MARCH-APRIL 2018
2018
RED AWARDS
INSIDE:
420 Properties p. 26 | Hospitality Construction p. 44
Photo by: Daryl Shields, HKS
90,000
26
297,000
14
Emergency Room Visits Annually
Miles of Electrical Conduit
Total Emergency Room Square Feet
Additional Surgeries Per Day
355,000
626,933
50,000
44,525
Pounds of Ductwork Equivalent to 40 Elephants
Pounds of Plumbing and Mechanical Pipe Valued at $1B+ in pounds of gold
Weight in pounds of Largest Column Equivalent to 12 Ford F-150s
Brick Veneer Wall Pieces
DPR Construction | 222 North 44th Street, Phoenix | (602) 808-0500 | www.dpr.com
The Best of 2017
I
t’s been said that you can’t know where you’re going unless you know where you’ve been. With that in mind, we look back each year at the Valley’s most significant projects completed the year prior through the annual Real Estate & Development (RED) Awards – now in its 13th year. Unlike past issues, you’ll notice this year’s RED Awards section identifies the winning project in each respective category in addition to the other finalists. Overall, the stories in this issue of AZRE look back at major investment and developments in various areas — such as the East and West Valleys, Tribal lands, hospitality and tourism as well as cannabis properties — to to help us better prepare for what’s coming next. This issue of AZRE features: - A look at Arizona’s budding cannabis industry and the role 420 Properties have on the commercial real estate market. - East and West Valley updates highlighting at least 50 different projects on both sides of Greater Phoenix that are greatly impacting its respective communities. - A breakdown of new hospitality and tourism projects that will tap into Arizona’s top export industry. - An analysis of how Tribal Communities are attracting commercial investment and developments near its existing casinos. - The CoreNet Global Arizona Chapter supplement, including a message from the new president, roundtable with local members and insights, and an updated on a first-of-its-kind corporate real estate program with Arizona State University.
President and CEO: Michael Atkinson Publisher: Cheryl Green Vice president of operations: Audrey Webb EDITORIAL Editor in chief: Michael Gossie Associate editors: David McGlothlin | Jesse A. Millard Interns: Will Everett | Emily Gadberry | Sage Schneider Contributing writers: Chris Camacho | Suzanne Kinney Tim Lawless | Cheryl Lombard ART Art director: Mike Mertes Graphic designer: Bruce Andersen MARKETING/EVENTS Marketing & events manager: Cristal Rodriguez Marketing specialist: Gloria Del Grosso Marketing designer: Jennifer Childres OFFICE Special projects manager: Sara Fregapane Executive assistant: Mayra Rivera Database solutions manager: Amanda Bruno AZ BUSINESS MAGAZINE Senior account manager: David Harken Account managers: April Rice | Thomas Patterson AZRE | ARIZONA COMMERCIAL REAL ESTATE Director of sales: Ann McSherry AZ BUSINESS LEADERS Director of sales: Sheri Brown RANKING ARIZONA Director of sales: Sheri King EXPERIENCE ARIZONA | PLAY BALL Director of sales: Donna Roberts
David McGlothlin Associate editor, AZRE david.mcglothlin@azbigmedia.com
HOME & DESIGN AZ BUSINESS ANGELS Director of sales: Cindy Kurtze
AZRE: Arizona Commercial Real Estate is published bi-monthly by AZ BIG Media, 3101 N. Central Ave., Suite 1070, Phoenix, Arizona 85012, (602)277-6045. The publisher accepts no responsibility for unsolicited manuscripts, photographs or artwork. Submissions will not be returned unless accompanied by a SASE. Single copy price $3.95. Bulk rates available. ©2018 by AZ BIG Media. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without permission in writing from AZ BIG Media.
2 | March-April 2018
“ LIMITLESS.
GENUINE. ESTABLISHED.
– Kim Moyers, City of Chandler
LGE Design Build has been perfecting the conception and construction of the Valley's most iconic projects for more than 23 years. But don't take our word for it. Listen to how clients, influencers and officials define our work. And there's more to come as we plan out LGE's thrilling future. Look to our next defining moment this spring.
CONTENTS
FEATURES 2 Editor’s Letter 6 Trendsetters 10 Executive Profile 12 After Hours 14 New to Market 16 Big Deals
20 Legislative Update
59
26 420 Properties
30 East Valley Update 34 West Valley Update
40 Building on Indian Country
26
44 Hospitality Construction
50 CoreNet Global
59 RED Awards
44
On the cover:
Portland on the Park
4 | March-April 2018
GO TO store.azBIGmedia.com to purchase subscriptions, digital issues and plaques
40
5
TRENDSETTERS
FUN FACTS:
Ritz-Carlton Paradise Valley Resort
What do you get when you take the largest, undeveloped parcel in Paradise Valley that includes just about every possible type of use, you mix in the endless amount of intricacies with a 10-year project of this magnitude and then you add the rare aspect of a project covering two jurisdictions: Scottsdale and Paradise Valley? The answer is the $2 billion RitzCarlton Paradise Valley.
120 ACRES
Largest undeveloped parcel in Paradise Valley with plans for 105 homes and 81 residential condos/villas
10 YEARS Project timeline
TWO TIMES
Number of times the project was zoned A Tale of
TWO CITIES Number of jurisdictions involved (Scottsdale & Paradise Valley)
MANY USES
Hotel, luxury, high-end retail, residential and office space Source: Withey-Morris
6 | March-April 2018
Where are they going?
2017 U-Haul migration trends In Metro Phoenix, two cities were identified as top growth cities in the United States for 2017 by U-Haul. Courtesy of U-Haul’s expansive network of 21,000 locations that blanket all 50 states and 10 Canadian provinces, it’s recognized as an authority on migration trends, providing a comprehensive overview of where people are moving based on over 1.7-million one-way U-Haul truck rental transactions that occur annually. The No. 1 growth city in the U.S. for
2017 was Tempe with year-over-year arrivals climbing to 39 percent while departures climbed one percent. Surprise was the only other Arizona city to make the list at the No. 14 spot with an 11 percent spike in one-way truck arrivals year-over-year, while its departures rose one percent. For a better idea of migration patterns around the Valley, here’s a look at the 10 busiest migration markets in Greater Phoenix based on one-way U-Haul truck rental transactions during 2017.
City
% Arriving Traffic
Y.O.Y % +/- arrivals
Y.O.Y. % +/- departures
Chandler
50.2% arrivals
6% decrease
3% decrease
Gilbert
50.9% arrivals
6% increase
5% increase
Glendale
50.3% arrivals
11% increase
6% increase
Goodyear
52.4% arrivals
32% increase
24% departures
Mesa
49.9% arrivals
6% increase
No change
Peoria
48.5% arrivals
5% decrease
4% decrease
Phoenix
46.5% arrivals
2% increase
4% increase
Scottsdale 47.5% arrivals
6% decrease
3% increase
Surprise
52.9% arrivals
11% increase
1% increase
Tempe
53.8% arrivals
39% increase
1% increase Source: U-Haul
Phoenix: Well performing, fast growing The fast-growing Phoenix market is performing better than the national average late in the cycle, according to the CoStar Group. Its recent market analysis report finds: Phoenix’s job growth is outpacing the national benchmark, driven by Arizona’s business-friendly environment, affordability, strong population growth, and accessibility to local talent. Demand is fueled by corporate relocations and expansions, compressing the vacancy rate substantially in recent years. Strong demand for high-end office
ECONOMIC INDICATORS Q4 16
Q4 17
12-Month Forecast
Phoenix Employment
1995k
2034k
▲
Phoenix Unemployment
4.3%
3.8%
▼
U.S. Unemployment
4.6%
4.1%
▼
Q4 data is based on the U.S. Bureau of Labor Statistics, All Employees: Total Nonfarm in Phoenix-Mesa-Scottsdale, AZ (MSA). Source: Cushman & Wakefield
space is partially driven by Phoenix’s relatively inexpensive rents, which are well below the national average. Despite virtually all new construction
being luxury apartments, affordability remains a big draw as rents average around $975 a month, much less than the average U.S. big city.
OFFICE | 4Q 2017
Phoenix office market finishes 2017 strong The Metro Phoenix office market experienced its seventh consecutive year of declining office vacancy, according to Colliers International’s Q4 office report. It finds: — Vacancy rates remain elevated in select submarkets, but positive overall. It’s anticipated to drop by 50 basis points to 15.6 percent during 2018. — Net absorption totaled 1.7 million square feet in 2017, which is well below recent averages. This year, net absorption is expected to increase and produce a total of approximately 2.5 million square feet. — Rental rates increased in each of the last five years and are anticipated to continue in 2018. — Median prices for properties sold in 2017 were $138 per square foot, a 6-percent increase from 2016. Meanwhile, 2017 cap rates averaged 7.5 percent, approximately 30 basis points below the 2016 level. — Construction shifted from buildto-suit to speculative development, totaling approximately 70 percent of current construction.
“Where we saw momentum in 2017 was at the high-end of the market,” explains Mindy Korth, executive vice president of investment properties at Colliers International. “Larger buildings
Q U A R T E R L Y NET ABSORPTION
and larger sales prices made up an increased share of the overall activity.” She doesn’t see any reason why the trend would change direction in 2018 either.
Y T D N E T A B S O R P T I O N
539,350
1,709,938
UNDER CONSTRUCTION
YTD COMPLETIONS
S Q U A R E
S Q U A R E
S Q U A R E
F E E T
1,695,776 F E E T
O V E R A L L VA C A N C Y
16.1%
S Q U A R E
F E E T
2,120,656 A S K I N G
F E E T
R E N T S
$24.40 PER SQUARE FOOT
Source: Colliers International
7
TRENDSETTERS Phoenix industrial market makes history In 2017, the Phoenix industrial market achieved its largest annual net absorption gain in market history, reaching 9.8 million square feet by year end and marking the fourth consecutive year of annual net absorption totaling 6 million square feet or more – a feat not reached since 2004- 2007 – according to the Q4 2017 JLL Phoenix Industrial Market Report. These benchmarks were accompanied by other positive market factors including annual rent growth of 4.2 percent and a drop to 7.6 percent in overall vacancy, the lowest in 10 years. And the industrial market shows no sign of slowing.
“In the Southeast Valley alone, we expect to see 500,000-700,000 square feet of new product break ground this year,” says JLL Senior Vice President Steve Larsen. “This space will provide modern amenities to meet the high demand from technology and advanced manufacturing users in this area. We’re also seeing a notable level of activity from pharmaceutical users.” Some of the most active industrial sectors are e-commerce, food and beverage, logistics services and manufacturing, with growth being generated among companies with footprints already in Phoenix and from new users entering the market.
Retail: a revolving door of store closures, openings While store closures and failing malls still grab headlines as e-commerce continues to shake up the retail industry, not all retail companies are following suit. According to an analysis of company data by Business Insider, more than 3,600 stores are set to close in 2018, following last year’s recordhigh rate, but more than 2,100 stores are set to open as well. Most of those retails include discounters such as Dollar General with up to 900 stores,
Dollar Tree, Family Dollar, and Aldi among others. “Just like the Depression changed our parents’ and great grandparents’ shopping habits forever, the Recession introduced more and more shoppers to the value they can receive from discount retailers,” explains Dave Cheatham, president at Velocity Retail Group. “One of the challenges for traditional malls is they haven’t kept up with staying fresh and exciting and have become experientially stagnant.”
Source: Business Insider
Source: JLL
Multifamily: investors return In 2011, Phoenix’s average multifamily occupancy rate was 92 percent, says ABI Multifamily Director of Research Thomas Brophy, but that number has since increased to 94.9 percent despite the delivery of nearly 31,000 units since then. As a result, Brophy says, “All the major institutional investors have re-entered the Phoenix market including: The Blackstone Group, The Bascom Group, Weidner, BH Equities, MG Properties, Priderock and Eaton Vance to name but a few.” With interest rates rising, albeit slowly, he predicts the multifamily market should continue to take a bite out of single-family home sales, forcing more people to rent for longer. Overall he describes 2018 as “the year of the central banker,” hinting that investments from central banks will ultimately determine the market this year.
NEW CONSTRUCTION Delivered | Avg Absorption 7,785 Units | 16 Units / Property Under Construction 17,456 Units
Planned Projects 12,034 Units Source: ABI Multifamily
8 | March-April 2018
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EXECUTIVE PROFILE
??????? The CRE psychologist What’s next for new SIOR Arizona Chapter President Rob Martensen?
By SAGE SCHNEIDER
R
ob Martensen didn’t intend to become a real estate agent. In fact, he received a psychology degree from Arizona State University. However, “If you can understand why people think the way they do, you can do anything with that,” he says. Initially, Martensen thought he would obtain his real estate license because he and his father planned to buy, fix and resell houses. When his dad changed his mind, he began selling homes to his recently-graduated friends, but soon gravitated toward industrial real estate. “My dad was in the rigging supply business and my uncle owned a furniture company,” he says. “I grew up around manufacturing facilities and warehouses, so I was more comfortable in that field than an office building.” His decision to enter commercial real estate for industrial brokerage paid off too. Last year, he celebrated his 20th anniversary at Colliers International Greater Phoenix where he is now the executive vice president of the industrial properties division.
10 | March-April 2018
Martensen also prides himself on being one of less than 50 Metro Phoenix members of the prestigious Society of Industrial and Office Realtors (SIOR), which represents a well-respected and exclusive group of successful industrial and office real estate specialists with 3,200 members worldwide. Last November, Martensen was selected to be president of the SIOR Arizona Chapter after serving on the organization’s board for the last eight years. He says, “To lead and promote the organization is a real achievement for me.” The main goals for his two-year tenure focus on exposure and promotion to help people truly understand what SIOR is. “If someone wants to know about industrial and office real estate, they should consult an SIOR broker,” Martensen says. “If they want to know who the strongest, most ethical brokers are, they should use one with the SIOR designation.” Martensen is also passionate about getting more young people interested in real estate. Last year as vice president of the Arizona Chapter, Martensen helped
PHOTO BY MIKE MERTES, AZ BIG MEDIA
launch a new partnership with Junior Achievement (JA) of Arizona that established the first-ever commercial real estate shop at JA’s popular JA BizTown facility in Tempe. Launched in 2001, JA BizTown gives students the opportunity to take business fundamentals that they receive during a school classroom curriculum and apply them to a student-sized town in a real-world mini economy for a day. In addition to locally expanding efforts with institutions like Junior Achievement, Martensen says, the Arizona Chapter will be more actively participating in the national chapter’s Candidate Program endeavors to attract more young achievers into the designation. His advice to those just starting out in real estate is to be patient, save money, work with a big firm under a mentor, and be prepared to take your lumps. “The first five years are rough,” Martensen cautioned, “but if you survive that, it can be a great career.” If you can stick with it and ride out the hard time, Martensen says, “Ultimately, it pays off.”
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11
AFTER HOURS
???????
The Network Effect A vision for winning partnerships By DAVID MCGLOTHLIN
T
here’s a concept in economics and business called “The Network Effect,” a phenomenon where increased numbers of participants improves the value of a good or service. Basically, the more people that use it, the more valuable it becomes. Eric Wolfe, vice president of commercial sales at Chicago Title Agency, applies this same model to his business except the good and service is himself, offering a wealth of insider knowledge and professional relationships that he developed throughout the industry since starting in 2002. By leveraging his experience, resources and network, Wolfe says, the ultimate goal is to always help others be successful in any way possible because “when that happens, we all win.” His vision for success includes helping his clients close more transactions while providing the highest level of responsiveness and customer service possible, but also mentoring young professionals to further develop their careers and pay forward all the knowledge originally shared with him by his mentors. “With a strong network of professional relationships, I market
12 | March-April 2018
myself as a resource for all things commercial real estate and add value to my clients by bringing people together,” he explains. “The ‘Network Effect’ model adds value to my clients because I can assist with all aspects of their business, not just title and escrow.” Whether it is investigating questions on title — liens, easements, ownership, etc. — providing property and market data, brainstorming marketing and business development strategies, or simply making introductions, Wolfe has met and worked with professionals in all aspects of the business, including through his current involvement within various industry organizations like NAIOP, SIOR, CCIM, DCREP and ACMLA. As a result, he says, “I learn about opportunities and am able to connect people and provide solutions that otherwise would not happen.” Efforts like these earned Wolfe the award for NAIOP Arizona Associate Member of the Year in 2015 because of his “significant contribution to NAIOP and the real estate community.” Honored by the recognition of his peers and industry leaders, Wolfe says, “Nothing makes me happier than seeing someone succeed as a result of my efforts.”
