Tag Archives: CBRE

BlackCanyon CP

Progrexion to add 450 employees at Black Canyon Commerce

CBRE has negotiated a 62,771-square-foot office lease at Black Canyon Commerce Park located at 2133 W. Peoria Avenue in Phoenix. The building is now 100 percent leased to Progrexion, a technology enabled consumer service business that provides a suite of credit repair services.

Currently, Progrexion occupies approximately 60,000 square feet in the I-17 corridor submarket. The additional 62,000-plus square feet will be used to house the 450 new employees Progrexion plans to hire in the near future.

Ashley Brooks, Jim Bayless and Jenny Aust Turner of CBRE’s Phoenix office represented the landlord, Newport Beach, Calif.-based Granite Black Canyon Holdings, in negotiating the long-term lease agreement. Darius Green of Keyser and Sam Pruitt of Site Selection Group represented Progrexion.

“This transaction is a great barometer for the overall health of the market,” said CBRE’s Brooks. “Companies are starting to focus on growth again. We’ve already seen a substantial increase in office activity through the first quarter of 2015 and we expect that to continue over the next several months as users either expand existing operations or enter metro Phoenix from other markets.”

According to CBRE Research, Q1 2015 saw 477,901 square feet of positive net absorption of office product across the Valley. For comparison, Q1 2014 recorded 319,820 square feet of positive net absorption and Q1 2013 saw 268,500 square feet of positive net absorption. These year-over-year increases are even more substantial when compared to Q1 2012 when the Valley only recorded 959 square feet of positive net absorption.

With the office market on the upswing, Valley business and municipal leaders are excited about economic growth in the post-recession market. Progrexion’s expansion demonstrates a clear commitment to metropolitan Phoenix and local leadership points to a growing, talented work force as a driver for economic growth.

“We’re excited to welcome an additional 450 Progrexion employees to Phoenix,” said Phoenix Mayor Greg Stanton. “This expansion shows that our growing, talented workforce is encouraging businesses to make long-term investments in our community.”

“Progexion opened its Phoenix office in 2013 with projections to grow,” said Phoenix Councilman Bill Gates of District Three. “I am pleased that within less than 3 years, they have announced an expansion and the addition of 450 quality new jobs and employees that will be a boost to the area economy and will continue to strengthen the commercial corridor within the North Mountain Business Alliance and along the east side of the Black Canyon Freeway Corridor.”


CBRE sells office building in Thistle Landing for $16.75M

CBRE has completed the sale of a 101,006-square-foot office building located at 4809 E. Thistle Landing in Phoenix. The property commanded a sale price of $16.75 million.

Jim Fijan and Will Mast with CBRE’s Phoenix office negotiated the sale. The buyer was Menlo Equities. The seller was a joint venture between Everest Holdings and Walton Street Capital.

“Thistle Landing is a smart investment for Menlo providing them ownership in a quality office building in a well-established corporate environment,” said CBRE’s Fijan. “The long-term, triple-net nature of the tenants’ leases yields a very stable return on investment going forward.”

According to CBRE Research, the metropolitan Phoenix office market has already seen more than $750 million in investment property sales through April of this year and real estate experts expect that level of activity only to increase.

“We’ve already seen significant sale activity this year and many of those sales have been characterized by triple-net lease tenancy,” continued Fijan. “Triple-net leased office properties are a very highly sought after asset class by investors, especially if they are heavily parked in high employment areas of the Valley.”

The property at 4809 E. Thistle Landing is part of the four-building Thistle Landing Office Park. The building is fully leased to two tenants – United Healthcare and Box Office Executive Suites – with long-term, triple-net leases.

A major employment hub in the South Tempe / Ahwatukee office submarket, Thistle Landing houses more than 500 United Healthcare employees. Built in 1999, Thistle Landing benefits from access to numerous amenities, including executive housing and the high-end retail of the Ahwatukee Foothills. The property is also located near several well-known restaurants, hotels and resorts.


Phoenix office building and data center sells for $91.5M

American Realty Advisors, an institutional real estate investment manager with nearly $7 billion in assets under management, on behalf of one of its clients, has sold an office building and data center totaling 513,361 square feet in Phoenix, AZ for $91.5 million.

The property is fully occupied by tenant American Express Travel Related Services Company, Inc. (a subsidiary of FORTUNE 500 company American Express).

“This asset was poised for strong investor interest, based on the long-term commitment to the property demonstrated by American Express,” says Stanley Iezman, Chairman & CEO of American Realty Advisors. “This resulted in an attractive property with a stable rent roll to market to investment groups.”

This asset is situated on a 28.54-acre site located at 3151 and 3202 West Behrend Drive within a growing submarket of Phoenix where demand for office and data center properties continues to rise, according to Iezman.

“Several major data centers are located in the Phoenix market, based primarily on the region’s skilled workforce, affordable power, and low rate of natural disasters,” says Iezman. “This particular data center competes on both a national and international level, making the asset even more attractive to investors.”

Iezman notes that the sale of this property demonstrates American’s overall strategy to acquire, stabilize, manage, and sell assets in a way that drives the highest yields for its institutional investors, which include major pension funds, insurance companies, and foundations.

