Cushman & Wakefield of Arizona, Inc. negotiated a creative, long-term lease for an international martial arts client, finding it a new home in an industrial building. The lease is part of an overall trend for destination retail users to select more cost-effective industrial space.
Gracie Barra, a global Brazilian Jiu Jitsu school, signed a long-term lease for 4,486 square feet at 16033 N. 77th St., Suite B and took occupancy this month. It is the first location in the Valley for Gracie Barra, which has schools in Tucson and Flagstaff. Gracie Barra offers advanced programs, black belt programs, fundamental programs, future champions programs, women’s programs and private training.
“It’s interesting to see retail tenants transitioning into industrial complexes,” said Keri Scott, Associate with Cushman & Wakefield’s Industrial Properties group. “It’s a more cost-effective way for retail tenants to still be successful in an aggressive market like Scottsdale. This market in particular, has a lack of retail product. Destination retail users are not as reliant on pedestrian traffic and street-front visibility, so these industrial options offer a great opportunity.”
Retail sales and retail leasing in Scottsdale have been very active since the beginning of the year. Four of the top five retail sales and two of the top four leases in 2015 have taken place in the Scottsdale submarket.
Scott and Dan Casey of Cushman & Wakefield represented Gracie Barra in the transaction. The landlord, MJD Investments, LLC of Gilbert was represented by Kevin Roos of Roos Realty Partners LLC.
Cushman & Wakefield of Arizona, Inc. completed the $14.275 million sale of Dwell Apartment Homes, 1923 N. 70th St.
The complex was constructed as two separate projects 1963 and 1975. They were later unified as one apartment complex. The recently renovated Dwell Apartment Homes development contains 193 modernized apartment units totaling 22,455 square feet ($116.35 PSF). The property, which includes 32 buildings, is 93 percent occupied.
3rd Ave. Investments of Phoenix purchased the property from FPA Multifamily, LLC, of San Francisco. The buyer acquired the property with an $11.48 million loan provided by Brandon Harrington and Matt Steffen of Walker & Dunlop in Phoenix.
“This community offers a modest interior rehab opportunity in an up-and-coming transitional neighborhood in South Scottsdale that synergizes with SkySong and the renaissance of the McDowell Road Corridor,” said Jim Crews, Senior Director with Cushman & Wakefield.
According to Cushman & Wakefield’s mid-year market overview, Metro Phoenix continues to experience job growth, adding 55,200 jobs in the past 12 months. Unemployment in the area declined to 4.6 percent, which is 90 basis points below the national average. Scottsdale, where Dwell Apartment Homes is located, has been a significant area of demand for office users.
Crews and Brett Polachek with Cushman & Wakefield’s Southwest Multifamily Advisory Group successfully marketed the property for sale and negotiated the transaction. No additional brokers were involved with the sale.
Cushman & Wakefield of Arizona, Inc. negotiated a long-term sublease for DialAmerica Marketing, Inc. at Riverpoint, located at 3100 E. Broadway Rd.
The transaction is for a new DialAmerica call center in the Valley. DialAmerica, headquartered in Mahwah, N.J., will occupy 50,267 square feet of office space at Riverpoint Building No. 2. The company’s lease has taken effect and operations are being DialAmerica is one of the nation’s largest outbound and inbound contract call center companies. It has 21 call centers throughout the U.S.
“The central location, along with the existing buildout that included furniture, fixtures and equipment in place, was a perfect ‘plug-and-play’ opportunity in getting their operation up and running,” said Larry Downey, Vice Chairman | Tenant Advisory Group with Cushman & Wakefield of Arizona.
Downey represented DialAmerica in the transaction. The sublessor, the University of Phoenix, was represented by John Bonnell, Brett Abramson and Matt Hersh of JLL.
“It was a pleasure working with Larry Downey and the entire Cushman & Wakefield team,” said Vito Porcelli, Property Manager for DialAmerica. “Subleases can be very tough when working with multiple parties, but they managed to complete this deal in record time.
DialAmerica is in the process of hiring up to 150 agents between now and the end of the year and they will enjoy working in a state-of-the-art call center.”
Cushman & Wakefield of Arizona, Inc. negotiated a 19,015-square-foot lease for HPOne at Reserve at San Tan, Phase I, located at 275 E. Germann Road.
