Tag Archives: Cassidy Turley

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.”

ZK Grill, SRS, WEB

ZK Grill leases space at Gilbert Crossing

SRS Real Estate announced ZK Grill, a Mediterranean fast casual restaurant,  has leased a 2,347-square-foot space at the northeast corner of Guadalupe and Gilbert roads in Gilbert, Ariz.

 

 

Other notable tenants located within Gilbert Crossing include: Power MMA & Fitness, Firestone, Meridan Bank, and Tots Unlimited. This will be ZK Grill’s fourth location in the Valley.

 

 

Scott Ellsworth with SRS represented the tenant, ZK Grill, in the transaction.  Cliff Johnson with Cassidy Turley represented the landlord, Tri Gate Capital.

 

555North18thStreet, Cassidy Turley, WEB

San Francisco investor buys St. Luke’s Medical building for $8.45M

Cassidy Turley announced the successful sale of a ±49,816 square foot medical office building at 555 North 18th Street in Phoenix’s downtown submarket. San Francisco-based Stockbridge Funds purchased the St. Luke’s Medical property for $8.45 million ($169.62/psf) from Chicago-based Heitman Real Estate Investment Management.

Executive Managing Director Eric Wichterman and Senior Vice President Mike Coover with Cassidy Turley negotiated the transaction on behalf of the buyer and seller.

Built in 2006, St Luke’s Medical Building is a multi-tenant medical office project on 5.63 acres. The property is located north of Van Buren Street on 18th Street, adjacent to St. Luke’s Medical Center and one-half mile from Interstate 10. St Luke’s Medical Building was 86% occupied at the time of sale. The new owner plans to hold the property and continue to lease-up the remaining space.

Marley Park Plaza

Cassidy Turley reports two retail center sales

Cassidy Turley announced the sale of Marley Park Plaza, a 77,545 square foot, grocery-anchored neighborhood shopping center at 15411 W. Waddell Road in Surprise. IMAN Enterprises, LLC of Surrey BC, Canada, purchased the retail center for $12.45 million from Donahue Schriber Realty Group.

Cassidy Turley Executive Managing Directors Ryan Schubert, Michael Hackett, Dan Wald and Matt Kircher negotiated the transaction on behalf of the seller.

Located on 11.83 acres at the southeast corner of Waddell and Reems Road, the sale included the Basha’s anchored shopping center and an adjacent 2.45 acre developable land parcel. The parcel is currently planned for an additional 16,705 square feet of retail space. In addition to Basha’s, Marley Park Plaza tenants include Subway, H&R Block, Little Caesar’s Pizza, Baskin Robbins and Great Clips. Developed in 2007 by Donahue Schriber Realty Group, the property is located one-half mile east of the Loop 303 with frontage on two primary thoroughfares in Surprise. Marley Park Plaza was 98% leased at the time of sale.

“There was tremendous upside for the buyer with the future development of the adjacent parcel,” Hackett said.

The brokerage firm has also announced that Hayden Crossing Shopping Center, a 63,446 square foot neighborhood retail center at 8015-8035 E. Indian School Road sold for $14 million ($221.38 PSF).

Executive Managing Directors Ryan Schubert and Michael Hackett with Cassidy Turley’s Retail Capital Markets Group represented the seller Hayden Crossing Shopping Center, LLC. The buyer was a Phoenix investor, 919 Hillsdale, LLC.

Hayden Crossing

Hayden Crossing

“Hayden Crossing is located in a prime infill Scottsdale submarket with a very high barrier of entry by future competition,” Schubert said. “The center includes two quality, net lease tenants, Bashas’ and Walgreens.”

Hayden Crossing is located on six acres at the southeast corner of Hayden and Indian School Roads. The center was built in 2004 specifically for Bashas’ and Walgreens. The neighborhood shopping center services all of downtown Scottsdale, the city’s second largest employment center and a hub for technology and healthcare companies like Yelp and McKesson.

8313 Latham, WEB

Ryan West Business Park sells for $14.59M

Cassidy Turley announced today that a subsidiary of Cohen Asset Management purchased Ryan West Business Park, a ±242,863 square foot warehouse distribution building at 8313 Latham in Tolleson for $14,591,460 from EG Properties, LLC. Ryan Companies US, Inc’s (Ryan) Real Estate Management group was the asset manager for the seller and will continue to serve as property manager for the buyer. Will Strong, Mike Haenel and Andy Markham, SIOR of Cassidy Turley procured the investment sale transaction, bringing the buyer, Cohen, and the seller together.

