s stylized as a hotel, features a cafe and is a public workspace for remote employees that, as Lynita Johnson, of Olson Communications says, are looking for somewhere that’s “never boring or beige.”

“It’s the way you want to work, because it’s the way you like to live,” she says of the development. Finance and law firms are among the next wave of industries adopting the new kind of office space. Old, dated, standard offices such as Rose Law Group’s former eight-year residence has transitioned into a high-tech, smart, fun, sleek and creative space in Old Town Scottsdale, near a cultural hub of restaurants.

Rose Law Group’s employees skew “young and energetic,” says Jordan Rose, founder of Rose Law Group. “We are 85 percent below the age of 40.” “If we weren’t locked into our old lease we would have been the first to the open floor plan party at least six years ago,” says Rose. “We knew as soon as we moved into the old space that we needed a more collaborative atmosphere that would only be achieved through design.

That said, traditionally law firms are not known as hot beds of creative thought and collaboration. We have a bit of a different model in that we employ lawyers and non-lawyer planners, MBAs, project managers and energy consultants who can help shape the ultimate advice we provide our clients. Sometimes legal advice in a box is just really bad for a client’s bottom line.”
Non-traditional changes include minimizing the firm’s waiting room area, meant to remind the team that clients shouldn’t wait long to see their attorney.

Conference rooms and open space areas are named after employees and balconies that can be used to host meetings. Offices are centered around a park space where people can eat lunch. There are also a few old, full-sized arcade games.

ELBOW ROOM
As space allotted per employee continues to drop to about 167 SF per person — down nearly 100 SF in the last few years, with CoreNet Global estimating a further drop to 151 SF by 2017 — developers are tasked with finding ways to make the workplace more enjoyable. Right now, that looks like raising the roof (or, rather, knocking out floors in high-rises). Floor-to-floor heights in buildings constructed in previous decades have been about 13.5 feet. Now, says Sven Tustin, vice president of development and investment for Trammell Crow, they’re about 15 to 16 feet floor-to-floor.

While eight-foot ceilings won’t make an office building obsolete, Taute says a space will be more challenging to sell and demand a lower rental rate than an office with higher ceilings. Buildings with lower parking ratios typically see leasing 80 percent of its space as success.

Tustin has seen some significant repurposing happen in southern California, most recently at Playa Vista, a former Howard Hughes hangar that received a $50M makeover that includes an office campus for media, entertainment and tech firms.

“There’s an authentic experience to be had,” says Tustin. “In Phoenix, it’s a little more challenging. Our office employment is a little less creatively geared and more focused on labor.”
Midtown is the only submarket that has experienced negative absorption over the last decade, thanks to the light rail, amenities and the right neighborhood.

“The trick,” says Tustin, “is buying those buildings cheap enough. “We’ve explored a lot of new developments for infill. We’ve been promoting this initiative quite a bit and one thing we’ve been concerned with is our flight of the younger demographics who view places as more fun.”

Trammell Crow has challenged itself to create a project that could be just as fun, though not as extreme, as Playa Vista. Also, Phoenix doesn’t boast a lot of old warehouses, notes Taute.

Trammell Crow is working on a 200KSF project at Cooper Road and Loop 202 that’s a two-story tilt-up office building with 50KSF floor plates and 16-foot, floor-to-floor heights. The building, he says, targets software and financial service companies. Trammell Crow is focused on creating “the arrival experience” with escape areas, shade structures and “the small things.”

“Developers have probably emphasized aesthetics more than the experience of a building,” says Tustin. “I think it’s worth reallocating the investment toward the employee.” zThis is where Millennials come in.

“From my perspective, it’s a lot more fun because in Phoenix it has always been about price and the things that create it as a commodity,” says Taute. “Now, the office space is being looked at as an attraction tool, which means people are willing to spend more money. If they can get the rents, to make cool office space…All of those things are good for our city. The longevity is better than cookie cutter office buildings.”

