NAIOP 2024

LOOKING

AHEAD Experts from NAIOP offer an outlook for commercial real estate’s biggest sectors

2023

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58 | September-October 2024

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BROKER BREAKDOWN NAIOP members detail what we can expect in commercial real estate’s biggest sectors

By KYLE BACKER

T

he commercial real estate market in Greater Phoenix has expanded in recent years, with some sectors outperforming others. With 2024 beginning to wane, AZRE magazine sat down with the following NAIOP members to learn more about their areas of expertise and what trends readers should be aware of: • Margaret A. Lloyd, senior vice president, Plaza Companies • Eric Termansen, founding partner, Western Retail Advisors • Kelly Royle, vice president, JLL • CJ Osbrink, executive managing director, Newmark • Cindy Cooke, vice chair, Colliers Responses have been edited for length and clarity.

AZRE: Margaret, what is the state of the medical office space?

Margaret Lloyd: It’s really robust and active right now — Phoenix is ranked No. 1 in the country for growth in medical office. In 2023, we leased more than 517,000 square feet, which was well beyond any other major market in the country. We’re down to about a 10% vacancy rate because of all the absorption in the last couple years. All levels of medical office, meaning Class A, Class B and even some Class C is leasing at this point.

There are still some challenges, mostly that there hasn’t been much new construction because of the costs of labor, materials and financing. It hasn’t been zero, but it’s very limited, which has led us to higher rents.

The reason for all this absorption is population growth, so it makes sense that medical is expanding in areas such as Queen Creek, San Tan Valley and Buckeye. There’s also been interest in North Phoenix and in the Laveen area as well.

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Cindy Cooke

Eric Termansen

Margaret A. Lloyd

CJ Osbrink

Kelly Royle 61

NAIOP

TEMPE KEEPS GROWING: Adjacent to Arizona State University’s Tempe Campus, the massive 355-acre Novus Innovation Corridor provides a plethora of urban living, recreation and entertainment. (Provided photo)

AZRE: What sort of medical products are being built in these growth areas?

ML: Interestingly, there’s a lot of activity in rehabilitation centers, behavioral health centers autism clinics, physical therapy and occupational therapy. Those users are taking anywhere from 8,000 to 12,000 square feet.

Our health systems are continuing to expand into the neighborhoods like they have for years now with primary care and multispecialty facilities, but also outpatient surgery center and micro hospitals.

AZRE: One trend that’s been talked about is converting traditional office space to medical office. Have you seen these happening in the market?

ML: It’s going to be very difficult, but not impossible. A few years ago, when retail centers had a lot of big space, everybody said, “Well, let’s put a medical facility in these retail centers.”

That worked in a few instances.

Retail is a bit easier to convert than office because it already comes with parking and typically has better-suited infrastructure.

A lot of office owners don’t understand how much it costs to put a medical tenant in a space, convert the 62 | September-October 2024

infrastructure or do whatever they need to do to make the building work for medical. Do you need more power because there’s an imaging tenant?

Parking ratios are usually a lot less for office than what medical requires, so can you add parking? Certain things need to be in place to make it work.

But CJ and I were just talking, and he’s got an office that’s potentially being converted, so that’s why I never say never. There will be opportunities, but will they be abundant? Probably not.

CJ Osbrink: It’s true that a lot of office buildings today aren’t going to be office forever. There will be adaptive reuse, but Margaret mentioned a great point — cost. It’s so easy for us to say, “Oh, this would be perfect medical because it’s right on campus and it’s by the freeway.” But then you look at the costs involved, and it becomes clear that it’s easier discussed than to execute on.

AZRE: Since we’re talking about office, could you tell us about what you’re seeing in the market? How are investors looking at the sector in 2024?

CO: Just looking at the first half of this year, there have been 10 notable deals that have traded for more than $20 million, for a total of about $387

million. If you look at the total transactional landscape, there have been about 39 deals — roughly the same number of deals as last year — totaling $640 million.

What’s interesting is that a lot of those trades aren’t going to be office anymore, just like we were talking about. There are, however, some deals that are pure office plays and will remain office. We sold two of the only $50-million-plus deals this year, which were the Beam on Farmer in Tempe, and then also 24th At Camelback. Those are trophy offices.

I’m not a leasing broker, but from a tenant and investor perspective, it’s all about a flight to quality.

That’s something you’re going to continue to hear because it’s true.

If you’re a tenant, you want your employees to be happy when they come back to the office. That’s something we’re battling every day — how do we get people back?

If you have an unamenitized office building, it’s tough.

Employees want to come back because there’s a gym, a conference center, nice high-quality finishes and a good company culture. That’s what will bring people back.

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NAIOP AZRE: Are you seeing a lot of activity in specific submarkets?

CO: Tempe, Camelback corridor and Scottsdale are the preferred areas for companies wanting to plant their flag in Arizona. That’s driving all the activity from tenant and investors. That’s where people want to be.

If you have trophy office on one end of the barbell, on the other side are the trainwrecks. Those trainwrecks would be lender-driven sales, deals that are heavily vacant and that’s where we are seeing activity believe it or not. We’ve got a 20-plus acre site that is currently multiple mostly vacant and tired office buildings. But it's a great land site. The group that is buying it plans to blade it and develop mid-bay industrial.

Everything between the two ends of the barbell is really quiet right now.

AZRE: Will older offices getting torn down for other product types have a long-term effect on supply that could be an issue?

CO: Offices users are not going after those types of office properties — when you’re coming back to the office, you’re not looking at Class B or Class C office long term. So those buildings will sit vacant for a long time unless someone redevelops them or tears them down and turns them into something that’s a higher and better use, whether that’s something like industrial or multifamily.

It’s hard to predict what will happen in the future, but I think generally, we all feel good about the return to office. Some companies are mandating a return to the office for three days a week. They’re seeing more productivity and a boost to employee morale, because it’s a lot easier to spitball ideas in person than on the phone.

I consider this situation similar to what we’ve seen in retail. You have omnichannel retail, which is a combination of bricks and mortar and e-commerce. That’s what you’ll see with office, so you’ll be able to have some employees who work from home a couple days of the week, and still have access to the culture of the company at the office. There’s a way to do both.

Going back to the original question on supply, it’s going to adjust. Some 64 | September-October 2024

office will be scraped, so we will reduce our footprint, but at the same time, as tenants come back and they expand, or they decide they want to be in Phoenix, you’ll see that excess inventory start to get gobbled up and vacancy rates will drop with it.

AZRE: Can you bring us up to speed on the multifamily market?

Cindy Cooke: Multifamily was a hot commodity in 2020 through 2022, but it has been the quietest of all segments in 2023 and 2024. Part of that is new construction. Interest rates moved and that changed cap rates. Everybody was pretty healthy before that happened, so they’ve been on a pause. We’ve got about 30,000 units being delivered this year, and another 25,000 in 2025.

There’s hardly anything coming in 2025, only about 5,000 units.

Our absorption is great — we’re at about 20,000 units absorbed this year.

The future look bright, it’s just getting through that pipeline of construction, and we’re making headway.

To me, what’s missing is the condo market. That got hit with latent defect laws, so nobody has been really converting apartments to condos, whereas last cycle that was the case.

That’s a piece of what’s missing regarding affordability.

AZRE: Any other multifamily trends we should be watching?

CC: We’ve seen a lot more build-torent communities, which are attractive for single parents. But those projects require a lot of land so they tend to be on the outskirts of town.

Overall, cap rates have leveled off, but our fundamentals are still soft. Our expenses have gone up, but that might change now that unemployment is going up, so we may be able to lower some of the payroll.

But insurance is double what it was five years ago. We’re seeing bad debt, concessions and rents have gone down about 6% since the peak.

To me, this is when great wealth is made — when buyers come in and say, “I like the overall growth of Phoenix, and now I’m able to buy at a price that doesn’t seem frothy.”