“Phoenix’s industrial market continues to attract capital searching for assets with credit tenancy, modern features and a history of being institutionally managed and maintained. Ryan West Business Park fits that description,” according to Will Strong, Vice President with Cassidy Turley’s Industrial Services Group. “Located less than one quarter mile south of I-10, this asset’s location is in the heart of the Southwest Phoenix distribution market and will continue to benefit from strong local labor, improving market fundamentals, and access to the Southwestern U.S.”

Built in 2001 by Ryan, the project was named Ryan West Business Park. Shortly after completion, Ryan was awarded the NAIOP Arizona Industrial Building of the Year for the development which features tilt panel construction, high performance reflective glass, a 30-foot clear height, 59 front-loaded fully-gated and -secured docks/truck wells, 150 feet of truck maneuverability, 17,836 square feet of refrigerator/freezer space and was designed to accommodate future two-story uses.

“Having a strong credit tenant like Circle K in a portion of the building, the ability to lease the remaining 61,713 square feet and projected rental rate growth in this segment made this a strategic acquisition for the buyer,” said Strong.

This is the second acquisition Cassidy Turley has secured for Cohen in 2014 and will be the fifth industrial building purchase in the last seven months by their firm. Cassidy Turley represented them in May for the $29 million purchase of a three-property industrial portfolio, totaling 174,644 square feet and 12.31-acres, from Alliance Commercial Properties.

Cassidy Turley will retain the leasing assignment for the remaining space at the Latham property.

Cave Creek CVS sells for $6.75M

Cassidy Turley reports that Mountain Villas, LLC, has purchased the 13,813 square foot CVS Pharmacy located at 28138 N. Tatum Blvd. in Cave Creek, AZ (85331) for $6.75 million.

Michael Campbell and Ed Colson Jr., CCIM,of Cassidy Turley’s San Diego office represented Mountain Villas LLC. John Wertz of Colliers International represented the seller, Charles W. Hostler Trust.

“We worked tirelessly with our client to satisfy his 1031 exchange and accomplish his investment goals.  We looked at a wide variety of potential deals,including those with credit and non-credit tenants, as well as a variety of geographies and product types.” said Mr. Colson.  “At the end of the day we were able to narrow  the search to a property that fits our client’s risk threshold. With this acquisition, he can also drive to see his new investment anytime.”

The free-standing CVS Pharmacy building, with drive-thru, is ideally located at the signalized intersection of N. Tatum Blvd and E Dynamite Blvd,  CVS has been successfully operating at the site since it was built in 2005 under a long-term triple net (NNN) lease.

2932 W Deer Valley, Cassidy Turley, WEB

California Investor Buys Motorcycle Mechanics Institute

Cassidy Turley announced the successful sale of a ±40,427 square foot Class B flex project at 2932 West Deer Valley Road in Phoenix’s Deer Valley Submarket. California-based Hyperion Fund L.P. purchased the property for $5.97 million ($148.00/psf) from California-based 2932 DVR LLC.

Executive Managing Director Eric Wichterman and Senior Vice President Mike Coover with Cassidy Turley negotiated the transaction on behalf of the buyer, while Barry Gabel and Chris Marchildon with CBRE represented the seller.

Built in 2002, the Deer Valley building on 4.01 acres is part of a three building complex incorporating the Motorcycle Mechanics Institute (MMI) campus. The project is located at Deer Valley Road, one-half mile from the Interstate 17 and two miles from the North Loop 101. The property is leased entirely to Universal Technical Institute, a private technical training school for auto mechanics, marine technicians and NASCAR techs. The new owners plan to hold the property and maintain the current tenancy.

Black Canyon Business Park, Cassidy Turley, WEB

California investor buys Black Canyon Business Park

Cassidy Turley announced that BKM Capital Partners (Irvine, California) acquired Black Canyon Business Park, a ±219,090 square foot business park at 8041 North Black Canyon Freeway for $13.1 million. The seller was Business Properties (Irvine, California).

Senior Managing Directors Bob Buckley, Tracy Cartledge and Steve Lindley with Cassidy Turley’s Capital Markets Group and Vice President John Pompay with Cassidy Turley’s Industrial Group brokered the transaction representing both parties.

“The project has an outstanding location, with freeway exposure,” Mr. Buckley said. “With the ability to capitalize on improving market conditions and tenant demand, Black Canyon Business Park offered exceptional value and upside potential for the buyer.”

Black Canyon Business Park is a 15 building business park with office, flex industrial and retail spaces ranging in size from 1,200 to 13,000 square feet. Built between 1975 and 1984, the property is located on the northeast corner of Northern Avenue and Interstate 17. The property was ±34% leased at the time of sale.

Colliers, WEB

Colliers International sells Class-B office in Phoenix

Colliers International in Greater Phoenix has recently completed the sale of a Class B office building in Phoenix for $950,000, or $79.40 a square foot.