HPOne, headquartered in Trumbull, Conn., will now have two offices in the Valley. It currently operates a Phoenix office off the Black Canyon Highway. Founded in 2006, HPOne is a health insurance sales and marketing firm with brokerage operations licensed in all 50 states. It focuses on sales of Medicare and individual and family health insurance plans.
“The tenant chose this second site in the Valley based on quality and quantity of an employee pool in close proximity to the property,” said Michael White, Senior Director in the Office Properties group at Cushman & Wakefield. “There are numerous amenities in the area including more than 1.5 million square feet of retail and easy access to the Loop 202.”
“We’ve been extremely happy with our ability to attract and retain qualified employees for our Phoenix office,” said Bill Stapleton, Founder and CEO of HPOne. “When it came time to choose a location for additional expansion, the options for us in the Valley made the decision easy.”
White, along with Scott Garlick and John Fish of C&W’s Tampa office, represented the tenant in the transaction. The landlord, GPC Reserve LLC of Phoenix, was represented by Mike Garlick of Newmark Grubb Knight Frank.
Banner Health is an existing tenant in the building. HPOne takes occupancy Aug. 1.
John Kirby has joined the Valuation & Advisory group at Cushman & Wakefield of Arizona, Inc. as Director.
Kirby has 11 years of experience in commercial real estate appraisal-related work, including litigation support. He previously worked at CBRE, where he was a Senior Appraiser for six years. Kirby also was a commercial appraiser with the Scott Niebling Valuation Group in Phoenix.
“John is an integral addition to our V&A group in the Phoenix office,” said Jo Dance, MAI, CCIM, Managing Director | Regional Manager for Cushman & Wakefield of Arizona. “His skills enhance our existing staff of experienced appraisers as we strive to provide best in class services to our clients.”
Kirby is a Certified General Real Estate Appraiser in Arizona, New Mexico and Nevada, and holds an Arizona State Real Estate license.
A native of California, Kirby earned a Bachelor of Arts degree in Anthropology from California State University in Fullerton.
Cushman & Wakefield of Arizona, Inc. recently negotiated a lease expansion for Western Refining at Papago Buttes Corporate Plaza, located at 1250 W. Washington St. The expansion results in the company occupying an entire four-story, 105,000-square-foot building.
Western Refining has agreed to lease 17,723 square feet of additional space on the fourth floor of the West Washington Street office structure. The firm took the opportunity to expand its administrative offices when two previous tenants chose to vacate the property. The company will take occupancy of the additional space this summer.
Western Refining is an independent refining and marketing company operating refineries in El Paso and Gallup, New Mexico and a retail segment that includes service stations and convenience stores in Arizona, Colorado, New Mexico and Texas. Western Refining, Inc. also owns the general partner and approximately 66% of the limited partnership interest in Western Refining Logistics, LP and is the general partner of approximately 38% of the limited partnership interest in Northern Tier Energy LP.
“This expansion opportunity enabled Western to accommodate our growth where we already have a successful tenancy,” said Gary Hanson, Vice President of Corporate Communications at Western Refining. “The additional square footage will allow us room for future expansion as more growth opportunities become available.”
Larry Downey of Cushman & Wakefield of Arizona served as exclusive tenant representative for Western Refining in the transaction. Tony Hepner and Janet Herlyck of Metro Commercial represented the landlord.
Cushman & Wakefield of Arizona, Inc. completed the $2,825,000 million sale of the Charter Palms Apartments, 1220 N. 44th St.
The complex was constructed in 1974 and contains 74 apartment units totaling 60,400 square feet ($46.77 PSF). The property, which includes five buildings, is 69 percent occupied.
Plaza de Vista, LLC of Tempe purchased the property from Realty Partners Charter LLC of Phoenix.
“The property has quite a bit of deferred maintenance that the buyer plans to take care of while also improving the quality of the asset,” said Brett Polachek, Senior Director with Cushman & Wakefield.
Polachek and Jim Crews of Cushman & Wakefield successfully marketed the property for sale and represented the seller. The buyer was represented by Brock Danielson of K.W. Commercial.
Cushman & Wakefield
Years with company: 2
Years as ICSC member: 9
What is the biggest issue facing shopping center real estate?