His commitment and passion for the industry and those in it has never started or stopped during regular business hours and still remains true today. After hours, Wolfe frequently attends industry events, conferences, happy hours and forums to constantly expand his knowledge of the industry and professional network throughout. In February, he helped organize and host a TopGolf networking event for a group of young real estate professionals, known as DCREP or “Developing Commercial Real Estate Professionals,” who were looking to expand and strengthen their networks on a more personal basis. After graduating from the University of Arizona in 2002, Wolfe still remembers three mentors from early in his career that greatly impacted his success and career path: David Wetta and Darrell Moffitt, formerly of Marcus & Millichap, and David Miller of Chicago Title Agency, who’s legacy of unmatched customer service and mentorship motivates Wolfe’s efforts every day. Overall, in-depth market knowledge and a vast network are just a couple of Wolfe’s commercial real estate strengths that distinguish him from others in his role throughout Greater Phoenix. He’s also traveled to five continents, hunted big game in Africa, studied in Spain, is father to a three-year-old boy, husband to Samantha, and is known for being an outdoor enthusiast, avid golfer and supporter of all things live and local.
COMING NEXT ISSUE Featured topics include: • AZCREW • Downtown Phoenix Update • Healthcare Building Trends • Top CRE Law Firms • Valley Partnership
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13
NEW TO MARKET A
D
E
HOSPITALITY/RECREATION A GREAT WOLF LODGE ARIZONA DEVELOPER: Great Wolf Resorts, Inc. GENERAL CONTRACTOR: Mortenson Construction ARCHITECT: Gensler LOCATION: 7333 N. Pima Rd., Scottsdale SIZE: 85,000 SF VALUE: WND START/COMPLETION: Jan. 2018 – Q4 2019
14 | March-April 2018
INDUSTRIAL B TEN DISTRIBUTION CENTER 1 DEVELOPER: Irwin G. Pasternack AIA + Associates GENERAL CONTRACTOR: Graycor Construction Company ARCHITECT: Irwin G. Pasternack AIA + Associates BROKERAGE: JLL LOCATION: 8181 W. Roosevelt St., Phoenix SIZE: 1.1 MSF (3.6 MSF at build out) VALUE: $300M (entire project) START/COMPLETION: Jan. – Summer 2018
OFFICE C THE RESERVE AT SAN TAN (BUILDING 6) DEVELOPER: Orsett GENERAL CONTRACTOR: Layton Construction ARCHITECT: Butler Design Group BROKERAGE: Newmark Knight Frank LOCATION: 343 E. Germann Rd., Gilbert SIZE: 140,000 SF (Phase I – 70,000 SF) VALUE: WND START/COMPLETION: Feb. – Q4 2018
C
B
F
HEALTHCARE D ESTRELLA MEDICAL PLAZA II DEVELOPER: Plaza Companies GENERAL CONTRACTOR: Okland Construction ARCHITECT: Butler Design Group LOCATION: 9201 W. Thomas Rd., Phoenix SIZE: 64,000 SF BROKERAGE: Plaza Companies VALUE: $16M START/COMPLETION: Dec. 2017 – Dec. 2018
INDUSTRIAL E CHANDLER CORPORATE INDUSTRIAL CENTER DEVELOPER: Desert Palm Management Group GENERAL CONTRACTOR: LGE Design Build ARCHITECT: LGE Design Group LOCATION: 370 N. Juniper Dr., Chandler SIZE: 100,018 SF VALUE: $10M START/COMPLETION: Nov. 2017 – Aug. 2018
OFFICE F CHANDLER FREEWAY CROSSING DEVELOPER: Mark IV Capital GENERAL CONTRACTOR: VENN Construction ARCHITECT: Balmer Architectural LOCATION: 2625 W. Geronimo Pl., Chandler SIZE: 153,370 SF BROKERAGE: JLL VALUE: $33.25M START/COMPLETION: Jan. – Nov. 2018
15
Buckeye attracts a big rig of a deal Upcoming manufacturing facility to bring $1 billion in capital investments IMAGE COURTESY, Nikola Motor Company
By JESSE A. MILLARD
T
he future of trucking will be taking shape in Buckeye. The far West Valley city will be home to a hydrogen-electric semi-truck manufacturing headquarters facility, which will represent a little more than $1 billion in capital investments and thousands of jobs by 2024. Nikola Motor Company will build a one-million-square-foot facility to house its semi-truck manufacturing efforts, research and development and headquarters in Buckeye, adding 2,000 jobs to the region. “We have already begun planning the construction for our new zero emission manufacturing facility in Buckeye, which we expect to have underway by the end of 2019,” says Trevor Milton, CEO and founder of the Nikola Motor Company. The facility will be built on a 500acre plot that Nikola Motor Company received for free from El Dorado Holdings and JDM Partners, which Arizona businessman and sports icon Jerry Colangelo is a principal of. The land is located near Douglas Ranch at Sun Valley Parkway and the future site of Wintersburg Parkway. The facility is at one of the entrances for the Douglas Ranch/Trillium masterplanned community being developed by El Dorado Holdings and JDM Partners. That community is projected
16 | March-April 2018
Trevor Milton
David Roderique
to house more than 300,000 residents. The free land isn’t the only thing that convinced the Nikola Motor Company to build its factory in Arizona. The semi-truck manufacturer will be financially assisted by Buckeye with a reimbursement of the building permit fees, and with a reimbursement of 49 percent of the sales tax generated by the project, says David Roderique, Buckeye’s economic development director. Between those two reimbursements, the city would give back between $3-6 million after the factory spends that money in the city, Roderique notes. The State of Arizona has offered an incentive package that will give up to $46.5 million based on the Nikola Motor Company project assumptions, according to information provided by the Arizona Commerce Authority. Qualified Facility Tax Credits make up $41.24 million of the incentives,
which are based around the amount of capital investment made into the facility and the number of full-time jobs created. Nikola Motor Company was also offered a $3.5 million grant through the Arizona Competes Fund, which is used to promote the growth and diversification of business in Arizona. Then, a $1.815 million Job Training Grant was offered to the manufacturing company. The Nikola Motor Company CEO also touted Arizona’s supply of workers as another reason for picking the Grand Canyon State. Creating this type of employment within Buckeye’s borders was very important to the city, Roderique says. Many of Buckeye’s residents leave town for work, and this manufacturing facility will help them stay in Buckeye. This project could also help draw many supporting businesses to the area. Roderique says that vehicle manufacturing facilities around the country typically generate 5-10 times the number of jobs through suppliers and other ancillary needs. “This will set the tone for future businesses in the city – our focus is on attracting technologically advanced and sustainable businesses, and Nikola is right in line with that,” Roderique says.
It’s the big deals and the brokers who close them that make the market an interesting one to watch. Here are the Top 5 notable sales for the months of December and January. Sources: Cushman & Wakefield Research and Costar.
INDUSTRIAL/SALES
OFFICE/SALES
7200 W. BUCKEYE RD., PHOENIX 400,000 SF; $31.2M BUYER: Cohen Asset Management SELLER: Cohen-Arizona One BROKERAGE: Colliers International
CENTRAL ARTS PLAZA 1850 N. Central Ave., Phoenix 485,687 SF; $80.7M BUYER: D.L. Long Properties SELLER: Morgan Stanley & Co. BROKERAGE: CBRE
PAPAGO INDUSTRIAL PARK 844 N. 47th Ave., Phoenix 264,981 SF; $16.85M BUYER: TIAA-CREF Investment Management SELLER: TA Realty BROKERAGE: CBRE COLDWATER DEPOT PHASE III 925 N. 127th Ave., Avondale 186,643 SF; $16.5M BUYER: STAG Industrial SELLER: Clarion Partners BROKERAGE: CBRE 5 S. 84TH AVE., TOLLESON 217,422 SF; $13.4M BUYER: Colony NorthStar SELLER: Gramercy Property Trust BROKERAGE: Cushman & Wakefield 125 N. 67TH AVE., PHOENIX 170,625 SF; $12.55M BUYER: TA Realty SELLER: Westcore Properties
LINCOLN TOWNE CENTRE NORTH & SOUTH (2 PROP. PORTFOLIO) 4250 & 4150 N. Drinkwater Blvd., Scottsdale 226,112 SF; $68.933M BUYER: GLL Real Estate SELLER: Transwestern BROKERAGE: Eastdil Secured EL DORADO TECH CENTER 2299 W. Obispo Ave., Gilbert 180,480 SF; $39M BUYER: El Dorado Operating Company SELLER: Walton Street Capital BROKERAGE: Newmark Knight Frank 3333 E. CAMELBACK RD., PHOENIX 96,248 SF; $21.5M BUYER: Robert Garrett SELLER: Fenway Properties BROKERAGE: Cushman & Wakefield HUMANA 8990 W. Glendale Ave., Glendale 106,418 SF; $19.067M BUYER: Sentinel Real Estate Corporation SELLER: Artis Real Estate Investment Trust BROKERAGE: CBRE
17
LAND/SALES
MULTIFAMILY/SALES
RETAIL/SALES
W. CAMELBACK RD., GOODYEAR 8,644,011 SF; $30,185,470 BUYER: MPS East I SELLER: Sunbelt Holdings
OPTIMA SONORAN VILLAGE 6895 E. Camelback Rd., Scottsdale 900,347 SF; $200M BUYER: Principle Real Estate Investors SELLER: Optima, Inc.
THE BOARDWALK AT ANDERSON SPRINGS 1949-1979 W. Ray Rd., Chandler 89,803 SF; $6.003M BUYER: N/A SELLER: West Valley Properties
W. CAMELBACK RD., GOODYEAR 13,302,338 SF; $17,964,101 BUYER: FAE Holdings 85310R SELLER: N/A W. COMBS RD., SAN TAN VALLEY 3,967,880 SF; $17,264,503 BUYER: Lennar Arizona SELLER: N/A KENSINGTON ESTATES PHASE I E. Knightsbridge Way, Gilbert 1,096,283 SF; $15,265,800 BUYER: Woodside Homes Sales AZ SELLER: Jen Arizona 24 2325 S. 7TH ST., PHOENIX 1,938,420 SF; $14M BUYER: N/A SELLER: N/A BROKERAGE: Lee & Associates
RED MOUNTAIN VILLAS 815 N. 52nd St., Phoenix 592,374 SF; $110M BUYER: Knightvest Capital SELLER: Weidner Property Management BROKERAGE: Marcus & Millichap CORONADO CROSSING 700 N. Coronado St., Chandler 307,055 SF; $57.75M BUYER: Avesta Communities SELLER: Simpson Property Group PINNACLE TERRACE 801 N. Federal St., Chandler 277,368 SF; $56M BUYER: Eaton Vance Real Estate Investment Managers SELLER: TA Realty BROKERAGE: Marcus & Millichap
SAFEWAY 17049 W. Bell Rd., Surprise 55,164 SF; $5,485,058 BUYER: Fortress Investment Group SELLER: Albertson’s GOODWILL 1980 W. Baseline Rd., Phoenix 20,390 SF; $5.42M BUYER: Florham Realty Group SELLER: N/A BROKERAGE: Marcus & Millichap WALGREENS 5895 W. Peoria Ave., Glendale 13,833 SF; $4.342M BUYER: Ismail & Mahmoud Hamdan SELLER: Paragon Real Estate Investment BROKERAGE: Marcus & Millichap RAISING CANE’S 21571 S. Ellsworth Loop Rd., Queen Creek 3,041 SF; $4.1M BUYER: N/A SELLER: N/A BROKERAGE: Marcus & Millichap
Coronado Crossing: Located in the heart of Chandler’s Price Road Corridor, the 326-unit multifmaily complex built in 1998 offers one-, two- and three-bedroom apartment homes just a short drive from Downtown Chandler and the Chandler Fashion Center.
18 | March-April 2018
LEGISLATIVE UPDATE
???????
To provide abatements, or not to provide: That is the question H amlet may have had a weightier choice when pondering his continued existence, but the existence of incentives, especially property tax abatements, seems to be on everyone’s mind in the commercial real estate industry at this time.
WHY WE ARE PONDERING Last year, a consensus bill (HB 2213) was passed at the Arizona Legislature to further reform the Government Property Lease Excise Tax (GPLET) because an Auditor’s Generals report found significant non-compliance with the initial reform from sevenplus years ago. The crux of the more current reform was to maintain the most valuable part of the tool, an eight-year property tax abatement, which can only be utilized in a city’s Central Business District (CBD) with a presumed historic nexus to slum/blight to justify the favored treatment. In exchange, the excise tax payment “tail” for years 9-25 were eliminated, which was the crux of the issue as more grandfathered projects were 20 | March-April 2018
Tim Lawless
Commercial Real-Estate Executives for Economic Development
proceeding rather than new projects subject to the revisions of the initial reform in 2010 (HB 2504). Another issue was the definition of “slum and blight.” The need to readdress this issue in the fall became more imperative when the Goldwater Institute and Angels Trumpet Ale House brought a lawsuit early last spring against a 19-story apartment complex called The Derby Roosevelt
Row and the City of Phoenix in utilizing the GPLET tool. The opponents argue the project violates the State Constitution’s “gift clause” prohibition and the slum/blight determinations, which were written in 1979 and in presumed need of revision. This has led to the current introduction of HB 2126 by Rep. Vince Leach (R-Oro Valley). As the stakeholders can attest, the definition of slum/blight is often in the eye of the beholder. Adding fuel to the fire was the recent and historic record-breaking sale of Marina Heights, the State Farm office complex in Tempe. The land is owned by the Arizona Board of Regents (ABOR) and, as reported by the Arizona Republic, no property tax payments were to be made by State Farm or future lease owners for the lease term - 99 years. This is by virtue of the authority granted to the universities to have tax free land under the State Constitution. Reformers would say that constitutional authority is checked however, by both the “gift clause” prohibition and “uniformity clause” also in our State Constitution.
PROS FOR ABATEMENTS Many economic development gurus believe there’s a need for some economic development tool to attract high wage jobs since Arizona has constitutional limits on bonding and Tax Increment Financing (TIF) mechanisms that are common in many/most other states.
A property tax abatement tool is at the forefront of this movement either via the expansion of GPLET or the use of a fivepercent CRE property tax assessment ratio break — normally 18-percent for everyone else — because our split property tax roll produces some of the highest effective property tax burdens for commercial property in the nation. Many blue ribbon panels over the years, whether it be Fiscal 2000 or the Citizens Finance Review Commission (CFRC) in 2003-2004, established that high commercial property taxes, especially the assessment ratio, are among the top impediments to high wage job creation. GPLET is seen as an ideal tool. Its practical application has de facto morphed more into a rehabilitation or redevelopment tool to spur infill over time instead of strictly a tool to remedy “slum/blight” or distressed areas of a city. For instance, GPLET has worked in areas such as Downtown Phoenix, which is now more vibrant than ever, and along Rio Salado Parkway in Tempe, which is now an economic development engine the envy of most other cities.
CONS FOR ABATEMENTS Reformers, on the other hand, believe that subsidies invariably turn into a bad deal for taxpayers and further distort a level playing field. For instance, they point to GPLET deals in Phoenix where tenant firms merely move from one office tower to another only a few blocks away to seek lower lease payments that occur because
of subsidization. A high geographic concentration of GPLET deals only escalates the property tax burdens for everyone else. Thus, a vicious Catch-22 is established whereby more GPLETs need to be granted, which pushes the rates higher due to the tax shifts and greater services demands. Reformers also claim that the tradeoff for this economic activity is further under-cut because K-12 school districts are denied valuable funding. Adding insult to injury is the theoretic need for all taxpayers in the state to back-fill the school aid formulas that kick-in due to the under-funding when they have no voice in these more localized subsidy decisions. In short, taxation without representation.
MIDDLE GROUND Most policymakers recognize the need for a tool to close a deal especially if it is tied to an environmentally challenged or truly slum and blight area. Since “slum/blight” is in the eyes of the beholder where one’s definition is 1965 Harlem or 2014 inner-city Detroit versus present day Downtown Phoenix and Tempe, perhaps the better way to deal with the issue is to limit a CBD’s land area in relation to the overall size of a city. Taken another way, does it really make intuitive sense that the 1.9 miles that Tempe has designated or the 5.5 miles that Mesa now is in the process of establishing are more slum and blighted than the 1.31.5 miles that Phoenix has designated? The rational person would have to say, “no.”
Regarding university leases and the push to eliminate private firms from taking advantage other than within a designated academic research park (HB 2280), the middle ground could be to level the playing field between ABOR and the cities with a common eight-year abatement versus a virtually unlimited abatement.
