Tag Archives: Velocity retail Group

Park West Shopping Center

Velocity Retail recent August transactions

The following is a summary of recent retail transactions completed by Velocity Retail Group, LLC.

Anytime Fitness opening in northeast Phoenix
GetFileAttachment-1Michael Clark, Larry Miller and John Jackson from Velocity Retail represented the landlord, Scottsdale Land Company, LLC, an entity of Wadsworth Development, in the 5,955 square foot 10-year transaction at the northeast corner of Thunderbird and 40th Street in the Paradise Shopping Plaza. The space was formally occupied by Total Woman Gym. Anytime Fitness is represented by CBRE’s Jami Savage, the new gym is estimating a grand opening in March of 2016.

WSS Shoes opens first location in Phoenix market
Andy Kroot, Darren Pitts and Nick Ault represented WSS Shoes in the sublease of a former 12,000 square foot Shoe Carnival building. The store is located in the Mesa Ranch shopping center on the northwest corner of Southern and Stapley. Jake Schumer of HILCO represented Shoe Carnival. The planned opening of is the 3rd quarter in 2015 will mark the first expansion for WSS Shoes into the Phoenix market.

XGT Fitness by Smart Gym energizes Park West Shopping Center
The team of Michael Clark, Larry Miller, and John Jackson also represented Howard Hughes Corporation in the lease of an 8,925 square foot space to Blu Phoenix, the parent company of XGT Fitness by Smart Gym. The lease is signed for 13 years and is located at Park West on the northwest corner of Northern and the Loop 101. President of Blu Phoenix, Drew Marsh, stated that Smart Gym’s new prototype, XGT Fitness, will accommodate everyone’s fitness needs by combining group fitness classes with a complete gym. Representing the tenant was Velocity’s Larry Miller and John Jackson. The gym is set to open November of 2015.

Val Vista Towne Center to get Nature’s Health Vitamin Shoppe
Brian Gast, Larry Miller and John Jackson of Velocity Retail represented the landlord, North American Development Group in the lease of a 1,262 square foot space in Val Vista Towne Center at the southwest corner of Warner and Val Vista Roads in Gilbert . The new tenant, Nature’s Health Vitamin Shoppe, was represented by Bryant Commercial’s Jonvieve Bryant. . This five year deal is expected to open in October of 2015.

Mattress Firm adds new location in Tucson
Velocity Retail Group’s Darren Pitts and Michael Clark represented Mattress Firm in the lease of a 6000 square foot building in the Rancho Center, on the southeast corner of Speedway and Camino Miramonte in Tucson, Arizona. The building was leased from Rancho Center, LLC for five years. Debbie Heslop of Volk Company represented the landlord in this transaction. The new location is set to open in the fourth quarter of 2015.

Mattress Pro expands further Into Tucson market
Darren Pitts and Michael Clark also teamed up to represent Mattress Pro in the leasing of a 6683 square foot building on the southeast corner of Oracle and Limberlost in Tucson, Arizona. The landlord on the five year lease is Oracle/Limberlost Shopping Center, LLC. The new store is also set to open in quarter four of 2015.

Mattress Firm to open new location on Broadway Boulevard in Tucson
Darren Pitts and Michael Clark represented Mattress Firm in the leasing of a 4,800 square foot building on the northeast corner of Broadway Blvd., and Pantano Rd. in Tucson, Arizona. The landlord on the five year lease Broadpan Properties, LLC, was represented by Cushman & Wakefield’s Aaron Laprise and Greg Furrier. The new store is set to open in the 4th quarter of 2015.

Baskin Robbins leases space from Desert Troon in southeast valley
Brian Gast of Velocity Retail represented the landlord, Desert Troon, in the lease of a 1500 square foot space in the Township Plaza on the southwest corner of Gilbert and Baseline. The new tenant, Baskin Robbins, was represented by Mathew Ault of Voit Commercial. This five year deal has an opening date set for September of 2015.

GetFileAttachmentHoda’s Gadgets takes space in Bell Tower Plaza
Larry Miller and John Jackson represented Bell Tower Plaza, LLC in the lease of a 1040 square foot space to Hoda’s Gadgets. Bell Tower Plaza is located on the northwest corner of Bell Road and 63rd Avenue. Set to open in 2016 lease marks the first location for the tenant, Hoda’s Gadgets.

OHM breaks ground in Phoenix market
OHM Factory leased a 1,200 square foot space from Red Mountain Retail Group. Velocity Retail’s Brian Gast represented the Landlord in the lease. It’s opening in July marked the first valley location for the tenant.

At Home StoreFront

Velocity Retail signs 110,850 SF lease for At Home

Velocity Retail Group has finalized a lease agreement with At Home to open a new location in Prescott, Arizona.  At Home will occupy the 110,850 square foot former Wal-Mart building; which is located at 1801 Highway 69 in Prescott, Arizona. The Landlord is the Yavapai-Prescott Indian Tribe. This will be the first At Home location to open in Arizona outside of the Phoenix metro area.  Velocity’s executive vice president, Darren Pitts represented At Home in this transaction.  “At Home is a new retailer to the Prescott market and a great addition in the shopping center.  The store will be a catalyst in bringing additional shopping traffic to the center,” said Pitts. The store is projected to open the first quarter of 2016.

The home décor superstore has trusted Velocity Retail Group to represent them in the opening of multiple new locations across the southwest.  At Home, based in Plano, Texas and Velocity Retail Group will continue to look for new opportunities to expand this successful brand into various markets.

Shea and 32nd

Velocity Retail Group May transactions

Following is a summary of recent retail transactions completed by Velocity Retail Group, LLC.

Andy Kroot of Velocity Retail Group represented Goodwill of Central Arizona in the purchase of 82,106 square feet of land for a new commercial maintenance facility. The lot, which was purchased from Satnam, LLC, is located just east of central Phoenix on the northeast corner of 32nd Street and Van Buren Road.

Velocity Retail Group’s Larry Miller and John Jackson represented Paragon Vison Sciences, the leader in CRT Lenses, in relocating and expanding to a 45,000 square foot facility at 2120 West Guadalupe Road in Gilbert, Arizona. AZCAL, LLC is the Landlord for this 10-year lease, which was represented by Tom Louer and Stein Koss from Lee & Associates. Paragon Vision Sciences has estimated an October 2015 opening date for the new location.

The duo also represented Arizona Greenway Hirani Investments, LLC in the 10-year lease of a 6,000 square foot building to Humana’s Iora Health. Located at the northeast corner of 32nd Street and Greenway Avenue in Greenway Park Plaza, this new clinic helps Humana expand their Iora Health brand into North Phoenix. DTZ’s Dev Gupta represented Humana in the transaction; which is set to open in October of 2015.

Velocity’s Larry Miller, John Jackson, and Brian Gast teamed up to represent Val Vista Village Square, LLC in the lease of a 2,400 square foot space to Susie’s Wigs. This is a relocation of the business to the southeast corner of Cooper Road and Baseline Road in Mesa. Susie’s Wigs was represented by Jane Lee with DPR Commercial in the 5 year deal which is set to open this month.

Larry Miller, John Jackson, and Michael Clark represented NorthStar Retail in the lease of a 3,184 square foot space to Shea Animal Hospital in Phoenix. This relocation is next door to their existing facility in Shea Plaza III, at the northwest corner of Shea Blvd., and 32nd Street.  Their former location is being razed to make way for a new mid-rise apartment complex. The new hospital is expected to open by September of 2015.

