AZRE Magazine March/April 2013

MARCH-APRIL 2013

2013OUTLOOK MAJOR BUILDING PROJECTS TAKING ROOT ONCE MORE INSIDE

Construction In Indian Country p. 30 8th Annual RED Awards p. 40 McCarthy Building Companies p. 65

Outlook is good for a favorable prediction

President & CeO: MIChAEl AtkInson Publisher: ChERyl GREEn ViCe President Of OPeratiOns: AuDREy WEbb editOrial editOr in Chief: MIChAEl GossIE editOr: PEtER MADRID assistant editOr: kIMbERly GunnInG interns: EMIly nICholson • CouRtnEy MERZ • DEsIREE tolI RoChEll vAnDEuRZEn • huAn vo art seniOr GraPhiC desiGner: MIkE MERtEs GraPhiC desiGner: lIllIAn REID interns: AlIshA huRst COntributinG PhOtOGraPhers: CoRy bERGQuIst • GloRy shIM diGital Media Web deVelOPer: ERIC shEPPERD Web & GraPhiC desiGner: MElIssA GERkE

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f there’s one thing we like to do, it’s make predictions. And to our benefit, we have experts whose job it is to do exactly that.

We watch the local newscasts and count on meteorologists to provide an accurate weather forecast. We look to our financial advisors to predict the right stocks or mutual funds in which to invest.

The March/April issue of AZRE is all about predictions. It includes our annual commercial real estate outlook. It’s the one issue in which I tap into the collective expertise of my industry sources. And in the almost 3 years I’ve been editor, I have put together quite an all-star team.

This year’s offering includes a main outlook story, plus an additional piece on one of 2012’s hottest markets, the multifamily sector.

In order to get a true indication of what lies ahead in 2013, I made sure I included the voices of small- to mid-size architecture firms, general contractors and brokers. Coming out of the recession, these are the companies I know have their fingers on the pulse of the industry.

This issue also includes the 2013 RED Award winners.

Again we had some great projects in 2012. And by all indications, 2013 is shaping up to be a good year.

That’s one prediction of which I’m pretty sure.

MarketinG/eVents ManaGer: WhItnEy flEtChER interns: sAbRInA sPECtoR OffiCe sPeCial PrOjeCts ManaGer: sARA fREGAPAnE exeCutiVe assistant: MAyRA RIvERA database sOlutiOns ManaGer: CInDy Johnson aZ business MaGaZine seniOr aCCOunt ManaGer: DAvID hARkEn aCCOunt ManaGers: shAnnon sPIGElMAn • ARthuR AlCAlA ZoE tERRIll ariZOna COMMerCial real estate aCCOunt ManaGer: stEvE kosloWskI rankinG ariZOna direCtOr Of sales: shERI kInG exPerienCe ariZOna/PlaY ball direCtOr Of sales and MarketinG: sCott fIRlE sCOttsdale liVinG aCCOunt ManaGers: GAIl RosIER • MARIAnnE AvIllA aZ business leaders direCtOr Of sales: CARol shEPARD aZ biG Media exPOs sCottsDAlE suPER ExPo/APRIl sCottsDAlE suPER ExPo/novEMbER exhibit direCtOrs: kERRI bluMsACk • tInA RobInson • MARIAnnE AvIlA

Editor (602) 424-8844 peter.madrid@azbigmedia.com

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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. ©2013 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.

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CON T E N T S9 40 65 FEATURES

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New to Market Projects in the pipeline

Project News Deco Communities renovates 4 Valley apartment projects; DPR tenant improvements include office, data center

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Annual Outlook The road ahead for Arizona’s CRE industry is getting smoother

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Construction in Indian Country Building relationships to build nations

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34

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65

Economic Development DMB’s Eastmark: History in the making

Executive Q&A Four faces of industry leadership

CoreNet Global Arizona Championing best practices to create awareness

McCarthy Building Companies Building communities one project at a time

On The Cover: The Health Sciences Education Building in Downtown Phoenix is the 2013 RED Award winner for Most Challenging Project. The team included two developers, two contractors and two architects.

Clarification: Douglas Sydnor Architect and Associates is architect for the Barry and Peggy Goldwater Library and Archives. A general contractor has yet to be selected.

COMING NEXT ISSUE

» » » »

U.S. Green Building Council Healthcare Building Trends Ryan Companies US, Inc. Valley Partnership

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RED AWARDS

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41 54 56

2013 Project Winners 2013 Merit Winners

2013 OTY Winners

3101 N. Central Avenue Suite 1070 Phoenix, Arizona 85012

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COMING NEXT ISSUE Healthcare Building Trends: Will healthcare reform affect the way new facilities are designed and built?

Real Estate Financing: Are banks lending again as commercial real estate comes out of recovery mode?

Special supplement: Ryan Companies, US celebrates 75 years of development, construction and property management.

Special supplement: Valley Partnership embarks on the next 25 years of responsible development.

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AZREmagazine.com

JULY-AUGUST 2012

SEPTEMBER-OCTOBER 2012

Back to School Major education building construction projects ready to open their doors

NOVEMBER-DECEMBER 2012

INSIDE Office, Industrial Over view: Hope on the Horizon p. 10

DRAMATIC BUILDING THRIVING DESIGNS CITIES Collaboration produces Urban Land Institute: stunning projects

A change agent for Arizona's communities Big Deals:

The best and the brightest in Arizona brokerage p. 30

Adolfson & Peterson: Building a reputation of excellence p. 42

Tucson Outlook: New Buzz in the Old Pueblo p. 20 AZCREW: An Advocate for Women in CRE p. 36

NEW TO MARKET

MULTI-FAMILY 1Ò ALMERIA AT OCOTILLO Developer: P.b. bell Companies and Gilbane Development General Contractor: Mt builders Architect: Whitneybell Perry Location: 2470 W. Edgewater Way, Chandler Size: 27.33 gross acres

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The $55M, santa barbara luxury style community will be located on the water at Dobson and Price. Exepected completion is 4Q 2013.

