Tag Archives: DeRito Partners

ecommerce

E-commerce opens retail channels

It’s estimated that U.S. e-commerce sales will be $278B in 2014. By 2016, that spending will be $327B — a 62 percent increase in five years, according to Forrester, Inc. estimates. Yes, that’s a drop in the pool of the U.S. retail market (about 3 percent). However, it’s not one that brick-and-mortar retail brokers are ignoring. Local brokers weighed in on how Phoenix can and should adapt to the changing channels of retail real estate.

“People have a tendency to separate e-commerce from brick-and-mortar stores. The retailer of the future has to learn to adapt to do both,” says Velocity Retail Group Executive Vice President Darren Pitts. “The strong retailers of the future will continue to evolve with a multi-channel, often referred to as an omni-channel approach, that takes advantage of various sales mediums including mobile devices, the internet, catalog, as well as brick-and-mortar.”

De Rito Partners’ Brokerage President Stan Sanchez says e-commerce will affect the way business is conducted but not replace store-front appeal to some customer groups.

“Service-oriented businesses and daily needs stores will always have a role in commercial real estate, because those tenants can’t be replaced by online retailers,” he says.

“While some may think that e-commerce threatens brick-and-mortar venues, the truth is it simply adds a new dynamic to the location, the size, and the type of real estate these businesses are looking for.”

E-commerce is shifting many retailers into smaller stores and creating more flexible shopping centers, says JLL Vice President of Retail Tyson Switzenberg.

“While e-commerce and technological innovations threaten certain retail models like bookstores or video stores, it’s not the whole story and does not represent all retailers,”adds Switzenberg.

What’s an important trend in retail that people should be watching?

Stan-SanchezStan Sanchez
President, De Rito Partners
One of the most important trends to emerge in retail, along with e-commerce, is the growth of buying power from groups such as millennials and Hispanic consumers. These two groups are growing at a rapid rate and control an enormous (over $1 trillion in consumer spending) amount of purchasing power. The key for retailers is learning the purchasing habits of these groups and making adjustments to their purchasing characteristics. Many see millennials as a segment of society that is in-tune with technology. For retailers, the goal is to take advantage of integrating that technology into physical stores and to track their customer’s buying habits to help increase the bottom line.


DarrenPittsDarren Pitts
Executive Vice President, Velocity Retail Group
Personalized offers or information provided to a shopper when they enter a store and sent directly to their mobile device. These offers are specific to the customer’s purchasing pattern and only for their use while they are in the store. Another trend is retailers who use their stores as fulfillment centers. As an example, if a customer wants a particular type of shirt but it is not in the store they are physically in, but in another, they can have it shipped directly to their home. The retailer controls their inventory better, and the customer gets what they want.


Switzenberg_TysonTyson Switzenberg
Vice President, JLL
Experiential retail. Retailers need to give shoppers a good reason to make an in-person visit to their stores—to go beyond a simple retail transaction that shoppers can do virtually anywhere. Customers are looking for an experience. Some retailers practicing this include: Apple Store: the “Genius Bar” offers hands-on troubleshooting, where customers can interact with friendly, trained experts in a unique, designated space; Flix Brewhouse: As America’s Cinema Brewery, this retailer combines the latest Hollywood productions, custom crafted beer and great food – all served “in theater” and a la carte basis so that the experience can be customized.

SheaScottsdale_10653NScottsdaleRd.

Karlin Real Estate Sells Scottsdale Neighborhood Center for $44.5M

Cassidy Turley announced the completed the sale of Shea Scottsdale to an entity formed by Jerry Simms for $44.5M. Shea Scottsdale, 10653 N. Scottsdale Road, is a 160,228 SF retail center anchored by Safeway and CVS Pharmacy. The seller was Karlin Real Estate, based in Los Angeles.

Executive Managing Directors Michael Hackett and Ryan Schubert with Cassidy Turley Capital Markets Group represented Karlin Real Estate. Marty DeRito with DeRito Partners assisted the buyer.