Jim Fijan and Chad Freese of CBRE represented the seller in the transaction. The buyer was Griffin Capital Corporation, a publicly registered non-traded REIT.

2100 N Kolb Road PHOTO

CBRE reports recent Tucson leases

CBRE’s Tucson office has released the following recent transactions:

International Rescue Committee has leased 6,200 square-feet of office space at 2100 N. Kolb Rd. from Reay’s Ranch Investors LLC. CBRE’s Tucson office handled the transaction with Pete Villaescusa, Bruce Suppes, and Jesse Peron representing the landlord/sublessor and Bruce Suppes and Ian Stuart representing the tenant/sublessee.

Communicus One LLC has leased 3,038 square-feet of office space at 2900 N. Swan Rd. from WCCP Plaza Palomino LLC. The tenant was represented by Bruce Suppes with CBRE’s Tucson office. The landlord was represented by Ben Craney with NAI Horizon.

Prestige Vending LLC has leased 7,600 square-feet of manufacturing space at 3651 S. Broadmont from 3651 South Broadmont LLC. Tim Healy and Bob DeLaney with CBRE’s Tucson office negotiated the transaction on behalf of both parties.

Leoni Wiring Systems has leased 8,416 square-feet of office space at 3100 N. Campbell Ave. from the Gibeault Office Company. The tenant was represented by Bruce Suppes and Ian Stuart with CBRE’s Tucson office. The landlord was represented by Casey King with Tower Realty.

One Main Financial has leased 2,052 square-feet at 6330 E. Golf Links Rd. from Karlin Golf Links. The tenant was represented by Dave Blanchette with CBRE’s Tucson office. The landlord was represented by Dave Dutson with NAI Horizon.

CBRE Cathy Teeter, WEB

Cathy Teeter promoted at CBRE

CBRE has announced that Catharine Teeter has been promoted to the position of regional sales director for the Southwest Region. In this role, she will work closely with the managing directors in CBRE’s Phoenix, Tucson, Salt Lake City, Las Vegas and Albuquerque offices on reporting business and market share activity, new business pursuits, pipelines and follow-up requirements. Her key objectives will include increasing opportunities and improving win rates for CBRE’s sales professionals. Teeter will also serve as a conduit for assisting professionals with identifying resources and information within the enterprise platform.

”I am pleased to announce Cathy’s promotion to regional sales director,” said Craig Henig, CBRE’s senior managing director and Arizona market leader. “Cathy has been instrumental in working towards our goal of achieving operational excellence, and I know she will bring the same focus and dedication to her new role. Cathy’s deep market knowledge and professional relationships coupled with her 25+ years of industry experience make her an ideal fit as our new Regional Sales Director.”

Teeter joined CBRE last spring as the director of operations for the Southwest Region. In this role, she has been responsible for the implementation and oversight of the firm’s new local market operations structure, which is designed to drive a deeper level of support to local offices and employees across markets.

Prior to joining CBRE, Teeter spent more than 25 years with Cushman & Wakefield, where she most recently served as the senior operations manager for their offices in Arizona and Nevada. During that time, she gained considerable experience successfully running profitable operations while leveraging an effective administrative infrastructure that provided superior service to professionals in brokerage, asset services, project management and valuation advisory groups. Additionally, Ms. Teeter served on national committees for broker support and broker training programs and has worked with major clients including American Express, Symantec, Lucent, Citigroup, eBay and Prudential.

Teeter holds an MA degree in Organizational Management, a BA in business administration and a professional human resources (PHR) certification. She is an active member of the Society of Human Resources Management (SHRM) and NAIOP.

3561 Sunrise, Courtesy of CBRE

CBRE Tucson reports recent transactions

CBRE’s Tucson office has released the following recent transactions:

Chris Valenzuela has leased 3,000 square-feet for a vapor lounge at 2900 E. Broadway Blvd. from HLF Properties. The tenant was not represented in the transaction. The landlord was represented by Nancy McClure and Michael Laatsch with CBRE’s Tucson office.

Darling Financial has leased 1,931 square-feet at 3561 E. Sunrise Dr. #239 from La Paloma Corporate Center LLC. CBRE’s Tucson office represented both sides of this transaction, with David Montijo and Jeff Casper representing the landlord and David Volk representing the tenant.

Jeffrey B Loomer M.D., P.C. has leased 1,200 square-feet at 2001 W. Orange Grove Rd. #610 from HTA-Tucson Medical Office LLC. CBRE’s Tucson office represented both sides of this transaction, with David Montijo representing the landlord and Damian Wilkinson representing the tenant.

Concise Fabricators has leased 4,304 square-feet at 3850 & 3875 N. Business Center Dr. from NTBC Trust Partners. The tenant was represented by Tim Healy and Bob DeLaney with CBRE’s Tucson office. The landlord was represented by Rob Glaser with PICOR.

Freewheel Investments has purchased a 1,867 square-foot office at 7337 E. Tanque Verde Rd. for $340,000 from PLM Holding Company. The buyer and seller were represented by David Montijo with CBRE’s Tucson office.


