AZRE September/October 2020 by AZ Big Media

SEPTEMBER-OCTOBER 2020

REIMAGINED

OFFICE

100 Mill

Developer: Hines/Cousins a Joint Venture Partnership General Contractor: Gilbane Building Company Architect: DAVIS

INSIDE:

Cool Offices p. 24 | AMA p. 30 | NAIOP p. 41

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MOVING FORWARD

ach day, we realize that being here in Arizona continues to be a blessing. Yes, the excessive heat has been a long, relentless force that has driven everyone and everything to seek someplace cool, but the overall environment in Arizona is all about working together to move the state forward. We see this environment of working together for the greater good constantly in commercial real estate development. In this edition of AZRE Magazine, a couple clear examples of this attitude are highlighted. One involves a massive land deal in the West Valley that will be home to more than 9 million square feet of industrial space. The developer on that project had neighboring homeowners in mind during the planning of this project and included a residential development that would serve as a buffer between an industrial park and an established neighborhood. Those homes used to be far away from any other development, but were now smack dab in the middle of one of the fastest developing areas in the western United States. Working together is the business model for multifamily developer Neighborhood Ventures, which brings small investors together to invest in properties that they wouldnâ&#x20AC;&#x2122;t otherwise have the means to invest in. Neighborhood Ventures renovates and remodels these old properties and returns them to the market, which helps improve their surrounding neighborhood. Also in this edition, AZRE Magazine highlights NAIOP Arizona, one of the strongest and most effective organizations in the industry. We examine how the COVID-19 pandemic has affected office and industrial developments in the state, while also highlighting NAIOP member projects that are transforming communities. Also, we look at one of the industries most affected by the pandemic, the multifamily industry, and how the Arizona Multihousing Association has been a guiding light for property owners who are dealing with all of the issues caused by the pandemic.

President and CEO: Michael Atkinson Publisher: Amy Lindsey Vice president of operations: Audrey Webb EDITORIAL Editor in chief: Michael Gossie Associate editors: Steve Burks | Alyssa Tufts Intern: Sara Walker Contributing writer: Carrie Kelly ART Art director: Mike Mertes Design director: Bruce Andersen MARKETING/EVENTS Marketing & events manager: Aseret Arroyo Digital strategy manager: Gloria Del Grosso Marketing designer: Heather Barnhill OFFICE Special projects manager: Sara Fregapane Executive assistant: Brandi Collins Database solutions manager: Amanda Bruno AZRE | ARIZONA COMMERCIAL REAL ESTATE Director of sales: Ann McSherry AZ BUSINESS MAGAZINE Senior account manager: David Harken Account managers: April Rice | Sharon Swanson AZ BUSINESS ANGELS AZ BUSINESS LEADERS Director of sales: Sheri Brown EXPERIENCE ARIZONA | PLAY BALL RANKING ARIZONA Director of sales: Sheri King

Steve Burks Associate editor, AZRE steve.burks@azbigmedia.com

2 | September-October 2020

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. ÂŠ2020 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.

CONTENTS

FEATURES 2 Editorâ&#x20AC;&#x2122;s Letter 6 Trendsetters 10 Executive Profile 12 After Hours 14 New to Market 16 Big Deals

20 Legislative Update

22 Neighborhood Venture

24 Cool Offices 30 Arizona Multihousing Association

41 NAIOP

ON THE COVER:

100 Mill

Developer: Hines/Cousins a Joint Venture Partnership General Contractor: Gilbane Building Company Architect: DAVIS

4 | September-October 2020

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Consistency in Times of Uncertainty Where there is fear, we see opportunity. At Taylor Street we continue to expand our presence with new ideas and new products. When you work with us, you have a team of Client First advisors. We are dedicated to delivering strategic solutions with a commitment to service excellence. Let us help you achieve your vision.

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TRENDSETTERS BEST OF

NAIOP

With COVID-19 affecting just about everything in the country, the annual Best of NAIOP Awards were a virtual affair this year. This year, NAIOP handed out 31 awards to the top projects, people and companies in the Valley. Below is a list of the 2019 Best of NAIOP Winners: Architect of the Year: Butler Design Group Brokerage Firm of the Year: CBRE Firm of the Year: Ryan Companies US, Inc. General Contractor of the Year: Ryan Companies US, Inc. Interior Architect of the Year: McCarthy Nordburg Owner/Developer of the Year: Lincoln Property Company Tenant Improvement Contractor of the Year: Willmeng Construction Developing Leader of the Year: Pat Boyle, Cushman & Wakefield Emerging Broker of the Year: Kyle Campbell, Colliers International Healthcare Broker of the Year: Perry Gabuzzi, Margaret Lloyd, Bill Cook and Mike McWilliams, Plaza Companies Industrial Broker of the Year: Pat Feeney, Dan Calihan & Rusty Kennedy, CBRE Investment Broker of the Year: Barry Gabel, CBRE Office Broker of the Year: Jerry Roberts & Pat Boyle, Cushman & Wakefield

Retail Broker of the Year: Chris Hollenbeck, Regan Amato & Brent Mallonee, Cushman & Wakefield Rookie Broker of the Year: James Cohn, CBRE Tenant Representative Broker of the Year: Ryan Bartos, JLL Economic Impact Project of the Year: Northrop Grumman Office Industrial Build-to-Suit Project of the Year: Northrop Grumman Manufacturing Industrial Tenant Improvement Project of the Year: Andersen Windows Medical Office Project of the Year: Banner-University Medical Center Tucson Mixed-Use Project of the Year: The Watermark | Tempe Office Build-to-Suit Project of the Year: Northrop Grumman Office Office Tenant Improvement Project of the Year (Less Than 40,000 SF): Sendoso Office Tenant Improvement Project of the Year (More Than 40,000 SF): Zovio Redevelopment Project of the Year: 225 W Madison Street Retail Project of the Year: Osborn Marketplace/The Astor at Osborn Spec Industrial Project of the Year: Lincoln Logistics 40 Spec Office Project of the Year: Grand 2 Transaction of the Year: Northrop Grumman Office NAIOP Arizona’s Official Branding Sponsor: TRADEMARK Phoenix Business Journal’s Talk of the Town: Lincoln Logistics 40

CBRE report forecasts hotel recovery in 2022 After suffering the greatest performance declines in the history of the U.S. lodging industry during 2020, the nation’s hotels will benefit from what is expected to be a relatively rapid economic turnaround in 2021 and 2022, according to the latest edition of CBRE’s Hotel Horizons forecast report. CBRE foresees demand for U.S. lodging accommodations returning to pre-crisis levels in the third quarter of 2022. However, a lag in ADR (average daily rate) growth will stall the recovery in RevPAR (revenue per available room) until 2023. “The U.S. lodging sector 6 | September-October 2020

has been hit by two headwinds in 2020: a contraction in overall economic activity and the need for social distancing,” said Jamie Lane, Senior Director of CBRE Hotels Research. “Accordingly, our current forecast calls for a 37 percent reduction in the number of room nights occupied in 2020 compared to 2019. There is some comfort knowing that travelers will be back on the road in full force within two years.” Similar to the U.S. lodging forecast, the Phoenix MSA calls for a 34 percent reduction in the number of room nights occupied in 2020 compared to 2019.

Caesars Republic Scottsdale

REPORT: CONSUMERS STILL SPENDING

economic environment as the unprecedented government support provided over the past months has helped solidify household budgets. Through June, restaurant bookings, air travel and hotel occupancy have all been on the rise, proving that many consumers are ready to get out of their residences and willing to spend money. However, rising COVID-19 case counts and hospitalizations in states that reopened earliest are representative of the national risk that comes with trying to kick-start an economic recovery this summer. Reopening too quickly could strain hospital resources and coax legislators to re-enact restrictions, as seen with California’s recent pullback, ultimately slowing the economic recovery in the long run. These trends exemplify why a medical solution is key to upholding consumer confidence and encouraging a return to pre-COVID-19 spending habits.

with firms throughout the economy reducing headcounts. As the expanded federal unemployment benefits are set to expire at the end of July, some forms of commercial real estate could face steeper headwinds later this summer. Workforce housing, in particular, could see a drop-off in collections as renters in this segment are especially vulnerable to an abatement of government support.

Leisure and hospitality sector will not quickly recover in the absence of a health solution. The recovery of lost jobs is dependent upon the consumer spending that ultimately fuels the demand for labor within each industry. This creates a challenge for the leisure and hospitality sector. Its consumer base has typically been bolstered by high-earners, as they have the income to support discretionary spending. While purchasing power within this demographic is less Looming expiration of federal unemployment benefits overshadimpacted by financial constraints linked to job losses, the implicaSELF-STORAGE BEYOND THE GLOBAL HEALTH CRISIS: TRACKING THE ECONOMIC RECOVERY ows recent job gains. The May and June employment reports revealed tions of the health crisis may continue to alter their consumption positive momentum as a combined 7.3 million jobs were added. The patterns. Until people feel safe leaving their residences, traveling and gains came primarily from industries that drastically slashed headspending on services, the demand for labor within these industries counts amid the onset of the disruption, as a handful of temporarily will continue to fall short of pre-crisis levels.

the federal unemployment benefits are not the past few months will be in high demand. extended. Retail and office assets remain On the other hand, hospitality and seniors more highly scrutinized; however, reopening housing assets face a tougher recovery, and processes support more optimism going lending for these will likely come with an forward, and assets that proved resilient over abundance of caution. Shoppers Eager to Spend After Tightening Budgets in Spring; High-Income Earners

Marcus & Millichap released a special report in late July taking a look the economy during the Pivotal to Reigniting the Economic Engine States' Reopening Timelines Impact Cases Labor Market Shows Signs of Recovery pandemic. The report, titled: Beyond the Health Retail sales bounce back emphatically, yet obstacles still weigh Hardest-Hit Retailers Had Greatest Rebound * Illinois/New Jersey/New York Unemployment Rate 18.2 percent Total retail Jobs sales increased Arizona/Florida/Texas on the industry. Total by a record Crisis: National Economy Special Report, month over month in May, and an additional 7.5 percent in June. Clothing/Accessories Stores noted that consumers have been willing to spend 16% on a 28,000 These 156 strong gains pushed retail sales to positive territory Furniture Stores despite the uncertain economic environment year-over-year basis. Pent-up demand for clothing and accessories, 21,000 148 12%months, after these retailers were forced to close their doors for Sporting Goods/Hobby/ as the unprecedented government support Instrument/Bookstores contributed to a two-month jump in sales exceeding 450 percent provided over the past months has helped 14,000 Electronics/Appliance Stores 8% assistfor this140segment. Additionally, auto sales moved up soundly, ed by favorable financing and low interest rates. Typically, durable solidify household budgets. The report cautions SELF-STORAGE Motor Vehicle/Parts Dealers BEYOND THE GLOBAL HEALTH CRISIS: TRACKING THEgood ECONOMIC RECOVERY 7,000 132 4% purchasing would remain sluggish during a recessionary peagainst reopening too quickly and reports that Food/Drinking Places riod, so this gain indicates that many consumers remain confident 0 the trends in both the economy and the number 0% 240% 360% 480% in their financial situation. However, the expiration of federal un- basis points ■ Rents decreased 0.4% in June on a124year-over-year basis, down 70 from a120%revised 0.3% 0% January February March April May June 1-Apr 15-Apr 1-May 15-May 1-Jun 15-Jun 1-Jul 12-Jul employment benefits also has the potential to impede momentum ofShoppers COVID-19 cases to show whythe a medical solution Spend After Tightening Budgets in Spring; High-Income Earners in Eager May. Given rapid decline in rents since March, we may not see positive year-over-year rent May and June Combined Change in Sales as consumers lose a key source of financial support. Meanwhile, isPivotal key to upholding consumer confidence. to Reigniting Economic Engineof 2020. the shift to online shopping raises questions regarding the future growth forthe the remainder The alsoback details that underwriters of small retailers who will struggle to compete as consumer spendRetailreport sales bounce emphatically, yet obstacles stillare weigh High-Income Consumers Spending Less Hardest-Hit Retailers Had Greatest Rebound * ing trends may be permanently shifting. Online retail transactions on the industry. sales increased by a record 18.2 percent beginning toTotal getretail a clearer picture on valuation Low-Income Spending** High-Income Spending** were up 81 percent year over year in May, and many of those new to ■ West Coast and tech hub markets experienced the steepest declines in year-over-year rents in month over month in May, and an additional 7.5 percent in June. Clothing/Accessories Stores as more data comesretail out sales revealing performance shopping online will continue to use e-commerce going forward. These strongJune, gains pushed to positive territory on a withOptimism San Jose (-4.6%) and SanFurniture Francisco (-3.8%) topping the list.15%On the other hand, more during the disruption. surrounding Stores year-over-year basis. Pent-up demand for clothing and accessories, ■ Rents decreased 0.4% in June on aSacramento year-over-year basis, down 70 basisEmpire points (2.9%) from a have revised 0.3% Health concerns limit high-income earners’ willingness and abilaffordable California markets like (2.2%) and the Inland held up after these retailers were forced to close their contrary doors for months, Sporting Goods/Hobby/ industrial has actually increased, to 0% ity to Instrument/Bookstores spend. In the second quarter, a dramatic cutback in consumthe rapid decline in rents since March, we may not see positive year-over-year rent contributed in to a May. two-monthGiven jump in sales exceeding 450 percent relatively well. The ability to work remotely and the desire to live in a less densely populated area other segments of commercial real estate, er spending accelerated the decline in GDP from the 5 percent drop Electronics/Appliance Stores for this segment. Additionally, auto sales moved up soundly, assistgrowth for the remainder of strength 2020. recorded in the quarter. It is notable that the steepest decline markets. -15% are likely contributing todurable the offirstthe latter two California and accelerated e-commerce ed bythe favorable financing andadoption low interest of rates. Typically, Motor Vehicle/Parts Dealers in consumption over the past few months has come from the highgoodsupport purchasingcontinued would remain sluggish a recessionary will growthduring for the sector.peer-income demographic -30% Food/Drinking Places as reflected in the record-level spike in the riod, so this gain indicates that many consumers remain confident ■financial West Coast and tech hub markets experienced the steepest declines in year-over-year rents in personal savings rate to0% 33 percent April, nearly480% doubled Multifamily has also exceeded expectations to in 120% in 240% which 360% The rapid YoY decline the Lifestyle asset class continued into June, with a 1.8% decrease in their■ situation. However, the rent expiration of federal unthe previous high set in 1985. This creates the potential for a boost in -45% employment benefits also has the San potentialsurveys to impede(-4.6%) momentum with Jose and San Francisco (-3.8%) topping the list. On the other hand, more this point,June, with rent collection showing nationally. Four of the five markets the largest Lifestyle declines are gateway markets. 1-Feb 15-Feb 1-Mar 15-Mar 1-Apr 15-Apr 1-May 15-May 1-Jun 15-Jun spendingwith in theMay coming months, as money has been accumulating on and June Combined Change in Sales as consumers lose a key source of financial support. Meanwhile, only a slight year-over-year drop, although affordable California markets like Sacramento (2.2%) and the Inland Empire (2.9%) have held up the sidelines. Unleashing this stock of cash into the economy would the shift to online shopping raises questions regarding the future Sources: Monthly help fuel the recovery as the hard-hit leisureAdvance and hospitality sector Retail Trade Survey; Federal Reserve; Marcus & Millichap the sector willwhoface steeper headwinds if spendof small retailers will struggle to compete as consumer relatively well. The ability to work remotely and the desire to live in a less densely populated area New-Home Sales Surge on Lack of Existing Inventory Consumers Spending Research Services; Opportunity Insights’ “Economic Tracker”; Rent U.S. Census Bureau relies onHigh-Income spendingYear-Over-Year by higher-income earners who are Less more inclined Year-Over-Year Growth— Year-Over-Year RentOnline Growth— Rent Growth— ing trends may be permanently shifting. retail transactions New-Home Sales are likely contributing to the strength of the latter two California to makeHigh-Income discretionary purchases. However, as long as people feel markets. Existing Inventory * Low-Income Spending** Spending** were up 81 percent year over year in May, and many of those new to New Daily COVID-19 Cases

Unemployment Rate

Nonfarm Employment (millions)

Year-Over-Year Rent Growth: West Coast and Tech Hub Markets Feel the Most Pain Year-Over-Year Rent Growth: West Coast and Tech Hub Markets Feel the Most Pain Change Relative to January 2020

Sources: Federal Reserve; state and local health departments and hospitals; U.S. Bureau of Labor Statistics; U.S. Census Bureau

Lifestyle Asset Class

Renter-by-Necessity Asset Existing Home Sales Class 24%

$16

Multifamily report

■ The rapid YoY rent decline in the Lifestyle asset class continued into June, with a 1.8% decrease $15 12% Implications of the pandemic buoy single-family housing de0% nationally. Four of the five markets with the largest Lifestyle declines are gateway markets. mand. New home sales rose 16.6 percent month over month in May, $14 0%

$16 $15

* Seasonally adjusted ** Categorizations based on average income by ZIP code Sources: Advance Monthly Retail Trade Survey; Federal Reserve; National Association of Realtors; Opportunity Insights’ “Economic Tracker”; U.S. Census Bureau

Source: ApartmentGuide.com

$12

-12%

Year-Over-Year Rent Growth— Renter-by-Necessity Asset-24%Class

ne Ju Au ly Se gu pt st em b Oc er t No obe ve r m De be ce r m b Ja er nu Fe ary br ua r M y ar ch Ap ril M ay

$14 According to a report on Apartmentguide.com, the COVID-19 pandemic and its lingering effects will have a $13 significant impact in design and construction of multifamily $12 properties. The report listed eight ways that new apartment construction will be impacted: 1. Common spaces will need to allow for heavy foot traffic 2. Better ventilation will be prioritized 3. Small group meeting space will need to be increased 4. Demand for natural light will increase 5. Apartments will have dedicated workspaces 6. Access to outdoor spaces will become more important 7. Larger floor plans will be sought 8. Touchless fixtures could be more common

in rent numbers in 2020. Average U.S. rents declined by 0.8 percent in the first half of 2020 and 0.4 percent in the second quarter. This is a stark Sales rent growth contrast fromExisting 2.6 Home percent 24% in the first half of 2019 and 1.2 percent 12% growth in the second quarter. Rent growth typically slows down in the 0% second half of the year, but we could -12% see a reversal of that trend if the fall becomes the new leasing-24% season. Phoenix has seen a 4.0 percent year over year rent growth through June, but the report forecasts a drop of 5.3 percent by year end 2020. June 2020 rent collections were in line with June 2019 collections. July 2020 collections are, so far, about 2 percent below July 2019 collections, but nothing to be concerned about yet, with 87.6 percent of apartment households paying some

$13

ne Ju Au ly Se gu pt st em b Oc er t No obe ve r m De be ce r m b Ja er nu Fe ary br ua r M y ar ch Ap ril M ay

Year-Over-Year Rent Growth— Yardi Matrix released its National Multifamily Report Lifestyle Asset Classand noted a decline

M-O-M Change

Implications of the pandemic buoy single-family housing demand. New home sales rose 16.6 percent month over month in May, pushing the rate up by double digits on an annual basis. Additionally, purchase mortgage volume was up 33 percent year over year as of late June, pointing to further gains in the coming months. The largest jumps have come from the Northeast and Western regions of the U.S. as people are looking to get out of dense cities that are more at-risk for COVID-19 community spread. Conversely, existing home sales were down year over year in May when lack of inventory and logistical hurdles complicated the process. Additionally, qualified buyers with higher incomes shifted their focus to new homes, while purchases at the lower end were likely delayed.

pushing the rate up by double digits on an annual basis. Additional-15% ly, purchase mortgage volume was up 33 percent year over year as of late June, pointing to further gains in the coming months. The -30% largest jumps have come from the Northeast and Western regions of the U.S. as people are looking to get out of dense cities that are -45% more at-risk for15-Feb COVID-19 community spread. Conversely, 1-Feb 1-Mar 15-Mar 1-Apr 15-Apr 1-May 15-May 1-Junexisting 15-Jun home sales were down year over year in May when lack of inventory and logistical hurdles complicated the process. Additionally, qualiNew-Home Sales Surge onshifted Lack of Existing Inventory fied buyers with higher incomes their focus to new homes, while purchases at theInventory lower end likely delayed. Existing * wereNew-Home Sales

Coronavirus effect Year-Over-Year Rent Growth— All Asset Classes on apartment construction

Inventory for Sale (millions)

Health concerns limit high-income earners’ willingness and ability to spend. In the second quarter, a dramatic cutback in consumer spending accelerated the decline in GDP from the 5 percent drop recorded in the first quarter. It is notable that the steepest decline in consumption over the past few months has come from the higher-income demographic as reflected in the record-level spike in the personal savings rate to 33 percent in April, which nearly doubled the previous high set in 1985. This creates the potential for a boost in spending in the coming months, as money has been accumulating on the sidelines. Unleashing this stock of cash into the economy would help fuel the recovery as the hard-hit leisure and hospitality sector relies on spending by higher-income earners who are more inclined to make discretionary purchases. However, as long as people feel unsafe traveling and leaving their residences to purchase luxury services, the economy cannot bounce back to full capacity.