ElevationChandler, Cassidy Turley, WEB

Hines buys Elevation Chandler site for $8.25M

Cassidy Turley announced the sale of a 10.55-acre site at the northwest corner of Loop 101 and Loop 202 Freeways in Chandler, Ariz. Hines Interests Limited Partnership purchased the former Elevation Chandler site for $8.25 million. The seller was Price & Frye Investments, LLC.

Cassidy Turley Executive Managing Directors David Fogler and Steven Nicoluzakis and Managing Director Don Arones represented the seller during the transaction.

“The challenges with the Elevation Chandler site have been well documented,” said Mr. Nicoluzakis. “Closing this property was a long process. It took perseverance by all parties involved and the support and cooperation of the City of Chandler to deliver title. Ultimately having a quality developer like Hines, with their experience and credibility, was important in closing the deal.”

Cassidy Turley was awarded the listing for the property in 2010, and originally had it under contract in 2011, but due to the litigation that was the result of a flawed trustee sale that contract was cancelled. Over the past four years the property has overcome numerous legal obstacles, including a fight that eventually led to an Arizona Supreme Court Ruling regarding ownership and the right to sell. Cassidy Turley put the property back on the market and through a bid process; Hines was selected and put the property under contract in November 2012.

Hines has announced plans for a mixed-use development with retail, office and multi-family residential on the property that they are calling Chandler Viridian. Demolition of the existing building will take approximately three months.

Marbella Ranch

Marbella Ranch Limited Partnership buys 350 acres

Cassidy Turley announced the sale of ±352 acres on the southwest corner of El Mirage and Northern Avenue in Maricopa County to Marbella Ranch Limited Partnership. The Scottsdale-based homebuilder purchased the property for $11.7 million from El Paso Natural Gas Company, LLC, an affiliate of Kinder Morgan.

Cassidy Turley Executive Managing Director Brent Moser, Senior Vice President Gary Anderson, Vice President Mike Sutton and Associate Brooks Griffith negotiated the transaction.

In June of this year, Marbella Homes announced its plans for future residential development of ±250 acres of the site, ±40 acres for the Northern Parkway right of way and the balance of the property for future commercial development.

The land is adjacent to the second phase of the Northern Parkway, from Dysart to 111th Avenue, which is planned to be under construction in 2015, the same timeframe that Marbella plans for pre-plat of the community’s first phase. The site is three miles from the Glendale Loop 101 Entertainment District, which includes the University of Phoenix Stadium, home to the Arizona Cardinals, and Gila River Arena, home to the Arizona Coyotes.

Village Gateway Pavilions, Cassidy Turley, WEB

The Village at Gateway Pavilions sells for $23.15M

Cassidy Turley announced the sale of The Village at Gateway Pavilions, a 240-unit apartment community located at 1700 N. 103rd Avenue in Avondale, Ariz.

PEM Real Estate Group, represented by Cassidy Turley Executive Managing Directors David Fogler and Steven Nicoluzakis, sold The Village at Gateway Pavilions for $23.15 million ($96,458 per unit). Alliance Realty Partners, LLC acquired the apartment community.

“The buyer was attracted to The Village at Gateway Pavilions because it offered the opportunity to acquire a Class A multi-family asset in a submarket viewed as offering significant rent growth potential,” said Fogler.

Built in 2004, The Village at Gateway Pavilions is a Class A garden-style apartment community in the West Valley, near the intersection of Interstate 10 and the Loop 101 Freeway. The complex includes four meticulously designed one-, two- or three-bedroom floor plans ranging in size from 685 to 1,071 square feet. The community includes a large clubhouse with kitchen, fitness and business center; resort style pool and spa; children’s playground; community volleyball court; and a gated entry.

Superstition Commerce Park, Courtesy of Cassidy Turley

Verde Investments buys Superstition Commerce Park

Cassidy Turley has announced the sale of Superstition Commerce Park, a 15.97-acre industrial project west of the northwest corner of U.S. Highway 60 and Sossaman Road. Phoenix-based Verde Investments, Inc. purchased the property for $8.8 million from Delta SCP, LLC. The buyer is an owner/user and plans to occupy the project.

Cassidy Turley Executive Managing Directors Andy Markham, SIOR, and Mike Haenel and Vice President Will Strong negotiated the transaction on behalf of the seller. Lee & Associates represented the buyer.

