Tag Archives: ICSC

X Team booth, courtesy of Velocity Retail

ICSC RECon 2014: Retail poised for expansion

The 2014 ICSC event in Las Vegas has successfully wrapped up, and initial reports are that the retail industry is poised for continued expansion. The attendance was up from last year with the attendee count reaching close to 40,000. Having experienced the last 5 years of our annual convention during the economic downturn, this year was a welcome change. It was encouraging to see people spending their time talking about what is going on for the future and reviewing new sites. Discussing business. Not the past.

The ominous cloud that has darkened many markets for the past five years has appeared to have lifted. Looking around the convention hall there were site plans on every table, conversations were about new deals as retailers and developers are preparing for a measured expansion in the coming years.

Velocity Retail Group a member of X Team International, a network of experienced retail partners throughout North America. With over 35 offices and 400 professionals we are able to understand the market from a global perspective. Some states such as Texas, California and Florida have strong growth and are back to their pre-recession activity level. This is contrasted by a few other markets that are still feeling the economic effects of recent years.

In the Phoenix market we still have a ways to go, but we are finally rebounding with several economic indicators pointing toward positive growth. Forbes magazine projected Arizona to have the fastest job growth at 3% annually over the next five years, and Moody’s Analytics forecasted Arizona to expand to a U.S. best of 4.6% annual economic growth. A myriad of retailers and restaurants are opening their first stores in the Phoenix area with several more exploring future expansion plans.
The retail market is frozen no more. Phoenix vacancy rates continue to improve, and should finally break back into the single-digits by the beginning of 2015. In fact at that time, most of the retail submarkets in Phoenix except for the Central and Southeast Valley will be considered to be in a healthy position. The big-box sector, with 265 vacant big boxes will continue to be a source of concern. Our company has invested in new technologies, resources, and personnel. We are prepared for the next wave, and are expecting a big one.

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.

metrocenter, WEB

The Magic’s in the Makeup: The Shopping Centers of the Past Are the Future

From fresh paint to new market positions, shopping centers are pumping in deferred dollars to greet the returning retail dollars.

“When things stay the same, that’s scary,” says Stan Sanchez, president and partner of De Rito Partners, about the shift in the Arizona shopping center marketplace. “There’s no doubt that location, location, location is still most important for retail site selection. The difference is that the market for the location is shifting.”

Sanchez and his company recognized the shift in the markets surrounding properties they own and manage, and post-recession activity is freshening those properties.

“There’s two parts to all the activity going on,” says Dave Cheatham, president of Velocity Retail Group. “It’s not a wave of renovation; it’s a combination of catching up with deferred maintenance and updating properties for the market.”

Gordon Keig, senior vice president at Kornwasser Shopping Center Properties, LLC, agrees, but with a slightly different take.

“Building in a growth area ties up your money for as much as three years,” he says. “Finding a good value in an older property and turning it around is a lot more appealing because you are working with a current cash flow.”

Although the proverbial “location, location, location” is still good, the property’s market has changed. Demographics shifted in Arizona markets from the time many shopping centers were built. Throughout 2013, the media bemoaned the plight of aging shopping centers or predicted the scraping and redevelopment of obsolete retail corners.

“I don’t see that happening,” says Cheatham. “In the Phoenix and Tucson markets, we have challenges with empty big boxes, and those are being adapted to alternative uses. Shopping centers, even distressed centers, are changing to match the market.”

Kornwasser bought the  Southgate Mall late in 2012 and has plans to tear down the main building in the 346,000 SF mall then rebuild it with smaller, contemporary outward-facing stores.

“There is shrinking demand for retail space,” he says. “Even with the reduced square footage, we’ll have a more functional, efficient and valuable property.”
At the other end of the spectrum are looks.

“Lipstick,” chuckles Sanchez, “Some properties just need a little lipstick – painting, landscaping and a facelift.”

From De Rito’s platform, Sanchez is involved with upgrading its properties, overseeing enhancements of properties managed and in some cases, running the redevelopment efforts.

