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2040 W Rio Salado Parkway - Liberty Center at Rio Salado - Tempe AZ - co...

Ground breaks on 215,000 SF industrial building in Tempe

Liberty Property Trust has announced that it will break ground on its first industrial development project in Liberty Center at Rio Salado in Tempe, Arizona to meet tenant demand. Development will commence immediately at 2040 W. Rio Salado Parkway, with expected delivery by the end of 2015.

Liberty has previously completed two LEED Gold speculative office buildings at Liberty Center at Rio Salado. The first building of 155,000 square feet, 1850 W. Rio Salado Parkway, was completed in October 2014 and is 100% leased. The second building of the same size, 1910 W. Rio Salado Parkway, was completed earlier this year and is 75% leased. The third office building in the center, a build-to-suit LEED Gold office building of 96,000 square feet for DriveTime is currently under construction and is scheduled to come on-line in October.

“There continues to be outstanding demand for office and industrial space across our entire portfolio. We have had tremendous success at Liberty Center at Rio Salado, and we’re continuing that momentum,” said John DiVall, senior vice president at Liberty Property Trust. “Our local industrial portfolio has reached 100% and the time is right to pull the trigger on new industrial product. This site, located on the west side of the project, adjacent to SR-143 is the ideal location for a Class A industrial building.”

The new 215,000 square foot industrial building will be designed and constructed to meet the LEED® Silver level of certification for new construction. The new state-of-the-art facility will feature 30’ clear height, 250’ building depth, concrete tilt construction, and a 185’ expandable full concrete truck court, with visibility on Arizona Route 143 and Red Mountain Loop 202 Freeway.

The architect for the development project is Deutsch Architecture Group, the civil engineer is Wood Patel and the general contractor is Wespac Construction. Megan Creecy Herman is directing Liberty’s leasing efforts.

The new industrial development comes on the heels of Liberty signing more than 1.1 million square feet of leases year-to-date in the market.

Liberty Center at Rio Salado is a partnership between Liberty Property Trust and Markham Contracting Co.

Liberty Center at Rio Salado completes first building

From the left to right on the couch: Mayor Mark Mitchell of Tempe, Megan Creecy-Herman (Liberty Property Trust) , John DiVall (Liberty Property Trust), Andrew Ching (City of Tempe). From left to right back row: Alex Smith (City of Tempe), Shannon Selby (City of Tempe), and Ryan Levesque (City of Tempe).

From the left to right on the couch: Mayor Mark Mitchell of Tempe, Megan Creecy-Herman (Liberty Property Trust) , John DiVall (Liberty Property Trust), Andrew Ching (City of Tempe). From left to right back row: Alex Smith (City of Tempe), Shannon Selby (City of Tempe), and Ryan Levesque (City of Tempe).

Liberty Property Trust announced that it has completed the construction of its 155,000 square foot Class A office building, located at 1850 W. Rio Salado Parkway in Tempe.  The building opening marks Liberty’s first of up to potentially 11 buildings planned at Liberty Center at Rio Salado, and officially launches the innovative mixed-use business park.


Liberty also welcomes WageWorks, the first tenant in the brand new state-of-the art sustainable building. WageWorks is occupying the first floor of the building and the second floor of approximately 78,000 square feet is still available for lease.


“This has been a very exciting project for us and we have been looking forward to the official opening of Liberty Center at Rio Salado,” said John DiVall, senior vice president and city manager for Liberty’s Arizona region. “We have long believed that the live-work-play concept of the park will be of tremendous appeal to prospective companies looking to enhance their employees overall work environment.”


The building features energy-efficient glazing, a minimum ten-foot ceiling height, an elegant open lobby, teak-stone throughout the interior and exterior of the building, state-of-the-art telecommunications and fiber optics, and six-per-1,000 parking. Twenty percent of the building’s construction materials consist of recycled content, including the concrete, steel, carpet, ceiling tiles and similar materials. The building also features a 10kw solar panel array.


The architect for the building is RSP Architects, the general contractor is Wespac Construction, and the civil

engineer is Wood/Patel.


In addition to the building’s official opening, now on display at the entrance to the park on Rio Salado Parkway are three unique Agave Torch sculptures, ranging in size from 13’, 15’ and 17’, which were designed and created by local artist and well-known sculptor Kevin S. Berry. The base of each torch is reminiscent of saguaro cacti and the baskets of each torch pay tribute to the Hohokam Indian tribe. The blue-green glass in the base of each torch represents the water from the Salt River on which the project is located and all three sculptures are internally illuminated at night.


