Tag Archives: retail

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Op-Ed: Slow and Steady Wins the Race for Phoenix Retail

Author: Dave Cheatham, President, Velocity Retail Group, LLC

 

Dave Cheatham

Dave Cheatham is an accomplished authority on retail real estate in the disciplines of brokerage, project leasing, development, consulting and advisory services. He is a senior advisor to merchants, entrepreneurs, investors and senior retail executives throughout the industry.

As we are nearing the end of 2013 there have been several positive trends and factors that have influenced the Phoenix retail real estate market. These factors are being recorded in economic improvement such as job growth, housing prices, and personal income increases as well as the retail real estate market’s increased leasing activity.

Velocity Retail Group has recorded a strong increase in big box leasing, with an increase of over 20% above last year. Our research department is predicting this trend to continue into 2014 and 2015. This increase will be evident by increased activity from many retailers who have been on the side lines for the past 4 or 5 years and are now gearing up to expand their store count. Value retailers, who have been very active during this past recessionary cycle, are still expected to show strong activity in the next twelve to twenty-four months. In addition, the Phoenix market should experience new retail concepts announcing expansion plans both regionally and nationally. These concepts have been unable to expand the last five years due to the economy, but they are now gearing up for growth. Velocity Retail Group is projecting strong leasing activity for year-end 2013 with nearly 2 million square feet absorbed. This amount of absorption will drive the vacancy down close to single digits by year-end.

This is supported by the 3rd quarter retail numbers from Velocity Retail Group’s research department when analyzing the big boxes in our market (those that are over 10,000 square feet). In fact, a greater number of big box deals have been completed during 2013 than we have had in four years. For 2013 there have been 39 big box deals completed. If this pace continues through the rest of the year we will be 20% above the leasing of last year, and nearly 75% above 2011. We are now at 297 vacant big boxes throughout metropolitan Phoenix.

We are forecasting a continued slow and steady improvement in our vacancy with the vacancy rate in 2014 breaking into the single digits. Leasing activity for the year is over 1.5 million square feet and on track to reach over 2 million square feet by year end.

Each of the regional areas in metropolitan Phoenix has shown significant improvement in vacancy since the beginning of 2013. In fact, at the start of the year all of the six regional trade areas had double-digit vacancy. Now, as of the 3rd quarter, four of the six regional areas have single-digit vacancy.

With three quarters of the year behind us we continue to see increased improvement in several key benchmarks for the Phoenix area:

 

  • Job Growth – Arizona heads the list of best states for expected job growth according to an article published by Forbes
  • Housing Prices – continued increase in the median home price, now at $192,000, which is a 30% year-over-year improvement
  • Personal Income – up over 5% since 2012
  • Retail Sales – up over 5.5% from 2012

These indicators solidify our projections of continued improvement in the retail real estate market in Phoenix. A rebound is under way and 2014 will be a pivotal year in laying the foundation for improved future growth, expansion and economic prosperity for Arizona.

 

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CBRE Negotiates 4.25-acre Sale at Mariposa Mall in Nogales, Ariz.

CBRE has negotiated the sale of a 4.25-acre lot at Mariposa Mall Shopping Center in Nogales, Ariz. The commercial retail zoned parcel commanded a sale price of $1.4M.

Peter Villaescusa and Jesse Person with CBRE’s Tucson office represented the seller, Phoenix, Ariz.-based HGC/MW Development LTD Partnership. The buyer, SBX Holding Company of Scottsdale, Ariz. was represented by Chip Thor with Velocity Retail in Phoenix.

This sale reaffirms Nogales position as a strong retail market,” said CBRE’s Villaescusa. “Mexico’s economy is healthy and the border market reflects that.”

The land parcel, which totals approximately 184,684 square feet or 4.25 acres, is adjacent to major tenants, Ross Dress for Less and a Kmart Supercenter. Plans for the property include further retail development.

Built in 1989, Mariposa Mall Shopping Center is located on Mariposa Road and is approximately three miles north of the US-Mexico border. The open-air destination retail center features a JC Penny, Boot Barn and Foot Locker, among others. There are a number of other national retailers in the area as well, including a Super Wal-Mart, Home Depot and Safeway.

Gilbert and Southern

Big Deals: Retail, Aug. to Sept. 2013

There’s no such thing as a “small” deal in this industry, coming out of a recession. However, it’s the big deals, and the brokers who make them, that make the market an interesting one to watch.
In every issue, AZRE publishes the top five notable sales and leases for a period of 60 days (one month out from publication) based on research compiled by Cassidy Turley and Colliers International with CoStar.

SALES

1. Gilbert & Southern

Gilbert and Southern

Gilbert and Southern

Mesa
238,613 SF; $9,530,200
Buyer: Astani Enterprises, Inc.
Seller: Wells Fargo
Listing Broker: Chad Tiedeman, Steven Underwood, Greg Laing, Teale Bloom and Cameron Warren, Phoenix Commercial Advisors

2. Tutor Time
Cave Creek
25,315 SF; $8,750,000
Buyer: Terry & Steve Blumenfeld Seller: National Retail Development Partners Listing Broker: Chad Tiedeman, Phoenix Commercial Advisors

3. Hurley Plaza
Phoenix
20,243 SF; $6,922,104
Buyer: Capstone Advisors, Inc. Seller: Lawrence & Geyser Development Listing Broker: Chad Tiedeman, Phoenix Commercial Advisors

4. 35th Avenue & Bell Road
Phoenix
78,422 SF; $5,493,146
Buyer: Kinetic Companies Seller: CWCapital Asset Management, LLC Listing Broker: Jules Sherwood, Rockwood Real Estate Advisors