“It was more than lipstick for Pavilions (Loop 101, Indian Bend and Pima roads in Scottsdale),” he says. “It was a large-scale redevelopment of the property.”
Countering the downsizing trend, De Rito Partners took the center from 900,000 SF to 1.4 MSF.

“Redevelopment in this market requires innovation and creativity. We changed paving, landscaping and facades,” Sanchez lists the upgrades to the Valley’s original power center. “We’ve got a modern look and changed the property to fit the changing market.”

This may be the most important mantra for retail property owners for the second half of the decade: changing the property to fit the changing market. Keig, Sanchez and Cheatham all spoke of how the market has shifted in the past 10 years.

“We have an interesting situation in the market,” says Cheatham. Velocity is one of the largest retail brokerages in the state in terms of square footage represented. “We have more big box vacancies than anywhere else in the nation, and we’re the best place in the country for small-space leasing activity.”

Small store leasing is going to be very healthy in 2014, he says. Rental rates are still very competitive for lessees, but there are going to be fewer new retail spaces developing. Sanchez sees single-digit retail vacancy rates in 2014. For Keig, the investment is in already-developed neighborhoods.

“In-fill is finally beginning to happen,” he points out. “We’ve heard of it for years, but with financing challenges today, it’s easier to back a project where there is some existing cash flow from current tenants. The project moves faster.”

It’s not just the small shopping centers undergoing facelifts and cosmetic surgery. “We’re going to be re-shaping (Scottsdale Fashion Square)” reports Steve Helm, assistant vice present, property management for Macerich and manager of the 1.9 MSF tri-level Fashion Square. Once city approvals are locked down, Macerich plans construction of a nearly 100,000 SF addition that replaces the current, aging Harkins theaterplex on the lower level by raising a new 12-screen complex to the second level. About 50,000 SF of retail space will be opened up under the new theater.

“Redevelopment is exciting and rewarding,” concludes Keig. “It’s an opportunity to invest in neighborhoods, and the neighbors return the favor when you do it well.”

TraciRussell, WEB

ICSC Member Profile: Traci Russell

Traci Russell

VP of Brokerage and
Retail Services CBRE

Years with company: 2
Years as ICSC member: 12

What is the biggest issue facing shopping center real estate?
Some of the major issues shopping centers face today are lack of new tenant concepts, rightsizing of prototypes, storefronts and reconfigurations. While this list might look long and daunting, I think each of these issues come back to a central issue of retailers still trying to navigate the post-recession retail market.

How have consumer attitudes affected the retail market?
Consumers have learned to be much more frugal and value-oriented. Also, they are willing to go much longer between big-ticket item purchases. I also think that consumers will continue to look for convenience; e-commerce and the internet are ways they can achieve that convenience.

What was your most significant deal in 2013?
I’ve partnered with Scott Kaplan and Erik Westedt in Newport Beach, Calif., to provide consultative retail solutions for the 260,000 SF Westgate Entertainment District in Glendale.

Matt Morrell, De Rito Partners, WEB

ICSC Member Profile: Matt Morrell, De Rito Partners

Matt Morrell

VP of Leasing
De Rito Partners, Inc.

Years with company: 10
Years as ICSC member:  6

What is the biggest issue facing shopping center real estate?
The big question mark is still the economy and public policy. Small businesses are the heartbeat of the shopping center world – the mom and pops. When they feel uncertainty, it impacts our leasing world.

How have consumer attitudes affected the retail market?
While there are still question marks, there is a positive trend in consumer confidence in regards to leasing and shopping center leasing. We are seeing established businesses that have made good solid decisions in the past five years now able to take advantage of an improving marketplace.

What was your most significant deal in 2013?
Our complete turnaround on the 120,000 SF San Tan Village Furniture Center. It was a foreclosed property and 50 percent vacant when acquired in June 2012. It is now 100 percent leased and a big win in my leasing efforts.

jim_edwards, WEB

ICSC Member Profile: Jim Edwards

Jim Edwards

Senior Associate
Velocity Retail

Years with company: 1
Years as ICSC member: 7

What is the biggest issue facing shopping center real estate?
While the Phoenix market is improving, vacancy rates are declining, and leasing activity is up, we still have an abundance of vacant big boxes. More than 275 big boxes are vacant in the Phoenix area. Many of these are not viable for retail use any longer.