Phoenix-based John F. Long Properties LLP purchased the building, located at 1118 E. Missouri Ave., from Gillman, Kawecki, McCluskey and Windes Investment Partnership of Phoenix.

Peter Nieman, an executive vice president, Kathy Foster, a senior vice president, and Marcus Muirhead, an associate vice president, all of Colliers International; served as the brokers for the seller.

Nieman and Foster are members of Colliers International’s Office Properties Solutions Group. The team has a diverse base of knowledge and expertise that leads to successful and tailored real estate solutions. Muirhead specializes in office and retail investment properties in the Phoenix area.

Thomas Jacobs of Cassidy Turley served as the broker for the buyer.

The building, encompassing 11,964 square feet, was constructed in 1975.

“The seller occupied and maintained the property, taking exceptional care of it. The building attracted much interest since there is a shortage of owner-user locations that have been well-maintained in that submarket,” Foster said.

CoStar

NXP Semiconductors leases 33KSF at Chandler Midway

The ViaWest Group announced today that NXP Semiconductors has signed a 10-year lease for 32,988 SF of office space at Chandler Midway Corporate Center, 5670 W. Chandler Blvd. Built in 2007, the project is comprised of two class-A office buildings totaling 111,800 SF. ViaWest originally purchased Chandler Midway in December 2012. At the time of the acquisition the buildings were 34 percent leased and with the addition of the NXP, the project is now 75 percent leased with deal activity that could bring the project in excess of 90 percent in the very near future.

NXP relocated to Chandler Midway from another ViaWest-owned building in the ASU Research Park. “We developed a great relationship with NXP and were excited that we were able to find an opportunity within our portfolio of assets that fit NXP’s long-term needs,” said Danny Swancey of ViaWest Group. “We pride ourselves as a relationship-oriented owner who works closely with the brokerage community and tenants to facilitate smooth and fair transactions for all parties involved,” added Gary Linhart of ViaWest Group.

Located at the northeast corner of Chandler Blvd and Gila Springs, the project is centrally located between the I-10, Loop 101 and new Loop 202 Freeways and is in close proximity to Chandler Regional Hospital. Chandler Midway is within 3 miles of 3MSF of retail amenities and 15 minutes from Sky Harbor International Airport.

We’re excited to continue our relationship with ViaWest and keep our Arizona operations in the Southeast Valley.  The talent of the workforce, quality of life, and lack of extreme weather and natural disasters are all factors that we consider when selecting sites, and Chandler has all of these key ingredients,” stated Greg Stuck, Sr. Director of Global Real Estate for NXP Semiconductors.

“The Chandler area has consistently outperformed the overall Phoenix market in attracting technology-related companies and is one of the top job-creating economies in the U.S. NXP continues this trend by bringing another a great global corporate name and quality workforce to Chandler Midway,” said Cassidy’s Scott Baumgarten. These properties are surrounded by first-class amenities, high-end executive housing and the I-10, Loop 101 & 202 Freeways making them very attractive to prospective tenants. Mark Stratz added, “NXP’s move to Chandler Midway solidifies their commitment to Arizona and further ratifies the Southeast Valley as one of the nation’s premier technology corridors.”

Vice Presidents Stratz and Baumgarten of Cassidy Turley’s Phoenix office represented the landlord and are currently marketing the remaining vacancy consisting of 23,117 SF in the 5670 building, as well as, a state-of-the-art 5,066 SF spec suite prominently located on the first floor lobby of the 5710 building. Don Rodie of Cushman & Wakefield’s Phoenix office represented the Tenant.

SAARS, WEB

TradeCor purchases SAARS building for $2.1M

4221_Obliques 1Cassidy Turley announced the $2.1 million ($247.06/psf) sale of SAARS Building, a Class-B office building at 4221 N. Scottsdale Rd. in the Scottsdale, Ariz., submarket. Phoenix-based 4221 Scottsdale LLC / TradeCor LLC purchased the property from Scottsdale-based Scottsdale Area Association of Realtors (SAARS).

Cassidy Turley Managing Director Mark Bramlett, Executive Managing Director Eric Wichterman and Senior Vice President Mike Coover negotiated the transaction on behalf of the seller and buyer.

Built in 1982, SAARS Building is a two-story, ±8,500 square foot office building on .57 acres located in the heart of the Old Town Scottsdale entertainment district at Scottsdale Road and 4th Avenue. The Scottsdale Area Association of Realtors occupied the building since 1982 and recently purchased a building at the Scottsdale Airpark for its new headquarters. No details have been disclosed for redevelopment at this time.