CREED’S POSITION Because CREED is a consortium of the largest property tax payers in the CRE industry across numerous product niches, we are opposed to the continued shifting of the property tax burden. We have no problem paying our fair share for schools, we just don’t want to have to pay for those who are paying much less and in some cases little to nothing relative to our share. Having stated that, we support GPLET so long as the tool is responsibly applied where projects would not occur otherwise. We are also sympathetic to the 34-percent state support of universities and could endorse ways to increase that — most likely via Prop 301 renewal/ expansion on ballot in 2020 — but do not believe ABOR should provide taxfree leases to private for-profit firms. We would rather see the assessment ratio lowered for all 100,000-plus incorporated Arizona firms as the better way to induce greater economic activity and bring/expand higher wage jobs to the entire state. Tim Lawless is the president of Commercial Real-Estate Executives for Economic Development (CREED). 21
LEGISLATIVE UPDATE Strengthening ???????
your economic development toolkit
A
t last year’s Arizona Association for Economic Development (AAED) Fall Forum, the theme for the two-day conference was “Strengthening Your Economic Development Toolkit.” As economic developers, we can all agree, maintaining a competitive operating environment where companies can grow and thrive is critical to the success of the region. While modern day site selection decisions hinge largely on labor, economic development programs play a role in the overall value proposition of the state and region. The tools we have available to help grow businesses or attract those from other markets is largely dependent upon the resources that are available to help these companies achieve success. In 2011, Arizona enacted legislation creating the Arizona Commerce Authority (ACA) and a host of programs and incentives designed to spur job creation and investment in the state. The result was a major leap forward in the state’s competitiveness, which has played a significant role in Arizona’s economic growth. In order to attract impact projects and support business retention and expansion efforts, Arizona relies on the utilization of these programs, as well
22 | March-April 2018
Chris Camacho
Greater Phoenix Economic Council as the reputation of a legislature that is willing to work toward supporting pro-business policies. Since the 2011 “Competitiveness Package,” groups such as AAED, Greater Phoenix Economic Council, Arizona Chamber of Commerce and the ACA have worked with legislators to refresh programs targeting advanced manufacturers, data centers and research and development companies. However, other states in the Mountain West, as well as top domestic markets, are in the habit of reviewing their tools and programs on an annual basis, focused on job training, and program modernization and utilization, which are the standards to retain and attract top global employers. With the recent open bid process
made public by Amazon, aggressive – if not grandiose – incentive packages were proposed as more than 230 cities in North America entered the bid for Amazon’s second headquarters. Ideally, site selection decisions would be based solely on the merits of each location, however, the reality is, we must compete with states boasting robust economic development programs and a history of paying top dollar for corporate locales. With confidence in the United States market, there will be more opportunities for large scale investments for us to compete for, and as a state, we need to decide how we can prepare for putting together an aggressive, yet thoughtful foot forward, or instead, choose to sit them out. Our state and our communities need to be armed with the right development tools in order to compete. These programs are not going anywhere, and if we are to remain competitive, it is incumbent upon us to keep these programs at our disposal sharp, performance-based and up to date if we are to ensure Arizona’s position nationally and globally. Chris Camacho is the president and CEO of the Greater Phoenix Economic Council, and a past president of the Arizona Association for Economic Development.
NAIOP legislative goals aims to keep Arizona competitive, growing
D
uring the 2018 legislative session, NAIOP Arizona is advocating for public policies that foster continued growth throughout the state. Our members, which represent all facets of the commercial real estate industry, strive to create projects that will transform Metro Phoenix into a truly world-class region. To that end, we support legislation that positions our state to be the preferred choice for corporate locations and expansions. We also support legislation that encourages entrepreneurship and new business formation. Retaining existing economic development tools and ensuring our tax rates stay low help Arizona effectively compete for big deals like the next headquarters for Apple or Amazon as well as countless others that may not make it into the news.
Suzanne Kinney
Arizona Chapter of NAIOP Unlike many of the states with whom we compete, Arizona offers few economic development incentives to attract companies. We have neither Tax Increment Financing (TIF) nor a large-deal closing fund. We do have Government Property Lease Excise Tax (GPLET), an economic development tool
that cities can use to encourage highvalue development in their urban cores. GPLET is designed to make possible projects that might otherwise locate on the suburban fringe or might not happen at all. NAIOP is working to educate lawmakers on the importance of retaining this important economic development tool so that Valley communities and beyond can benefit from the jobs and associated economic activity that these new projects bring. We are also partnering with our state universities to build thriving communities around the campuses and to further the mission of university research parks. When NAIOP members meet with investors and site selectors, a consistent theme they hear is that higher education matters in the decisionmaking process. Our state universities provide the qualified workforce that these prospective businesses require. Further, the research and development that occurs at universities spurs the creation of new start-up companies, which fuels organic growth in our economy. NAIOP is opposing legislation (HB2280) that would effectively stop a range of mutually beneficial partnerships between state universities and commercial real estate developers, resulting in the loss revenue to the universities and economic activity in surrounding communities. We applaud the leadership of Gov. Doug Ducey for taking action to help make Arizona a hub for innovation and new technologies, such as autonomous vehicles. Cutting regulations and providing an open and predictable marketplace put us ahead of the competition. This matters to the commercial real estate industry because it promotes growth. As more new businesses choose to call Arizona home, the demand grows for office, industrial, retail and mixed-use space. This helps us build the kind of city, region and state that make us all proud. Suzanne Kinney is president and CEO of the Arizona Chapter of NAIOP, the commercial real estate development association. 23
LEGISLATIVE UPDATE
???????
Vision, clarity and stability will help grow Arizona’s economic base
T
he discussion continues in 2018 at the 53rd Legislature, Second Regular Session in Arizona on whether we are actually open for business. Amazing news was recently announced that Nikola Motor Company is going to manufacture innovative, new technology in Arizona, but at the same time Arizona did not even qualify as a finalist for Amazon’s second headquarters. Governor Doug Ducey, the Arizona Commerce Authority, Greater Phoenix Economic Council, Greater Phoenix Leadership, Valley Partnership and others are leading the way to change the perception of Arizona. While they are working locally, nationally and abroad to make the case for Arizona, our Legislature is taking tools out of our economic development toolbox. The Legislature is considering cutting the area eligible for the state’s only economic development tool, the Government Property Lease Excise Tax (GPLET), in any city by half of current law (HB 2126). They are threatening cities that use this
24 | March-April 2018
Cheryl Lombard
Valley Partnership tool to lose their shared revenue (HB 2330). These moves may violate the Arizona Constitution by limiting the definition of economic development and restricting city leases (HB 2005), and they are considering preventing Arizona public universities from utilizing their lands (HB 2280). We have an interesting push and pull going on regarding what is economic development, how do we do it, and who is in charge of it. We tout a probusiness climate and approach, and then allow the Legislature to modify or remove the tools that can be used to
secure major operations for our state. This chaos is playing out as confusion to financing entities and those who are making large and long investment decisions that need certainty. Property tax incentives have been successfully used to revitalize Arizona cities’ downtowns since the 1980s. This is a necessary tool because Arizona has high commercial property taxes - rates that shock developers trying to do business in what they thought was a low tax environment. Arizona’s commercial property taxes are at odds with the image the state claims as being “pro-business.” Tinkering with these tools every year — as is the recent history — causes confusion, lawsuits and unequal circumstances for similarly situated projects. It also signals to large scale employers that the political environment is unstable and that could impact their businesses. Let’s actually discuss solutions to the real problem instead of just chipping away at what we have so we can continue attracting great companies such as Caterpillar and Nikola Motor Company. Cheryl Lombard is president and CEO of Valley Partnership.
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420 PROPERTIES
420 Properties
The impact of Arizona’s growing cannabis industry By DAVID MCGLOTHLIN
T
he former Revlon cosmetics and fragrance manufacturing plant, located in a South Phoenix industrial park, was originally built in the late 1960s and employed more than 900 people at its peak before eventually closing in 2001. For more than 14 years, the 880,000-square-foot big box space sat vacant and shuttered. Today, it is home to a new tenant with new employees that are all part of a budding industry in Arizona – cannabis. The adaptive reuse transformation of the Revlon building into the largest indoor cannabis cultivation facility in Arizona by True Harvest is just one example of the state’s cannabisrelated real estate activity and the
26 | March-April 2018
industry’s growth overall, which continues to attract investor interest while also creating jobs and real estate opportunities. Marijuana isn’t a new topic by any means but it’s evolution into a legally regulated multi-billion-dollar industry for medical and recreational use is relatively new. And experts predict the cannabis industry is only expected to grow in Arizona, nationally and globally, as the industry evolves and more places consider legalizing medical and/or recreational marijuana. It’s important to keep in mind that cannabis is still federally illegal for both medical and recreational use, which presents certain complex legal and financial challenges, but
that’s not stopping cannabis pioneers and business entrepreneurs from capitalizing on ways to earn some green from the cash crop in Arizona. Arizona passed Proposition 205 — the Arizona Medical Marijuana Act (AMMA) — in 2010, becoming the 14th state to make medical marijuana legal for adults over the age of 21. As of November 2017, the Arizona Department of Health Services (ADHS) reports more than 151,000 qualifying patients with medical marijuana cards. Other states have gone even further. Since 1998, 29 states and Washington D.C., have legalized marijuana in some form, or at the very least, decriminalized possession or consumption of small amounts.
“It has become much more business-like, professional and normalized.”
CASH CROPS: Bill Brothers currently owns Encanto Green Cross Dispensary in Central Phoenix, and operates one of the largest marijuana cultivation sites in the state, which serves 13,000 local patients each year.
— Laura Bianchi, director of Rose Law Group’s Cannabis Department
Looking at reports calculating the value of the cannabis market, projections of the industry’s potential growth often times yield different results. One report by Arcview Market Research, states, the regulated marijuana sales in North America totaled $6.7 billion in 2016, and it predicts sales to increase to an estimated $20.2 billion by 2021. Globally, a report by Ameri Research Inc., forecasts the legal cannabis market to be valued at $63.5 billion by 2024. Now locally, the ADHS reports, nearly $280 million worth of medical cannabis sales in 2016, which generated roughly $30 million in tax revenue. In total, Arizonians consumed 29 tons of medical marijuana
throughout 2016, which is more than double last year’s amount. Laura Bianchi, partner at Scottsdalebased Rose Law Group has been on the forefront of the legal cannabis movement since 2010 when the firm first launched its Cannabis Department, which Bianchi leads as the director. She describes the changes and evolution of the cannabis industry in Arizona since then as “tremendous.” “It has become much more businesslike, professional and normalized,” she explains. “It’s a functioning business like any other business and I think people in Arizona see it as another business that brings growth and benefits our economy.”
Over the years, people became more educated and aware of Arizona’s medical marijuana program, its regulations and rulemaking process, Bianchi says, and as a result, “people became far more comfortable and supportive.” According to the Arizona Medical Marijuana Clinic, the state’s cannabis industry supports more than 4,680 fulltime jobs across Arizona, which includes growers and dispensary employees, but also ancillary service jobs — such as lawyers, accountants, title companies, builders, insurance and real estate agents to name a few — much like any other traditional business. Bianchi says, “Overall, we think it has evolved well over time into a very 27
420 PROPERTIES
Laura Bianchi
well-regulated cannabis market that investors are interested in.” In Arizona, those investors already include companies like Kaylax Development, a private real estate investment trust focused on the cannabis industry, which currently manages a 23,600-square-foot cultivation facility in Mesa, and Innovative Industrial Properties Inc., a Maryland-based provider of creative real estate capital solutions to the medical-use cannabis industry. Both companies and similar groups have spent millions of dollars in Arizona to turn vacant warehouses into state-of-the-art cultivation facilities and empty retail spaces into licensed dispensaries. In December, Innovative Industrial Properties closed on the acquisition of a 350,000-square-foot greenhouse and industrial property in Wilcox for $15 million via a 15-year, sale-leaseback transaction with a subsidiary of The Pharm, which sells products in nearly half of Arizona’s retail dispensaries. Among the first people to start cannabis-centric businesses in Arizona were father and son duo, Bill and William Grant Brothers, which had the first licensed indoor cultivation site regulated by the ADHS as well as the first licensed greenhouse in the state. They currently own Encanto Green Cross Dispensary, a 90,000-squarefoot facility in Central Phoenix, and operate one of the largest marijuana cultivation sites in the state, which serves 13,000 local patients each year. One of the main challenges to the industry is regulation and legal conflicts between state and federal laws. Since marijuana is still federally illegal, traditional lending opportunities 28 | March-April 2018
Bill Brothers
Wil Ralston
are not available and deals are predominately done in all cash. However, creative funding solutions involving blockchain technology and cryptocurrencies are in the works to provide an alternative to cash transactions. Arizona-based SinglePoint, a publicly-traded cannabis and technology holding company, recently launched a proprietary bitcoin exchange to solve payment processing issues in the cannabis space. “We are trying to give them an alternative to cash,” says Wil Ralston, president of SinglePoint. In addition to over 100-people already using the beta version of the program, Ralston describes daily inquiries from people who want to use the program once it’s fully launched later this year. Other cryptocurrencies for cannabis transactions already exist, including PotCoin and HempCoin. Overall, Bianchi says, “The commercial real estate industry has certainly benefited from the cannabis industry.” Since locations for cannabisbusinesses are difficult to find because of regulations like zoning, she says, “I’m seeing land owners get 2-3 times per square-foot what they would have gotten previously because they are zoned or can be zoned for a cannabisrelated facility.” Ralston agrees. “It’s common to see a markup for 3-4-times what the land would otherwise cost for regular commercial zoning,” he says. Bill Brothers describes it as the “marijuana premium” because of a deal’s risk to return ratio. In his experience, cap rates for marijuana deals can range from 12-16 percent.
Looking ahead, cannabis advocacy groups have already filed paperwork with the Arizona Secretary of State’s Office to start collecting enough signatures to get on the November 2018 ballot with an initiative to legalize cannabis for adults at least 21 years old. If passed, Arizona’s industrial and retail sectors might experience another fundamental boost similar to what has been observed in more established cannabis markets like Denver, Colo.
The GREEN Affect on CRE Since medical marijuana took off in Denver, Colo. in 2009 and the recreational market followed in 2012, the cannabis industry helped boost industrial and retail market fundamentals, decreasing vacancy, lifting absorption and raising rental rates.
According to a report from CBRE Group Inc., there are five pot stores to every stand-along Starbucks in Denver and the city’s marijuana industry accounted for more than 35-percent of industrial net absorption from 2009-2014. INDUSTRIAL: Cannabis properties account for at least 3.7-MSF of occupied industrial space in Denver, or approximately 2.6 percent of the existing warehouse footprint. RETAIL: Similar to industrial tenants, marijuana retail tenants tend to absorb more Class B and C space.
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EAST VALLEY UPDATE-CHANDLER
GOING SPEC
Speculative development surges to meet Chandler's growing office demands By DAVID MCGLOTHLIN
T
he City of Chandler has been touted as having the fastest growing labor base in Metro Phoenix, which should bode well for the several speculative office projects that recently broke ground in Chandler. It should also help Chandler’s continued mission to bring more high-wage jobs to the city. Chandler has historically been known for attracting innovative technology companies like Intel, which employs 11,000 workers and eventually led to the relocation of other companies nearby such as NXP and Microchip, says City of Chandler Economic Development Director James Smith, but the city’s largest growth industry over the last 6-7 years has been financial services. He notes Well Fargo’s 410,000-square-foot expansion with 4,500 new jobs, Bank of America’s expansion to 3,800 employees, as well as other companies like PayPal and Toyota Financial Services, which account for nearly 2,500 jobs. “This shows confidence in our market from developers and site selectors,”
30 | March-April 2018
explains Smith. “The spec buildings constructed a few years back are filling up and developers are seeing another opportunity in Chandler.” For example, Park Place, a 160James Smith acre speculative business park at the intersection of the Loop 101 and 202 freeways, already has 10 existing buildings, nine of which are fully leased and nine more buildings are currently being planned. At full build out, the connected campus with proposed dining and retail spaces as well as an on-site hotel will total more than 2-million square feet and consist of a variety of building types, including low-rise and mid-rise office space and flex space for research and development needs. Referring to The Hub, a 76-acre campus offering 300,000 square feet of Class A office space, Smith points out, “if there was a large corporate type campus wanting to come to the Phoenix area, this presents a great opportunity to have an immediate building to occupy and then really grow into the campus with future buildings on that site.” Overall, he attributes the main driver of new companies and jobs in Chandler to the city’s large and highly educated workforce, which totals over 152,000 residents with nearly 75 percent of adults having attended college.