Michael Clark and Darren Pitts at Velocity represented Mattress Firm in the leasing of a 10-year, 4040 square foot space on the southwest corner of 75th Avenue and Bell Road. The landlord is a venture formed by Wadsworth Development and Accelerated Development Services. The store is expected to open in the fourth quarter of 2015.

Velocity Retail Group Represented V’s Barber Shop in the lease of two separate facilities. The first is a 1200 square foot space on the northeast corner of 7th Street and Missouri Avenue in the Cinema Park Shopping Center. The second is an 1100 square foot facility on River Road at Campbell Avenue in Tucson, Arizona. Both leases are 10-year deals and expand V’s footprint to eleven stores in Arizona.

Final Front View

Sale of Starbucks at SWC of Scottsdale & McKellips negotiated

Andy Kroot with Velocity Retail Group, LLC sold the single tenant Starbucks store located at the SWC of Scottsdale and McKellips – 1926 North Scottsdale Rd, Tempe AZ. Andy Kroot, Principal of Velocity Retail Group represented the Seller in the transaction and Jon Stansbury of DTZ represented the Buyer.

The ownership – SWC Scottsdale & McKellips, LLC and the buyer – TEMK Investments Femont, LLC closed the transaction April 8, 2015.

“The Greater Phoenix Retail market is very strong right now and is a key expansion area for many investors and tenants alike; we were happy to be able to facilitate a successful close. Strategically locating A+ sites for national tenants is paramount.” said Kroot.

This Starbucks building is approximately 1,850 SF on approximately 23,000 SF of land with a drive- thru.

Downtown Phoenix Shopping

ICSC: Surfing the Omni-channel

When web-based shopping gained popularity over the last two decades, spearheaded by the likes of Amazon and major retailers’ internet storefronts, the imminent demise of brick-and-mortar establishments seemed likely. War was declared between bricks and clicks.

The win-lose conversations are fading into the background as researchers suggest a more symbiotic relationship between the two.

Stores such as Birchbox, Warby Parker and Bonobos are retailers that began as e-commerce only and are moving into physical storefronts. Amazon.com, which reportedly controls about half of online-only sales in the U.S. (and 5 percent of U.S. retail sales), has also announced plans to open a physical storefront in New York City.

“Several national directors of real estate have indicated that zip code specific sales suffer when a proximate brick-and-mortar store is closed,” says Joel Moyes, principal of Kinetic Companies and Arizona and New Mexico state director for the International Council of Shopping Centers (ICSC).

No one denies the retail sector, plagued by high vacancy due to abandoned big box spaces waiting for alternative uses or to be broken down into smaller storefronts, is one of the hardest hit by the economic downturn. Moreover, it is having to evolve with a changing base of consumers.


Despite the pressures of technology, not that much has really changed at the core of retail’s purpose, says Dave Cheatham, president of Velocity Retail Group, LLC.

“Retail is about getting product to a customer,” he says. “Whether the customer comes into the store and looks at the product but then purchases it over the internet or whether the customer shops online and then goes into the store to purchase is irrelevant. The bottom line is that the retailer is still selling their product.”

According to IDC Retail Insights, omni-channel customers shop three times more frequently and spend 3.5 times as much as single-channel shoppers. A survey of 100 senior executives at leading retailers as reported by the Retail Industry Outlook Report compiled by KPMG LLP reported the biggest revenue driver in the next one to three years is customer retention.

Omni-channeling is paving the way for this. One example, Cheatham points out, is a store’s ability to search inventory at all surrounding stores to find and ensure delivery of the product carried by the company but not at the store within 24 to 48 hours.


Dave Cheatham


“This newer offering is better for the customer, who now gets the product they wanted, and the retailer does not lose a sale,” he says. “Additionally, it helps the retailer utilize their inventory more efficiently by pushing product to the customer, rather than sitting in a back room.”

This kind of technology, employed by heavy hitters such as Wal-Mart and Target, do require significant technological upgrades. More than half of the senior executives surveyed said investing in technological updates, which include company website, brick-and-mortar stores and social media, then mobile, in that order, were a high priority. However, about that same number of executives cited cost as a hindrance in technological upgrades.

According to a January 2014 report by Business Insider, the number of smartphone users using mobile coupons was estimated to reach 47.1M last year — this equates to about 41 percent of department store customers. Mobile payments are a focus of about 40 percent of the KPMG surveyed retail executives.

“Retail is constantly evolving,” says Cheatham. “From the size of the prototypical store for each retailer, to their product mix, changes occur continually. More importantly, how a retailer reaches their customer has also changed. Omni-channel retailing is nothing more than a continuation of this evolution.”

Many luxury name brands are continuing to expand worldwide, including H&M, which is adding 375 stories, including one that will land at Tempe Marketplace this fall. RBC Capital Markets reported 40,000 U.S. retail store openings planned between November 2014 and 2015. Overseas, Dubai is building the world’s largest mall (8MSF) this year, reports Colliers International in its Global Retail Highlights for the second half of 2014.

Right-sizing is still very much a thing, while retailers feeling the crush of online shopping are becoming more creative with the brick-and-mortar space they do have.

National vacancy for retail is 6.3 percent as of 2Q 2014, according to Colliers International. Phoenix saw an increase in rent per square foot rise to $22, a 26 percent year-over-year rent increase.

In June 2014, UPS published “UPS Pulse of the Online Shopper,” a white paper featuring research by comScore, Inc. It found “long-term infrastructure investment will be required to support growing customer demand.”

This begins with distribution centers, which allows orders to be fulfilled and increase transparency across retail channels, the paper continues. According to 2014 Forrester research, more than half of U.S. retail sales will be influenced by online store visits. This includes shipping items to a store for pickup, which has a 40 percent chance of leading to more on-site purchases.

UPS reports that two-thirds of smartphone owners use their phones in-store for shopping to compare prices (36%), read reviews (27%), text friends about the product (25%). That same percentage of people, according to A.T. Kearney’s Omni-channel Shopping Preferences study, visit a physical store before or after making an online purchase.

Obviously, with e-commerce and distribution centers, retailers are thinking about delivery times, which can influence retention of a customer — 50 percent of shoppers have abandoned an online shopping cart due to long delivery estimates or a lack of an estimate, according to UPS. However, about 83 percent of customers are willing to wait an additional two days for delivery in exchange for free shipping, this is particularly true for people who are ordering items that are not available at local retailers.

“Shopping is one of America’s favorite entertainment venues, and that is not likely to change. A case in point is that the Mall of America has more visitors than Disney World in a given year,” says Cheatham. “It’s not about bricks or clicks. It’s about bricks, clicks and happy customers.” 


Retail real estate veteran joins Velocity Retail Group

Velocity Retail Group, LLC announced Dean Ingram has joined the firm as a vice president.


“Dean has very deep experience and client relationships,” said Greg Coxon, Chief Administrative Officer at Velocity.  “Having spent time in the Arizona, Oklahoma and Texas markets will provide our clients with valuable insight and knowledge,” he added.


During his career Dean has achieved several awards and milestones, including Rookie of the Year, Top Producer, and the Million Dollar Award.  He has earned a reputation for persistence in achieving his clients’ goals and objectives in the areas of strategic planning, market knowledge and by utilizing his sharply honed negotiation skills. His proactive and highly responsive approach in marketing properties has provided exceptional results for many high-profile shopping centers throughout the Phoenix and Oklahoma markets.


“I am excited to be part of the team at Velocity Retail, the depth of experience in all aspects of retail real estate are unmatched in the market.  The superior technology and resources that have been created and developed at Velocity are going to be a huge asset to my clients,” he added.