“Shea Scottsdale is one of the premier neighborhood centers in the Southwest,” Mr. Hackett said. “The buyer saw tremendous value in the stability and long term growth available in purchasing an asset of this quality.”

The center was built in 1994 and was 95% leased at the time of sale. The transaction included all in-line space as well as additional pads with freestanding structures, including Wells Fargo, McDonalds, MidFirst Bank, Jason’s Deli and Arby’s.

Mr. Hackett and Mr. Schubert sold Shea Scottsdale and an adjacent 117,025 SF retail center Shea Scottsdale East, 7366 E. Shea Boulevard, to Karlin Real Estate in October 2011 for $50.32M. At that time the two centers had a combined overall occupancy of 85%. Karlin Real Estate has retained ownership of Shea Scottsdale East.

rsz_48th&chandler

De Rito Partners' Recent Commercial Transactions

 

De Rito Partners, Inc. releases its recent commercial transactions:

>>Jimmy John’s expanding with new location in Gilbert

Jimmy John’s Gourmet Sandwiches leased 1,600 SF at the Encore Plaza at the SEC corner of Gilbert and Baseline roads. Adrienne Bryant and Bill Bones of De Rito Partners, Inc. represented the landlord in signing the lease.

>> Tortas Paquime to open at Market Place on Central

Tortas Paquime finalized a lease for 1,360 SF at the SEC of Central and Dunlap avenues. Lizette Fonseca of De Rito Partners, Inc. represented the tenant in the lease. Tortas Paquime specializes in sandwiches called tortas and other Mexican specialties.

>> School of Rock set to open second location in Ahwatukee

School of Rock, a music school offering private lessons and group rehearsals, leased 2,328 SF at The Shops at Kohl’s in Phoenix (Ahwatukee). The center is at the SWC of 48th St. and Chandler Blvd. Gordon Heckaman and Patrick Salcido of De Rito Partners, Inc. represented the landlord in the lease.

>> Zia Records to open a new location in Tempe

De Rito Partners, Inc. brokers Adrienne Bryant and Bill Bones represented the landlord in signing a lease for 10,380 SF at Huntington Square in Tempe. Zia Records, specializing in selling music, movies and more, will move into the center located at the NEC of Southern and Mill avenues.

>> Naber’s Neighborhood Bar & Grill to join Chandler Pavilions

Naber’s Neighborhood Bar & Grill will take over the former Ernie’s restaurant at Chandler Pavilions located at the SWC of 54th St. and Ray Rd. Paul Serafin of De Rito Partners, Inc. represented the landlord in signing the lease for 7,575 SF.

>> General Dentistry 4 Kids opening new location in Phoenix

De Rito Partner’s, Inc. brokers Lizette Fonseca and Chris Corso represented the landlord in completing a lease located at the NWC of 35th and Glendale avenues. The deal was for 7,264 SF for the dentistry which caters to babies, toddlers and kids of all ages.

>> Urban Wear to open first location

Urban Wear signed a lease for 1,478 SF just west of the NWC of 19th Ave. and Camelback Rd. in Phoenix. This will be the retailer’s first location. Adrienne Bryant and John Trujillo of De Rito Partners, Inc. represented the landlord in the deal.

>> Nail Rainbow opens under new ownership in Gilbert

Nail Rainbow signed a lease for 1,060 SF at the NWC of Gilbert and Warner roads in Gilbert. Gordon Heckaman and Morey Fischel of De Rito Partners, Inc. represented the landlord in the lease.

>> State Farm Insurance renews lease in Central Phoenix

Adrienne Byrant and Roger Brevoort of De Rito Partners Inc. represented the landlord in renewing a lease for State Farm Insurance west of the NWC of Central Ave. and Roosevelt St./Portland St. in Phoenix. The lease was for 947 SF.

