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ChandlerCorpCenter, WEB

Chandler Corporate Center sells for $13.9M

Capital markets experts in the Phoenix office of JLL have completed the $13.914 million sale of Chandler Corporate Center I, a 67,561-square-foot Class A office property in Chandler, Arizona. The sale price breaks the $200-per-square-foot mark for suburban office space—a significant indicator according to JLL.

JLL Senior Managing Director Dennis Desmond represented the property seller, Chandler HFP, LLC, an affiliated entity of Held Properties, a California real estate development firm. Palisades Capital Realty Advisors is the property buyer. JLL Managing Director Dave Seeger serves as the project’s exclusive leasing broker and partnered with Desmond to market the property for sale.

“This building came out of the ground in 2008 and has outperformed the Phoenix and Chandler markets ever since,” said Desmond. “This includes through the toughest office market recession we’ve ever experienced. That is evidence of the strength of the Chandler market and was a tremendous draw for investors looking for stable acquisition properties located in high-growth markets.”

According to JLL research, in the four years from 2009 to 2012, Chandler was responsible for 66 percent of Greater Phoenix’s total office space absorption. At year-end 2013, Chandler Corporate Center I was only 8.5 percent vacant, compared to an overall Chandler submarket office vacancy rate of 13.9 percent and an overall Phoenix office market vacancy rate of 23.9 percent.

“When it comes to the velocity of our recovery, Chandler is definitely one of our market’s bright stars,” said Seeger.

Chandler Corporate Center I is located at 585 N. Juniper Drive in Chandler, northwest of Chandler Boulevard and McClintock Drive, and with direct access to the Loop 101 and Loop 202 freeways, and the burgeoning Price Road technology corridor. The two-story building totals 67,561 square feet with a 6.63/1,000 parking ratio, modern office construction and benefiting from the area’s highly educated labor pool.

JLL will retain the leasing assignment at the property and assume the property management responsibility.

JLL Report

As Phoenix Suburban Office Markets Recover, Skyline Poised to Follow

“Game on” seems to be the sentiment of Phoenix office tenants as they continue to bounce back from the recession, albeit with smaller work spaces that must achieve greater efficiencies with a reduced footprint. Suburban office markets—primarily in Tempe, Chandler and the Camelback Corridor—that are close to employees and offer higher-density parking are leading this trend, according to JLL’s Spring 2014 U.S. Skyline Review. (see link below)

“The Phoenix Skyline experienced the full force of the recession, and most of its tenant base shed jobs and reduced their real estate footprints in response,” said Dennis Desmond, Senior Managing Director in the Phoenix office of JLL. “But Phoenix jobs are returning, and with them a steady growth in occupancy that is tightening and pushing rental rates Valley-wide. Over the next several years, we expect this to have the same impact on the Downtown and Midtown Skyline submarkets.”

JLL’s proprietary Skyline report identifies and tracks micro-segments of 43 city centers across the nation. The Skyline features Trophy and Class A buildings where tenants and investors focus demand for office space in a flight to quality and efficiency. (Check out the themes that shape the U.S. skyline.)

Though the direct vacancy rate for Phoenix’s Skyline still sits at 22.9 percent, sights are set on rapidly improving Skylines across the nation—where competition for office properties in 2013 propelled the national vacancy level to an average 13.4 percent.

“If you look at the JLL Skyline Clock, Phoenix sits squarely between the ‘Bottoming Phase’ and the ‘Rising Phase’,” said John Bonnell, Managing Director in the Phoenix office of JLL. “This is a perfect storm for tenants who appreciate the price differential, central location and amenities that Downtown and Midtown have to offer. It’s an opportunity that we remind our clients about constantly, and one that we expect to continue throughout 2014, since new construction is also very limited.”

In spite of tightening market fundamentals, construction activity in Skylines across the nation remains low. Seven U.S. Skylines—including Phoenix—show no current development. Two Skylines indicate just one proposed project.

”The lack of development is causing a space crunch on each end of the spectrum,” said John Sikaitis, Managing Director of Research at JLL. “Trophy properties are far outperforming the broader market with respect to occupancy levels and rents, and a similar tightening exists in value-add properties. This squeeze from both ends is expected to have a significant impact on the properties in the middle as tenants are being priced out of their former go-to options.”