2Ò VIVE DISTINCTIVE LIVING Developer: P.b. bell Companies General Contractor: Mt builders Architect: Whitneybell Perry Location: 1901 W. Germann Rd., Chandler Size: 13.2 gross acres

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P.b. bell recently broke ground on this $25M community that will feature 194 luxury units. The resort-style multifamily project will feature high-tech amenities. Expected completion is 4Q 2013.

3Ò SAN PASEO Developer: Mark-taylor and Grossman Company Properties General Contractor: Mark-taylor Architect: Mark-taylor Location: Arizona Grand Parkway and beverly Rd., Phoenix Size: 138 units

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The $20M multi-family community will be built around a lagoon-style pool and poolside cabanas and include a 24/7 fitness facility and cyber cafe. It will be adjacent to Arizona Grand Resort. Expected completion is 3Q 2013.

4Ò LIV NORTHGATE Developer: The Rockefeller Group and Investment Property Associates General Contractor: MC Clark Wayland Architect: Whitneybell Perry Architects Location: nEC Warner and Recker roads, Gilbert Size: 402 units The first of two phases recently broke ground and completment The Rockefeller Group’s 155-acre, mixeduse north Gateway master plan, which can accommodate more than 1 Msf of office and industrial space and 12.2 acres of retail development. liv northgate will consist of 402 garden-style, luxury apartment units in 2- and 3-story buildings. Each apartment will be finished with a premium appliance package, custom cabinets and slab granite kitchen counters, among its amenities.

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HEALTHCARE 5

5ÒU.S. DEPT. OF VETERANS AFFAIRS SOUTHEAST COMMUNITY OUTPATIENT CLINIC Developer: Mcshane Development Company General Contractor: Mcshane Construction Company Architect: Rees Architect Location: 3285 s. val vista Dr., Gilbert Size: 60,000 sf The new 2-story facility will be built to lEED silver for healthcare standards. The interior will incorporate a modern public waiting area and lobby, physician offices, treatment rooms, staff support areas, diagnostic testing and laboratories. The design supports the expansion of healthcare services to include audiology, radiology, dental care, family support and physical therapy, among others. Expected completion is 2Q 2014.

EDUCATION 6Ò MESA COMMUNITY COLLEGE PERFORMING ARTS CENTER Developer: Maricopa County Community Colleges General Contractor: layton Construction Architect: Jones studio Location: 1520 s. longmore Dr., Mesa Size: 44,050 sf The $10M MCC Performing Arts Center supports a sustainable building ethic through the adaptive re-use and expansion of a vacant movie house adjacent to campus.

The centerpierce will be 450-seat multi-purpose theater.

Expected completion is 2Q 2014.

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INDUSTRIAL 7

7ÒEmpire Southwest Mesa Campus Expansion Developer: Empire southwest General Contractor: Porter brothers Architect: saemisch + Di bella Architeccts Location: 1725 s. Country Club, Mesa Size: 125,000 sf Empire southwest’s new contruction project includes a 2-story administrative offices and a single-story component rebuild center warehouse. It also includes two new covered parking areas. This structure will utilize elevated equipment platforms for photovoltaic systems that will provide a large portion of the electrical needs for the entire campus. Estimated completion is 2Q 2014.

RETAIL

8ÒTHE SHOPS AT 7TH & OSBORN Developer: Wetta ventures llC General Contractor: Chasse building team Architect: RsP Architects Location: 7th st. and osborn, Phoenix Size: Phase 1, 1,700 sf Phase 1 of the $2M shops at 7th and osborn will incorporate the ideas of experience-based retail and is designed to fill a niche market: true, local, renewal. The site includes renovation of an existing church into a new, 4,000 sf restaurant; the adaptive re-use of an existing school building into retail space; and an addition of a new, mid-century inspired 1,700 sf coffee house. Expected completion is 2Q 2013.

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CONSTRUCTION PLANNING & ZONING Ò STATE OF ARIZONA

The state’s Joint legislative Income tax Credit Review Committee has recommended, without dissent, that its colleagues in the state legislature repeal a law that gives home builders and developers a state income tax credit equal to 30% of the value of any land they donate for public school facilities. The Committee’s recommendation is not the final word and the repeal must now be approved by the full legislature and gain approval of the governor. to date the recommendation has gone nowhere and is not currently scheduled as a legislature agenda item. Repeal of the tax credit will not, however, come easy since, according to constitutional amendment Proposition 108, it may require a two-thirds vote of both the house and the senate since the repeal would result in an increase in state revenues. The Proposition states that while the two-thirds vote applies to new taxes or increases in the tax rates, it also states that “a reduction or elimination of a tax deduction, exemption, credit or other tax exemption feature in computing tax liability” requires the same two-thirds vote.

Ò CITY OF SCOTTSDALE

Citizen participants who where applicants to the scottsdale visioning town hall (vth) feedback process through January 11 will have the opportunity to craft a draft vision statement for scottsdale’s General Plan 2014 process. This will be the initial step toward guiding the City’s growth over the next 20 years. The vth was conducted by the Arizona town hall organization who will oversee the selection of participants and the proposed discussions. for updates go to generalplan@scottsdaleaz.gov.

Ò TOWN OF GILBERT

The office of Economic Development launched a new website that enables citizens, developers, and last January a committee was convened to discuss businesses to explore Gilbert’s opportunities for any issues that have been identified by stakeholders commercial investment. The website allows assessment regarding the proposed update to the City of Mesa’s sign of the town’s operational environment and is intended ordinance. The City had previously requested feedback to inform and assist any entity interested of the town’s from stakeholders in november on any topics or issues general business climate and available real estate as related to the proposed updated ordinance that may well as its business development incentives, workforce have to be addressed as agenda items for the committee. availability, and existing or potential target markets.