Superstition Commerce Park includes two existing buildings and ±5.49 acres of fully improved land for future expansion. The existing buildings are a ±49,438 square foot back office building at 7457 East Hampton Avenue and a ±57,793 square foot flex/industrial building at 7465 East Hampton Avenue.

Rendering courtesy of Gensler

Wentworth Property, Northwood Investors to redevelop 234KSF office

Wentworth Property Company (WPC) and Northwood Investors purchased a ±234,446 square foot office project at 1665 W. Alameda Drive. The partners had the vision to see the unique potential in the property and purchased it for $13.83M with plans to spend $20 to $25 million on redeveloping the project. They selected Gensler as the architect, Kennedy Design Build, LLC as the general contractor and Cassidy Turley as the leasing agent.

The Cassidy Turley team of Executive Managing Directors Jeff Wentworth and Mike Beall and Vice Presidents Sean Spellman and Chris Walker represented WPC during the property purchase from FNB Fountainhead, LLC.

“This property was the perfect vehicle for us to come in and reimagine it as an open, creative office environment where we can create an interconnection between indoor and outdoor environments,” said Jim Wentworth, Jr., Principal. “Even the most conservative companies want this type of office space because they understand how the work environment plays a major role in attracting and retaining employees, productivity and synergy within their company.”

The team plans to start the redevelopment of the 1665 Alameda project this year with availability by mid-2015. “There is enormous demand in this submarket for unique office space for large tenants,” said Cassidy Turley’s Jeff Wentworth. “This property gives us the opportunity to deliver innovative, flexible office space perfectly designed to function for tenants from 30,000 to 235,000 square feet.  It provides 16 to 20’ ceiling heights, 7/1,000 SF parking and because of the connection between the indoor and outdoor spaces there is the opportunity for functional space not under roof.”

The single-story existing 1665 Alameda building was constructed in 1986 and has been used by multiple tenants until the recent purchase of the property. The challenge was to significantly transform the building image and regain its stature as a viable Class A office environment. WPC and the Gensler design team saw the opportunity to transform the site and building to develop an amenity–rich, creative workplace environment that embraces its freeway location with direct visibility from I-10.

“Renovating existing building assets is an exercise in sustainability allowing us to extend their life and usage.” says Beth Harmon-Vaughan, Managing Principal of Gensler’s local Phoenix office. “The 1665 project is in a great location and provided a strong foundation for impactful design upgrades.”

Specific concept strategies focused on heightening the building image, creating a unified appearance, developing personalized entry elements for tenants, adding shared amenities to the site, enhancing daylighting opportunities, and creating indoor/outdoor connections. The existing U-shaped footprint allowed for a functional courtyard space in-between the building volume to connect the interior with the exterior and create usable year-round spaces. The existing mansard roof and visually low façade will be eliminated and a new façade proposed.

Architectural entry elements create a new frontal projection to the street, a fluid architectural language and significant visual markers for branding and tenant signage. Proposed building materials include integral colored cementitious panels, aluminum composite naturally finished metal panels, steel and glass elements, and textural gabion wall features integrating the new façade with the courtyard concept in a seamless fashion. New building amenities include bocce ball, café dining, fitness center, outdoor shaded seating, water features, and a unique rain garden concept that uses sustainable and indigenous landscape.

“Creating a fresh identity and amenity-rich creative office environment in Tempe will help ensure attraction and retention of top tenants in the market.” says Harmon-Vaughan.

WPC partnered with Northwood Investors and purchased Discovery Business Campus (DBC) in November 2011. DPC is a 136 acre campus with 800,000 square feet of existing office space and up to 1.6 million square feet of additional, entitled Class A office, hotel and retail development in Tempe. WPC is currently developing a 237,000 square foot build-to-suit facility for Shutterfly, Inc. at DBC, slated for completion in April 2015.