M-O-M Change

Inventory for Sale (millions)

unsafe traveling and leaving their residences to purchase luxury services, the economy cannot bounce back to full capacity. 15% Change Relative to January 2020

All Asset Classes

shopping online will continue to use e-commerce going forward.

form of rent by July 13. This is the final month of the extra $600 per week in unemployment benefits, unless they are extended. August rent collections will be a good indicator of the financial situation for many. 7

TRENDSETTERS Phoenix in

Phoenix TOP 10 rises of STEM Job Growth Index on tech talent report

RCLCO, partnering with CapRidge Partners, has produced the 4th annual STEM Job Growth Index (“STEMdex”), once again highlighting a number of metro areas commonly recognized as STEM strongholds. The STEMdex tracks STEM job growth momentum, not just to identify where these jobs are today, but where they might be going in the future based on changing local economies, migration of young households, and the presence of other factors that have historically been correlated with STEM job growth.

THE 2020 STEMdex

CBRE released its annual Scoring Tech Talent report and Phoenix ranked 18th on the list—up two spots from 2019. The report evaluates each market for tech-talent supply, concentration, cost, completed tech degrees and real estate costs. The top five markets for tech talent in 2020 were the San Francisco Bay Area, Washington DC, Seattle, Toronto, and New York, all large markets with a tech labor pool of more than 100,000 Tech talent has proven resilient during economic distress from COVID-19, signaling that the pandemic is unlikely to derail the growing importance of tech-talent markets across the U.S. Here are the key highlights that make Phoenix a great place for tech companies: Phoenix’s tech-talent labor pool is the 16th largest nationally at 94,650 workers, which amounts to 4.5 percent of the overall metro

Cleaning up in the COVID-19 world

8 | September-October 2020

Phoenix workforce. The national average is 3.7 percent. No. 2: Phoenix offers affordable living for tech-talent workers, with the average annual apartment rent amounting to 15.6 percent of the average tech-talent wage. That ranks 17th most affordable among the 50 tech-talent markets. The metro churns out a lot of tech graduates, with 5,056 tech-degree completions in 2018. In fact, Phoenix produced roughly 10,000 more tech graduates (24,314) from 2015 to 2019 than new tech jobs (14,500). Overall, Phoenix ranks in the middle of the pack for expenses of operating a tech company. The average one-year cost for operating a 500-employee tech company occupying 75,000 sq. ft. in the metro amounts to $40.4 million. That ranks 25th most affordable among the top 50 techtalent markets.

Since launching in 2019, CPR Construction Cleaning has experienced tremendous growth the past six months. The company has expanded to more than 40 employees in Arizona, has opened offices in Utah and California and has plans to expand to Nevada. Founded by restoration and facility maintenance professionals Corina Burton and Patrick Maez, co-owners and CEOs, the Gilbertbased firm offers three phases of cleaning: progress/ rough cleaning, final cleaning and touch-up cleaning. CPR’s approach to the disinfecting process has helped it secure clients as the nation wrestles with the COVID-19 pandemic. It is constantly receiving calls from businesses looking for disinfecting services. Maez said April was CPR’s busiest month for work volume. Burton said CPR teams have disinfected office buildings, schools and medical office buildings. CPR recently completed a major disinfecting job at St. Luke’s Medical Center.

Learning the trade

Housed at the DP Electric home office in Tempe, DP University (DPU) began as a safety training program and has since expanded across several other disciplines including technology, electrical theory and leadership development. Now in its third year, DP University has elevated the learning experience for its employees by achieving a new quality standard; accreditation through the NCCER. “Our company culture is at the core of all we do. One important piece of our companies’ culture is opportunity. We believe in creating opportunities for our team to grow both personally and professionally” said DP founder and president Dan Puente. “It is with this commitment, we brought on a learning and development team to make this program a reality.” Courses will use NCCER curriculum as the backbone of the program along with data from annual performance reviews to tailor classes to the organization’s employee development needs. Using this approach DPU will be able to effectively address developmental needs. The Apprenticeship Program at DPU began its in its inaugural year on July 27. The first apprenticeship class comprises of more than 65 students and 12 instructors to create a unique, hands-on learning experience. Using a block scheduling method, students in the program will attend classes only a single night a week with their school night being dependent on how far along they have progressed in the program. For information on the program, visit DPElectric.com.

Skill-Bridge program helps open up new opportunity

Brandy Braveboy’s retirement as a Master Sergeant in the United States Air Force opened a door to a new opportunity. Through the Department of Defense Skill-Bridge program and Phoenix West Commercial, Braveboy is getting that opportunity as a commercial real estate agent. Skill-Bridge is a program that establishes training avenues for local military veterans with their career transitions. It helps them to gain valuable civilian work experience through specific industry training, apprenticeships or internships during the last 180 days of service. Skill-Bridge connects

service members with industry partners in real-world job experiences and provides service members an invaluable chance to work and learn in civilian career areas. A native of Tempe, Braveboy spent 20 years in the military; more than 8 years of service overseas. She said her interest in commercial real estate was piqued during a flight home to visit family when she caught a glimpse of the view over Tempe Town Lake. “I couldn’t believe my eyes. A long time ago Tempe Town Lake was a run-down area,” she recalled. “Now it’s an amazing area of the Valley with so many community features.

There was even a magazine in my airplane with an article on how Tempe Town Lake is now an attractive submarket for commercial development. I hardly recognized it.” Over the years Braveboy’s interest and desire to transition into the commercial real estate industry have increased while following the Valley market from overseas and various duty locations. With a strong love for her community, Braveboy is now a resident of Buckeye and eager to contribute her passion and dedication towards commercial real estate growth in the West Valley. Her first day at Phoenix West Commercial was June 1. 9

EXECUTIVE PROFILE

A rewarding journey Skanska executive reflects on successful 35-year career By ALYSSA TUFTS

ollaboration, vision and persistence are part of what has made Ross Vroman, executive vice president and general manager for Skanska Arizona’s construction operations, successful throughout his career—the other part? His ability to build loyal relationships. Vroman joined Skanska as a project engineer after graduating from the University of Washington and worked his way up to his current position over the last 35 years. “I love the construction industry,” Vroman said. “I really didn’t know where it would take me, but it’s given me an opportunity to work on some really neat projects and move around the West Coast—Oregon, Washington, California and Arizona.” Through the years, Vroman’s work has been focused in high-tech, retail, healthcare, commercial and aviation market sectors and he has been involved in notable Valley projects including Phoenix Sky Harbor International Airport Terminal 4 N4 Concourse Renovation, EdgeCore Data Center and the Arizona Center Retail Refresh. Vroman’s strengths that guide him in his role include persistence, loyalty and business acumen. “Persistence because you don’t get a lot of chances to redo things; a large loyalty factor and business acumen, so you have

10 | September-October 2020

to understand the entire business, and most of our successful people in construction started on the ground floor and experienced all the different dynamics of construction besides management; so persistence, loyalty and business acumen are pretty important. I like to treat other people the way I like to be treated.” Vroman said it’s exciting to be on the front end of projects and working with new clients who have since become existing clients. Vroman said the construction industry has evolved into a team atmosphere, which helps deliver projects quickly and safely. “The best thing about doing large concrete buildings is you become a really dynamic team, especially when you’re a subcontractor performing your own labor, everybody knows everybody on the job and everybody is pulling to solve for the actual project, not just their own win and that’s a really neat dynamic.” Technology advancements have also helped streamline processes and given construction leaders and crews access to critical data in seconds. “Technology has been a huge enabler to successfully extract information and execute projects that are data driven,” Vroman said. “And then when you explain what the data means, you have this neat teaching moment between a mentor and mentee within your team and for the people on the project.”

In addition, Vroman said workforce development initiatives and programs involve companies attending construction career fairs and programs at high schools to peak students’ interest. “People aren’t even aware the opportunity exists and we’re still spending an enormous amount on education,” Vroman said. “Careers in construction are an opportunity where you don’t have to choose to be behind a computer and you’re showing them how to translate what they’ve learned and relate their experience in the construction industry.” Vroman also supports Sky Harbor Coalition,which strives to educate the public about the economic benefits and quality of life advantages Sky Harbor brings to Arizona and is dedicated to supporting the continued development of the airport and the enhancement of its existing operations. “We also work with a great organization called New Pathways for Youth, which serves youth ages 12-21 experiencing poverty and adversities through mentorship, workshops and retreats.” Throughout his career, Vroman doesn’t state a specific project, but credits the people he’s worked with as the most rewarding part of his career. “It’s the people; you create lasting relationships most of the time. There’s difficulties, but you meet people that want to accomplish something everyday.”

Arizona Center Retail Refresh, Phoenix, AZ

EdgeCore Data Center, Mesa, AZ

#8 Ranked #8 on Engineering News-Recordâ&#x20AC;&#x2122;s 2020 Top 400 Contractors List

Building What Matters Skanska is proud to be building what matters in the Valley for the last 13 years.

usa.skanska.com www.usa.skanska.com

AFTER HOURS

??????? Two worlds collide Michael Beethe: lawyer and equestrian By SARA WALKER

t’s not every day you find a lawyer who has 40 years of experience as an equestrian. But Michael Beethe is both an accomplished real estate lawyer and horseman. Beethe is a real estate transactional and litigation attorney at Comitz Beethe, a firm based in Scottsdale. He began his career as a litigator, then transitioned to doing real estate transactions, and now has been merging the two for ten years. “Generally speaking, I represent small- to mediumsized businesses in their commercial and business transactions,” he says. Outside of the office, Beethe is an involved and accomplished equestrian. He grew up in Kansas City, Missouri “in what I call a horse show family,” he says. His parents showed Arabian horses and he has been showing horses himself since he was eight or nine years old. “I picked it up there and showed a lot as a youth rider and kind of followed the circuit,” he says. He was lightly involved in the Arabian horse industry throughout college and law school and has been actively involved since graduating and beginning to practice law. Showing horses “is a passion and one of the things I work for,” says Beethe. Spending time outdoors with his family (Beethe’s wife also shows

12 | September-October 2020

horses) clears his head and is a welcome change of pace. Whereas the real estate world is deadline- and contract-based, things in the horse world are more easygoing and informal. Being around horses is refreshing, since, Beethe says, “communicating with a horse is a lot different than communicating with people.” And attending horse shows is a social outlet. “My family and I like going to horse shows because we have lifelong friends that come from all over the United States to go to these horse shows,” Beethe says. “It’s a combination of that we like showing our horses but we also like seeing all the people that we see at the horse shows and reconnecting with them.” Showing horses is a big time commitment, one that Beethe takes seriously. “It can be a lot,” he says, “because I focus my efforts on the highest level of competition.” The biggest competitions are the Scottsdale Arabian Horse Show in February and the Arabian U.S. National Championships in October in Tulsa, Oklahoma. In the two months leading up to those events, “I spend a lot of time with the horses getting ready and making sure that I’m ready for competition.” During that time, Beethe practices three or four times per week. Managing work and horse showing

requires some advance planning. “Work has to be the No. 1 priority because it’s my livelihood and I have to support my family,” he says. Fortunately, flexibility comes with planning real estate transactions. “As long as I know what my two schedules look like, for the most part I’ve been able to work it out so there are no major interruptions.” Beethe competes as an amateur (in other words, he does not accept money for showing horses) and is well-recognized as a horseman: he has been named National Champion in ten different divisions and Amateur Exhibitor of the Year three times. “It’s pretty rewarding when you get that type of award,” he says. But recognition is not always Beethe’s objective. “When I have a horse that I’m working with, my goal is to get that horse and me to be competitive at the highest level possible,” he says; Beethe adjusts his goals according to the mental and physical state of his horse. “I usually shoot for the National Championships. My ultimate goal is to try and win a National Championship with a horse.” Since he kept fielding legal questions at horse shows, Beethe now also practices a small amount of equine law, which, he says, is “an interesting combination of my two different worlds colliding.”

NEW TO MARKET A

OFFICE A DOBSON MEDICAL CAMPUS DEVELOPER: Ventas GENERAL CONTRACTOR: Okland Construction ARCHITECT: Krause â&#x20AC;&#x201C; Architecture + Interiors BROKER: Colliers International LOCATION: 1432, 1450, 1500, & 1520 S Dobson Rd, Mesa SIZE: 365,963 SF of Building Improvements. 4 acres of Total Site VALUE: WND START/COMPLETION: August 2020/ November 2021

14 | September-October 2020

OFFICE B CHOICE HOTELS INTERNATIONAL TECHNOLOGY DIVISION DEVELOPER: Nationwide Realty Investors GENERAL CONTRACTOR: Layton Construction ARCHITECT: Butler Design Group BROKER: Lee & Associates LOCATION: Loop 101 and Hayden Rd., Scottsdale SIZE: 160,000 SF VALUE: WND START/COMPLETION: June 2020/ Summer 2021

INDUSTRIAL C GLENDALE 303 (G303) DEVELOPER: Hines GENERAL CONTRACTOR: Graycor Construction Company Inc. ARCHITECT: Ware Malcomb BROKER: JLL LOCATION: Fronting the Loop 303 between Glendale Ave. and Bethany Home Rd, SIZE: 570,000 SF VALUE: WND START/COMPLETION: July 2020/Q1 2021

MIXED-USE D MESA HANGARS AT FALCON FIELD DEVELOPER: Davcon Aviation and Mesa Hangar GENERAL CONTRACTOR: GCON, Inc. ARCHITECT: ADM Group BROKER: Leading Edge Real Estate LOCATION: 4800 E. Falcon Dr., Mesa SIZE: 400,000 SF VALUE: $65 million START/COMPLETE: Q3 2020/Q1 2022

RETAIL E FATCATS ENTERTAINMENT - QUEEN CREEK DEVELOPER: FatCats Entertainment GENERAL CONTRACTOR: A.R. Mays Construction ARCHITECT: TK Architects International LOCATION: 20660 E. Riggs Rd., Queen Creek SIZE: 61,040 SF VALUE: $11 million START/COMPLETE: June 2020/April 2021

MULTIFAMILY F DERBY ROOSEVELT ROW OWNER: Ascentris DEVELOPER: Transwestern GENERAL CONTRACTOR: Hensel Phelps ARCHITECT: Wilder Belshaw Architects LOCATION: 800 E. 2nd St., Phoenix SIZE: 222 units VALUE: WND START/COMPLETION: April 2020/Q1 2022

Unlocking the Loop Camelback 303 is Merit Partners’ latest mega project By STEVE BURKS

he Loop 303 may soon be renamed Merit Partners Parkway if the developer keeps doing what it has been doing along the West Valley freeway. Merit Partners is one of the companies developing the PV|303, a 1,600 acre business park that spans both sides of the Loop 303 from Thomas Road north to Camelback Road in Goodyear. That development, at full build out, could include more than 20 million square feet of industrial, office and retail space. Merit Partners, with joint venture partners First Industrial Realty Trust Inc. and Diamond Realty Investments, recently acquired 615 acres of land along the 303 and announced plans for Camelback 303, a $1.5 billion global logistics park that will accommodate up to 10 million square feet of Class A industrial distribution and manufacturing space. “We are extremely excited to be building at this location and at a point in the cycle where demand for Class A industrial is exponential – and expected to continue to rise in the years ahead,” said Merit Partners President Kevin Czerwinski. “Camelback 303 is the natural extension of the market success we’ve already experienced at our adjacent industrial park, PV 303. Camelback 303 allows us to continue that momentum.” The Camelback 303 development is situated on land that runs along the west side of the Loop 303 between Camelback Rd. and Bethany Home Rd. in Glendale. Merit Partners is seizing on the rapid industrial growth along the Loop 303 freeway. Marc Hertzberg, managing director at JLL, the firm that brokered the land purchase for the joint venture group, said the area is growing into a “Baby Inland Empire.” “It was just 10-15 years ago that

16 | September-October 2020

the Inland Empire east was probably under 100 million square feet and now they are over 350 million feet,” said Hertzberg. “Right now, this Loop 303 corridor has 15 million square feet and we’re projecting that more than 50 million square feet will be built in the next five to six years. So it’s large land development opportunities for all different ranges of corporate users.” Camelback 303 is a sub-four-hourdrive from Southern California’s Inland Empire submarket and will leverage its proximity to the ports of Los Angeles and Long Beach. It is less than 30 minutes from Sky Harbor International Airport and 2.5 miles from the new Northern Parkway, a four-lane I-10 reliever expressway providing workforce connectivity between the Loop 303, Central Phoenix and Glendale, and placing Camelback 303 within 30 minutes of 1.5 million residents. Merit Partners and its partners plan to develop build-to-suit and speculative buildings. The initial plans have buildings ranging in size from 267,000 square feet all the way up to 1.5 million square feet. Hertzberg said he’s already had several meetings during the land sale transaction period with corporate users of all sizes. “From JLL’s perspective, we look forward to using it as the gold standard for solutions for these kinds of users,” Hertzberg said. “These properties come few and far between. This group is going to be able to tie it up with a bow and be able to deliver unbelieveable sites, whether on a build-to-suit or sale basis. It just offers everything.” A project of this size doesn’t just snap together quickly. The 615 acres that Camelback 303 will occupy was part of a larger, 840 acre parcel that was owned by Allen Ranch and was originally a Maricopa County island before it was annexed by the City of

Glendale. First Industrial Realty Trust purchased that 840 acre parcel for $70.5 million. The property is next to a large residential development, Douglas Ranch, whose residents were strongly opposed to the large-scale industrial project. In order to alleviate some of those neighbors concerns, the developers planned for a 760 lot single-family residential development, Allen Ranch, on 250 acres along the western

part of the property, creating a buffer between the established community and Camelback 303. The bulk of the property is less than two miles from Luke Air Force Base and along a freeway corridor that is exploding with industrial development, making the options for its use pretty cut and dry. “Realistically, the land, to a large degree, planned itself,” said Jason Morris, partner at Withey Morris, the law firm that worked on land use and entitlement issues on the property. “From a land use planning standpoint, there really wasn’t a lot to be said. It was a matter of how you put the uses that could occur on that property in place. “We knew we wanted to have a residential component because of the size of the property and because of the

residential to the west. It was a matter of keeping it out of the flight contours and making sure that there is a land plan where the industrial had a buffer to the residential. If you could do that well, it meant that you actually had an opportunity to design something where you had created jobs and housing in one place.” Morris credits both the City of Glendale and Merit Partners for having the foresight to unlock the economic opportunities that the Loop 303 corridor can produce. “Recognizing that there are not opportunities that come up with a site this large with that much freeway frontage and that much access across that many arterials; recognizing what that opportunity could be and not being

Marc Hertzberg

Kevin Czerwinski

frightened by it. I think says a lot about how Merit Partners operates,” Morris said. “And Glendale has recognized that this is where our financial well-being as a jurisdiction lies and have sort of remade themselves into a jurisdiction that is incredibly business-savvy and they work with all of these projects in mind.”