Information on the updated ordinance and the visit gilbertedi.com. committee’s progress can be found on the City’s website.

Ò CITY OF MESA

Ò CITY OF PHOENIX

The City of Phoenix is in the process of adopting the 2012 International Residential Codes and has proposed various amendments to those codes. feedback regarding the proposed amendments was provided by the home builders Association of Central Arizona at the City’s request. The amendments have been presented to the City’s Development Advisory board. for questions or information go to phoenix. gov/webcms/groups/internet/@inter/@dept/@dsd/@trt/ documents/webcontent/ircamend.

Ò TOWN OF BUCKEYE

Ò TOWN OF QUEEN CREEK

The town’s Development services Department (DsD) announced the following changes for 2013: >> Chris Anaradian was named Development services Director and will be planning, organizing, and directing the activities of that department. he previously worked for the City of tempe as Community Development Director and in private civil engineering practice. >> In order to minimize delays and improve communication throughout a project’s entitlement, permitting, and construction processes, the DsD is enabling online permit applications, plan submittals, and inspection scheduling within 1Q 2013. >> The town will be doing a full technology assessment to improve on the elimination of red tape and to emphasize value-added service to its customers.

The town of buckeye recently approved its Engineering Design standards (EDs). The EDs document became effective in mid-December and can be The P&Z column is compiled by Dave Coble and George Cannataro with found at buckeyeaz.gov/index.aspx?nid=1096.

Coe & Van Loo Consultants, cvlc.com.

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CONSTRUCTION: PROJECT NEWS

Cabana on McClintock

Ò SCOTTSDALE DEVELOPER RENOVATES, RENAMES APARTMENT PROJECTS

Ò DPR PROJECTS INCLUDE OFFICE, DATA CENTER

Deco Communities of scottsdale is renovating and redeveloping four apartment projects in the valley under its Cabana brand. they include Cabana on McClintock (181 units/140.000 sf) and Cabana on Mill (167/130,000) in tempe, and Cabana on thomas (382/205,000) and Cabana at the Pointe (180/113,00) in Phoenix. urban Pointe Construction is the general contractor and design firms include Private label International and xerophytic Design. subcontractors include Indigo Contracting, Greencraft Interiors, Wilkinson flooring, Gryphon flooring, General Plumbing. Expected completion is 2Q and 3Q 2013.

“We have been eagerly anticipating the opportunity to expand the Deco brand into this exciting part of the valley,” Deco Communities Partner Rob lyles said. “the 16th street corridor is rapidly becoming a hub of restaurants, shops and entertainment and Cabana at the Pointe is located close to the area and also has close proximity to many corporate headquarters and valley freeways.” the company’s commitment to rehabilitating older properties in infill areas has garnered accolades from local government officials, community leaders and police departments that say Cabana properties have inspired urban renewal in key areas throughout Metro Phoenix.

DPR Construction is making tenant improvements to an office building and installing electrical, mechanical, structural and architectural infrastructure to a data center. the 5060 building renovation project in Phoenix includes tI to the core and shell, design build items (roofing and fire sprinkler systems). the $1.8M, 15,000 sf project includes law office space, lounge, workout facility and common area spaces. owner is Alliance Project Advisors and the architect is RsP Architects.

Expected completion is 3Q 2013. the Goodyear Modular Data Center Phase 2 project includes support of a second hP EcoPod, generators and Active Power Powerhouses at nov’s existing modular data center. Architect is dpa architects. Expected completion is 2Q 2013.

Ò LINTHICUM RENOVATING DESERT HIGHLANDS CLUBHOUSE linthicum is in the process of renovating the 30,000 sf clubhouse at Desert highlands in scottsdale. Work includes the clubhouse’s formal and informal dining rooms, and clubhouse bar. Work includes new rustic doors, decorative chandeliers, cabinetry for wine display and storage, interior wall finishes, wood ceiling enhancements, recessed candle niches and the addition of a fireplace in the sofa lounge and a balcony fire pit creating new gathering spots. linthicum is also expanding the bar terrace for additional seating. Art Jordan of linthicum is the project manager for the renovation, swaback Partners is project architect and studio b is the interior designer. Completion is expected in the fall.

Ò LGE COMPLETES MEDICAL, MANUFACTURING PROJECTS lGE Design build completed construction on a 11,740 sf medical office for sonoran Medical Centers in Phoenix. the design build primary healthcare facility features 19 exam rooms, a laser treatment room, nursing stations, back office support and a patient waiting area. lGE also completed construction on a 17,607 sf major manufacturing expansion for Galco International. this 100% air conditioned space was designed to match the original Galco headquarters completed in 1988. Galco specializes in holsters constructed of horsehide. law enforcement personnel around the nation are issued and use Galco products.

Ò ENCANTO POINTE APARTMENTS OPEN the City of Phoenix housing and human services departments, native American Connections (nAC), the Arizona Department of housing and valley of the sun united Way celebrated the grand opening of Encanto Pointe apartments, 4175 n. ninth st. Encanto Pointe is a 54-unit apartment housing complex serving homeless individuals through a “housing first” model. the complex was developed and is managed by nAC. nRP Group was the general contractor.

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BROKERAGE

BY ROCHELL VANDUERZEN • PHOTOGRAPHY BY LILLIAN REID

The referee tallies points at the bocce ball activity station during Brokers for Kids.

LOOKING AFTER THE OVERLOOKED The industry gives back as Brokers for Kids raises awareness and money for underprivileged kids

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t’s difficult to think about commercial real estate brokers and agents without imagining type-A, motivated players whose drive and persistence make them great at their jobs.

Each year in the valley, many of them also apply their skill and enthusiasm to a lively charity fundraiser called brokers for kids, created by the scottsdale Active 20-30 Club, which culminates in the brokers Cup olympiad. since its inception in 1999, the olympiad has grown to 38 teams and dozens of sponsors. Events events volleyball, bocci ball, basketball and a four-team dodgeball tourney to determine the winner. It’s a day fi lled with competition and camaraderie. but the goal is to help the kids, and in less than 15 years more than $1.84M has been raised.