Scottsdale Executive Office Center, Courtesy of Cushman & Wakefield of Arizona

Scottsdale Executive Office Center signs new tenants

Cushman & Wakefield of Arizona, Inc. negotiated 21,085 square feet of new leases at Scottsdale Executive Office Center, 15880, 15990 and 16100 N. Greenway-Hayden Loop.

Ingram Micro, Inc., a Santa Ana, Calif.-based firm, opened a technology incoming call center and occupies 14,926 SF. PHX Architecture relocated from a central Scottsdale location into 6,159 SF.

“The Scottsdale Executive Office Center meets the needs of tenants who require dense floor plans with 5.77:1000 ratio parking to go with it,” said Chris Nord, Associate Director with Cushman & Wakefield of Arizona, Inc.  “The bay depths allow for efficient floor plans and a 1 percent load factor keeps the required size of the premises smaller than competing office properties.”

Nord and Michael White of Cushman &Wakefield represented the landlord, Perry Investment Trust No. 1. Mark Seale of Cassidy Turley represented Ingram Micro. Victor Gilgan and Scott Fey of Omni America, LLC represented PHX Architecture.

Both tenants took occupancy this month, bringing the property to 87 percent leased. Other tenants include Trivita, Stella & Dot, MWA Intelligence, and Landmark Education.

Gold Canyon Candles signs lease at 6205 S. Arizona Ave., in Chandler, Ariz.

Gold Canyon Candles signs 3-year lease in Chandler

An Arizona-based company signed a 36-month lease for 42,000 SF at the Gold Canyon Candles Building at 6205 S. Arizona Ave. in Chandler, Ariz.

Lee & Associates principals TJ Swearengin, Stein Koss, SIOR and Tom Louer, SIOR, represented the landlord, Gold Canyon Candles, which occupies a majority portion of the 212,070 SF warehouse building. Andy Cloud with Cassidy Turley represented the tenant, Barlow Company Inc. of Tolleson, Ariz.

The property features the original 122,366 SF with an additional 99,704 SF addition added in 2008. The warehouse building is situated on 19.81 acres near the intersection of Riggs Rd. and Arizona Ave. in Chandler and is close to I-10.

First Commons at West 10

First Commons at West 10 sells for $6.08M

Cassidy Turley announced the sale of First Commons at West 10, a ±99,528, institutional-quality, multi-tenant industrial complex. Located at 4625 and 4635 W. McDowell Road, the two-building, general industrial warehouse buildings were purchased by Enright Capital, Calgary, Alberta for $6.08 million. The seller was MDI Capital.

Cassidy Turley Senior Managing Directors Bob Buckley, Tracy Cartledge and Steve Lindley negotiated the transaction on behalf of both the buyer and the seller.

“Although First Commons at West 10 was built over a decade ago, the property includes design and functionality that makes it competitive with the most modern multi-tenant industrial properties in the market,” said Mr. Buckley.

Built in 2002, the complex sits on 6.88 acres just north of Interstate 10 at 45th Avenue and includes the 44,637 SF north building at 4625 W. McDowell and the 54,890 SF south building at 4635 W. McDowell. The property was ±60% leased at the time of sale.

Southern Plaza, WEB

California investor buys retail plaza for $11.9M

Cassidy Turley announced that Amargosa Palmdale Investments, LLC of Beverly Hills, Calif., purchased Southern Plaza, a ±75,233 square foot neighborhood shopping center located at 6036 S. 7th Avenue for $11.9 million.

 

Executive Managing Directors Ryan Schubert and Michael Hackett with Cassidy Turley’s Retail Capital Markets Group represented the seller, Park West Development of Scottsdale, Ariz.

 

“Southern Plaza offered the buyer the opportunity to own a stabilized, high-volume grocery center with the potential to add value through ground leases or development of additional outparcels,” Schubert said. “The Food City performs very well and currently accounts for over 73% of the center’s total square footage.”

 

Built in 2007, Southern Plaza was 95.3% occupied at the time of sale. The property is anchored by a ±55,014 square foot Food City (Bashas’) grocery store and includes ±20,219 square feet of additional shop space and two developable pads. In addition to Food City, Southern Plaza’s tenant mix includes Payless ShoeSource, Grand Mart, Pizza Patron, AA Insurance, Rapido Tax and locally owned operators of a hair salon, nail salon and dentist. Southern Plaza is located in densely populated trade area that services over 102,000 residents within a three mile radius of the center.