Read Phoenix_Skyline_Report

dennis desmond - AZRE Magazine May/June 2012

After Hours with Dennis Desmond

Dennis Desmond

  • Managing director, Jones Lang Lasalle
  • Born in Chicago
  • Attended Loyola Marymount University (Los Angeles), where he received a BS in personal and industrial relations
  • Married to wife, Kathleen, for 38 years
  • Dennis Desmond has been with JLL for 2 years; has been in commercial real estate for more than 30 years

Responsibilities
Dennis Desmond leads the investment sales practice within the Capital Markets Group of Jones Lang LaSalle’s Phoenix office, specializing in office investment sales for institutional clients and private owners of real estate.

Favorites
SPORTS TEAM: Arizona Diamondbacks, Chicago Cubs and Chicago White Sox
ACTIVITIES: Baseball games and time with my grand kids.
DESTINATIONS: I’m Irish, so Ireland tops my list. My favorite spots are Kinsale and Dingle. Both are small, picturesque coastal seaport cities.

What did you think you’d be when you were growing up?:
A major league center fielder. My goal was to play in Yankee Stadium. I fell a little short — played minor league ball for two years for the Coos Bay/ North Bend A’s.

What accomplishment are you especially proud of?:
Our children (son, Ryan, 34; daughter, Megan, 32). They are wonderful people.

What would people be surprised to know about you?
I’m a two-time cancer survivor of Non-Hodgkin’s lymphoma. I was diagnosed 15 years ago and told there was no cure. My advice to others: “Enjoy every day.” Desmond also served 8 years as a special agent in the U.S. Secret Service. In between protection assignments, he investigated forged U.S. Savings Bonds and worked in Washington, D.C., during Watergate.

For more information on Dennis Desmond at Jones Lang Lasalle, visit Jones Lang Lasalle’s website at joneslanglasalle.com.

Knowing more about the people we work with is the fun side of the business. It helps start conversations and strengthens business relationships. To nominate a colleague, request an After Hours form from Peter Madrid, peter.madrid@azbigmedia.com.

Dennis Desmond

Dennis Desmond, Jones Lang LaSalle, Phoenix Market Observations

Dennis Desmond, Senior Managing Director – Phoenix of Jones Lang LaSalle, shares observations about the Phoenix market that came out of ULI’s 2011 Real Estate Summit at the Spring Council Forum, held May 18-20 at the Sheraton Phoenix Downtown


Though the past year-and-a-half have been eerily quiet on the Phoenix commercial real estate investment front, 2011 is reflecting a clear uptick in buyer interest that has most industry experts confident about our return to the capital markets playing field.

This sense of re-emergence was echoed at last week’s Urban Land Institute (ULI) Real Estate Summit– an event that brought together top decision makers and industry experts to discuss the future of real estate and how companies can best operate within that future. Forums highlighted the opportunities that are emerging through Phoenix’s market recovery, efforts to diversify the Phoenix economy and the drivers of that diversification. A strong turnout of investors from across the country attended Jones Lang LaSalle’s client events, with a generally upbeat attitude about the future of our CRE marketplace.

Different investor groups are showing varying degrees of interest. Institutions are looking at Phoenix’s numbers but are holding back. They are focusing on the biggest cities like New York, Chicago and San Francisco until Phoenix can provide similarly competitive returns.

Conversely, investors who have “been here, done that” are returning to Phoenix to look and often buy,
An example from earlier this month is the Scottsdale Center, a 164,000-square-foot, Class B building in a Class A location on Scottsdale Road. Within days of a teaser announcement from JLL for this asset, more than 130 confidentiality agreements were signed. The bids on that property underscore the general belief that Phoenix will recover in earnest over the next two to three years.Dennis Desmond

Most investors participating in offerings like this one are located in nearby markets like Colorado, Texas or Southern California. They have owned Phoenix assets before, are aware of our market swings and instead focus on the strong fundamentals for future potential. Investors understand that the highest returns may go to those who acquire properties now, while we’re bouncing on the bottom, in anticipation of the approaching recovery.

Desmond DennisDennis Desmond is Senior Managing Director for the Phoenix office of Jones Lang LaSalle. He is responsible for directing the firm’s office and industrial landlord representation, research and capital markets teams, as well as pursuing local and national investment opportunities as head of the company’s Phoenix Capital Markets Group.

To reach Dennis Desmond, call (602) 282-6300 or email him at dennis.desmond@am.jll.com.