John Jackson

Velocity Retail promotes two brokers

Velocity Retail Group, LLC announced Friday that retail brokers John Jackson and Larry Miller, Jr. have been promoted to associate vice president.

Larry Miller

Larry Miller

“Both John and Larry are known for providing their clients with excellent service and superior real estate expertise,” said Greg Coxon, Chief Administrative Officer at Velocity.  “They are an integral part of the team that is working on the eleven-property NorthStar Realty portfolio in Phoenix,” he added.

Jackson’s work focuses on working with owners of shopping centers. For over eight years he has been achieving results for his clients by increasing their cash flow, bringing solutions for excess vacancy, and consulting on market strategy and long-range planning.  He has completed hundreds of transactions for both landlords and tenants during his career and was in the top 5 brokers in the office during 2013.

Miller has over 12 years’ experience in commercial real estate.  Larry works with developers and landlords to achieve their goals and objectives through highly responsive and proactive marketing strategies, solid tenant relationships, and comprehensive knowledge of the retail real estate arena.  Additionally, Larry represents a number of tenants in their market strategy and expansion plans in Arizona.

Moon Valley Towne Center

Goodwill to open new stores other Velocity Retail transactions

In August, Velocity Retail Group, LLC completed 18 deals totaling nearly 300,000 square feet spanning from Texas to Arizona, Utah and Oregon.  Below is a summary of those transactions.


Ahwatukee will soon have a new 22,565 square foot store for Goodwill Industries of Central Arizona.  The retailer will be opening in the Foothills Shopping Center at the northeast corner of Ray Road and 48th Street in Phoenix.  Formerly a Michael’s, the tenant was represented by Velocity Retail Group’s Andy Kroot.


Darren Pitts of Velocity Retail Group, and Chris Peters of Capital Pacific in San Francisco represented the seller, J & M Management, LLC in the sale of 10011 Metro Parkway East in Phoenix. The buyer, Tombstone Tactical was represented by Larry Miller of Velocity Retail in the purchase of the 5,425 square foot former Verizon store.  Tombstone Tactical has a location in Chino Valley and is growing their business by opening this second store.


Judi Butterworth of Velocity Retail represented the seller, Sooner Frye Price, LLC in the $1.5 million sale of 2.4 acres at the southeast corner of Frye Road and the Loop 101 Freeway in Chandler, AZ.  The buyer will open a Chuck E. Cheese restaurant on the parcel.  The buyer, Melvin Property #3260 LLC currently has 14 restaurants in multiple states.  He was represented by Western Retail Advisors.  The property is adjacent to the Hilton hotel.


Moon Valley Towne Center at the southeast corner of Bell Road and 7th Street will soon have two new tenants.  Orange Theory Fitness will be opening a 3,090 square foot location adjacent to Hobby Lobby in October of 2014.  Additionally, Cartridge World will be opening a 1,260 square foot store.  This is a relocation from an existing location.  The Landlord, NorthStar Realty Finance Corp. is represented by John Jackson, Larry Miller and Michael Clark of Velocity Retail Group.


Brian Gast of Velocity Retail Group represented the landlord of Scottsdale Fiesta shopping center at the southeast corner of Shea Boulevard and the Loop 101 Freeway in a 3,749 square foot lease to Watercolors High Fashion.  The new store recently opened for business. Danielle Davis of LevRose Real Estate represented the tenant in the transaction.


Dave Cheatham of Velocity Retail Group represented Mega Furniture in three separate transactions in San Antonio and Austin, Texas.  Working with Nick Altomare of The Retail Connection in San Antonio, the team leased a 29,487 square foot location at 125 NW Loop 410 in the La Plaza Del Norte shopping Center.  RPAI was the landlord for this 10-year deal.  In a second transaction, Mega Furniture purchased a former K-Mart building located at 3150 Pat Booker Road in San Antonio.  The 72,454 square foot building is located on 11.15 acres.  These stores are expected to open in the next quarter.  In the third transaction in Austin, Texas, Mega Furniture leased a 31,736 square foot building at 3815 Dry Creek Drive in Austin, Texas.  The landlord is Sandalwood Management in this 10-year lease.  Todd Wallace of Jones Lang LaSalle worked with Velocity Retail group on this transaction.  Look for more locations to be announced in the coming months as Mega Furniture expands its Arizona footprint in Texas.


Velocity Retail’s Darren Pitts and Chad Moore of Mountain West Retail represented Mattress Firm in a new 4,084 square foot location at 598 W. Main Street in American Fork, Utah. The site was a former Rubio’s.


Goodwill Industries of Central Arizona, Inc. was represented by Velocity’s Andy Kroot in a new 25,000 square foot location at the northeast corner of Ellsworth Road and Heritage Square in Queen Creek, AZ.  The Landlord is E.R. 15, LLC.


Popeye’s Louisiana Kitchen was represented by Dave Cheatham, Darren Pitts, Michael Clark, and Nick Ault of Velocity Retail Group in the 15-year lease of a parcel that will accommodate a 2,695 square foot freestanding building at The Pavilions at Talking Stick at Indian Bend Road and Loop 101 in Scottsdale, AZ.  The Landlord is De Rito Pavilions 140, LLC.


Ashley Furniture Stores will open a 15,505 square foot location in the Cascade Village Shopping Center in Bend, Oregon.  The tenant was represented by Darren Pitts of Velocity Retail Group and Mark New of New & Neville from Portland, Oregon in the 10-year lease transaction.  The store is expected to open this fall.


Larry Miller and John Jackson of Velocity Retail Group represented Edward Jones Investments in two separate transactions.  First in a 1,436 square foot lease at Bell Plaza North shopping center located north of the northwest corner of Bell Road and Boswell Road in Sun City, AZ.   This location is expected to open by January 2015.  The second transaction is a 915 square foot location at the southeast corner of Baseline Road and Hawes in Mesa, AZ.  The store is expected to open in October of this year.  Edward Jones continues to reposition their stores into more prominent locations including office buildings.  Look for more transactions in the near future.


Andy Kroot of Velocity Retail Group represented Goodwill Industries of Central Arizona in a 25,000 square foot transaction at the southeast corner of 99th Avenue and Lower Buckeye Road in Phoenix, AZ.  The Mack Southwest Corporation is the landlord for this build-to-suit location.


Total Sports Therapy leased 3,238 square feet in Lone Mountain Landing at Cave Creek Road and Lone Mountain Road in Cave Creek, AZ.  The Landlord, NorthStar Realty Finance Corp. is represented by John Jackson, Larry Miller and Michael Clark of Velocity Retail Group.  The tenant is expected to open in October of this year.


Goodwill Industries of Central Arizona, Inc. is opening a 25,000 square foot location north of the northeast corner of RH Johnson Blvd., and Camino Del Sol in Sun City West, AZ.  Brown Grace 6 Investments, LLC is the landlord for this build-to-suit location.


Velocity Retail, WEB

Velocity Retail Group reports recent transactions

Below is a summary of Velocity Retail Group, LLC recently completed transactions:

Goodwill Industries will be opening a new retail store at the southwest corner of Arizona Avenue and Riggs Road in Candler, Ariz.  Andy Kroot of Velocity Retail Group negotiated the ten-year lease of 27,600 SF on behalf of the tenant. The landlord, Greenway 32, LLC, was represented by Bob Rusing of Arizona Partners Retail.

Velocity Retail Group represented Tokyo Joe’s in a ten-year lease of 2,500 SFnorth of the northeast corner of Baseline Road and Val Vista Drive in Gilbert, Ariz. The landlord was represented by Trent Rustan of Commercial Properties.  A second Tokyo Joe’s was also signed at Chandler Pavilions at the southeast corner of Ray Road and Interstate 10 in Chandler.  The 2500 SF store will be opening in the former Barbeques Galore space during the 3rd quarter.  The landlord was represented by Cliff Johnston of Cassidy Turley BRE.