BETHANY HOME ROAD

526,000 SF

418,000 SF

950,000 SF

770,000 SF

COTTON LANE

1,500,000 SF

610,000 SF

326,000 SF

870,000 SF

378,000 SF 610,000 SF

610,000 SF

290,000 SF 296,000 SF

267,000 SF

CAMELBACK ROAD

MULTIFAMILY/SALES

$80M | 10,152 SF CITRUS GARDENS MOBILE HOME PARK

4065 E. University Dr., Mesa BUYER: The Carlyle Group SELLER: Edward Wenner, Inc. BROKER: Marcus & Millichap

$73M | 70,576 SF JEFFERSON TOWN LAKE

$63.25M | 141,456 SF

$71.5M | 347,460 SF

$62.5M | 1,044,133 SF CHANDLER VILLAGE APARTMENTS

909 E. Playa del Norte Dr., Tempe BUYER: Fairfield Residential SELLER: JPI/TDI. BROKER: CBRE

THE DAVENPORT 4130 S. Mill Ave., Tempe. BUYER: Federal Capital Partners SELLER: Tides Equities BROKER: N/A

PARK PLACE AT FOUNTAIN HILLS 16725-16845 E. Ave. of the Fountains, Fountain Hills. BUYER: Ken Okamoto. SELLER: Real Capital Solutions, Inc. BROKER: CBRE

600 W. Grove Pkwy., Tempe BUYER: Knightvest Management SELLER: Western Wealth Capital BROKER: N/A

RETAIL/SALES

$20.29M | 50,428 SF TARGET

1625 E. Camelback Rd., Phoenix BUYER: Agree Realty Corporation SELLER: Menin Development, Inc. BROKER: Newmark Knight Frank

$13.05M | 63,294 SF

$10.12M | 8,000 SF

8688 E. RAINTREE DR., SCOTTSDALE CHANDLER VIRIDIAN PRIMEGATE 3031 W. Frye Rd., Chandler BUYER: The Ron Kaufman Companies, LLC BUYER: Wood Partners SELLER: Jim Riggs BROKER: N/A SELLER: Winfield Lee Investments BROKER: Marcus & Millichap

$10.5M | 69,755 SF

THE SHOPS AT DYNAMITE CREEK 28212-28260 N. Tatum Blvd., Cave Creet BUYER: Scottsdale Development Partners SELLER: Cornerstone Development Partners BROKER: CBRE

18 | September-October 2020

$9.05M | 14,490 SF WALGREENS

2000 S. Mill Ave., Tempe BUYER: JVZ Greystones Trust SELLER: Lamar Kyle Ochs LLC BROKER: Marcus & Millichap

It’s the big deals and the brokers who close them that make the market an interesting one to watch. Here are the top notable sales for the months of June and July. Sources: Race Carter at Cushman & Wakefield Research.

OFFICE/SALES

$64.5M | 296,215 SF DISCOVERY BUSINESS CAMPUS (2 buildings)

2160 & 2190 E. Elliot Rd., Tempe BUYER: Orr Partners SELLER: Northwood Investors LLC BROKER: N/A

$43.5M | 140,756 SF WELLS FARGO GAINEY CENTER

$19.47M | 79,537 SF

8601 N. Scottsdale Rd., Scottsdale BUYER: Ascent Real Estate Advisors SELLER: Principal Financial Group, Inc. BROKER: CBRE

KIERLAND 14646 N. Kierland Blvd., Scottsdale BUYER: Providence Real Estate Group SELLER: Waitt Company BROKER: N/A

$27M | 107,049 SF

$6M | 14,501 SF 7135 E. CAMELBACK RD., SCOTTSDALE

SCOTTSDALE GATEWAY 9201 E. Mountain View Rd., Scottsdale BUYER: Healthpeak Properties, Inc. SELLER: Equus Capital Partners BROKER: JLL

LAND/SALES

BUYER: Alliance Residential Company SELLER: Equitable Home Mortgage BROKER: LevRose Real Estate

INDUSTRIAL/SALES

$24M | 139.4 AC 3410 N. HIGLEY RD., MESA

BUYER: Lafarge Holcim SELLER: Jane Thorson BROKER: N/A

$23M | 60.2 AC

W. DOVE VALLEY RD. & N. VALLEY PKWY, PHOENIX BUYER: W.L. Gore & Associates SELLER: Metropolitan Land Co. BROKER: N/A

$21.9M | 65 AC

6100 S. KINGS RANCH RD., GOLD CANYON BUYER: N/A SELLER: Gold Canyon Golf Resort & Spa BROKER: West Commercial USA

$19.8M | 91.5 AC

NW COTTON LANE & INDIAN SCHOOL RD., GOODYEAR BUYER: Amazon SELLER: The Rados Companies BROKER: Lee & Associates

$18.8M 125 AC

| HARMONY LANE, SUN CITY BUYER: Lafarge Holcim SELLER: Jane Thorson BROKER: N/A

$57M | 651,775 SF 101 LOGISTICS PARK

10205 & 10209 W. Roosevelt St., Avondale. BUYER: PGIM Real Estate Finance SELLER: Seefried Properties BROKER: N/A

$42M | 285,022 SF

CAFE VALLEY BAKERY CO. 7000 W. Buckeye Rd., Phoenix. BUYER: AEW Capital Management SELLER: Cornerstone Arizona LLC BROKER: Lee & Associates

$38M | 164,486 SF AMAZON

2550 N. Nevada St., Chandler BUYER: Westcore Properties SELLER: Walton Street Capital BROKER: N/A

$30M | 325,800 SF

ONTRAC DISTRIBUTION CENTER 7400 W. Buckeye Rd., Phoenix BUYER: Cohen Asset Management Inc. SELLER: Kansas City Life Insurance Company BROKER: N/A

$19M | 620,000 SF CONAIR

7811 N. Glen Harbor Blvd., Glendale BUYER: HFZ Capital Group SELLER: Conair Corporation BROKER: CBRE 19

LEGISLATIVE UPDATE

STRONGER TOGETHER AAED focuses on assisting businesses large and small

he Commercial Real Estate Industry has long worked hand-inhand with economic development professionals to advance quality growth in Arizona. Often times both industries are accused of “buffalo hunting” or pursuing new, bigger, shinier opportunities and overlooking the businesses that already exist in their respective communities. Nothing could be further from the truth; and, now more than ever, it’s important to tout a function of economic development that is regularly overlooked in the headlines but is an active focus for most economic development organizations or entities with those responsibilities. A formalized business retention and expansion (BRE) strategy provides community leaders with advance warning about problems that may lead to business closures or relocations. Proactive interventions and creative solutions retain employers and assist companies, large and small, to establish and maintain a firm foundation within the community. Under normal circumstances, these range from input in infrastructure planning, placement on city boards and commissions, making connections for employee training and hiring, and even finding local suppliers. Arizona Association for Economic Development (AAED) members are asked daily to provide assistance to the businesses, industries, and communities we serve. When this

20 | September-October 2020

Skip Becker

Wendy Bridges

pandemic began, our Lori Collins Mignonne Hollis Nicole Snyder members quickly AAED Executive Committee pivoted to an “all hands on deck” approach to business thru service; Mesa’s Small Business outreach, contacting as many local Reemergence Grant and Technical businesses as possible as various Assistance Program, providing handsshutdowns were occurring. The on assistance in response to the needs Coronavirus Aid, Relief and Economic of businesses; and Arizona Regional Security (or CARES) Act also placed Economic Development’s COVID business retention and assistance at Response Program. the forefront of economic developers’ Communities that have strong programs post-pandemic. CARES retention and expansion programs funding flowed from the U.S. Treasury in place are much more resilient. to the State of Arizona and then to Get to know your local economic local municipalities through the AZ development organization, and Cares Program. Created from this introduce your clients to them. program was grants funding flowing Consider them your advocates at City directly to local businesses affected by Hall. (Hint… we provide a directory the pandemic. of these organizations on our website This connection from municipalities at AAED.com. And consider joining and economic development AAED to make those connections.) departments to local businesses AAED practitioner members will make has been critical in assisting a point to visit your clients and get business survival. Much of the to know them — not in a regulatory intel gathered from speaking with fashion, but in an effort to build a countless businesses and hearing relationship and help ensure they the struggles they were facing led to thrive within our communities. We are the development of loan programs, #StrongerTogether. grants, technical assistance programs, business resource portals, and The AAED Executive Committee is temporary relief from some city comprised of: Mignonne Hollis, Arizona ordinances, such as those controlling Regional Economic Development signage and outdoor restaurant seating. Foundation; Lori Collins, City of Mesa; Examples of these programs include Wendy Bridges, City of Avondale; Skip Avondale’s Ready to Serve program, Becker, La Paz Economic Development a website and marketing campaign Corporation; and Nicole Snyder, Orcutt | to highlight eateries that are open Winslow. for takeout, delivery, and/or drive-

Arizona Association for Economic Development presents:

ROADTRIP Az Arizona municipalities will virtually “take the wheel” and drive us through their community’s past, present, and future. Get a glimpse into new projects and meet the people making the deals.

HITCH A RIDE ON THE 4TH TUESDAY OF EVERY MONTH FOR MORE DETAILS, VISIT AAED.COM

NEIGHBORHOOD VENTURES

Successful Ventures Crowd-funding model opens door for new investors By STEVE BURKS

t’s been three years since Jamison Manwaring and John Kobierowski decided it was the perfect time to try something new in the world of multifamily investment and redevelopment. The pair founded Neighborhood Ventures, which utilizes “crowdfunding” to raise capital for redevelopment projects. The three-year anniversary of the company’s founding comes in a year in which Neighborhood Ventures is working on its fourth and largest project and has seen its vision embraced by 478 individual investors. “To get a person to write a check for an investment where they could lose it all, to get almost 500 of those, is no small task,” said Manwaring, whose career started as a technology analyst for Goldman Sachs before he served as Vice President of investor relations for LifeLock. “We’ve learned a lot about talking to investors, communicating, keeping them informed and involved. Our investors are really happy. They are engaged with us, which is the most important thing to me.” Neighborhood Ventures’ investor pool isn’t drawn from the list of Arizona’s most wealthy residents. Investors in the company can put down a minimum of $1,000 and the average investment across all four projects is just over $5,300. Neighborhood Ventures’ first project, the 12-unit Venture on Wilson in Tempe, took six months to raise the $500,000 that was needed to fully renovate the

22 | September-October 2020

John Kobierowski property. After the funds are raised, Neighborhood Ventures comes in and fully updates each unit with upgraded flooring, kitchen cabinetry and appliances, as well as installing a washer and dryer in each unit. At Venture on Wilson, the renovations themselves took six months, as the company went through a serious learning curve on their first project. “The remodel on the first one, we were trying to do everything through a management company and we quickly learned that they didn’t have the capabilities to do that, so I had to jump in and basically jockey that whole thing and show up every day on the property,” said Kobierowski, who has held on to his “day job” as senior managing partner for ABI Multifamily, one of the top multifamily brokerages in the Valley. “Now we have staff, we now have a really phenomenal construction manager. We now have a designer who is totally in tune with both the types of materials we need and the price point and the functionality of it, so all of that stuff plays into getting the project done and we’re ahead of things now.” As the company shook off the growing pains of the first project, all of that knowledge has paid off on the next three. Project number two, Venture on Marlette, needed just 60 days to raise $600,000 as word spread among people looking for ways to invest in commercial real estate without needing huge sums of capital. “We had an open house at one of our properties, Venture at Villa Hermosa, and more than 60 investors came out to talk with us,” Manwaring said. “One of the first investors at the event was

Jamison Manwaring

this guy driving his mail truck. It hit me that this guy, he could never invest in something like this and he told me how much he loved what we were doing. He never thought he could be an investor in real estate projects until he saw what we were doing.” Everything that Neighborhood Ventures is doing, it is doing better each time out. Renovations on the 12unit Venture on Marlette project took just three months, and Manwaring said the Venture on 66th project, which is an 8-unit AirBnB complex in Scottsdale, took just under four months from start to completion. “We’ve learned a lot and I think that’s part of the whole experience, figuring out what you can do better and what we need to do more of,” said Kobierowski. “We realize what our niche is, what kinds of properties to buy, where to buy, how big the pool of investors is in Arizona. Our projects are moving faster, our construction is getting better, our delivery is better, our returns have been stronger. We’re getting better building where we have better people working for us. It’s been fun and it’s been quite a learning experience the whole time.” The latest project is the companies’ largest, a 14-unit AirBnB complex called Venture at Villa Hermosa in Phoenix. The funding for that project, which drew 161 investors, took 90 days and produced $894,000. For investors with Neighborhood Ventures, when the properties start collecting rents, each investor gets an annual distribution from those funds. Originally, Manwaring felt a three percent annual return would be the target, but currently, investors in the

Venture on Wilson project are receiving a six percent distribution. Manwaring said before Neighborhood Ventures remodeled that project, it was generating, on average, $770 per unit. Now, that complex is generating $1,100 per unit. “Rents haven’t gone up this year because of everything that’s happening, but they have been steady,” Manwaring said. “To see that sort of increase per unit, 30 to 40 percent, that’s the sort of increase that we and our investors want to see.” Manwaring said that his promise to investors on each project is a liquidity event by two or three years, depending on the project. So, for the Venture on Wilson investors, that event is scheduled to come in July of 2021. The company will be mindful, however, of the timing in the market to make sure the investors get a solid rate of return. The co-founders are looking forward to seeing their first project finish its cycle with their company so they can demonstrate to potential investors what a completed project looks like. “The thing about finance and investments, stability and history and repeatability is so important,” Kobierowski said. “Once we get our first project done and we pay out everything on it, it will be pretty obvious how well our process works. “When we sell our first project, I’m going to be excited about it, but it’s just the next step. It’s the continuation of the first one. Personally and for our company, that’s important for us. It shows completion of a project, a successful project ticket from start to finish.”

4 ad-Ventures

Venture on Marlette

Venture on Wilson

Since establishing Neighborhood Ventures in 2017, co-founders Jamison Manwaring and John Kobierowski have successfully financed four properties through “crowd-funding,” with many small investors chipping in a minimum of $1,000. Here are their first four projects:

Venture on Wilson

Venture on Marlette

Venture on 66th

Venture at Villa Hermosa

Size: 12 unit apartment complex Location: 626 S. Wilson St., Tempe Funds raised: $500,000 Fund raising period: 6 months Number of investors: 104 Preferred return: 12% Target hold period: 3 years

Size: 12 unit apartment complex Location: 813 E. Marlette Ave., Phoenix Funds raised: $600,000 Fund raising period: 60 days Number of investors: 130 Preferred return: 12% Target hold period: 3 years

Size: 8 unit AirBNB complex Location: 3307 N. 66th Pl., Scottsdale Funds raised: $550,000 Fund raising period: 3 weeks Number of Investors: 88 Preferred return: 12% Target hold period: 2 years

Size: 14 unit AirBNB complex Location: Phoenix Funds raised: $894,000 Fund raising period: 90 days Number of investors: 161 Preferred return: 12% Target hold period: 2 years

COOL OFFICES

Normal never looked so good

s the novelty and convenience of working from home wears off, many who have been forced to work from home for the past six months are beginning to long for the office environment. Even those who work in plain, spartan offices are longing for the connections and energy that come from working alongside their colleagues in what is fondly referred to as “normal.” Each year, AZRE Magazine shines a spotlight on office environments that are attractive, functional and inspiring. The “Cool Offices” that are showcased in this year’s installment will make even the most ardent home office professional wish they could spend their workdays in these unique spaces. For the employees who are away from these eye-catching office spaces, getting back to “normal” has never been so appealing.

24 | September-October 2020

Burch & Cracchiolo

General Contractor: Stevens-Leinweber Construction, Inc. Architect/Interior Design Firm: McCarthy Nordburg Location: 1850 N. Central Ave., Phoenix Size: 17,700 SF Brokerage Firm: Savills Value: $1.3 million Start/Completion dates: 01/2020 — 06/2020 Why it’s awesome: This established law firm’s new modern office highlights the 360 degree views of the city. The project features a lot of glass keeping the space open and bright. The break room serves as a hub for collaboration and socialization and feel more like a coffee lounge than a traditional law firm. Many of the interior finishes, designer features and furniture have a hospitality/spa feel to them. The concept of the offices was to depart from the traditional law firm and create a new dynamic focused around light, warmth and the employee experience.

Carvana HQ3

Owner: Carvana General Contractor: Wespac Construction Architect: RSP Architects Interior design firm: RSP Architects Location: Tempe Size: 50,374 SF Start/Completion: 4/2019-1/2020 Why it’s awesome: Adaptive re-use of an existing 2-story office with attached warehouse. The entire space was designed to have a modern Scandinavian feel. The warehouse area was transformed to include a basketball court, freestanding conference rooms, and 26 feet high grid ceiling with “UFO” style LED light fixtures. All conference rooms feature a different finish palate to separate the spaces into unique design features. Glass railings and continuous pine wall accents tie the two floors together and create a wood cabin feel for the two breakrooms. Old warehouse HVAC curbs were re-purposed for new skylights to provide natural lighting for real trees surrounding the wood-clad collaboration space.

Emerge

Owner: Andrew & Michael Leto General Contractor: Ganem Construction Architect/Interior designer: McCarthy Nordburg Brokerage firm: Keyser Co., Matthew Cummings Location: Pima Center at 9055 E. Del Camino Dr., Scottsdale Size: 36,684 SF Value: $2.9 million ($80 / SF) Start/Completion: 4/2019-5/2020 Why it’s awesome: The goal of this design was to create a dynamic collaborative office environment for this local software company that touts the most advanced truckload procurement technology on the market. The office design aesthetic is clean and modern while incorporating a transportation theme. Their bold blue branding color accents a neutral finish material palette. The reception area welcomes you with a polished concrete floor and a natural wood feature wall. Wood details are carried throughout the office within workstation panels and accent walls.

COOL OFFICES Stevens-Leinweber Construction, Inc. Offices General Contractor: Stevens-Leinweber Construction, Inc. Architect: Phoenix Design One Location: 730 E. Highland Ave., Phoenix Size: 7,800 SF Value: Confidential Start/Completion: 11/2018 - 11/2019

Why it’s awesome: For nearly 40 years, Stevens-Leinweber Construction, Inc. (SLC) has been delivering Phoenix’s most efficient and creative office build-outs. This year, it was SLC's turn to put that talent to work for its own office relocation and expansion. The result: a fully-renovated, stand-alone headquarters building featuring all of the character and functionality that today’s office users want most. SLC is all about the welcome with a central reception desk bookended by a collaborative break-out nook to the right and state-of-the-art conference room to the left. These spaces are accessed directly off of the lobby.

Hawkins Design Group

General Contractor: Kennedy Design Build Architect/Designer: Cawley Architects Location: 1140 W. Harwell Rd., Gilbert Size: 12,275 SF (6,000 SF office, 6,275 SF warehouse) Value: $3 million Start/Completion: 11/2018-11/2019 Why it’s awesome: The main interior focus of the project is the open space office area, where project managers work in a collaborative office environment highlighted by outstanding light fixtures. The office area is supported by an impressive conference room and a flexible break room area that opens onto a large, expansive covered patio. Unique contemporary lighting schemes are featured in each private office to illustrate the variety of possible fixtures and effects that a customer may choose to showcase in their business. Cawley Architects worked closely with Dave Hawkins and his executive team to incorporate favorite decorative themes into the project.