“We are anxious to watch the evolution of this site in the near future,” said Mr. Bramlett. “Based on its zoning, the property has the potential to be redeveloped as a restaurant, bar or for numerous other adaptive reuses.”

MMIBuildingPR, WEB

Motorcycle Mechanics Institute building sells for $6M in Deer Valley

CBRE has completed the sale of the Motorcycle Mechanics Institute (MMI) Building located at 2932 W. Deer Valley Rd. in Phoenix. The 41,739-square-foot technical training facility commanded a sale price of $5.975 million.

Barry Gabel and Chris Marchildon with CBRE’s Phoenix office represented the seller, 2932 DVR, LLC. The buyer, Hyperion Fund, LP, was represented by Eric Wichterman and Mike Coover with Cassidy Turley.

Deer Valley is a prime area for large corporate users like Universal Technical Institute’s Motorcyle Mechanics Institute. Investment opportunities like this are unique and sought after because the asset provides the opportunity to acquire a well-located, 100 percent triple-net leased facility with a strong-credit tenant on a long-term lease,” said CBRE’s Gabel.

The MMI Building is 100 percent leased to UTI on a long term lease. It is one of three buildings that comprise the MMI campus. The building is located on Deer Valley Road, the main street serving the market, and half mile west of the Interstate 17. The property also benefits from its adjacency to numerous retail services, residential neighborhoods including multi-family developments and other strong corporate users.

Headquartered in Scottsdale, Ariz., UTI, a NYSE (UTI) publically traded company, is the leading provider of post-secondary education for students seeking careers in automotive, diesel, collision repair, motorcycle and marine technicians. UTI has more than 170,000 graduates from 11 locations througout the country within its 48 year history.

SkySong III

Online advertising co-op signs lease at SkySong 3

An advertising innovator changing the way companies advertise online will set up shop at SkySong 3 early next year.

The company, adhesive.co, is relocating from east Indian School Road and will begin its five-year lease at SkySong on January 1, 2015. The layout of the space will be in line with the online ad company’s philosophy of a creative and collaborative environment.

The performance display online advertising company—where they like to say “the geeks are in charge”—helps drive incremental business for clients and is regarded as an industry leader with a fresh approach to online advertising. The adhesive team turns pages of code into advertising solutions for advertisers and publishers.

With the leasing agreement, adhesive.co’s presence at SkySong will help enhance its brand and a perfect fit for its collaborative environment.

“The innovative environment at SkySong will become even more dynamic with the addition of adhesive,” said Sharon Harper, President & CEO of Plaza Companies, the developer of the project. “They are online ad innovators and model collaborators who represent the best in entrepreneurial striving. We are thrilled they decided to come to SkySong, where their unique view of the world will be welcomed with open arms.”

Chad Little, one of the adhesive.co founders alongside Patrick Schwind, said: “Serial entrepreneurialism needs the right place to grow and prosper. Fortunately for Patrick and I, and our clients, we have found that place—SkySong. It’s the perfect fit for our approach, for who we are and for what adhesive is all about. We can’t wait to move in and meet our new neighbors and potential collaborators.”

The addition of adhesive.co is the latest addition to the growing SkySong project, which recently saw the completion of the SkySong Apartments and is nearing the completion of SkySong 3, the third office building at the property. With the adhesive.co lease, SkySong 3 is now at 88 percent leasing occupancy even before opening its doors. Leasing is currently ongoing for SkySong 4, the next office building at the project, with construction anticipated to begin by the end of 2014.

Mark Seale of Cassidy Turley was the leasing agent handling the transaction for adhesive.co. The Lee & Associates team of Craig Coppola, Andrew Cheney and Gregg Kafka represented the SkySong ownership group.

SkySong, the ASU Scottsdale Innovation Center is a home to a global business community that links technology, entrepreneurship, innovation, and education to position ASU and Greater Phoenix as global leaders of the knowledge economy.

SkySong is a 42-acre mixed use development designed to:

• Create an ecology of collaboration and innovation among high-profile technology enterprises and related researchers;
• Advance global business objectives of on-site enterprises;
• Raise Arizona’s profile as a global center of innovation through co-location of ASU’s strategic global partners; and
• Create a unique regional economic and social asset.

Companies located at SkySong enjoy a special relationship with Arizona State University, which has more than 73,000 students at four metropolitan Phoenix campuses. Its campus in Tempe is the single largest campus in the U.S., and is located less than three miles from SkySong.

In addition to locating its own innovative research units at the center, ASU provides tenants with direct access to relevant research, educational opportunities and cultural events on its campuses. Through ASU’s on-site operations, tenant companies have a single point of contact for introductions to researchers, faculty and programs to address their specific needs.