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WPCarey-School-Sign

W. P. Carey School Honors Top Business Leaders

Three top business leaders will be honored for their innovation and achievements, when they are inducted into the W. P. Carey School of Business Homecoming Hall of Fame this month. They include the head of a famed jewelry company, a high-profile business founder from China, and a corporate leader at one of Arizona’s biggest companies.

On Oct. 17, they will join previous Arizona State University alumni inductees from such diverse organizations as the American Red Cross, Motorola, the U.S. Air Force, Wells Fargo Bank, XM Satellite Radio and the Arizona Diamondbacks.

“These stellar inductees represent strength, leadership and accomplishment in the business world,” says W. P. Carey School of Business Dean Amy Hillman. “They demonstrate how far our students can go and have gone in making their mark on the global economy.”

The 36th annual W. P. Carey School honorees are:

> Eddie LeVian, chief executive officer of the Le Vian Corporation, who has made Chocolate Diamonds® a red-carpet staple in Hollywood. LeVian earned a business degree from the W. P. Carey School in 1979 and took his innovative marketing ideas back to his family’s fine jewelry business in New York. The company’s sales have more than quadrupled over the past decade, and the LeVian family is active with many charities, raising $75 million in the past decade alone.

> Canglong Liu, a high-profile business leader in China, who founded one fertilizer factory in 1979, which grew into a conglomerate of major companies, including the Sichuan Hongda Group, now with 30,000 employees and 60 subsidiaries around the world. Liu is chairman of businesses that focus on finance, minerals and real estate. He is also a member of the national committee of the Chinese People’s Political Consultative Conference and the standing committee of the All-China Federation of Industry and Commerce. The Hongda Group has given $8 million to AIDS prevention and research in China. Liu received his MBA from the W. P. Carey School’s prestigious executive MBA program in Shanghai in 2007.

> MaryAnn Miller, chief human resources officer and executive leader of corporate communications for Avnet, a Phoenix-based Fortune 500 company with more than 18,000 employees and customers in 80 countries. Avnet is one of the largest distributors of electronic components, computer products and embedded technology in the world. Miller has more than 30 years of experience in human resources and operations management, and is responsible for leading the company’s human resources, organizational development and corporate communications worldwide. She is also a member of the Avnet Executive Board. She received her MBA from the W. P. Carey School’s executive MBA program in 2001.

About 200 alumni, business leaders and students are expected to attend the Homecoming Hall of Fame event on Thursday, Oct. 17 at the JW Marriott Desert Ridge Resort & Spa in Phoenix. A reception starts at 5:30 p.m., followed by the awards ceremony.

Space is limited. For more information on tickets or sponsorship, go to www.wpcarey.asu.edu/homecoming or call (480) 965-2597.

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Indoor Shooting Range Joins New Tenants at Emerald Center

C2 Tactical Indoor Shooting Range has purchased a 17,219 SF retail showroom building at Emerald Design Center near Warner Road and Interstate 10 in Tempe for $1.125M.

C2 purchased the property from Wells Fargo Bank. Construction will commence on a state-of-the-art, air conditioned 23-lane indoor shooting range, a 5,000 SF retail showroom, several training classrooms, corporate conference room, VIP area and a new training simulation room.

The buyer, led by investor Boe Bergeson, was represented by Rick Robertson of Lee & Associates Arizona. The seller was represented by Jan Fincham, Pat Dempsey and Chris McClurg, also of Lee & Associates Arizona.

Bergeson selected RJM Construction Company to do the tenant improvements and the new facility should be open in 1Q 2013.

C2 Tactical Indoor Shooting Range is joining several other new tenants in the 162,000 SF retail condo project adjacent to the IKEA store. In August, Lee & Associates represented Wells Fargo in the sale of a 21,568 SF showroom space to Aveda Institute of Denver, which will be opening a retail showroom, training facility and salon in a $1.725M transaction. RJM Construction will serve as general contractor for this TI as well.

Over the past year, five new tenants have leased approximately 40,000 SF of showroom space in the project that was constructed in 2007 by LGE Design Build.

The tenants are, Diamondback Billiards, Mattress RX, La Casona Furniture, LMC Home Entertainment and Furniture Fun.