Th is year’s event was feb. 15 at tempe beach Park. highlights included silent auctions and a raffle for a new car or $15,000. In the spirit of the event, the winner took the cash, and donated half

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of it to the charity.

The energy of the teams was contagious as they networked and played for a great cause.

“This event was definitely a step up from years past,” says ben hawkins, brokers for kids Chairman. “We brought in live music and gained support from Pride Group, creating an ideal olympiad.”

Throughout the year, companies work tirelessly to be the top fundraiser.

CbRE, for instance, holds an annual preparty to the Phoenix open and shuttles attendees to the tournament. There are also sponsored happy hours, horseshoe tournaments, 50/50 raffles and a friday Jeans Day. Caretaker landscape and tree Management sponsored a battle of the bands at a scottsdale bar.

The primary beneficiary this year was boys hope Girls hope of Arizona, which helps capable, motivated, underprivileged children succeed. With the belief that a quality education opens doors in life, bhGh specifically focuses on children who fit the future-high-

school-dropout profi le.

“We unlock potential in the whole child — mind, body, spirit, and relationships,” says tami bohannon, Executive Director of boys hope Girls hope.

According to bohannon,100% of the scholars enrolled in the program are admitted to college, many with academic scholarships. Altogether, more than $700,000 has been raised for boys hope Girls hope, providing countless hours of crucial programs to help local children succeed.

“With overwhelming support from the commercial real estate industry and the scottsdale 20-30 Club, we were able to raise just over $350,000 (this year),” hawkins says. “Everyone involved had a great time and has recommitted for next year, and prospective teams are already committing as well. We plan on building on this great foundation and raising the event up another notch next year.”

If you’re keeping score, Cole Real Estate Investments raised the most money; Costar Group won the olympiad.

ECONOMIC DEVELOPMENT

by CAssIDy CAMPAnA

HISTORY IN THE MAKING Innovation, regional planning and endurance result in DMB Associates’ newest community — Eastmark

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or decades, oleanders shaded the proving grounds of General Motors Corporation in a residential part of Mesa. testing new models for endurance, the iconic carmaker built one of the most innovative test tracks in the world, pushing the limits of Corvettes, hummers and harley Davidson motorcycles.

It comes as no surprise, then, that the same site has become a kind of community and economic development planning ground for DMb Associates, a mixed-use real estate developer with a history of innovation in Arizona, California, hawaii and utah. Purchased

by DMb at the end of 2006, plans for the 3,200-acre site have been meticulously and diligently advanced by DMb planners for more than six years.

“The proving grounds property is unlike any other DMb community. Its strategic location and history offered us an opportunity to create something new,” says Drew brown, one of DMb’s founders and company president when the land was purchased. “It’s fitting that the history of this site is all about innovation. We knew from the

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beginning it would evolve into a new kind of planned community, unlike any previously attempted, that serves as home for families and an economic core for the region.”

Encompassing five square miles and access to every part of the valley, Eastmark is close to Phoenix-Mesa Gateway Airport, boeing and other major employers, including Asu’s Polytechnic campus.

“We examined the growth patterns of cities like Irvine and stapleton and we looked to Europe’s great cities for lessons about how to create the most attractive integrated community that blends lifestyle and commerce,” says trevor barger, principal of Espiritu loci and DMb’s lead planner for Eastmark. “our team travelled and studied the world’s great cities to better understand how to develop a city today where people want to live now and 40 years from now.”

A REGIONAL SOLUTION Roc Arnett, president of East valley Partnership, is well aware of the impact

the community will have on the area.

“Eastmark is part of the emerging Gateway Area, which is at the epicenter of the East valley,” Arnett says. “It’s like the center of a set of concentric circles, each one building on the assets and successes of its neighbors. Th is is defi nitely a regional marathon and DMb, working with all of its East valley partners, has started the race with exactly the right blend of area commitment, energy and endurance.”

While DMb planners were focusing on the heart of Eastmark, the same sort of attention radiated through the region. by 2008, Gateway Airport was exploring the idea of transforming itself into the regional reliever airport.

Renamed Phoenix-Mesa Gateway, the airport has since wooed three major airlines — Allegiant, frontier and spirit — and secured fAA approval and funding to continue expansion.

Passenger counts in 2012 exceeded 1.3M, a nearly 400% increase compared to 2008. other infrastructure has followed.

East valley legislators and city councils have cooperated to create a freeway

Rendering of the Great Park at Eastmark

system that is the envy of other parts of the valley.

Asu’s Polytechnic Campus at the old Williams Air force base has similarly transformed over the past five years, bringing some of the university’s most exciting R&D programs to the campus. In just three years, the colleges there have nearly tripled in size and today serve about 12,000 students.

NO SMALL PLANS In the midst of the Great Recession, Mesa’s newly elected Mayor scott smith brought a strategic focus to the city’s economic development efforts.

“We knew Mesa had to step up and do its part to create a framework that would encourage investment and help business succeed,” smith says.

At Eastmark, that meant thinking big and thinking long-term.

“We were creating a blueprint for a property that would defi ne Mesa and the Gateway area for generations to come,” Mayor smith says. “We had to do it right.”

The planning framework developed for Eastmark broke new ground in Mesa. The city’s planning leaders supported the development of a plan that used “form based code” for the fi rst time in Mesa to create a master plan that is flexible; allowing the community to evolve and respond to market fluctuations

and changes in technology and transportation over time.

The unique planning framework has been a key factor in the early successful business attraction for the company. one of the fi rst calls came from Gaylord Entertainment, seeking a major hotel and convention site.