AZRE: How are things looking in the retail market now that we’re a few years out from the pandemic?

Eric Termansen: The pandemic ended up taking a whole bunch of things that were going to happen to the sector over the next decade or so and did it in about 18 months. What became clear was that people want the socialization and the environment.

Retailers also did a nice job of adapting and giving people lots of choices.

I think we’re going to see a continual change, and retailers will become much more educated about their consumers with all the data they have available, whether it’s through geofencing in the stores, loyalty programs and even communicating with their landlords on the traffic in shopping centers. All of those tools are going to make the retail experience better, even if it does a feel a bit like Big Brother.

AZRE: How else has retail evolved?

ET: Retail is much more about food and much less about the department store now. When I grew up in the retail industry, regional malls and department stores dominated. The next big thing was the move to Walmart Supercenters and Targets.

Today, as department stores are failing, you’re only going to have a few strong players in the long term. In 20 years, Phoenix may only have one enclosed mall — my bet is Scottsdale Fashion Square.

The others are fantastic pieces of real estate that will have to continue to evolve and add different uses.

If you look at the old Sears building at Arrowhead Mall, that’s going to be an Asian-focused grocer with an entertainment use on the second floor, so it’s going to be completely different than what it was and hopefully attract a different customer there.

I’d also add that we should not underestimate the change that’s happened with drive-thru food. Nine out of 10 food users want a drive-thru because of what it does to supercharge their sales. Starbucks often doubles their sales when they have a drive-thru option. That’s going to be an interesting trend to watch.

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NAIOP

RISING IN THE WEST: Verrado Marketplace in Buckeye is a $275 million, 500,000-square-foot project that will be anchored by Target, Harkins BackLot, Safeway, Marshalls, Ross and HomeGoods. (Rendering provided by Vestar)

AZRE: Experiential retail is a buzz word that gets thrown around a lot. Is that something you’re seeing?

ET: That’s a small portion of retail, but I think retail overall is a social experience. If you go to a mall on the weekend, you see young people hanging out and shopping, which is not terribly different than what happened in my childhood. It’s less about what the retailers are doing to make it experiential, but the human connection that people are having by being together.

AZRE: Could you share what’s been happening in industrial?

Kelly Royle: It’s no secret that the vacancy rate has gone up a little bit Valley wide — we’re sitting at about 11% right now. The pandemic changed our business, but we’re starting to see that level out as companies start to right size, whether they’re downsizing or expanding.

To put everything in perspective, there’s a little over 400 million square feet of industrial, with another 32 million square feet under construction.

That’s actually down from where we were in 2022 going into 2024 when we had a lot of product under construction and that was ultimately delivered.

We’re still preleasing buildings, maybe not at 50% like we were during the pandemic when people were scrambling for space, so that has settled down.

We’re preleasing at about 35%.

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AZRE: What some of the trends in industrial?

KR: There’s been a big push towards delivering products rent ready. We’re seeing a big push for 100% HVAC now in the building, and that’s for employee retention. During the pandemic, buildings were leased in shell condition and the tenant came in and made improvements, but that has changed.

Some tenants will come to tour when their timing to sign a lease isn’t even until Q1 or Q2 of next year, but they won’t even look at a building that’s just broke ground or is halfway done that could still hit their timeline. For them it’s the risk.

AZRE: Can you talk more about how tenants are thinking about risk?

KR: COVID-19 disrupted the construction industry like long lead on items. Companies can’t take on that risk that the space won’t be ready when it supposed to be. The broker wants to touch it and see it.

AZRE: Tell us more about tenants’ size requirements.

KR: I specialize specifically in the West Valley and we have a lot of midbay and big box buildings, but not a lot smaller industrial space that’s available today or even in the future.

Tenants who need 5,000 to 15,000 square feet unfortunately don’t have a lot of options, and that’s the vacancy.

When you peel back the onion with 11% vacancy rate, the smaller products are closer to 5%.

Generally, we’re seeing a lot more manufacturing requirements. I’m hearing now that “power is the new parking.” A lot of developers are including more power and assuming that tenants will need it, not only for 100% HVAC, but also their forklifts and material handling equipment they’re using. A true manufacturer may need upwards of a megawatt of power.

We’re still getting looks from all sorts of companies who want to come into our market, which has been nice.

It’s no secret that Amazon took down 3 million square feet in the West Valley during Q1, so that pushed up our numbers, and similar brands are looking at Phoenix.

AZRE: Is there still a lot of interest from California companies?

KR: We see a lot of businesses from California looking to either expand here or completely relocate out of California. At one point, about 50% of all new leases were from California, but that number is down to 20% to 30% but there’s a lot of landlords in the Inland Empire with vacancy in the under 300,000 square feet category. The delta between Phoenix and some places in California isn’t as big as it was.

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NAIOP

BIGGER AND BETTER

Here’s how NAIOP Arizona bolsters the commercial real estate industry

By KYLE BACKER

I

n 2017, Suzanne Kinney stepped into the role of president and CEO of NAIOP Arizona, taking the reins of one of the largest chapters in the country. Since then, NAIOP Arizona has continued to grow, engaging more sectors within the commercial real estate industry and expanding its membership.

AZRE magazine sat down with Kinney to discuss the reasons behind NAIOP Arizona’s success, what it does on behalf of the industry and how it’s engaging the next generation of leaders.

The following responses have been edited for length and clarity.

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AZRE: What has made the Arizona chapter of NAIOP one of the best in the nation?

Suzanne Kinney: I would start by saying that we listen to our members to make sure we’re in tune with meeting their needs as they change over time. We’re very much a member driven association, so having active participation from our members is key to putting together the programming, the events and the political advocacy.

For the past several years, we’ve focused on modernizing and professionalizing the association, so the member experience is consistent, reliable and of high quality. That has contributed a lot to the success of our organization.

LEADING THE WAY: Suzanne Kinney has led the Arizona Chapter of NAIOP since 2017. During her tenure, the Arizona Chapter has increased membership by around 30% to more than 1,000 individuals and has won several national awards, including NAIOP Chapter of the Year in 2021. Kinney was named Top Chapter Executive of the Year at NAIOP’s 2024 Chapter Merit Awards.

AZRE: You mentioned the importance of listening to members. How do you collect that feedback?

SK: Between the staff and our board of directors, we make the effort to meet with our members to understand how things are going for them, what their needs are, what their pain points are and how we as an association can help with that.

Our committees are another avenue for listening to members. An example of that is a year and a half ago, we started our multifamily committee, which was brand new for us as an organization.

We spent the first six months engaged in a dialogue with members who are developers, brokers and otherwise focused on multifamily to understand what was going on. We learned there were a ton of challenges related to zoning and permitting at the city level.

That’s an area where we can gather input from our members and communicate that to city officials and staff to show it’s not something project specific, but a broader challenge. Our committees are a great way we can get feedback and then try to implement it.

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NAIOP Our chapter is known for creating an environment where connections can be made and fostered over time.

– Suzanne Kinney

AZRE: NAIOP has three guiding principles — connect, advocate and learn. Let’s go through each of these, starting with “connect.” Why is networking so important for this business?

SK: Our chapter is known for creating an environment where connections can be made and fostered over time. When I talk to cohorts of young professionals, I enjoy hearing stories about people who got involved in our Developing Leaders program early in their career, created a peer network that spanned different functions within the industry and grew alongside that peer network. Having a group of people to call on when they have questions and get referrals from is rewarding to hear about.

We also facilitate opportunities for our Developing Leaders to meet with senior level executives that they might not otherwise have the opportunity to talk with. NAIOP opens the door for people early in their career to get to know the experts in the industry they might not otherwise get to meet. We’ve also found there is a desire amongst our senior level members to share their knowledge with the younger generations.

AZRE: The second point is “advocate.” How is NAIOP involved with legislative affairs?