Business Lending - AZ Business Magazine November/December 2011

Now Is The Right Time For Business Lending, Financial Banking

Now is the Right Time for Business Lending, Financial Banking

Now might be the right time for businesses looking for financial backing to reach out to banks to help with plans for expansion and growth.

“When small businesses are given the tools to grow, that means growth for the economy,” says Craig P. Doyle, Arizona regional president of Comerica Bank. “We have the ability to provide capital to those businesses that can grow.”

The status of business lending in Arizona has been in question during a tough economy, but the reaction from Arizona banking representatives has been similar across the board: banks are lending, and the number of loans issued has increased over the past year.

Most banks in Arizona have weathered the economic crisis fairly well, and have had the ability to continue to make loans.

Dean Rennell, a regional president at Wells Fargo Bank says he has seen a steady improvement in business lending over the past year.

During that period Wells Fargo extended approximately $14.9 billion in loans to small businesses nationwide, a 13 percent increase over the year before.

In Arizona alone, Rennell says he has seen Wells Fargo’s lending increase 15 percent over the past year.

“Borrowers are showing improved financial performance,” Rennell says. “That means they’ve adjusted to what people are calling the ‘new normal,’ and they’ve diversified and become more efficient.”

Rennell is seeing a significant amount of loans from small businesses looking to buy competitors or real estate, or expand the company.

Companies that had cut back on expenses are now starting to invest in new equipment and technology that they had refrained from purchasing in the past.

“We’re seeing expansion requests and some businesses are taking advantage of the opportunities they see in the marketplace,” Rennell says.

Arizona banks have been able to lend during the recession because Arizona has a large number of companies that are well managed and credit-worthy, experts say.

“Most banks in Arizona are capitalized and have enough liquidity and capacity to make loans,” says Curt Hansen, executive vice president of the National Bank of Arizona. “There are a lot of well-run large and small banks, and Arizona is a good market long-term.”

When looking at possible loans, banks still desire the same qualifications they have in the past, such as a good track record, a strong management team and an ability to weather tough times.

The biggest difference now is that banks are paying more attention to the actual documents required for the loan.

“Bankers are looking at borrower’s ability to withstand short-term shocks and the borrower’s ability to repay the loans requesting,” Hansen says.

Lynne Herndon, city president at BBVA Compass, has seen an increasing number of loan requests coming from the small business segment.

“Almost 70 percent of business owners in Arizona belong to the smaller business segment, and that’s the segment where we’re seeing growth,” Herndon says. “Those entrepreneurs and business owners were cautious before and are beginning to venture out more.”

Most businesses large or small have some form of lending, whether it is a line of credit, equipment loan or real estate loan. Lines of credit are necessary for companies to continue to operate, and many companies are renewing the lines of credit they already have.

BBVA Compass Phoenix saw double-digit loan growth in 2010 of about 12 percent, and has seen about a 15 percent increase in 2011.

The only area where Herndon says he doesn’t see as many loans being issued is in real estate lending.

According to Herndon, the uncertainty in the Arizona housing market plays a huge role in the decline of real estate lending. People are still wondering if values have hit bottom.

“The economy is still a concern, and the political climate,” Herndon says. “Most of the companies and businesses here need a banking relationship in order to maintain and grow their company. The demand for loans is definitely increasing and I’m hopeful this trend will continue to improve.”

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For more information about business lending and financial backing, visit:

comerica.com
wellsfargo.com

nbarizona.com

bbvacompass.com

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Arizona Business Magazine November/December 2011

 

Property Taxes, AZRE Magazine May/June 2011

Property Taxes: Keep A Keen Eye On County Valuation Notices

What if your business was overcharged for its electricity, natural gas, or perhaps new computers or furniture? Most of us would take a look at our bills, determine where the mistakes occurred and then take the needed steps to resolve the discrepancies. But what if your business is being overcharged for its property taxes by thousands of dollars each year? Is there a course of action to fix this potentially costly problem? The answer is yes.