5. Peoria Square
Glendale
23,075 SF; $5,300,000
Buyer: Cave Creek Capital Partners LLC Seller: Sierra Consulting Group, LLC Listing Broker: Adrian Evarkiou, Helo Real Estate Buyer’s Broker: Max Bippus, CBRE

LEASES

1. Glendale Market Square, Glendale

Glendale Market Square

Glendale Market Square

5870 W. Bell Rd.
45,000 SF
Landlord: Kimco Realty  Tenant: Lina Home Furnishings
Landlord Brokers: Dan Lupien, Kimco Realty

2. Glendale Market Square, Glendale
5850 W. Bell Rd.
29,000 SF
Landlord: Kimco Realty Tentant: J. Levine Auction & Appraisal
Landlord Brokers: Dan Lupien, Kimco Realty

3. Ahwatukee Foothills Towne
Center, Phoenix
26,939 SF
Landlord: DDR Corp. Tenant: Michaels Tenant Broker: Tommy Woods and Brian Woods, Colliers International

4. Glendale Galleria, Glendale
20,990 SF
Landlord: Brixmor Property Group Tenant: Sears Outlet
Landlord Broker: Traci Russell, CBRE

5. Bell Town Center, Phoenix
19,689 SF
Landlord: Nexus Development Tenant: Office Max Landlord Brokers: Tommy Woods and Brian Woods, Colliers International

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NorthMarq Capital Arranges $4.275M In Combined Mortgages For 2 Chandler Properties

James DuMars, senior vice president and managing director of NorthMarq Capital’s Phoenix Regional office, arranged combined first mortgage refinancing of $4.275M for Paseo Del Oro and Dobson Plaza (above photo) in Chandler.

Combined these two properties contain a total of 123,480 SF of retail space.

Paseo Del Oro was financed at $2.975M and contains 96,892 SF of anchored retail space. The major tenant at the site is LA Fitness (Dark). Dobson Plaza was financed at $1.3M and contains 26,588 SF retail space.

Financing was based on a 10-year term and a 25-year amortization schedule and was arranged for the borrower by NorthMarq through its correspondent relationship with a life insurance company lender.

 

Scottsdale Quarter Phtography

Making the Retail Experience, Well, An Experience

Shoppers can buy just about anything they’d like or need on the Web. What they can’t do online, however, is make a craft, have their hair done by a blow-dryer-wielding stylist or munch on gourmet snacks delivered to their reserved seats as they’re watching a movie. Call it the retail experience.

It’s non-Web entertainment options such as these that mall developers are banking on to help them compete against online shopping, which over the next four years is expected to reach $327 billion in sales in the U.S. alone, according to Forrester Research Inc. Experience retail represents the future of the mall.

“Experience retail refers to how people enjoy the mall,” said Michael Glimcher, CEO of Glimcher Realty Trust, developer of Scottsdale Quarter, an open-air shopping district located near Scottsdale and Greenway roads. “Today, shopping isn’t about selecting a color and size. You can do that online. You can’t have a salad and glass of wine with girlfriends online. Going to the mall today is about entertainment, brand engagement and socializing with friends and family.”

Scottsdale Quarter has pioneered the concept of experience retail for Glimcher. Since early 2011, the shopping destination has integrated experience-based merchants into its tenant mix, including the addition of several stores and restaurants that shoppers won’t find anywhere else in Arizona. While there are still clothing-only retailers there, more than two thirds of Scottsdale Quarter’s 58 tenants offer shopping experiences and in-person-only opportunities – such as the rear-viewing booty cam at Industrie Denim – that can’t be replicated online.

At Make Meaning, for example, shoppers paint pottery, make soap and decorate picture frames. Nearby at Drybar, salon clients can have their hair straightened or curled by stylists using nothing but a brush and a blow dryer. Fitness enthusiasts tap into their inner peace at Blissful Yoga, where traditional or hot yoga classes, and the gravity-defying Yoga Wall, offer a respite from the hustle and bustle of life.

The experience retail concept exists at other Glimcher properties nationwide including Polaris Fashion Place in Columbus, Ohio; The Outlet Collection | Jersey Gardens outside New York City; the Mall at Johnson City in Tennessee; and River Valley Mall in Lancaster, Ohio. Other national retailers experimenting with the concept include the Shadow Lake Town Center in Omaha, Nebraska, and The Shoppes at Chino Hills in California.

According to Glimcher officials, experience retail benefits all of a mall’s tenants by keeping shoppers at the center for longer periods of time, and by offering people a reason to return. Activities at Make Meaning often have wait lists, so shoppers spend time by eating at the mall’s restaurants or buying merchandise at nearby stores. Crafters must return to pick up their creations also, which means an extra visit and perhaps another stop at a neighboring merchant.

Scottsdale Quarter’s upscale food establishments seem to be doing extraordinarily well with the leasing strategy. Restaurant sales have grown substantially over the last few years, despite the soft economy.

“Experience retail gets people off the computer and into the store,” said Richard Hunt, general manager of Scottsdale Quarter. “It makes shopping fun and interactive, and — as the other developers who have toured Scottsdale Quarter to see what we’re doing can attest — it’s working.”

 

 

 

 

 

Celebrity City, AZRE July/August 2010

Mixed-Use: Celebrity City


CELEBRITY CITY

Developer: Old World Communities
General contractor: TBD
Architect: CCBG Architects
Location: 
 NWC 32nd & Van Buren streets, Phoenix
Size: 1.3 MSF

The 10-year, multi-phased plan calls for 640 residential units within five multi-story buildings; an 820-room hotel; 177,000 SF of retail space; and 380,000 SF of office space within two mid-rise towers. Construction is estimated to begin in the latter part of 2010 or 2011.

AZRE July/August 2010