Tag Archives: commercial projects

Beth Harmon-Vaughan - 50 Most Influential Women in AZ Business

Beth Harmon-Vaughan – 50 Most Influential Women in Arizona Business

Beth Harmon-Vaughan – Managing principal, Gensler

With more than 30 year’s experience, Harmon-Vaughan leads design teams in innovation and service for Gensler in Phoenix. Her body of work, encompassing almost every type of commercial and institutional project, is continually recognized for design excellence. As managing principal, Harmon-Vaughan oversees project design development, management and overall strategy. She serves as the client’s advocate, challenging the team to explore all options to ensure solutions are thoroughly developed. Harmon-Vaughan has been recognized and honored by her peers with fellowship status in the IIDA.

Surprising fact: “I’m half Canadian.”

Biggest challenge: “The recent recession, which we have overcome by having positioned for a better market while building our local design portfolio.”

Fifty Most Influential Women in Arizona Business – Every year in its July/August issue Arizona Business Magazine features 50 women who make an impact on Arizona business. To see the full list, read the digital issue >>

Rendering of Joshua Springs

Brookfield Communities Launching Commercial, Residential Expansion Projects

 

Brookfield Communities, a master-plan developer of two Arizona active adult communities and large land-holder, announced significant expansion plans commencing in 2013 – a new model home complex and large medical and commercial project in Bullhead City and plans for major expansion of its Verde Santa Fe master-plan near Sedona in the Verde Valley.

Early in 2013, Brookfield will break ground on a medical campus within its Fox Creek master-plan in Bullhead City. The 5-acre project will be anchored by five 7,500 SF medical office buildings – targeted and marketed to medical/physician practices and health-related service providers. The medical campus is strategically situated near two hospitals and thousands of residents.

In addition, an assisted living facility will be built adjacent to the medical office complex. Joshua Springs will be a 95,300 SF, $17M facility that will include 74 assisted living units and 30 memory care beds. Once fully-operational, Joshua Springs will employ more than 50 full-time staffers.

Brookfield Communities sold the land for the facility to Oregon-based Strata Management who is developing the project. The builder of Joshua Springs is Seabold Construction and the architect is John Lape. Plans are to break-ground on the assisted living project next month and anticipate it being completed in the first half of 2014.

“For years, Brookfield Communities has been a responsible and generous partner in our region and we look forward to the upcoming expansion at its Fox Creek community,” said Connie Davis, executive director of the Laughlin Chamber of Commerce. “We are excited to see Brookfield Communities continue to make a positive impact in the region.”

Near the medical complex, Brookfield Communities is also planning to develop a 10-acre commercial site to include space for a future national pharmacy retailer as well as a unique urban market and specialty retail complex.

“Currently, there is not a project like this in the region,” said Phil Petersen, founder and president of Brookfield Communities. “This is a game-change project for the entire market.”

In Northern Arizona, Brookfield Communities and Republic Companies are in the advanced stages of planning on an additional 700 acres for mixed uses adjacent to its Verde Santa Fe master-plan. The site will eventually include about 1,400 new homes. However, the project will start with a unique new commercial addition.

A major feature of the new project will be several acres set aside for a wine tasting center, featuring many of the best wineries in Arizona. The area will include cafes and will be surrounded by vineyards. The project will also include a commercial center, a large resort, medical office buildings, office condos and restaurants.

Petersen said plans for the Verde Santa Fe project were originally conceived back in 2005 and 2006, but were shelved during the real estate recession. Now, Brookfield Communities is just about ready to “fire it up again,” he added.

“We have been planning both the Bullhead City and Verde Santa Fe projects for some time, anticipating an improvement in the market, and are confident the market is ready for both of these significant projects,” Petersen said. “Historically, we have ideally timed our projects and are confident this time around as well.”