>> Tio Rico Te Ayuda expanding near Central Phoenix

Tio Rico Te Ayuda Financial Centers to open another location at the NWC of 24th and Roosevelt streets in Phoenix. The lease is for 1,200 SF at the complex located just off Loop 202 and Interstate 10. Trevor Clinch of De Rito Partners Inc. represented the landlord in the deal.

>> Barro’s Pizza opening new location in Mesa

Barro’s Pizza completed a lease to move into the Superstition Promenade at the SWC of McDowell and Power roads in Mesa. De Rito Partners Inc. broker Michael McWilliams represented the landlord in signing the lease for 4,000 SF.

>> Former Wendy’s Sold in Phoenix

De Rito Partners Inc. broker Martin Leon completed the sale of a former Wendy’s Restaurant at the SEC of 28th Ave. and Indian School Rd. in Phoenix. The deal was for a 2,399 SF freestanding restaurant with drive-through.

>> Batting cage complex opening in Casa Grande

Hit Zone, a batting cage complex, will be opening a location in Casa Grande at the NEC of Florence Blvd. and Amarillo St. The deal was for 8,460 SF at the Casa Grande Center. John Trujillo and Trevor Clinch of De Rito Partners Inc. represented the landlord in the deal.

>> Wells Fargo Pad Sold in Surprise

A 1.65-acre Wells Fargo pad was sold in Surprise just south of the SWC of Cotton Lane and Greenway Rd. The pad is across from a Fry’s Food and Drug Store and located in a growing trade and residential area. De Rito Parterns Inc. agents Steve Bonnell, Bill Bones represented the seller; Paul Serafin and Bruce Milton represented the buyer in the deal.

>> Chopsticks Express opens second location

De Rito Partners Inc. brokers Bruce Milton, Justin Rihs, and John Palmieri represented the landlord in signing a lease to Chopsticks Express. The deal was for 1,500 SF at Cooper Crossing located east of the southeast corner of Cooper and Baseline roads in Gilbert.

 

Kachina Cadillac building in Chandler.

De Rito Partners Announces April Commercial Transactions

 

De Rito Partners announces its April commercial transactions:

>> PHOENIX SCUBA TO RELOCATE, EXPAND IN NEW LOCATION

Phoenix Scuba leased 3,850 SF at the Siete Square Shopping Center east of the SEC of 43rd Ave. and Bell Rd. Paul Serafin and Kyle Walters of De Rito Partners, Inc. represented the tenant in signing a 5-year lease at the center located in Glendale.

>> SENTIMENTAL JOURNEY ANTIQUES TO OPEN IN HEART OF CAREFREE

De Rito Partners, Inc. brokers Trevor Clinch and John Trujillo represented Sentimental Journey Antiques in signing a lease at the Mariachi Plaza in the heart of Carefree. The deal is for 850 SF at the SWC of Tom Darlington Dr. and Cave Creek Rd.

>> MANKAVE SUPPLIES TO OPEN NEW LOCATION IN AVONDALE

ManKave Supplies finalized a lease for 1,200 SF at the North Central Plaza in Avondale. Lizette Fonseca and Carl Jones, Jr. of De Rito Partners, Inc. represented the tenant for the lease located south of the SEC of Central Ave. and Van Buren.

>> NEW ASU CAMPUS BAR TO OPEN AT SUNSTOP PLAZA

Twisted Sisters leased 3,322 SF at Sunstop Plaza on the NEC of Apache Blvd. and Terrace Rd. in Tempe. The tenant will be opening a new Arizona State University campus bar and is slated to open in the fall of 2013. Justin Rihs and Marty Olejarczyk of De Rito Partners, Inc. represented the tenant in the 5-year lease.

>> HEALTH, WELLNESS CENTER COMING TO FAIRWAY PARK PLAZA

De Rito Partners, Inc. brokers Lizette Fonseca and Carl Jones, Jr. represented Marta Lepe and Fidel Amador, owners of a yet to be named gym, in signing a lease for 4,511 SF at Fairway Park Plaza Shopping Center in Phoenix. The tenant will open a health and wellness center at the plaza located at the SEC of 59th Ave. and Indian School Rd.