SK: We are organized as a 501(c)(6), which means that we can lobby as much as we want and need, which makes us unique in the association space. We’re the only organization that exclusively represents private development and advocates at all levels of government and that’s a critical piece of the value we provide our members.

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We’re active with the state legislature, the governor’s office and state agencies that impact our industry.

We’re also engaged at the federal level with Arizona’s congressional delegation, and now more often at the local level as well. There are a range of challenges, like meeting our energy needs, that we’re starting to experience and we want to make sure that commercial real estate is well represented in these important conversations that are taking place.

AZRE: Last but not least is “learn.”

Can you talk about the educational opportunities available to members?

SK: We provide a lot of value in this space. Most of the year, we’ll have two programs that fall under the education umbrella per month that span a wide range of topics. Some are real estate focused, such as financing and lending.

Others are addressing broader issues that impact the industry.

We’ve also incorporated our programming for the retail, multifamily and DEI committees within our larger education umbrella. These are areas where committee involvement is really important because committee members will come up with ideas for topics, as well as speakers who can share their knowledge on these topics. We also build networking into all of these events as well, so “connect” and “learn” are closely intertwined.

We’re also excited that we’re relaunching our Young Professionals group, our premier mentorship program, in 2025. The goal is to elevate the program so it becomes an even more enriching experience for Developing Leaders who participate. More to come on that, but it’s a big focus for us right now.

AZRE: Can you talk about the relationship that NAIOP has with ASU and UArizona?

SK: We have two programs with ASU. The first is a long-standing partnership with the Master of Real Estate Development Program, or MRED. Each semester, NAIOP puts on a practicum where we have an actual project that’s selected, and everyone involved in that project comes to the MRED class to teach about their piece of that project, including the developer, contractor, design professionals, broker and so on. It’s an amazing program and our members are eager to hire those MRED graduates because they are so qualified upon graduation.

At the undergraduate level, we’ve worked with the Hispanic Business Students Association as a sponsor.

The signature program we put on with them is an annual workshop where we bring in four or five of our members who talk about different career paths in commercial real estate to introduce students to what’s available in terms of careers.

The third program we have is with the University of Arizona and its Commercial Real Estate Club within the Eller College of Management. The club is a group of 25 or so members, and we host them each year on their road trip up to Phoenix. We set up a full day of meetings with NAIOP members, so students typically go to six different companies to learn more about what that business does, how they work, projects they’re working on and what they’re looking for when they hire employees out of college.

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NAIOP

DEVELOPING

LEADERS

NAIOP brings young professionals together in an effort to boost careers and the industry

B

eing new to any career can be intimidating, especially in a field such as commercial real estate with all its intricacies. That’s why NAIOP created its Developing Leaders program for professionals under 35 to connect these upand-comers with one another and senior leaders within the industry.

“One of the biggest risks a lot of professional associations face is keeping up with the changing times,” explains Suzanne Kinney, president and CEO of NAIOP Arizona. “Half of our new members are in the Developing Leaders category, meaning 35 and under. At the same time, we’re retaining senior level executives with decades of deep expertise, while also attracting younger professionals who see NAIOP as the preeminent organization to grow their careers and be successful.”

Learn more about the experiences of four of these Developing Leaders in the pages that follow.

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Casey Koziol Associate // Colliers After graduating from the University of Arizona in 2019, Koziol wanted to move back to his hometown — Phoenix — and get involved in the commercial real estate world. He ended up cold calling a handful of contacts he received from a family friend, and ended up connecting well with his current boss, starting at Colliers in the summer of 2019 working in research.

“I was only working there for a couple months before COVID hit, and we all had to work from home,” Koziol says. “In this industry, you need to meet a lot of people and pick their brains, and [the pandemic] eliminated my ability to do that. So, I was more focused on our research reports for industrial and office properties and got a good gist for what those entail.”

Once everyone started returning to the office, Koziol transitioned to a program where he would work on different product teams every three months, landing in the industrial team. He also got involved with NAIOP, meeting folks from different firms and in other asset types.

“I started developing relationships with those people, and then got involved with events and volunteering,” Koziol continues.

“After being involved with Developing Leaders, I applied to the Young Professionals Group in 2023, which was instrumental to my growth.”

Admittance to the Young Professionals Group is selective, with about 30 Developing Leaders accepted for each class. Koziol explains that everyone is broken up into teams of four or five and given a real-life scenario.

“You’re in charge of a piece of land, and I was partnered with another broker, an architect and a construction guy. We had a mentor too who is part of a developer group,” he continues.

“We had to put together what we would develop on that land, what our cost analysis would be, put together a pro forma and pitch it to a group of ‘investors.’ Our group ended up winning the case competition.”

Koziol still connects with his teammates on that project, which he says is a huge benefit for the programs.

“Once you’re in this business, it feels like you’re drinking out of a fire hose, but it really helps meeting with people who are dealing with similar situations and trying to get their start in the industry,” he concludes. “30 years down the road, this group will be the folks I’ll be able to call on to talk about a project or give business to.”

Erika Eckblad Senior associate // Cushman & Wakefield A native of Michigan, Eckblad moved to Phoenix in 2017, eventually landing at Cushman & Wakefield on its healthcare team. Prior to her current position, Eckblad worked in property management and the skills she learned there have been an asset to her as a broker. Since Eckblad moved to the Valley as an adult, she says that being a part of NAIOP is a great way to meet people, especially through the Developing Leaders program.

“I wanted to meet individuals close to my age that want to be successful and are focused on making that happen,” she says.

“That’s why I got involved. It’s a great way to open your mind to the different groups within the industry and bridge the gap on a lot of different jobs.”

Today, she’s the co-chair of the educational committee, which hosts site tours of new developments around the Valley and sets up panels with luminaries in the industry to hear their insights.

“Right now, we’re planning a panel on how to be successful during a downturn,” Eckblad says. “A lot of people my age didn’t feel the full force of the last downturn, because it was in 2008 and I was still in high school, but others in our industry remember that time and can provide tips on how to thrive in that environment.”

The last tour the committee arranged was for the Ceasers Republic Hotel in Scottsdale, where attendees heard about the challenges of getting that project finished. Seeing properties outside your specialty, Eckblad says, is beneficial because it broadens a broker’s knowledge of the Valley.

The value of participation in NAIOP is well worth the time commitment, which Eckblad says is reasonable.

“In this industry, you spend a lot of time focused on your job, and the extra few hours spent growing and learning is priceless,” she concludes. “I’m happy to do it and really enjoy it. It can be scary to get involved, but I always push people to join committees even if they don’t think they know what they’re doing. There are lots of people who are willing to help. Don’t be intimidated by it.”

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NAIOP Brady Maus

Kean Thomas Director of finance // Vestar For Thomas, NAIOP membership runs in the family. His mother, an architect in the Valley, has been involved in the association throughout her career, meaning Thomas attended Night at the Fights long before he attended Arizona State University for finance and accounting. After graduation, Thomas moved to California, where he worked in public accounting and earned his CPA license before taking a job with a large developer in Orange County on its finance team.

“From there, I transitioned back to Phoenix and found my way over to Vestar three years ago as [its] director of finance, working on all new financing and refinancing,” he explains. “I also perform our development underwriting, oversee a portion of the accounting team and do some work for developments on a project management basis.”

Since settling back in Phoenix, Thomas has reconnected to his NAIOP roots, first by joining the association’s retail committee, which he says is unique.

“Retail professional organizations often wind up focusing on serving tenants, whereas NAIOP at its heart is a developer’s organization,” Thomas explains. “It focuses on the landlord and tenant representation brokers for sure, but it’s really about the general contractors, vendors and developers who operate in the Valley.”

After joining the retail committee, Thomas had a desire to become more involved with NAIOP and applied for the Developing Leaders program. While accepted, he hasn’t officially started, yet he already sees the value in being a part of the initiative.