DMb secured the deal by working with the city, the Convention and visitors bureau and winning the support of Mesa voters. now stalled by the economic downturn and sale of the Gaylord brand to Marriott, this plan was a spark igniting other efforts. first solar’s national search for a second American facility location ultimately ended in its own backyard when it also chose Eastmark.

DMb worked with economic development leaders at the Arizona Commerce Authority, Governor’s office, Maricopa County and the City of Mesa to create a package that would keep first solar in Arizona and bring green technology jobs to the East valley.

“While we can’t make a commercial or residential market, we can be creative in attracting companies to Eastmark,” says karrin taylor, executive vice president at DMb and the leader of the company’s economic development efforts. “our zoning and infrastructure investments provide us with the speed and agility that businesses need.”

>> The transformation of an automobile test track into a regional anchor community might intimidate even the most experienced of developers. But with Eastmark, DMB Associates proved the job can be done. >> At 5 square miles, Eastmark is the largest tract of privately-held developable land in the East Valley.

That scope is not lost on landowner DMB.

Mayor Scott Smith

Karrin Taylor

Roc Arnett 13

EXECUTIVE Q&A

BY PETER MADRID

Robert R. Preiss

Cathy Zoccoli

Q: WHAT WAS IT ABOUT THE INDUSTRY THAT ATTRACTED YOU? A: I am attracted to the industry because it is on the forefront of building design and operation. Th is allows a whole building approach that can take advantage of all opportunities and synergies to minimize impact on the environment while providing a healthy and comfortable place for people to live and work.

Q: What was it about the industry that attracted you?

A: I was happy to land a job after graduating college. Most important what has kept me in this industry have been the opportunities and different facets of commercial real estate. I started as a receptionist and every day there were different opportunities and challenges. There is also lots of opportunity to grow. I have advanced by furthering my education and knowledge in different aspects of the Industry. In the past few years, I obtained my Designated broker license, lEED accreditation, CPM designation and, am now I’m working on my RPA designation.

ENERGY MODELING MANAGER GILBANE BUILDING COMPANY years in commercial real estate: 1 years at company: 1

Q: HOW HAS THE INDUSTRY CHANGED SINCE YOU STARTED? A: The industry now has a higher regard for social and environmental responsibility and understands that these are integrated with a successful business model and not mutually exclusive. The industry now understands that high performance building and sustainable practices make the businesses that use them more profitable and competitive in the long run.

Q: WHAT PROFESSIONAL ACHIEVEMENT ARE YOU MOST PROUD OF? A: having learned to offer turn-key, one stop sustainable and energy efficient building solutions to our clients. I have the ability and skills to put all the pieces together necessary to build high performance buildings that will benefit our clients and the environment for many years to come.

SENIOR PROPERTY MANAGER/DESIGNATED BROKER THE MULLER COMPANY years in commercial real estate: 15 years at company: 5

Q: How has the industry changed since you started?

A: like in any industry, the main thing that has changed over the past 15 years is the technology. With smartphones, tablets, and networks, work may get done quicker, but there always seems to be more. however, what has stayed the same is providing the best customer service and taking pride in what you are working on. Customer service and building relationships will always be demanding and rewarding if you are good.

Q: What professional achievement are you most proud of?

A: I am most proud of my relationships with my tenants and peers.

In 2012 one of my professional achievements was winning the (boMA) toby Award for biltmore Commerce Center off of 32nd st. and Camelback. It was a great honor competing against newer, more updated buildings and having my team come together and be successful showcasing our building.

James R. Pederson

SENIOR LEASING AGENT PEDERSON GROUP, INC. years in commercial real estate: 13 years at company: I started working at squire sanders right out of law school. other than a short period with Meritage homes, have continued to work here the past 14 years.

Ari Spiro

PRESIDENT ORION INVESTMENT REAL ESTATE years in commercial real estate: 17 years at company: 4

Q: WHAT WAS IT ABOUT THE INDUSTRY THAT ATTRACTED YOU? A: over the past 30 years my father has developed a successful retail development firm recognized as one of the valley’s most respected development companies. The opportunity to carry his vision and play an important role in creating vital and contemporary shopping destinations had a great deal of appeal.

Q: WHAT WAS IT ABOUT THE INDUSTRY THAT ATTRACTED YOU? A: The deal-making process, negotiation strategies, and finances have always fascinated me. I gravitated to real estate at an early age — driving residential properties with my parents to selling houses in college to eventually finding myself in the CRE industry as a young adult.

Q: HOW HAS THE INDUSTRY CHANGED SINCE YOU STARTED? A: over the past four years, development of large centers has significantly declined. The redevelopment of small, high-quality projects in high-density locations has increased, providing retailers with an opportunity to make a significant impact on a specific trade area.

Q: HOW HAS THE INDUSTRY CHANGED SINCE YOU STARTED? A: Communication and reach. Through technology, a well-directed and forward-thinking boutique firm can outperform its national competition. to the benefit of our clients, we have the ability to adapt and move quicker with industry advancements and implement new tools immediately.

Q: WHAT PROFESSIONAL ACHIEVEMENT ARE YOU MOST PROUD OF? A: over the past four years, we have been fortunate enough to have fully leased our stetson village shopping Center in northwest Phoenix. opened in november 2008, the center is anchored by a 57,860 sf safeway and includes four retail pads and four in-line shop buildings.

Q: WHAT PROFESSIONAL ACHIEVEMENT ARE YOU MOST PROUD OF? A: Creating the unique, synergistic, high-energy environment at oRIon, where top-producing brokers from various product types have come together to maximize their potential, income and value to their clients. being in a firm filled with industry leaders is exciting, but to also be associated with such high caliber individuals is enriching.

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Fortitude

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Building Successful Arizona Projects for 26 Years

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15

AFTER HOURS

Knowing more about the people we work with is the fun side of the business. It helps start conversations and strengthens business relationships. To nominate a colleague, request an After Hours form from Peter Madrid, peter.madrid@azbigmedia.com.