Integrity Staffing leased a 6,005 SF free-standing building at the Agua Fria Towne Center, located at the northeast corner of Camelback Road and Loop 101 in Glendale, AZ. Velocity Retail Group’s Judi Butterworth, Nick Ault, and Michael Clark represented the landlord. The tenant was represented by Michael Prochelo of Financial Management Group.

Nick Ault of Velocity Retail Group represented Yummi Sushi in a three-year lease of 3,797 SF at the northeast corner of Thunderbird Road and 32nd Street in Phoenix.  The landlord was represented by Reuel Couch of The Restaurant Brokers.

Representing the landlord at the Sun Village Fair Shopping Center at the NEC of Warner Road and Alma School Road in Chandler, Ariz., Michael Clark, John Jackson, and Larry Miller of Velocity Retail Group leased a 1,507 SF space to Third Party MVS Services on a five year lease. Sun Village Fair is one of eleven valley centers that Velocity Retail Group represents for owner NorthStar Realty Finance Corp.

Denny’s Restaurants was represented by Andy Kroot of Velocity Retail in the 10-year least of 5,695 SF at the NWC of I-17 and Dunlap Avenue, in Phoenix. The Winco/Conn’s Shopping Center was represented by Gordon Keig of Kornwasser Properties.

Larry Miller and John Jackson of Velocity Retail represented Edward Jones Investments in the five year lease of 1,100 SF at Lindsay Groves on the SWC of Lindsay Road and Germann Road in Gilbert, Ariz. The landlord was represented by Matt Zaccardi of CPI. Edward Jones Investments plans to relocate their Gilbert office to the new location in October of this year.

Miller and Jackson also represented The Sherwin Williams Company in the ten year lease of 4,000 square feet West of the Southwest corner of Happy Valley Road and 19th Avenue in Phoenix, AZ. The landlord, Happy Valley Towne Court, was represented by Jerry Roberts of NNN Amercia. The lease represents the first of several stores Sherwin Williams plans to open in 2015, as they expand their North Phoenix footprint.

Westfest LLC, owners of Desert Sky Festival located at the southeast corner of Thomas Road and 75th Avenue recently completed a 3-year lease with CFC financial for a 1200 square foot space.  Judi Butterworth from Velocity Retail, and Paul Serafin of De Rito Partners co-listed the project and negotiated on behalf of the Landlord.

Darren Pitts of Velocity represented Uptown Cheapskate in a five-year lease of 4056 square feet at Chandler Gateway shopping center located at the northeast corner of Chandler Boulevard and Chandler Village Parkway.  The landlord is Chandler Gateway SPE, LLC.  The retailer is a sister company of Kid to Kid, and will focus on teen and tween resale and new clothing and accessories.  The store is planning to open by 3rd quarter of this year.


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.


Velocity Retail Group takes flight with UAV technology

For years Velocity has invested in cutting-edge technologies to service our clients and help them stay in front of the competition. Velocity is already known for delivering high-quality photography and video for our listings, tenants, and our events. Now UAV’s (unmanned aerial vehicles) will allow us to provide our clients a much different perspective than they’ve had before. All without paying a fortune for custom aerial photography.

Having the ability to get a prospective buyer or tenant above the rooftop of shopping center, or building provides them with a unique view of the trade area. From this angle important details like traffic flow, ingress and egress, surrounding tenants are easily viewed. Another benefit is the ability to see the current conditions of the roof and other structural features that can not be seen from the ground.

“We are known for seeking out the newest technologies for our clients. UAV’s are one of the most exciting tools we have had that we think will impact our clients ability to make more informed decisions,” remarked Dave Cheatham. “We researched many UAV units and chose one that had plenty of safety features, advanced flight capabilities, stabilization, and the ability to deliver high-resolution stills and video.”

John Jackson is one of our experienced pilots and real estate agents. He specializes in listing shopping centers in the Phoenix market and believes this will be one more tool in the box that sets Velocity Retail Group apart. “As a remote-control aircraft pilot, I have a passion for getting up in the air. The fact that I can do this for my clients makes it even better,” said John Jackson. “The unit we fly is the most stable one on the market, even in the wind conditions that we can experience in the Phoenix area.”

We predict this technology will change the retail commercial landscape for our clients. As retailers expand into our market, they will have a more comprehensive view of the best sites, the best intersections, and their competitors. Our shopping center owners will also have the benefit of greater exposure to national tenants who are not currently in the local market. Through aerial video and photographs they can virtually walk a shopping center that was shot a day or two prior without having to fly to Phoenix.

Watch the video to see first hand just what a UAV can do in marketing a shopping center.

Brian Gast

Brian Gast Joins Velocity Retail Group

Velocity Retail Group, LLC announces that veteran retail broker Brian Gast has joined the firm as a senior vice president. With more than 12 years of experience in the industry he brings a wealth of proficiency and solid relationships into Velocity’s existing client base.

“As a top producer at his previous firm, Brian is adept at knowing how to provide his clients with superior service and unparalleled retail expertise. We are pleased to be able to have Brian join our firm and instantly increase our strength in the market,” said Greg Coxon, chief operating officer at Velocity.

Brian will focus on working with owners of shopping centers and retailers. He has the ability to accomplish their goals and objectives through his highly responsive and proactive approach in each transaction. By harnessing his relationships and thinking outside the box, Brian has been able to put opportunities and deals together where many people might not have seen the potential. This unique ability has brought remarkable results for his clients. He has built an impressive tenant client list that includes many household names from a national and regional scope. His expertise with owners is well established and also includes national, local and regional firms.

“Velocity Retail has a diverse and dynamic group of experienced professionals who have a tremendous reputation in the business and are able to perform at a very high level for their clients,” said Gast. “In looking at performance and experience it was important that I be part of a company that is able to respond quickly to changing market conditions and has the resources, technology and expertise to help my clients achieve their goals. Velocity Retail Group fit all of those requirements and more.” he added.

Brian has completed hundreds of transactions in his career and has earned the honor of being a Million Dollar Producer and Top Deal Producer during his tenure at previous brokerage firms. He is a graduate of Arizona State University and a long-time Valley resident.

Northwest corner of Camelback and 95th Avenue

Velocity Retail reports recent transactions

Laser Away Centers will be opening their 2nd location in Arizona at the northeast corner of Camelback Road and 44th Street in Phoenix. Judi Butterworth of Velocity Retail Group negotiated the five-year lease of 1,259 square feet on behalf of the tenant. The landlord, Camelback & 44th OPCO, LLC was represented by Joe Hoye of Westwood Financial Corporation. The new location will open in the 3rd quarter of this year.

Velocity Retail Group, LLC announces that Carter’s Retail, Inc. will be opening a 3,483 square foot store this summer at Yuma Palms Regional Center at the northeast corner of Interstate 8 and 16th Street in Yuma, AZ. Dave Cheatham of Velocity Retail Group represented Carter’s in the 10-year lease transaction. The landlord, Inland Continental Property Management Corp. was represented by Joe Doucette of GDCRE.

Larry Miller and John Jackson of Velocity Retail Group represented CrossFit Magna in a 11,704 square location in the Village Center located at the northwest corner of Cactus Road and Paradise Village Parkway in Phoenix, Arizona. The landlord is Phillips Edison & Company. The tenant is currently in the trade area and is doubling their store size with this new location. They are expected to open by August 1st.