“The biggest thing is meeting peers,” he says. “They are working their way up in the industry, and the reality is that the people who get [involved in Developing Leaders] usually stick around for a long time. It’s great to meet people who are like me — relatively early on in their career, and that’s great because you can really build a long-term relationship with someone in similar position.”

Because Thomas’ duties require him to engage in other parts of the business, such as property management, acquisitions, development and construction, being in a program with other early-career professionals allows him to pick up valuable insights.

“I’d like to get to know the different general contractors in town,” he concludes. “Who are the different vendors out there?

What are people seeing in terms of construction costs? Where are the opportunities in technology implementation on projects?

Those are the types of things you wouldn’t normally get exposed to if you’re in an organization that’s just focused on finance.”

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Vice president // Trammell Crow Company When Maus moved from Phoenix to Texas for college, he thought the Valley was firmly in his rearview. But after working for a retail brokerage and development company in Dallas for four years, he found himself missing the Grand Canyon State.

“I realized that Phoenix is home — it’s where my family is, and where I wanted to raise a family,” he says.

After moving back to the Valley, he eventually found his way to his current position at Trammell Crow Company and decided to join NAIOP and its Developing Leaders program.

“At first, I didn’t understand that NAIOP covers more than office and industrial. Why would I join NAIOP? I’m a selfstorage guy,” he recalls. “In retrospect, I wish I would have joined earlier because it would’ve helped my career as I came back to Phoenix.”

Maus says there are multiple benefits to his membership in NAIOP. Through his participation, he has created a network of peers in both casual and formal environments.

“When you’re in your 20s, it’s important to start developing those relationships, even with your competitors,” Maus continues. “All of us are the future leaders of the market and we’re growing up in the industry together. It’s really important to have that conduit for connection through Developing Leaders.”

Beyond connecting with other up-and-comers, Maus notes that he gets exposure to different product types and other aspects he wouldn’t otherwise have, which he believes is necessary to be successful.

“It’s good to understand what brokers in other asset classes are seeing to pain the picture of the entire real estate market,” Maus continues. “While everything seems siloed, at the end of the day, all of it is connected to some degree.”

NAIOP has also given Maus the opportunity to branch out and support the next generation. He and a colleague helped teach a unit on real estate to students at GateWay Early College High School.

“Collectively, NAIOP members taught a two-semester course on real estate and the built environment to high school students,” Maus concludes.

“I put together a two-hour presentation where we taught them what it means to be a developer. There was a case study involved where students presented an idea to us based on information we gave them. It was cool because these students probably didn’t know that this a career opportunity for them, and NAIOP was able to give them that exposure.”

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NAIOP

LEGISLATIVE LIAISON How NAIOP advocates for the commercial real estate industry at the Capitol

By KYLE BACKER

L

ike every industry, commercial real estate is affected by legislation and rulemaking processes throughout all levels of government. Suzanne Kinney, president and CEO of NAIOP Arizona, notes that political environment in Arizona has changed dramatically over the past several years.

76 | September-October 2024

“We are truly a swing state, which is new and different,” she says. “It’s a polarized time, nationally all the way down to the state level, and there are extremes on both sides of the political spectrum. That creates a new set of challenges when we’re dealing with elected officials to get the work of the people accomplished.”

NAIOP has always been engaged in public policy — Kinney highlights the association’s efforts to reduce property tax rates that affected the competitiveness of the state. That initiative, she continues, was narrowly focused but the issues facing the industry, such as water supplies, energy and air quality, necessitate more resources to tackle. Just this last year the association brought on John Baumer as its director of government relations.

“In the changing political environment, especially at the state level, we found it was necessary to have that full-time presence representing NAIOP and our members at the state capitol,” Kinney says.

“There are big, overarching issues that are not going to have a single, simple policy solution to them where one bill solves the challenge. These are going to be issues that require a lot of legislation over a period of many years to rise to the challenges that are in front of us.”

CHANGE-MAKERS: The Arizona State Capitol building in Phoenix. (Photo

by Gage Skidmore from Surprise via Wikimedia Commons)

Water and air Water issues have long been a top priority in Arizona, with the Groundwater Management Act of 1980 serving as a landmark piece of legislation addressing water supplies. As the Colorado River suffers from drought conditions, concern over the state’s water future has become more acute.

Baumer says having NAIOP at the table during these discussions is needed to advocate on behalf of commercial real estate.

“When it comes to water management, stewardship and conservation, there are misconceptions out there as to what commercial development uses for water on average,” he continues. “It’s been an education campaign this past year for lawmakers and other stakeholders.

We want to make sure we’re part of the conversation so any improvements to how we oversee water in the state are smart, intentional and economical.”

Another area that warrants attention is air quality and how that may impact future developments. This issue, Baumer explains, is complicated because it involves the EPA and the Clean Air Act, which are policy areas that can’t be easily changed.

“When it comes to manufacturing development, we don’t have the same ability as other states to offset the emissions, so we’re going to hit a point in the near future where we will not be able to develop those manufacturing projects,” he says. “That’s going to have a real impact. Arizona doesn’t have tons of coal stacks that can be turned offline to improve air quality and receive offsets — we’re tapped out when it comes to that.”

NAIOP is working with state representatives, congressional delegation and other groups to tackle the issue.

77

NAIOP

Suzanne Kinney

Baumer is hopeful that coordination with other impacted states can help address the problem and find solutions to sustain Arizona’s growth.

Housing affordability Kinney adds that as Greater Phoenix has grown rapidly into an emerging Tier 1 city new problems have emerged.

One of the attractive aspects of the region to out-of-state businesses was the availability of affordable housing for their workforces, but that has changed in recent years. That, along with NAIOP starting to include more members in the multifamily sector, means the association is now more involved with housing issues.

“Housing and permitting reform are things that we don’t believe the solutions are going to come from the state legislature,” Baumer says.

“Part of our strategic plan is to build stronger relationships with localities — mayors, council members and planning departments to figure out where things can be improved. There are things that can be done in the private sector to make [the process] easier for local governments, but we need to have a frank conversation about how to best go through the city process from buying a piece of land to actually getting something built.”

78 | September-October 2024

John Baumer

One of the points Baumer says is important for municipalities to understand is that the more amenities they require a multifamily development to have, the less affordable those units will be for renters.

“We need to figure out a path forward that lets localities keep their individual jurisdictions as they want, but also meet the needs of Arizona residents,” he says.

A popular idea to address the housing shortage has been turning unused commercial space into apartment units. The process, Baumer says, isn’t a simple one.

“There’s talk about how we can better utilize unused office or retail space. I’ve had conversations with lawmakers and stakeholders that think you can turn a strip mall into housing, but it’s not that easy,” he continues.

“For us, it’ll be having conversations about where the tolerances are for incentives are for these adpative reuse and conversion projects, because that’s huge. Without incentivizing it or offering something like tax breaks, it’s still going to be difficult for these conversions to pencil out.”

Speaking to NAIOP members who have done these types of projects, Baumer says that the construction itself is difficult. When something is built for retail or office, the structure is

considerably different from a building developed specifically for housing.

“Oftentimes in a commercial building, the utilities are all in the center of the building and feed out into the different offices,” he continues.

“They have huge footprints, but not a lot of window space. It’s trying to figure out how to make those things work.

And oftentimes, when developers go to convert a building, and you start tearing things apart — you never know what you’re going to find and what needs to be redone to get it up to code.”

Another housing issue of interest to NAIOP members relates to condos.

Baumer notes that condo construction has been low since it’s hard for these projects to pencil out and developers can be faced with high insurance costs in some instances.

“There are also strict contracts written out that apartment units can’t be turned into a condo,” he continues.

“There’s a desire not only from NAIOP but a number of other stakeholders to find out how to improve the market to make it so condos can actually be developed again and make that product type available to Arizona residents. It would take time for legislation to ripple out, but in the long run it would be beneficial to Arizona’s overall housing supply.”