PHOTOGRAPHY PROVIDED BY KRISTINE NEWMAN

Kristine Newman Controller for Southwest Region, McCarthy Building Companies With McCarthy for 8 1/2 years Born in Crown Point, Ind. Received a BA in Accounting from Purdue University Husband Justin; six children ages 1-16

Responsibilities:

Financial oversight of construction projects throughout the region, and financial management of the firm’s Southwest office.

Favorites:

Sports/teams: Chicago Cubs; Indianapolis Colts; and my oldest daughter’s teams at Higley High School (volleyball) and the Aspire Volleyball Club Team.

Music: I am a sucker for a good old country song.

Activities: I love running (not after kids), and participating in marathons when I can. Also, our family enjoys spending time together, helping others who have fallen on hard times through charity involvement, including helping to build homes, play grounds, area clean-ups, group reading and hosting a lemonade stand.

Destinations: Favorite places are Chicago, San Francisco and Aspen, Colo.; those I hope to get to are Italy — all of it, Boston and Vancouver.

What did you think you’d be when you were growing up?: A math teacher

What accomplishment are you especially proud of?: I am personally most proud of my family, and being a parent to six amazing kids. Virtually every day one of them does something to remind me how special they are. In particular, 16 | March-April 2013

I am proud of the way Justin and I have encouraged them to give back to the community through charitable activities and they run with it. Just a few months ago they hosted a lemonade stand to support Alex’s Lemonade Foundation and served hundreds of glasses of lemonade to raise several hundred dollars for the charity.

Professionally, I am proud to be a woman in a leadership position with a nationally recognized construction firm, which also provided me the opportunity to serve as president of the Valley of the Sun Chapter of Construction Financial Management Association; and most recently, thanks to support from McCarthy, was named to the board of directors at UMOM, where we will help families facing homelessness and domestic violence.

What would people be surprised to know about you?:

I am an Olympic Commissioner. Well, not the Olympics you are thinking of, but because our family is so large, we host our own Olympic games each year, and I am the Commissioner.

Advice:

Received: From John Wooden, UCLA coach, “Do not let what you cannot do interfere with what you can do.”

To Share: Don’t get so lost in the job that you forget the community that allows you to have your career. Be sure to do for others, and appreciate every relationship that you build.

Visit AZREmagazine.com to see what Christian does After Hours. Christian Green, Business Development and Marketing Manager for the City of Goodyear, knows every canyon in Arizona — up close and personal.

Register Today at www.valleypartnership.org or call (602) 266-7844

17

OUTLOOK 2013

2013 A N N UA L OUTLOOK

BY PETER MADRID

T

THE ROAD AHEAD FOR ARIZONA’S COMMERCIAL REAL ESTATE INDUSTRY APPEARS A BIT SMOOTHER AFTER SOME BUMPY YEARS

he driving forces behind the commercial real estate recovery in Arizona can best be described in a few analogies:

>> A disastrous 2011 is firmly — and finally — in the rearview mirror; >> A stuck-in-neutral 2012 ended with the industry gaining momentum at year’s end; >> A revved up 2013 is on the horizon, but it’s still too early for a cruise-control mentality.

According to Elliott D. Pollack and Company, the commercial real estate markets in Arizona are recovering, although slower than the hot-again and active single- and multi-family housing markets. you want proof? Get behind the wheel of your car and take a spin around the valley. under construction in the East valley are DMb Associates’ Eastmark development and Riverview Park, the new spring training home of the Chicago Cubs. Rising from 3rd and Roosevelt in Downtown Phoenix is Roosevelt Point, a 326-unit apartment project. Additional multi-family developments are popping up in scottsdale, Gilbert and Chandler. A new John C. lincoln hospital will soon rise near I-17 and Carefree highway.

William l. spart, senior vice president at Wells fargo bank, shares tangible proof: >> Multi-family is still strong and rental rates are inching up; >> Retail is starting to show signs of gaining strength, although big box space is 18 | March-April 2013

still a concern; >> Industrial vacancy continues to decline as rents increase; construction activity is up and at least 50% represents build-to-suits; >> The office market continues to have high vacancy, but it has declined from a year ago; rents are still a bit soft as the market tries to absorb the excess inventory.

“It is hard for me to predict how 2013 will do because there are still some uncertainties with our local and national economy, not to mention some of the issues we are seeing on a global scale,” says Curt Johnson, senior vP at Coe & van loo Consultants. “We saw positive momentum in 2012 and I hope we can continue that trend going forward. one key element is job creation, and we are seeing gradual gains in employment for Maricopa County and Arizona.”

While the larger and more established commercial real estate companies are enjoying an uptick in the economy, smaller ones such as Phoenix-based architectural firm hunt & Caraway, which focuses on public projects, are benefitting as well.

“As business grows and adjustments occur, we have seen a spark in new housing,” says Executive vP tamara Caraway. “Additional rooftops translate to commercial needs, additional schools, fi re and police stations, libraries and overall increase in construction.

“Commercia l rea l estate has been transforming itself to address the changing economy: engaging a new tenant genre for the commercial property and adjusting to retail and office needs,” Caraway says. “state and city officials and economic development organizations are driving economic campaigns

and offering incentives to attract new business and grow current businesses.”

AZRE Magazine once again taps key players from within the industry to look into their crystal balls and offer their outlooks.

ECONOMIC DEVELOPMENT the Greater Phoenix Economic Council (GPEC) remains on the forefront of establishing market and industry trends through direct conversations with C-level executives around the country and the world.

GPEC is projecting that 2013 and 2014 will be better-than-average years as the economy steadily improves and unemployment declines both regionally and nationally, says Chris Camacho, executive vP, business development. “so far in 2013, the level of corporate activity has equaled that of 2012, but project compositions are vastly different,” he says. “In 2012, GPEC’s top two industry categories, business services and industrial manufacturing, comprised 27% and 20% of the total active prospect activity for the year. from July 2012 through December 2012, business services (back office, It, customer service, technology centers) increased to 43% of year-to-date prospect activity. Industrial manufacturing also increased to more than 27%.”