How have consumer attitudes affected the retail market?
When consumer attitudes are positive, retail sales increase. During the recession, spending was down, and this has an obvious effect on retail sales. With improvements in the job market, economy and local housing values, we should see improvement in leasing.

What was your most significant deal in 2013?
Our company recently was awarded 1,534,276 SF of retail owned by Northstar Realty Finance Group. I am part of the team responsible for marketing and leasing this portfolio.

Mary Ridberg, Sperry Van Ness, WEB

ICSC Member Profile: Mary Ridberg, Sperry Van Ness

Mary Ridberg

Director of Leasing
Sperry Van Ness

Years with company: 6
Years as ICSC member: 9

How have consumer attitudes affected the retail market?
As consumer confidence returns, the retail market demand increases, urgency for locations increase, leasing volumes increase and vacancy decreases. The tipping point in this equation leads to the need for future development, which occurs with pre-leasing to meet the demands of lenders funding development…The consumer attitude is positive for daily needs and soft goods, technology retailers, and specialty items due to the consumers’ desire to see, feel, touch and experience the product prior to purchase.

What was your most significant deal in 2013?
My largest deal in 2013 was a combination of two spaces for Origami Owl at 10 Chandler. We secured 81,238 SF in its production facility and 66,248 SF for corporate offices. This was not simply a real estate “deal” but a mission critical project for my friend.

JonCowen, SRS-CUT

Jon Cowen Joins SRS Real Estate Partners

SRS Real Estate Partners hired Jon Cowen as senior vice president in the Phoenix office. A well-known name in the Arizona market, Cowen brings a wealth of experience and relationships to SRS. He will focus on representing local and national retailers, shopping center leasing and development and investment sales.
Cowen has more than 24 years of experience in commercial real estate. His career boasts involvement in more than 500 transactions with a value in excess of $1B. He has worked with many high-profile clients such as Kimco Realty, Vestar Development Co., Sears Great Indoors, Skechers, Bank of America, CVS/Pharmacy, McDonald’s, Starbucks, and Staples. Cowen has represented many national retailer’s roll-outs and expansions in the Arizona marketplace such as Café Rio and The Keg Steakhouse and Bar.
Previously, Cowen worked with the Retail Advisory Group at Cushman & Wakefield after his own real estate firm, Cowen Commercial, LLC, was acquired by the company. While at Cushman & Wakefield, he was recognized as the company’s top retail producer for 2011 and 2012.
“Jon is going to be a great addition to the Phoenix office,” said Ed Beeh, executive vice president and market leader for the Phoenix office. “He has made a name for himself in the area and has a wealth of experience. We are very lucky to have him on our team.”
Cowen attended the University of Arizona and is a member of the International Council of Shopping Centers.

rsz_icsc_booth_photo

Now That ICSC Dust Has Settled, The Real Work Begins

 

With more than 33,000 attendees at the 2013 ICSC RECon in Las Vegas, all are talking about the upbeat condition of the retail market and wanting to put together a deal.

Now is when the real work begins.

De Rito Partners had more than 30 agents and all of its principals attend the event. More than 500 meetings were scheduled, not to mention the hundreds that resulted from being an exhibitor.

Now we have to follow up with all the leads and contacts, whether it is sending a site plan to a tenant to get the deal started, tweaking the language in a lease that was holding up execution, or finalizing agreed upon changes to the LOI (Letter of Intent).

A deal starts with a vision, but deals are developed step by step, execution by execution and execution is what gets the deals done. Sweating the details for our clients is of utmost importance to ensuring the experience is a positive one.

De Rito Partners employs state-of-the-art technology that provides up-to-date demographic data and market trends to benefit its clients and its team. This kind of technology gave agents access to their property materials and information as they worked away from the office.

