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Why more companies are coming to the Valley

When it comes to recruiting new companies to relocate, expand or begin operations in Arizona, it’s all about “getting in the game and the closing the deal.”

That was the message delivered at Valley Partnership’s June breakfast before a robust audience at the Phoenix Country Club.

Christine Mackay, Economic Development Director for the City of Chandler served as moderator. The panel featured Justin Meritt, Senior Investment Professional, Southwest Valley Partners; Auguste Goldman, Chief People Office, Go Daddy; and John Lenio, Economist and Managing Director, CBRE.

As the Arizona economy improves, Valley communities are successfully recruiting new companies to bring their business here. CBRE’s Lenio said favorable economic conditions nationally are a key: leading indicators such as the stock market are up, consumer debt is down, net worth is up, and although housing prices have increased they have also leveled off.
How is Arizona doing it?

“It’s all about jobs,” Lenio said. “Real estate is an enabler in the site selection process. In the end it’s all about getting in the game and closing the deal.”

Meritt cited the Continuum development along the Price Corridor in Chandler as a project in which several entities joined forces and talents. In her opening remarks, Mackay spoke of a “pipeline of quality developments” in Chandler. Continuum, Meritt said, fit the bill.

“It’s a quality business park in one of the top office markets in the Valley,” he said.

Goldman shared the success of local company Go Daddy and showed why “we win in Arizona. Talent, impact, culture, and quality of life.”

Goldman said Go Daddy works with instate institutions of learning including ASU, UA, NAU and Thunderbird. When it comes to company culture, the thought is to change the global economy to small business.

“It’s something we should all invest in,” Goldman said.

>> Community Project update

In lieu of the Mayor’s Minute, the Community Project Committee shared two presentations with the audience. Robyn Ratcliff, director at 2014 Community Project recipient Arizona Foundation for the Handicapped addressed the partners. She was followed by a heartwarming rendition of “Good Night Irene” by Bill, one of the clients that AFH serves. Bill received a standing ovation and moved many of the partners. This was the perfect way to introduce the sponsorship opportunities available for the 27th annual community project.
Several partners have already generously signed on to sponsor this year’s project including Norris Design, Rick Engineering, Shift Redevelopment, Small Giants and Cushman & Wakefield of Arizona.

“I received several calls and emails after the breakfast from partners who wanted to support this year’s project and enhance the quality of life for those served by AFH,” said committee co-chair Dena Jones. “I feel so fortunate to work with partners who are committed to giving back to the community and leaving a legacy.”

The 50/50 raffle included four prime tickets to a Dbacks game courtesy of CBRE. The winner donated the cash back to the community project. Another partner came forward after the raffle winner was announced and pledged his company’s Dbacks tickets for the July raffle.

Photo provided by 123RF.com

City 15 A, WEB

City 15 sells for $10.85M

Cushman & Wakefield of Arizona, Inc. negotiated the $10.85 million sale of City 15, a multi-family property located at 4728 N. 15th St.

City 15 was built in 1969 and contains 26 buildings with 161 units. The property was 96 percent occupied at the time of the sale.

Mica Creek-Sagamore Capital Partners of Phoenix sold the property to Retirement Concepts of Vancouver, B.C., Canada.  The sale price brought $67,391 per unit, which equates to $102 per square foot.

“The property attracted a lot of attention given its location,” said Brett Polachek. “City 15 has undergone interior and exterior renovations and has captured the demand for urban living.”

Polachek and Jim Crews of Cushman & Wakefield represented the seller in the transaction.

4141 N. Scottsdale Rd.

Cushman & Wakefield negotiates two leases at Scottsdale office building

Cushman & Wakefield of Arizona, Inc. negotiated leases totaling 24,486 square feet for a commercial real estate advisory firm and a medical care company at 4141 N. Scottsdale Rd.

Fresenius Medical Care of Waltham, Mass., signed a 12-year lease for 15,317 square feet. Fresenius provides dialysis treatment through a network of more than 1,800 facilities nationwide. Keyser signed a 6-year lease for 9,169 square feet. It is relocating from 1048 N. 48th St. in Phoenix.

“Both tenants saw an opportunity to plant a flag in the heart of Old Town Scottsdale,” said Chris Latvaaho. “Scottsdale continues to attract innovative companies that see the value of locating their business in what has been branded as the live-work-play that is unique to Scottsdale and not easy to replicate anywhere else in the Valley.”

The anchor tenant is Aetna Life Insurance. With the two leases, occupancy will be 89 percent.

Latvaaho and Tim Whittemore of Cushman & Wakefield represented the landlord, an entity owned by certain affiliates of Westport Capital Partners LLC. Keyser was represented by company owner Jonathan Keyser. Fresenius was represented by Pete Wentis and Jim Greene of CBRE.

Riley joins Capital Markets Group at Cushman & Wakefield

Matthew Riley has joined the Capital Markets Group at Cushman & Wakefield of Arizona, Inc. as a Retail Capital Markets Analyst.

Matthew Riley, Cushman & Wakefield of Arizona

Matthew Riley, Cushman & Wakefield of Arizona

Riley transferred to Cushman & Wakefield of Arizona from C&W’s Los Angeles office where he was an analyst in the Global Hospitality Group that specialized in sale, debt, equity and structured finance transactions for the hospitality industry.

Prior to joining C&W in 2013, Riley held various roles in real estate acquisition, finance and research primarily with San Diego-based Pacifca Companies. There Riley specialized in the financial analysis and cash flow projections for a $2.5 billion portfolio of real estate assets. He also participated in the underwriting and placement of more than $270 million of debt for new acquisitions and the refinancing of existing loans.

His new focus will be working with Greg Valladao in the underwriting and dispositions of retail assets throughout the Southwest.

“I am very excited to be continuing my career with Cushman & Wakefield and transitioning to the firm’s Phoenix office,” Riley said. “I look forward to working with Greg and helping to expand the group’s capital markets footprint within the dynamic retail market here in the Southwest.”