Infinity Software

Owner: Jeff Torczon General Contractor: Travis Reid Custom Builders Architect/Designer: Cawley Architects & Monica Sullivan Design Location: 9362 E. Raintree Dr., Scottsdale Size: 12,762 SF Value: WND Start/Completion: 5/2015-8/2016 Why it’s awesome: The concept of opening up the space yet still having privacy prompted the designer to come up with the idea of using FilzFelt panels which brought in color, pattern and helped with acoustics throughout the space. The designer used the company’s vibrant blue and green logo colors for the panels. The panels earned the design an American Society of Interior Design 1st Place Award for Element in a Commercial Space. The partition walls were opened up to serve as frames for the hanging felt panels. They were used on sliders to close off the game room in the kitchen/lounge area for acoustics and some privacy. 26 | September-October 2020

PF CHANGâ&#x20AC;&#x2122;S CORPORATE HEADQUARTERS SCOTTSDALE, ARIZONA

RELATIONSHIPS. DESIGN. SERVICE. INTERIOR ARCHITECTURAL DESIGN 602.955.4499 | MCCARTHYNORDBURG.COM

COOL OFFICES Professional Beauty Association offices Owner: Professional Beauty Association General Contractor: Wespac Construction Inc. Architect: Ware Malcomb Location: 7755 E. Gray Rd., Scottsdale Size: 17,790 SF Value: $1.6 million Start/Completion: 5/2018-4/2019

Why it’s awesome: The design features an open floor plan concept highlighting open and exposed ceilings throughout the space, creating a modern and industrial feel. New skylights and exterior windows bring more natural light to the space. A neutral color palette is accentuated with pops of color that reflect the client’s brand. Modern finishes complete the design, incorporating various materials including ceramic tile, luxury vinyl tile, carpet and quartz counter tops. The design also included vintage beauty artifacts, which caused Ware Malcomb to think outside the box to incorporate these artifacts into the space.

LIV Communities

Owner: LIV Communities General Contractor: Stevens-Leinweber Construction, Inc. Architect: SmithGroup Brokerage Firms: Lee & Associates and CBRE Location: 8950 S. 52nd St., #115, Tempe Size: 8,900 SF Value: $1.1 million Start/Completion: 8/2017-3/2018 Why it’s awesome: SmithGroup established three goals at the onset of the project. The first was to create a centralized hub that would bring everyone together to meet, socialize, and work. This was brought to life in the Activity Zone, located in the middle of the plan, at a pinch point that separates the work area from the community area. The second goal was to use graphics and branding to express who they are, the communities they serve, and to communicate their purpose and passion. Lastly, they wanted to provide multiple modes of work to support a variety of individual needs. Dark oceanic tones and natural materials served as inspiration for the interior vibe. 28 | September-October 2020

Sendoso

Owner: Avison Young General Contractor: Wespac Construction Architect: Ware Malcomb Interior design firm: Ware Malcomb Brokerage firm: Avison Young Location: 6900 E. Camelback Rd., #1100, Scottsdale Size: 10,053 SF Value: $651,327 Start/Completion: 5/2019-8/2019 Why it’s awesome: This high-end office build-out of an 11th floor penthouse suite features a wrap-around patio with 360 views. The space consists of a reception area, open office, conference rooms, huddle rooms and a large break/club room. Finishes include custom millwork, quartz counters with waterfall edges, LVT flooring, ceramic wall tile, exposed ceilings with galvanized ductwork and LED lighting.

Sisense

General Contractor: Stevens-Leinweber Construction, Inc. Architect/Designer: Krause — Architecture + Interiors Location: 6991 E. Camelback Rd., Building B, 3rd Floor, Scottsdale Size: 15,000 SF Value: $1.5 million Start/Completion: 01/2018-01/2019 Why it’s awesome: Designed to build efficiency and attract and retain top talent, highlights include an open ceiling concept, hand-painted murals flown in by the tenant, acoustical wall panels imported from Australia, polished concrete in common corridors and a highdesign breakroom featuring wood flooring, mosaic hexagon tiles and a white oak slat ceiling with wood slats designed to represent Central Park and the New York City skyline, as a nod to the company’s headquarters.

Wallick & Volk

Owner: Est Est Inc. General Contractor: AFT Construction Architect: Poetzl Architecture & Design Brokerage firm: Wallick & Volk Location: 21040 N. Pima Rd., Scottsdale Size: 8,900 SF Value: WND Start/Completion: Q1/2016-10/2016 Why it’s awesome: The use of organic woods and clean contemporary finishes reflects current residential design trends evident in the reception lounge and the character most sought after by home buyers. Space planning allowed every employee to have a window while conference rooms were positioned in the center. A secondary challenge was the size of a conference room. Creative space planning and the use of glass partitions resolved the issue. The room feels comfortable and casual when used for open-door meetings and the transparency prevents it from feeling contained during bi-annual conferences when it is at maximum capacity. 29

ARIZONA MULTIHOUSING ASSOCIATION Message from the President

Assistance, not Moratoria, is the COVID-19 Housing Solution Converting private housing into public housing is defining moment for property rights By COURTNEY LEVINUS

n times of crisis, we often feel an obligation to secure our most vulnerable. Whether it be securing their access to healthcare, food, employment, or shelter, the public and private sectors have often partnered to find innovative solutions to address all four of these needs. Like all partnerships, these solutions require consent from both parties; however, when one party acts without the consent of the other, then we often times see adverse effects arise from hastily assembled solutions. In the context of the COVID-era, the federal and state eviction moratoria have created a patchwork of convoluted regulations which have ultimately induced the opposite effect of what some policymakers have sought to accomplish: providing relief for Americans hit hardest by the government-induced closures and shelter-in-place orders of the past six months. Moreover, these eviction moratoria have effectively converted privatelyowned housing into public housing, abridging private contracts in the process. This COVID-era has proven to be the most significant threat on our private property rights in the state, and an equally unprecedented attack on our Constitution. Starting back in March, rental property owners worked with residents to create payment plans, reduce rent, and waive fees. For months they have provided assistance accessing rental assistance resources, worked with furloughed, sick, and vulnerable

30 | September-October 2020

residents to keep them sheltered, and continued to keep staff on payroll, all while maintaining their properties, and paying their property taxes, utilities, and insurance. Over the same period of time, owners have forfeited rent and operated at a loss for, in some cases, over five months. Few, if any, businesses or agencies are able to operate for months on end with little to no relief. The unilateral decision to establish an eviction moratorium, which has now been extended to October 31st without the consent of the legislature, has actually put our most vulnerable at risk. This is due to the fact that the state has only allocated $5 million to both the stateâ&#x20AC;&#x2122;s rental assistance fund and Rental Property Owner Preservation Fund. The burden of providing rental assistance to residents and owners alike

has now fallen upon local government. As a result, Phoenix, Tucson, Maricopa County, Pima County, and dozens of others have had to hire hundreds of staff, approve federal funding allocations, and establish programs with varying requirements to assist these at-risk citizens. This patchwork of relief funds has resulted in only $7 million of the over $90 million available statewide in rental assistance and eviction prevention funds being disbursed since April 1st. Considering that most of a property ownerâ&#x20AC;&#x2122;s rental income goes straight to paying their mortgage and other costs, months of lost rental income resulting from moratoria and massive unemployment, combined with slow and late-to-arrive rental assistance is ultimately endangering the very communities meant to be protected. As no business can afford months of operating on a loss, no rental property owner, especially the mom-and-pop rental owners which comprise the majority of Arizonaâ&#x20AC;&#x2122;s property owners, can afford to maintain their properties, pay their taxes, maintain their payroll expenses, and pay their mortgages on time, ultimately putting their properties at risk of foreclosure and their residents at risk of displacement. It is to this end, to keep our fellow Arizonans housed and healthy, that the Arizona Multihousing Association has, and will continue to fight for rental assistance reform across the state. Only when the barriers for assistance are removed will the threat of displacement and foreclosure disappear. With over $90 million available, no resident has to be evicted, but only so long as the assistance is able to flow. Courtney LeVinus is the president and CEO of the Arizona Multihousing Association.

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AMA

PANDEMIC SURVIVAL KIT AMA and its members patiently working through crisis By STEVE BURKS

ne of the biggest storylines throughout the COVID-19 pandemic and all of the residual fallout to the commercial real estate industry, was the effect it was having on the multifamily industry. As the COVID-19 pandemic hit Arizona in March, the obvious first step for multifamily property owners was making sure residents and employees were safe. That meant closing pools and other amenities to limit activities that draw people together. Multifamily operators had to come up with new policies and procedures for staff and residents and communicate those new policies to everyone affected. And, they had to make all of these major adjustments while some residents were unable to pay rent due to job losses caused by COVID-19. Luckily for these multifamily owners and managers, the Arizona Multihousing Association was on the job, providing leadership and guidance when the industry needed it the most. “The AMA has been phenomenal in communication from the start of this pandemic,” said Kristin Heiple, vice president of Phoenix operations for Baron Properties. “The AMA has consistently been two steps ahead of new restrictions and changes in policy. Often times we would be watching the Governor speak on a new executive order and within minutes we would be receiving email guidance and interpretations from the AMA of how

32 | September-October 2020

Crystal DeHoag

Kristin Heiple

this effects our industry. We shared and collaborated on policies, ideas and templates and made these items public to all members as we are committed to the fact that we are all in this together.” Early on in the pandemic, the focus was on keeping everyone renting one of the 920,000 rental units statewide safe. So, properties limited face-to-face interaction between residents and staff as much as possible and shut down shared amenity spaces. Heiple said that Baron established a Pandemic Plan in the companies’ Policy and Procedures Manual that gave instructions on new sanitizing procedures as well as general operations. “A crucial guideline early on was upon our maintenance team members performing service requests they had to give a health questionnaire to the resident prior to entering their home to protect our team members from potential exposure,” said Heiple. “What was once a business that thrived on face-to-face and social interactions, changed to a virtual experience, not only for our customers but for our employees as well. We turned our focus on developing creative ways to have that same rapport and engagement with our residents and guests virtually.” The most effective policy approach

Courtney LeVinus

Nicole Wray

that Baron and other property owners found was clear and constant communication with staff and residents. After all, the pandemic was something no one in the industry had dealt with, so in order to lessen the anxiety caused by the great “unknown” of the pandemic, maintaining constant communication was crucial. “While this was unchartered territory for all we maintained clear, timely and honest communication with our residents to reassure them that we were taking this very seriously and approaching changes in policy with our team members, residents and guests at the forefront,” Heiple said. “As we approached April, we notified our residents that we were available to help and provided resources and solutions that met their needs. We had a policy of what we could do and how to communicate to our residents.” Heiple noted that some policies that were implemented during the pandemic may be effective on the longer term. She said virtual or selfguided tours were very popular among guests and she felt Baron would likely continue to offer those as options for people wanting to tour their properties. While the early part of the pandemic was focused on the health and safety of residents and staff, as the pandemic

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THE SAFE SIX:

WORKPLACE READINESS ESSENTIAL AMA

The migration from furloughed and Work From Home (WFH) workforce back to places of business will look different for ev How can real estate owners most effectively prepare their assets for the return of building occupants? And how can emplo prepared to receive their workforce—and make sure their employees are prepared? Faced with many of the same challeng have a unique opportunity to come together, following a handful of operational guiding principles to help navigate the retu

THE SAFE SIX:

WORKPLACE READINESS ESSENTIALS The migration from furloughed and Work From Home (WFH) workforce back to places of business will look different for every organization. How can real estate owners most effectively prepare their assets for the return of building occupants? And how can employers make sure they are prepared to receive their workforce—and make sure their employees are prepared? Faced with many of the same challenges, owners and occupiers have a unique opportunity to come together, following a handful of operational guiding principles to help navigate the return to the workplace:

PREPARE THE BUILDING

PREPARE THE WORKFORCE

    



PREPARE THE WORKFORCE CONTROL ACCESS

Policies for deciding who returns and when; employee communications

PREPARE THE BUILDING

#6 #5

CREATE A SOCIAL DISTANCING PLAN Decreasing density, schedule management, office traffic patterns

REDUCE TOUCH POINTS & INCREASE CLEANING

Policies for reception, deciding who returns and CONTROLTouchless ACCESS building shipping/receiving, ingress/egress, clean  Mitigate anxiety of returning to  Consider phasing based on roles and elevators, visitor policies desk policy, food plan, cleaning the workplace through changewhen; employee communications priorities, including temp workers if Ensure safety of all workers Protocols for safety Cleaning plans, pre-return inspections, commonand areas health checks,  Control the entry points including management planning and needed Ready Mechanical, HVAC, Fire/Life deliveries communications building reception, shipping/receiving, HVAC & mechanicals checks enhanced cleaning and work weeks in the office  Maintain Safety systems t Mitigate anxiety of returning to – Alternating disinfecting practices  Reconfi gure gathering and lobby  Consider why people can benefi and WFH elevators, visitor policies Clean with products from approved areas for social distancing from returning to work  Supply disinfectants near or on each the workplace through change – Staggered arrival/departure times from Ensure lists governingsafety authoritiesof all workers desk or work area, particularly those  Install plexiglass shields as – Productivity from proximity to Control points including – Enable teams to negotiate theirthe entry management planning and Ensure compliance with owner/ that are shared appropriate colleagues; socialization; amenities; own ‘in-office’ schedules  Ready Mechanical, HVAC, Fire/Life Landlord requirements policies deliveries and work tools & resources communications  Remove food/beverages – consider  Clearly communicate building  Introduce planning to support social EngageSafety vendors insystems back-to-work plan restocking with single-serving items protocols through signage and floor  Consider why people can benefit distancing/ 6 Feet Office Protocols markings  Reconfi gure gathering and lobby from continued WFH  Consider why people can benefit Review and prepare plans regarding  Enable DIY cleaning through hand  Monitor space usage changes to cleaning scope or any  Clean with products from approved disinfectant wipes, and other  Consider temperature screening – Health and family priorities; areas for socialsanitizer, distancing from returning to work additional services such products  Specify seating assignments for reduced commute time; technology lists from governing authorities  Provide sanitizer, wipes, PPE as employees to ensure staff adheres to enables WFH without loss of Ensure all inspections, remediations,  Sanitize all workspace appropriate Install plexiglass shields as areas, including – Productivity from proximity to minimum work distances productivity repairs and communications are office, conference room, breakroom,  Ensure compliance with owner/  Disable touchscreens complete before reopening cafeteria, restroom, and other areas appropriate colleagues; socialization; amenities;  Redesign spaces, alternate desk/chair  Develop and execute detailed plan on prior to opening. Ensure appliances/ Landlord requirementshow policies use, etc., for social distancing to return to work and work tools & resources equipment are in working  Clearly communicate building order  Add panels between desks including  Advise on alternate means of safe  Limit in person meetings  Engage vendors in back-to-work plan for sit/standthrough commuting protocols signage and floor  Consider why people can benefitheight adjustable panels

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stretched on through the summer, located near universities. Many of DeHoag said her company is seeing  Proh the focus of the industry turned to our residents also rely on the tourism more rental delinquency, saying it and finances. Rent collections and leasing industry, which we know has been is higher than it has ever been with use rates dropped during the pandemic heavily impacted throughout Arizona. some residents owing more than three  Des and while renters were protected by an The vast majority of our residents are months rent. of fo Constantly reinforce hand washing, social evictionMOST moratorium, property owners working with us, and we are working “To most Arizonans, that is an IMPORTANTLY distancing and staying home when ill had no such protections. with them doing everything we can to insurmountable amount of debt and “The economic impact of COVID-19 help them get current.” they need help,” DeHoag said. “The last has been felt by the multifamily Housing is a basic need for people, thing we want to do is evict anyone. industry from increased vacancy and so when businesses shut down Our business is providing housing.” delinquency to increased operational and jobs were lost by the millions Nicole Wray, managing director of costs,” said Crystal DeHoag, president nationwide, states and municipalities real estate services for the Western US of Bella Investment Group, which took measures to ensure people were and Desert region for Greystar, one of owns several multifamily properties able to remain in their homes or the largest multifamily companies in in northern Arizona. “Initially, when apartments. In Arizona, Gov. Doug the United States, said her company the universities went online for Ducey implemented the eviction was able stay ahead of many rent the remainder of the semester and moratorium on March 24 that was to collection issues by maintaining businesses closed, we had widespread expire in August. Ducey then extended communication with residents and skips at all of our communities that moratorium to October 31. providing payment options. 34 | September-October 2020

ENTIALS AMA

ll look different for every organization. ? And how can employers make sure they are of the same challenges, owners and occupiers help navigate the return to the workplace:

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& INCREASE CLEANING

Decreasing density, schedule Recognize the fear in returning, REDUCE TOUCH POINTS building reception, shipping/receiving, Touchless ingress/egress, clean  Mitigate anxiety of returning to  Consider phasing based on roles and elevators, visitor policies desk policy, food plan, cleaning management, patterns communicate transparently, listen/ thecworkplace through change& INCREASE CLEANING priorities, including temp workers if Ensure safety of all workersoffice traffi common areas  Control the entry points including management planning and needed survey regularly Ready Mechanical, HVAC, Fire/Life deliveries communications Touchless ingress/egress, clean – Alternating work weeks in the office  Maintain enhanced cleaning and Safety systems  Consider phasing based on roles and disinfecting practices  Reconfigure gathering and lobby  Consider why people can benefit and WFH desk policy, food plan, cleaning Clean with products from approved areas for social distancing from returning to work  Supply disinfectants near on each  Ensuretimes leadership alignment onor repriorities, including temp workers if – Staggered arrival/departure lists from governing authorities desk or work area, particularly those common areas  Install plexiglass shields as – Productivity from proximity to entry – Enable teams to negotiate their Ensureneeded compliance with owner/ that are shared appropriate colleagues; socialization; amenities; own ‘in-office’ schedules Landlord requirements policies and work tools & resources  Maintain  Remove food/beverages – consider enhanced cleaning and  Clearly communicate building  to Establish communication Alternating work in the office  Introduce planning support socialtwo-way Engage–vendors in back-to-work plan weeks restocking with single-serving items protocols through signage and floor  Consider why people can benefit distancing/ 6 Feet Office Protocols disinfecting practices markings from continued WFH and WFH Review and prepare plans regarding  Enable DIY cleaning through hand  Ensure a trusting and transparent  Monitor space usage changes to cleaning scope or any sanitizer, disinfectant wipes, and other  Consider temperature screening – Health and family priorities;  Supply disinfectants near or on each additional services such products Specify seating assignments for culture – Staggered arrival/departure timestime; technology reduced commute  Provide sanitizer, wipes, PPE as employees to ensure staff adheres to enables WFH without loss of Ensure all inspections, remediations, desk or work area, particularly those  Sanitize all workspace areas, including appropriate minimum work distances productivity repairs – andEnable communications are to negotiate office, conference room, breakroom,  Clearly set employee expectations, teams their that shared are Disable touchscreens complete before reopening cafeteria, restroom, and other areas  Redesign spaces, alternate desk/chair  Develop and execute detailed plan on with an emphasis making own ‘in-office’ schedules prior on to opening. Ensurethem appliances/ use, etc., for social distancing how to return to work equipment are in working order  Remove food/beverages – consider  Add panels betweenfeel deskssecure including Advise on alternate means of safe  Introduce planning to support social  Limit in person meetings restocking with single-serving items height adjustable panels for sit/stand commuting desks – Return to work/WFH policies and  Consider low-touch or no-touch distancing/ 6 Feet Offi ce Protocols  Prepare and post reminders of social switches, doors, drawers and other  Enable DIY cleaning through hand  Enforce stringent cleaning protocols distancing and cleaning protocols incentives fittings for shared spaces  Monitor space usage sanitizer, disinfectant wipes, and other  Remove high-touch shared tools  Reduce capacity of spaces—e.g., – Guest and visitor policies such products such as whiteboard markers, remote remove some chairs from large  Specify seating assignments for controls, etc. conference rooms – Employee travel policies employees to ensure staff adheres to  Sanitize all workspace areas, including  Institute a clean desk policy  Prohibit shared use of small rooms minimum work distances and convert them to single-occupant Create secured, designated storage office, conference room, breakroom, – HR policiesregarding illness, use only areas for personal items cafeteria, restroom, and other areas etc.  Redesign spaces, alternate desk/chair  Designate and signpostsupport the direction forcaregivers, Designate a specifi c enclosed room of foot-traffic in main circulation paths Constantly reinforce hand washing, social prior to opening. Ensure appliances/ to isolate any person identifying use, IMPORTANTLY etc., for social distancing MOST themselves with symptoms distancing and staying home when ill equipment are in working order  Add panels between desks including  Limit in person meetings height adjustable panels for sit/stand desks  Consider low-touch or no-touch switches, doors, drawers and other  Enforce stringent cleaning protocols fittings for shared spaces

Cleaning plans, pre-return inspections, HVAC & mechanicals checks

alth checks, g/receiving,

PREPARE THE CREATE A SOCIAL WORKFORCE DISTANCING PLAN PREPARE THE BUILDING

reening

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 Remove high-touch shared tools such as whiteboard markers, remote controls, etc.