>> EARNHARDT CADILLAC MOVING TO CHANDLER

Earnhardt Auto Group purchased Kachina Cadillac and 7.9 acres of land at the Chandler Auto Mall at the NWC of Loop 202 Freeway and Gilbert Rd. The Earnhardts plan on moving the Cadillac dealership to Chandler in early 2014. Martin Leon and Marty De Rito of De Rito Partners, Inc. represented both the buyer and the seller.

 

De Rito Partners - Dale Harsh

New Agent Gives De Rito Partners a Presence in Northern Arizona

De Rito Partners hired Dale Harsh, giving the company a presence in Northern Arizona.

Harsh comes to De Rito with more than 25 years experience in the real estate industry, having started his own company in 1986. From a one-man start, his business grew into 3 offices and 30 agents by the late 1990s.

Throughout his career, Harsh has trained agents in all aspects of the business, successfully brokered more than $100M in transactions, and built and sold real estate companies.

His experience includes all areas of real estate; development, construction, investment sales and managing/securing financing for real estate projects. He has worked with local, regional, national and international companies in projects involving retail, office, land development and industrial/manufacturing.

He has also represented municipalities, school districts, banks, utility companies and various trusts. Internationally, Harsh consulted and brokered island properties, resorts and farms in the Caribbean country of Belize. He attended Kansas University and has more than 300 hours of continued Real Estate License required education.

“I am excited to have Dale’s ‘boots on the ground’ in the Northern Arizona market offering the same extensive level of service currently being provided in Metro Phoenix,” said Stan Sanchez, President of De Rito Partners.

Harsh will cover Sedona, Verde Valley, Cottonwood, Prescott and Flagstaff in addition to the Phoenix area.

For more information on De Rito Partners, visit their website at www.derito.com.

Todd Holzer, NAIOP-AZ - AZRE Magazine September/October 2010

NAIOP-AZ Chairman Todd Holzer Provides Leadership At Crucial Time

After more than a quarter century in commercial real estate, Todd Holzer, chairman of NAIOP-AZ, has been witness to many industry ups and downs.

Holzer began his career with Opus Southwest in Phoenix and San Diego. After 12 years at Opus, he moved on to DeRito Partners, where he spent eight years developing retail projects. Now in his sixth year at Ryan Companies US Inc., specializing in office and industrial projects and overall marketing for its Southwest regional operation, Holzer says market conditions in Arizona make for some intriguing times.

“Two things that I find interesting about our local market: First, the volatility of the Metro Phoenix market has to be among the greatest of all major U.S. markets,” Holzer says. “It seems that in my career, the overall market conditions for office and industrial have either been on fire or in the dumps. There are days I wish we were a little more steady, like some other Ryan offices in the Midwest. The feast-or-famine scenario we have can be an emotional and economic roller coaster for those in the business.

“Secondly, and again unfortunately, I always think about what could have been a very cool, relevant Downtown Phoenix. Despite some good vision out of the City of Phoenix political leaders, we are still a metro area that has grown outward with sprawl. I wonder if true urbanism can happen here. Most people live here to take advantage of activities that are suburban in nature: golf, hiking and other outdoor activities that don’t occur in a downtown setting.”

Holzer takes the reins at NAIOP-AZ during rocky economic times, but he says he is up to the challenge. When he started at Opus, he joined NAIOP-AZ mainly for networking purposes.

“When I moved into retail development, I spent more time and energy in other organizations such as ICSC, Valley Partnership and ULI,” he says. “But when I came to Ryan with an office and industrial focus, I decided that I needed to get back into NAIOP and take on a leadership role.”

Holzer has been on NAIOP’s local board of directors for five years and on the national board for three. After about two years on the local board, he was asked to take on the time and challenge of training for his eventual role as chairman.

“I have served under a few visionary and hard-working chairmen that have given me the experience to run the local chapter in what are very challenging times,” he says.