A native of Phoenix, Riley graduated from the University of San Diego with a Bachelor of Business Administration. He majored in Finance and minored in Real Estate.

4127 E. Van Buren

Prosper Marketplace expands into Phoenix

Cushman & Wakefield of Arizona, Inc. negotiated a 17,998-square-foot lease for Prosper Marketplace, a peer-to-peer lending company that opened a new office at Airport Tech Center, 4127 E. Van Buren St.

It is the first office outside the company’s San Francisco headquarters. The Prosper platform connects people who want to borrow money with people who want to invest money, offering an alternative to traditional banking institutions.

“They initially toured over 20 locations and buildings,” said Larry Downey, Vice Chairman for Cushman & Wakefield of Arizona. “Airport Tech Center gave Prosper Marketplace a central location within the city and great access to the transportation freeway corridors. This is a very functional building for them and gives them the flexibility and room to expand within the project.”

Located minutes from Phoenix Sky Harbor International Airport, the new location is currently recruiting, with plans to expand to 40 employees in its first year. The office will eventually employ about 150 people.

“The Prosper platform has grown more than 400 percent over the past year, and we expect continued growth in 2014. Prosper Marketplace is excited to open a new office in Phoenix to support our growth, and we are looking forward to being part of the local business community,” said Josh Tonderys, Chief Risk Officer, Prosper Marketplace.

“We are encouraged by the expansion of companies like Prosper Marketplace,” said Barry Broome, president and CEO of the Greater Phoenix Economic Council. “The new jobs that will be available at the Phoenix office show a transformative shift from traditional back office jobs, providing exciting new opportunities for the existing technical talent in the region.”

Downey and Curtis Chickerneo of Cushman & Wakefield represented the tenant. The landlord, Arden Realty Limited Partnership, was represented by Jerry Roberts and Corey Hawley of CBRE. Occupancy is in late July.

Galleria Corporate Center 1, WEB

Weebly expands to Arizona, signs 25KSF Scottsdale lease

Weebly, a website creation service based in San Francisco, has signed a 25,000-square-foot office lease at the Galleria Corporate Centre, 4301 N. Scottsdale Rd. The office space will serve as the company’s North American customer operations headquarters to support its growing customer base.

Weebly’s expansion to Scottsdale will have a significant impact on the city’s economy. T The total economic impact over the course of the five-year lease term is estimated to be $256 million, according to an economic impact analysis provided by the City of Scottsdale. The company plans to bring more than 250 new positions to the city over the next three years, and will support more than two million customers from its Scottsdale office location.

“We’re extremely excited to open our new customer operations headquarters in Scottsdale. There is an amazing pool of quality talent in the area,” said David Rusenko, co-founder of Weebly. “With support from the city and the Arizona Commerce Authority, we’re looking forward to building a world-class team to support the success of our customers globally.”

The location, in the heart of Old Town Scottsdale, will allow Weebly to hire local talent to lead customer sales and support operations. Roles will include: customer sales and support specialists, team leaders, trainers, quality assurance and additional roles to be added in the future. Each new employee will become part of the company’s larger mission to help anyone start their something and easily build a business, website, blog or online store.

“The expansion of Weebly to Scottsdale was a collective effort by the city and our regional economic development partners to continue building Scottsdale’s software and technology sector,” said Scottsdale Mayor Jim Lane. “I am very pleased to welcome Weebly to Arizona and to Scottsdale.”

“It’s very fulfilling watching innovative clients like Weebly expand beyond their headquarters to new locations throughout the country,” said Cushman & Wakefield Senior Director Jon Dishotsky of San Francisco, who leads Weebly’s brokerage team along with Ryan Bartos and Matt Coxhead of Cushman & Wakefield of Arizona, Inc.
“After scouting several markets, including Denver and Austin, we were thrilled to partner with our Arizona colleagues to secure a great expansion location at Galleria Corporate Centre. The space is not only centrally located in Scottsdale, but also part of a bustling 24-7 lifestyle center, a feature important to Weebly’s unique culture,” Dishotsky said.

“This is a huge win for Scottsdale,” Bartos said. “It is exciting to see a company like Weebly expand into the Arizona market and bring some vibrancy to an already strong and growing technology tenant base. We believe this trend will continue and we look forward to witnessing their future success.”

Weebly was represented by Dishotsky and Cutter MacLeod of Cushman & Wakefield’s San Francisco office and Bartos and Coxhead of the Phoenix office. The landlord, Stockdale Capital Partners, was represented by Bryan Taute of CBRE.
“Weebly was also fortunate to have the support and guidance of the Arizona Commerce Authority (ACA), Greater Phoenix Economic Council (GPEC) and Scottsdale Economic Development Department to assist in this expansion,” Dishotsky said.

Each month, 175 million people visit more than 20 million Weebly sites worldwide. In the U.S., 33 percent of the total Internet population visits a Weebly site each month, up from 25 percent in 2013. As more people embrace the concept of the personal economy and starting a business of their own, Weebly is seeing tremendous demand for its technology which enables anyone to easily and affordably create a high-quality website, blog or online store to bring their unique idea to the world.

“Globally-focused companies continue to choose Arizona to achieve their goals for growth, and our highly skilled and available workforce is among our key advantages attracting corporate investment and expansions to the state,” said Sandra Watson, President and CEO, Arizona Commerce Authority. “We thank Weebly for selecting Scottsdale to expand its operations, and are excited to see the company help more businesses across the U.S. connect with their customers and grow through Weebly’s innovative web and e-commerce platform.”

RMRM, LLC has leased 7,910 square feet of industrial space at Antigua Corporate Center located at 16681 84th Ave. in Peoria, Ariz.

CBRE releases recent lease transactions

CBRE’s Phoenix office has released the following recent leasing transactions for the metropolitan area:

Wells Fargo Tenant Advisors has renewed a 5,000-square-foot lease for office space at 12515 W. Bell Rd. in Surprise, Ariz. Kevin Calihan with CBRE’s Phoenix office represented the tenant. The landlord, Nellis Family Investments, LLC, was represented by Alan Davidson with Eagle Commercial Realty Services.