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79

NAIOP

NAIOP MEMBER PROJECTS TO WATCH

By KYLE BACKER

D

espite the challenges, members of NAIOP Arizona have been busy delivering innovative projects to the market, from big box industrial to slick, amenityrich offices. The following pages showcase a sampling of the best products from NAIOP throughout Arizona. All photos were provided to AZRE.

80 | September-October 2024

Park Algodon Developer: Creation // General contractor: LGE Design Build // Architect: LGE Design Build // Location: 9840 W. Indian School Rd., Phoenix // Size: 1.3 million square feet // Broker: Land Advisors // Value: $250 million // Start date: May 2024 // Completion date: Q2 2025 (Phase 1)

Fun fact: Creation, in partnership with Clarion Partners, has acquired nearly 100 acres in Phoenix for the $250 million Park Algodon project. Additionally, Creation is developing The Shops at Park Algodon on an adjoining seven acres, offering 14,000 square feet of restaurant and retail space and four additional restaurant pads.

Goodyear AirPark Developers: Lincoln Property Company, Harvard Investments General contractor: Stevens-Leinweber Construction Architect: Butler Design Group Location: 14900, 14910, 14980, 15030, 15140, 15150 W. Broadway Rd., Goodyear Size: 1.6 million square feet (Phase 1) Broker: Lincoln Property Company

Value: $290 Million (Phase I) Start date: Q3 2022 Completion date: Q4 2024 Fun fact: Ultimately totaling up to 7 million square feet and 20 buildings, Goodyear AirPark is the largest industrial park to break ground in Goodyear, with “enough fiber to power NASA.” Features include 40-foot clear height, private truck courts and generous parking, along with a 10,000-square-foot retail component providing everyday conveniences.

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NAIOP

True Food Kitchen Office General contractor: Jokake Architect: RSP Location: 8605 E. Raintree Dr., Scottsdale Size: 18,521 square feet Broker: Cresa Southwest Value: $3,085,657 Start date: November 2023 Completion date: May 2024 Fun fact: True Food Kitchen’s headquarters in Scottsdale blends office operations with a kitchen to test new recipes and train new chefs. Coordination with Southwest Gas was critical to bring natural gas into Axis Raintree, plus an exhaust and grease duct.

Thunderbird Commerce Park

Marsh McLennan Agency

Scott Roberts Communities

Developer: Creation General contractor: LGE Design Build Architect: LGE Design Build Location: 7501 E. Redfield Rd., Scottsdale Size: 243,360 square feet Value: $60 million Start date: February 2024 Completion date: Q4 2024 Fun fact: Set on a rare 18acre parcel, Thunderbird Commerce Park is a 243,360-square-foot, Class-A industrial building located east of the southeast corner of Scottsdale and Thunderbird roads within Scottsdale Airpark.

Developer: Trammell Crow General contractor: Wespac Architect: evolution design, inc.

Locatin: 8605 E. Raintree Dr., Scottsdale Size: 23,080 square feet Broker: CBRE Value: $3.195 million Start date: January 2023 Completion date: March 2024 Fun fact: This project features a raw metal deck ceiling with exposed ductwork and polished concrete flooring to express the space’s industrial and modern aesthetic.

General contractor: Jokake Architect: STG Design Location: 16435 N. Scottsdale Rd., Scottsdale Size: 7,475 square feet Value: $980,264 Start date: March 2024 Completion date: July 2024 Fun fact: Leveraging creativity with unique solutions, the Scott Roberts Communities office in Scottsdale welcomes employees and guests.

Warm design like custom millwork and residentialinspired lighting balances work with a relaxed ambiance.

82 | September-October 2024

Ashton Thomas General contractor: Jokake Architect: McCarthy Nordburg Location: 8605 E. Raintree Dr., Scottsdale Size: 17,919 square feet Broker: Cresa Value: $2,501,907 Start date: October 2023 Completion date: April 2024 Fun fact: Ashton Thomas built its Scottsdale headquarters on the 2nd floor at Axis Raintree with lease negotiations performed

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83

NAIOP Project NIX Developer: Prologis General contractor: Willmeng Construction Architect: HPA Architecture Location: 87th Avenue and Durango Street, Phoenix Size: 300,000 square feet Value: $53 million Start date: August 2023 Completion date: May 2025 Fun fact: This project consists of a 300,000-square-foot Type III-B build-to-suit tilt-up warehouse building with site improvements. The tenant improvement (TI) portion of the project includes a 15,000-squarefoot office area with a break room, and conference and training rooms for accessory uses.

Palm Valley Commerce Center Buildings A, B and C Developer: Schnitzer Properties General contractor: Willmeng Construction Architect: VLMK Engineering + Design Location: 13550 W. Auto Drive, Goodyear Size: 294,840 square feet Broker: JLL Value: $39 million Start date: May 2024 Completion date: May 2025 Fun fact: Project includes three concrete tilt buildings, noted as building A, B and C on a total of 22.8 acres.

All buildings are designed as shell buildings with the intent for future multitenant mixed use and light industrial/office use.

INISIO at Kierland Developer: Stream Realty and Vero Capital General contractor: Willmeng Construction Architects: Zebra Projects and Good City Studio Location: 16430 and 16600 N. Scottsdale Rd., Scottsdale Size: 32,208 square feet 84 | September-October 2024

Cotton Lane Commerce Park Developer: Trammell Crow Companies General contractor: Willmeng Construction Architect: Butler Design Group Location: 4200 S. Cotton Lane, Goodyear Size: 987,702 square feet (Phase I is 542,873 square feet, Phase II 445,701 square feet) Broker: CBRE Value: $51.6 million Start date: September 2023 Completion date: October 2024 Fun fact: This development occupies a 66.97-acre site and features space for three new warehouse buildings, designated A, B, and C. These modern structures are designed with tilt-panel walls to support the evolving needs of industrial enterprises.

Formation Park 10 Developer: Formation Interests and Crescent Real Estate General contractor: Willmeng Construction Architect: Deutsch Architecture Group Location: Bullard Avenue and Celebrate Life Way, Goodyear Size: 680,000 square feet in 5 buildings (Phase I is 427,000 square feet in 2 buildings) Broker: Cushman & Wakefield Value: $34.2 million Start date: June 2024 Completion date: July 2025 Fun fact: Formation Interest’s first project outside of Texas will consist of five Class A industrial buildings at build out. The site sits on 44 acres and a key element is the 2.5-acre park in the center of the site.

Broker: Stream Realty Partners Value:res $29 ut million rest aborpos minullaute quas estiuntuscim volendebit Landiossimus aute sunt dolore volorem Start expe date:dest, May siminctem.

2024 fugia vel il intore rerorios Completion date: March 2025 exceped mo maximpo reperibusae ad quata veliteum simaior eperum qui doluptaspis debit Fun fact: INISIO is set to undergo a comprehensive renovation inspired plaborem quo blaccusam eum in reperum duntiate mi, quo

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85

NAIOP Mack Innovation Park

Sub-Zero

Developer: Mack Real Estate Group General contractor: Willmeng Construction Architect: Butler Design Group Location: Loop 101 and Bell Road, Scottsdale Size: 572,170 square feet (4 buildings: Building A – 97,205 square feet; Building B – 169,590 square feet; Building C – 184,960 square feet; Building D – 120,415 square feet) Broker: JLL Value: $47.8 million Start date: September 2024 Completion date: March 2026 Fun fact: This modern industrial development is being built in phases on a well-located 124-acre infill site in North Scottsdale.

The site has easy access to the Loop 101 freeway and the Scottsdale Airpark submarket.

Developer: ViaWest Group General contractor: Willmeng Construction Architect: DLR Group Location: 17215 W. Camelback Rd., Goodyear Size: 600,000 square feet Value: $75.9 million Start date: January 2023 Completion date: July 2024 Fun fact: The project is a ground-up, tilt-panel building with a total area of 600,000 square feet.

The building features ultra-high-efficiency HVAC units, providing a more energy-friendly heating and cooling system.