West Osborn Apartment Community sells for $800,000

CBRE has negotiated the following multi-family sale transaction:

Clear Sky Uptown III LLC from Phoenix, AZ has purchased West Osborn, a 17-unit multi-family property located at 445 West Osborn Road in Phoenix, Arizona from West Osborn Apartments LLC of Phoenix, AZ. Brian Smuckler and Jeff Seaman of CBRE’s Phoenix office represented both buyer and the seller in negotiating the $800,000 transaction.

Stone Canyon, Courtesy of CBRE

Stone Canyon sells for $47M

CBRE has completed the sale of Stone Canyon, a 392-unit apartment complex located at 5210 E. Hampton Ave. in Mesa. The multifamily asset sold for $47 million and was 95 percent leased at time of sale.

Tyler Anderson, Sean Cunningham, Asher Gunter and Matt Pesch with CBRE’s Phoenix office represented the sellers, a group of tenant-in-common co-owners who were supported throughout their hold period and the sales process by National Asset Services, Inc. (NAS), a Los Angeles-based real estate asset management company. The buyer was Olen Residential Realty Corp. of Newport Beach, Calif.

Karen E. Kennedy, president of NAS commented, “We have worked diligently with the 33 co-owners to drive value on this fantastic investment property, and are delighted to see these co-owners realize their financial objectives at the sale.”

“The Stone Canyon apartments offer an excellent opportunity to purchase an institutional-quality asset well below replacement cost. The asset is located in a submarket that has no new multifamily construction underway with none planned,” said CBRE’s Anderson. “The property has been well maintained and the buyer is in an excellent position to capitalize on a submarket that is expected to post the strongest population growth metro-wide over the next five years.”

Stone Canyon located in the core of Mesa’s employment corridor. The property is surrounded by the largest employers in Mesa, including Banner Gateway Hospital, Banner Baywood Hospital and The Boeing Company, among others. Stone Canyon also offers excellent access to other major local and regional employment corridors throughout the southeast valley with immediate access to the US-60 via Higley Road.

Built in 2000, Stone Canyon features spacious, well-designed floor plans ranging in size from 727 to 1,146 square feet. Units feature nine-foot ceilings, built-in computer desks, walk-in closets, and personal balconies/patios. Community amenities include two resort-style pools, a fitness center, clubhouse and resident lounge, outdoor fire pit with cushioned seating, barbecue grilling stations with entertainment areas, nine-hole putting green, an outdoor water feature, mountain views and gated entrance.

Highland Villa

Highland Villas sell for $1.71M

CBRE has negotiated the following multi-family sale transaction:

Highland Villa, LLLP from Richmond B.C., Canada has purchased Highland Villas, a 36-unit multi-family property located at 1110 East Highland Avenue in Phoenix, Arizona from Mustard Seed Housing, LLC of Scottsdale, Arizona. Brian Smuckler and Jeff Seaman of CBRE’s Phoenix office represented both buyer and the seller in negotiating the $1.71 million transaction.


Lexington 45

45 Lexington sells for $1.87M

CBRE has completed the sale of 45 Lexington, a 23-unit apartment complex located at 45 East Lexington Avenue in Midtown Phoenix. The multifamily asset commanded a sale price of $1.875 million, or $81,522 per unit.

Brian Smuckler and Jeff Seaman with CBRE’s Phoenix office negotiated the transaction on behalf the buyer, Continental Mountain LLC of Evergreen, Colorado, and the seller, Clear Sky Capital Lexington, LLC.

Built in 1963, 45 Lexington is located in a dynamic midtown Phoenix location and was completely renovated and repositioned in 2014.

“We see increasing investor demand for renovated assets that service millennial renters who are getting priced out of A-/B+ quality properties,” said Smuckler. “45 Lexington’s irreplaceable location in midtown Phoenix fueled its successful reposition, as it caters to this growing population of renters. This turn-key asset is ideally positioned to capitalize on expanding employment drivers.”

Interior property upgrades include polished concrete flooring, new contemporary cabinetry with brushed nickel hardware, quartz countertops with porcelain tile backsplashes, stainless steel appliances, porcelain tile shower surrounds with new fixtures, premium lighting, and low-flow toilets. The revamped exterior features a sandblasted block facade with a contemporary metal monument sign, repurposed wood access gates with keyless entry, new dual-pane windows, and a resurfaced Pebble Tec swimming pool.


Katie Kelley joins CBRE

CBRE’s local Healthcare Services team has grown by one. The firm has announced the hiring of Senior Associate Katie Kelley.

Ms. Kelley joins the team lead by First Vice President Kate Morris and Vice President Vince Femiano. She will focus her attention on agency leasing and investment services. In her new role she will work with healthcare systems, practice groups and medical building owners to help them meet their healthcare real estate and business goals.

“We are thrilled to welcome Katie to the team. Bringing her onboard completes our team and will allow us to grow our agency platform,” said Ms. Morris. “Her asset management experience gives her an “ownership” mentality that will greatly benefit our agency clients. Her unique skillset and contacts, coupled with the experience and creativity Vince and I have will allow us to better service our healthcare clients and provide them a spectrum of fully compressive solutions.”