DNB Engineering, Inc. has leased 5,435 square feet of industrial space at 10 Chandler Business Park located at 580 N. 54th St. in Chandler, Ariz. Mike Parker, Evan Koplan and Mark Krison with CBRE’s Phoenix office represented the tenant. The landlord, North 54th Street Venture, LLC, was represented by James Harper with Cassidy Turley.

Cumming Construction Management, Inc. has leased 4,876 square feet of office space at14350 N. 87th St. in Scottsdale, Ariz. CBRE’s Kevin Calihan represented the tenant. The landlord, Miref Northsight, LLC, was represented by Sean Spellman with Cushman & Wakefield. This marks an expansion for the international project and cost consulting firm.

Dell, Inc. has renewed an existing 12,303-square-foot lease at 4747 N. 22nd St. in Phoenix, Ariz. CBRE’s Kevin Calihan represented the tenant. The landlord, Anchor Center II, LLC, was represented by Judy Tucker with Camroad Properties.

RMRM, LLC has leased 7,910 square feet of industrial space at Antigua Corporate Center located at 16681 84th Ave. in Peoria, Ariz. Mitch Stravitz, Cooper Fratt, John Werstler and Jerry McCormick represented the landlord, First Arrowhead Commerce Center, LLC. The tenant was represented by Tom Keck with West USA Realty.

Pathlight Investors has leased 4,067 square feet at 3131 E. Camelback Rd. in Pheonix, Ariz. Kevin Calihan with CBRE’s Phoenix office represented the tenant. Ray Harris with Cassidy Turley represented the landlord, Lincoln Property Company. The lease marks an expansion for the investment advisory firm.

ICSC image, Cushman Wakefield, WEB

ICSC RECon 2014 shares what’s in store

ICSC RECon 2014 lived up to the hype of being a busy convention packed with retailers and developers looking for their next deals.

Courtney Auther Van Loo is Associate Director | Retail Properties at Cushman & Wakefield of Arizona, Inc.

Courtney Auther Van Loo is Associate Director | Retail Properties at Cushman & Wakefield of Arizona, Inc.

More than 35,000 professionals gathered in Las Vegas to attend the show and the many cocktail parties that brokerage firms and owners host across the Strip.

Common trends continued to be smaller retail prototypes, redevelopments, mixed-use projects, outlet centers and social media. Multiple emails were sent out reminding attendees to use their social media tools to get the word out about RECON and company updates.

Arizona developers were back showcasing new developments as well as redevelopments; more so than in the previous few years. Multiple conversations with landlords discussed ways to break up larger vacant spaces to accommodate smaller uses and the right co-tenancy.

Many landlords continue to focus on ways to redevelop their current projects in order to bring more traffic and a stronger, more unique tenant mix.

The buzz continued from out-of-state developers looking to attract Arizona restaurant operators to their proposed projects as they have read and seen the success of Arizona restaurants and projects anchored by local operators.

Although some retailers continue to keep Arizona off their radar, there was an increased interest in tenants looking to expand their operations in Arizona as they see the market continuing to strengthen. Much of the interest was from restaurant operators and fitness users. There was additional interest from entertainment and grocery concepts not yet in the Arizona market.

Jackie Orcutt named Rising Star

Jackie OrcuttJackie Orcutt, Director of Industrial Properties at Cushman & Wakefield of Arizona, Inc., was named 2013 Rising Star at C&W’s Industrial Conference in New Orleans.

The award is given annually by Cushman & Wakefield’s Industrial Services Group to the rising star in the business that has raised their production and profile over the past year.

“Jackie was chosen from a list of many,” said John C. Morris, Executive Managing Director | C&W Industrial Services Lead for the Americas. “We are so proud of her progress and impact, and we are excited about watching her continue to excel. She is an important part of our future in Phoenix.”

Jackie Orcutt awardOrcutt joined C&W of Arizona in 2011. In 2013 she helped negotiate 96 transactions (69 in Arizona and 27 nationally) totaling 2.945 million square feet. The largest single transaction was representing Alliance Commercial Properties and American Realty Advisors in the lease of 147,486 square feet to Origami Owl in Chandler.

“It has been an honor to work with such incredible talent within Cushman & Wakefield – both locally and nationally,” Orcutt said. “I am grateful for the recognition and for the opportunity to grow our client relationships with the support of the C&W platform.”

Orcutt is a board member with AZCREW, is on NAIOP Arizona’s Best of NAIOP committee, the ULI Partnership Forum program and is a member of C&W’s Future Leaders Group.

Orcutt was named to Arizona Business Magazine’s Generation Next Forty Under Forty, and was a nominee in the brokerage categories for the RED Awards and Best of NAIOP.

Scott Offermann Joins Cushman & Wakefield

Scott OffermannScott Offermann has been named Managing Director | Critical Operations for Corporate Occupier and Investor Services (CIS) at Cushman & Wakefield of Arizona.

In his role, Offermann will oversee the delivery of critical operations for Cushman & Wakefield. His duties include providing support on requests for proposal (RFP) and providing technical guidance and support on critical operations including data centers, call centers, high-tech facilities and manufacturing facilities to the client-based teams.

Prior to joining the Phoenix office, Offermann was head of facility management in Tucson for a global client of Cushman & Wakefield, Symantec Corporation.

“Having been dedicated to a client for the past eight years, I am excited to join the corporate team to bring my knowledge and experience across all platforms and accounts,” Offermann said.

Chris Toci will present annual Phoenix market overview

Chris TociAn in-depth overview of the Metro Phoenix real estate market including the evaluation of demographic drivers, supply and demand, and trends will be presented by Chris Toci of Cushman & Wakefield of Arizona at the May event sponsored by the Arizona chapter of CoreNet Global.

The presentation by Toci, Executive Director for Capital Markets at Cushman & Wakefield, also will answer the question: What next?