 Prohibit shared use of small rooms and convert them to single-occupant use only

 Institute a clean desk policy

 Designate and signpost the direction of foot-traffic in main circulation paths

 Designate a specific enclosed room to isolate any person identifying themselves with symptoms

“Greystar took a very sympathetic approach to our residents who were negatively impacted by the pandemic and allowed up to six month payment plans and no late fees for the first five months,” Wray said. “We found this policy to be very effective as we have experienced less than 1 percent, out of over 35,000 units, of residents who have not communicated with us and/or 36 | September-October 2020

 Create secured, designated storage areas for personal items

made no payments at all.” “Our delinquency outside of payment plans is hovering around 5.5 percent, which is quite healthy considering the economic strain on people and our payment plan debt has already been paid at almost 90 percent,” Wray added. “Both signals that the multihousing industry has fared far better than many media outlets have conveyed.”

(Source: Cushman & Wakefield)

The major issues with the eviction moratorium in the industry is the lack of effort by government officials to allocate available rental relief funds. The Arizona legislature has appropriated $50 million for rental assistance for the governor to use and the Arizona Department of Housing has identified an additional $5 million that could go to rental relief. However,

 Ensure lea entry

 Establish t

 Ensure a t culture

 Clearly set with an em feel secure

– Return t incentive

– Guest an

– Employe

– HR polic support

Scotia Group Management would like to thank all of our hard working employees for your dedication to our properties and our industry during these trying times.

scotiagroupmanagement.com 520-323-6515

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AMA despite the availability of $120 million to $130 million in rental relief funds statewide, less than $2 million has been allocated. “The state has money set aside but they are slow to release funds, to those that need it most,” said DeHoag. “Unfortunately, the unintended result of the eviction moratorium has been the apparent loss of any sense of urgency to release these funds to our residents. I am grateful to the Arizona Multihousing Association for all the help and guidance they have given us in the last five months; they have provided leadership as we navigated a legal landscape that was changing at times daily.” AMA executive director Courtney LeVinus has worked tirelessly during the pandemic to get more assistance deployed to renters who need it. In an interview on Arizona PBS program, Arizona Horizon, LeVinus detailed ways in which the process can be streamlined for renters who seek out the rental assistance funds.

“From the state perspective, the Arizona Department of Housing program, there are too many qualifications for the residents,” LeVinus said. “We have suggested time and again that they mirror the City of Phoenix program which just requires proof of residency and a copy of the lease and an understanding of the COVID-19 related situation to get some rental assistance. The Department of Housing program still has additional qualifications that the resident has to fulfill, and they need to pay at least 30 percent of their income. So, it’s that income verification that really slows the process down.” LeVinus said that of the 920,000 rental units statewide, roughly half are owned by small investors. These owners may have two or three rental units, making them more vulnerable to foreclosure if their renters aren’t paying rent and they cannot be evicted until November. “It might be their retirement plan, or it might be their only investment for

Tribute Awards Winners 2020 The Arizona Multihousing Association announced its annual Tribute Award Winners for 2020 via a virtual award ceremony, which streamed live on Aug. 21. To see the awards presentation video, visit azmultihousing.org.

Housekeeper Roxanne Redfield, Greystar Real Estate Partners Service Technician Ildefonso Alejandro Salinas Duran, Camden Property Trust Service Supervisor (1-199 Units) James Brancatelli, Quarterpenny Management Service Supervisor (200+ Units) Carlos Silva, PEM Real Estate Group Leasing Consultant Isaac Davis, Bella Investment Group, LLC Assistant Manager Kimberly Frampton, BH Management Services Community Manager (1-199 Units) Staci Zimmerman, Baron Property Services, LLC Community Manager (200+ Units) Nicole Woodley, Baron Property Services, LLC Property Supervisor Sandra Giambanco, MEB Management Services Regional Service Supervisor Troy Carnicle, BH Management Services Best Team & Community prior 2001 Denim Scottsdale, Greystar Real Estate Partners, LLC Best Team & Community 2001-2011 Encantada Queen Creek, HSL Asset Management, LLC Best Team & Community 2012-2019 7160 Optima Kierland, Optima Realty Inc. 38 | September-October 2020

their retirement,” LeVinus said of those small, ‘mom and pop’ rental owners. “Those are some of the owners that are most struggling. They may have one or two rentals and one of them isn’t paying and hasn’t paid for the last five months. There’s a high likelihood that rental property will go into foreclosure.” “In our industry, nobody wants to see people evicted, especially during a pandemic. That’s why it’s so critical that the resources get deployed, but the rental owners have to be protected too. If we’re going to be expected to all of the sudden provide public housing, it needs to be with resources. The income needs to be made up some other way, and that’s not what we’re seeing. We’re not asking restaurants to provide free meals. We’re not asking grocery stores to provide free food, or gas stations to provide free gas, but somehow we’re asking rental housing owners to provide free housing without any assistance. It’s not sustainable and we can’t continue down this path.”

Community Manager OTV Hilda Lopez, Shelton Residential Maintenance Supervisor OTV Jose Mills, Quarterpenny Management Best Team & Community OTV The Colony, Greystar Real Estate Partners, LLC Volunteer of the Year – Tucson Kimberly Barrow, MEB Management Services Volunteer of the Year – Statewide Michelle Sinclair, Evergreen Devco, Inc. Industry Partner – Statewide Mark Zinman, Zona Law Group Industry Partner – Tucson Natalie Evans, Apartments.com Corporate Employee of the Year Luis Verger, Shelton Residential Arizona Executive of the Year Lesley Brice, MC Residential Developers Award for Best Community Design (High Rise Style) The Link PHX, CA Ventures Developers Award for Best Community Design (Garden Style) Riverwalk, MC Residential Developers Award for Best Community Design (Mid/Low Rise Style) Arista at Ocotillo, P.B. Bell Companies Renovated Community of the Year The Wexler, Chamberlin & Associates Affordable Community of the Year Downtown Motor, MEB Management Services In Appreciation of Your Title Sponsorship 28 Years Cox Communications

The total annual economic impact within Arizonaâ&#x20AC;&#x2122;s apartment industry is the equivalent to the state playing host to more than 10 Super Bowls each year.

NUMBERS TELL THE STORY: $3.8 billion in economic output annually $699 million in wages annually 930,000 rental home residents 131,000 jobs supported 170,000 new apartment homes needed by 2030 $1 million+ raised by Arizona Multihousing Association to

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MOVING FORWARD

he long, hot summer of 2020 just added to the misery index in Arizona. The state has managed to still move forward with many new developments, and the pace of building has remained steady. There are signs all around the Phoenix market that this COVID-19 induced economic downturn will be a short-lived one when compared to what occurred in Arizona just over ten years ago. Leading that recovery will likely be the industrial and office markets. As companies return to normal operations in the post-COVID era, there are indications that more space will be needed for office workers, not less, which could create opportunities for office developers. Industrial developers never really stopped launching new projects, even in the midst of a historic pandemic, and there are still companies actively looking to move and build new operations centers in Arizona. AZRE Magazine posed questions to a roundtable of NAIOP Arizona members, looking for their thoughts on the market, how it will look coming out of the pandemic and where the

44 | September-October 2020

opportunities are for those ready to take the lead in our economic recovery. DF: Derek Flottum, Vice President of Development, Irgens JWe: Jim Wentworth, Principal, Wentworth Property Company JWo: Jeremy Womack, Senior Managing Director, Capital Markets, JLL KM: Kate Morris, Senior Vice President, Healthcare Services, Transwestern DP: Darren Pitts, Executive Vice President, Velocity Retail Group, LLC CR: Candace Rosauro, Director of Business Development, Layton Construction AZRE: What do you think the economic recovery will look like, and how long will it take? What sectors do you expect to recover first, and which will lag? DP: We expect the remainder of 2020 to have continued overall uncertainty. We are still in the thick of COVID-19, civil unrest, and an election year â&#x20AC;&#x201D; which all mix together to create a level of uncertainty for

many corporate decision-makers. In 2021, we are anticipating more stability. This will be fueled by the hope that a vaccine for the virus gets closer to the finish line. As far as our commercial sectors are concerned, industrial and multi-family sectors, which have experienced very little slow down during the COVID shut-down will remain the strongest coming into 2021. Single-family residential is also maintaining a strong performance in Arizona as the lack of resale inventory is driving new home sales even higher. Through April, new housing permits were up 24 percent on a year-overyear basis. Office will be looking for innovation to help pave the way as office occupiers find their business models shifting with many employees working remote part time and full time. For retailers, we will continue to see more consolidations of concepts, as well as opportunities which focus on drive-thru models to expand. JWo: The U.S. economic recovery will remain disjointed in nature with starts and stops until a meaningful COVID-19 vaccine and therapeutics are

DF - Derek Flottum, Vice President of Development, Irgens

KM - Kate Morris, Senior Vice President, Healthcare Services, Transwestern

developed and distributed widely. Unfortunately, there will continue to be market winners and losers along the way. Medical, healthcare, food and beverage, re-shored manufacturing, eCommerce, 3pl’s and other “essential” industries will sustain or flourish while non-business travel, crowd-centric public activities and related events will remain challenged. KM: Once a vaccine is in place, we expect pent up demand for health services and surgeries to keep providers busy until the backlog is caught up, estimated at 9–12 months. CR: I think the recovery speed will be in phases, but will also depend on how long the shutdown lasts. From a construction standpoint, recovery will lag similar to what happened after the Great Recession. The market segments we expect to recover more quickly include data centers, due to the increase of employees working from home, as well as distribution centers such as “last-mile” facilities. The sectors that will lag are those that are dependent on tourism, such as hospitality, retail, and entertainment. JWe: I think industrial, self-storage and medical will be more recession resistant this downturn. Office and retail will lag by a year or more due to the amount of vacancy and timeline for normal behavior to recover. Unfortunately, a vaccine will dictate the timeline for recovery and when people will feel comfortable getting back to normal. I think the recovery will take time with starts and stops as we have seen

DP - Darren Pitts, Executive Vice President, Velocity Retail Group, LLC

CR - Candace Rosauro, Director of Business Development, Layton Construction

with the COVID response. Despite our current trends related to the virus, I believe over the long run the United States will remain the most attractive international location to invest capital. Nationally, I think there will be geographic winners and losers. Markets that are conducive to lower density, affordable living and quality of life will experience an expansion following the inflow of workforce capital, while some of the more traditional dense urban markets will experience a contraction. The US economy is largely built on consumers. And it is consumers who have the most immediate impact on the retail and hospitality markets. These sectors have carried a lot of the burden over the past six months and will take time to recover. I think other sectors that provide goods and services to those markets will lag but still experience the effect of that slowdown. If consumers are not pushing dollars though the economy because of job loss, fear of job loss, or inflation, it could have a precipitous effect on the timing and flow of our recovery. AZRE: How would you compare our Metro Phoenix commercial real estate market to other major markets throughout the nation, and specifically the Western U.S.? JWe: Phoenix should perform better than many of the dense gateway markets in the Western U.S. Unlike most prior cycles, we have not overbuilt office or industrial product. Phoenix was much slower to rebound from the last recession than many of the other

JW - Jim Wentworth, JWo - Jeremy Womack, Senior Principal, Wentworth Managing Director, Property Company Capital Markets, JLL

major markets and we have done a good job keeping inventory in check. We have also greatly diversified our economy and have not been as reliant on homebuilding and real estate as an economic driver. DF: No metro market has been spared the effect of this event, however long term I absolutely believe in Phoenix. Phoenix’s modern infrastructure, educated work force, business friendly environment and affordable cost of living makes it an ideal choice for corporate expansion or relocation. Phoenix has added thousands of jobs during this cycle in financial/ insurance, healthcare and biomedical, e-commerce and distribution and continues to be a leader in the semiconductor and advanced manufacturing fields. This has created a more dynamic economic base than we have had in the past and leaves us well positioned to grow in the future. JWo: The metro Phoenix market is fortunate to have robust population growth, a pro-employment political environment and a strategic location to the ports of Los Angeles, Long Beach and Mexico. Additionally, Phoenix offers a high quality of living to lowand middle-income families, which is something more difficult to achieve in the coastal markets. DP: Despite the effects of COVID-19, Phoenix is one of the strongest growth markets in the nation and remains considerably less expensive compared to the coastal markets of Seattle, Portland, San Francisco, Los Angeles and San Diego and inland markets of Las Vegas 45

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and Denver. In comparison, the market in Phoenix on both the residential and commercial side remains very affordable. This coupled with a strong labor pool make Phoenix an attractive choice for corporate expansions or relocations. The Phoenix area offers a desirable lifestyle and affordability. AZRE: What are the biggest opportunities that exist in the Phoenix market over the next three to five years? JWo: Phoenix has a tremendous opportunity to become a major western U.S. hub for technology, manufacturing and related global supply chain logistics due to its deep, qualified, affordable workforce; reasonably priced and reliable energy; and direct access to Mexico and the ports of Los Angeles and Long Beach. With an influx of new residents looking to reside in a lower tax, pro-business state, we see an opportunity for many sectors to grow. Arizona provides a high quality of life which attracts people for its climate, recreational opportunities, low taxes and employment opportunities. With population growth comes the need for housing, essential service real estate and new and upgraded infrastructure. KM: We expect to see Phoenix’s growth continuing over the next 3-5 years. Because the Valley is already stretched for medical services, we anticipate continued strategic placement of new services and medical providers during this period. DP: We anticipate strong retail shopping cores to get stronger, such as Kierland, Desert Ridge, Fashion Square, San Tan, Chandler Fashion and the Biltmore corridor. Humans are social by nature and despite COVID we expect these centers to perform well and fill any large box vacancies that may occur. Look for more mixeduse redevelopments of defunct retail centers. A great example is Park Central 46 | September-October 2020

Mall, which transformed with higher education, office, medical and retail space within the central Phoenix location. Metrocenter and Fiesta Mall, though several years away, will be the ones to watch over the next 36 – 48 months. The grocery sector continues to get more efficient as value and low price leaders disrupt the market. With Aldi entering the market near the end of 2020 we see continued downward pressure on prices in this highly competitive arena, as all of the players will compete for their market share. CR: The Phoenix market will benefit from the manufacturing companies seeking to reshore their operations. We continue to attract new residents, thus increasing our workforce, and have been successful in promoting our business-friendly environment. Our manufacturing footprint will continue to grow as more data centers and highly-technical manufacturing industries, such as semiconductor and life sciences, expand in the Valley. DF: I think Phoenix has become a financial services/insurance, biomed, and technological manufacturing hub and this will continue. Both State and City government has been committed

to being open to new technology and innovation and has done a good job in promoting its business-friendly environment through its political leadership, economic development departments, and wonderful metro organizations like GPEC. JWe: I expect the office market to offer the biggest discount and value add opportunity. Some current owners don’t have the right kind of debt in place to handle the disruption we are seeing with COVID. There will be higher than normal vacancy in both suburban and urban submarkets. There will be opportunity to buy and then push occupancy once social behavior starts to return to normal. AZRE: How has the increase in lastmile delivery impacted how investors and developers view industrial opportunities? Is the metro Phoenix market positioned to take advantage of these changes? CR: One of the most important aspects to last-mile facilities is the requirement for parking and delivery van queuing. Site coverage has always been one of the key factors for industrial developers. The emerging

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last mile model has very little building coverage and enormous amounts of surface parking / van queuing. Developers should always be studying how truck courts and trailer parking can be converted into vehicle parking. JWo: Last-mile delivery service is the next step in the comprehensive multichannel eCommerce paradigm. An industry that was once growing at 12 percent to 15 percent annually is expected to double in 2020. Phoenix has a significant amount of older, infill, inefficient industrial building stock that will offer unique, urban lastmile solutions. Amazonâ&#x20AC;&#x2122;s large metro Phoenix footprint validates the dynamic nature of this type of commerce. AZRE: How have the needs of industrial occupiers changed with the acceleration of the e-commerce trend? JWo: Many of todayâ&#x20AC;&#x2122;s modern industrial occupiers require more energy for climate control (both HR recruitment and products) as well as equipment and IT within their facilities. Additionally, car parking, truck trailer drops and building clear heights have all increased. Site security is also paramount for employers who mandate technology propriety as well as easy access to interstate and major highway systems. CR: The supply chain model has changed drastically in the last few years as e-commerce has become 48 | September-October 2020

the virtual brick and mortar stores. Industrial occupiers are requiring buildings and sites that allow for efficient product movement, where the design of new buildings are larger in size and height. Industrial buildings have evolved by growing taller to allow mezzanines throughout the building, becoming more technologically advanced to break down the bulk packaging, and more user-friendly with higher occupancy levels to provide same-day or two-day delivery. AZRE: What is the current state of the retail market in metro Phoenix? What changes do you expect to see for retail over the next few years? DP: The vacancy rate has risen only slightly from 7.5 percent at the second quarter 2020, compared to 7.3 percent at year-end 2019. Absorption is negative for the first time since 2011, with less than 153,000 square feet. COVID has had an impact on retailers who already were struggling with high debt, or a large number of lower performing stores. They found that the quick shut down caused irreparable damage, and some may not reopen. On the other spectrum some retailers have used COVID as a pretext to enter Chapter 11 reorganization without the normal stigma attached. They have been renegotiating leases and eliminating non-performing stores all without taking a hit to their brand

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identity. The benefit of this is that the retail market should be stronger and more efficient than it has been in the last decade. We fully expect to get to the other side of this with better logistics, technology, delivery platforms and healthier retailers. AZRE: In light of social distancing measures, what are the prospects for co-working over the next several years? JWo: Unsurprisingly, most new office deals are lease-expirationdriven transactions, as companies attempt to preserve cash and cut discretionary spending. Large occupiers have rapidly adopted agile space strategies. Although freelancers are more likely to shed coworking space as the COVID-19 outbreak stalls business, 67 percent of CRE decisionmakers are increasing workplace mobility programs and incorporating flexible space as a central element of their agile work strategies. After the initial wave of uncertainty has passed, some of the larger, wellcapitalized flexible space operators will

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Downtown Phoenix. There have been a significant number of projects in the past five years that secured credit tenancy because there was product to meet an immediate need. This needs to be balanced with the risk of fronting capital for an undetermined amount of time into a potentially changing economic cycle as you move through the construction process.

restart their expansion drive, picking up assets and market share from those unable to weather the storm. Market consolidation will yield a healthier marketplace, with strong flexible space operators remaining. At the same time, we will expect growth to shift from leases to fee-based management agreements, white-labeling or selfperform concepts by landlords. In a revived post-pandemic market where flexibility is high on the corporate agenda and the purpose of the office is centered around collaboration, flexible space should emerge stronger than ever and growth could quickly return to its impressive pre-COVID rates. AZRE: Is the Phoenix market still ripe for spec building? If so, where and what type of buildings? CR: Yes. Speculative industrial buildings will continue to be a part of the Phoenix market and all the surrounding markets. As the need for last mile distribution continues to increase, the need for speculative industrial buildings in every market in the Valley will continue to rise. The industrial market is not just about the 500K – 1M SF buildings. The market for smaller 150K – 300K SF buildings will need to fill the last mile demands of e-commerce. JWo: Over the next five to six years, 50 | September-October 2020

we will witness the Phoenix West Valley/Loop 303 submarket double or even triple in size from its current 15 million square feet, leveraging significant population growth, new Loop 202 extension and expanded Northern Parkway. The submarket offers operators 30 percent or more in cost savings while maintaining accessibility to Southern California’s ports and large population. KM: Speculative medical buildings are unheard of in the Phoenix market; we do not expect this to change. JWe: Definitely for industrial. We will have to wait and see what the office sublease market looks like and how long it takes to absorb that space. Spec office development will be much more selective in the next couple years. Once the tenants can start touring space again, Phoenix should continue to see large tenants expanding and relocating here from other markets and we could have a shortage of large blocks of space in no time. DF: I think certain submarkets can support spec building. Financing them is another question. Building along the transit infrastructure where you have seen consistent demand for a particular type of product is the safest for spec, for example distribution warehouses in the West Valley, large floorplate offices in the East Valley and class A office in North Tempe, North Scottsdale and

AZRE: Do you expect suburban office to regain appeal due to the COVID-19 pandemic? If so, for what reasons? KM: Healthcare companies had already been expanding their services to outlying areas. They want their patients to have easy access to their physicians, testing, surgery centers, etc. This trend will only accelerate as suburbs gain popularity. DF: I do. I think, in general, larger floorplates, fewer floors reducing the need for elevators and confined spaces, and absence of required mass transit are all conducive to a post COVID market. People that want to have the ability to distance from others can do so in that setting. I think people will want to spend less time commuting, work in their own general neighborhoods and can spend more time with friends/family. I think you will see more community clusters where people can meet all their needs without spending considerable time in their cars. JWe: Yes, though I’m not sure that it ever lost its appeal. We have seen strong absorption in suburban markets like Chandler, Tempe and Scottsdale in recent years. The desire to be in the suburban markets will continue as large tenants relocate to Phoenix from more dense markets. Large tenants will be attracted to these markets for many of the same reasons such as proximity to labor and cost. They will also be attracted to large floor plates that allow them efficiency and flexibility in layout.