Each year, typically in February, the county assessor releases “postcard” valuations for each property in the county. In some cases, these valuations exceed the properties’ market value. The problem that we see in Arizona is that many people do not take notice of their property taxes until the county treasurer’s office mails its annual tax bill. But in Arizona, you cannot protest your taxes — only the postcard valuation. Therefore, the time to review your property taxes is when your values are mailed in February, not when you receive your tax bills in October.

What does this mean for local business owners?

Without protesting a postcard valuation, a business owner’s taxes may be substantially higher. In many cases, they need not be. If a business owner paid $4M for an office building last year, on average, the owner will owe approximately $100,000 in real property taxes. However, if the county assessor values the property at $7M based on its computerized mass appraisal, and the business owner does not protest, the owner’s taxes may exceed $175,000.

Why would my property be overvalued?

Over the past several years we have seen significant changes in commercial values, with prices quickly rising in 2005 and 2006, and falling over the past couple of years. Today, however, there are signs of hope. According to William Spart, senior vice president of Wells Fargo Bank, “some submarkets and property types, including apartments, are showing signs of firming up.”

These drastic changes in the market over the past several years have made it difficult for county assessors to determine property value. It is not feasible for the assessors to separately analyze the unique characteristics of each and every parcel. Therefore, the assessor must rely on a blanket formulary approach that attempts to classify buildings and land into various categories to produce a valuation.

The positive is that many people, including Pete Bolton, executive vice president and managing director of Grubb & Ellis, says he believe that we are at the bottom of the market. According to Bolton, the “market has definitely stabilized and we are seeing five to seven main groups, including the FDIC, national banks, CMBS special servicers and others slowly releasing property to the market with market values bouncing along the bottom.”

What if I recently acquired my property?

In Arizona, real property is assessed on an annual basis by the assessor’s office of the county, where the property is physically located. Property tax values are released around February prior to the tax year. While existing owners of real property are required to file all administrative protests within 60 days of release of the postcard values, Arizona has special rules for new owners.

Under Arizona law, new owners have the ability to either take over the old owners’ appeal or if an appeal was not filed, they can typically appeal their valuation to the County Superior Court until Dec. 15 of the valuation year. If the prior owner did not appeal the current year taxes (prior year’s postcard values), you may be able to appeal these taxes as well.

For more information about property taxes, visit wwptax.com.

AZRE Magazine May/June 2011

 

Data Centers

i/o Data Centers Raises $200M In Two Integrated Financings

i/o Data Centers today announced the closing of $200 million in two financings, including a senior long term credit facility of up to $130 million led by Wells Fargo Bank and Wells Fargo Securities and a $70 million secured facility led by Caterpillar Financial Services Corporation.

“Demand for data centers as a service continues to be strong,” said George D. Slessman, CEO of i/o. “This new long term capital enables i/o to execute its Enterprise Class Data Center Roadmap. We will add 35 megawatts of data center capacity for our customers within the next 12 months.”

In addition, Jonathan F. Mauck, CFO of i/o, noted that “The next phase of our growth plan is fully funded.”

Steven Reinhart, senior vice president of Wells Fargo, said that “The strength of i/o’s customer base, balance sheet and cash flow are a testament to the strength of its business model and management. We look forward to a long term relationship with i/o.”

William Luetzow, managing director of Caterpillar Financial Services’ Global Power Finance-Americas, added, “We’ve enjoyed a long-term financing relationship with i/o since its inception. The high quality i/o power systems and their customer base of multi-national enterprises are an excellent fit with Caterpillar’s worldwide finance and distribution capabilities.”

i/o has grown rapidly over the past three years and recently announced the launch of i/o ANYWHERE, a modular data center service that allows it to deploy data center capacity anywhere a customer requires it.

“This latest financing, key additions to our management ranks, and our world class customer base position i/o for additional growth and success as the industry’s leading provider of enterprise co-location and data center solutions,” Slessman said.

NAIOP, AZRE Magazine September/October 2010

NAIOP Roundtable 2010: Q&A With Members of NAIOP

NAIOP Roundtable 2010: Q&A With Members of NAIOP

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


NAIOP Roundtable 2010 NAIOP Roundtable 2010 Participants

NAIOP Roundtable 2010 Participants:

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

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

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

Economy

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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