Brokers were encouraged to “bank” their data on GoodReader, an Ipad application that provided marketing materials for each member of the company at their fingertips. We are looking forward to the next year as we seek additional ways to improve our resources and functionality at the next convention.

As a relatively small company in a large market, we are committed to implementing cutting edge technology more efficiently and effectively in order to exceed expectations.

The ICSC arena gave our brokers the opportunity to meet clients on a different level from the in-office environment. Face-to-face meetings often build a rapport that might never have formed otherwise. Everyone attending this year’s session appeared to have a “let’s do business” attitude, which was encouraging and will result in more deals this year.

Phoenix once again was among the nation’s fastest-growing cities last year, newly released Census Bureau estimates show. The city added more than 24,000 new residents and edged closer to overtaking Philadelphia as the fifth-largest city in the country.

This kind of growth makes Phoenix and Arizona one of the most desirable marketplaces right now. Now we really have to focus on getting a return on all of the time and energy spent in preparation and execution of what we call the “Super Bowl of the Shopping Center Business.”

 

shopping

Retail: It’s a New Reality

As municipalities all across Arizona have seen their general funds strongly impacted over the last several years due in part to significant drops in sales tax revenue, the importance of a vibrant/strong retail sector has once again taken on a prominent role.

With Arizona cities in some instances relying on retail sales taxes for up to one-third of their general fund revenue, there is today a quiet, but forceful emphasis – particularly in rural areas – being placed on economic development professionals to make sure their programs help retain and attract new retail businesses to their communities, with the progressive municipalities leading the way.

In addition to the general fund ramifications of retail sales tax collection, another significant new reality of the retail sector has been recognized.  Todd Sergi, co-chair of the AZ/New Mexico Alliance for the International Council of Shopping Centers (ICSC), said the stigma of retail jobs being associated only with unattractive, part-time or low-paying jobs is changing.

“With bankers, pharmacists, medical professionals and other non-traditional retail businesses more commonly becoming a part of the new, redefined mainstream shopping environment, the retail sector is now creating well-paid jobs not traditionally seen before,” Sergi said.

The recession in Arizona provided examples in many instances of what a well-designed, well planned center does, or does not, look like.  Successful retail centers have common themes.  Municipalities have realized what it takes for retailers to have success in their cities, including ample parking, un-obscured visibility and easy access from the surrounding streets and easy-to-see signage.  These elements are routinely found in the more highly occupied centers that fared better through the economic down cycle.
Sergi said, “Everyone realizes that a hard-to-get-to retail center hidden behind large over grown landscaped settings with bad signage and limited parking is a lose-lose.  We don’t need more empty buildings.”

Fortunately, the design and planning barriers for retailers to enter a market have been noted.  Lessons were learned.  Statewide, both elected leaders and municipality staff have seen first-hand examples where dated or onerous policy cost their communities opportunities for new sales tax revenue.  The demand and competition to attract those businesses, in some instances, sent potential new entrants to neighboring communities viewed as more reasonable and forward thinking.

The retail industry has been adapting, as well.

Garrett Newland, vice president of development for Macerich, said we are seeing these adaptations every day with continuing anchor changes and new retail concepts.
“Retail is reinventing itself right before our eyes,” he said.  “What malls look like today is vastly different than what we saw in the ‘80s and ‘90s and it doesn’t matter if it’s a super-regional mall or a corner strip center.”

With empty stores and some poorly designed centers dotting Arizona’s retail landscape, a number of existing centers will have to be retrofitted, or possibly redeveloped, to make them assets to the community that can be counted on to generate needed sales and/or real estate tax revenue.

The evolution of retail e-commerce is also changing the face of retail.

An ICSC report recently indicated that retail e-commerce has grown seven-fold since 2000 and at its current growth rate will double again by 2016.  Legislation that requires e-commerce retailers to capture sales tax dollars for government coffers to some degree may level the playing field for the bricks and mortar retailers.