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STAYING CONNECTED NAIOP’s Developing Leaders program adapts amid pandemic By ALYSSA TUFTS

etworking and mentorship have perhaps never been more important in these challenging times. Making connections and having an industry mentor who can offer guidance and advice can make all the difference in a positive outlook given the state of the job market. However, NAIOP’s Developing Leaders (DL) program has adapted and is providing their members with virtual offerings to stay connected during this time. Chelsea Porter, treasurer, NAIOP Developing Leaders and director of marketing, Renaissance Companies, said the DL steering committee came up with ideas to engage the DLs that depend on their events each year since they can’t gather due to the pandemic. “We challenged the programs and education group to discuss some ideas of how we could combine all of these processes to still engage our group and that resulted in the Virtual Fireside Chats,” Porter said. Stirling Pascal, associate at Lee & Associates Arizona, worked with the DL’s to launch the Virtual Fireside Chat Series in July. This program is a digital discussion for DLs to meet in an interactive format on Zoom with experienced professionals to get career advice and exchange ideas. Each chat features two Market Leaders and is limited to 15 DLs. So far, the Virtual Fireside Chats have focused on office, industrial and retail segments. “We’re covering topics including advice for a DL going through a downturn in the market,” Porter said. “We also talked about work-life balance, that’s something a lot of people our

52 | September-October 2020

Micheal Strittmatter

Chelsea Porter

age tend to struggle with potentially launching their career as a whole.” Porter said the Chat’s goals are to engage DLs and support them through this time. “We understand that during this time a lot of jobs have been cut and a lot of the DLs could lose their job if they haven’t already so we’re also brainstorming tips to get them in touch with people so they’re able to find a new job or what can they do during this time when they may not have one, to prepare themselves when the market starts to come back to be on the top of the list for someone to bring back onto a team.” Thomas Maynard, vice president of business development at Greater Phoenix Economic Council, has been coordinating the DL Ask NAIOP series, where DLs discuss topics with seasoned professionals in a quick video that covers work life balance, family dynamics at work, job searching and networking. In addition to engaging members in professional development and career

Jenna Harrison guidance, Porter said the DL Steering Committee and committee heads are striving to be positive by reaching out to their membership by email or a phone call to check in. “We’re asking them how they’re doing; ‘Are you okay? What’s going on? Do you need help or need us to put you in touch with anyone to help you?’ Or hopefully they’re doing great; if anything it’s more of a fun chat like, ‘Hey, want to have a Zoom call and a White Claw and touch base?’ because obviously the mental side of COVID-19 is something that everyone is very conscious of too.” Porter said one of the goals of the DL program is to connect young people with top leaders in the industry and hopefully foster potential mentors who can guide them. “Another goal is to educate especially during this time there may be those who are out of a job or who maybe are still in their job,” Porter said.

NAIOP ENGAGING EVENTS: NAIOP's annual golf tournament held on November 7, 2019 at Talking Stick Golf Club in Scottsdale.

One way to do that was by taking some of NAIOP’s courses that were offered for free. “In your free time, you could be educating yourself in specific topics that you may not be strong in; so education is a huge way to get yourself ahead or to build a resume so you are at the top of the list when we do come out of this and there’s an opportunity to get a new job,” Porter said. Micheal Strittmatter, NAIOP Developing Leaders Steering Committee chair and first vice president, CBRE, said the Developing Leaders Steering Committee found out a way to provide value to the membership without having in-person events. “Our four pillars for our events are education, networking, fun and giving back to the community — so we’re trying to cover all those things in a virtual world,” Strittmatter said. Part of that includes a virtual back to school drive via Amazon in coordination with St. Vincent de Paul; the Virtual Fireside Chat series and the NAIOP Ask DL series. By adapting how they’re providing value to DLs amid the pandemic, Strittmatter thinks working from home, telecommuting, and technologies including video conferencing will have a role moving forward. “I can’t wait to get back to our in person events, however, we can still have virtual events, programs, interviews and chats. It’s a time commitment to go to work and our in 54 | September-October 2020

person events, however, I think moving forward we’ll have the best of both worlds and offer virtual and in person events and programming.” Strittmatter said the networking aspect of the DL program is very beneficial. “I think something that’s pretty unique in the commercial real estate industry is how willing a lot of the veterans and senior leaders and experts are willing to give their time in a mentorship role to come to these events and interact with the younger generation and the people that have just gotten into the industry,” Strittmatter said. “That’s why I am so committed to the DLs because when I first joined and started working at CBRE and joined the NAIOP DLs, it was a fantastic way for me to meet people in the industry very quickly at events and use that as a springboard to spend more time with them and create some relationships, but there’s no way I would have been able to meet so many senior leaders as quickly without NAIOP.” The Developing Leaders also have a philanthropy committee that facilitates quarterly volunteer opportunities with St. Vincent de Paul. Jenna Harrison, NAIOP Developing Leaders Philanthropy chair and associate with Harrison Properties, said they “wanted to provide a way for younger people within the real estate community to get involved in the community and get to know one another.”

Harrison said they gravitated towards St. Vincent de Paul because it provides great volunteer opportunities through pizza making, packing lunches or working in the community garden. “It’s a great way to give back with a social aspect as well so everyone can network and get to know each other. It also takes the pressure off of going to a strictly networking event, I think that can be pretty nerve wracking if you’re not already familiar with people there so it’s a good way to make everybody feel comfortable.” Harrison said it’s beneficial for younger people to get involved in the community with charitable organizations early on because “hopefully some will be living in the Valley for a long time and will continue to support whatever organizations we’re working with, so I hope we’re starting those lifelong habits.” “A goal of these programs is simply to connect with each other,” Porter said. “Developing Leaders has developed people who through NAIOP support become some of the top leaders to this day, so we know when we get involved with the programs, DLs and NAIOP as a whole, we are amongst peers we will be working with for years to come. So it’s not only connecting to the larger group and who are leaders in the industry, but it’s also connecting with each other and helping support each other for years to come.”

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GREAT UNKNOWN Pandemic’s effect on office market slowly coming into focus By STEVE BURKS

here was a general feeling of prosperity and buoyancy in the Phoenix office market a long, long time ago (circa February 2020), but those days are now only fond memories. What has occurred in the proceeding months in the office sector in Arizona and across the United States has profoundly changed how office spaces are utilized and sent the industry into unknown territory. “The (COVID-19) pandemic has presented new and incredible challenges for millions of workers around the globe,” said NAIOP Arizona member Rory Carder, studio director and workplace leader for Gensler. “In just a matter of weeks, the workforce at large has quickly navigated the sudden shift to remote working, while maintaining the relationship between

Rory Carder

56 | September-October 2020

Jeff Emmons

business continuity and employee well-being.” For office users, the initial effects of the pandemic created a new reality and new ways of working. The pandemic forced an overwhelming majority of workers to do their jobs from home, and currently, companies are gradually and carefully welcoming their staff back to the office as the spread of COVID-19 slows. NAIOP Arizona members have utilized new tools to continue showing properties to potential tenants, and office designers, tenants and landlords are contemplating just how long this new reality will last into the future. Carder said that her company had some insight into what was coming down the road in the early part of 2020 as the Coronavirus spread through Asia

Nate Franke

Michael Hsiung

and Europe. Carder said Gensler used the experience of their international colleagues to make the move to work from home beginning late March. NAIOP Arizona member Jeff Emmons also sent everyone home from his Immedia Integrated Technologies offices in late March, but that wasn’t the final move. “We brought everyone back and at the end of June we had someone contract COVID and we sent everyone back home and told them we believed it would be sometime next year before they returned,” said Emmons, who is the founder and CEO of Immedia. “Since our business focuses on audio visual communication tools, this hasn’t been a huge impact for us.” “Approximately 75 percent of our offices nationwide are still

Eric Whitehurst

working 100 percent remotely, said Eric Whitehurst, an associate at Kimley-Horn, which had everyone in its Arizona offices working from home in March. “The offices that have been granted in-person access have all been re-opened on a reduced capacity basis. The reduction factor is being calculated individually based on a per square foot occupancy target along with staff’s personal appetites to return. Masks and appropriate distancing are mandatory in all offices that have been reopened.”

As more workers are returning to the office, they are returning to a different environment. “There is a prevalence of sanitizers and signage,” said Michael Hsiung, owner of Valley-based development firm Phoenix Rising Investments. “There’s an awareness of physical distance between people and an extensive use of flexible schedules and attempting to stagger schedules to ensure a healthy amount of physical distance between people.” Nate Franke, senior manager of

real estate development at The Opus Group, said his company had divided staff into two teams that rotate weeks in the office, with everyone working remotely on Fridays to ensure a threeday window of no one being in the office. Other changes in office protocols include no guests allowed in the office, no handshakes or other forms of contact greeting, health screening protocols and daily disinfecting of the office. “All associates situated in cubes have been moved to private offices as much as

NAIOP possible,” added Franke. “And people are encouraged to work from home even when they are allowed back into the office.” Carder said that the biggest challenge is that there is no single approach that works for everyone. She said that Gensler has helped formulate some methodologies that can help companies in their quest to make the office safer for the employees. Those methods include rethinking density to prioritize physical distancing, planning phased scenarios for returning to work, reconfiguring flex spaces and free address spaces, introducing shift work, screening for admittance to the office, and of course, enforcing cleaning regimens to both support services and employees. While the changes and new policies in place have helped allow more people to return to the office, it is unclear what the longer-term ramifications of the pandemic will be on the office market. The market entered the pandemic in strong shape, with positive net absorption in 32 straight quarters, including Q1 of 2020, which included the early stages of the COVID-19 pandemic. Rental rates were increasing and construction was (and is) very robust, with more than 3.3 million square feet under construction. The second quarter of 2020 was the first negative absorption quarter in several years in the Phoenix market, which prompted some fears of a major downward spiral. “I think we are going to see a slight decrease in demand, but I believe the Phoenix market won’t feel the pinch because of the number of “out of state” companies that are considering relocating to Arizona,” said Emmons. Those words appear to fall in line with industry forecasts. According to the NAIOP 2020 Second Quarter Office Space Demand Forecast, quarterly net absorption is expected to decrease rapidly through the end of 2020. The NAIOP forecast predicts a turnaround occurring in early 2021, led by markets like Phoenix, and quarterly net absorptions will rebound into the positive side of the ledger in Q3 of 2021. The report states, “Workers across multiple industries are staying home, and it is unclear how or when 58 | September-October 2020

they will return to their workplaces. Due to the turmoil in the national economy, rising unemployment and continued uncertainty about future work arrangements, the U.S. office market absorption is forecast to decline into negative territory through the second quarter of 2021.” “I believe that office space demand over the medium to long term per company will continue to be consistent,” said Hsiung. “The bigger issue is the macroenomic conditions

“I think we are going to see a slight decrease in demand, but I believe the Phoenix market won’t feel the pinch because of the number of “out of state” companies that are considering relocating to Arizona.” –Jeff Emmons

that determines the number of companies that exist to drive the demand per company.” As the market moves forward, there are a number of unknown factors that will go into how far office absorption will rebound. Franke cited several elements that could play a role in just how much space companies will need in the future. He said there is potential for more square feet per employee to allow for distance between employees, and there may be a return to more

private offices vs. open space floor plans. He also noted that suburban office submarkets may benefit as companies potentially seek out less dense office buildings and spaces. “I believe some offices will offer staff the ability to permanently work remotely or do so on a part time basis now that the digital infrastructure has been established,” Whitehurst said. “The less emphasis on large scale gatherings moving forward may also be a factor for some. But ultimately, assuming the pandemic passes and a reliable vaccine is developed, things will eventually go back to something close to the ‘old normal’ similar to how the travel industry rebounded from 9/11. It may take a few years for some, but in my opinion, no force is stronger than human behavior/natural tendencies.” While how much space will be used in the future is unknown, it is certain that some of what goes into those spaces will be impacted by the pandemic. “No doubt the coronavirus has raised everyone’s level of awareness about the potential for their surroundings to serve as breeding grounds for communicable viruses or disease,” said Carder. “As a response to the pandemic, offices are implementing building-wide cleaning protocols, focusing on indoor air quality and access to fresh air where possible, incorporating biophilic design that mimics the outdoors to alleviate stress in the office, and rethinking floor plans.” “We have seen a few of our large clients cancel expansion plans because they believe that ‘work from home’ will be a big part of their future,” said Emmons. “I am convinced that work from home will be a big part of our everyone’s future, but I don’t believe that it is going to have the substantial impact that others believe. The majority of our clients want to have the staff back in the office. “We are already having conversations with clients about the need to outfit all rooms with video conferencing systems. It used to be 20 to 30 percent of rooms were outfitted with video conferencing capabilities and we are confident these numbers are going to climb to 90 to 100 percent in the future.”

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Pandemic proof Key factors play role in resiliency of Arizona’s industrial market By STEVE BURKS

he commercial real estate industry in Arizona entered 2020 with a full head of steam and ran head-on into a pandemic. While other market sectors were stopped in their tracks, the industrial sector proved to be very resilient. In fact, as recent announcements of major industrial developments will attest, the sector may have accelerated out of the COVID-19 curve. “Despite the challenges that COVID-19 has presented to our community, and the world for that matter, the Arizona industrial market has continued to be very healthy,” said Rusty Kennedy, secretary of the NAIOP Arizona Board of Directors and a senior Vice President with CBRE. “We continue to see development moving forward, new companies locating here and values and lease rates increasing. The work that our collective community has put in since the Great Recession has paid off and we anticipate continued growth moving forward.” According to the CBRE Q2 2020 Marketview report for Phoenix Industrial & Logistics, there is 13,096,560 square feet of industrial space underway in the Phoenix market, and those numbers do not reflect the activity just south of the Valley in Pinal County, which has the 720,000 square foot Lucid Motors production

60 | September-October 2020

plant close to completion and the 1 million square foot Nikola Motors manufacturing plant already underway. “The Arizona industrial market has shown tremendous resiliency through 2020 despite COVID, geopolitical upheaval, trade wars and other uncertainty,” said Saint Holdings president Jackob Andersen, whose company is the developer for both new vehicle production facilities in Pinal County. “The state enjoys robust demographic growth, reasonable, pro-employment legislation and strategic location proximate to both Mexico and Southern California ports. The recently enacted United StatesMexico-Canada Agreement (USMCA) is accretive to Arizona more than $25 billion export trade sector. The state has seen significant capital investment from high-tech manufacturers like Lucid Automotive, Nikola Trucking and others.” More recently, more industrial developments have been announced. The largest project in terms of dollars is the $12 billion Taiwan Semiconductor Manufacturing Company (TSMC) plant that the company announced was to be built in Arizona at a yet-tobe-determined site. Also announced, was the $1.5 billion Camelback 303, which is located along the Loop 303 in Glendale. Merit Partners, in a

joint venture with First Industrial Realty Trust Inc. and Diamond Realty Investments, is building a logistics park that has the potential to be 10 million square feet when it’s all filled in. And, less than a mile away and across the Loop 303, VanTrust Real Estate is expected to break ground on a 660,000 square foot speculative industrial facility in October. “Our fundamentals as an industrial market are strong with a growing workforce, affordable real estate and utility costs,” said Jeanine Jerkovic, economic development director for the City of Surprise, which has hundreds of acres of land ready for development along the Loop 303. “As we anticipate businesses diversifying away from China and nearshoring to Mexico, and given significant transportation corridor infrastructure investments statewide, West Valley communities like Surprise with capacity for growth are extraordinarily well-positioned.” The reasons for the continued success of the industrial market in Arizona are varied. Like Andersen noted, the state has continued to grow in population, which in turn creates the need for goods to be delivered into the state. Also, Arizona communities like Surprise, Glendale and Pinal County have worked aggressively to create pro-development policies that

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Jackob Andersen make building in these areas much more streamlined for companies. “The City of Surprise and its surrounding areas are still positioned for growth offering a pro-business climate and rail-served and highwayadjacent land with infrastructure and available workforce,” Jerkovic noted. “We’re a community that grew almost overnight, and for investors on the outside looking in, it takes time to piece together whether a fast-growth market is growing in quality or in just quantity. Arizona overall is a businessfriendly, right-to-work state situated to capture growth, and Surprise is a market hospitable to that growth.” The effects created by the pandemic have also played a role in the industrial market in Arizona. Early in the lockdown across the country, some goods became scarce and politicians and leaders saw that the country was heavily reliant on foreign goods. This realization forced companies to look at improving and expanding their supply chain network, and Arizona is a prime spot due to its proximity to the coastal ports and the population in Southern California. “The COVID-19 pandemic actually increased demand in the industrial sector as online shopping has drastically increased, companies are demanding higher levels of inventory and the overall shift to omni-channel supply chain which is the merging of industrial and retail approaches,” Kennedy said, noting that Phoenix is ideal for a company that wants to have the ability to distribute to over 30 million people in a single day’s truck haul. “We have actually seen an uptick in development over the past several months in the industrial sector. Remarkably, there have been very few developments sidelined due to COVID-19.” 62 | September-October 2020

Jeanine Jerkovic

Rusty Kennedy

“Companies recognize that they can produce and facilitate their goods and services at a 30 to 40 percent lower cost compared to California,” Andersen said. “Additionally, Arizona enjoys a competitive advantage over other western states spatially with our California and Mexico adjacencies. Additionally, our state leaders have eliminated more than 1300 unnecessary regulations which have enhanced operating efficiencies and employment.” The Southwest Valley, led by Goodyear, continues to be a hot market for industrial development, but the Northwest Valley (Glendale and Surprise) is beginning to gain a

We have actually seen an uptick in development over the past several months in the industrial sector. Remarkably, there have been very few developments sidelined due to COVID-19. lot of traction since the completion of the Loop 303. The Southeast Valley is also expanding its industrial footprint, just at a slightly slower pace than out in the western part of the Valley. Pinal County remains a wild card for industrial development in the state, with two huge draws in Nikola and Lucid that could attract many suppliers who need manufacturing or warehouse space near those plants. Kennedy pointed out that the wellestablished submarkets, such as the Sky Harbor Airport area and North Phoenix, are doing well in terms of vacancy and rental rates, but will

struggle to grow due to the lack of available land to build on. “The only challenges we see on the horizon are municipalities that do not have land available for industrial development,” Kennedy said. “This said, creative re-use of existing buildings or strategic acquisitions will continue to play a role in the health of those submarkets.” Jerkovic also noted how the pandemic has created more awareness of how critical healthcare is to developers when looking at where they should locate. “Access to healthcare facilities and other critical services will be increasingly important considerations for employer site selection and growth, and communities without immediate access to those will likely struggle,” Jerkovic said. “Suburban communities like Surprise and the West Valley Greater Phoenix area overall are positioned to be successful offering critical service accessibility in addition to workforce and transportation infrastructure.” What the pandemic put on full display for the Phoenix market was how critical diversification has been to the overall economic health of the region. In the past, with single-family housing playing such a large role in the Arizona economy, the effects of the pandemic would have been felt for several years. Now, the market appears ready to rebound quickly due to a wider base of industries creating jobs for the growing population base. “The region has always been blessed with a higher quality of living,” Andersen said. “Now, we have significant economic diversity from various industries and have become a key player in the North American and global supply chain ecosystem.”