The event is scheduled for Thursday, May 22, at Phoenix Country Club. Registration begins at 11:30 a.m. followed by Toci’s presentation from noon to 1 p.m. Price is $35 for CoreNet Global members and $70 for non-members and includes the program, lunch, and networking.

Since beginning his investment broker career in 1998, Toci has been a consistent top performer, earning accolades from both the local and national Cushman & Wakefield offices. In 2013 he closed on 10 investment sales totaling 1.805 million square feet for $278.8 million in consideration. He was Cushman & Wakefield of Arizona’s Top Producer of 2013.

To register, go to arizona.corenetglobal.org and click on the Arizona Chapter Events link.

Golden St. John joins Cushman & Wakefield

Golden St. JohnGolden St. John has joined the Retail Services Division at Cushman & Wakefield of Arizona, Inc. as a Director.

St. John has more than 10 years of real estate experience and is a licensed broker in Arizona. He began his career with a boutique retail consulting firm that specializes in the design and strategic tenant placement of high-profile projects in the market. He assisted in the lease up of some of the region’s premier retail centers including Desert Ridge Marketplace, Tempe Marketplace and Scottsdale Waterfront.

“Between the great group of people already established here in Phoenix and the numerous tools and level of support I’ve never before experienced, I’m positive that we’ll continue to develop our retail services team into one of the highest respected in the market,” St. John said.

St. John is a graduate of Northern Arizona University and is a Valley native.

USA Place, the new headquarters in Tempe for USA Basketball, will feature 180,000 SF of retail – including a grocery store on this corner. Cushman & Wakefield of Arizona has the retail leasing assignment.

RECon 2014 to address retail market trends

Courtney Auther Van Loo is Associate Director | Retail Properties at Cushman & Wakefield of Arizona, Inc.

Courtney Auther Van Loo is Associate Director | Retail Properties at Cushman & Wakefield of Arizona, Inc.

The good news for the Metro Phoenix retail market as 2013 ended was that net absorption topped 3 million square feet, up from 2.7 MSF in 2012.

Some of that momentum has carried over as vacancy in the Valley in 1Q 2014 declined 70 basis points over the same period last year to 10.3 percent. There has been more than 53,000 square feet of net absorption year to date with the North Phoenix market leading the way.

What lies ahead for the rest of the year?

Next week’s ICSC RECon 2014 will discuss trends, issues and even provide a look into the crystal ball as more than 32,000 retail real estate professionals converge on Las Vegas. RECon is the global convention for the shopping center industry. Trends and issues to be discussed:

>> The New Math: Online shopping has changed the modern shopper’s habits in adding another avenue to products. The Internet has allowed already time-constrained consumers to shop at all hours of the day with product sometimes arriving at their front door the next day. Many retailers have found ways to market themselves apart from other retailers by offering free shipping, online only offers and more.

Although many retailers continue to see an increase in productivity because of the ease and added shopping hours online shopping presents, we’ve also seen online shopping adversely affect retailers and the bricks-and-mortar developments. The adverse side has been the downsizing, consolidation and retailers closing the once-needed space or being unable to compete with online retailer pricing, thus affecting the way developers move forward with future development size.

>> Revitalizing a Challenged Center: A common trend in Metro Phoenix has been the revitalization of shopping centers and older buildings within our core markets. A number of local developers have found it fortuitous to purchase older buildings. It has become a hobby of sorts to purchase and peel the buildings back to their original state in order to expose the brick and wood tresses the buildings have to offer. By then adding some modern fixtures and anchoring the building with a local restaurant operator, the landlord has increased the rents and property values in the surrounding neighborhoods.

Additionally, landlords have taken advantage of purchasing mid- to high-vacancy shopping centers during the down market in order to reposition them with a new tenant mix and create cash flow. Others have been successful in giving their existing shopping centers a simple facelift and adding a restaurant or two to their tenant mix, thus increasing the rents, demand and property values in the surrounding areas. The tenant emphasis is on local restaurant operators with a mix of some regional and national flair.

>> Outlet retailing … Past, Present and Future: Metro Phoenix has seen the opening of two new outlet malls within the past two years – one in Glendale and one in Chandler. Additional outlets are planned. We can relate this trend locally and in the U.S. to shoppers being cash conscious while still wanting access to the brand names.

In turn, retailers see their sales increase as they’re not only able to access the full price shopper, but the outlet shopper as well while having less rent overhead in their locations. Outlet merchandise prices seem lower than what they are, thus driving shoppers to spend more than they normally would at a full-price store; a win for the retailer.

The outlet trend in Metro Phoenix has begun to affect national retailer’s expansion plans in Arizona. Retailers are beginning to see their outlet locations as competition to their full-priced store options. Consequently retailers are not only paying attention to the distance between their full-price stores, but their outlet locations as well.

>> The New Frontiers … A Look Back, and Forward: We will continue to see operators using social media to increase their sales. Operators see social media as a great resource to let their customers (followers) know of upcoming sales, special offers such as free shipping as well as marketing their merchandise by showing their customers who’s buying their products. We have a handful of local businesses that have seen their sales drastically increase over the past couple of years by using social media to market their products.


Latest leasing deals bring 3131 & 3133 Camelback to full occupancy

Cassidy Turley announced that it completed leases of 13,782 square feet with Kforce, Inc., 7,468 square feet with Lawyers Title, 6,293 square feet with GL Legacy Commercial Advisors, Inc., and 2,250 square feet for Newmark Realty Capital at 3131 and 3133 East Camelback Road in Phoenix.

Cassidy Turley Managing Director Trevor Klinkhamer and Senior Vice President Ray Harris represented the landlord, TR Camelback Corp. Chris Latvaaho of Cushman & Wakefield represented Kforce Inc.; Tom Imparato of Orion Realty Group represented Lawyers Title; Tom Jacobs of Cassidy Turley represented Newmark Realty Capital; and GL Legacy Commercial Advisors, Inc. was represented by Torrey Briegel of Phoenix Commercial Advisors.