Prior to joining the CBRE Healthcare Services team, Ms. Kelley was Vice President of Leasing for Healthcare Trust of America, Inc. (HTA), a publicly traded REIT based in Scottsdale, Arizona. In this role, she was directly responsible for the marketing and leasing of HTA’s 1 million SF medical office building portfolio in Phoenix, and oversaw the marketing and leasing of an additional 500,000 SF in Tucson, Arizona and Los Angeles and San Luis Obispo, California. Before being elevated to Vice President, Ms. Kelley was HTA’s Leasing Manager for the South/Southwest Region. As leasing manager, she was responsible for the performance of HTA’s 4.5 million SF portfolio across eight states.

Ms. Kelley began her commercial real estate career in 2010 as part of an office services brokerage team with CBRE’s Phoenix office. The team represented institutional and private owners of office and medical office buildings, totaling over 5 million SF in Phoenix.

“Katie is a great addition to our already strong Healthcare Services team and I’m happy to welcome her back into the CBRE fold,” said Craig Henig, senior managing director and Arizona market leader. “Katie is the perfect compliment to Kate and Vince’s team and her experience, client-service mentality and market knowledge will greatly benefit our healthcare clients.”

Ms. Kelley holds a B.A. in communication from Arizona State University in Tempe, Arizona.

Four Gateway

State Farm building sells for more than $22.9M

CBRE has recently completed the sale of Gateway Four, a 137,069-square-foot, single-tenant office building, located at 444 N. 44th Street in Phoenix. The property is fully leased to State Farm Insurance and commanded a sale price of more than $22.9 million.

Tom Adelson and Jim Fijan with CBRE’s Phoenix office negotiated the sale. The buyer was Kansas City, Missouri-based VanTrust Real Estate, LLC. The seller was LBA Realty of Irvine, California.

“This was a great opportunity for VanTrust to acquire a quality, class A asset at well below replacement cost in one of the most active office submarkets in metro Phoenix,” said CBRE’s Adelson. “In the last few months alone the 44th Street corridor and Airport areas have seen several leases of 10,000 sq. ft. or greater, and we expect that type of activity to continue.”

Built in 1998, Four Gateway is currently home to a portion of State Farm Insurance’s local operations. However, State Farm is set to vacate the property in late 2016 when the company consolidates local operations at its new regional headquarters in the currently-under-construction Marina Heights located at Tempe Town Lake.

Four Gateway is part of the larger Phoenix Gateway Corporate Center. The office complex is comprised of three other class A office buildings: One Gateway, Two Gateway, and Three Gateway. The development is situated near the northwest corner of 44th and Van Buren Streets and is comprised of more than 569,661 square feet of class A office space.


CBRE completes $2.1M sale of single-tenant retail property

CBRE has completed the sale of a single-tenant retail property located at 7316 E. Stetson Drive in Scottsdale, Ariz. The asset, which is currently home to Red Revolver Night Club, commanded a sale price of $2.1 million.

Steve Julius and Jesse Goldsmith with CBRE’s Phoenix office represented the seller, GEM Realty Advisors, LLC of Phoenix. The buyer, Zephyr Cove, Nev.-based Tornga Family, LLC, was represented by Robert Jones with Torrey Pines Real Estate Investments, Inc.

“Old Town Scottsdale is one of the healthiest submarkets in Metropolitan Phoenix,” said CBRE’s Julius. “Scottsdale has several new multifamily developments underway, has recently announced high-profile office-users entering the market, and continues to have one of the most vibrant night-life and retail scenes in the Valley. The Stetson building is well situated for long-term success.”

This transaction marks the second sale the CBRE retail investment team has completed in Old Town in recent history. The previous sale was the US Bank Plaza building located at 4273 N Scottsdale Road, which sold for $3.94 million. Julius and Goldsmith note that investor interest in the submarket has been strong through the first quarter of 2015 and they expect that demand to remain steady.


38 Street Apts

CBRE completes sale of 38th Street Apartments in Phoenix

CBRE has negotiated the following multi-family sales transaction(s):

· Trinity Apartments, LLLP from Vancouver, B.C. Canada has purchased the 38th Street Apartments, a 14-unit multi-family property located at 3234 North 38th Street in Phoenix, Arizona from 3234 N 38th Street, LLC of Mesa, Arizona. Brian Smuckler and Jeff Seaman of CBRE’s Phoenix office represented both buyer and the seller in negotiating the $860,000 transaction.

Site-Plan-for-PR, cbre, web

Las Plazas at Old Vail breaks ground in Tucson

A 17-acre parcel of land at the northwest corner of Houghton and Old Vail Roads in southeastern Tucson is slated to become a new retail and restaurant hub. The development’s site work has begun at Las Plazas at Old Vail, as the project has been dubbed, in the form of under-ground utilities, grading, retention/detention, common drive aisles, landscaping, curbs and parking lot lighting.

The plot of land has been divided into fifteen lots ranging in buildable areas from 3,000 to 19,000 square feet. The lots are being marketed for retail and restaurant use, according to CBRE’s Nancy McClure who, along with Michael Laatsch, has the marketing assignment on the property.

“We’ve already seen significant interest in Las Plazas,” said McClure. “In fact, we already have two lots in escrow and another is in negotiations with a contract out for signature; all three are national operators.”