Brookfield Communities recently moved to its new corporate headquarters at 3550 N. Central Ave., #1001 in Phoenix. The larger, more expansive space allows the company to continue to add staff to manage its increase projects and activities in 2013 and beyond. Unlike many residential developers who folded during the past five years, Brookfield Communities continued to grow and remain profitable.

 

wood beam

As Commercial Real Estate Sector Prepares To Be Hit By Recession, Leaders Should Become Proactive

The headlines today have focused on the bailout of the banking industry and the housing market’s severe contraction. Not a lot of attention has been paid to the commercial real estate sector. As with all business cycles, there is a flow-through to the various sectors. The fact that we have lost more than 1 million jobs this year, and have had a severe reduction in housing values and record foreclosures, can only bode ill for retail and other commercial areas.

Since retail traditionally follows housing, how can it not be negatively impacted when fewer homes are being built and more and more people can barely afford their current homes? In recent months Mervyn’s, Linen ’n’ Things, The Shoe Pavilion and Circuit City have all announced either closing of some or all of their stores. The larger tenants oftentimes are the anchors of some of the smaller centers. There is usually a cascading effect on other tenants who feed off the traffic generated by the anchors. We have many clients who talk about tenants leaving in the middle of the night.

At this time, most of the bankers we have talked to have stated that they have few commercial projects on their radar, but most admit this is the next big area to hit them and the economy in general. Are they prepared and how can the lenders minimize the fallout from this?

We would like to outline some of the steps that lenders and others can take to be proactive in the process. Some lenders we have talked to take the position that they will sell the returning assets “as is,” so they do not incur anymore costs on a bad loan. This shortsighted approach will end up costing these lenders and their shareholders money.

We advise lenders to do a thorough analysis of the project in such areas as:

  • What is the current situation with the permits, utilities and other entitlements? This may unfortunately turn up information that the bank should have known about before it made the loan or kept funding it. There is a good case to not have the same people who approved the loans involved in this process. Some of these items may involve minor fixes that could make the project more marketable. For example, assume the contractor had not ordered some of the utilities, which usually involves a long lead time. By the bank being proactive (after they take the project back) and ordering some of the utilities, the project would have more appeal for a potential tenant versus sitting on the asset and waiting for things to happen. A new potential owner may have a tenant, but he needs to get him into the space within a set period of time. If the bank has done nothing but sit on the asset, the buyer may go to a project where he can get his tenant in immediately.
  • What is the status of payments to the contractors versus how much work has actually been performed? Is the project really 50 percent complete but you have paid out 60 percent, for example? Where are materials stored if ordered and paid for?
  • Another problem is when banks have the same people or departments evaluate the project. They are the ones who may have missed some of these issues to begin with. You want a fresh look at what you have. It is difficult to want to spend more money on an asset that will be a loss — but if you can do a proper evaluation of what you have, you may recoup quite a bit of additional money.

Why do Realtors for homes recommend cosmetic fixes to make them more saleable? Because they work. But the real estate owned (REO) departments of many banks do not want to incur additional costs in these areas. We like to assist the lenders by also giving some ideas on how to reposition the property. When clients come to us for an initial project, we frequently work with them on site plans. Even on a project that is partly or fully built, you can analyze how it can be revitalized and repositioned. It may have been poorly designed to begin with. Smart buyers are going to be looking at these ideas before they make an offer. If the lender hires someone to give them some of these ideas it can be very helpful information real estate brokers can use in marketing the asset.

We know of certain retailers developing new concepts to fit into smaller spaces to take advantage of a good location. If you have prepared some estimates of what would be involved to reconfigure the space, that makes it easier on the potential new owner and his tenant.

In summary, retail should be the next area to seriously impact the balance sheets of lenders. Most lenders have not had departments devoted to this problem because the market has been good for so many years. It is important to hire experts who can give an unbiased view of the asset and what can or cannot be done with the project. When a lender uses the same people or moves some of its people over they may not have the expertise to properly analyze the project to obtain the best possible value from it upon a sale.