The company celebrated the opening of its building at a broker event held last night. In attendance at the event were top brokers from the area, in addition to several local representatives from the city including Tempe Mayor Mark Mitchell and Tempe City Council members Robin Arredondo-Savage, Kolby Granville and Corey Woods. Liberty Property Trust’s John DiVall, senior vice president and city manager, Megan Creecy-Herman, senior director of leasing and development, and Jay Ohanesian, senior project manager were joined by Jim Lutz, senior vice president of development for Liberty Property Trust (nationally) and the rest of the Arizona Liberty Property Trust team at the evening’s event.

Liberty Tolleson Center

Liberty Tolleson Center reaches 100 percent occupancy

Liberty Property Trust announced it has signed a lease with Green Light Direct Services at Liberty Tolleson Center, bringing the 200KSF project to 100 percent occupancy.

Green Light Direct Services will move into its new location, 8601 W. Washington Street, in October. Rick Collins of CD Commercial Advisors represented Green Light Direct Services and Tony Lydon, Marc Hertzberg and Riley Gilbert of JLL represented Liberty Property Trust in the transaction.

“There continues to be strong interest in high quality assets in prime locations throughout our Arizona portfolio,” said John DiVall, senior vice president and city manager for Liberty’s Arizona region.  “We’ve seen momentum in the Southwest Valley returning as of late, spanning from 50,000 square feet and up.”

Since January, Liberty has closed eight lease agreements totaling more than 500,000 square feet across the Arizona region.

Megan Creecy-Herman

Megan Creecy-Herman Joins Liberty Property Trust

Liberty Property Trust today announced that Megan Creecy-Herman has joined the company as director of leasing and development.

Creecy-Herman will be responsible for marketing the portfolio and working on existing and future development projects throughout the Valley.

Creecy-Herman comes to Liberty from EJM Development Co., where she held various positions in leasing, acquisitions and development. That company specializes in the acquisition of unimproved land and the development and management of commercial/industrial projects in California, Nevada, Arizona, Utah and New Mexico.

“I’m extremely pleased to announce the addition of Megan to our Arizona team,” said John DiVall, senior vice president and city manager, Liberty Property Trust. “I met Megan through some of our mutual NAIOP responsibilities and was very impressed. She will play an integral role in helping me continue to grow our portfolio.”

In 2009, Creecy-Herman was the founding chairperson of NAIOP Arizona’s Developing Leaders Group for commercial real estate professionals age 35 and under. That year she was a recipient of first the NAIOP Arizona Chapter Developing Leaders Award and then the NAIOP National Developing Leaders Award.

In 2010, she became the youngest person elected to the NAIOP Arizona Chapter Board of Directors. She has also served as the co-chair of the NAIOP National Developing Leaders Diversity Task Force.

A graduate of Arizona State University, Creecy-Herman earned her Bachelor of Science Degree in Business.  She recently received her Master’s of Business Administration from the University of Arizona.

Creecy-Herman continues to serve on the NAIOP Arizona Chapter Board of Directors and the NAIOP National Industry Trends Task Force. She is an active member of the Junior League of Phoenix Leadership Team, and the Arizona State University Real Estate Alumni Club.

Liberty Property Trust

Liberty Property Trust Buys 3 Buildings In Phoenix And Tolleson

Liberty Property Trust recently purchased three  Class A buildings for its Arizona portfolio: a flex building in Phoenix and two industrial buildings in Tolleson.

“By the close of 2011, our portfolio was nearly 100% leased,” said John DiVall, senior vice president and city manager for Liberty Property Trust’s Arizona region. “We had a number of inquiries from companies – including many in our current portfolio – seeking larger amounts of industrial and flex space, and we anticipate that the acquisition of these properties will be met with enthusiasm in the marketplace.

“Additionally, these acquisitions are consistent with our local strategy of adding well-located assets, at below replacement cost, to our region’s portfolio,” DiVall added.

Liberty Property Trust purchased an empty flex building at 9801 S. 51st St. in Phoenix from GE Capital last month at an investment of approximately $4.3M. The property is a 71,550 SF state-of-the- art call center located just a half-mile from the Interstate 10 freeway at Elliott Road.

On the same day that Liberty Property Trust purchased the building, the company also signed UPS to a new lease for 29,181 SF of space.  This brought occupancy to 41%. UPS has been a Liberty tenant in several regions across the country over the years.

Liberty Property Trust was represented by Karsten Peterson of Cushman Wakefield. The tenant was represented by Steve Corney of Jones Lang LaSalle of Phoenix.