NAIOP

NAIOP F member projects

rom the 10,000 square foot shared offices of DMB and DFE to the more than 1 million square foot Elwood Logistics Center, NAIOP Arizona members are the driving force behind some of the most impactful projects in the state. NAIOP members are continuing to deliver better looking, better functioning products to the market, and doing it at a time when efficiency and effectiveness have never been more important. The following projects are just a sampling of the work being done by NAIOP members in Arizona:

100 MILL

DEVELOPER: Hines/Cousins a Joint Venture

Partnership GENERAL CONTRACTOR: Gilbane Building

Company ARCHITECT: DAVIS LOCATION: 100 Mill Ave., Tempe SIZE: 315,515 SF of office space BROKERAGE FIRM: CBRE VALUE: $75 million START/COMPLETION: 2/2020-12/2021 SUBCONTRACTORS: HACI Mechanical

Contractors Inc.; Kovach Enclosure Systems, LLC; McCain Construction, LLC; RKS Plumbing & Mechanical; Suntec Concrete Inc.; Wilson Electric PROJECT DESCRIPTION: The 100 Mill office tower is an urban 17-story podium office building situated as the gateway to Tempe at the intersection of Mill Ave and Rio Salado Parkway. Overlooking Tempe Beach Park and the lake, the project makes a significant urban gesture at the street level by elevating the parking podium to create a pedestrian connection to downtown Tempe and light rail. The minimalist building design is functionally articulated as interlocked architectural forms clad in sleek glass curtain wall and metal fins, reinforcing its verticality and creating a bold, iconic statement on the Tempe Skyline. 64 | September-October 2020

17300 PERIMETER

DEVELOPER: Irgens GENERAL CONTRACTOR: RSG Builders ARCHITECT: Vertical Design Studios LOCATION: 17300 N. Perimeter Dr., Scottsdale SIZE: 48,514 SF BROKERAGE FIRM: Cushman & Wakefield VALUE: $20 million START/COMPLETION: Q2/2019-Q1/2020 SUBCONTRACTORS: TCK A/C Pinder Nation

Electric; Sun Valley Masonry PROJECT DESCRIPTION: Located just north of

TPC Scottsdale and Scottsdale Airport along Loop 101 with two on/off ramps, 17300 N. Perimeter Drive is easily accessible for both tenants and their clients. With its new modern design, spacious lobby, two balconies and views of the McDowell Mountains, the building offers amenities unique to the submarket.

AVONDALE 101 LOGISTICS

DEVELOPER: Seefried Industrial Properties, Inc. GENERAL CONTRACTOR: Wespac Construction,

Inc. ARCHITECT: DLR Group LOCATION: 10205 & 10209 W. Roosevelt St.,

Avondale SIZE: 652,146 SF VALUE: $27,189,175

START/COMPLETION: 7/2019-5/2020 SUBCONTRACTORS: Keystone Concrete; Suntec;

S&S Paving; Torrent; Beecroft; Abco West; Milam Glass; AME Landscaping; Integrated Masonry; Holly Steel; JJ Sprague; Diversified Roofing; Desert Structures; The Ultimate Plumber. PROJECT DESCRIPTION: 101 Logistics Park totals 652,146 SF in two buildings, the first 240,844 square feet and the second 411,302 square feet.

Together the project can accommodate multiple industrial users needing space from 40,000 to 411,302 square feet. Buildings feature 32- to 36-foot clear heights, generous full concrete truck courts and a total of 155 dock high doors, 12 grade level doors, 534 auto parking stalls and 107 trailer parking stalls on a secure fenced site. It will have eight points of ingress and egress and is minutes from the Interstate 10/Loop 101 stack.

NAIOP AXIS RAINTREE

DEVELOPER: Trammell Crow Company GENERAL CONTRACTOR: Willmeng Construction, Inc. ARCHITECT: RSP Architects LOCATION: 8501 E. Raintree Dr., Scottsdale SIZE: 175,000 SF BROKERAGE FIRM: CBRE Phoenix VALUE: $60 million START/COMPLETION: 11/2019-1/2021 PROJECT DESCRIPTION: Axis Raintree is a 175,000 square-foot,

three-story, Class A speculative office building with a structured garage, located on an 8.24-acre site in Scottsdale. The office building will feature 16’ deck-to-deck volume, expansive glazing, large efficient floorplates, several tenant amenity areas, structured parking, and an outstanding view of the McDowell Mountains. This speculative office space is the first, Class A building to be delivered in the Scottsdale Airpark submarket since the completion of Scottsdale Quarter Block M in 2015.

AZ 202 COMMERCE PARK-PHASE II

DEVELOPER: ViaWest Group GENERAL CONTRACTOR: Nitti Builders ARCHITECT: McCall & Associates LOCATION: 1600 S. Hamilton, Chandler SIZE: 2 buildings totaling 140,372 SF (65,892 SF & 74,480 SF) BROKERAGE FIRM: Andy Markham, Mike Haenel, & Phil Haenel from

Cushman & Wakefield VALUE: $8,600,000 START/COMPLETION: 9/2019-8/2020 SUBCONTRACTORS: Crown Electric; Adobe Drywall; Compton Plumbing

Services, LLC, TRI-MEGA Mechanical PROJECT DESCRIPTION: Two speculative general industrial buildings,

65,892 SF and 74,480 SF, divisible to 16k-35k SF, will feature 28’ clear heights, ESFR sprinklers, a mix of dock-high and grade doors, and a 180’ shared concrete gated truck court. The property is located just south of Willis Road east of Arizona Avenue and is less than half a mile from a fulldiamond interchange on Santan 202 Freeway. The project will complete Phase II of the AZ 202 Commerce Park.

BALL CORPORATION CANNING FACILITY

DEVELOPER: Merit Partners, Inc. GENERAL CONTRACTOR: Layton Construction

Company ARCHITECT: Butler Design Group LOCATION: 15101 W. Peoria Ave., Waddell SIZE: 500,000 SF VALUE: $69 million START/COMPLETION: 3/2020-1/2021 SUBCONTRACTORS: Suntec Concrete; AME

Electrical; TDIndustries; Ricor PROJECT DESCRIPTION: Ball Canning Facility broke

ground in late March and serves as the expansion building from Ball Corporation’s first canning facility. Their rapid growth in the market has yielded an additional need for more space to bottle and manufacture canned beverages for companies like Red Bull and Rauch Fruit Juices. 66 | September-October 2020

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NAIOP BLOCK 23 AT CITYSCAPE

DEVELOPER: RED Development, StreetLights Residential GENERAL CONTRACTOR: Whiting-Turner Contracting Co. ARCHITECT: Omniplan LOCATION: 125 E. Washington, Phoenix SIZE: 1,145,000 SF VALUE: $160 million START/COMPLETION: Q2/2017-Q2 2020 SUBCONTRACTORS: PK Associates; Suntec Concrete;

David Evans & Assoc.; Energy Systems Design (ESD); Graelic, LLC PROJECT DESCRIPTION: The mixed-use redevelopment project in Downtown Phoenix, Block 23 at CityScape, does not disappoint. The 1,145,000 SF development includes “The Ryan,” a 17-story high-rise residential tower with 332 units. The 9-story office/retail building includes Office, Retail/Restaurant, and the area’s first Fry's Food Store. This building provides retail space on the ground and first level; a parking structure is located on levels 2-4, and office space occupies levels 5 through 9. Parking is provided for 1200 vehicles. An outdoor amenity deck is located between the two buildings on the 5th level, on top of a portion of the parking structure.

BOEING/XPO

DEVELOPER: Merit Partners, Inc. GENERAL CONTRACTOR: Stevens-Leinweber Construction Inc. ARCHITECT: Winton Architects LOCATION: 16560 W. Wells Dr., Goodyear SIZE: 643,793 SF VALUE: $9 million START/COMPLETION: 1/2019-1/2020 (main building) and Q3/2020

(additional improvements) SUBCONTRACTORS: Brown & Sons Electrical; Ryan Mechanical;

Adobe Drywall PROJECT DESCRIPTION: The Boeing/XPO Global Services building has

industry-leading features including a mix of Class A office space, a high-density pick module and 40-feet clear height, fully air conditioned warehouse/distribution space with state-of-the-art racking/conveyors and mission-specific product handling equipment. Logistics are supported by 25 automated dock doors and a custom 25 feet by 20 feet overhead door with a 5-ton crane to manage Boeing’s oversized inventory. 68 | September-October 2020

CARVANA HQ3

DEVELOPER: Carvana GENERAL CONTRACTOR: Wespac Construction, Inc. ARCHITECT: RSP Architects LOCATION: 1930 W. Rio Salado Pkwy., Tempe SIZE : 48,954 SF START/COMPLETION: 1/2019-2/2020 SUBCONTRACTORS: Sierra Glass; Door Works; AZ Hardwood; Castaldi

Custom Millwork; Meyer Borgman Johnson; MSA Engineering Consultants; Forward Tilt; EdgeQuarters PROJECT DESCRIPTION: Calm, comfort, clarity and craft are the guiding principles that shape the distinctive identity for Carvana’s third headquarters. A quiet palette, light wood tones, soft patterns, and smooth transitions foster a sense of serenity. Natural materials, glass, and living trees give the space a transparent, hand-crafted feel.

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NAIOP CENTRAL ARIZONA COMMERCE PARK (CAZCP)

DEVELOPER: Saint Holdings GENERAL CONTRACTOR: Multiple ARCHITECT: Multiple LOCATION: SWC Peters Rd./Thornton Rd,,

Casa Grande SIZE: 820,000 SF BROKERAGE FIRM: JLL VALUE: ±$300 million START/COMPLETION: 2011-Ongoing PROJECT DESCRIPTION: Central Arizona

Commerce Park (CAZCP) in Casa Grande is a shovel-ready industrial park located in the heart of Casa Grande / Pinal County. The park is home to Lucid Motors and is in close proximity to Inland Port Arizona, home to Nikola Motor Company. CAZCP offers Opportunity Zone status, FTZ capability, and is also Union Pacific served. With sites from 1 – 50 acres, CAZCP is ideal for small to mid-sized industrial uses requiring heavy-industrial zoning. CAZCP is centrally located at the convergence of Interstates 10 and 8, in the middle of the Mexico-Southwest U.S. trade transportation route. From the park, California and Mexico are within a one-day turnaround trip.

CHANDLER CORPORATE CENTER II CHANDLER AIRPORT COMMERCE PARK PHASE 1 DEVELOPER: Ryan Companies US, Inc. GENERAL CONTRACTOR: Ryan Companies US, Inc. ARCHITECT: Ware Malcomb LOCATION: SEC McQueen Rd. & Queen Creek Rd., Chandler SIZE: 337,880 SF BROKERAGE FIRM: Lee & Associates VALUE: WND START/COMPLETION: 6/2019-4/2020 SUBCONTRACTORS: Specified Electrical Contractors, Inc.; G & G

Enterprises; Riggs Companies; RKS Plumbing & Mechanical PROJECT DESCRIPTION: Phase one of this project includes three buildings

with two, 28’ clear high structures and a 30’ clear height warehouse. The project also offers secure, concrete loading courts and high-quality design aesthetics. These buildings are designed to accommodate tenants by providing a very efficient layout to single building users. 70 | September-October 2020

DEVELOPER: VanTrust Real Estate GENERAL CONTRACTOR: Stevens-Leinweber Construction Inc. ARCHITECT: Butler Design Group LOCATION: 4100 W. Chandler Blvd., Chandler SIZE: 118,000 SF BROKERAGE FIRM: Colliers International VALUE: $11.8 million (construction value only) START/COMPLETION: 2/2019-9/2020 SUBCONTRACTORS: Riggs Contracting; Bell Steel; Scotts Diversified

Construction; McKinney Glass; 3d pipelines PROJECT DESCRIPTION: Chandler Corporate Center II is being developed following the successful construction and lease up of the first building at Chandler Corporate Center to Allstate Insurance. Designed to attract similar, Fortune 500-level corporate entities, building II features a twostory glass entrance with stone and wood accents, 10 to 14-foot floorto-floor interior heights and premier Class A suburban office features and finishes with a high 6/1,000 parking ratio.

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NAIOP ELWOOD LOGISTICS CENTER

Contractors; Progressive Roofing; Alpine Mechanical; RMJ Electrical PROJECT DESCRIPTION: Elwood Logistics Center is the largest industrial building

ever built on spec in Arizona. The cross dock facility meets all the needs for the modern distribution center, e-commerce, light manufacturing, and other logistics users. It features 40’ clear height, ESFR fire protection system and high-performance slab allowing for high density, very narrow aisle, robotic access material handling systems. The building will have 6,000 amps electrical service and provision to add another 6,000 amps. The site layout allows for efficient truck traffic patterns and ample trailer parking, with additional area for expanded employee or trailer parking depending on tenant needs.

FERRERO

PROJECT DESCRIPTION: Project consists of

DEVELOPER: Tratt Properties, LLC GENERAL CONTRACTOR: The Renaissance

Companies ARCHITECT: Deutsch Architecture Group LOCATION: 16155 W. Elwood St. Goodyear SIZE: 1,302,434 SF BROKERAGE FIRM: JLL VALUE: $110 million START/COMPLETION: 12/2019-12/2020 SUBCONTRACTORS: Suntec Concrete; D&O

DMB / DFE

DEVELOPER: DMB GENERAL CONTRACTOR: Southwest

Architectural Builders (SAB) ARCHITECT: Krause – Architecture + Interiors LOCATION: 6263 N. Scottsdale Rd., Suite 330,

Scottsdale SIZE: 10,000 SF BROKERAGE FIRM: Lee & Associates VALUE: $1.8 million START/COMPLETION: 11/2019-4/2020 SUBCONTRACTORS: LIR metals; Mirror

works; Todek; Interior Works; Adobe Paint; Reeves Paperhanging; Accent Marble & Granite; Norcon; Climatec; ATS; Sierra Fire; IOC Systems PROJECT DESCRIPTION: This corporate office, just under 10,000 SF, combines a major developer and their partner foundation. As two separate companies under one roof, the challenge was creating one seamless space that still allowed privacy, with a high-end, transitional aesthetic. The solution became a bifurcated floor plan with shared central communal spaces, and a finish palette influenced by designers like Ralph Lauren. A large investment at $140/SF, virtual reality via 3D modeling ensured clarity and aided in approval of the final design. Undulating lights in the reception area contrast with the rigidity of wood and stone surfaces. 72 | September-October 2020

DEVELOPER: Merit Partners Inc. GENERAL CONTRACTOR: Layton Construction

Company ARCHITECT: Butler Design Group LOCATION: NWC 3600 N. Cotton Ln., Goodyear SIZE : 644,000 SF BROKERAGE FIRM: Matt Mulvihill CBRE Chicago

Tenant Rep, Feeney / Calihan / Kennedy CBRE Phoenix Landlord Rep VALUE : Confidential START/COMPLETION : Q2/2019-Q1/2020 SUBCONTRACTORS : Suntec Concrete; Ikon Steel; Desert Structures; L&H Mechanical; Deer Valley Plumbing; Olympic West Fire Sprinkler

an approximately 640,000 SF cross dock warehouse with 40-feet clear height. This building has been designed for expansion capabilities per tenant requirements for up to 1.8 million SF. The building will be designed with load bearing concrete tilt-up exterior walls and steel joist and girder/ wood panelized roof system. Development is consistent with the PV303 design guidelines & PAD and is intended to parallel the design of the recently completed buildings A & B-17 to the east across Loop 303 as part of a complex of large distribution facilities on either side of the 303.

Millennium Park Central

PHOENIX, ARIZONA

CURRENTLY UNDER CONSTRUCTION!

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FIRST PARK PV303 WEST 2

DEVELOPER: Merit Partners Inc GENERAL CONTRACTOR: Stevens-Leinweber Construction Inc. ARCHITECT: Butler Design Group LOCATION: 3350 N. Cotton Ln., Goodyear SIZE: 644,000 SF BROKERAGE FIRM: CBRE START/COMPLETION: Q1/2020-Q4/2020 SUBCONTRACTORS: Suntec; Brown & Sons; Olympic West; IKON;

GLENDALE 303 (G303)

DEVELOPER : Hines GENERAL CONTRACTOR: Graycor Construction Company Inc. ARCHITECT: Ware Malcomb LOCATION: Fronting the Loop 303 between Glendale Ave. and Bethany

Home Rd., Glendale

PROJECT DESCRIPTION: This project is located at SWC cotton lane

SIZE: 570,000 SF BROKERAGE FIRM: JLL (Bill Honsaker, John Lydon) START/COMPLETION: 7/2020-Q1/2021 SUBCONTRACTORS: SDC PROJECT DESCRIPTION: Glendale 303 (G303) is a Class A industrial

and Osborn road on the loop 303 in Goodyear. Project and consists of an approximate 640,000 SF cross dock warehouse with 40 feet clear height with painted load bearing concrete tilt-up exterior walls and steel joist and girder/wood panelized roof system. Development is consistent with the PV303 design guidelines & PAD and is intended to parallel the design of the recently completed buildings A & B-17 to the east across Loop 303 as part of a complex of large distribution facilities on either side of the 303.

project that, at build-out, will offer up to 1.2 million SF in the booming Loop 303 corridor in Glendale, Arizona. Fronting the Loop 303, G303 will run between Glendale Avenue and Bethany Home Road. It will be constructed in two phases – with two buildings each totaling 569,520 SF, or the unique ability to combine those buildings into a single, 1.2 million SF facility. Industry-leading amenities at G303 include direct freeway frontage, 40-feet clear height, 60-feet speed bays and 80 dock-high loading doors. Phase I alone has the ability to park more than 550 cars.