Surprise Pointe Commerce Center

Midway Commerce Center

Developer: Rockefeller Group General contractor: Layton Construction Architect: Ware Malcomb Location: 13290 W. Sweetwater Ave., Surprise Size: 418,400 square feet Broker: CBRE Value: $50 million Start date: December 2023 Completion date: September 2024 Fun fact: Rockefeller Group is developing Surprise Pointe Commerce Center, a 418,400-square-foot speculative distribution center in Surprise. Surprise Pointe Commerce Center is strategically located near major transportation corridors including U.S. 60, Interstate 17 and Loop 101.

Developer: Creation General contractor: LGE Design Build Architect: LGE Design Build Location: 1835, 1975 and 1905 S. Hamilton St., Chandler Size: 301,994 square feet Broker: Lee and Associates Value: $57 million Start date: Q3 2023 Completion date: Q3 2024 Fun fact: Located in the heart of the Chandler Airport infill submarket, Midway Commerce Center is a 301,994-square-foot project featuring three state-of-the-art buildings with ample parking and truck maneuverability.

The Arroyo Developer: Southwest Value Partners (SWVP) General contractor: Derek Builders Architect: Gensler Location: 1215, 1225, 1255, 1275 and 1295 W. Washington St., Tempe Size: 31-acre site Value: $25 million Start date: February 2023 Completion date: July 2024 Fun fact: The 31-acre site is made up of 4 parcels with 4 existing buildings and a parking garage. The improvements for this project include enhanced driveway entries from Washington St, 56th St, and Priest Drive; canopy additions and exterior elevation improvements on all 4 existing buildings.

86 | September-October 2024

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NAIOP Chandler Airpark Technology Center (Phase 2) Developer: Clarius Partners General contractor: LGE Design Build Architect: LGE Design Build Location: Building C, 2600 S. Gilbert Rd., Building D, 2550 S. Gilbert Rd., Chandler Size: Total: 430,700 square feet; Phase 2: 203,000 square feet Start date: Phase 2, Q1 2023 Completion date: Phase 2, Q3 2024 Fun fact: Chandler Airpark Technology Center has now completed phase two. This phase included two buildings, 114,250 square feet and 88,750 square feet, respectively, each with 32-foot clear heights and speculative suites.

4210 E. Camelback

80th and Pecos

Gateway Quads

Jones Industrial

Developer: 3Edgewood LLC General contractor: LGE Design Build Architect: LGE Design Build Location: 4210 E. Camelback Road, Phoenix Size: 32,832 square feet Start date: February 2024 Completion date: Q4 2024 Fun fact: 4210 Camelback, located at The Grove in Arcadia, is a two-story building featuring 32,832 square feet of Class A office space. Designed and built by LGE Design Build, it showcases modern architectural elements, a gym and two pickleball courts.

Developer: Outrigger Industrial General contractor: LGE Design Build Architect: LGE Design Build Location: 8147 E. Pecos Road, Mesa Size: 420,631 square feet Start date: February 2023 Completion date: May 2024 Fun fact: The 80th and Pecos industrial project features a modern, elegant design that integrates tenant identification with a classic yet contemporary aesthetic.

Key highlights include four-sided architecture with varied parapet heights, plane changes and a thoughtful mix of colors and textures, creating a dynamic facade while reducing continuous wall lengths.

Developer: Greenwood and McKenzie Real Estate Investments General contractor: Sun State Builders Architect: Winston Architects Location: 8150 E. Germann Rd, Mesa Size: 122,720 square feet Broker: Lee & Associates Value: $17 million Start date: August 2023 Completion date: April 2024 Fun fact: Gateway Quads is an industrial office warehouse complex that consist of four freestanding buildings that are each 30,680 square feet.

Potential tenants can lease an entire building or select to divide into smaller spaces, allowing for up to four smaller spaces beginning at 7,600 square feet.

Developer: Phoenix Jones Partners General contractor: Sun State Builders Architect: Dalke Design Group Location: 1800 E. Encinas Lane, 1850 E. Encinas Lane, 1900 E. Encinas Lane, Phoenix Size: 130,300 square feet total; three buildings 46,530 square feet; 69,480 square feet; 14,290 square feet Value: $14 million Start date: April 2024 Completion date: May 2025 Fun fact: Jones Industrial consists of three shell buildings on an 11.8-acre City of Phoenix infill site. Buildings are constructed with concrete tilt panels and hybrid wood/steel roof structure. Clear heights are 26 feet for two larger buildings and 16 feet for smaller building.

88 | September-October 2024

Perfectly Positioned for Success: Today and Beyond

Jeff Foster VP, Market Officer Lic # BR630618000 jfoster@prologis.com +1 602 474 8383

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Anchored by the vital Loop 303 highway, the West Valley of Phoenix has become a hub for industrial and manufacturing

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BrinkmannConstructors.com 89

NAIOP

Taawaki Inn Developer: Hopi Tribe Economic Development Corporation General contractor: Wespac Construction, Inc. Architects: Smith Architects | Hank Arens Designs Location: 441 Broadway St., Clarkdale Size: 32,763 square feet Start date: March 2023 Completion date: April 2024 Fun fact: Located at the entry to Tuzigoot National Monument, this 2-story, 44room boutique hotel features a culturally significant and educational component, as the hotel pays homage to and reflects the Hopi culture with elements such as woven belts, baskets, pottery, Kachina Dolls, large paintings, hand-painted tiles, and a stained-glass window, all created by Hopi artists.

Mack Innovation Park | Scottsdale (Phase I)

Surprise Crossings

Developer: Mack Real Estate Group (MREG) General contractor: Willmeng Construction Architect: Butler Design Group Location: Bell Road and Loop 101, Scottsdale Size: 305,375 square feet in two buildings Brokers: CBRE, Shell Commercial and Stream Realty Value: $104.5 million Start date: Q3 2024 Completion date: Q4 2025 Fun fact: This two-building multi-tenant Phase I of Mack Innovation Park | Scottsdale features freeway frontage along Loop 101 and frontage along Bell Road and Pima Road. The property is one of the only state-of-the-art industrial projects in the North Scottsdale submarket.

Developer: Panattoni Development Company General contractor: Wespac Construction Architect: Cawley Architects Location: 13301 N. 137th Ave., Surprise Size: 274,040 square feet | 16.23 Acres Broker: JLL Start date: March 2023 Completion date: April 2024 Fun fact: This state-of-the-art, LEED-certified industrial shell building represents a significant milestone in sustainable construction and innovative industrial design. The structure consists of durable concrete tilt panels, accentuated by an architecturally striking entry corner that combines storefront glass, aluminum composite material and corrugated metal panels.

90 | September-October 2024

Arevon Developer: Nationwide Real Estate Group General contractor: Clune Construction Architect: McCarthy Nordburg Location: 8800 N. Gainey Center Dr., Scottsdale Size: 32,500 square feet Broker: JLL Value: $3,085,980 Start date: April 2023 Completion date: October 2024 Fun fact: Arevon is a leading renewable energy company that looked to expand their existing space at Gainey Ranch Corporate Center. The main goal of the project was to create a new flagship office that reflected their brand and culture with a focus on modern industrial design elements.

American Furniture Warehouse and Showroom - Marana Developer: American Furniture Warehouse, Co. General contractor: Burton Construction Architect: Butler Design Group Location: 6595 W. Marana Center Blvd., Marana Size: 260,861 square feet Value: $44 million Start date: February 2023 Completion date: April 2024 Fun fact: American Furniture Warehouse is a 260,861-square-foot, fully air-conditioned tilt wall building including a 122,500-square-foot showroom and a 114,056-square-foot warehouse.

