Tag Archives: southeast Valley

GCU Campus, Eastmark

Boiling Point: The Southeast Valley Heats Up 2013

Arizona’s development is expected to have a hot few years ahead of it, but no place is more on fire right now than the East Valley. General Motors announced its move to Chandler last March, with the promise of 1,000 tech-related jobs. GoDaddy broke ground in May on a Global Technology Center in Tempe. On July 30 and 31, more than $1B in economic development projects, with the Marina Heights and USA Place headquarters, were announced along Tempe Town Lake, and Grand Canyon University announced a second campus to be built in the master planned community Eastmark in Mesa, bringing thousands of jobs to the Valley. Before the end of the year, the state squeezed in another deal — Apple bought a former First Solar factory in Mesa, which will bring with it 2,000 jobs.

TEMPE
“Capital investment and the number of jobs increased substantially over (2012),” Tempe reports in its mid-year 2013 economic development budget plan for 2014, “and economic developers participated in locating companies to Tempe resulting in 12,503 jobs, with 3MSF of Class-A office space being developed and/or absorbed with a capital investment exceeding $704M.”
The city also announced two developments totaling $950M in summer. Marina Heights, a 20-acre, $600M development is the largest office development in the state and is anchored by 6- to 16-story buildings. The home of the new State Farm regional headquarters is expected to attract thousands employees. Within 24 hours, the city also announced the $350M development of USA Place headquarters, which will include a 330-room luxury hotel, a 30,000SF conference center, apartments, office and retail space as well as five full basketball courts and a 4,500-seat event center. It’s estimated this attraction will annually bring 300,000 people to Tempe.

MESA
When the recession hit Mesa, the city made cutbacks that included giving up $100,000 in capital and decreasing the economic development staff by 40 percent. The city filled a budget gap and continued to invest in the infrastructure for key projects and took advantage of lower cost construction; the Cubs spring training facility, known as Cubs Park, was contemplated at the bottom of the recession in 2009, and development of State Highway 24 has been expedited with the knowledge that the state will reimburse Mesa.
“We have a strong bond capacity because we made those cuts early on,” explains Mesa’s Director of Economic Development Bill Jabjiniak. “As we’ve come out of this, we’ve been able to handle projects people are a little surprised about.”
The city self-funded the aforementioned $84M stadium and spring training complex plus the $15M infrastructure and park leading to the stadium. The park will have a $137M impact on Arizona. Another big player is the Phoenix-Mesa Gateway Airport, which generates $1.3B in economic benefits and 10,470 jobs in or around the airport, according to a report by ASU’s W. P. Carey School of Business.
The city is now home to five “legacy” institutions, which consist of satellite campuses for established liberal arts schools, and Grand Canyon University announced its intent to build a 160-acre, second campus at the master planned community, Eastmark expected to open in 2015 with a seven-year build-out.

CHANDLER
When Motorola left a 152-acre hole in Chandler’s Price Road Corridor, the city had to decide between a “quick fix” or staying true to the space’s identity as an innovation hub equipped for technology.
“We were at a crossroads 10 years ago,” Mayor Jay Tibshraeny says. They had the option to convert the space to residential, but the mayor adds, “Our vision is not to do what’s easy but to maintain it as a job-creator and an employment center.”
That site is now Continuum — a 152-acre campus primed for business and tech with a capacity for thousands of employees.
Chandler has added 4,800 jobs since the recession. It has the largest data center in Arizona, and in August 2012, Intel invested more than $300M to build an R&D facility near its existing Chandler campus, which now employs 10,000 people. Wells Fargo broke ground in December on a 410,000 SF expansion at its downtown campus. This would nearly double the existing structure, providing an estimated 2,500 new jobs to the area. General Motors will add another 1,000 jobs to the city this year.

GILBERT
The Town of Gilbert is one of the fastest growing metros in the Valley. It has seen a consistent increase in commercial permits since 2010 and 3MSF of development since it came online the Loop 202 five years ago. The town also added 10,000 jobs in that time and $1.1B in capital among 200 companies. Gilbert has also seen significant development off U.S. Route 60, with Banner MD Anderson Cancer Center’s expansion. Gilbert also will welcome its first four-year and graduate institution in Chicago-based St. Xavier University.

verma

Vermaland buys 8,000 acres at La Osa Ranch

Vermaland LLC, a land banking and land development company based in Phoenix, has made its first significant investment in the southeast Valley land market – and its largest to date – with the purchase of 8,000 acres in La Osa Ranch, a master-plan community near Casa Grande.