Coldwater Depot

Industrial Sector Suits Up

If Q1 reports are any indication, the Phoenix metro’s industrial sector is suiting up for an interesting year. Intel finished construction on its 2.2MSF manufacturing fab in Chandler, Ariz. It sits vacant with hopes for adaptations into a manufacturing facility for chips.

The 700KSF Buckeye Business Center is under construction without any tenants. Last year, Turner Spectrum Ridge broke group on eight industrial buildings that totaled 120KSF of space in Deer Valley. And WinCo Warehouse is expected to complete a 800KSF distribution facility in Q2 2014. While there are a handful of tenants looking for large industrial spaces, a majority of market demand lingers between 20KSF and 100KSF.

Still, Phoenix ranks No. 3 in the country for year-over-year construction completion increases, according to Cushman & Wakefield’s Q1 2014 report. In Q1 2013, 316KSF of industrial product was completed. In Q1 2014, that number jumped to 2.1MSF. Another 2.7MSF is being developed. Industrial vacancy in Phoenix is at 10.5 percent, still above the national average (7.4 percent), Cushman & Wakefield reports. Vacancy reached a two-year high, reports Colliers International, and vacancy in buildings larger than 100KSF has spiked to 16 percent, while vacancy in buildings of 200KSF and larger has more than doubled in the past year to 17.6 percent.

“But the glass is half full,” says Marc Hertzberg, managing director of industrial/supply chain and logistics solutions at JLL. “Phoenix remains a great place for labor, lower operating costs and quality of life. Economic conditions are improving and we expect to bounce back.”

“Phoenix typically absorbs somewhere between 3.5MSF and 4.5MSF of industrial space per year,” says Hertzberg. “We’ve been off this mark for about 12 months now, but we are not the only market in this position. Our large-scale industrial sector is a mirror image of a phenomenon taking place in southern California, and particularly the Inland Empire, which usually absorbs as much industrial space in one quarter, approximately 4MSF, as Phoenix does all year. At almost mid-year, that market has only absorbed 3.4MSF.”

The sweet spot, he says, are the small- and mid-size users who need between 75KSF and 200KSF. “The small- and mid-size users are typically made up of higher-wage specialized employers like medical and high-tech companies,” Hertzberg says. “They are looking for fully-air conditioned flex industrial space that is close to quality labor, vendors and transportation, and they are willing to pay prices of approximately 10 to 20 percent higher than the big-box users in the areas of west Phoenix to secure those factors.”
Build-to-suit construction is what companies need to factor into their projections, says Hertzberg.

“In the build-to-suit sector, vertical markets like e-commerce and food and beverage are providing us with some positive absorption, however this does nothing to fill existing space,” he says. “Rather, it is adding specialized building inventory to our market—product that is built specifically for its user versus the specs of an existing warehouse.”

“We are seeing an aggressive level of capital looking to be placed in Phoenix,” says Cassidy Turley’s Industrial Group Vice President Will Strong. Companies are looking toward build-to-suit options over taking existing buildings, he says.

“New industrial developments are pushing higher on clear height, bigger on truck courts, and are continuing to find better, more efficient and modern ways to meet the tenants’ changing facility needs,” he says. “We are seeing companies increase employment density for fulfillment centers, which in-turn pushes the parking requirements higher than a traditional warehouse user would have.”

Spec is also being leased up. Coldwater Depot in Avondale, Ariz., the Trammel Crow-Clarion project, entered the market with 600KSF in spec development and leased out to Conn Appliances and SanMar Corp.

“Capital markets are really looking at Phoenix hard right now because they can’t find anything to buy in other markets that pencils out,” Strong says. “This has pushed investors to look not only at traditional listings but also off-market opportunities. Whether current owners will sell is another question. Some are contemplating offers, but even if they were to sell they’d need to determine where to put their money next, and if that investment has the same kind of upside potential as Phoenix industrial space.”