91

NAIOP Innovate48 Industrial Park Developer: Ryan Companies US General contractor: Ryan Companies US Architect: Butler Design Group Location: 4833 E. Washington St., Phoenix Size: 163,000 square feet Broker: JLL Start date: June 2024 Completion date: Q2 2025 Fun fact: The project is comprised of approximately 163,000 square feet and will provide users with unparalleled accessibility and amenities. The building will be 100% air conditioned, have LED lighting, and will contain approximately 3,500 square feet of speculative office suite space.

Prologis Loop 303 Developer: Prologis General contractor: Layton Construction Architect: Ware Malcomb Location: 4660 N. Cotton Ln., Goodyear Size: 1,630,820 square feet Broker: JLL Start date: Q1 2023 Completion date: Q3 2024 Fun fact: This project consists of two buildings that are minutes from Arizona State Route 303 (0.5 miles), Interstate 10, and State Highway 85; the Foreign Trade Zone designated park and building is ideally located to serve Arizona as well as the key markets in the Western United States including Northern California, ports of Long Beach, New Mexico, Utah and Nevada.

Schrader Farms Business Park Developer: Ryan Companies US General contractor: Ryan Companies US Architect: Deutsch Architecture Group Location: 800 E. Queen Creek Rd., Chandler

92 | September-October 2024

Prologis I-17 Logistics Center (Phase ll) Developer: Prologis General contractor: Derek Builders Architect: Ware Malcomb Location: 100 E. Hammond Lane, Phoenix Size: 276,063 square feet Broker: Lee and Associates Start date: January 2023 Completion date: March 2024 Fun fact: Prologis I-17 Logistics Center is a +/50-acre development.

Immediately adjacent to I-17, a full diamond interchange at 7th Street, and more than 1,100 feet of I-17 frontage, the project offers unparalleled access to I-17 and I-10.

Prologis Pima DC1 Developer: Prologis General contractor: Willmeng Construction Architects: HPA Architects, KSS Architects Location: 1717 S. 91st Ave., Phoenix Size: 300,040 square feet Broker: JLL Start date: December 2023 Completion date: December 2024 Fun fact: This 300,040-squarefoot state-of-the-art distribution center is set to receive both LEED Silver and WELL program certifications, underscoring its commitment to sustainability and wellbeing.

Size: 432,000 square feet Broker: JLL Start date: June 2024 Completion date: Q3 2025 Fun fact: Schrader Farms Business Park is comprised of three industrial buildings totaling more than 432,000 square feet. The project will suit users looking for space to fulfill their manufacturing, logistics and supply chain needs.

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93

NAIOP VT 101 Developer: VanTrust Real Estate General contractor: Layton Construction Architect: Butler Design Group Location: Southwest corner of North Ballpark Boulevard and 99th Avenue, Glendale Size: 311,660 square feet Broker: JLL Start date: July 2024 Completion date: April 2025 Fun fact: VT 101 is a 48acre property zoned for 3 industrial buildings.

The first two buildings totaling 311,660 square feet are being developed on a speculative basis. The third building is a 435,000 cross-dock and available for build-to-suit.

SouthPointe Apartments

Camelback 303 Logistics Center

Agave Ridge Behavioral Health

Developer: Caliber & Trillium General contractor: Tricon Architects: Upward Architects, Felten Group Location: 10831 S. 51st St., Phoenix Size: 172,000 square feet Value: $70 million Start date: Q2 2024 Completion date: Estimated Q4 2025 Fun fact: SouthPointe Apartments is a hotelto-multifamily project converting an existing 160-key hotel tower to a 104-unit apartment along with the groundup development of build-to-rent unit on the surrounding and adjacent land.

Developer: Brookfield Properties General contractor: StevensLeinweber Construction Architect: Butler Design Group Location: 16395 and 16565 W. Camelback Rd., Goodyear Size: 616,100 square feet Broker: CBRE Start date: September 2023 Completion date: December 2024 Fun fact: This project offers the latest industrial building amenities with a strategic twist — expansive industrial outdoor storage space. With each building representing less than 15% coverage of its overall site, future tenants gain a cost-effective, secure outdoor storage amenity that is extensive for a development of this size and perfect for managing industrial and logistics-related items.

Developer: Acadia Healthcare General contractor: Adolfson & Peterson Architect: Stengel Hill Location: 3322 S. Ellsworth Rd., Mesa Size: 73,000 square feet Value: $43 million Start date: February 2023 Completion date: April 2024 Fun fact: This state-of-theart, 100-bed hospital is purposefully designed to address the growing need in Arizona for more accessible, high-quality behavioral healthcare services for adult, older adult and pediatric patients, including comprehensive treatment for those who struggle from behavioral health disorders.

Formation Park 10 Developer: Formation // General contractor: Willmeng Construction // Architect: Deutsch Achitecture Group // Location: Goodyear // Broker: Cushman & Wakefield // Size: 688,000 square feet // Value: $105 million // Start date: May 2024 // Completion date: May 2025 Fun fact: Formation Park 10 is a 5-building business park totaling 688,000 square feet and offers tenants unparalleled access to labor, including a 5-acre amenity space at the heart of the project, which transforms commoditized space into a sense of place for tenants, offering walking paths, activity lawn, table games, shaded seating and food truck parking.

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NAIOP Fountainhead Heights Amenity Refresh Developer: Shorenstein Properties General contractor: CHASSE Building Team Architect: Gensler Location: Tempe Size: 455,000 square feet Broker: CBRE Start date: January 2022 Completion date: April 2024 Fun fact: Fountainhead Business Park, a two-building Class-A office renovation project, offers a compelling destination for its tenants. Inspired by the water feature and desert landscape, the building park was transformed into a welcoming space infused with hotel-inspired amenities and finishes that elevate the form and function of the asset.

Weylyn Luxury Apartments Developer: P.B. Bell General contractor: MT Builders Architect: BMA Architecture Location: 9100 S. 59th Ave., Laveen Size: 308 units Value: $89 million Start date: Q4 2021 Completion date: Q4 2024 Fun fact: The unit mix is 88 one-bedroom units, 32 one-bedroom loft units, 154 two-bedroom units, 10 two-bedroom carriage units and 24 threebedroom units. A one-story clubhouse building, a pool, shade structures, turf areas, a firepit and barbeque area, and a dog park are all located within the community.

96 | September-October 2024

Merit Buckeye 27

Union Building One

Empire 101

Developer: Merit Partners General contractor: StevensLeinweber Construction Architect: Butler Design Group Location: 1515 S. 27th Ave., Phoenix Size: 253,498 square feet Broker: CBRE Start date: September 2023 Completion date: September 2024 Fun fact: Transforming this site from a school campus to a prime, shovel-ready infill parcel required six months of extensive preparation, including remediation and the demolition of 12 existing buildings.

Developer: Lincoln Property Company / Harvard Investments General contractor: Team Icon Architect: McCarthy Nordburg Location: 2046 W. Riverview Auto Dr., Mesa Size: 22,927 square feet Start date: June 2024 Completion date: September 2024 Fun fact: This stunning amenity expansion is taking Lincoln’s newest Valley office delivery to the next level. Centering on “The Clubhouse” additions include a luxury lounge, kitchen and bar, golf simulator, conference area and spec suites.

Developer: Nuveen/KBC Advisors Arizona General contractor: StevensLeinweber Construction Architect: Deutsch Architecture Group Location: 8850 W. Sweetwater Ave., Peoria Size: 152,134 square feet Broker: Kidder Mathews Start date: April 2023 Completion date: July 2024 Fun fact: Empire 101 is a new Class A industrial project fronting the Loop 101 freeway, just 12 minutes from the new TSMC semiconductor fab plant. Now complete, it is a rare infill site selection opportunity for industrial tenants seeking to capitalize on metro Phoenix growth, including boom markets like the semiconductor industry.