Las Plazas at Old Vail is expected to relieve significant pent-up demand for retail and restaurant options in what many real estate experts believe is an underserved area. McClure says the high-density residential area is well equipped to handle additional retail amenities. She points to the success of Super Wal-Mart, which opened in the immediate area just last year and has reported sales numbers that far exceed initial sales projections. This is a good indicator that area residents will welcome new food and shopping offerings.

“The surrounding community has been very supportive of the project. As soon as our signs went up, we had residents calling to inquire about potential users and which restaurants might be locating at the property. People are excited about new amenities for Rita Ranch and the surrounding outlying areas.”

Las Plazas at Old Vail is designed to accommodate retail and commercial users. The available lots are for sale to users and developers who want to provide build-to-suits to tenants. The site is approximately a mile and a half from the I-10 freeway, just south of the Rita Ranch master-planned community.

Phoenix firm buys El Paso industrial portfolio

CBRE announced the sale of a four-building, 245,745-square-foot industrial portfolio in El Paso, Texas, on behalf of New York-based Sullivan Crosby Trust. Phoenix, Arizona-based ViaWest Group purchased the portfolio in an off-market transaction for an undisclosed price.

Christian Perez GieseWilliam CaparisAnthony Mash and Arturo De la Mora, with CBRE’s El Paso office, represented the seller.

The buildings are approximately 50 percent occupied—short-term tenants bring it to 75 percent occupancy. They are located south of Interstate Highway 10 in the central El Paso submarket. According to CBRE Research, the central El Paso submarket is approximately 94.7 percent occupied as of Q4 2014.

“We are very excited about our first purchase in El Paso. This acquisition is part of the ViaWest Southwest Fund and is our first purchase outside of Phoenix with the Fund. We are hopeful that this is the first of many as we expand further into El Paso, Salt Lake City, Las Vegas, and some other southwestern cities. This property fits all the attributes that we are looking for: a solid, infill location; excellent clear height and truck court; the ability to add value immediately; and a great brokerage team with the CBRE guys,” said Steven Schwarz, Principal at ViaWest Group.

“The portfolio is made up of good, quality assets. Once a few deferred maintenance items are addressed, these assets will be highly competitive,” said Mr. Perez Giese, Senior Vice President and Director of CBRE’s El Paso/Ciudad Juarez office.

This is the first El Paso-area acquisition for ViaWest Group. A host of rehabilitation projects are slated for the properties, including new roofs, landscaping, fencing, equipment replacement and more.

ViaWest has selected CBRE to lease and manage the properties. Mr. De la Mora will lead the leasing assignment.

Oblique & Renderings of Airport I-10-1

Airport I-10 announces three national tenant leases

Just as Airport I-10’s 600KSF Phase I approaches completion, Wentworth Property Company/Clarion Partners and the Phoenix office of JLL have announced the signing of three major, national tenant leases that bring one of the largest speculative office projects in Phoenix history to more than 35 percent pre-leased.

The new tenants at Airport I-10 include:

• DLS Worldwide, a major, volume-leveraged third-party logistics provider, leasing 78,843 square feet in Building B for a new headquarters, light manufacturing, assembly and distribution facility.

• DHL, the world’s leading postal and logistics group, leasing 40,529 square feet in Building E for a regional parcel delivery hub.

• Pilot Freight Services, a worldwide provider of transportation and logistics services, leasing 31,824 square feet in Building E for centralized pick-up and delivery service operations.

JLL Executive Vice Presidents Pat Harlan and Steve Sayre, and JLL Associate Kyle Westfall represented Wentworth/Clarion in all three leases. Mike Gordon of Cresa represented DLS. John Werstler, Jerry McCormick and Cooper Fratt of CBRE represented Pilot. Jim Wilson of Cushman & Wakefield represented DHL.

The new leases join with a 63,470-square-foot pre-lease completed by JLL in mid-2014 with Anixter International, Inc., a leading global distributor of enterprise cabling and security solutions, electrical and electronic wire and cable, and OEM supply fasteners and other small parts.

Inclusive of Anixter, this brings JLL’s new lease commitments at Airport I-10 to 215,000 total square feet, leaving the project’s three-building, 600,000-square-foot Phase I at 35 percent leased, before construction is even finalized.

“Modern companies want modern buildings. This is making all types of users more sophisticated about what they look for in an industrial location,” said Harlan. “They are requiring the kind of improved function that you get from features like higher clear heights, better overall building layout and better truck maneuverability. Airport I-10 checks all of these boxes, and because of this is attracting tenants making an overall flight to quality – a trend that is happening across the entire industrial market.”

“Airport I-10 was designed to give modern industrial tenants a home in the heart of Phoenix’s industrial distribution network. We couldn’t be more pleased with the companies that have committed to space here,” said Wentworth Property Company Principal James R. Wentworth. “They are a barometer of the types of businesses that we believe will continue to chose Airport I-10 and build out one of the submarket’s best and last industrial parcels.”

Located at the northwest corner of 24th Street and Rio Salado, Airport I-10 Business Park represents the last large, developable parcel left in the Sky Harbor International Airport submarket. Phase I includes three Class A industrial buildings totalling more than 600,000 square feet (277,954 square feet, 169,109 square feet and 156,000 square feet). This portion of the project is 35 percent pre-leased to Anixter, DHL, DLS and Pilot.