We’ve seen a few larger tenants close or downsize their business due to the competition of internet sales and a decrease in consumer spending. This left many big boxes available with little business options to backfill the spaces.
How have consumer attitudes affected the retail commercial real estate market?
Consumers have moved to online shopping, which is one of the reasons for the downsize in business size as well as store closings. Locally, we’ve seen an increase in adaptive re-use projects due to the consumers moving to in-fill areas and wanting a unique experience while shopping/dining.
What was your most significant deal in 2013?
The deals we’re doing in Fiesta Mall. It’s significant because I’ve never leased a mall before…leasing mall space during the holiday season has been a great learning experience.
Griffin Capital Essential Asset REIT of El Segundo, Calif., paid $54.5M for a two-building office campus in Northwest Phoenix, according to Chris Toci, Executive Director with Cushman & Wakefield of Arizona, Inc.
The 232,648 SF buildings at 25500 and 25600 Norterra Parkway are fully occupied by a Fortune 500 company. The two buildings are part of a 573-acre master plan campus, adjacent to the USAA Phoenix Campus.
Located along Interstate 17 at Happy Valley Road, the property is within the Deer Valley submarket, which houses more Fortune 500 companies than any other area of Metro Phoenix.
“This is the second large acquisition in Phoenix for Griffin Capital in recent months,” Toci said. “The REIT acquired a sizable AVNET building in Chandler earlier this spring. These assets provide the buyer with incredibly strong tenants in large facilities with long-term occupancy plans. As our market rebounds from recession conditions, these assets will surely provide impressive appreciation for the investors.”
The Corporate Campus at Norterra also benefits from surrounding retail amenities offered at Shops at Norterra and Happy Valley Towne Center. This amenity base provides abundant retail, entertainment and dining options.
Griffin Capital Essential Asset Reit purchased the property from an affiliate of USAA Real Estate Company. Toci represented the seller in taking the asset to market and successfully procured Griffin Capital as a buyer.
Toci, Chad Littell and Tim Whittemore of Cushman & Wakefield of Arizona, Inc. handled the transaction, in conjunction with Mike Beall of Cassidy Turley in Phoenix.
Cushman & Wakefield of Arizona announced the sale of 6700 W. Morales Place in Chandler, an industrial facility that houses Avnet Global Solutions. The purchase price was approximately $32.5M.
Cushman & Wakefield Executive Director Christopher E. Toci represented the seller, Fort Properties of Los Angeles and procured the buyer, Griffin Capital Essential Asset REIT of El Segundo, Calif.
The 222,086 SF building houses light assembly and integration processes for Avnet, one of the largest distributors of electronic components and technology. Avnet, Inc. is headquartered in Metro Phoenix and operates several facilities throughout the city.
The property was a build-to-suit project constructed by Ryan Companies US in 2008. Avnet signed a 10-year lease for the property at the time of the building’s completion. Ryan Companies sold the project to Fort Properties, Inc. of Los Angeles in July 2008.
Griffin Capital Essential Asset REIT, affiliated with Griffin Capital Corp., made the purchase with AVNET’s current lease extending until April 30, 2018.
“This has been a unique sale, involving investment complexities not typically experienced in simple transactions,” Toci said. “This involved converting multiple ownership shares into future investment vehicles, while certain shareholders liquidated with cash. Both entities benefited from this sale with Griffin acquiring a well-designed, newer building that houses a very committed, strong credit tenant.”
Cushman & Wakefield announced Larry Downey has been named Vice Chairman, a title reserved for an elite few throughout the firm’s worldwide offices.
The distinction marks the first time in the 25-year history of the company’s Phoenix office that an individual has been assigned that designation.
“The Vice Chairman title honors Cushman & Wakefield professionals who stand out as top performers, both in production and fulfilling the core values of our firm,” says Tom Johnston, senior managing director of Cushman & Wakefield of Arizona, Inc.
“In order to be considered for this distinction, professionals must not only be perennial top producers, but exhibit leadership, a genuine commitment to collaboration, mentorship of our future leaders, exemplary client reviews, and a strong history of dedication to charitable causes. Over the years, Larry has excelled in each category and elevated the importance of the Phoenix market to the firm.”
Larry Downey is a 28-year veteran of the commercial real estate industry. He represents both tenants and building owners.