Nick Ault and Judi Butterworth of Velocity Retail Group represented Edwards Hollywood, LLC in the lease of a 6,005 square foot former Hollywood Video space at the northwest corner of Camelback and 95th Avenue to Integrity Staffing Solutions, Inc. The tenant was represented by Adam Hood of Colliers International in the three-year lease transaction. The new location is planning on opening in July.

Nick Ault of Velocity Retail Group represented Carmel Cleaners in a 5-year lease for 2,200 square feet at the southeast corner of Pinnacle Peak and Scottsdale Roads. The landlord was represented by Ryan Amato of Eisenberg Companies. This will be the 3rd location for this tenant and they are expected to open in the first quarter of 2015.

Larry Miller and John Jackson of Velocity Retail Group represented CompassQuote Insurance in a 1,028 square location at the northeast corner of Pinnacle Peak and Pima Roads in Scottsdale, Arizona. The landlord, La Mirada Shopping Center was represented by Jennifer Eggert of Zell Commercial. This is the first location for this tenant and they are currently open for business.

VelocityRetail_CollinLandis, WEB

Collin Landis joins Velocity Retail Group

Velocity Retail Group, LLC announced Wednesday that Collin Landis has joined the firm as their GIS and Research Analyst. Collin brings 14 years of combined experience utilizing GIS and graphic technology to spatially analyze and visually convey geographic data. For the past eight years Collin managed the GIS, research, marketing and graphic activities for a local commercial real estate firm in Phoenix.


We are excited to have someone of Collin’s caliber join our team at Velocity,” said Greg Coxon, Chief Operating Officer at Velocity. “He has solid experience in the industry and brings a greater level of depth to the research capabilities we provide for our clients,” he added.

Shea Scottsdale Safeway

Safeway sale creates looming cloud over Phoenix retail real estate market

Over the past two years, the Phoenix retail real estate market continues to improve with lowered

vacancy rates and strong absorption. The one area that persists as a cause for concern is the number of vacant big boxes in the market. With the recent announcement of the impending sale of Safeway to one or more of their competitors, this is news that could create further hardship in the Arizona shopping center industry; here is why.

Overall Phoenix retail market 4Q 2013.

Overall Phoenix retail market 4Q 2013.


Currently, there are 308 vacant big boxes in the Phoenix metropolitan area. Over 56% of these boxes are in neighborhood shopping centers.


This amounts to a total of 175 vacant boxes in neighborhood centers. Never before in the history of the Phoenix area have we ever come close to having this amount of vacancies in our neighborhood shopping centers.


When a grocery store becomes vacant in a neighborhood center this obviously creates a harmful effect on the small shop tenants in the shopping center who depend on the traffic driven by the grocery store. A grocery anchored center does not have the same pulling power to draw customers that a power center or regional mall does. Neighborhood centers typically only reach shoppers in a one to three mile radius. These smaller trade areas are the hardest to replace from a re-tenanting perspective if there is not another grocery store that can fill the void.

Vacant big boxes by type of center.

Vacant big boxes by type of center.



With the continued transformation of the grocery industry shifting to regional trade areas and to larger and larger formats often over 100,000 square feet, retailers such as WinCo, Super Wal-Mart and Fry’s Marketplace are not viable candidates for these neighborhood centers. Additionally, many times a grocery store has a restriction against another grocery store going into the same space, limiting the already small pool of potential replacement tenants even further. These types of vacancies also have a very negative effect on the value of this type of shopping center. Many of them have lost 70% to 80% of their value because of a vacant anchor.


When Basha’s filed for bankruptcy in 2009 they left 25 vacant grocery stores in their wake. Today, five years later 13 stores — over half —are still vacant. If Safeway is sold to someone who is currently in our grocery market, I fear that there will be a rash of store closings which will further exacerbate our big box problem – just as we are starting to gain some ground.


Neighborhood shopping centers have been a mainstay for investors as power centers have lost some of their appeal in recent years. Neighborhood centers were considered a safer investment as they had not been affected by the downsizing and consolidations among the power center users (electronic stores and office supply, are examples). Many REITs are looking for a safer product type for their investors and neighborhood centers fit their criteria nicely. A merger of this type will cause the investors to step back and evaluate their options even further.


In the event of a Safeway-Albertson’s merger this could be one of the better outcomes for Arizona, as Albertson’s would have an opportunity to increase their footprint and market share in Phoenix. In this event, don’t be surprised if there is a large block of stores that hit the marketplace, which will impact our improving yet still fragile retail market.


The grocery business in Arizona is very diverse and like all retail, will continue to evolve. There is no doubt that we will have some interesting times on the horizon. Let’s hope that this merger creates a cloud that has a silver lining, and that however this merger shakes out that the stores are able to continue to operate and not add to our big box surplus.

Popeyes, Velocity, WEB

Velocity Retail Group Negotiates First Redesigned Popeye’s for Phoenix

Velocity Retail Group, LLC announces that the first newly redesigned prototype for Popeye’s Louisiana Kitchen will be built at the southwest corner of Elliot Road and Priest Drive in Tempe, Ariz. President Dave Cheatham,  Vice President Michael Clark and Associate Nick Ault of Velocity Retail Group represented Popeye’s in the transaction. The landlord TPP JV Maricopa, LLC an entity controlled by Trigate Capital was represented by Clift Johnston of Cassidy Turley BRE.


“The site is the first of many that this new Phoenix franchisee is planning for the Arizona market. While we have existing Popeye’s stores in our market, the Louisiana Kitchen concept it new to the chain and our market,” said Cheatham.


“Arizona is a key expansion market for our franchise company, by working with Velocity Retail we are able to maximize their experience and relationships in the market to execute our expansion plan,” said Amin Dhanini, President of HZ Props AZ, LLC the entity which will control the Arizona stores.


Popeye’s Louisiana Kitchen, Inc. is the world’s second-largest quick-service restaurant chicken concept with 2,225 stores as of the end of last year. Popeye’s distinguishes itself with a unique “New Orleans” style menu that features spicy chicken, chicken tenders, fried shrimp and other seafood, as well as jambalaya, red beans and rice and other regional items. Popeye’s is a highly differentiated brand with a passion for its Louisiana heritage and flavorful authentic food.


The new building will be 2,951 SF and be located on a 23KSF parcel fronting Elliot Road. It is expected to open by the 4Q of this year. “We are pleased to be able to represent Popeye’s as they roll-out this new concept to the Arizona market. Our goal is to strategically locate A+ sites and get their stores up and running as fast as possible,” said Clark.

Greg Coxon

Velocity Retail Group Names Veteran Real Estate Executive Greg Coxon COO


Velocity Retail Group announced that Greg Coxon has been appointed Chief Operating Officer of the firm and its affiliated development services company Accelerated Development Services.

Coxon is a seasoned real estate executive who most recently was the President of Brokerage Services for Grubb & Ellis, and then transitioned that role to Executive Vice President and Regional Manager for Newmark Grubb Knight Frank during the recent purchase in 2012.

Prior to that he was the Senior Managing Director at CBRE for the Phoenix office. While with the Phoenix office, Coxon was awarded Manager of the Year, and was the Founding Manager for various specialty practice groups including, Hospitality, Land, Economic Incentives and Property Tax Appeal.

“Greg is a long-time colleague and friend,” said Dave Cheatham, President and Managing Principal. “His capabilities are a perfect match to help our company capitalize on the improving real estate market while enhancing the services we offer across all of our business platforms. We are very pleased to be working together again.”

The newly-created position will provide the companies with additional expertise to manage the day to day operations for brokerage, development and their asset management businesses. Coxon’s focus will be to grow these service platforms and business development programs, and enrich the service offerings to their clients.