At Ancona Tolleson Center in Tolleson, Liberty Property Trust purchased two industrial buildings from E&V Investments for approximately $17M. The first is a 219,225 SF facility located at 8591 W. Washington St. (above photo) that is 39% occupied. The second, a 184,096 SF building located at 8601 W. Washington St., is 74% occupied.

In this deal, Liberty Property Trust was represented by Mark Hertzberg of Jones Lang LaSalle and the seller was represented by Bob Beardsley of Southwest Commercial Brokerage.

At the close of 2011, Liberty Property Trust also purchased a 46,725 SF industrial flex building at 921 S. Park Lane in Tempe from Hohokam Park, LLC for approximately $2.7M. The property, which was fully occupied at purchase, is now available for lease. Bill Bayless and Andrew Brigham of CBRE represented the seller and have been retained by Liberty Property Trust to lease the building.

Liberty Property Trust owns 1.7 MSF of industrial and office space in Arizona. Major holdings include Cotton Center in Phoenix, Liberty 303 Business Park in Goodyear, the LEED Gold 8501 E. Raintree Dr. in Scottsdale and Ryan West Business Park in Tolleson.

For more information on Liberty Property Trust, visit www.libertyproperty.com

NAIOP Roundtable 2011 - AZRE Magazine September/October 2011

NAIOP Roundtable 2011

NAIOP Roundtable 2011

The commercial real estate industry is clearly recovering. Companies are absorbing vacant space, build-to-suit development is active and abundant capital is pursuing core real estate. The key question remains, however, how do we compare with the other major markets when it comes to job and population growth?
In short, when will the market justify new development and how will the state and our local commercial real estate industry assist in this effort? To be sure, the future remains bright in Arizona but the recovery will last longer before the next boom.

— Mike Haenel

NAIOP Roundtable Participants Key NAIOP Roundtable - AZRE Magazine September/October 2011

Roundtable Participants


1 — SB: Scott Bjerk
Bjerk Builders, Inc.

2 — MC: Megan Creecy
Leasing and Development Manager
EJM Development Co.

8 — JD: John DiVall
Senior VP
Liberty Property Trust

MH: Mike Haenel
Executive VP, Industrial Group
Cassidy Turley BRE Commercial
Chairman Profile

6 — TH: Todd Holzer
VP of Development
Ryan Companies US

5 — KM: Keaton Merrell
Legacy Capital Advisors

7 — BM: Bob Mulhern
Managing Director Greater Phoenix
Colliers International

3 — DW: Deron Webb
Managing Principal
Wentworth Webb & Postal

4 — CW: Clay Wells
Director, Business Development
McShane Construction Co.

Q: What is different in July 2011 in our local commercial real estate industry than a year ago?

BM: The short answer is that the market is stronger, but still burdened by vacancy rates that are high by historical standards, despite being lower than recent peaks. What is decidedly different, however, is that the outlook is considerably brighter than it was a year ago.

Last year at this time, uncertainty was the overriding theme and it plagued the market. The industrial market had posted just one quarter of positive absorption, and it was unclear whether that was a one-time burst in activity or a sign that tenants were more optimistic and the industrial market was beginning to turn a corner. Now we can see that tenant demand for industrial space has been sustained for more than a year, vacancy is tightening, and rents are stabilizing. We are also seeing headline-making announcements from companies such as Amazon and First Solar that not only improve the numbers, but also renew confidence in the market as a whole.

The office market has been slower to bounce back, but it is far more stable today than it was a year ago. A year ago, we were averaging negative net absorption of more than 500,000 SF per quarter, and the vacancy rate was shooting higher. While absorption has been mixed in recent quarters — up one quarter, down the next — the overall vacancy trend is essentially flat. The market hasn’t necessarily started to improve, but it’s no longer in free fall. We’re forecasting slightly positive absorption in the second half of 2011 and then positive absorption of nearly 1 MSF in 2012. We think rents will likely tick lower through the remainder of this year, because the high availability of space will continue to create competition in the marketplace.

MC: Activity is up, but it is still the quintessential “tale of two tenants.” National companies with 200,000 SF+ warehouse requirements are in the market. And, there are definitely more of those types of requirements (including build-to-suits) in the market today than there were last year at this time.

When looking, however, at say deals in the 5,000 SF to 20,000 SF range, there has been an increase in activity, but the regional and local tenants who comprise a large portion of that market segment are still facing a lot of challenges, such as difficulty obtaining financing, and economic uncertainty. These challenges result in a constraint on their ability to expand and the lack of confidence needed to make long term real estate decisions, which is why we are still seeing a number of these tenants in the smaller size ranges wanting only short-term extensions in their current spaces.