Holzer is not one to dwell on the negative. Instead, he says focus should be put on the quality of projects being built today, including NAIOP-member LEED certification initiatives.

“I take my hat off to some developers in our market that build with quality and with vision,” he says. “RED Development building CityScape and SunCor building Hayden Ferry are great projects that went to a level that most developers would not go.

“In my opinion, there has not been an increase in the quality of office projects over the last 15 to 20 years. The granite exterior projects built in the ’80s and early ’90s have stood the test of time. Most developers don’t build true quality because they are building to the level requested by the tenant and user market, and tenant and user groups have been fixed upon cost rather than quality and amenities.

“On the other hand, industrial projects have been built in the last cycle to a much higher standard of function than in the past.”

Among those higher standards is building to LEED specifications and the move toward more energy-efficient projects. Nationally, Holzer says, NAIOP has become fully engaged in LEED initiatives by having educational events tied around the green movement, with the major event being an annual conference dedicated to energy-efficient development. Phoenix hosted the conference a few years ago.

“Locally, we are giving awards to the best energy efficient new development each year at our Best of NAIOP event,” he says.

Examples of recent projects, Holzer cites, are Liberty Property Trust and its Scottsdale building for Vanguard; Lincoln Property Company and the Arizona Game and Fish Department building; Ryan’s 3900 E. Camelback building; and Hines’ office building at 24th Street and Camelback. There also are numerous local municipal and higher-education projects that have been built to LEED standards.

For those in the commercial real estate industry preparing for the future, Holzer offers this advice:

“At the present time, our industry is going through a monumental change,” he says.

“Speculative development will not re-appear for approximately five years in the Valley, so new development will be way down and that side of the business will not be hiring. People and companies will need to reinvent themselves. Take your strengths and use them in different ways within our industry.

“We are still the fifth-largest city in the country and our role as a major place of commerce in the Western U.S. will continue to grow.”

Holzer predicts 2011 will be a sequel of 2009 and 2010; users and tenants are price sensitive and looking for deals.

“We are in a period where land, rents and construction costs are on sale,” he says. “Those with a long-term approach and sufficient funding can solve real estate needs at very attractive costs.”

Some of the biggest challenges Holzer sees in 2011 are lack of capital and nominal job growth. The industrial sector needs capital to be available to companies for expansion and purchasing of inventories and equipment, he says, and the office sector is tied to job creation.

“Unless we can get local and national job creation to pick up dramatically, high-vacancy rates and shadow space inventory will continue with us,” Holzer explains. “The main challenge facing most sectors of commercial real estate is the national political scene and the decisions coming out of Washington, D.C. There is too much uncertainty currently for small business owners to make real estate decisions.”

For more information about NAIOP-AZ and Todd Holzer, visit naiop-az.org.

AZRE Magazine September/October 2010

Mega Retailers

Mega Retailers Provide Optimum Outdoor Opportunities

Gone Fishing

Mega retailers provide optimum outdoor opportunities, but how do cities lure them here in the first place?

By Mica Thomas Mulloy

Glendale and Mesa may as well be bringing amusement parks into their respective towns. Upcoming additions to the cities are expected to draw millions of visitors each year—many traveling from hours away—and infuse hundreds of millions of dollars into municipal coffers. But it isn’t Disneyland and Six Flags opening their doors in the Valley; rather outdoor mega-retailers Cabela’s Inc. and Bass Pro Shop.

gone_fishingCabela’s plans its grand opening at the end of August in the Zanjero Business Park near Glendale’s Westgate City Center. Bass Pro Shop recently broke ground in Mesa’s super-sized Riverview retail center at the confluence of loops 101 and 202. Both sporting megaliths are highly coveted and, much as IKEA put Tempe on the retail destination map, are expected to edge West and East Valley commerce opportunities toward retail nirvana.