Park Place Building 16: The 150,000-square-foot, speculative office is under construction at Price and Willis roads.
PROJECT NEWS: A look at speculative office developments breaking ground in Chandler over the last few months. CAMBRIDGE WEST: a 67,000 SF, Class A office designed by Butler Design Group near the Chandler Airpark and Loop 202. CHANDLER CORPORATE CENTER: a 114,000 SF, Class A office development by VanTrust Real Estate, constructed by Layton Construction, designed by Butler Design Group, and located adjacent to Chandler Fashion Square. PARK PLACE (BUILDING 15 & 16): currently under development by Douglas Allred Company, both are located on the southern portion of the 160-acre speculative business park and offer a total of 275,000 SF of Class A office space. THE HUB: a 300,000 SF building with 146,000 SF of space and 19-foot ceilings on a 76-acre campus with room to grow and additional land for future build-to-suits. THE OFFICES AT CHANDLER VIRIDIAN: a six-story, Class A office building with 250,000 SF of space, located at the intersection of Loop 101 and Loop 202 near the Chandler Fashion Center. Developed by Hines, the building will be the tallest multi-tenant office building in Chandler at completion and home to Stantec’s 55,000 SF Southwest regional office.
EAST VALLEY UPDATE-GILBERT
A destination to celebrate Arizona Agritopia owners go local with new mixed-use project By DAVID MCGLOTHLIN
U
nlike the other East Valley cities such as Mesa, Scottsdale or Tempe, Gilbert is still recognized as a “town” by the state and Maricopa County, but that doesn’t take away from all of its recent commercial real estate investment, development and activity. In fact, the Town of Gilbert is projected to be fully built-out by 2030 with an anticipated population of over 300,000 people, which means demographics will see a favorable boost but available land is becoming more scarce. That’s not slowing down the development and next chapter of Agritopia though. The 166-acre mixed-use planned community, located on the northwest corner of Higley and Ray roads, offers “modern village life” surrounding 11
acres of farm land in a community that features a farm-to-table restaurant, coffee shop, senior living community, creative shared spaces and more is currently being added. The owners Johnston Properties will develop the next chapter in Agritopia’s story called Epicenter, which broke ground during fall 2017 with completion expected in 2019. Located on 19.7 acres next to Agritopia, Epicenter will encompass 55,000 square feet of retail space and 287 residential units, totaling 300,000 square feet. Johnston Properties envision Epicenter drawing all of its tenants from across Arizona and setting a new standard for mixed-use projects in the Valley, which it is calling a “Celebrating Arizona Destination.” One reason is because many of Epicenter’s estimated 30 tenants will be first-time business owners and about half of those will be food-based concepts, which will include Obon Sushi & Ramen and Bird Southern Table & Bar, both Tucson-based concepts, as well as Gadzooks Enchiladas & Soup, a Phoenix-based concept.
General Contractor: Ryan Companies Architect: Whitneybell Perry Architects Civil engineer: Terrascape Landscape architect: Floor of Phoenix Development consultant: Casey Treadwell of Vintage Partners Leasing broker: Joe Doucett of Newmark Knight Frank Value: $75M
In addition to restaurants and retail, the tenants will focus on improving health and wellness services for area residents. Additional new tenants include: Dr. Worden, an Arizona-based physician focused on integrated medicine; The Yoga Center, a local start-up business; Cycle Ave, a stand-alone concept from the operators of funkfit.com; and Vintage Home, a new retail business offering refurbished and original midcentury modern furniture. “Over the next 10 years, Epicenter is projected to directly and indirectly support approximately 258 jobs, generate $7.9 million in annual personal income in Gilbert, and have an economic impact of over $170 million to the Gilbert community,” says Director of the Gilbert Office of Economic Development Dan Henderson. Dan Henderson 31
EAST VALLEY UPDATE-MESA
Ready for what’s ahead Falcon Field Business Center
Mesa projects target growing industries, high-wage jobs By DAVID MCGLOTHLIN
O
ver the years, the City of Mesa implemented economic development strategies for every part of the city with a shared theme to create new high-paying jobs by attracting new companies to set up operations in Mesa and existing ones to expand, which will in turn spur housing and multifamily projects that will lead to more retail, hospitality and recreational demand. City of Mesa Economic Development Director Bill Jabjiniak says, while the four corners of Mesa — Falcon District, Bill Jabjiniak Gateway Area, Fiesta District and the Riverview Area — and Downtown Mesa all have strategic economic development plans, each area’s strategies differ based on its respective strengths, demographics, amenities and needs. For instance, he explains, several years ago, the city noticed the Falcon Field District was strictly focused on general aviation, but industry growth sectors were in other areas like technology, medical devices and
32 | March-April 2018
commercial aerospace. So they began asking themselves, “How do you meet the demands for users in those sectors?” This strategy is visible across the city. Overall, Jabjiniak says, “Our economic development strategies are paying off.” FALCON DISTRICT – Located south of the Loop 202 between Greenfield and Power roads, various new speculative developments are priming the area for numerous aerospace, technology and advanced manufacturing opportunities, Jabjiniak says. Falcon Tech Center: a 63-acre development anticipated to be a multi-tenant, mini-campus for medical, bio-med, medical device and technology industries. Longbow Gateway One: a 150,000 SF speculative industrial facility designed to attract aerospace and defense businesses broke ground in August and is expected to have at least 175 employees once fully leased. Falcon Field Business Center: a 96,000 SF speculative industrial facility designed to attract manufacturing and distribution users broke ground in November. Falcon Commerce Park: the proposed three building, 125,000 SF industrial park, includes a 73,000 SF multi-tenant industrial building, and two freestanding 26,000 SF industrial buildings. GATEWAY AREA – With 14,000 acres of developable land, the area offers numerous build-to-suit options near the Phoenix-Mesa Gateway Airport, explains Jabjiniak.
Elliot Road Technology Corridor: power, land, water, natural gas, fiber, market access, quick entitlement process and a Foreign Trade Zone makes this an ideal fit to meet every high-tech manufacturers’ need. Niagara Bottling: The largest, private-label bottled water supplier in the U.S. is building a $76 million, 450,000 SF manufacturing and bottling plant that will create 45-55 new jobs. SkyBridge Arizona: a first-of-itskind, $230 million joint United StatesMexico Customs inspections facility, to be located on 360-acres at the PhoenixMesa Gateway Airport, which will bring tens of thousands of new jobs. FIESTA DISTRICT – Located in West Mesa, the redevelopment area was designated by the City Council as in need of revitalization and has since been boosted by $400 million in public and private investment over the last few years. Fiesta Mall: the 926,000 SF shuttered mall will be transformed into the Fiesta Corporate Campus through an adaptive reuse project to convert its retail space into Class A office space for potentially 2,000 employees. MESA RIVERVIEW AREA – Located at the intersection of Loop 101 and 202, the 250-acre master-planned, mixeduse project boasts over 1.3-million SF of retail, says Jabjiniak. Waypoint: its four Class A office buildings, totaling 425,000 SF, makes it a great location for Class A office space and other back office operations.
EAST VALLEY UPDATE-TEMPE
Innovation that counts Novus Innovation Corridor rendering
Tempe ranked No. 1 office market in U.S. By DAVID MCGLOTHLIN
O
ver the past two decades, Tempe experienced rapid growth, including that of Arizona State University, which now ranks as the largest public university in the nation in terms of students and No. 1 in the nation for innovation. As ASU’s Tempe campus grew, so has commercial development activity throughout Tempe, transforming the once quaint, small, collegecommuity of Downtown Tempe into a bustling live-work-play environment that continues to experience more commercial activity. In fact, Tempe was recently recognized as the No. 1 market in the nation for office absorption and rising rent rates, according to CBRE’s annual Tech-30 report. Tempe was the top submarket for net absorption growth from Q2 2015Q2 2017, at 33.2 percent, followed by Seattle’s Lake Union (27.5 percent) and Salt Lake City’s South Valley (19.3 percent). However, this isn’t slowing down interest from developers and site selectors who want to build in the area, says City of Tempe Economic Development Director Donna Kennedy. She points to Tempe’s unique quality of life, live-work-play synergy and its
vision to be an “innovation district” as a few reasons why Tempe continues to attract so much attention from companies and residents. For example, Kennedy says, office occupancy in Downtown Tempe is currently at 98 percent and some companies vying for space are choosing to be placed on a waitlist instead of looking for space elsewhere. In fact, Tempe has attracted 30,000 new jobs over the last five years and that’s expected to rise as more office development occurs to meet demand, including the next phase of the Novus Innovation Corridor. It’s a bold new community created by ASU and master developer Catellus Development Corporation that encompasses 330-acres of which 130-acres will be available for new development. When completed, Novus will integrate more than eight million square feet of private, mixed-use urban development with new and renovated technology-enhanced collegiate athletic venues, ultimately bringing approximately 20,000 new jobs and 5,000 new residents to Central Tempe. Kennedy says, “The Novus Innovation Corridor provides us with an opportunity to have a sustainable Donna Kennedy economy where
we build off of what’s existing as well as redevelopment opportunities.” Phase I will consist of the first 1-million square feet of mid-rise, Class A office space, urban residences, hotel rooms, and a diverse collection of retail shops and restaurants in a compact, urban setting just north of the University Avenue Metro Rail station. As one of ASU’s seven “Innovation Zones,” Novus Innovation Corridor will act as a living laboratory for technical advancements produced by the university in partnership with global leaders in a variety of technological and research fields. “The Novus Innovation Corridor is an opportunity for ASU to harness and leverage its resources to create a place that integrates leadingedge technologies into an urban landscape,” said ASU President Michael M. Crow. “The innovation corridor will be a constantly evolving illustration of how local and global enterprises can partner to put innovative research and technology into practice in the greater community.” Plans for the project’s next phase include three office buildings. Meanwhile, negotiations are progressing with a regional, urban multifamily developer on a 260-unit, mid-rise housing project, located north of University Drive and Rural Road, that will connect to the retail district with multiple ground-level opportunities. Private development in Novus is expected to last over the next 20year period. 33
WEST VALLEY UPDATE
Quality improvements The latest projects fueling the West Valley’s enriched quality of life By DAVID MCGLOTHLIN
T
here’s no question, a lot has changed in the West Valley over the last 10-12 years. Old citrus groves and farm fields have been developed into commercial and residential properties like master-planned communities, entertainment centers and business parks, although land still remains for agriculture uses. Nowadays, the West Valley is becoming increasingly known for new transportation and employment corridors like the Loop 303 and PV|303 as well as super-regional entertainment districts for shopping, dining and entertainment like Westgate in Glendale and P83 in Peoria. All of which translates to the upgraded quality of life now being enjoyed in the West Valley courtesy of strategic efforts to improve the region’s work-live-play synergy. Aiding in the development of projects like these and others coming down the pike is the Western Maricopa
34 | March-April 2018
Coalition (WESTMARC), a public/ private partnership of 15 communities, the business community and education sector in the West Valley. The efforts of WESTMARC, local economic development departments, private and public officials and community members have all contributed over the years in showcasing why the West Valley is a viable place to live, work and play. It’s catching on too. The region now boasts a diverse range of restaurants, retail, championship golf courses, hotels, parks, award-winning schools, healthcare facilities and a variety of housing for executives and employees. The dated-identity of the West Valley as an older retirement community with limited employment, shopping, dining, and entertainment options is largely a misnomer today, says WESTMARC President and CEO Sintra Hoffman. She describes the West Valley as a high-quality community with quality
amenities that people may not realize. “The West Valley has changed dramatically over the last 10-12 years,” Hoffman explains. “It’s a different community now in terms of buying power, education levels, workforce availability and jobs.” One shared goal throughout the region’s communities is to attract enough companies to the West Valley so 69 percent of its 1.6-million residents no longer need to commute outside the region to work in other parts of Maricopa County. Thus, Hoffman and other economic development groups like the Arizona Commerce Authority (ACA) are targeting companies in industries such as: advanced business services, healthcare, STEM occupations, advanced manufacturing, information technology and aerospace. “Due to a skilled workforce concentration, geographic location and proximity to Luke Air Force Base,” ACA President and CEO Sandra Watson
Sintra Hoffman
WEST VALLEY: BY THE NUMBERS 1.6-million people live in the West Valley. 69% of the West Valley workforce commutes outside of the region to work in other parts of Maricopa County. 40% of Phoenix’s 1.5-million residents live west of Interstate 17. 62% of the West Valley population is workforce age. 28% of manufacturing workers in Maricopa County live in the West Valley, but only 16% of jobs are located there. 37% of healthcare workers in Maricopa County live in the West Valley, but only 21% of jobs are located there. 34% of professional finance and insurance workers in Maricopa County live in the West Valley, but only 12% of jobs are located there.
Pat Feeney
says, “the West Valley has a history of strength in the business and financial services, technology and aerospace and defense industries, and recently has also seen increased growth in the manufacturing and transportation and logistics industries.” Overall, a majority of activity is occurring near the West Valley’s transportation corridors like the Loop 101 and Loop 303, which is no surprise based on daily traffic counts and the amount of residents and amenities nearby. The most industrial activity can be seen along the Loop 303 within a 1,600-acre business park known as PV|303, which has already landed several company relocation projects and expansions. For example, Iris USA, a storage products manufacturer, expanded to Surprise from Japan in 2015, establishing a U.S. headquarters and manufacturing operation that created 100 projected new jobs and a $33 million capital investment. More recently in December, Chewy.com, a pet products retailer, announced plans for a new e-commerce facility in Goodyear that will create 700 projected new jobs. “As commercial developers are watching the trend of companies and people moving to West Valley cities, they are advancing new projects to meet the demand of tenants looking for space,” Watson explains. For Hoffman, what really differentiates the West Valley from the
Sandra Watson
FUTURE WORKFORCE West Valley cities’ employment estimates for 2050:
GLENDALE = 206,900 BUCKEYE = 143,600 SURPRISE = 120,300 PEORIA = 118,000 GOODYEAR = 104,600 rest of Maricopa County is the quality of life it offers, which keeps evolving and growing as the region matures and more capital investments flow into the area for new projects. “People realize what we have in the West Valley and we are seeing those investments take shape,” she explains.
INDUSTRIAL’S ROLE When the West Valley portion of the Loop 303 was completed, it created a much needed transportation corridor that in turn opened the region to more employment opportunities, especially for e-commerce and manufacturing companies. One example being developed by Merit Partners and Sunbelt Holdings is PV|303, located in Goodyear and ranked as one of the largest masterplanned business parks in the Western U.S. that will include over 20-million square feet of industrial, office and retail space at full buildout. Joining the ranks of existing companies within PV|303 — like 35
WEST VALLEY UPDATE WEST VALLEY PROJECT HIGHLIGHTS NIKOLA MOTOR COMPANY
MANUFACTURING TECHNOLOGIES INC.
SK FOOD GROUP
AMAZON
LOCKHEED MARTIN CORPORATION
TYR TACTICAL
BRAVADA YACHTS
GOODFELLOW CRUSHERS
CARDINAL GLASS
TOP GOLF
VISIONARY AUTOMOTIVE GROUP
SANTE OPERATIONS
EMPEREON-CONSTAR
COPPER STATE RUBBER
AVIAGE
BALL CORPORATION
DANBY
IRIS USA
Buckeye, 2,000 new jobs, February 2018 Goodyear, 108 new jobs, February 2018 75 new jobs, January 2018 Glendale, 197 new jobs, December 2017 Glendale, 427 new jobs, September 2017 Goodyear, 130 new jobs, September 2017
West Phoenix, 35 new jobs, September 2017 Luke AFB, 225 new jobs, July 2017 El Mirage, 41 new jobs, June 2017
Glendale, 125 new jobs, May 2017 Avondale, 15 new jobs, April 2017
Tolleson, 75 new jobs, March 2017
Carvana Vehicle Inspection Center: Marking the company’s first West Coast inspection center, the facility will employ up to 500 workers at the 40-acre site in Tolleson.
Tolleson, 550 new jobs, July 2016 Peoria, 150 new jobs, June 2016 Buckeye, 100 new jobs, June 2016 Glendale, 150 new jobs, May 2016 Peoria, 40 new jobs, July 2015 Surprise, 63 new jobs, January 2015
Huhtamaki: The Finland-based food packaging firm acquired a 750,000-square-foot rail-served manufacturing and distribution facility in Goodyear, and plans to make a more than $100 million capital investment into the site over the next two years, creating approximately 300 jobs.