More than 84% of GPEC’s current prospects require existing office or industrial facilities instead of greenfield developments. the demand for existing office facilities with 6:1,000 parking ratios increased exponentially in late 2012. large office demand (in excess of 50,000 sf) has increased by 50% year over

Roosevelt Point

year, Camacho adds.

“A s s u c h , o u r c o nt i nu e d commitment to an expeditious municipal permitting process will be a differentiator against other states as the economy continues to improve.”

In 2012 GPEC launched its California 100 campaign on the heels of a $6b tax increase in California, and has led to more than a dozen leads and direct contact with CEos. China continues to be one of GPEC’s most targeted countries for foreign direct investment. last year, GPEC launched its Z Corridor strategy in partnership with Arizona Commerce Authority and Asu. In the southeast valley, Mesa is seeing positive economic trends from 4Q 2012, according to Economic Development Director bill Jabjiniak.

“Anyone who has been in economic development for any length of time will tell you that having base industries employing a skilled and educated workforce will increase demand for housing, which in turn leads to commercial real estate development,” Jabjiniak says. “our region would be well served in focusing on attracting those sectors offering high wage jobs.

“We have seen an increase in high quality business prospects with gains in advanced business services and manufacturing sectors,” he adds.

“There remains interest in existing real estate assets, however, as these

become occupied and/or are not suitable for business needs there will be demand for new construction.”

Also in the southeast valley, Chandler has seen more than its fair share of exciting projects in the past few years. Economic Development Director Christine Mackay says she does not expect 2013 to be any different.

“With our office vacancy rate continuing to hover in lowersingle digits, the demand for new office space has created the need to build,” she says. “The Douglas Allred Companies was first to market with a new, 92,000 sf office building that is now 100% leased to Infusionsoft.

That success prompted Allred to start construction on an additional 68,000 sf building, and this has encouraged other developers to consider doing the same.

Chandler could see several office projects come out of the ground in 2013, including the Rockefeller Group’s Chandler 101 development, which will start its kick-off of infrastructure and road construction in mid-2013. Pr ice Cor r idor continues to be a significant draw for large employers, but development will begin to gain steam along loop 202 as well, Mackay adds. Continuum’s improvements are nearly complete and that signature business park is primed to attract new companies.

Joyce Grossman, e xecut ive

director of the Arizona Association for Economic Development added: “With employment improving, housing permits on the rise, 2013 promises to be a better year for the commercial real estate industry in Arizona. We expect a positive year in 2013 and an even stronger year in 2014.”

LEADING INDICATORS In 2013, the industry that will lead the local and national economy is housing, says Jim belfiore, president of belfiore Real Estate Consulting. last year, Metro Phoenix homebuilders boosted production by 64%; this year, growth will top 50%, as purchasing activity surges off of 40+ year lows. housing supply is extremely low, belfiore says, lower than anytime since late 2005.

“In an environment of rising jobs, rising population, rising consumer confidence, and all-time low interest rates, homebuilders are going to find themselves busy,” he says.

And according to Costar Group, national sales of commercial real estate reached nearly $64b in 2012, an increase of 22% from 2011. Even land prices showed signs of recovery in 4Q 2012. sales activity spiked in December, Costar reports, as investors wasted no time in closing deals. based on the investment market in

Curt Johnson

Tamara Caraway

Chris Camacho 19

OUTLOOK 2013 2013 Market PrediCtiOns PriCes: Average prices will increase throughout the year, both from improved overall quality and lower yields on the better qualit y assets. however, pr icing (for the most part) will continue to be below replacement costs, since most rent rolls have rolled to market rates that are well below replacement cost pricing. by the end of 2013, reports of rental rate increases will cause further cap rate compression as buyers stretch on first year proformas and anticipate spikes in rates.

John C. Lincoln Sonora Health and Emergency Center 2012, what is the prediction for 2013 and are current cap rates outpacing prudent real estate fundamentals?

“That is the concern of many commercial real estate veterans as the 2013 commercial real estate investment market continues 2012’s slow rebound,” says Randy levin, CEo and managing member or MRl Partners. “Arizona’s emergence from the great recession should mirror those of the past with expansion of regional offices for fIRE (fi nance, insurance and real estate related companies) industries filling up empty office and multi-tenant industrial properties. new commercial construction will still be mainly focused on build-tosuits, although developers will start to raise their heads once again. since 2008, levin says, lenders have liquidated most of the poorly developed REo commercial properties leaving higher quality REo properties for sale in 2013. The pipeline for REo supply will continue as loans issued prior to 2008 mature.

“Competition for higher qua lit y properties will be fierce,” he says. “REIts and institutional investors will aggressively

Christine Mackay 20 | March-April 2013

Lorraine Bergman

compete for the larger, high quality properties resulting in continued cap rate compression. local commercial private equity investors may struggle with bidding wars when residential investors move into the smaller commercial properties space.

Prudent investors will need to be wary of buying into this frenzy as the rental rates in the current and immediate near future will not justify the pricing.”

The demand for medical office space will also grow — specifically in locations within close proximity to a hospital campus as both patients and providers look to maximize their efficiency and productivity. Mobs will also continue to see services move from the hospital acute care locations; the motivators behind this trend are both for patient convenience and reducing the cost of care as the increased demand pushes growth in both locations and services provided. “the implementation of healthcare reform will cause an increase in demand for healthcare services by virtue of the 30M to 40M people who will be newly insured,” says Chelsea Maddox, regional leasing director, south/southwest Region

Eric J. Wichterman Dave Cheatham

WhO and What Will be sellinG: owners who have defer red ret i r i ng a s s e t s i n t i me d investment funds will bring their properties to market with the renewed confidence that assets will clear at reasonable pricing.