At build out, the 58-acre Airport I-10 property will include five Class A industrial buildings totalling 920,584 square feet, with a modern environment for corporate users and fully equipped with state-of-the-art features such as ESFR sprinkler systems, 30- to 32-foot clear heights, cross-dock loading and 140- to 200-foot truck courts.

Kyrene Corporate Center, CBRE

Kyrene Corporate Center sells to retail mortgage lender

RMK Holdings, LLC has purchased Kyrene Corporate Center, a 30KSF building located at 9280 South Kyrene Road in Tempe. The sale price was $3.33 million.

Kevin Calihan with CBRE’s Phoenix office represented Phoenix-based RMK Holdings. DTZ’s Eric Wichterman and Mike Coover represented the seller, Phoenix-based Kyrene 919280, LLC.

“The metro office market continues to improve and Tempe, especially, continues to be a place in which office users want to locate,” said Calihan. “This purchase allows RMK Holdings to not only enter a highly sought-after submarket from an investor standpoint, but also gives the company more control over their own operations as well.”

RMK Holdings is a joint venture between Kent Nielson, Ryan Sandell and Michael Jones, the local principals of Primary Residential Mortgage, Inc. (PRMI), one of the largest retail mortgage lenders in the nation. RMK Holdings will lease 15,000 square feet of Kyrene Corporate Center to PRMI. This location will serve as PRMI’s primary office for the Arizona market, which is being relocated from San Tan Corporate Center II in Chandler. PRMI has four offices through out the Valley and one in Flagstaff.

“Kyrene Corporate Center is in an excellent location and offers us the ability to continue to grow our business while having better control over our operating expenses for PRMI,” said Kent Nielson. “We are anticipating the metro Phoenix housing market will continue to strengthen in 2015 and this purchase and lease with PRMI means we will be well-positioned to better serve our clients as this demand increases.”

Kyrene Corporate Center is located just a mile and a half from the full-diamond interchange at Warner Road and the I-10 freeway. The property was approximately 50 percent leased at time of sale. Tenants include enChoice, Inc., Triton Medical Solutions and Great American Title Agency.

ReCommunity, Courtesy of CBRE

ReCommunity Recycling Center sells for $7M

CBRE has completed the sale of the ReCommunity Recycling Center located at 3780 E. Ajo Way in Tucson. The asset commanded a sale price of $7 million.

Mike Sandahl, David Blanchette, CCIM and Wyatt Campbell in CBRE’s Tucson office negotiated the transaction on behalf the buyer, a joint venture of three Alaska-based partnerships and the seller, Delaware-based Olyver Land, LLC.

“This was a unique opportunity for an investor to purchase a stable asset with a high-quality tenant in a rapidly growing industry,” said Sandahl. “ReCommunity is an industry leader in recycling, offering “green” solutions for the betterment of the communities they serve.”

The sale included 53,783 square feet of warehouse space, and 5,258 square feet of office space on 7.1 acres. The property is wholly leased and operated by ReCommunity Holdings, Inc. ReCommunity, which has a long-term lease at the property, is the nation’s largest pure play recycler.

In early 2012, development began on the raw land at the southwest corner of Alvernon and Ajo to construct the 59,000 square-foot, build-to-suit complex for ReCommunity, which holds the sole recycling contract for the City of Tucson. The state-of-the-art facility began operating just months later in June of 2012.

“The sale of the ReCommunity Material Recovery Facility is a real Tucson development success story,” said Blanchette, who provided site selection services and represented Olyver Land in the initial purchase of the land in 2012. “The predecessor of ReCommunity was announced as the winning recycling contract in the summer of 2011. That gave developers just seven short months to develop the raw land into the 53,000 square foot Industrial complex you see today. The City of Tucson, Pima County and Barker Morrissey Contracting worked tirelessly to deliver the project to ReCommunity on time in June of 2012. Tucson now has one of the most modern and efficient recycling facilities in the country, which will serve Southern Arizona for many years to come.”

ReCommunity also operates recycling and recovery facilities in Phoenix and Scottsdale. The company has a total of 36 facilities operating in 13 states across the country.

PMHC West, Courtesy of CBRE

ConnectionsAZ leases 36KSF at Phoenix Memorial Center

CBRE has negotiated a long-term, 36KSF lease at Phoenix Memorial Center. ConnectionsAZ, a physician-led company that specializes in providing emergency/crisis psychiatric services, has leased the space and will operate a patient intake center from the location.

Kate Morris and Vince Femiano with CBRE’s Phoenix office represented the landlord, Memorial Key, LLC of Gilbert, Arizona. The tenant was represented by Kevin Lange with Keyser.

“Memorial Key and I really enjoyed working with ConnectionsAZ and Kevin Lange to create a new, efficient long-term home for their much-needed services,” said CBRE’s Morris. “With the MIHS urgent care already in the building, its convenient access to major highways and proximity to downtown and major hospitals, Phoenix Memorial Center really was the ideal location for this tenant.”