But even so, to remain competitive the storefront of tomorrow is changing.  Retailers now understand the need to integrate their physical and on-line presence, how to balance the product search, selection, transaction and delivery processes desired by today’s consumer and the ability to offer a variety of delivery and return options.

Michael P. Niemira, vice president, chief economist and director of research for ICSC, said the partnerships being established between the private and public sectors, the ability of retail to adapt and meet the needs of today’s customers and the willingness of economic developers to embrace retail bode well for the future economic success of each of our communities.
Eric Larson is president-elect of the Arizona Association for Economic Development (AAED) and board chair for the Scottsdale area Chamber of Commerce. AAED and ICSC will co-present a retail symposium Jan. 8 in which these topics will be discussed in detail by those quoted and others, as well as presentations made by representatives of new/expanding Arizona retailers.  For information, call (602) 240-2233 or visit www.aaed.com.

ICSC - Jones Lang LaSalle

ICSC, Jones Lang LaSalle To Issue Global Research Study

The International Council of Shopping Centers (ICSC) today reported that in conjunction with Jones Lang LaSalle (JLL), a financial and professional services firm specializing in real estate services and investment management, it would release findings at the 2012 ICSC Retail Real Estate World Summit in Shanghai from a groundbreaking multinational study that examines the evolution and future of Global Retail Real Estate Investment.

Being held Sept. 11-14, the World Summit is an open forum designed to address and shape the critical role and socio-economic impact of the worldwide retail property market.

“Preliminary findings show that over the past decade alone, in excess of one trillion U.S. dollars of retail real estate has been directly traded, of which more than one-third has involved cross-border capital,” said Lauralee Martin, CFO, Jones Lang LaSalle.

“Initially focused on the established markets in North America, Western Europe, Australasia and Asia, capital flows have gradually spread during the mid-2000s to embrace retail markets in Central and Eastern Europe, Russia, China, Turkey and Brazil. ‘Signpost’ deals point to a further widening of activity into new markets in Latin America, North Africa and South East Asia.”

To be authored by Jeremy Kelly, director in global research, Shelley Matthews of the International Capital Group, Alexandra Bryant of Asia Pacific Capital Markets and Josh Gelormini, director of research for the Americas, at Jones Lang LaSalle, this paper will, in the context of significant structural change, explore four key areas:

  • A Typology of Retail Investment Destination – a review of the different investment market characteristics across in the globe.
  • Recent Patterns of Retail Investment – a look at the current wave of globalization and which countries are attracting the most investment.
  • Regional Trends in Retail Investment – a  comparison of regional patterns across Asia Pacific, the Americas, Europe, the Middle East and Africa.
  • The Future Retail Investment Landscape –  a forecast on how the investment landscape will change over the remainder of the decade.

“Our initial research shows that the retail investment market is globalizing,” noted Jeremy Kelly. “Cross-border activity, which accounted for only one-quarter of volumes back in 2004, now accounts for nearly half of trade.  Inter-regional activity has seen particularly strong growth in tandem with the rise of a number of global investors and operators.  2011 and H1 2012 has seen a record U.S. $46B of inter-regional capital flows.”

“The World Summit is undeniably the most appropriate setting from which to release such impactful information, as the foremost global leaders in retail real estate investment will be in attendance,” added Lauralee Martin.

Michael P. Kercheval, president and CEO of ICSC, commented that, “we are honored to have JLL so intricately involved in the World Summit. Having a highly respected global firm like JLL produce this unique piece of research increases the value of the Summit for our attendees and speaks to the nature of this being a groundbreaking and critical event for our industry.”

For more information on The International Council of Shopping Centers, visit www.icsc.org.

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

Newsmakers, AZRE Magazine September/October 2010

Newsmakers: AZRE Magazine September/October 2010

The newsmakers of September and October 2010.

Paul Klink, Alisa Timm and Sarah Searight joined the Cassidy Turley BRE Commercial property management division. Klink was named managing director Southwest Region; Timm was named associate vice president and Searight joined the company as property manager. Justin LeMaster joined the industrial group as senior associate. LeMaster previously was with NAI Horizon.