Conair Corp.: The $40 million, 812,900-square-foot distribution center in Glendale created 300 new jobs, and increased the Glendale Conair Campus to 2.3M SF, making it the second largest campus in the Valley behind Intel. 36 | March-April 2018
the interchange of business
Arizona’s Hub for Business Expansion
United Parcel Service – 618,350 sf. Distribution Center
REI, Inc. – 400,000 sf. Omni-Channel Facility
Sub-Zero – 705,000 sf. Manufacturing and Distribution Facility
Dick’s Sporting Goods – 720,000 sf. Distribution Center
The 1,600+ acre master planned business park located in Goodyear, Arizona is the ideal location for expanding businesses. An FTZ-designated site, PV|303 offers excellent freeway access and expansive on-site amenities. Foreign Trade Zone Designated Site #277 | Shovel-Ready Sites Build-To-Suit Options | Spec Buildings Available PV303.com
TOP EMPLOYERS Here’s the current top target industry employers for the West Valley:
Dick’s Sporting Goods and REI — is the United Parcel Service (UPS), which selected Goodyear as the best location for its new $180 million, 970,000-square-foot package processing hub, which will create 1,500 projected new jobs. “This is not your grandpa’s manufacturing world any longer,” Hoffman says. “The industrial skillset needed today revolves around robotics and computers, which means the jobs require higher skill and generate higher wages.” Pat Feeney, senior vice president at CBRE, focuses on the sale and lease of single and multi-tenant industrial properties, including multiple completed deals and others currently in the works within PV|303. He remembers when there was little to no industrial users in Goodyear and the most desired industrial submarkets were in the Southwest Valley from 35th to 99th Avenues, Tempe Airport, or Chandler. Nowadays, Feeney describes constantly fielding calls, giving site tours, and working on contract agreements for industrial properties near the Loop 303 and within PV|303. Compared to the older industrial submarkets like in the East Valley, Feeney says, the West Valley offers less expensive and more widely available land for new projects as well as cheaper property taxes and more flexible zoning codes. Looking ahead, Watson is confident the West Valley will continue to grow as a manufacturing and distribution hub. She notes the recent Nikola Motor decision to build a new manufacturing and R&D headquarters operation in Buckeye, which will create 2,000 projected new jobs and $1 billion in capital investment to the region. 38 | March-April 2018
Banner Health
6,683
Luke Air Force Base
5,072
Amazon.com
4,538
American Express
3,240
APS/Palo Verde
2,624
PetSmart Inc.
2,061
Abrazo Healthcare 1,726 FedEx
1,308
Shamrock Foods Company
1,204
JBS Packerland Tolleson
1,200
Arizona State University
1,187
HonorHealth
1,145
JPMorgan Chase Bank
945
Grand Canyon University
903
Humana, Inc.
940
NEW AMENITIES COMING SOON The area along the Loop 101 Aqua Fria Freeway near the 223-acre Westgate Entertainment District in Glendale is heating up with more retail, hospitality and entertainment projects, in addition to the existing 8-million square-feet of retail at Westgate, which attracts 22-million visitors annually. With economic development steadily increasing over the past several years, Watson says, commercial real estate development has followed in both key targeted industries and also in the restaurant and retail sectors as a result of the multiplier effect. Topgolf started construction in November on its fourth Arizona location in Glendale along the northwest corner of Loop 101 and Bethany Home Road, which will total 65,000 square feet and open in late 2018.
In addition to creating 500 full and part-time jobs and serving as an anchor tenant that tends to attract other popular franchises to the area, Topgolf’s economic output in Glendale alone is expected to exceed $264.5 million over a 10-year-period, according to a third-party audit. Not too far away at the southwest corner of Bethany Home Road and 99th Avenue, Drive Shack is also building a new, 60,000-square-foot, multi-level golf entertainment venue with a bar and restaurant that is expected to produce more than 500 new jobs. Hoffman says projects like these and the $400 million Desert Diamond West Valley Casino represent a demand from younger demographics in the West Valley and a willingness to spend on higher dollar entertainment. After opening an interim, slotmachine only casino facility in December 2015, the Tohono O’odham Gaming Enterprise (TOGE) broke ground last December, on the permanent, full-scale home for its Desert Diamond West Valley Casino. Once complete, it will employ approximately 1,600 people while also complementing the region’s vibrant sports and entertainment attractions, including Glendale’s Westgate Entertainment District and Peoria’s P83 Entertainment District. Future phases of construction will include a hotel, spa and other resort amenities, but at full buildout, the resort and casino is expected to occupy over one-million square feet and create more than 3,000 jobs. All of which is good news to the West Valley as it keeps looking ahead at other ways to improve its quality of life, attract more companies in key industries, create additional jobs and provide a truly unique live-work-play synergy throughout its communities.
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39
INDIAN COUNTRY
Hitting the jackpot Tribal lands attract commercial investment, development near existing casinos By JESSE A. MILLARD
A
rizona’s tribal casinos brought in close to $25 billion from 20042017, according to annual tribal contribution reports by the Arizona Department of Gaming. In total, there are currently 16 Tribes operating 24 casinos throughout the state. There’s no doubt these casinos are bringing in big bucks, but Arizona casinos are also attracting big commercial investment and development interest to the tribal communities and surrounding areas.
40 | March-April 2018
New casinos projects like the $400 million Desert Diamond West Valley Casino that broke ground in December have people interested in what additional development opportunities might arise and how it will further define the surrounding area. The project will bring five restaurants and 75,000 square feet of slot machines, blackjack, poker and bingo to Northern Avenue and the Loop 101, replacing the temporary, slot machineonly gaming facility that was built in
2015 in the same area. Construction of the new casino is expected to take 24 months, but the Tohono O’odham Gaming Enterprise is already planning to add a hotel, spa and other resort amenities during future phases. At full buildout, the Desert Diamond West Valley Casino is projected to be over one-million square feet, and employ 3,000 workers. Meanwhile, existing casinos undergo renovations to stay competitive just as a density movement draws more
DESERT DIAMOND WEST VALLEY CASINO: Construction of the $400 million project will be lead by the Hunt/Penta Joint Venture and is expected to last an estimated 24 months. Future phases of construction once the permanent casino is completed will include a hotel, spa and other resort amenities.
development and investor interest to tribal communities and nearby casinos. FROM DESERT TO CASINO When Ak-Chin Indian Community Chair Robert Miguel was growing up, the area where Harrah’s Ak-Chin Casino would be built was desert, mesquite trees and rocks. Community members came to the area to enjoy the nature, he remembers. Over the years, that area has gone from raw desert to hospitality haven.
The Harrah’s Ak-Chin Casino would be built in 1994, continuously growing over the decades. Next door to the casino, the 165,000-square-foot UltraStar Multi-tainment Center was built, adding a movie theater, bowling alley, laser-tag, arcade and event center, which kept folks in the region for their entertainment needs, instead of driving to Casa Grande or Metro Phoenix. More recent construction includes a multi-million-dollar expansion of Harrah’s Ak-Chin Casino that will add ballroom space, more restaurants and 200 guestrooms while updating the facilities with a more modern ascetic. A sky bridge connecting the casino with the UltraStar Multi-tainment Center is also in the works. The casino isn’t getting all of the excitement though, as it helps boost awareness of this growing community. “The enhancement and expansion of the casino and entertainment centers really bolstered the interest of companies and enterprise that may want to relocate out here,” Miguel says. Lately, both the Ak-Chin Community and City of Maricopa have been fielding many inquiries about future development potential in the area, he explains. Miguel has spoken with three separate manufacturing companies and hotel developers since interest in the community has grown, saying the community gets requests from companies looking to relocate a couple of times per month. Other investor interest has been spurred by the community’s purchase of the Phoenix Regional Airport, which was renamed to the Ak-Chin Regional Airport, and upgraded. The more the community progresses, the more interest it will be able to create, Miguel says.
TALKING STICK’S SUCCESS SETS STANDARD Since Talking Stick Resort and Casino was built, the area known as the Talking Stick Entertainment District has grown a great deal within the Salt River PimaMaricopa Indian Community (SRPMIC). When the resort was completed in 2010, the economy was still in the midst of its slump and there wasn’t much development happening in the area, says Martin Harvier, vice president of the SRPMIC. Not long after Talking Stick Resort was completed, the community had the opportunity to develop Salt River Fields, which was the first spring training facility to be built on Native American land. Between the completion of those two projects and now, the SRPMIC has become home to many other developments. Part of the area’s success has to do with its prime location near Scottsdale and the Loop 101, Harvier says, but a lot of what the SRPMIC has been able to accomplish was through the community’s opportunity to game with its casinos. “With Talking Stick Resort being the first to be there, and then the ball field, everything else took off from there,” he says. “It’s really surprising to see the developments happening.” OdySea in the Desert, the newest entertainment hub, built on 35-acres of SRPMIC land in 2016 by McCarthy Building Companies, now includes approximately 20 restaurants and other interactive experiences like an ice bar called Polar Play, the OdySea Mirror Maze, the Aqua Massage & Oxygen Bar and the Carousel Arcade. The community has seen success outside of hospitality projects as well, attracting mega office, retail and mixeduse projects. Developed by The Alter Group, the $400 million Riverwalk at Talking Stick, is one of the country’s largest developments on Native American land, which will yield 41
INDIAN COUNTRY
Michael Gonzalez
Martin Harvier
an estimated 1.5-million square feet of corporate office and retail space and create up to 15,00 jobs at full buildout. There’s also the Pima Center, a 209-acre, mixed-use business park developed by Main Spring Capital Group along the northwest corner of the SRPMIC. Meanwhile, the SRPMIC has developed the Scottsdale Autoshow at Salt River and the Pavilions at Talking Stick. Greg Mayer, senior director at Cushman & Wakefield specializing in office space, says, if the SRPMIC was marked as its own submarket, it would be one of the most competitive markets in the Metro Phoenix area. One of the biggest, and perhaps most impactful developments has been the 271,000-square-foot regional headquarters that the McKesson Corporation occupies on SRPMIC land. McKesson is a Fortune 500 healthcare and technology company that will bring 2,200 jobs to the area over the next few years, which is a huge regional win for the community in drawing the attention of other office users. “We have about 600,000 [square] feet of active prospects looking to be within a two-mile radius of that McKesson building,” Mayer says. “There’s demand that exceeds supply currently.” However, there’s hundreds of developable acres for offices available at development parks like Riverwalk at Talking Stick, Calendar Stick Business Park, Pima Center and the Chaparral Business Center within the SRPMIC. The community has provided modern infrastructure, telecommunications systems, plenty of entertainment and 42 | March-April 2018
Greg Mayer
Robert Miguel
dining options while capitalizing on its close proximity to Scottsdale and ease of access to the rest of the Valley. All of this have been helping drive development in the area. “Tribal communities are beneficial, not only to our Tribes, but I really believe we’re a player and benefit to the areas that are surrounding us as far as the economy goes,” Harvier says. THE ECONOMIC IMPACT For Arizona’s tribal communities, casinos have played a wide range of roles. While bringing in jobs, tourists and money for the communities, they’ve also helped boost the recognition of each casino’s respective community. The Ak-Chin Community has seen considerable growth since the development of Harrah’s Ak-Chin Casino, and there is only more
Kurt Nyberg
opportunity on the horizon as the surrounding communities continue to grow. Miguel says the Ak-Chin Community is looking to develop the surrounding farm fields near the casino into added features and amenities that will help accommodate the area’s growth. The Ak-Chin Community is a hidden gem, he says, and businesses looking to grow and relocate in the area may find that both Maricopa and the Ak-Chin Community are ideal places to start a business and raise a family. Michael Gonzalez, project director for McCarthy Building Companies, DOLPHINARIS ARIZONA: The $15 million project completed in 2016 offers visitors the change to swim with dolphins within its 925,000-gallon salt-water pool, which is the largest in Arizona.
CASINO FLOOR AT HARRAH’S AK-CHIN CASINO: The Harrah's Ak-Chin Casino renovations are modernizing the casino floors, adding new rooms for guests and a ballroom that will attract big-name entertainment acts. DIAMOND LOUNGE AT HARRAH’S AK-CHIN CASINO: The Diamond Lounge is in a brand new room, offering a sit-down bar, lounge seating, extended hours and luxurious dining options.
a general contracting company that has done work on many local projects on Native American lands, says, the goals of the Tribe and its council when developing are typically focused on driving the economy. McCarthy Building Companies has done work on OdySea in the Desert and is currently working on the expansion of the Pascua Yaqui Tribe’s expansion of Casino Del Sol in Tucson, which will add 150 rooms, more convention space and 90 RV sites once completed. This project intends to support the Tribe’s economic development goals by allowing the Pascua Yaqui Tribe to provide new options to community members and the surrounding community and businesses, says Kurt Nyberg, the McCarthy Building Companies project director for the Casino Del Sol expansion. “Casino Del Sol has been successful in attracting guests, businesses and golfers over the years. Since they have a good understanding of what the needs and desires of their community and consumer, enhancing their project in these ways will undoubtedly have a positive impact,” Nyberg says. Looking ahead, keep an eye out for more commercial investment and development prospects on tribal lands as other businesses and investors also try to cash in on emerging opportunities near casinos. 43
HOSPITALITY
The rise of
attraction corridors New projects tap into Arizona’s thriving hospitality and tourism industry
44 | March-April 2018
BY JESSE A. MILLARD
M
AC Hotel Downtown Tucson
arch ranks as the biggest month for Arizona’s hospitality and tourism industry, which was Arizona’s top export industry in 2016, according to the Arizona Office of Tourism. Great weather, sunshine and annual tourism attractions like the Cactus League Spring Training season and the Waste Management Phoenix Open definitely help, but Arizona has also become known for fun in the sun all year round and much more. The Office of Tourism reports Arizona enjoyed the company of 43 million visitors in 2016. Those visitors collectively spent $21.2 billion in the state, which pencils out to more than $40,000 being spent per-minute by out-of-staters that year. To capitalize on Arizona’s tourism popularity and large crowds for other mega events previously hosted in Metro Phoenix like the NCAA National Football Championship, NCAA Final Four Tournament and Super Bowl, new commercial real estate projects have emerged in the form of new attraction and entertainment hubs that have either been recently completed, under construction or being planned. In fact, there was approximately $594 million worth of hospitality construction in Arizona last year, which accounted for 5.83 percent of total market construction activity, according to AZBEX’s 2018 construction forecast. Arizona already has a lot to offer in terms of its natural beauty with tourist destinations like the Grand Canyon, which boasted nearly six million visitors in 2016. However, since Metro Phoenix doesn’t have an original Wonder of the Natural World, other strategies are being deployed such as 45
HOSPITALITY
Shaun Baker
new hotel projects and renovations to keep up with market demands and drive industry growth. Another trend catching on across the Valley is how to thoughtfully incorporate new hospitality developments with existing ones to increase foot traffic and an area’s overall attractiveness as an entertainment hub for people of all ages. In recent years, hotels have been integrating offerings with local attractions, says Dr. Claire McWilliams, a hospitality and tourism instructor at ASU’s School of Community Resources and Development. “Why settle for being a ‘place to sleep’ while tourists find entertainment and attractions elsewhere?” McWilliams asks. “Many Metro Phoenix hotel properties have chosen to creatively use their space for entertainment venues.” These attractions can be anything, from hosting seasonal events, to pool parties or concerts at the hotels, McWilliams says. Those draws are not limited to the grounds of the hotel or resort though. Large hospitality hubs have been cropping up in the Valley, creating “attraction corridors,” McWilliams says. One prominent East Valley example that continues to grow and attract new places to shop, dine, play and stay is Scottsdale’s Talking Stick Entertainment District, which is located within the Salt River PimaMaricopa Indian Community. The entertainment hub is already home to amenities such as Talking 46 | March-April 2018
George Forristall
Dr. Claire McWilliams
Stick Resort, Salt River Fields at Talking Stick, Topgolf, and most recently OdySea in the Desert - a 35-acre, multi-million-dollar entertainment destination with approximately 20 restaurants, retail and amusement establishments. Here, residents and visitors can stay at the resort to catch a nearby Spring Training game, round of golf or make their way to America’s largest butterfly conservatory called Butterfly Wonderland, the Southwest’s largest aquarium at OdySea Aquarium or swim with dolphins in Arizona’s largest salt-water pool at Dolphinaris Arizona, to name a few. The latest attraction to break ground in the area is the Great Wolf Lodge, which will include an 85,000-squarefoot waterpark and 27,000-square-foot family entertainment center located on an 18-acre lot adjacent to Salt River Fields at Talking Stick. Downtown Phoenix has also tapped into the trend described by McWilliams. As the area has grown in popularity, so has the number of hotels offering boutique, hip experiences. Recent projects like FOUND:RE in the Roosevelt Row Arts District have brought a hip and vibrant, culturebased staying experience to the area by featuring public art displays that rotate throughout the year. Other hotels currently under construction like the $33 million, 210-key Hampton Inn & Suites in Downtown Phoenix will also integrate into the area’s urban identity with a focus on community as well. In total, more than 530 hotel rooms will be
added and opened in Downtown Phoenix during 2018 on top of the existing 3,199 rooms. The developers of the Hampton Inn, Mortenson Development Inc., chose the hotel’s location near the center of Downtown Phoenix, by the ASU Campus, for the larger ecosystem around the hotel that offers a very immersive mix of demographics from visitors to students and professionals from the private and public sectors. And that ecosystem is thriving as the Downtown Phoenix area has grown exponentially over the last decade with more fun restaurants, venues and events to go to. According to Downtown Phoenix Inc., more than 180 restaurants and bars are located in Downtown Phoenix and the area’s arts, culture and sport venues draw in a total of over six million visitors each year. “It’s more about the ecosystem that’s around you,” says George Forristall, development executive at Mortenson. “And that’s why the Hampton is in a downtown urban environment, where it’s very walkable, so you’re not in a suburban hotel and you have to get in a car to drive to everything.” This focus on creating a hotel that’s tied to the public is stretching into other parts of the Valley as well. In Scottsdale, the recently renovated Hotel Adeline opened and anticipates it will become a hangout for locals, says Shaun Baker, general manager of Hotel Adeline. The place has a warm and approachable atmosphere that he likens to a friend’s house.