Connections AZ is one of the largest intake centers that specializes in mental health in the Valley. This new center will expand the company’s physical footprint by nearly three times, which will allow them to significantly increase the number of patients they are able to serve.

Phoenix Memorial Center is the former Phoenix Memorial Hospital, located at 1201 S. 7th Avenue. In the fall of 2014, Memorial Key purchased the facility with the intent of bringing new life to the former community hospital. As part of the repositioning, the property was renamed Phoenix Memorial Center.

Norman King and Larry LeSueur with Memorial Key commented, “Phoenix Memorial Hospital was a cornerstone of the community for decades. Our goal with Phoenix Memorial Center to create a community-welfare and care-center facility that will again serve and bring value to the members of the immediate community and metro area at large.”

In just five short months, the new owners and CBRE leasing team have brought the once nearly-vacant property to 95 percent occupied. In addition to the new lease with ConnectionsAZ, tenants at Phoenix Memorial Center include, Haven Behavioral Health, a geriatric in-patient psychiatric care provider; Packages from Home, a non-profit that sends care and comfort packages to deployed American military members stationed in active duty theaters around the world and facilitates activities that elevate morale of all veterans; and a Maricopa Integrated Health Systems’ urgent care and family clinic location, among others.


CBRE completes sale of Esplanade III

CBRE has negotiated the sale of Esplanade III, a 218,266-square-foot office building located at 2415 East Camelback Road in Phoenix. Financial terms of the transaction were not disclosed. The property was approximately 95 percent leased at time of sale.

Jim Fijan and Will Mast with CBRE’s Phoenix office negotiated the sale, along with Kevin Shannon of CBRE’s South Bay, California office. The seller was an institutional client of AEW Capital Management, L.P. The buyer was Dallas-based Crow Holdings.

“This is the highest price per square foot for a multi-tenant, class A asset since the downturn,” said CBRE’s Fijan. “Office fundamentals are improving and pricing is approaching pre-recession levels. Investors are taking notice and have shifted their attention to Phoenix, especially as pricing in coastal markets skyrockets.”

As part of the Esplanade mixed use development, Esplanade III benefits from the wealth of on-site amenities shared by the complex. MetLife, owner of the other four office buildings in the development, recently announced a refresh of the retail amenities such as new restaurants and a new common area business center. 

Developed in 1997, Esplanade III is a ten-story, class A, multi-tenant office building located in the heart of the Camelback Corridor. Ninety-five percent leased at time of sale, tenants include CBRE, Alliance Residential, Regus, Helios and Major League Baseball’s western headquarters, among others.

MG Properties buys Trillium Papago Apartments for $36M

 MG Properties Group, a private San Diego-based real estate investor and operator, has announced the acquisition of the Trillium Papago Apartments in Phoenix, Arizona.

The property consists of 270 luxury apartments built in 2007. The property features an exceptional array of common area amenities, including a resort-style pool and spa, modern fitness center, movie theater, and pool room.

The property is located north-east of Phoenix Sky-Harbor Airport, providing convenient access to multiple job corridors within the region. MGPG plans to rebrand the property as Ascent at Papago Park. Units include nine-foot ceilings, full-sized washers and dryers, and a mix of 1, 2, and 3-bedroom floor plans. 

Trillium Papago was purchased for $36,220,000 from Trillium Residential. The acquisition was financed with a 10-year fixed-rate mortgage from Fannie Mae, arranged by CBRE. 

According to Mark Gleiberman, MG Properties Group Chief Executive Officer, “This acquisition reflects our continued belief in the long term growth potential of the Phoenix market. The property’s excellent design and central location position it well to benefit from further growth in the region.”

Trillium Papago marks MG Properties Group’s fourth acquisition in the past six months.  The four acquisitions totaled approximately 700 units and $125,000,000 in combined purchase price. The company is targeting further acquisitions in Arizona, California, Colorado, Nevada, Oregon, and Washington. 

Vacancy rate falls to single digits for 1st time since 2008

Retail vacancy rates for Metropolitan Phoenix have fallen into the single-digit range for the first time since 2008, according to a recent retail study by CBRE’s Phoenix office. While the retail market continues to improve at a more gradual pace than previously anticipated, retail real estate experts point to the 9.6 percent vacancy rate as an important milestone and a good reflection of the economic recovery.

“Single-digit vacancy is very good news for the retail sector,” said CBRE Vice President Greg Abbott, who specializes in retail real estate services. “This number is actually telling us two things: first, existing retailers are experiencing growth and new retailers are entering the Phoenix market; and second, the positive leasing and absorption activity is resulting in an improvement in market conditions such as higher rents and lower tenant concessions.”

Abbott, who partners with Vice Presidents Chris Ryan and Bill Bones, points to the fact that metropolitan Phoenix has not experienced any substantial, new retail development since 2008 as a major factor in the falling vacancy rate. Additionally, Bones notes that a significant amount of available retail space is considered functionally obsolete. This means the amount of functional, available space is even less than the numbers show.

“Slowly, but surely, retail tenants are expanding or entering the market. However, availability in the type of space retailers are interested in is growing increasingly tight,” says Bones. “Class A space, in particular, has a high barrier to entry right now in terms of supply. Tenants are very interested in class A opportunities and they are jumping on them when they come available.”