Proud Member of NAIOP Arizona

HACI Mechanical Contractors, Inc. HACI Service, LLC 2108 W Shangri-la Road Phoenix, AZ 85029 Phone (602) 944-1555 Https://hacimechanical.com/ 97

NAIOP Mack Innovation Park | Deer Valley Developer: Mack Real Estate Group (MREG) General contractor: Sites A & C - Nitti Builders; Site B - Graycor Architects: McCall Architects and Butler Design Group Location: Site A - 23975 and 23869 N. 19th Ave. and 1775 W. Alameda Rd., Phoenix. Site B - 333 and 555 W. Pinnacle Peak Rd. and 23555 N. 7th Ave., Phoenix. Site C - 33, 55, 125 and 275 Pinnacle Peak Rd., Phoenix Size: 1,332,008 square feet Brokers: CBRE and Stream Realty Value: $450 million Start date: Sites A and C broke ground in late 2022 and Site C broke ground Q2 2024 Completion date: Site B to be completed early Q1 2025. Sites A and C delivered summer 2024 Fun fact: Mack Innovation Park | Deer

Valley is a multi-phased development featuring ten speculative buildings ranging in size from 62,831 square feet to 201,189 square feet with an additional 115 acres available for lease, sale or build to suit.

Rinchem-Surprise Developer: Rinchem General contractor: Graycor Construction Company Architect: Archicon Architecture + Interiors LC Location: 13255 W. Sweetwater Ave., Surprise Size: 123,516 square feet Start date: March 2023 Completion date: March 2024 Fun fact: Rinchem-Surprise is a custom-built hazmat facility providing highly specialized warehouse space, administrative offices, shipping/ receiving and 11-truck loading dock designed to safely manage high purity chemicals and gasses — a service

Caliber by Greystar Developer: Greystar General contractor: Layton Construction Architect: Deutsch Architecture Group Location: 9303, 9451, 9595 N. 79th Avenue, Peoria Size: 411,918 square feet in three buildings Broker: JLL 98 | September-October 2024

that many of the Valley’s high-growth industries depend on, including the local semiconductor industry.

SkyBridge 108 & 109 Developer: SkyBridge Arizona/SkyPlus Developments General contractor: Graycor Construction Company Architect: ADM Group Location: 7835 and 7733 E. Velocity Way, Mesa Size: 50,000 square feet Broker: CBRE Start date: Q1 2023 Completion date: Q4 2024 Fun fact: Nearing completion, SkyBridge 108 and 109 will soon become the largest buildings to deliver at the 435-acre SkyBridge master plan, which at build out will span more than 4 million square feet of aeronautical, non-aeronautical, retail and office development.

Value: $90 million Start date: April 2023 Completion date: April 2024 Fun fact: Caliber is the first element to complete in Greystar’s $500 million Peoria Place master planned project, designed to revitalize Peoria’s historic district. Minutes from Loop 101 and US 60, Caliber is poised to bring quality, close-to-home jobs for the city and region at large.

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NAIOP

The Osborn Developer: Aspirant Development General contractor: Brinkmann Constructors Architect: Gensler Location: 3300 N. Scottsdale Rd., Scottsdale Size: 418,058 square feet Value: $84 million Start date: September 2024 Completion date: April 2026 Fun fact: The Osborn, located in the heart of Old Town Scottsdale, will have 226 residential units, comprising 118 active adult units, 34 memory care, and 74 assisted living units with a gross floor area of just under 500,000 square feet.

I-10 International

Project Nemo

Developer: Lincoln Property Company General contractor: Brinkman Constructors Architect: Butler Design Group Location: SEC Alvernon Way and Los Reales Road, Tucson Size: 560,000 square feet Broker: Lincoln Property Company Value: $100 million (Phase 1) Start date: Q3 2024 Completion date: Q4 2025 Fun fact: This is the Tucson market entry for Lincoln, soon bringing four new Class A warehouse/distribution buildings to its airport submarket. It offers proximity to I-10 and I-19, direct connections to ports and cities in the U.S. and Mexico, and Tucson International Airport — connecting tenants to 46 million people within 500 miles.

General contractor: FCL Builders Architect: Ware Malcomb Location: 8650 N. 75th Ave., Peoria Size: 211,892 square feet Value: $44,587,000 Started: January 2024 Completion: October 2024 Fun fact: Nemo is a cooler/freezer facility for a national specialty grocer that incorporates specialty areas for ice cream and turkeys within the overall freezer space. The refrigeration system includes adiabatic cooling towers that conserve water, and the newer equipment is much more energy efficient than older systems, and includes the latest refrigerants required by the federal EPA.

100 | September-October 2024

Park303 Phase 2

Gateway Grand

Developer: Lincoln Property Company General contractor: Layton Construction Architect: Butler Design Group Location: 7200 N. Sarival Rd., Litchfield Park Size: 2,500,000 square feet Brokerage Firm: Lincoln Property Company Value: $360 million Start date: February 2022 Completion date: November 2023 Fun fact: Following a “creative industrial” vision, it spans 2.5 million square feet in three buildings with 40-foot clear heights, 25-foot insulated glass entries, high-end spec office space and shear bracing supporting the latest equipment.

Developer: Greystar General contractor: Derek Builders Architect: Deutsch Architecture Group Location: 7852 and 8016 E. Pecos Rd., Mesa Size: 1,074,858 square feet Phase 1 (2.1 million square feet at build-out) Broker: CBRE Value: $200 million Start date: June 2022 Completion date: December 2023 Fun fact: Gateway Grand is the first Arizona industrial delivery for Greystar, a long-term holder who builds with long-term tenant satisfaction in mind. Totaling 1 million square feet, its two buildings feature 40-foot clear height, 60-foot x 60-foot column spacing and 3,600 amps of power (expandable with gear on order).

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NAIOP

Elliot 94 Developer: Kitchell Development Company General contractor: Nitti Builders Architect: Butler Design Group Location: 9342 E. Elliot Rd., Mesa Size: 214,548 square feet Broker: CBRE Start date: June 2022 Completion date: December 2023 Fun fact: Elliot 94 is a 214,548-square-foot project encompassing two buildings with modern functionality including 30-foot clear heights, ample parking and efficient use of natural light.

Elliot 96

Lex Cotton 3 and 4

Developer: Kitchell Development Company General contractor: Nitti Builders Architect: Butler Design Group Location: 9512 E. Elliot Rd., Mesa Size: 214,548 square feet Broker: CBRE Start date: June 2024 Completion date: Q2 2025 Fun fact: Elliot 96 is a 266,204-square-foot project encompassing two buildings and located in the prime Elliot Road technology corridor. The development is directly south of the Meta Data Center campus and near Amazon and Apple locations in the East Valley.

Developer: Merit Partners General contractor: Stevens-Leinweber Construction Architect: Butler Design Group Location: Southwest Corner of Loop 303 and Indian School Road, Goodyear Size: 880,000 square feet Broker: CBRE Start date: February 2022 Completion date: December 2023 Fun fact: This is a two-building spec project with amenities and location quickly attracted a leading national landscape supply company and an American e-commerce organization.

102 | September-October 2024

Moxy Phoenix Downtown

Park Central Retail

Developer: PEG Companies General contractor: Okland Construction Architect: FFKR Architects Location: 116 S. Central Ave., Phoenix Size: 94,094 square feet Value: $35 million Start date: December 2019 Completion date: December 2023 Fun fact: The Moxy Downtown Phoenix at the Luhrs Building embodies urban renewal development, leveraging an existing property to bring new vitality, commerce and beauty to a previously blank spot in the downtown fabric.

Developer: The Plaza Company General contractor: Irwin Construction Company Architect: Butler Design Group Location: 3120 N. Central Ave., Phoenix Size: 7,500 square feet Value: $3.2 million Start date: September 2021 Completion date: December 2023 Fun fact: Park Central is an office/retail development at the northwest corner of Earll and Central Ave at Park Central Mall.

This project blends its mid-century modern history with a focus on today’s technology and design.

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While we’re constantly growing and evolving, what won’t change is our dedication to our values — doing everything with honesty, safety, unity, and quality.

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