“I am delighted to reunite with many Velocity Retail associates with whom who I share a rich history as friends and former business associates, and look forward to exploring new relationships with other professionals in the firm,” Coxon said.

“Any services business is dependent of the quality an ability of it people and their ability to deliver on client needs, solutions and business objectives. The Velocity team is filled with bright and creative professionals who a committed to achieving exactly that.”

“I have spent the majority of my career at larger firms developing leaders and managers, nurturing client relationships, while also coaching real estate professionals and client teams for better results. It will be fun and rewarding to apply those skills and experiences within a more entrepreneurial organization and environment.”

“Having someone with Greg’s experience, integrity, and high level of respect in the industry rounds out our company’s team to amplify our client service level and strengthen offerings to our clients,” said Andy Kroot, Principal with Velocity.

The core group at Velocity Retail was formerly with CBRE until April 2005 and has worked together for many years. Coxon’s expertise in managing multiple offices and platforms is finely honed and was put to the test during the integration of Grubb & Ellis to Newmark Grubb Knight Frank. Coxon was responsible for the firm’s strategic shift into a practice-group based client servicing model.


Biscuits Café To Take Over Former Baja Fresh Space On University


Biscuits Café has signed a new lease at 414 W. University Dr. in Tempe – the former Baja Fresh space. Biscuits Café leased 2,876 SF and the store is expected to open in 3Q 2013

“We were excited to be able to help Biscuits Cafe expand their presence in Arizona and bring a fresh new breakfast concept to Tempe,” said Andy Kroot of Velocity Retail Group. “Biscuits Café has two other stores currently open in Arizona (Chandler and Glendale) and continues to search for great, high traffic locations.”

Biscuits Café has 11 stores in Oregon and two stores in Washington.

Biscuits Café is a family run business that originated in Oregon. Since 1998, Biscuits Café has been opening locations at a steady pace and looks forward to more grand openings in Arizona.


Will 'Furniture Wars' Be A Hit In Valley With Super Stores On The Way?


While not quite as popular as the television shows including “Storage Wars,” “Parking Wars,” or even “Cupcake Wars,” Phoenix is in for a “war” of its own with the onslaught of heavy-hitting furniture retailers coming to Phoenix.

In the next few months look for grand openings of huge “super stores” that will knock your socks off in terms of size, selection, pricing and speed of delivery.

These new furniture companies that are investing in the Phoenix area are further proof that the local economy is on the rebound and confidence is returning both from the retailer perspective and consumer perspective.

It’s no surprise to anyone that housing sales and furniture sales go hand-in-hand. The recent upswing in the Phoenix area residential market is further proof. Housing prices in the past year alone have risen 22% to a new median housing price of $180,000. New construction is commencing in many communities previously put on “pause” from the recession, and new home permits are on the increase.

This coupled with positive job growth, increased in-migration, and lower unemployment numbers are all helping to fuel the improved economic outlook in Metro Phoenix.

The furniture market in Arizona is very competitive. In fact, there are several operators in the Valley listed in Furniture Today’s Top 100 list. The RoomStore of Phoenix is ranked No. 72 on the Top 100 list, and EBCO, the Phoenix-based La-Z-Boy Furniture Galleries licensee is ranked No. 84.

Mattress Firm is ranked No. 6 and had the greatest net sales gain growing its sales three-fold in the past year alone. Mega Furniture has increased its store count to 10 in the past two years with its three newest stores in the Southeast Valley.

“The expansion of furniture retailers has been one of the brighter spots across the country,” said Darren Pitts, executive vice president at Velocity Retail. “With home improvement struggling during the recession, furniture purchases offered an alternative to many cash-strapped consumers.

“High-performing furniture retailers have continued their expansions across the country. Velocity Retail Group specializes in representing home furnishing retailers. We have completed transactions of almost 1.5 MSF in the past few years.”

As far as the new “super stores,” the first grand opening will be Aug. 8 when Living Spaces extends its reach outside of California for the first time with a new store in Scottsdale. It is taking over the 130,000 SF former Great Indoors space at Frank Lloyd Wright and Scottsdale Rd. in the Scottsdale Promenade shopping center.

Living Spaces is based in southern California and this will be its ninth store in the chain. Living Spaces is ranked No. 36 on Furniture Today’s Top 100 list with estimated sales topping $200M in 2012.

The Scottsdale store will feature more than 150 living rooms, more than 70 bedrooms and an assortment of other goods including dining room, youth bedroom, home office furniture and accessories. Also will be an Elements accent gallery that the retailer said will feature one-of-a-kind pieces from around the globe.

A second store will be located on 23 acres at the SEC of 67th Ave. and I-10, which will be a combination warehouse and retail showroom. The warehouse, which is currently open, comprises 315,000 SF, with the store nearly 123,000 SF. The company’s promise of same day delivery necessitates a warehouse component along with their stores.

The chain reports that more than 150 new jobs were created with these two locations. It was reported that the company is negotiating on a parcel in the Southeast Valley across from San Tan Regional Mall at Williams Field Rd. and the Loop 202.

American Furniture Warehouse expects to open its 550,000 SF facility at Power Rd. and the Loop 202 in Gilbert this year. The Englewood, Colo., retailer is building the facility on 73 acres of former farm land. The plans call for a 150,000 SF showroom and a 400,000 SF distribution center.

It was reported that AFW is in negotiations to buy 47 acres of land for a west side location at the SWC of Bethany Home Rd. and Loop 101 in West Phoenix. The site would have a 350,000 SF facility.

American Furniture Warehouse ranks No. 23 on Furniture Today’s Top 100 list with estimated sales topping $323M in 2011.

The furniture industry is poised for growth; the top 100 stores have recorded double-digit growth in the past year, with predictions even rosier for the future. The added competition will keep prices down, and the new stores will bring greater selection.

With more new home construction, continuing positive in-migration and pent-up demand from customers who have reigned in their spending over the past five years all add up to positive news for retailers and customers alike. It’s a great time to be a consumer in Phoenix.

Dave Cheatham of Velocity Retail Group is an 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.



Metro Phoenix Retail Continues A Slow, Steady Rebound


With the close of 2Q 2013, Velocity Retail’s research has confirmed what we have been speculating: the retail market in Phoenix is on the rebound with several key benchmarks collaborating this:

>> Vacancy is down;

>> Leasing activity is up;

>> Regional areas are showing significant improvement.

Currently, as of 2Q 2013, our research shows that the retail vacancy has dropped to 11.3%. This is nearly a full percentage point improvement from just 6 months ago, (at the end of 2012 the vacancy was 12.2%), and more than 2 percentage points below the highest level, which was two years ago in 3Q 2011 when the vacancy reached 13.7%

Some of the regional areas have improved a little faster than the others. In the Southwest region where the vacancy was 12.4% at the highest point in 4Q 2009, it is now 8.2% — this is an improvement of 4.2% in 31/2 years. Currently, this is the region with the lowest vacancy.

The Southeast region, which is significantly affected by a glut of 129 vacant big box spaces, continues to show improvement. Vacancy in 3Q 2011 was the highest for this area at 14.8%. Currently the vacancy rate has improved 2 percentage points to 12.8%. This area recorded leasing activity of more than 525,000 SF in the past 6 months.

What do all these numbers really mean? It means that nearly 1M net square feet of retail space was leased in just 6 months. It means that all six of our regions have improved; some more than others. It also means that retailer confidence is returning both from national and local tenants, and landlords are finalizing deals which improve the vacancy within their shopping centers and the bottom line.