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HOSPITALITY The new shape of hotels
The Greater Phoenix region has been adding many new hotel developments, while many other hotels receive brand-new face lifts. Here’s a breakdown of some of the latest hotel deliveries and renovations. “Of course, we want guests to experience clean, comfortable and beautifully designed accommodations along with excellent services,” Baker explains. “Beyond that, we hope the impression is that we’ve created a welcoming, eclectic and low-key environment where our guests can kick back, relax and enjoy a completely unique experience.” Hotels that are stodgy and almost royal are becoming less common as more boutique hotels, offering 100-rooms or less, come online throughout Arizona, especially Greater Phoenix. Many of these hotels are boutique properties, meant to feed the public’s desires for lodging that’s more different than what we commonly think of as hotels, McWilliams says. Like the $20 million hotel currently under construction in Uptown Phoenix. The innovative adaptive reuse project by Vintage Partners and Venue Projects will transform a pair of architecturally significant yet long-neglected midcentury modern mid-rises into Uptown Phoenix’s newest dining, entertainment and urban hotel hub. Named Arrive Phoenix, the stylish, 79-room boutique hotel will also feature a boutique coffee shop, poolside taco bar, gourmet ice creamery and a nautical-themed rooftop craft cocktail bar featuring sweeping 360-degree city views. Overall, an emphasis on a destination’s sense of place can be seen in Instagram and Facebook feeds, and many local developments and hotels have been working towards catering to this niche with unique spaces folks of all ages and backgrounds will enjoy. “The Camby, the industrial-artsy FOUND:RE in the Roosevelt Arts District in Downtown Phoenix, the Hotel Adeline in Scottsdale… all of these re-toolings and newbies speak to the novelty and sense of place niche hotels offer,” McWilliams says. 48 | March-April 2018
AC Hotel Downtown Phoenix at Arizona Center
In addition to renovations currently underway at the Arizona Center, a 15-story, 200-key AC Hotel will be added that's urban-inspired and overlooks a three-acre park.
AC Hotel Tucson Downtown
Downtown Tucson’s first hotel in more than 30 years, this AC Hotel Tucson by Marriott delivers unobstructed views of the city, an open-air pool, full-service bar and easy access to historic theaters, retail shopping and public transit.
Hampton Inn and Suites
Slated for completion this summer, the Hampton Inn and Suites in Downtown Phoenix will utilize the area’s walkability while also adapting to the community. This hotel will feature local artworks and embrace the character of the Southwest. Guests will truly feel like they’re in an urban environment with easy access to the local food scene and light rail transportation.
Hotel Adeline
Formerly known as the Scottsdale Inn, Hotel Adeline is a boutique hotel all about chic, sleek, uncomplicated designs meant to make guests and locals feel at home. Modern wood furniture with that retro vibe adorns the hotel and there’s also a zero-edge pool that will be the centerpiece of Hotel Adeline.
The Scott
The Firesky Resort & Spa has been rebranded into the Scott as a $15 million renovation reshapes this space. The first phase of the renovations changed the lobby areas, restaurants and outside patios, playing with the original, classic architecture while giving The Scott a new look and feel. Next, the guestrooms are getting touched up with new furniture, redesigned bathrooms and an all-new Presidential Suite.
Residence Inn/Courtyard by Marriott Phoenix Downtown
Designed to blend in with the historic, neighboring Luhrs City Center, the dual hotel project towers 19 stories above Phoenix. The building has 320 rooms between the Residence Inn and Courtyard by Marriott. This project is playing a major part in the revitalization of this part of Downtown Phoenix and of the Luhrs City Center, which was originally built in the 1920s. 49
CORENET
New year, new CoreNet What to expect in 2018 and beyond from the Arizona Chapter By DAVID MCGLOTHLIN
A
pproximately 80 percent of New Year’s resolutions fail by midFebruary, according to U.S. News and World Report. The CoreNet Global Arizona Chapter, on the other hand, is remaining steadfast in its New Year’s resolutions to create better content, offer wider learning opportunities, and provide richer networking opportunities. Since it was founded in 2002, CoreNet Global, a nonprofit association providing education and best practices for corporate real estate has grown to include nearly 10,000 executives and 47 local chapters globally. The goal is to support its dynamic global network of professionals by offering education and networking opportunities that advance knowledge, connect people, and promote personal excellence. The Arizona Chapter is led by President Simon Davis, sales director at Saltmine. Davis has been a member of CoreNet since his move to the United States in 2004, and serves as faculty on CoreNet’s Masters of Corporate Real Estate program, teaching both the workplace strategy and technology courses. In addition to creating better content, learning and networking opportunities, Davis says, “We also recognize the need to attract more corporate occupiers to the chapter. They truly are our lifeblood.” Overall, he and fellow executive board members want to provide the best programs and opportunities possible, which started by developing comprehensive committees for disciplines including events, membership, community involvement and more while also grooming today’s committee members into tomorrow’s board members.
50 | March-April 2018
What is CoreNet Global? Since it was founded in 2002, CoreNet Global, a non-profit association providing education and best practices for corporate real estate has grown to include nearly 10,000 executives and 47 local chapters globally.
The Program Committee, led by Keyvan Ghahreman of Willmeng Construction, plans to sponsor 14 events throughout 2018 on different topics, including Simon Davis creative ways to develop business cases; how employee experience is changing the workplace; outsourcing vs. insourcing; and case studies on expansion and relocation to Arizona. Not only is the Arizona Chapter adding new programs and seeking additional committee members, it’s also adding to its list of annual events. Two of the group’s most popular events include the Annual Golf Tournament at the start of the year and the Real Estate Technology Symposium in November, says Davis, “but we will also be adding an end-of-the-year Awards and Holiday Party in early December.” As for the lifeblood of the chapter, Davis says, special corporate occupier only events will also be added this year such as tours of Arizona’s most prestigious offices, which will allow corporate occupiers to exclusively network with their peers.
Additional learning and networking opportunities include the expansion of the Young Leaders Committee, spearheaded by Jamie Selenski, focusing on delivering programs for our members under the age of 35. Davis says, “It represents a great opportunity for young professionals to understand the benefits of association membership and also provides the ability for them to gain access to industry experts and mentors.” Meanwhile, CoreNet continues to grow the talent pipeline of young corporate real estate professionals through its Fundamentals in Corporate Real Estate class for Arizona State University’s Master in Real Estate Development, which was launched last semester and led by Mark Singerman of the Rockefeller Group Development Corporation. The program is made up of members of the CoreNet Global Arizona Chapter who all volunteer their time to educate future corporate real estate professionals. New year’s resolution or not, 2018 is already shaping up to be a mega year for CoreNet Global Arizona Chapter as it embarks on news ways to advance knowledge, promote personal excellence and add value to each individual member and their respective enterprises.
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CORENET
The hidden career path
ASU and CoreNet Global launch a first-of-its-kind program for corporate real estate By DAVID MCGLOTHLIN
Marina Heights: Completed in 2017, the 2-million-square-foot regional campus built for State Farm is one example of corporate real estate in the Valley.
R
eal estate is often the second largest budget item for companies behind labor. It’s also becoming an increasingly important tool affecting everything from how companies are managed and operate to effective hiring and employee retention. This has some looking more closely at real estate’s impact on their businesses. That said, many people interested in the industry or already a part of it are unaware of a viable career path in corporate real estate, which is fundamentally different than traditional commercial real estate, and universities with real estate schools across the country have yet to offer a program focused on corporate real estate. That was until fall of last year when CoreNet Global and Arizona State University launched the firstever optional, non-credit certificate program for real estate students at a
52 | March-April 2018
PROGRAM REQUIREMENTS Graduate students must: Undergraduate students must: Have a declared minor in real estate n Be enrolled in a W.P. Carey School n Be a member of the ASU Real Estate Club of Business Master’s Program nH ave completed REA 380 (RE Fundamentals) n Have paid the $30 enrollment fee n Have completed REA 401 (RE Appraisal) n Have paid the $30 enrollment fee n
university specifically for corporate real estate and understanding real estate necessary to support business. “One goal of CoreNet is to become more involved on grassroots educational efforts,” says Simon Davis, CoreNet Global Arizona Chapter president and sales director at Saltmine. “What we are trying to do is educate students interested in real estate that corporate real estate is a very viable and rewarding career.”
The corporate real estate certificate program, called “CORE – Fundamentals of Corporate Real Estate,” consists of nine, 90-minute classes held on the last Monday of each month and taught by corporate real estate practitioners who are members of CoreNet Global with the assistance of W.P Carey School of Business and Division of Real Estate faculty. “Companies own billions of dollars of real estate in this country and real
“What we are trying to do is educate students interested in real estate that corporate real estate is a very viable and rewarding career.” — Simon Davis estate is part of our community and economic infrastructure,” explains Mark Stapp, executive director of Arizona State University’s Masters of Real Estate Development program. “Understanding how businesses need it, use it and how to proficiently provide it is really important to the community in general.” He describes commercial real estate as “having the real estate be the business to generate wealth and revenue for you.” Whereas, the whole purpose of corporate real estate is to support the business activities of the occupant. There’s a lot of crossover between skills needed for commercial and corporate real estate, but CoreNet’s program focuses more on workforce studies, searching for locations relative to workforce needs, and operational efficiencies for business units, Stapp says. “It’s a different kind of thinking.” Another benefit unlike other career paths, he adds, “There’s an immediate ability, even while you’re in school, to be working in the business. It’s a good running head start that you don’t find in many other career paths.”
For many years, CoreNet has provided classes for practicing professionals in the corporate real estate world to get certificates — Master of Corporate Real Estate (MCR) and Senior Leader of Corporate Real Estate (SLCR) — showing that they mastered the business. Often times, these designations and certificates can impact a person’s potential salary and standing within the company that they are interviewing with, says Mark Singerman, vice president and regional director for Rockefeller Group Development Corporation. However, he adds, “It appears that nobody else in the country has gotten to this point in terms of what we are doing with a formal certificate program with a major university, specifically focused on corporate real estate.” This year, 75 students enrolled in the program, which was well above the capacity limit for the program’s lecture hall so the class had to be capped at 57 students. “We were thrilled with the response,” says Singerman. “It really underscored the need for a program like this and the interest in what corporate real estate is all about.” Looking ahead, the program’s ultimate goal is to garner enough interest to deliver it at a higher level such as a certificate program for classcredit towards students’ degrees.
SCHEDULE & TOPICS AUGUST 2018: Introduction to corporate real estate SEPTEMBER 2018: Economic development and site selection OCTOBER 2018: Real estate transactions NOVEMBER 2018: Portfolio strategy and optimization JANUARY 2019: Facility management and Sustainability FEBRUARY 2019: Project management and construction MARCH 2019: Finance, tax management, disaster recovery/continuity APRIL 2019: Coordination with corporate executives and key departments
ROLES OF CORPORATE REAL ESTATE A ttract and retain talented employees Create a platform for growth n Develop efficient business solutions n Enhance the quality of the work environment n Improve sustainability components n Increase productivity of real estate portfolio n n
Simon Davis
Mark Singerman
Mark Stapp 53
CORENET
CoreNet Global Roundtable Arizona Chapter members share insights and outlook for the local market By DAVID MCGLOTHLIN
A
s a leading global association for corporate real estate and workplace professionals, CoreNet Global consists of over 10,000 members worldwide, including 70 percent of the Fortune 100 and nearly half of the Forbes Global 2000. Since it was founded, the mission of CoreNet Global’s Arizona Chapter has been to connect groups of professionals, end users and service providers in order to advance knowledge, promote personal excellence and add value to each individual and their respective enterprises. To do so effectively, the corporate real estate association facilitates and sponsors a variety of diversified programs that provide members with educational and networking opportunities. With that in mind, we asked four local members to share their thoughts and insights on Arizona’s commercial real estate market. What trends are you seeing in the Arizona market? Keyvan Ghahreman: I see continuing trends toward densification, and communities paying a lot more attention to issues such as walkability and live-work-play. This is also the most upbeat I’ve seen our market in a long time, but the fundamentals seem much healthier than in years’ past. Lindsay Moellenberndt: Smaller ancillary businesses that service the e-commerce fulfillment/ distribution market have been thriving, which has led to a lack of quality inventory, spurring the industrial development craze. The inventory is drastically shrinking in the 10,000-50,000-square-foot industrial space. We’ve seen an increase in activity and foresee it becoming a common practice.
54 | March-April 2018
Tyler Gentry: The biggest trend that continues to make Arizona one of the hottest markets in the U.S. is our growing workforce to meet the needs of more advanced manufacturing, financial services, insurance and more tech companies. What’s the biggest commercial real estate project, deal, announcement or story that caught your attention in the last year? LM: The 618,000-square-foot deal signed by UPS solidifies Phoenix as a distribution hub in the Western U.S. and it’s going to further open the door for e-commerce facilities to migrate to Arizona. Liberty Development leased its entire building in three years when it was initially planned to be completed in 10. Companies such as Carvana, DriveTime and Centene have all relocated its operations there. KG: The new Amazon campus stands out in my mind, mainly because of its sheer scale. It’s interesting to see how Greater Phoenix and competing markets position themselves to win this deal. For a deal of that size and
DriveTime HQ: Liberty Property Trust completed DriveTime’s current 96,000-square-foot corporate headquarters in November 2015 at Tempe’s Liberty Center at Rio Salado.
profile, a market needs to meet certain thresholds like livability and workforce pipeline. It seems like there are a good deal of markets willing to “give away the farm” to attract business, and I’m happy our market is not one of them. TG: It’s not one single real estate project, but rather a movement that’s been evolving in the last five years, and it’s happening in Tempe. A new “city-center” for Greater Phoenix has emerged because of its location, access to ASU and work/life amenities. What are the driving factors for companies relocating or expanding to Arizona? Mark Singerman: The primary considerations include, but are not limited to: favorable hiring opportunities; proximity to existing customers; lower cost of living; low
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CORENET GLOBAL
Tyler Gentry
vice president of business attraction at Arizona Commerce Authority, advocates for companies to explore relocation or expansion across Arizona.
utility costs; good schools; lower costs for all types of insurance; central location of a major airport; good infrastructure for transportation and communications; absence of natural disasters; and ease of doing business in general. KG: Compared to 10 years ago, our economy is much more diversified and communities have developed a real sense of place. We’re still witnessing Downtown Phoenix’s transformation with the continued growth of ASU and UA, an explosion of residential options, and the proliferation of dining and entertainment opportunities. With our relatively low cost of living compared to competing markets, the quality of life here is hard to beat. LM: I don’t think we give the Arizona Commerce Authority, Greater Phoenix Economic Council and our local economic development teams enough credit. Through their efforts, we have gotten the word out to companies throughout the world. The cost of living, affordable real estate, accessibility, a large workforce, university partnerships, freeway infrastructure, the arts and culture, craft breweries, spring training games all play into making our community that much more attractive. 56 | March-April 2018
Keyvan Ghahreman director of client and pre-construction services at Willmeng Construction, works to develop and deliver client service strategies as the company and its projects expand.