“It’s very hard and unusual to lease a multi-tenant project of this size to 100%, and we believe this is a testament to the excellent location, timeless quality of construction and the excellent property management at 3131 and 3133” said Mr. Harris.

Built in 1998 and 1999, 3131 & 3133 Camelback is a Class A, multi-story office project. It is ideally located in the Camelback Corridor, on the southwest corner of 32nd Street and Camelback Road and is one of the most highly prized tenant addresses in the Phoenix metro area. The two-building property is in proximity to Arizona SR 51, Interstate 10, and 202 freeways and Phoenix Sky Harbor International Airport. Convenient to the recently renovated Biltmore Fashion Park, Ritz Carlton Hotel and many fine restaurants including Central Bistro, Tarbells, Donovan’s Steakhouse, Capital Grille, Tomaso’s, True Foods, Hillstone, Stingray Sushi, Seasons 52, Christopher’s & Crush Lounge, and Chelsea’s Kitchen. For more information contact: Trevor.Klinkhamer@cassidyturley.com or Ray.Harris@cassidyturley.com.

Dick's Sporting Goods distribution warehouse, Goodyear

Industrial Evolution: West Valley poised for land grab

Dick’s Sporting Goods built a 720KSF distribution center in Goodyear to service its West Coast stores.

A California-based investor erected a 400KSF spec shell in Surprise’s Southwest Railplex business park.

Corporate giants, Macy’s, Amazon, Sub-Zero, Marshall’s/TJ Maxx, Southwest Products and WinCo have landed or expanded their vast West Valley industrial operations within the last two years.

Even more companies are eyeing potential stakes in the burgeoning industrial parks springing up in once sleepy bedroom communities west of Phoenix.

With the recession in their rear-view mirrors, local, national and international companies are revving up manufacturing and distribution operations, and the West Valley is poised to be a big beneficiary of their expansion plans.

Justin LeMaster, Cushman & Wakefield

Justin LeMaster, Cushman & Wakefield

Available and affordable land, a deep labor pool, business-friendly state and local governments and top-notch transportation corridors contribute to the West Valley’s desirability, said Justin LeMaster, Cushman & Wakefield’s director for industrial properties.

Farsighted developers are already master-planning vast spreads of land, setting up infrastructure and even building large-scale spec structures that can accommodate another industrial giant or get sliced and diced to accommodate several smaller operations.

The developers — along with city and state economic development specialists — want their properties primed to snag the business when the lookers become movers, LeMaster said.

“Smart, creative developers will make the West Valley a successful high-growth market for years to come,” he said.

The numbers confirm the trend.

An impressive 4.5 MSF — nearly 94 percent of the metro area industrial construction started or completed in 2013 — is in the West Valley, according to Jones Lang LaSalle’s Q4 Industrial Report.

Q4 absorption was 1.96 MSF, and only 15.3 MSF of the West Valley’s 90.7 MSF total industrial inventory was still available at year’s end.

Nevertheless, 4.5 MSF is a significant amount of new inventory for a post-recession market, and, in fact, it boosted Valleywide industrial vacancy rates above 12 percent.

Anthony Lydon, Jones Lang LaSalle

Anthony Lydon, Jones Lang LaSalle

Industry experts aren’t worried.

“The new, grown-up, industrial tenants coming to market right now are looking for 300KSF, 400KSF and above,” said Anthony Lydon, Jones Lang LaSalle managing director for Supply Chain & Logistics Solutions.

Less than half of the West Valley’s available space meets that criteria, and a few big employers could snatch that up in a flash, he said.

Like LeMaster, Lydon expects that to happen sooner rather than later.

“Over the next 24 to 36 months, the Valley, and the West Valley in particular, will see significant new job creation,” he said.

So what makes the West Valley suddenly so attractive to the industrial users?

“Economics and location,” said Pat Feeney, CBRE senior vice president for industrial services.

Cost is key
Of the metro area’s three major industrial hubs ­— the airport area, the Tempe/Chandler corridor and the West Valley — the first two are nearly out of developable land, Feeney said. And scarcity makes that land pricey, especially for a large user.

Pat Feeney, CBRE

Pat Feeney, CBRE

A skilled and diverse labor force that moved west when the home builders did is another major factor, he said.

“Nearly 70,000 people live in Goodyear, but only 14,000 or 15,000 work in Goodyear,” Feeney said.

When big employers like Sub-Zero, Amazon and Macy’s held job fairs for their new West Valley digs, they typically attracted eight to 10 qualified applicants for every position, he said.

“They all shared that they were so happy they could pick the cream of the crop,” Feeney said. “It’s a really big draw.”

David Krumwiede, Lincoln Property Company

David Krumwiede, Lincoln Property Company

Staffing a large warehouse is a major economic concern, especially for companies with labor-intensive, e-commerce picking systems, said David Krumwiede, executive vice president for Lincoln Property Company, which owns 6 MSF in its four-state Desert West Region, 2.4 MSF of that in the West Valley, including Goodyear AirPark and 10 Lincoln.

Arizona’s main competition for the big industrial users looking to establish or expand operations in the West is California’s Inland Empire, Krumwiede said.

While the Inland Empire’s construction costs are comparable to Arizona’s, labor costs in Arizona, a right-to-work state, are much lower, he said.

“We are extremely competitive with California’s Inland Empire if a user has more people than trucks,” Krumwiede said.

And big energy consumers, such as companies employing sophisticated e-commerce logistics technology, can save as much as 30 percent to 40 percent in operating costs by locating in Arizona instead of California, Lydon said.

But possibly the biggest economic incentive for many industrial users is Arizona’s much more favorable tax basis, Krumwiede said.

All of the West Valley’s large planned business hubs have designated areas that are Foreign Trade Zone capable, and that’s a big selling point for companies that do significant international business in parts or products, Krumwiede said.

“If a company qualifies, it can see a 72 percent reduction in property taxes,” Feeney said. “It’s a tremendous benefit.”

And a benefit none of the nearby states can offer, he said.

Such issues make Arizona, especially the West Valley, where land is available and affordable, a clear economic winner over California.