We are projecting that by the end of 2013 or the beginning of 2014 vacancy in Phoenix should be in the single digits for the first time since the end of 2008 when the vacancy was 9.8%.

Dave Cheatham is president of Velocity Retail Group. He is an 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.

Foothills Park Plaza

Velocity Retail Group June Transactions


Velocity Retail Group completed nine transactions in June. A summary of each transaction:

>> Velocity Retail’s Larry Miller and Jim Edwards represented the Landlord, Pacific West Land in a 10-year transaction for Urgent Cares of America Holdings, LLC (dba, Fast Med) at Corona del Sol shopping center at the SEC of Ray and Rural roads in Chandler. The tenant will be occupying 5,000 SF of space. Terry Martin-Denning of NAI Horizon and Patrick Wathen, of Equity, Inc. represented the tenant. The store is expected to open in August.

>> John Jackson, Nick Ault and Michael Clark represented the Landlord of Bell Tower Plaza, LLC at the NWC of Bell Rd. and 63rd Ave. in Glendale in a, 8,100 SF, 5-year transaction for Pawn 1st. Additionally, Arizona Iron Furniture is expanding their existing store in the same shopping center. This tenant signed a 3-year additional lease term for 3,125 SF. Jackson, Ault, and Clark also represented the tenant in this transaction. Both stores are expected to open in July.

>> Togo’s is opening its second store in Metro Phoenix with a 5-year, 1,190 SF store at Warner Ranch, 9920 S. Rural Rd. Tempe. Andy Kroot of Velocity Retail represented the Tenant. Joe Doucett of GDCRE represented the Landlord, Sy Warner Ranch, LLC. The store is expected to open in 3Q 2013.

>> Michael Clark, John Jackson and Nick Ault of Velocity represented West Valley Properties in negotiating a new 7,476 SF lease for Full Circle Gym at Cobblestone Village at the SWC of Warner Rd. and McClintock Dr. in Tempe. Patricia Wodrich of Preserve Property Management represented the tenant. The new store is expected to open in August.

>> Velocity Retail’s Darren Pitts and Dave Cheatham and Nate Ballard of Wadsworth Development Group represented the seller, Wadsworth Accelerated Ventures – Logan, LLC in an 10,851 SF sale of a 100% leased building at 1145 N. Main St., Logan, Utah. Mattress Firm recently leased the building from the ownership group. Jon White was the Buyer, who paid $2.25M for the asset which closed June 5. The buyer was represented by Ryan Reeves and Trevor Kyle of Newmark Merrell in Utah.

>> Early Learning Language & Arts leased a 5,012 SF space at Foothills Park Plaza shopping center at the SWC of Chandler Blvd. and Desert Foothills Parkway in Phoenix. The landlord, Pacific West Land, was represented by Velocity Retail’s John Jackson, Nick Ault and Michael Clark. This is the first location for E.L.L.A. center in Ahwatukee, the new store is opening this month. In the same shopping center, the listing team also finalized a 5-year 1,800 SF foot transaction for Perfect Pear Nature’s Bistro. The new restaurant will be opening in August.

>> Mattress Firm leased a 3,497 SF building from Madison Development at 6965 N. Glenwood St. in Garden City, Idaho. Both parties were represented by Chad Moore and Jeff Harrison of Mountain West Retail in Utah, and Darren Pitts, Michael Clark, and Nick Ault of Velocity Retail.


RECon 2013 Recap: How's Your Exchange Coming Along?


More than 33,000 shopping center owners, developers, brokers, consultants, etc. descended upon the International Council of Shopping Centers 2013 RECon convention in Las Vegas last month, and we thought it would be timely to give a mid-year assessment about retail investment activity in the very hectic NNN 1031 (triple net lease) sector.

As the stock market closes at record levels above 15,000 and investors grow nervous about the prospects of a market correction, real estate continues to be an attractive investment alternative. NNN leased investments are a very popular vehicle for this capital. Historically there has been plenty of this type of product available and it provides investors with relative safety and increasing rental yields over the long-term.

We foresee interest rates remaining relatively low for the near term as the Federal Government wrestles with historic debt levels. This will push more private capital out of the banks and into real estate as investors seek higher yields.

Below are some key questions that many clients ask us to evaluate on a regular basis:

>> Is The Asset a Single Purpose Building?

In the push to find a suitable 1031 property, many investors give little thought to the long-term suitability of the building for re-tenanting purposes. For example, a new Bridgestone Firestone NNN investment is a building that is very specifically designed to accommodate an automotive business operation. Hydraulic lifts and multiple bay doors make for a very difficult renovation if the building ever needs recycled. On the flip-side, remember all of those Blockbuster Video buildings? They were perfect for new tenants like Chipotle, Verizon, Vitamin Shoppe, Five Guys Burgers and Mattress Firm. In general, the more vanilla shell or generic the building, the more safety when it comes to reuse down the road.

>> What is the Best Product Type?

Ground-leases. Single-tenant assets. Multi-tenant buildings. Which of these has the best outlook for a long-term investor? The answer is that it depends. Investors with less sophistication are going to be much more comfortable owning a long-term ground lease where in the event of a tenant default, the investor stands to inherit a building from the transaction. Single-tenant and multi-tenant deals allow some tax advantages relating to depreciation that are favorable for certain investors. While multi-tenant buildings probably require a more sophisticated investor to manage, they provide more safety in that they are not dependent on an income stream from a single user. If Supercuts closes in a 3-tenant building, there’s a strong likelihood of re-tenanting the building in short-order with the right leasing advisors.

>> How Creditworthy is the Tenant?

Remember when a NNN investment with the United States Postal Service was one of the safest investments around? The financial tumult of late 2008 and early 2009 surely taught us that what can be a credit tenant today could very likely not be a credit tenant in the future. Just ask some landlords that got caught owning a Washington Mutual NNN investment only to have the lease terminated in the government-arranged takeover of Washington Mutual by JP Morgan Chase. Some investors ended up with a vacant bank building with a drive-through with no rental income and a long-term loan to service. Washington Mutual was seen as bulletproof and was the darling of 1031’s earlier in the decade. There are only a handful of A-rated retailers in the United States. The speed at which technology and hand-held devices is changing the retail landscape will surely change the creditworthiness of a tenant.

>> Why are the NNN 1031 markets so competitive today?

Certainly the NNN 1031 market has changed very significantly over the past cycle. What used to be a buyers’ market full of affluent families, doctors, dentists and lawyers is now full of private-capital buyers, institutional investors and publicly-traded REIT’s. Large buyers like Cole Capital, American Realty Capital, NNN REIT, STORE Capital and others have raised enormous amounts of capital in order to allow investors to place funds in commercial real estate without the risk of taking title to the properties themselves. This model has created the ability for an investor to stay much more liquid than purchasing a McDonald’s where the capital is parked for decades. Look for this trend to continue as Wall Street continues to deploy capital into these markets and the markets become more efficient.

>> Why is 1031 Exchange product so scarce?

A significantly increased buyer pool has created a shortage of NNN 1031 product nationally. A colleague of mine is currently working on more than 20 different 1031 requirements with clients where they have been unable to find a suitable replacement property. This has caused buyers to increase their offering prices, pushing capitalization rates to near all-time lows. Plentiful inexpensive long-term debt has further fueled this phenomenon. As this trend continues, look for investors to pursue slightly more risk to achieve higher yields.