Class B space is also seeing healthy tenant demand. While these spaces may be older, the team points to their location in neighborhood or community centers, which offers great identity and stable residential and nighttime demographics, as key benefits for tenants.

Ryan says continued, pent-up demand for A and B space will cause rental rates to rise significantly over the next couple of years, particularly if there is no substantial new development. Increased rental rates could translate to high barrier to entry for some retailers.

“We have reached a point in the market cycle where existing, useable space is being absorbed, whereas five years ago we were absorbing new space as it came online via preleased tenants. Now tenants are leasing up existing space,” notes Ryan.

CBRE Research reports that the metropolitan area has not seen more than one million square feet of new retail construction delivered to the market, year over year, in the the last five years. 2014 reported merely 285,400 square feet of new product, while 2013 saw 512,000 square feet come online. Conversely, from 2000 to 2010 metro Phoenix saw an average of 5.5 million square feet of retail product delivered annually.

So, as the amount of quality space continues to tighten and retailers experience more incremental growth, new development will be inevitable. But what does new retail development look like? And what happens to the so-called “un-useable” space?

“Those spaces that have reached or are nearing functional obsolescence will have to be repurposed for new uses such as charter schools or mini-storage or redeveloped as multi-family or office,” says Abbott. “In fact, we’re already seeing those types of projects across the Valley.”

The retail team points to examples like the former East Valley Mall at the northwest corner of Arizona Avenue and Warner Road in Chandler, which is being repurposed from a mall into multiple new uses including a charter school, multi-family development as well as mini-storage. Additionally, Valley East Plaza, located at the northwest corner of Southern Avenue and Longmore Road, has been demolished to make way for the new Centrica office project. The shopping center, which formerly housed Bed, Bath & Beyond, Petco and Circuit City, sat vacant for more than six years before new ownership had it repositioned for office development.

As for new development, Abbott says developers today are still fairly conservative and most want a committed tenant or a solid anchor or shadow anchor prior to commencing the project.

New construction that will come online this year includes 132,000 square feet at Fashion Square Mall that’s going to be a new Harkin’s Theater and Dick’s Sporting Goods location. A 75,000-square-foot neighborhood center called Silverstone at Pinnacle Peak is also under construction and will be anchored by a Sprout’s grocery. Scottsdale Quarter, which has already established itself as a retail hub, also has an additional 30,000 square feet that will come online in its new mixed-use building.

Going forward, the retail team says retail market participants will continue to keep a watchful eye on improving fundamentals and tightening supply of space.

“If vacancy in the A and B spaces continues to fall, as it has in recent quarters, development really is inevitable,” says Abbott. “I think this is an interesting point in the cycle and tenants and landlords alike could see some really great opportunities in the coming quarters.”

Chris Brozina, WEB

Generation Next: Chris Brozina, Mark-Taylor

When Chris Brozina, vice president of Mark-Taylor, worked as a broker at CBRE, his team transacted more than $1.59B of multifamily transactions in seven states. In 2011, he made the decision to move into development with Mark-Taylor. He reveals to AZRE his steps to climbing the ladder of success, while sustaining his humility and connecting with his employees on a personal level.

Have you always been interested in real estate or did you start on a different career path?
As a young person coming into the industry in 2007, right into the teeth of the Great Recession, I was a young kid who didn’t have any money and didn’t have a whole lot to lose. The timing probably allowed the opportunity to accelerate through the ranks a little faster than what otherwise would have been the case.

Where did your real estate career start?
I started as a researcher and runner in the brokerage industry. In other words, a grunt. I did a lot of research, familiarizing myself with the lingo of the industry, and made cold calls like crazy. I absolutely started in the most un-glamorous role you can start in. I’d never know at the time just how valuable that time was.

What the biggest risk you have taken in your career?
I switched careers from being a broker at a very well-respected large company to the development world and Mark-Taylor. At the time, it was a major risk personally, because I was leaving something that I was starting to see a lot of success doing and a place I was really happy, with very respected brokerage partners. I thought I was going to be a broker for the rest of my life and I treated it that way. As is usually the case, the opportunity at Mark-Taylor hit me at a time when I certainly wasn’t expecting it. It was the brokers I worked with that gave me the perspective to understand what this opportunity meant. In retrospect, there is zero question that this has been the right move for me and something I see doing for the rest of my life.

What qualities do you think successful business leaders and mentors should have?
You become a leader only because people choose to follow you. At the end of the day, you can have any title you want behind your name but if people don’t choose to follow you you’re not leading anybody. That is the way I approach everything.

What advice would you give to a college graduate wanting to work in the real estate industry?
The advice I would have above all else to new college graduates: salary should be the furthest thing from your mind and your entire focus should be on finding a company where they are willing to teach you. You’re going to meet a lot of people in this industry that are constantly sniffing around looking to move companies. I would think that attitude is a pretty big turn-off to executives. Whatever you decide to do, whether you see it as a long-term career or a short-term job, act like you’re going to do it for the rest of your life. That passion and preparation is going to be palpable and is going to bring opportunities your way that you would never find if you were out there trying to seek opportunities on your own.