TH: I sense that we are now a local real estate industry made up of survivors. The attrition of firms is over for the most part. Those remaining have right sized for this “new normal” that we find ourselves in. Companies in our business have had to make changes in their business plans and doing activities that they did not anticipate 4 to 5 years ago. I think that this transformation has completed where a year ago it was still finding itself.

Q: How would you compare our Metro Phoenix commercial real state market to other major markets throughout the Western U.S.?

BM: At present, the characteristic that best describes the Phoenix commercial real estate market is the vacancy rate, which is among the highest, if not the highest of the major markets in the Western U.S. In the period immediately preceding the recession, development in Phoenix was fairly active, and when the economy cratered and companies slashed payrolls, there was a significant supply/demand imbalance.

The difference between Phoenix and the major California markets — where employment losses were nearly as dramatic as losses here — is that those markets didn’t have nearly as much speculative construction in the pipeline. As a result, vacancies rose in California, but not to the heights that they rose in Phoenix.

The other state that makes for an interesting comparison is Texas, where development has historically been quite active — just like Phoenix. The primary difference between Phoenix and the major Texas markets in the recession and thus far in the recovery is that the Texas markets weren’t hit nearly as hard by job losses during the downturn and the state has led the way with job gains during the recovery.

Looking ahead, the picture brightens significantly. Most forecasts call for Phoenix to rebound favorably once the economic recovery really gains traction nationally. Long-term forecasts call for annual population and employment gains in the 2.5% range, which should be similar to the major Texas markets and far outpace the California markets. This anticipated expansion is the primary source of optimism in the Phoenix market — now we’re just waiting for it to happen.

CW: The Metro Phoenix commercial real estate market has actually fared no worse or better than the other major Western U.S. markets. Retail and office continue to struggle in most markets while industrial vacancies for building over 500,000 SF have started to decrease. Recently a 500,000 SF speculative building broke ground in the Inland Empire and I believe if the economy stays as is we will see a speculative industrial building in Phoenix breaking ground by 3Q 2012. Where the Phoenix market differs from the rest of the Western U.S., with the exception of Las Vegas, is the residential real estate market. Metro Phoenix was too dependent on the residential construction market for creating jobs.

The reason this is so important until we create new jobs to replace these lost jobs, the retail and office sectors will continue to be slow to recover. People have to have a job, which allows them to have diposable income to spend at stores creating a need for new retailers. The same can be said for the office market. Until new companies locate to Metro Phoenix or are created here the need for office space will remain depressed. Most activity we are seeing in the office market are new investors coming to Metro Phoenix and buying distressed properties at a discount. This allows them to quote reduced rents forcing a downward pressure on existing landlords, who must rent space at a loss or lose a tenant. Office markets in some cities that have a more diverse economic base are recovering at a better pace than Metro Phoenix.

MC: While there has been increased activity across the Western U.S., the divergence is in the stage of recovery in primary markets such as the Inland Empire, vs. secondary markets like Phoenix.

The Inland Empire, for example, is one of the strongest industrial markets in the country with vacancy at 6.3%, which is the lowest vacancy rate in 14 quarters. By comparison, Phoenix’s Q2 2011 industrial vacancy rate was 13.9%, which was our 5th consecutive quarterly decline. But, I would say that the steady decline in vacancy we are experiencing here in Phoenix is a positive indicator, and it is only a matter of time before our recovery picks up speed.

NAIOP, AZRE Magazine September/October 2010

NAIOP Roundtable 2010: Q&A With Members of NAIOP

NAIOP Roundtable 2010: Q&A With Members of NAIOP

Members of NAIOP-AZ sat down with AZRE magazine in a roundtable discussion, discussing the state of the local commercial real estate industry.

NAIOP Roundtable 2010 NAIOP Roundtable 2010 Participants

NAIOP Roundtable 2010 Participants:

1 — DW: Deron Webb, Managing Principal, Wentworth Webb & Postal 5 — BM: Bob Mulhern, Managing Director Greater Phoenix, Colliers International

2 — JB: Jodi Bailey, VP Property Management Services, Transwestern

6 — KR: Kurt Rosene, Senior VP, The Alter Group
3 — WS: William L. Spart, Senior VP & Manager, Middle Market Real Estate, Wells Fargo Bank 7 — TH: Todd Holzer, VP of Development, Ryan Companies US
4 — MH: Mike Haenel, Executive VP, Industrial Group, Cassidy Turley/BRE Commercial 8 — JD: John DiVall, Senior VP, Liberty Property Trust


TH: We are more than two years into the so-called “Great Recession.” How much longer will it last? Will Arizona pull out the same time as the rest of the nation? Since the commercial real estate industry is closely tied to the job market, it’s been a bumpy ride.