Location, location, location
Second only to the West Valley’s attractive economics, is its advantageous location, less than half-a-day’s drive from the southern California ports — a major consideration for retailers and e-commerce leaders like Amazon, as well as manufacturers like Sub-Zero, according to the experts.

Rob Martensen, Colliers International

Rob Martensen, Colliers International

“If you can get out of traffic and get closer to the ports in Los Angeles and Long Beach, you can make that in six hours,” said Rob Martensen, Colliers International vice president.

That means truck drivers can log a round trip and still stay within federal guidelines regarding length of time on the road, a feat not so easy to accomplish from the East Valley.

And for companies distributing products regionally — Macy’s or Dick’s Sporting Goods, for example — the completion of the Loop 303 will forge the final freeway link that can speed trucks to and around cities and states north and west of Phoenix.

“It will open the gateway,” LeMaster said. “Companies want to be in Phoenix, and the West Valley will be the industrial hub of Phoenix with the (Loop 303/I-10) interchange.”

Overall, the combo of favorable attributes will ensure the West Valley lands on the short list for large and small industrial users for the next decade or so, Krumwiede said.

“The companies that are already out there — Amazon, Target, Costco, PetSmart, Staples, Macy’s — are all household names. It’s a great start. We’ll see more of those,” he said.

“My vision is that a lot of that vacant land will be put into production in the next five to 10 years.”

USA Place includes a 390-room Omni International hotel, 65KSF events center and exhibit hall, 545 Class-A apartments, 180KSF of street level retail, 240KSF of office space and underground parking. Rendering courtesy of Concord Eastridge.

Valley sports venues a slam dunk for developers

The Valley is already home to the largest concentration of Major League Baseball fields, used during the Cactus League Spring Training, but even more sporting venues are breaking ground and with them a variety of mixed-use retail, hospitality and multi-family developments. USA Place, Avenue Shoppes at P83 and Riverview Park are such milestone investments in the Valley. Between the three projects, more than three-quarters of a billion dollars is coming out of the ground next to major sports venues. There’s something to be said about the generating return of investment when a few months of star-quality use also needs to spur another eight to 10 months of revenue.

The key behind the three projects is that developers are focused on what happens when USA Basketball and Major League Baseball Spring Training games are not filling the stadiums. It’s the “off-season” activities that return the investment and ensure successful revenue streams. These are “they’re coming; now we can build it” developments. However, each has its own business plan for success.

A City Built Around a Campus

Susan Eastridge, Concord Eastridge

Susan Eastridge, Concord Eastridge

When USA Place, the largest of the trio, broke ground in February, it became the second-largest Phoenix Metro project under construction. Its $450M price tag is second only to the nearby $600M Marina Heights project. Designed by Future Cities, one of the development partners, and Architekton, the single-phase project is being built by Turner Construction. CBRE is handling the office and residential leasing; Cushman & Wakefield is leasing the retail.

The joint venture that is USA Place LLC is run by Scottsdale-based Concord Eastridge. CEO Susan Eastridge says the project is the ultimate urban mixed-use development. Located on the future Tempe trolley line, USA Place is the new home to USA Basketball and Arizona Interscholastic Athletics. When it comes to filling the venue, AIA and landlord Arizona State University are the ones who will keep the 65KSF events center filled 10 months of the year. Eastridge says there are already 200 events a year locked into the facility.

Alisa Cutright-Thompson, Concord Eastridge

Alisa Cutright-Thompson, Concord Eastridge

“This is a community where people can literally live, work and shop,” explains project manager Alisa Cutright-Thompson. “We have retail shops, apartments for professionals, the events center, meeting space and a hotel in a single urban complex.”

“We’re building something that ASU and Tempe have wanted — a class-A hotel and mixed-use community,” says Eastridge.

“The AIA will fill the center with more than 200 events per year. Conferences and meetings from the hotel will fill the rest. The residents will connect with the shops.”

The high-rise, full-service hotel- and tallest building in Peoria- will have 140 rooms and likely carry a Hilton brand. The restaurant-retail complex will include more than 245KSF in space. The city is paying $30M for the twin parking garages that PSP LLC will build. Avenue Shoppes at P83. Image courtesy of Peoria Sports Park, LLC.

The high-rise, full-service hotel- and tallest building in Peoria- will have 140 rooms and likely carry a Hilton brand. The restaurant-retail complex will include more than 245KSF in space. The city is paying $30M for the twin parking garages that PSP LLC will build. Avenue Shoppes at P83. Image courtesy of Peoria Sports Park, LLC.

A Venue for Westsiders
One of the largest projects in the West Valley will be the $150M mixed-use retail and hospitality development called the Avenue Shoppes at P83. Anchoring the main gate of the Peoria Sports Complex, the project brings life to the P83 entertainment district the city is trying to create.

“This is going to be a destination,” says Peoria Sports Park LLC managing member Michael Oliver. The Peoria-based developer says his personal experience is what led to the vision for the facility. “There are no entertainment and shopping destinations in Peoria. We’re going to anchor this with a complex that is in a category falling between Scottsdale Fashion Square and Kierland Commons. It will be a place to go and stay, not just shop and run.”

The development includes city-funded parking garages and a 140-room, high-rise hotel. Not including the rooftop bar, there are 245K SF for restaurants and shopping. PSP is looking at a major flag for the hotel, which will be set on top of the retail complex on city-owned land.

The Avenue Shoppes will start construction in the next year and is estimated to costing $150M. Michael Baker Jr. Inc. is handling design duties; a contractor has not been selected. CBRE is consulting on leasing.

The Cubs Park stadium has touches of Wrigley Field. The bricks behind home plate and the scoreboard are replicas of the same facilities at the Chicago ballpark. The Sheraton Hotel and Wrigleyville will be east of Cubs Park. Photo by Eric Jay Toll.

The Cubs Park stadium has touches of Wrigley Field. The bricks behind home plate and the scoreboard are replicas of the same facilities at the Chicago ballpark. The Sheraton Hotel and Wrigleyville will be east of Cubs Park. Photo by Eric Jay Toll.