Lindsay Moellenberndt
vice president of client development at Cresa, is motivated by promoting the brands that she loves through assisting clients will all their real estate needs.
TG: The most significant factors are workforce availability, our pro-business environment and an unmatched quality of life coupled with a low cost of living. With so much growth in the West Valley, what is necessary for commercial office users to take a leap of faith and relocate there? TG: I believe all we need is one large well-known brand to make the move to lay down roots. The key is to find an employer that aligns with the West Valley’s workforce. In fact, nearly 70 percent of West Valley residents commute to the East Valley for work. If given the option, employees want to work closer to home. MS: Most jobs in the West Valley are manufacturing, warehouse and distribution, healthcare and military related. However, the new South Mountain Freeway/Loop 202 extension may facilitate more office development in the West Valley. We wouldn’t be surprised to see office development in close proximity to the new freeway interchanges at major east/west arterial roads in the West Valley after the freeway opens in late 2019. LM: The workforce demographics supports the notion of why companies
Mark Singerman
vice president and regional director for Rockefeller Group Development Corporation, is responsible for identifying development opportunities and overseeing the company’s projects across the state.
should relocate there. Many West Valley residents were previously working in the central core of our community, traveling an average of 25 minutes each way. Now that more companies are moving, our team at Cresa believes that the West Valley residents will opt to select an employer that is closer to home. What will be the next big disruptor to the commercial real estate market? LM: The Industrial Air B&B Model often referred to as “the Flexe Model” that allows for warehouse operators to lease out excess space is a trend happening across the country. Our team at Cresa believes it’s just a matter of time for that model to appear in our local market. KG: Family formation of the Millennial generation could be a major disruptor. This generation, I think is largely responsible for trends like urban densification and live-work-play. As they get married and have children in increasing numbers, I don’t think we have a clear sense yet of how the market will respond in terms of development. Will they tend to remain in denser areas, will they search for more space, or will development in urban areas adapt to retain these families?
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HIGHLIGHTING the BIGGEST, BEST and MOST NOTABLE COMMERCIAL REAL ESTATE PROJECTS from 2017 59
2018 RED AWARDS
2018 RED AWARDS Arizona’s red hot year of real estate and development By WILLIAM EVERETT
T
he annual Real Estate & Development (RED) Awards are back, highlighting impressive projects completed in the last year as well as the companies and people that make each one possible. As the Phoenix market remains red hot, more companies are relocating and expanding across the Valley and state, which made selecting this year’s
finalists a challenge. Ultimately picking one winner was the most difficult, but speaks towards the quality and breadth of the projects nominated this year. A breakdown of each finalist project can be found in this section. Each winner was unveiled at the 2018 RED Awards on March 8th at the Pointe Hilton Tapatio Cliffs Resort in Phoenix. Additional project details and a list of the winning projects can be found online.
Biomedical Sciences Partnership Building at the Phoenix Biomedical Campus PHOTO BY SUN CZAR BELOUS
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EDUCATION University of Arizona Biomedical Sciences Partnership Building Located within the Downtown Phoenix Biomedical Campus, the new 10-story research laboratory enables collaborative clinical and translational research for cancer biology, neuroscience, traumatic brain injury, bioengineering and public health informatics. OWNER: University of Arizona GENERAL CONTRACTOR: DPR Construction; Sundt Construction ARCHITECT: CO Architects; Ayers Saint Gross SUBCONTRACTORS: Barrett-Homes Contractors; Cannon & Wendt Electric; KT Fabrication; Kovach Building Enclosures; University Mechanical & Engineering Contractors SIZE: 244,650 SF VALUE: $106,807,262 LOCATION: 475 N. Fifth St., Phoenix START/COMPLETION: June 2014 - January 2017
Honorable Mention
WINNER
Great Hearts Academies North Phoenix Campus At a bustling plaza in North Phoenix, Great Hearts Academies had one goal in mind: expansion of its offerings to more students in a cost-conscious, environmentally suitable and highly effective learning environment. OWNER: Great Hearts Arizona GENERAL CONTRACTOR: Adolfson &
Peterson Construction Honorable Mention
Embry-Riddle STEM Education Center Frequently referred to as the “Harvard of the Sky,” the aeronautical university’s new facility houses classrooms, laboratories and a domed auditorium/ planetarium, providing students with STEMcentered know-how and hands-on experience. OWNER: Embry-Riddle Aeronautical University GENERAL CONTRACTOR: Sundt Construction PROJECT MANAGER: Sundt Construction ARCHITECT: LEO A DALY SUBCONTRACTORS: AAA Landscape; Delta
Diversified Enterprises; Gen3; Milling Machinery; Newgaard Mechanical SIZE: 52,570 SF VALUE: $19.2M LOCATION: 3700 Willow Creek Rd., Prescott START/COMPLETION: April 2016 - July 2017 64 | March-April 2018
PROJECT MANAGER: Nations Group ARCHITECT: Studio Ma SUBCONTRACTORS: McCain Construction,
Pete King Construction, SiteWorks, Stone Cold Masonry, Venetian Plastering BROKERAGE: Colliers International (Todd Noel) SIZE: 93,418 SF VALUE: $16.5M LOCATION: 14100 N. 32nd St., Phoenix START/COMPLETION: October 2016 August 2017
HEALTHCARE Banner University Medical Center Phoenix Emergency Department Expansion The BUMCP’s emergency department is more spacious, sophisticated and accessible to first responders and patients than ever before thanks to the collaborative work of Banner, DPR, HKS and 66 subcontractors.
OWNER: Banner Health GENERAL CONTRACTOR: DPR Construction PROJECT MANAGER: Banner Health ARCHITECT: HKS Architects SIZE: 297,458 SF VALUE: $133,180,060 LOCATION: 1111 E. McDowell Rd., Phoenix START/COMPLETION: October 2015 -
Honorable Mention
April 2017
WINNER Cobre Valley Regional Medical Center Patients would travel nearly two hours to Phoenix for care and treatment before Cobre Valley placed an updated facility in Globe making it easier for patients to receive care. OWNER: Cobre Valley Regional Medical Center GENERAL CONTRACTOR: Layton Construction ARCHITECT: Orcutt | Winslow SUBCONTRACTORS: Comfort Systems USA; Jones
Concrete; Parsons Electric; Pete King Construction; RKS Plumbing & Mechanical SIZE: 84,325 SF VALUE: $29M LOCATION: 5880 S. Hospital Dr., Globe START/COMPLETION: January 2015 September 2017 Honorable Mention
Hacienda at the River With skilled nurses, assisted living and memory care professionals, Hacienda at the River provides a state-of-the-art senior living community that pays homage to the area’s rich farming and ranching heritage.
OWNER: The Freshwater Group DEVELOPER: Drive Development Partners GENERAL CONTRACTOR: The Weitz Company PROJECT MANAGER: The Weitz Company ARCHITECT: RTKL Associates SUBCONTRACTORS: CMR Manufacturing;
MKB Construction; Mountain Power Electrical 66 | March-April 2018
Contractor; Rouser Concrete; Universal Wallboard SIZE: 74,324 SF VALUE: $21.6M LOCATION: 2626 E. River Rd., Tucson START/COMPLETION: October 2015 -
March 2017
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HOSPITALITY Honorable Mention
Renaissance Phoenix Downtown Hotel Renovation + Street Activation The improvements made to the Renaissance Phoenix Downtown Hotel create a more pedestrian friendly atmosphere halfway between the Arizona Center and CityScape Park, both popular hangouts for people throughout downtown. OWNER: Renaissance Phoenix Downtown Hotel GENERAL CONTRACTOR: Holder Construction ARCHITECT: Gensler SUBCONTRACTORS: Energy Systems Design; Loewen Design Group; PK Associates; Ritoch-Powell & Associates; TRUEFORM Landscape Architecture Studio SIZE: 17,900 SF VALUE: WND LOCATION: 100 N. First St., Phoenix START/COMPLETION: June 2016 - April 2017
Honorable Mention
68 | March-April 2018
Mountain Shadows Resort The new Mountain Shadows Resort began its rebirth in 2014 after the original resort opened in 1959 and closed in 2004. The iconic Valley landmark is again appealing to international travelers, families and even celebrities. OWNER: Westroc Hospitality; Woodbine Development GENERAL CONTRACTOR: Balfour Beatty Construction
PROJECT MANAGER: Balfour Beatty
Construction ARCHITECT: Allen + Philp Partners SUBCONTRACTORS: Bergelectric; Pete King
Construction; RKS Plumbing & Mechanical; Suntec Concrete; Western Millwork SIZE: 186,000 SF VALUE: $44M LOCATION: 5445 E. Lincoln Dr., Scottsdale START/COMPLETION: November 2015 March 2017
WINNER
AC Hotel Tucson Downtown The eight-story AC Hotel marked the first opening of a family hotel in Downtown Tucson in nearly 40 years. There are 136 rooms, a spa, fitness center and rooftop pool with a bar and views of the Southern Arizona mountains. OWNER: 5 North Fifth Hotels GENERAL CONTRACTOR: Lloyd Construction PROJECT MANAGER: Lloyd Construction ARCHITECT: FORS architecture + interiors SIZE: 176,000 SF VALUE: $36M LOCATION: 151 E. Broadway Blvd., Tucson START/COMPLETION: December 2015 October 2017
INDUSTRIAL Carvana Vehicle Inspection Center (Phase I) Location, location, location. Carvana started as a small Tempe-based online car retailer but has since expanded to 37 markets. The new inspection facility sits on rail tracks, allowing cars to be shipped to customers the very next day. OWNER: Carvana DEVELOPER: Verde Investments Honorable Mention
Honorable Mention
GENERAL CONTRACTOR: Jokake Construction PROJECT MANAGER: Jokake Construction ARCHITECT: WHN Architects SUBCONTRACTORS: Newgaard Mechanical;
Honorable Mention
RMJ Electrical Contractors; Vincon; Waterworks; Wholesale Floors SIZE: 94,000 SF VALUE: $3M LOCATION: 600 S. 94th Ave., Tolleson START/COMPLETION: May 2017 August 2017 Aligned Data Center The 30-year-old building sat vacant since 2008 until Aligned Energy gave it a new life by building the first consumer-based data facility to deliver real estate infrastructure and power on demand. OWNER: Aligned Energy GENERAL CONTRACTOR: Skanska USA Building PROJECT MANAGER: Skanska USA Building ARCHITECT: Dimovski Architecture BROKERAGE: JLL (Mark Bauer) SUBCONTRACTORS: AROK; Hardrock Concrete Placement; PowerSecure; SME Steel; TDIndustries SIZE: 550,000 SF VALUE: $31M LOCATION: 2500 W. Union Hills Dr., Phoenix START/COMPLETION: October 2015 - April 2017
Copper State Rubber Four times the size of its old building, the new location includes warehouse and office operations for the fabrication, testing and shipping of the company’s long length industrial hoses. OWNER: Copper State Rubber DEVELOPER: Seefried Industrial Properties GENERAL CONTRACTOR: Wespac
Construction PROJECT MANAGER: Wespac
Construction ARCHITECT: Ware Malcomb SUBCONTRACTORS: Architectural Building
Systems; JJ Sprague; Kortman Electric; Spectrum Mechanical; Suntec Concrete SIZE: 150,000 SF VALUE: WND LOCATION: 10485 W. Roosevelt St., Avondale START/COMPLETION: August 2016 April 2017
70 | March-April 2018
WINNER
MS Chandler Airpark The airpark’s six structures range in size from 11,187-22,874 square feet with grade-level loading and exterior storage yards, which tenants can choose to lease or buy. OWNER: Silagi Development & Management GENERAL CONTRACTOR: LGE Design Build PROJECT MANAGER: LGE Design Build ARCHITECT: Cawley Architects SUBCONTRACTORS: L.R. Cowan Concrete; Milam Glass; Phoenix Commercial Electric; Sandstorm Construction; TCK Air Conditioning & Heating BROKERAGE: Lee & Associates (Chris McClurg, Adam Tolson) SIZE: 96,954 SF VALUE: $13M LOCATION: 2100-2150 S. Douglas Dr., Chandler START/COMPLETION: June 2016 May 2017
Vinyl Visions The Southern California manufacturer brought 50 new jobs to the City of Prescott at the build-to-suit project, which features a Class A, two-story office component and state-of-the-art manufacturing capabilities.
Honorable Mention
OWNER: Vinyl Visions DEVELOPER: Sun State Builders GENERAL CONTRACTOR: Sun State
Builders PROJECT MANAGER: Sun State Builders ARCHITECT: Balmer Architectural Group SUBCONTRACTORS: Reynolds Electric;
Spiller Fabrication; Suntec Concrete; TCK Air Conditioning & Heating; The Structures Group BROKERAGE: Commercial Properties, Inc. (Jeff Hayes) SIZE: 47,931 SF VALUE: $4.7M LOCATION: 5380 Larry Caldwell Dr., Prescott START/COMPLETION: February 2015 January 2016
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Stays that
INSPIRE Westroc Hospitality proudly presents two of Arizona’s most distinct destinations. Mountain Shadows stands as the historic heart of Paradise Valley, with timeless refinement, endless comfort and modern design. Hotel Valley Ho—a RED award winner—offers a contemporary take on mid-century style with architecture and design that embody the hotel’s 60-year legacy.
H O T E L V A L L E Y H O . C O M | 8 7 7. 4 5 9 . 8 4 2 2
M O U N T A I N S H A D O W S . C O M | 8 7 7. 4 5 3 . 8 1 4 9
S COT TS DA L E, A R I ZO N A
P A R A D I S E V A L L E Y, A R I Z O N A
Hotel Valley Ho and Mountain Shadows are part of the Westroc Hospitality collection.
WORKPLACE ADVANTAGE. Optimized workplaces fuel efficiency, mobility and innovation. We build them for our clients and for our people. CBRE is proud to unveil our latest workplace environment in Phoenix. By helping shape the future of the workplace, we continue to inspire our people to build advantage for every client we serve. How can we help you transform your real estate into real advantage?
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MULTIFAMILY Honorable Mention
Broadstone Fashion Center Redefining the luxury apartment experience, location, lifestyle and design, the Broadstone Fashion Center boasts lots of on-site amenities as well as close proximity to nearby retail, office and hotel space. OWNER: Alliance Residential Company GENERAL CONTRACTOR: Alliance Residential Builders
PROJECT MANAGER: Alliance Residential Company ARCHITECT: ORB Architecture SUBCONTRACTORS: American Openings; BCK Coatings; Fairco
Landscaping; Ridgeline Concrete; Steel Masters SIZE: 298,909 SF; 355-units VALUE: $54,197,500 LOCATION: 555 S. Galleria Way, Chandler START/COMPLETION: September 2016 - May 2017
WINNER
Optima Kierland Already 80-percent sold, the North Scottsdale Kierland community represents the next generation of Optima living, artfully integrating design and sustainability, function and amenities to create a new standard in multifamily design and development.
74 | March-April 2018
Honorable Mention
OWNER: Optima DEVELOPER: Optima DCH Development GENERAL CONTRACTOR: Optima Construction PROJECT MANAGER: Optima ARCHITECT: David Hovey & Associates Architect SUBCONTRACTORS: Bulthaup Scottsdale; Jen Electric;
RKS Plumbing & Mechanical; S Diamond Steel; Suntec Concrete BROKERAGE: Polaris Pacific (Crel Vogel) SIZE: 1.3MSF; 173-units VALUE: $500M LOCATION: 15450 N. Scottsdale Rd., Scottsdale START/COMPLETION: September 2015 - December 2017
Portland on the Park Portland on the Park is the second phase of the RED Award winning Portland Place. The space boasts 149 units in three buildings, all five stories each, overlooking 32 Hance Park, in a vertically dense and bustling urban setting. OWNER: Portland Place Partners DEVELOPER: Habitat Metro; Sunbelt Holdings GENERAL CONTRACTOR: UEB Builders PROJECT MANAGER: UEB Builders ARCHITECT: DAVIS BROKERAGE: Launch Real Estate (David Newcombe) SIZE: 220,000 SF; 149-units VALUE: $83M LOCATION: 200 W. Portland St., Phoenix START/COMPLETION: April 2015 - January 2017
OFFICE Carvana at Liberty Center at Rio Salado With nearly 500 employees on-site and plenty of room to grow, Carvana's new center provides a high-tech environment that mirrors the company’s innovative goal to change the way people buy cars.