Darren Pitts is a widely recognized and respected expert in the retail real estate industry. With more than 18 years of experience as an award-winning, elite performer and Senior Vice President at both CBRE and Staubach Retail, he has streamlined his multi-market knowledge across the West, primarily focusing on big-box clients like Lowe’s Home Improvement Warehouse, JC Penney, Lifetime Fitness, and others. He was involved in over 15 investment transactions in 2012 with a total consideration in excess of $75M. Pitts was instrumental in leading and executing a 60 store rollout of CVS as well as implementing an expansion program of more than 30 branches with JP Morgan Chase. He is particularly known for his ability to identify invisible real estate and accelerate a client’s speed to market.


Home of a new Pet Club in Gilbert.

Velocity Retail Group May Transactions



Velocity Retail Group completed seven transactions in May totaling nearly 100,000 SF. A summary of each transaction follows:

>> Velocity Retail’s Dave Cheatham, Andy Kroot and Darren Pitts represented the Landlord, De Rito Pavilions, 139, LLC in a 10-year transaction for Conn’s Appliances, Inc. at the Pavilions at Talking Stick shopping center at the NWC of Indian Bend Rd. and the Loop 101 in Scottsdale. The tenant will be occupying 36,200 SF of space in the former Best Buy. Todd Folger of CBRE represented the tenant.

>> Pet Club signed a 10-year lease to open in a former Ace Hardware store south of the SWC of Chandler Heights and Power Rd. in Gilbert. The 20,086 SF store will open in the fall. The landlord, Ulrich Horst Hamfler of the 2002 Hamfler Family Trust, was represented by Michael Clark, Nick Ault and John Jackson of Velocity Retail, and the tenant was represented by Greg Saltz of Phoenix Commercial Advisors.

>> Michael Clark and John Jackson of Velocity Retail represented the landlord, Wadsworth Velocity Ventures – Kingman, LLC in a new 10-year transaction with Sears Hometown. The new 7,680 SF store will be opening this summer in the newly redeveloped Kingman Frontier Plaza shopping center is at the SEC of I-40 and Stockton Hill Rd. in Kingman. The store is relocating from their existing freestanding location nearby.

>> Velocity Retail’s Jim Edwards and Larry Miller represented the Landlord, Carioca Company in negotiating a 10-year lease for Creating Magic Salon in a shopping center  east of the SEC of Indian School Rd. and 32nd St. in Phoenix. The 1,800 SF store is expected to open in August. The tenant was represented by Chad Merwin of Commercial Properties, Inc.

>> Swap and Save Market is opening a new 13,750 SF store at 3522 W. Peoria Rd. in Phoenix. Andy Kroot of Velocity Retail represented the landlord, Pacific 35th & Peoria, LLC. The tenant will be joining 99 Cent Only and Goodwill of Central Arizona in the shopping center. The store is expected to open in 3Q 2013.

>> Michael Clark, John Jackson and Nick Ault of Velocity represented Pacific West Development in negotiating a new 1,100 SF lease for State Farm Insurance at Peoria Crossings at the NWC of Northern and 91st avenues in Peoria. Brian O’Connor of Tri West Real Estate represented the tenant in the transaction. State Farm is relocating from an existing store and is expected to open in their new location this summer.

>> Goodwill Industries of Central Arizona is opening a 4,560 SF workforce development location at Southgate Mall at 3140 S. 4th Ave. in Yuma. The tenant is represented by Andy Kroot of Velocity Retail. The landlord is Southgate Mall, LLC.


Raintree Northsight in Scottsdale.

Velocity Retail Group April Transactions


Velocity Retail Group completed transactions in April totaling nearly 130,000 SF. A summary of each transaction follows:

>> Goodwill of Central Arizona is expanding its existing store and training center into a 35,882 SF facility at 6750 W. Peoria Ave. in Peoria. The current store and training center were previously in separate suites within the shopping center and will now be housed in the same storefront. The training center is increasing in size from 2,700 SF to more than  7,000 SF. Goodwill is represented by Andy Kroot of Velocity. The Landlord is First Chino Hills Properties, LLC, an entity formed by Ethan Christopher, LLC, Aric Browne is its representative.

>> John Jackson, Michael Clark, and Nick Ault represented the landlord, LP Realty, Inc., in a 4,800 SF transaction to Windy City Café at Northsight Crossing at the NEC of Northsight Blvd., and Raintree in Scottsdale. The tenant signed a 5-year lease and is expected to open in May of this year.

>> Velocity’s Chip Thor and Dave Cheatham negotiated a 3,830 SF lease on behalf of Four Peaks Brewing Company at Sonora Village at the SEC of Frank Lloyd Wright and Hayden Rd. in Scottsdale. This is an existing location for the tenant with a newly extended lease term.

>> Judi Butterworth of Velocity Retail leased a 7,575 SF space to Naber’s Music Bar & Eats, and entity of 1 D and D, LLC. The restaurant will be located at 825 N. 54th St. (Ray/54th) in Chandler. The local operators are offering new comfort food for lunch and dinner and a late-night menu. The western-themed venue will have live music, feature local and regional beer and wine and plan to open in August of this year. Pavilions Holdings, LLC is the landlord, they were represented by Paul Serafin from De Rito Partners.

>> Velocity’s Andy Kroot represented Goodwill of Central Arizona in a new 12-year, 29,919 SF location at 1625 W. Camelback Rd. in Phoenix. The landlord is AT Park Lee AZ, LLC.

>> Mattress Firm signed a 10-year lease at the SWC of 22nd and Harrison in Tucson. Mattress Firm was represented by Darren Pitts, Michael Clark, and Dave Cheatham of Velocity Retail. The landlord is an entity formed by Bourn Advisory Services of Tucson, whose representative was Alan Tanner. The 3,800 SF store is expected to open in December.

>> Velocity’s Judi Butterworth represented Audio Express in a new 4,417 SF location at Chandler Village. The landlord, BAMA Chandler, LLC was represented by Adrienne Bryant at De Rito Partners. The tenants signed a 5-year lease and plan to open in August of this year. Audio Express’s parent company is Freight Sales, Inc. which has 43 stores in 8 states with 10 under the Audio Express banner throughout Arizona.

>> Velocity’s Jim Edwards and Larry Miller leased a 2,100 SF location to Flair Gifts and Boutique at Tatum Plaza located at the SEC of Tatum Blvd. and Cave Creek Rd. in Phoenix. The tenant is relocating from their current location at Tuscany Village, and signed a 5-year lease with plans to open in June of this year. CBRE’s John Rehling and Aaron Retts represented the landlord in this transaction. The tenant is the original Lotions & Potions owner with a location still operating on Mill Avenue in Tempe.

>> Andy Kroot of Velocity Retail represented Capriotti’s Sandwich Shop/Everything Bagel in a new 1,800 SF location at 4017 N. Scottsdale Road in Old Town Scottsdale. The store opened April 30, 2013. This is Capriotti’s Sandwich Shop’s sixth location in the Valley with many more in the works for 2013/2014.

>> Andy Kroot leased a 24,492 SF location at 455 E. Warner in Chandler to Gold Medal Gymnastics. The new facility is a relocation of an existing site allowing Gold Medal to expand their programs and services. The company was founded in 2004 by former Olympic gold medalist, Amanda Borden-Cochran and her husband, Brad Cochran. CBRE’s Mike parker and Evan Koplan represented the Landlord, Aviv Realty ADA in the transaction. The location is expected to open in November.

>> Jim Edwards and Larry Miller of Velocity leased a 1,245 SF store to Polished & Pamper Mani-Pedi Spa at Dobson Baseline Plaza located south of the SEC of Baseline and Dobson in Mesa. Edwards and Miller represented the landlord, Tang Enterprises in the five-year transaction. The store is expected to open in July.