Mesa ‘Ville Plans Year-Round Action
“This is new money in the market, and it’s a destination with both regional and local opportunities,” says Mesa Mayor Scott Smith about the showcase Cubs Park and hometown Riverview Park complex nestled against the Loop 101 and 202 freeways in northwest Mesa. “It’s the anchor for a lot of activity,” he adds. “Wrigleyville’s hotel and shops provide an opportunity for conferences and sports events.”

The city invested more than $90M into Cubs Park and another $30M into the recreation and sports facilities at Riverview Park. Structures, Inc., and Powers Hotel Corp. will build a full-service Sheraton Hotel next to Cubs Park, along with 20K SF of retail space in the first phase.

Construction starts this summer and developer Bob Yost expects it to be completed in time for the Super Bowl. Structures Inc., with Yost as CEO, is handling the design-build. It’s estimated that the hotel-retail project will cost more than $60M, but no one from Structures would confirm the price tag.


Cushman & Wakefield Research Shows Continued Progress for U.S. Industrial Market

Construction Pipeline Ramps Up to Meet Strengthening Demand

Robust absorption, declining vacancies and rising rental rates reflect continued progress for the U.S. industrial real estate market through the first quarter of 2014, according to commercial real estate services firm Cushman & Wakefield’s latest research findings, released this week. And while tightening supply may have contributed to a slowdown in leasing velocity through January, February and March, the nation’s industrial construction pipeline has ramped up to meet strengthening demand.

 Cushman & Wakefield’s John Morris, leader of Industrial Services for the Americas

Cushman & Wakefield’s John Morris, leader of Industrial Services for the Americas

“First quarter performance continued the notable progress industrial real estate experienced in 2013,” noted Cushman & Wakefield’s John Morris, leader of Industrial Services for the Americas. “Domestic manufacturing continues to gain traction, driving increased production and shipments, and electronic fulfillment continued to expand. As a result, the economic environment for our sector is the best we have seen in many years.”

In fact, industrial space occupancy gains rose 31 percent year over year, with 30.5 million square feet of absorption, compared to 23.2 square feet in the first quarter of 2013. Atlanta led the nation, with 5.1 million square feet of absorption, followed by the Inland Empire, with 4.6 million square feet. The U.S. overall industrial vacancy rate continued to trend down, ending the quarter at 7.4 percent, 80 basis points lower than one year ago.

“Availabilities are dwindling, especially in the highly competitive big-box market,” Morris noted. “This is holding industrial leasing in check. Only 11 out of the 38 markets tracked by Cushman & Wakefield posted increased activity year-over-year.”

Greater Los Angeles continued to lead the nation in leasing volume, with 7.7 million square feet in activity through March (down 16 percent year over year), followed by Dallas/Fort Worth, with 6.8 million square feet (up 13 percent year over year). Seven markets posted double-digit gains during the first quarter, with Northern New Jersey up 43 percent year over year, and Philadelphia recording a 74 percent increase.

A shortage of top-tier industrial space has placed continued upward pressure on rents. Average asking rates grew in most major markets tracked by Cushman & Wakefield, with the national direct average climbing from $5.73 per square foot to $6.03 per square foot during the past 12 months. Houston led the way with a 10.3 percent year-over-year average rent increase.

“The supply/demand imbalance also continues to fuel construction activity, including both build-to-suit and speculative product,” Morris noted. “Virtually all of the top markets are seeing construction pipelines return to near pre-recession levels.”

Dallas/Fort Worth and California’s Inland Empire are leading the nation in construction, with 16.5 million square feet and 14.8 million square feet of total volume, respectively. In Dallas/Fort Worth, 14.4 million square feet of that total is being built on spec. Of the 85.8 million square feet of total development expected to be completed nationwide by year-end 2014, 51.7 million square feet is speculative.

“Moving forward, we are watching a number of private sector developments that will likely add near-term momentum to the industrial real estate market’s positive trending,” Morris said. “Among them, we anticipate a continuing revival of the housing sector, the activation of pent-up consumer demand and rising export volume. Most importantly, we are beginning to see a shift in business attitudes and a greater willingness to take risk, which will lead to stronger employment growth and increased investments in people and equipment.”

* Indicates change in “percentage points” from prior year (not percent).


Nexius Solutions Relocates to Gilbert

Cushman & Wakefield of Arizona, Inc. helped negotiate the relocation of Nexius Solutions to a 20,982-square-foot facility at 377 S. Hamilton Court.

Nexius Solutions, which provides end-to-end wireless services to prominent carriers and data-driven industries, will relocate from 2601 S. 37th St. in Phoenix. Nexius takes occupancy this month.

“The new site for Nexius provided them better access to their customers,” said John Grady. “Also, occupying the entire freestanding building was appealing to the company.”

Grady and Jackie Orcutt of Cushman & Wakefield represented the tenant. Eric Jones of Commercial Properties represented the landlord.

201 West, WEB

Cushman & Wakefield Sells $27.35M in Multi-Family Properties

Cushman & Wakefield of Arizona, Inc. negotiated the $27.35 million sale of Mill Pointe and 201 West, a pair of multifamily properties, located at 4130 S. Mill Ave. and 201 W. Hermosa Dr., respectively.


Mill Pointe was built in 1980 and contains 22 buildings and 218 units. 201 West was built in 1973 and contains 16 buildings and 223 units. The properties are a combined 346,476 square feet and were 94 percent occupied at the time of the sale.PR-Mill Point


Bank of America Community Development in Dallas sold the properties to Gelt Inc. of Los Angeles. The sale price brought $62,018 per unit, which equates to $78.94 per square foot.


“This strategic acquisition gives the buyer the opportunity to acquire an asset with strong existing cash flow and rental upside in a great, long-term location at value significantly below replacement cost,” said Jim Crews with Cushman & Wakefield.


Crews and Brett Polachek of Cushman & Wakefield negotiated the transaction.