Vermaland bought 4,000 acres in La Osa Ranch in 2012 and recently acquired an additional 4,000 acres in the same community. Strategically located off of Interstate-10 between Greater Phoenix and Tucson, long-term plans call for residential, retail and commercial development at La Osa Ranch. The deal is one of the largest land deals in recent history and indicative of an improving real estate market.

“The market has been buoyant in the past six months and while we have made significant land sales, we also have seen great buying opportunities,” said Vermaland CEO Kuldip Verma. “The opportunities we have the land market will not been seen in the next 10 years.”

Vermaland currently has the largest holdings of 50-1,200 acre parcels in metro Phoenix and the La Osa Ranch is its first significant investment in the southeast Valley.

Verma said besides its location, La Osa Ranch is attractive because of the advanced ground-work already completed including all water and land studies. Current plans call for more than 33,000 residential lots, 1,000 acres of commercial development and 2,000 acres of open space, parks and trail systems. The purchasing entity for the project is Verma La Osa Ranch, an LLC holding company for Verma Legacy Trust.

Verma said the residential real estate industry and land sale market are increasingly improving throughout Greater Phoenix and Arizona as a whole. Currently, finished residential lots are seeing double their value in comparison to 2011, with most foreclosures being flushed out. He added that 2013 will have more raw land sales than 2008-2012 combined and that 2013’s raw land market is seeing record activity halfway through the year and expects this pace to continue. On a side note, Verma added that raw land remains a valued commodity given that only 17 percent of all land in Arizona is private land.

Vermaland prides itself on the ownership of high-quality land parcels with good road access, electricity and water, proximity to substations and flat land conditions to allow for easier building. In the height of 2007 and 2008, Vermaland supplied land to some of the nation’s largest solar projects. Because of limited expansion options in most areas of Phoenix, other than the west Valley and southeast valley, Vermaland entities have maintained their portfolio in these two areas.

Elliot Business Park

Elliot Business Park In Tempe Getting 316,000 SF Industrial Warehouse

Elliot Business Park has launched the final phase of its 1 MSF project, bringing 316,000 SF of investment-grade warehouse distribution space to market by the end of the year.

The two new buildings, which broke ground in the second quarter, are the first speculative industrial projects in the Southeast Valley since first quarter 2008.

Jerry McCormick, John Werstler and Cooper Fratt of CBRE’s Phoenix office will handle the leasing assignment for the project’s owner, Phoenix-based Tempe Marketplace Commerce Associates LLP and its affiliate, Transpacific Development Southwest, which developed the industrial park in phases, beginning with the first building in 1999.

The owner’s philosophy is to develop quality buildings for long-term investment that attract quality tenants, and maintain those relationships.

The leasing team has already filled one of the new buildings prior to completion, pre-leasing it to Clear Energy Systems. The other 158,000 SF building under construction is the only space available at Elliot Business Park, and all the existing space is 100% occupied.

“While demand is high, supply is not,” McCormick said. “The vacancy rate for distribution product in the Southeast Valley is below 8%, leaving only Elliot Business Park and two other options for users needing 100,000 square feet or more in the Southeast Valley. Clearly more product is needed to accommodate growth of the area’s high-tech industry, which will bring more jobs to the area.”

In addition to the 316,000 SF of warehouse/distribution space under construction at Elliot Business Park, another 500,000 SF is planned by others in the Southeast Valley. Yet, according to CBRE Research, roughly 1 MSF of warehouse/distribution space has been absorbed in the same area since the start of the year.

Elliot Business Park caters to high-quality and high-end users that desire Class A, energy efficient warehouse space designed for long-term durability and lower maintenance costs. Notable building features include a steel roof structure, ESFR fire sprinkler system, 30-foot clear height, Portland cement concrete paved truck courts, ample parking and up to 3,600 amp 277/480 volt electric service provided by Salt River Project — the lowest cost electric provider in the Valley.

The buildings’ energy efficient features include insulated windows, insulated roll-up doors, R-30 roof insulation, an Energy Star rated single-ply roof membrane and skylights.

Completion of the two new buildings is anticipated by 4Q 2012. Euthenics Architecture of Phoenix is the architect and DL Withers Constructions of Phoenix is the contractor.