Born in the ‘War Room’
Cabela’s opens in the midst of Glendale Arena and Cardinals’ stadium to offer West Valley residents a super supply of hunting, fishing and outdoor gear. Cabela’s spokesman David Draper says when his company looks for a retail location, executives first examine their mail-order customer base. They literally pinpoint their customers on large maps in their retail “war room” and determine if there is a large enough demand. With countless recreation opportunities in Arizona and metropolitan Phoenix, Glendale was a good match. “Obviously there is a great opportunity there,” Draper says.

Cabela’s purchased a 28-acre site in September 2005 and anticipates hosting 3 to 5 million customers in its first year. The store will feature acres of sporting displays, a freshwater aquarium and a centerpiece mountain replica complete with running waterfalls and streams.

The retailer received some help along the way—Glendale foot the bill to add necessary infrastructure as a development incentive. “The way we look at it, we are bringing something to the area,” Draper says. “To put our store there, we are going to need some infrastructure.” Glendale Economic Development Director Karen Thoreson says the city agreed to build public improvements based on the calculated financial boom Cabela’s should bring: an estimated $34.6 million in tax revenues over 10 years. “It’s bringing in a lot of business around it, it’s bringing in a lot of people who have never been to this side of the Valley,” she says.

Thoreson believes the area will experience supplementary benefits upon the mega-retailer’s arrival such as more than 1 million annual tourists and the addition of 300 new hotel rooms worth $30 million. “People come to Cabela’s like they come to Disneyland,” she says.

How to Land a Retail Giant
Marty DeRito, DeRito Partners CEO and Riverview developer, wanted to kick off the 250-acre commerce center with a unique anchor tenant. With that in mind, he, project partner Kimco Developers and Mesa economic officials started pursuing IKEA and Bass Pro Shop. When IKEA signed on with Tempe, all focus moved to Bass.

DeRito notes Bass Pro Shop, which sells everything outdoors from boats to bait, was interested, but also looked elsewhere in the state and toward California for their next location. “I had as much competition from other states as I did locally,” he says.

A Mesa contingency traveled to the International Council of Shopping Centers convention several years ago to meet with Bass Pro Shop executives and tout what Mesa, and the entire region for that matter, had to offer the retailer.

DeRito said Riverview will ultimately house three to five auto dealerships, 1.5 million square feet of retail space, 400,000 to 500,000 square feet of office and commerce facilities and two hotels. The center is expected to employ 5,000 to 6,000 people, making it one of the largest employers in the region.

After two years of negotiations, Bass Pro Shop was hooked and signed a letter of intent. Larry Whiteley, Bass Pro Shop manager of corporate public relations, says regardless of what a developer offers, all the puzzle pieces must fit together perfectly before the retailer makes a move. “They could offer the moon, but it still has to be right for us,” he says. “We have to research it ourselves and find out if there is a built-in customer base.” Bass looks at the number of hunting and fishing licenses sold in an area, zip code reports of catalog sales and the area’s outdoor activities. Whiteley says in Mesa’s case, everything fit. “We wouldn’t be considering this and doing this if we didn’t feel confident with this,” he says.

With Bass Pro Shop now on board, DeRito Partners and Mesa came to terms on an incentive package for the project. Developers agreed to front $42 million needed to get the center on its feet with the possibility of earning that money back in coming years with shared retail-generated sales taxes.

AZ Business MagazineDeRito says if the center, and therefore the city, makes money, the developers earn some of their down payment back. If not, it is the developer who will suffer, not the tax payers.

Mesa Economic Development Management Assistant Scot Rigby says the incentive package is a win-win situation for Mesa, and the region as a whole. “Since you’re performing, since you are truly becoming a benefit to the city, you are eligible for these types of incentives,” he says of the plan’s structure.

Rigby believes Bass Pro Shop’s agreement to build in Mesa speaks volumes not only for the store and local citizens, but also the economic viability of the entire valley. “The region is showing national retailers that they need to be in Arizona if they are going to be successful in their plans as a business,” he says. “It’s too big of an area for them to overlook now.”

www.cabelas.com
www.basspro.com

Arizona Business Magazine Aug/Sept 2006