Farina,Patti, WEB

Cushman & Wakefield Promotes Patti Farina to Director

Patti Farina has been promoted to Director at Cushman & Wakefield of Arizona, Inc.

Farina, who joined Cushman & Wakefield in 2011 as Senior Portfolio Manager in the Property Management Division, will oversee the management of the office’s industrial property portfolio, said Greg Valladao, Market Leader of C&W of Arizona.

“We are pleased that Patti has accepted an expanded role in our organization.” Valladao said. “Her knowledge and experience with industrial property/asset management is unsurpassed in the industry.”

During her tenure at C&W, Farina has played an integral role in growing Arizona’s industrial property management portfolio to 13 million square feet. In her new role, which begins immediately, she will be working closely with Victoria Knudson, national lead of C&W’s Industrial Property Management portfolio.

“This is a tremendous opportunity and I couldn’t be more excited for Cushman & Wakefield and the industrial team,” said Farina, who has more than 18 years experience in the commercial real estate industry working with institutional and non-institutional clients primarily in industrial. “The passion within C&W to grow our industrial portfolio is amazing.”

Prior to joining Cushman & Wakefield, Farina was Senior Real Estate Manager at CBRE, overseeing its industrial portfolio. She held a similar position at The Trammell Crow Company.

Key assignments include the Clarion Partners industrial portfolio, the Industrial Income Trust portfolio, and the Cabot Properties portfolio.

Farina has an Arizona Real Estate License, Real Property Administrator (RPA) and LEED AP designations and is a member of the Building Owners and Managers Association (BOMA) Greater Phoenix chapter.

Cathy Teeter, WEB

Catharine Teeter joins CBRE as director of operations

CBRE has announced that Catharine Teeter has joined the firm as its Director of Operations for Arizona and the Intermountain Region. In this role she will partner with the firm’s market and regional leadership to develop and implement strategic priorities for operations.

”I am thrilled to welcome Cathy to the team. She is the perfect complement to our team of best-in-class professionals,” said Craig Henig, CBRE’s senior managing director and Arizona market leader. “Her years of experience coupled with deep market knowledge will make her a pivotal asset as we work to continue to provide unrivaled service to our clients. I’m looking forward to partnering with her as we develop and implement initiatives that will move us ever closer to our vision of making CBRE a world-class organization.”

Teeter comes to CBRE after 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, 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.

Agave Center

Cushman & Wakefield Sell Agave Center for $29.6M

Cushman & Wakefield of Arizona, Inc. has negotiated the $29,593,000 sale of the distinctive five-building office/flex development project known as Agave Center.

Agave Business Center (55,221 rentable square feet), located at 8945 S. Harl Ave., is 71 percent occupied and enjoys one of the largest remaining blocks of potential “creative” space along the I-10 corridor.

Agave Corporate Center, located at 1711 W. Greentree Dr., is a two-story professional office building containing 86,115 rentable square feet that is 98 percent occupied.  Agave Executive Center contains 78,405 RSF in three buildings, located at 17211, 1725 and 1729 W. Greentree Dr. The three buildings are 95 percent occupied.

Collectively, the five-building project was developed in 2000, accounts for 219,741 RSF, and is more than 90 percent occupied.

An entity owned by certain funds managed by Westport Capital Partners LLC, sold the project to Dornin Investment Group of Laguna Beach, Calif.

“Westport Capital Partners LLC did an exceptional job of executing its business plan several years ahead of schedule and Dornin Investment Group has been eyeing the Phoenix market for office acquisitions and was waiting for the right opportunity to enter the market,” said Chris Toci of Cushman & Wakefield.

Toci, Chad Littell, and Ryan Bartos of Cushman & Wakefield represented the seller in the transaction.

CFA Cabinetry, WEB

Cabinet Supplier Leases Remaining 63,840 SF at SW Phoenix Warehouse

CFA Cabinetry, LLC, a wholesale seller of kitchen and bathroom cabinetry, signed a five-year-plus lease for the remaining 63,840 SF at Freeport Center, 420 S. 53rd Ave., Phoenix.
The Koss/Louer Team, featuring principals Stein Koss and Tom Louer of Lee & Associates Arizona represented the landlord, Overton Moore Properties. Keri Amrhein Scott with Cushman & Wakefi eld represented the tenant, CFA Cabinetry.
The Koss/Louer team assisted Overton Moore Properties (OMP), a Gardena, CA-based development company with the purchase of the property earlier this year. OMP acquired this asset under its newly formed venture with Pacifi c Coast Capital Partners and an institutional partner. The venture is committed to acquire $80M to $100M of industrial real estate in the Phoenix market within the next two to three years. The recently closed transaction marked Overton Moore’s entry into the Phoenix commercial real estate market.

The building features 30-foot clear height, dock high loading, heavy industrial (A-2) zoning and a secured yard with fencing around the entire property. The Freeport Center is located in the heart of the Southwest Valley industrial market with proximity to Interstate 10.

CFA Cabinetry, WEB

CFA Cabinetry Relocates to 64KSF Space in Southwest Phoenix

CFA Cabinetry, a wholesaler of kitchen and bathroom cabinetry, is nearly doubling its warehouse and distribution space with a relocation to 420 S. 53RD Ave.


Cushman & Wakefield of Arizona, Inc. negotiated a five-year lease relocating CFA to a 63,840 SF facility. The company is expanding and relocating on May 1 from its 32KSF facility in Deer Valley at 1725 E. Williams Rd.


“The relocation to a larger facility will allow CFA Cabinetry to grow its business,” said Keri AmRhein-Scott of Cushman & Wakefield. “With the continued rebounding of the housing industry, the Southwest Valley will continue to do well as companies like CFA absorb more space.”


AmRhein-Scott and John Grady of Cushman & Wakefield represented CFA Cabinetry in the lease transaction. Overton Moore Properties of Gardena, Calif., the landlord, was represented by Stein Koss of Lee & Associates. The lease brings the property to 100 percent occupancy.