WINNER
OWNER: Carvana DEVELOPER: Liberty Center at Rio Salado GENERAL CONTRACTOR: Wespac
Construction PROJECT MANAGER: Wespac Construction ARCHITECT: RSP Architects SUBCONTRACTORS: Fine Line Manufacturing;
Ganado Painting & Wall Covering; Ryan Mechanical; Wilson Electric; Wholesale Flooring SIZE: 135,000 SF VALUE: WND LOCATION: 1930 W. Rio Salado Pkwy., Tempe START/COMPLETION: November 2016 - May 2017
Honorable Mention
Waypoint Building Four The newest development within a 20acre Class A office campus, Building Four offers modern users a prime location and contemporary amenities at Mesa’s booming 250-acre Riverview mixed-use area. OWNER: Harvard Investments DEVELOPER: Lincoln Property Company GENERAL CONTRACTOR: Wespac
Construction Honorable Mention
The Grand at Papago Park Center The Grand represents the first Class A office building at the Papago Park Center, a mixed-use development decades in the making, which will include 3.2 million square feet of office, retail and hotel space when completed. OWNER: Papago Park Center DEVELOPER: Lincoln Property Company GENERAL CONTRACTOR: Whiting-Turner PROJECT MANAGER: Lincoln Property Company ARCHITECT: HKS Architects SUBCONTRACTORS: Coreslab Structures; Delta
Electric & Air; Harder Mechanical Contractors; KT Fabrication; Suntec Concrete BROKERAGE: JLL (Keith Lammersen, Jason Moore) SIZE: 213,056 SF VALUE: $80M LOCATION: 1101 W. Washington St., Tempe START/COMPLETION: April 2016 - February 2017 76 | March-April 2018
PROJECT MANAGER: Lincoln Property
Company ARCHITECT: DAVIS SUBCONTRACTORS: Hardrock Concrete
Placement; Saguaro Steel; SGSI Glass & Glazing; Spectrum Mechanical; Wilson Electric SIZE: 152,000 SF VALUE: $50M LOCATION: 1130 N. Alma School Rd., Mesa START/COMPLETION: April 2016 March 2017
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OFFICE-INTERIORS CBRE Phoenix - Workplace360 The Phoenix office at The Esplanade ranks as CBRE’s largest Workplace360 office in the world. Boasting a “metropolis in the desert” themed interior, this new global workplace strategy promotes flexibility, mobility and productivity through a techenabled, completely free-address and paperless office. OWNER: CBRE GENERAL CONTRACTOR: Layton Construction
PROJECT MANAGER: CBRE ARCHITECT: Gensler SUBCONTRACTORS: CDS Framing; Crown
WINNER
Custom Millwork; Integrity Electric; KT Fabrication; Wholesale Floors BROKERAGE: CBRE (Chuck Nixon) SIZE: 75,000 SF VALUE: WND LOCATION: 2575 E. Camelback Rd., #500, Phoenix START/COMPLETION: June 2017 December 2017
The James Agency The James Agency, a full-service advertising agency, doubled its office size after relocating to The Quad. The office’s new amenities include a massage room, a large kitchen and a spacious outdoor patio.
Honorable Mention
OWNER: EverWest Real Estate Partners DEVELOPER: George Oliver Companies GENERAL CONTRACTOR: RSG Builders PROJECT MANAGER: RSG Builders ARCHITECT: Evolution Design SUBCONTRACTORS: itSynergy; Private Label
International; TelTech; WORKspaces BROKERAGE: CBRE (Bryan Taute, Charlie von
Arentschildt); LevRose Commercial Real Estate (Geoffrey Turbow) SIZE: 8,278 SF VALUE: $455,290 LOCATION: 6240 E. Thomas Rd., #200, Scottsdale START/COMPLETION: July 2017 - November 2017
Wentworth Property Headquarters Located within the Downtown Phoenix Redevelopment Area, the existing threestory building was rehabilitated with a timeless design that blends an industrial look and residential twists into a corporate headquarters that includes open workstations and enclosed offices. OWNER: Wentworth Property Company GENERAL CONTRACTOR: Jokake Construction ARCHITECT: RSP Architects SUBCONTRACTORS: Atmosphere Commercial
Interiors; Energy Systems Design; PK Associates; SlabHaus; Transact Commercial Furniture SIZE: 11,000 SF VALUE: WND LOCATION: 802 N. Third Ave., Phoenix START/COMPLETION: June 2016 January 2017 78 | March-April 2018
Honorable Mention
“Whether this is your first home or your fifth … whether you’re buying a castle or a cottage … your home purchase is important to you … and to us.”
Our job is to gather all the necessary documents to finalize your home purchase and bring it to a successful closing. We also protect the investment you – and your lender – have in your home, through our Lender’s and Owner’s Title Insurance. Since North American Title has been in the business for over 60 years, you can depend on us to be here for you today and into the future. To learn how North American Title does the heavy lifting to close and insure your home purchase, go to www.nat.com/AZHeavyLifting.
www.nat.com/AZHeavyLifting ©2018 North American Title Group, LLC and its subsidiaries. All Rights Reserved. North American Title Company and related design and Like Clockwork are registered Service Marks of North American Title Group, LLC or its corporate parent. | AZ17-12333 R 1.29.18
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PUBLIC/UTILITIES APS Red Rock Solar Facility Totaling 400-acres, the 40 megawatt solar plant consists of 2,286 single-axis trackers supporting 182,880 photovoltaic panels, making it APS’s largest solar plant to date. ASU and PayPal already entered into an agreement with APS to purchase power from the plant.
Honorable Mention
OWNER: Arizona Public Service GENERAL CONTRACTOR: McCarthy Building
Companies PROJECT MANAGER: McCarthy Building
Companies ARCHITECT: Taylor RyMar Corporation SUBCONTRACTORS: American Fence; Blount
Contracting; NEXTracker; Trina Solar; Wilson Electric SIZE: 17,420,000 SF VALUE: $82,622,856 LOCATION: 25990 E. Camino Adelante Rd., Red Rock START/COMPLETION: March 2016 February 2017 Honorable Mention
Tucson International Airport Terminal Optimization Project The single largest effort to upgrade the airport in its history included giving underused space new purpose like relocating security checkpoints, revitalizing concession spaces and upgrading the infrastructure of the airport, which serves 3.6 million passengers each year. OWNER: Tucson International Airport Authority DEVELOPER: Tucson Airport Authority
WINNER Grady Gammage Memorial Theatre Renovation The 3,000-seat theatre designed by Frank Lloyd Wright in 1964 underwent renovations to update its accessibility to reflect modern ADA standards and its restrooms to meet code while also preserving the historic structure’s original design. OWNER: Arizona State University GENERAL CONTRACTOR: CORE Construction PROJECT MANAGER: Arizona State University ARCHITECT: RSP Architects SUBCONTRACTORS: Fisher Engineering; Henderson
Engineers; Meyer Borgman Johnson; Sun Valley Construction; Wood, Patel & Associates SIZE: 12,000 SF VALUE: $7.4M LOCATION: 1200 S. Forest Ave., Tempe START/COMPLETION: June 2016 - June 2017 80 | March-April 2018
GENERAL CONTRACTOR: Sundt Construction PROJECT MANAGER: Hill International ARCHITECT: DWL Architects + Planners SUBCONTRACTORS: Adams and Associates
Engineers; Martin, White & Griffis Consulting Structural Engineers; Monrad Engineering; Sturgeon Electric; Sun Mechanical SIZE: 382,045 SF VALUE: $28M LOCATION: 7250 S. Tucson Blvd., #300, Tucson START/COMPLETION: November 2013 December 2017
Building structure in all our projects
THIS IS AROK.
INTERIOR & EXTERIOR SYSTEMS CONTRACTOR
AROK.COM | (602) 997-1492
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RECREATION Honorable Mention
Arizona State University Memorial Union Also known as the MU, Arizona State University’s Memorial Union is the renewed hub of the Tempe campus, delivering a trendy design with needed collaborative workspaces, new meeting areas and recreation amenities.
Bob & Renee Parsons Leadership Center for Girls and Women at Camp South Mountain The 14.5-acre site of the former Camp Sombrero increases the Girl Scouts Arizona Cactus-Pine Council’s capacity to serve more girls with relevant programs from STEM to aquatics and other recreational activities. OWNER: Girl Scouts Arizona Cactus-Pine Council
DEVELOPER: Burns & McDonnell GENERAL CONTRACTOR: The Weitz Company PROJECT MANAGER: The Weitz Company ARCHITECT: Marlene Imirzian &
Associates Architects SUBCONTRACTORS: Bell Steel; Complete
Roofing & Waterproofing; Mirror Works; Rouser Concrete; Vertical Build SIZE: 38,000 SF VALUE: $15.8M LOCATION: 1611 E. Dobbins Rd., Phoenix START/COMPLETION: May 2015 – March 2017
Honorable Mention
OWNER: ASU DEVELOPER: ASU Capital Management Group GENERAL CONTRACTOR: CORE Construction PROJECT MANAGER: Studia Ma ARCHITECT: Studio Ma SUBCONTRACTORS: Architectural Millwork Design;
Artcraft Granite, Marble & Tile; Barratt Construction; Magnum Companies; Mirror Works SIZE: 34,000 SF VALUE: $11.5M LOCATION: 301 Orange Mall, Tempe START/COMPLETION: June 2016 - September 2017
WINNER
Neighborhood Ministries Silos Classroom Building The long abandoned silo building in South Phoenix was transformed into a classroom building and playground, exemplifying an ideal prototype for sustainable design, adaptive reuse and positive community impact. OWNER: Neighborhood Ministries GENERAL CONTRACTOR: Logos Builders
Southwest PROJECT MANAGER: Nelsen Partners ARCHITECT: Winton Architects SUBCONTRACTORS: Bakkum Noelke Consulting
Structural Engineers; Hawkins Design Group; Henderson Engineers; Landcor Consulting BROKERAGE: Neighborhood Ministries (Jeremy Wood) SIZE: 12,183 SF VALUE: $1.7M LOCATION: 1918 W. Van Buren St., Phoenix START/COMPLETION: June 2016 - April 2017
82 | March-April 2018
Great partners build outstanding projects Congratulations to all our valued partners for helping Balfour Beatty successfully deliver the Mountain Shadows Resort. The project serves as an outstanding model of collaboration. We are honored to be recognized as an AZRE 2018 RED Award finalist.
7154 E. Stetson Drive, 4th Floor Scottsdale, AZ 85251
www.allenphilp.com
8777 E. Hartford, Suite 140 Scottsdale, AZ 85255
www.balfourbeattyus.com
CONGRATULATIONS TO THE WHOLE TEAM ON A BEAUTIFUL, TRANSFORMATIVE PROJECT
www.gensler.com
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REDEVELOPMENT/INFILL Biltmore Center For the core asset to remain a core asset, reinvestment was needed, which translated to increasing community activity in a “live, work and play” setting. It now includes a recreation area called Hub24, an Over Easy restaurant and gym.
WINNER
OWNER: ViaWest Group GENERAL CONTRACTOR: Willmeng Construction PROJECT MANAGER: Willmeng Construction ARCHITECT: DAVIS SUBCONTRACTORS: AE Concrete; AME
Landscape Companies; Gaylor Electric; Ikon Steel; Progressive Roofing BROKERAGE: CBRE (Jim Figan); Colliers International (Phil Breidenbach, Kathy Foster, Todd Noel, Ryan Timpani) SIZE: 211,624 SF VALUE: $1,214,000 LOCATION: 2390 E. Camelback Rd., Phoenix START/COMPLETION: June 2016 - January 2017
Honorable Mention
Tuft & Needle Headquarters Founded in 2012, the Phoenix-based startup disrupted the mattress industry via e-commerce, but decided to go brick-and-mortar for its new corporate headquarters, which is an adaptive reuse of a historic 1917 industrial building.
Honorable Mention
Mountain Park Health Center – Tempe Clinic The former boat dealership turned state-of-the-art community health center allows for patients to be seen by a variation of healthcare professionals in one setting. Each clinic’s design is specific to the needs of its community. OWNER: Mountain Park Health Center GENERAL CONTRACTOR: Concord General Contracting ARCHITECT: SmithGroupJJR SUBCONTRACTORS: Classy Closets; DIRTT Environmental
Solutions; Pete King Construction; Western Acoustics; Wholesale Floors SIZE: 32,000 SF VALUE: $7.5M LOCATION: 1840 E. Broadway Rd., Tempe START/COMPLETION: September 2016 - May 2017 84 | March-April 2018
OWNER: SimonCRE GENERAL CONTRACTOR: GCON PROJECT MANAGER: Tuft & Needle ARCHITECT: Cawley Architects BROKERAGE: SimonCRE (Dan Biswas) SIZE: 35,450 SF VALUE: $2.5M LOCATION: 735 Grand Ave., Phoenix START/COMPLETION: June 2016 -June 2017
When You Win, Arizona Wins!
Yuma Regional Medical Center Emergency Department • 2018 ENR Best of the Best “Excellence in Safety” • 2017 ENR SW Best Healthcare Project • 2017 AZRE RED Award Winner in Healthcare
Arizona Public Service Red Rock Solar Plant • 2018 AZRE RED Award Finalist • 2017 ENR SW Top Project Award of Merit
Arizona State University Biodesign Institute C • Fall 2018 Formal Dedication • ADOSH VPP “Star Site” Top Safety Designation • June 2017 Topping Out
“At McCarthy, we strive for excellence in everything we do. Bringing our best to our clients and partners gives communities across Arizona award-winning world-class projects. Thanks for making us part of your success!” Justin Kelton Southwest Region President
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RETAIL WINNER
Dierks Bentley’s Whiskey Row Gilbert Located within Downtown Gilbert’s energetic Heritage Marketplace, Dierks Bentley’s Whisky Row is part concert venue, part bar and restaurant and part dancehall with a spacious dance floor and patio with unique design elements and room for outdoor competitions and games. OWNER: Whiskey Row DEVELOPER: DBM Properties
GENERAL CONTRACTOR: LGE Design Build PROJECT MANAGER: LGE Design Build ARCHITECT: LGE Design Group; AV3 Design SUBCONTRACTORS: Indicom Electric; Milam Glass;
Pinnacle Plumbing; Riggs Companies; TriMega Mechanical SIZE: 13,456 SF VALUE: $2M LOCATION: 323 N. Gilbert Rd., Gilbert START/COMPLETION: May 2016 - March 2017
Honorable Mention
Mora Italian The concept from Food Network’s Chef Scott Conant, Mora Italian, offers a trendy indoor/outdoor restaurant setting for 165 patrons. The project took less than half a year to finish and is styled in the spirit of an authentic traditional Italian Osteria. 86 | March-April 2018
Honorable Mention
OWNER: Mora Italian DEVELOPER: 7th Street & Montebello GENERAL CONTRACTOR: LGE Design Build PROJECT MANAGER: LGE Design Build ARCHITECT: LGE Design Group; Brick + West SUBCONTRACTORS: DV Plumbing; Indicom Electric; Milam
Glass; Procon Professional Concrete; TriMega Mechanical SIZE: 5,800 SF VALUE: $2.3M LOCATION: 5651 N. Seventh St., Phoenix START/COMPLETION: August 2016 - January 2017
The Shops Gainey Village The mix of tenants at the newly renovated Gainey Village includes 12 clothing stores, 10 restaurants, a jewelry store, hair salon and much more. Before the renovation, the shopping center was unanchored with a 30-percent vacancy rate. It’s now 95-percent occupied, and Sprouts will open a flagship store this spring. OWNER: Principal Real Estate Investors GENERAL CONTRACTOR: A.R. Mays Construction PROJECT MANAGER: Main Street ARCHITECT: Evolution Design BROKERAGE: The Corritore Company (John Corritore) SIZE: 140,000 SF VALUE: $80M LOCATION: 8777 N. Scottsdale Rd., Scottsdale START/COMPLETION: Fall 2015 - December 2017
CPI specializes in: - Sales & Leasing - Corporate Services - Office - Medical
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Property Management Association Management Land Retail
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Facilities Management Maintenance & Engineering Industrial 1031 Exchanges
CPI’s listings include over 21 million square feet for sale/lease with more than 180 properties and associations under management, totaling over 11.2 million square feet.
Thank you to our partners on taking to the next level of speciality retail success.
8777 N Scottsdale Rd, Scottsdale, AZ 85253