Panelized Systems; Roofing Southwest; Denny Clark

GRAND2

DEVELOPER: Lincoln Property Company GENERAL CONTRACTOR: Whiting-Turner

Contracting Company ARCHITECT: DAVIS LOCATION: 1033 W. Roosevelt Way, Tempe SIZE: 358,800 SF BROKERAGE FIRM: Lincoln Property Company VALUE: $195 million START/COMPLETION: Q2/2018-Q1/2020 74 | September-October 2020

SUBCONTRACTORS: Holder Construction;

Hardrock Concrete Placement Co.; Coreslab Structures; Delta Diversified; Haci Mechanical Contractors PROJECT DESCRIPTION: Grand2 is the second Class A office building developed at The Grand at Papago Park Center by Lincoln Property Company, NAIOP Arizona’s 2018 Owner/Developer of the Year. The landmark building fronts the Loop 202 between

downtown Tempe, Papago Park and Sky Harbor. One of Arizona’s largest-ever purely speculative office buildings, Grand2 targets the most contemporary companies with a massive indoor-outdoor lobby with lounge, TV viewing area and conference facilities. Office space has floor-to-ceiling glass overlooking a major central water feature, landscaped core and multi-use paths.

NAIOP I.D.E.A. CAMPUS

DEVELOPER: The Boyer Company GENERAL CONTRACTOR: Okland Construction,

Coreslab Structures ARCHITECT: SmithGroup LOCATION: 850 W. Rio Salado Pkwy., Tempe SIZE: 1.5 million SF BROKERAGE FIRM: Transwestern PROPERTY MANAGEMENT GROUP: CBRE VALUE: $56 million START/COMPLETION: 10/2018-3/2020 SUBCONTRACTORS: Suntec Concrete; Kovach

Enclosure Systems; Gen3; SECON; Hayes Mechanical; Spectrum Mechanical; AirPark Signs & Graphics; Speedie & Associates; Buesing; Amber Steel Fabrication; C.D.S., Roofing Southwest; IES Communications; Dibble Engineering; PK Associates PROJECT DESCRIPTION: Five multi-story office buildings, two parking garages, a restaurant pad, and a hotel comprise the Innovation, Discovery, Education, and Art (I.D.E.A.) campus located adjacent to the Tempe Center for the Arts. The newly-opened Phase One is a six-story, 185,000 SF office building and a 1,270 stall parking garage. Community pocket parks and a public-art

integrated festival area create an amenity-rich oasis for tenants and residents. The campus is a partnership with the City of Tempe and

OUAZ STUDENT UNION AND RESIDENCE HALL

DEVELOPER: NOVO Development GENERAL CONTRACTOR: Wespac Construction,

Inc. ARCHITECT: HKS LOCATION: 14360 W. Tierra Buena Lane, Surprise SIZE: Student union 27,000 SF; Residence hall

76,000 SF

NORTHERN 101 COMMERCEPLEX DEVELOPER: Creation Equity GENERAL CONTRACTOR: LGE Design Build ARCHITECT: LGE Design Group LOCATION: 7860 N. 106th Ave; 7867 N.

106th Ave; 7230 N. Glen Harbor Blvd; 7220 N Glen Harbor Blvd., Glendale SIZE: 4 buildings (146,630 SF; 96,100 SF; 76,533 SF; 69,358 SF) BROKERAGE FIRM: Lee & Associates (Robert Kling, Matt Hobaica) VALUE: WND START/COMPLETION: Q1/2020-Q3/2020 PROJECT DESCRIPTION: Located in the prestigious Glen Harbor submarket, Northern 101 Commerceplex is a 4 building development offering best in class architecture, truck maneuverability, spec office floor plans and proximity to the Westgate entertainment district. 76 | September-October 2020

VALUE : $32 million START/COMPLETION: 10/2018-10/2019 SUBCONTRACTORS : Structural: PK Associates; CIVIL ENGINEER: Dibble Engineering; MEP:

Associated Mechanical Engineers; Woodward Engineering

requires the over-excavation of the site and the import and compaction of clean fill dirt due to the previous burial of construction debris. PROJECT DESCRIPTION: OUAZ Student Union:

Two-story, 27,000-square-foot building, houses the cafeteria with indoor and outdoor dining space, the Spirit Fan Shop, campus mailroom, student lounge with indoor/outdoor fireplace, conference center and designated quiet study spaces. Residence Hall: A 76,000-square-foot, four-story residence hall to the east of Spirit Field. This 83-room, 332-bed dormitory is the first of the on-site housing buildings planned for the campus, and features fully furnished, four-person suites, four student lounges and the campus security office. It is located on four acres adjacent to the community greenspace OUAZ shares with Surprise City Hall.

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Learn how we deliver value to our clients, our partners and our communities.

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BUILD THE FUTURE RESTORE THE PAST SUSTAINABLE HVAC CONTRACTING SINCE 1972

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NAIOP

PARK303

DEVELOPER: Lincoln Property Company GENERAL CONTRACTOR: Willmeng Construction Inc. ARCHITECT: Butler Design Group LOCATION: East side of Loop 303 between Bethany Home Rd. and

Glendale Ave. SIZE: 1.25 million SF BROKERAGE FIRM: Lincoln Property Company VALUE: $120 million START/COMPLETION: 3/2020-Q4/2020 SUBCONTRACTORS: Hunter Engineering; Suntec Concrete; Reynolds

Electric. PROJECT DESCRIPTION: Park303 Phase I is a $120 million, two-building,

Class A industrial development delivering a rare combination of direct Loop 303 freeway frontage and access, the best labor market in the Valley, and the most modern “creative industrial” space with 40-feet clear height, 182 dock doors, steel moment frame shear bracing and LED lighting throughout. Phase I includes two buildings (705,531 and 488,995 SF) with the unique ability to combine into a single building totaling 1.25 million SF.

PLAYA DEL NORTE

DEVELOPER: Irgens GENERAL CONTRACTOR: A.R. Mays ARCHITECT: WORKSBUREAU LOCATION: 999 E. Playa del Norte Dr., Tempe SIZE: 94,311 SF BROKERAGE FIRM: Lee & Associates VALUE: $40 million START/COMPLETION: Q1/2020-Q2/2021 SUBCONTRACTORS: ABCO Electric; Spectrum

Mechanical; Baker Concrete PROJECT DESCRIPTION: Offering prominent freeway signage along the south side of the Loop 202 Freeway, Playa del Norte is Tempe’s newest technology-centric, highprofile, Class A office building. The project is ideally positioned at the gateway to downtown Tempe and ASU’s main campus with a fulldiamond freeway interchange at Scottsdale Road. This six-story structured parking project is just over 94,000 SF with 27,000 SF floor plates. Playa del Norte will have best-inclass filtration systems, touch-free access, and hardscape conducive to the demands of today’s office talent. 78 | September-October 2020

PARK ALDEA

DEVELOPER: Trammell Crow Company and CBRE Global Investors GENERAL CONTRACTOR: Haydon Building Corp ARCHITECT: Butler Design Group LOCATION: 10100, 10150, 10200, 10250 W Montebello Ave, Phoenix SIZE: 356,000 SF BROKERAGE FIRM: CBRE VALUE : $33 million START/COMPLETION: 10/2019-7/2020 SUBCONTRACTORS: Aero Automatic Sprinkler; Arizona Stucco

Systems; Benson Security Systems; Cookson Door Sales of Arizona; Daylight America; Den-Mark Specialty Constr.; Denny Clark Masonry & Concrete; Earthscapes; Extreme Drywall Concepts; Fulcrum; Ikon Steel; Jenco; Kelley Bros.; King Insulation of AZ; Panelized Structures; Pinal Excavation; Precision Glass & Aluminum; Progressive Services; S & S Paving & Construction; S & W Land Surveying Services; Sanders & Wohrman; Suntec Concrete; The Pipeline Company PROJECT DESCRIPTION: Park Aldea is a Class A industrial park that consists of four buildings totaling 356,000 square feet. Located southwest of the full diamond interchange at the Loop 101 and Bethany Home Road in the West Valley.

WHERE CULTURE COMES FIRST. DP Electric, 30+ years as a dedicated trade partner.

www.dpelectric.com

NAIOP

PROJECT MAB

DEVELOPER: Merit Partners GENERAL CONTRACTOR: Layton Construction Company ARCHITECT: Butler Design Group LOCATION: 9601 N. Reems Rd., Waddell SIZE: 916,000 SF VALUE: $160 million START/COMPLETION: 1/2020-9/2020 SUBCONTRACTORS: Ricor; Suntec Concrete; Triad Steel; Bel-Aire;

Canyon State Electric PROJECT DESCRIPTION: MAB (Mark Anthony Brewing), which is the fourth largest brewer in the U.S., is behind a new 916,000 SF stateof-the-art BrewPure manufacturing and distribution facility located off the Loop 303 in the “New Frontier” in Waddell, Arizona. The facility will brew, package, and distribute White Claw Seltzer, Mike’s Hard Lemonade and Cayman Jack’s throughout the U.S. The facility has rail service, a wastewater treatment plant, LED lighting and is fully air conditioned throughout with a 36-feet clear height. At completion, the facility will employ over 200 full-time positions.

RIO 2100 EAST

DEVELOPER: The Boyer Company GENERAL CONTRACTOR: Wespac Construction,

Inc. ARCHITECT: Butler Design Group LOCATION: 2128 E. Rio Salado Pkwy., Tempe SIZE: 260,892 SF VALUE: $27,981,464 START/COMPLETION: 8/18-4/20 SUBCONTRACTORS: AARA Metals; Integrated

Masonry; Walters and Wolf; Saguaro Steel; MKB Construction PROJECT DESCRIPTION: Rio 2100 East is a 4-story, Class A office spec building with a 2-story parking facility. Building features include glass, metal panels and masonry elevations, along with panoramic views of the Valley. This Class A lease space consists of a 260,892 SF and 848 stall adjacent structured parking for an expanding corporate tenant base attracted to the Southeast Valley. 80 | September-October 2020

PROJECT SOL

DEVELOPER: Prologis GENERAL CONTRACTOR: Layton Construction Company ARCHITECT: HPA Architecture LOCATION: NE Corner of Bullard & Yuma, Goodyear SIZE: 2,320,000 SF VALUE: $24,190,000 START/COMPLETION: 12/2019-TBD SUBCONTRACTORS: Suntec Concrete PROJECT DESCRIPTION: Project Sol is a large, multi-floor storage site

located in the West Valley. The site will feature numerous bays for trailer parking as well as space for racking and material handling equipment. Used as an online order fulfillment center for general merchandise, the facility will be designed to accommodate a large, open, four-level RSP structure, an elevated process level, and high-piled combustable storage up to 35 feet. Additionally, the four-floor development will total 2,320,000 square feet with office and warehouse space.

NAIOP RRB MANUFACTURING (PROJECT T2)

DEVELOPER: Merit Partners GENERAL CONTRACTOR: The Renaissance

Companies ARCHITECT: Butler Design Group LOCATION: 10501 N. Reems Rd., Glendale SIZE: 737,129 SF VALUE: $150 million START/COMPLETION: 6/2019-9/2020 SUBCONTRACTORS: TDIndustries; Energy

Systems Design; PK Associates; AME Electrical Design; Suntec Concrete; Castle Steel

SKYBRIDGE LOTS 106 & 107 DEVELOPER: SkyBridge Arizona GENERAL CONTRACTOR: Graycor

Construction Company Inc. ARCHITECT: ADM Group LOCATION: 7852 E. Velocity Way & 6341 S. Downwind Circle, Mesa SIZE: 134,000 SF (combined) BROKERAGE FIRM: CBRE (Jackie Orcutt, Pete Wentis) START/COMPLETION: 9/2019-12/2020 SUBCONTRACTORS: HilgartWilson; A Shade Above; Hardrock Concrete; Secon PROJECT DESCRIPTION: Lots 106 and 107 are the first buildings to be constructed at SkyBridge – a master planned development

82 | September-October 2020

PROJECT DESCRIPTION: RRB Manufacturing

is a state-of-the-art beverage manufacturing facility located in the PV303 corridor. The 737,129 SF building consists of an approximately 20,000 SF, 2-story office; 136,000 SF, inbound warehouse; 400,000 SF, outbound warehouse; and 170,000 SF production area. On the south end of the building is a 40 feet deep rail platform. The facility has a central cooling plant, boiler room, 90 feet sugar silos, a water treatment room served by well water and a wastewater treatment system. The building is on track to be LEED Gold certified.

at Phoenix-Mesa Gateway Airport and the nation’s first-ever U.S. – Mexico inland port and customs processing hub. Lot 106 totals 52,000 SF of Class A flex industrial space, supporting light industrial/warehouse with loading docks, storefront entries, administrative and conference space. Lot 107 is an 82,500 SF aviation hangar and the project’s first runway-adjacent building. It includes administrative and conference space and four bays accommodating business jet aircraft. At completion, SkyBridge will deliver a new logistics link between the U.S. and Mexico with 4 million SF of office, warehouse, industrial/ecommerce and retail/restaurant space.

SALT RIVER PROJECT - PROJECT ADMINISTRATION BUILDING GENERAL CONTRACTOR: Mortenson ARCHITECT: Corgan LOCATION: 1500 N. Mill Ave., Tempe SIZE: 440,783 SF START/COMPLETION: 12/2012-10/2020 SUBCONTRACTORS: Western Millwork;

Johnson Controls; Varitec, Delta Diversified; IES; Arizona Tile PROJECT DESCRIPTION: Salt River Project’s Project Administration Building has served as a corporate headquarters and operational hub for over 60 years. As SRP has grown, prior building additions have added square footage but resulted in an inflexible interior layout. The design team developed a strategic vision using high-quality systems, innovative technologies and energy-efficient methods. High-caliber finishes were used to create an improvement from the existing spaces. Architectural elements added to the elevations of the building harmonize disparate enclosure styles resulting in a consistent, attractive aesthetic that unifies the facility.

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NAIOP THE ALEXANDER

DEVELOPER: George Oliver LLC GENERAL CONTRACTOR: RSG Builders ARCHITECT: George Oliver Design LOCATION: 25 S. Arizona Pl., Chandler SIZE: 112,000 SF BROKERAGE FIRM: JLL (Ryan Timpani/Nick Bialkowski) VALUE: $30 million START/COMPLETION: Q1/2020-Q4/2020 SUBCONTRACTORS: MTJ Electrical; Thanos

Mechanical; Urban Elevators PROJECT DESCRIPTION: The Alexander is a unique,

upscale and experiential office community located in the heart of downtown Chandler. The building is being transformed from an outdated mid-rise office building into a next-generation project capitalizing on a vibrant downtown. At completion, the 112,000 SF, five-story building will deliver highly efficient/design-forward

workspaces, a hospitality-inspired lobby and lounge area, 60-seat training center, mother’s room, Kaleidoscope Juice & Coffee Bar, outdoor activity/game area,

library-themed workspace and billiards room. The wellness center includes cardio and yoga rooms, spa-inspired showers and outdoor relaxation area.

THE AMERICANO

DEVELOPER: Creation GENERAL CONTRACTOR: LGE Design Build ARCHITECT: LGE Design Group LOCATION: 17797 N. Scottsdale Rd. Scottsdale SIZE: 7,000 SF VALUE: $2.2 million START/COMPLETION: Q1/2019-Q1/2020 SUBCONTRACTORS: Urban Plough Furniture LLC;

Carlson Glass, LLC; Sonora Drywall; V.E.P Valley Exterior Painting, LLC; Interior Concepts, Inc.; TCK Air Conditioning & Heating, Inc.; Pinnacle Plumbing Contractors, Inc.; Phoenix Commercial Electric, Inc. PROJECT DESCRIPTION: LGE’s attention to detail and quality shines through on this high-end concept restaurant located in north Scottsdale.

THE COLLAB

DEVELOPER: Creation GENERAL CONTRACTOR: LGE Design Build ARCHITECT: LGE Design Group LOCATION: 325 N. Ash St., Gilbert SIZE: 40,559 SF BROKERAGE FIRM: Cushman and Wakefield- Scott Boardman,

Dave Carder. OX Urban Realty- TJ Claassen. Jose Ramirez VALUE : $6.3 million START/COMPLETION: Q1/2019-Q1/2020 SUBCONTRACTORS: AZ Patch & Seal Corp.; Denny Clark

Masonry & Concrete; Arc Steel, LLC; Milam Glass Co.; Sonora Drywall; Tri-Mega Mechanical Heating & AC, LLC; Pinnacle Plumbing Contractors, Inc.; Phoenix Commercial Electric, Inc. PROJECT DESCRIPTION: The Collab building design, colors and materials have a cohesive palette that maintains consistency throughout both the site and building elevations while complimenting the surrounding Gilbert Downtown Heritage District. 84 | September-October 2020

something’s different. We understand how important it is to bring people together and know that connection will always be critical to the health of an organization. That’s why Willmeng exists—for people to build their genuine place of purpose. Experience the difference.

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NAIOP THE WATERMARK | TEMPE

DEVELOPER: Fenix Development GENERAL CONTRACTOR: Okland Construction ARCHITECT: Nelson Partners LOCATION: 410-430 North Scottsdale Rd.,

Tempe SIZE: 1,900,000 SF BROKERAGE FIRM: CBRE VALUE: $150 million START/COMPLETION: Q3/2017-1/2020 SUBCONTRACTORS: Nelsen PartnersArchitect; Erickson & Meeks- Engineering; ESD Mechanical; Landscaping ArchitectDesign Workshop; Civil Engineer- Civil & Environmental consultants; Trademark VisualSignage; Suntec Concrete PROJECT DESCRIPTION: The Watermark is Tempe’s newest premier mixed-use development located on the north shore of Tempe Town Lake. Watermark offers the most unique mixed-use environment in the Phoenix Metropolitan Area and contains

over 1.9 million square feet of thoughtful development. Total square footage is ±600,000 square feet of Class A office

space which includes ±265,000 square feet in Phase I and ±340,000 square feet in Phase II.

UNION

DEVELOPER: Lincoln Property Company GENERAL CONTRACTOR: Wespac Construction, Inc. ARCHITECT: DAVIS LOCATION: Between Cubs Way/Riverview Auto Dr./Dobson Rd./Rio

Salado Pkwy., Mesa SIZE : 238,384 SF BROKERAGE FIRM: Lincoln Property Company VALUE : $125 million START/COMPLETION: 10/2019-11/2020 SUBCONTRACTORS: Coreslab, Suntec; Walters & Wolf; Western Building Group; Saguaro Steel. PROJECT DESCRIPTION: Lincoln Property Company and Harvard Investments are nearing completion on the first of four Class A office buildings (ultimately totaling 1.35 million SF) at Union – a new employment centerpiece at the confluence of Scottsdale, Tempe and Mesa. In the heart of Riverview District, Union is purposefully built to attract premier Fortune 500-level companies with features including a sleek glass exterior, modern lobby, large floor plates, outdoor balconies and vision glass providing sweeping city and mountain views, and the adjacent Riverview Park and Lake. Union’s built environment encourages connectivity and walkability via a lush pedestrian plaza and paths. The project is minutes from two full diamond freeway interchanges, millions of square feet of premier shopping/dining/entertainment/sports, as well as ASU and Sky Harbor. 86 | September-October 2020

ZOVIO

DEVELOPER: Irgens GENERAL CONTRACTOR: Stevens-Leinweber Construction Inc. ARCHITECT: McCarthy Nordburg LOCATION: 1811 E. Northrop Blvd., Chandler SIZE: 130,000 SF BROKERAGE FIRM: CBRE VALUE: $17,550,000 million START/COMPLETION: 7/2018-7/2019 SUBCONTRACTORS: Energy Systems Design, Inc.; Caruso Turley Scott;

Acoustical Consulting Services; DIRTT; GMBI PROJECT DESCRIPTION: With a resimercial (residential and commercial)

aesthetic woven with subtle elements of biophilic design, Zovio’s new cutting edge 130,000 SF headquarters looks less like a corporate office and more like an exciting place to work, socialize and live. The offices were created to foster innovation and support the unique culture of this educational technology services organization. The offices reflect the same forward thinking and people focused values that make this organization the leader in the online educational industry.

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