Dick Crowley was promoted to vice president of Kitchell Construction’s healthcare division. Crowley joined Kitchell six years ago as director of client services.

Neal Churney joined Johnson Capital as senior vice president. Prior to joining Johnson Capital, Churney was a director with Marcus & Millichap Capital, where he financed multi-family, office, industrial and retail properties.

Luke Snell joined Western Technologies as senior construction materials engineer. Snell formerly was with the Concrete Industry Management program at ASU’s Del E. Webb School of Construction.

Brian Ackerman joined Jones Lang LaSalle as senior vice president. He will specialize in the acquisition and disposition of office and industrial property throughout Arizona.

Anthony Lydon and Marc Hertzberg joined the industrial brokerage team as managing directors. Most recently with Cassidy Turley, the duo has a combined 50 years of experience in industrial real estate.

GPE Management Services added Mark Carrell and Shirley Hawley as senior commercial real estate professionals. Carrell is responsible for managing the 200,000 SF local portfolio of West Coast Capital Partners.

Grubb & Ellis expanded its Phoenix operation with the addition of the office and medical condo team of Sheila Bale, Colleen McPherson and Ryan O’Connor. David Cravath joined the multi-housing group as vice president. Also joining Grubb & Ellis are Steve Julius (senior associate) and Jesse Goldsmith (associate). Previously with Marcus & Millichap, they will specialize in retail investments.

ICSC appointed six Arizonans as volunteer officers for Arizona and New Mexico: Gordon A. Keig, Kornwasser Shopping Center Properties, state director; Jeff Manelis, The Pederson Group, Inc., government relations committee chair; Steven R. Helm, Macerich, alliance private sector co-chair; Jim Brennan, Vestar Development Co., operations chair; Dennis Barr, The Kroger Co., retail chair; and John C. Reva, SR Commercial Real Estate, next generation chair. All appointments are for the 2010-2011 term.

Dave Headstream and Mike Ratliff were named to the land services group of CB Richard Ellis in Phoenix. They join Jason Hyams, another CBRE first vice president, to form a new land services team.

James Abell, FAIA of James Abell & Associates Architects in Tempe received the Edward C. Kemper Award at the AIA convention in Miami. The Kemper Award is given annually to an architect who has contributed significantly to the profession through service to AIA.

Rowland Luxury Homes hired Mary Norton as director of marketing and business development.

MODE Real Estate Management Services hired Ryan King as tenant services coordinator to its commercial property management staff.

Voit Real Estate Services opened an Arizona regional office in Phoenix. Jason Quintel was named managing director for the area. Voit also announced the hiring of Robert A. Freund as COO. Phoenix is one of the operations he will oversee.

SmithGroup hired Michelle Romero as senior interior designer for the firm’s Workplace Studio. Romero formerly worked for Tempe-based DAVIS.

Brock Huttenmeyer was named director of pre-construction services for Haydon Building Corporation’s building division. Denise Arredondo joins Haydon’s building division as a junior estimator.

Boe Bergeson was named leader of business development in the Southwest Region for the Weitz Company. Bergeson will focus on mtunicipal, commercial, industrial, higher education, hospitality, federal, senior living, tenant improvements, renovations, retail and distressed properties.

CB Richard Ellis’ 12th Annual Charity Golf Tournament at Grayhawk Golf Club in Scottsdale raised nearly $35,000 for Valley charities and local chapters of national nonprofit organizations. Three charitable organizations will receive a sizable portion of the money: Childhelp, Phoenix Children’s Hospital and the Boys & Girls Clubs of Metropolitan Phoenix.

The Phoenix Asset Services Division of CB Richard Ellis announced that Camelback Esplanade III achieved Gold certification under the USGBC LEED rating system for Existing Buildings (EB). The 218,254 SF building at 24th St. and Camelback Rd. is the third CBRE-managed office building to earn the LEED-EB rating.

AZRE Magazine September/October 2010