Q: What is different in July 2010 in our local commercial real estate industry than a year ago?

MH: The two biggest differences today compared to a year ago, are that tenant demand is on the rise and there are limited distressed industrial real estate opportunities available for sale. It’s important to note that, because we have not seen the oversupply of distressed real estate hit the market, values are higher than we thought they would be given the overall market conditions. This has translated into a significant and noticeable increase in tenant demand.

JD: It is marginally better. As part of the Arizona NAIOP, I wish I could say substantially better, but it’s not. There is more activity, but rates are still depressed, and we are now in the summer doldrums. We are clearly experiencing a jobless recovery. With no new construction on the horizon, we should gradually absorb space and improve.

WS: There are more lenders jumping into the market. We are seeing conduit, CMBS, life and other banks. A year ago we did not see much activity.

Q: How would you compare our Metro Phoenix commercial real estate market to other major markets throughout the Western U.S.?

BM: Phoenix’s metro commercial real estate market has been hit harder than most Western cities, with Las Vegas being the exception. At the end of the second quarter Phoenix vacancies for office (29 MSF/22.5%), industrial (41 MSF/17.7%) and retail (28 MSF/13.3%) were all in historically high ranges, and they remain significantly higher than other Western cities such as Denver (6.7% industrial/14.8% office), San Diego (8.7% industrial/16.2% office), and Los Angeles (not including Orange County and the Inland Empire — 5.0% industrial/12.7% office). Most of the basic fundamentals that draw people to the Valley are still in place, but the lack of job growth, coupled with the depressed residential housing market, are continuing to act as detriments to a commercial real estate rebound. Recognizing these realities, it should be noted that multi-family sales, for which purchase financing is available, are very strong, and that foreign investors, especially from Canada, are entering the market and helping create some velocity in the private client sales market.

JB: Phoenix is a very dynamic commercial real estate market with a highly skilled labor force, an abundance of labor because we are a right-to-work state with competitive wages, and reliable, lower cost energy sources for large users. Ultimately, this means that we attract a wide variety of users from semiconductor manufacturers, biotech/life science laboratories, aerospace and Department of Defense manufacturing, as well as back office and data center occupiers of space. Each building occupier has their reasons for choosing Phoenix over other markets, but we find ourselves to be very competitive as compared to other regional markets.

TH: Phoenix is in the infamous Bermuda Triangle of both residential and commercial real estate, which also includes Las Vegas and the Inland Empire of California. Because of the housing market dive, cities in this area went into recession mode before the rest ofthe nation, and the drop in our economy has been greater than most. Los Angeles, San Francisco and Seattle keep their economy above water due to Pacific Rim trade. Denver has energy and high tech, and Salt Lake City was not overbuilt. Texas has fared well due to energy and the George W. Bush presidency. It will be a long and difficult struggle for Metro Phoenix to pull out of the tough times it finds itself in.

Q: How are the boycotts and state public policies affecting our industry?

BM: I have not heard one comment about the boycott in our offices or from any of our clients, which is an indication to me that the boycotts, though serious issues, do not rank high in the commercial real estate priorities of concern. Shrinking rents and occupancies are a much bigger issue these days.

Regarding public policy, the inability of the federal and state governments to implement policies and programs to stimulate job growth is prolonging our recession. There will not be a jobless recovery so, until jobs are created, our industry is continuing to experience high levels of tumult.

Public policy toward banks is also prolonging our recession as the de-leveraging process is being allowed to be spread over time, preventing the painful, but inevitable total market reset necessary to stabilize the real estate market and allow it to begin to create some positive momentum.

TH: The boycotts are affecting the convention and tourist sector, but I do not believe that they have affected the office and industrial markets here in Arizona. Companies choose to come here due to the ease of doing business and quality of life, not due to our state’s policy on immigration. That being said, our state needs to make job creation and business attraction a primary focus. We need the Legislature and the governor’s office to make jobs our No. 1 priority. I suggest a formal jobs bill from our legislative leadership should come forward that includes a lower tax burden on hiring businesses and commercial property owners.

DW: After the initial national “knee jerk” reaction of higher deficit spending and dubious stimulus policy, leaders underestimated the outcry and we did not do a good job of getting the message out nationally. Projects have been stalled and some major players are taking a wait-and-see attitude. Any time there is substantial disturbance, those active in the market cool.