This includes institutional-quality as well as stabilized, mid-level quality assets. Many value-add investors who purchased REo properties in 2010 and 2011 will sell in 2013 after having created value. special servicers will cull their holdings for non-performers, or assets that foreclosed two to three years ago.

Infi ll, adaptive-reuse properties will quickly clear the market. sales volumes will equal or exceed 2012 levels.

Where the CaPital is flOWinG frOM: Phoenix will continue to attract all buyer types, from institutional, fund managers and REIts to private capital and local entrepreneurs. foreign investors will primarily be from Canada and latin America. Most major transactions will close all cash, with debt placed post-closing. ­MindY kOrth Executive vice President CbRE

Tyson Breinholt

Chelsea Maddox

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OUTLOOK 2013 oPtIMIstIC by DEsIGn

“As our industry continues to recover,

Rendering of expansion project Banner MD Anderson Cancer Center in Gilbert

healthcare Management of America.

“Providers will respond by increasing their patient volume which will, in turn, cause an increase in demand for medical office space.

Th is influx of demand will have a positive impact on Mob occupancy nationwide.” how active will the Mob market be 2013?

According to Maddox, Mob sales topped $4.8 b in 2012 and leasing activity was up considerably.

“Investors are seeking yield and Mobs provide a conservative approach to achieving yields in this economic environment,” Maddox says. “hospitals will likely continue to seek opportunities to monetize their Mobs.”

CONSTRUCTION

sundt Construction completed two of the valley’s ground-breaking projects in 2012: the 298,000 sf Interdisciplinary science & technology building 4 at Asu and the 265,000 sf health sciences Education building in Downtown Phoenix (a joint venture with DPR Construction). both projects won 2013 RED Awards.

Marty hedlund, senior vP at sundt, predicts that in 2013 there will be much more activity in the private sector, at least in terms of discussion, preliminary studies and due diligence on projects. “this, I believe to be a very good sign because, ‘you can’t build it, until you start talking about building it,’” he says. “My basis for this opinion is that we are already seeing a significant increase in discussions about projects; the consistent corporate trend we have all heard that most corporations have kept their capital dollars on the sidelines for two to three years, and the general sentiment that those speculative players that get in first on the recovery, will do the best.

22 | March-April 2013

“The early birds of the recovery may just get some shovels in the ground in 2013 … then watch out for 2014 and 2015.” lorraine bergman, president of Caliente Construction, is somewhat optimistic and predicts that construction in Arizona will see a moderate growth in 2013. The first quarter, she says, will be a continuation of the slow but steady growth that began in 2012 with an increase in activity each quarter thereafter.

“As with any economic sector, construction is fueled by demand, and one of the major factors for the entire real estate market inc lud ing commercia l constr uct ion, is population growth,” bergman says.

“Population growth is spurred by jobs, and while Arizona’s job market did make some gains, which in relationship to other areas of the country, were substantial in 2012, it was not at rates we have seen in past years. however, leading indicators in the state are very promising. In addition to increased jobs and demands in new home construction, reports of steady activity on the architectural side are positive signs that construction is on the rise. to keep the economy on the upswing, Arizona needs to attract new business to the state and improve our education system to provide a qualified workforce to meet the growing demands.”

Adds Andrew Geier, executive vP at layton Construction: “With the election and the fiscal cliff behind us, there are fewer national hurdles delaying decisions on capital expenditures. locally, the business climate is continuing to improve with new legislation that has made Arizona more competitive with our peer markets. Conversely, the new legislation in California is creating opportunities to attract businesses away from the Golden state. both scenarios present opportunities for Arizona construction.

Another positive factor is the housing

we anticipate 2013 will persist with concerns about project budgets and ensuring every dollar spent is stretched for maximum results. There is a lot of work in the public sector focused on extending and leveraging current assets allowing for spaces to provide multiple uses. We predict the trend towards innovation through renovation and adaptation of existing real estate will continue.”

— beth harMOn-VauGhan Principal Gensler “I have seen the largest positive increase in the build-to-suit market. Many of these proejcts are trying to fit into a more generic, speculative building platform for flexibility. the value acquired buildings that are repurposed have made a bit of a run and the more flexible specific buildings w i l l need to be constructed. I sense that companies have waited out all the dizzying financial crisis, elections, etc., and now it’s time to get back to business.”

— PatriCk haYes PhArchitecture President /CEo

“I am cautiously optimistic in my outlook for 2013; the economic downturn for the past 4 years has affected everyone in the construction industr y and continues to have a negative impact on architectural services in Arizona. We have all suffered through one of the worst, if not the worst, recessions in recent memory. however, I am optimistic about 2013 because the buildings that are being built are exhibiting a vitality of livable and civic space, energy savings integration and real value for the construction dollar that are improving our neighborhoods, communities and cities throughout Arizona and the southwest.”

— CraiG randOCk President AIA Arizona hDR

OUTLOOK 2013 market. I think everyone is feeling better with the resurgence of home prices (especially their own) and the increase in new home construction.”

Geier adds that collectively, the brokerage houses and design fi rms are busy with new deals — which are a key indicator for shortterm construction activity.

“After the market peak and the lows of the recent recession, we are expecting 2013 and 2014 to represent the ‘new normal’ in commercial construction.”

BROKERAGE In general, national retailers are returning from the “pause” over the past 4 years and becoming interested in expansion opportunities, says Dave Cheatham, managing principal at velocity Retail Group.

“This is exciting for us — even though the activity is moderate, it drives net absorption which lowers vacancy,” Cheatham says. “Along the same line, local retailers are finding that lending is starting to change the climate for small businesses as the banks are becoming healthier; this coupled with low interest rates are helping retailers get funding for their new stores. “tepid retail construction, continued positive absorption, and almost no speculative building are factors that will allow us for a

faster return to a healthy vacancy,” he says. “our prediction for the overall vacancy in Phoenix by year end 2013 is that it be just under 11%, and by the end of 2014 to be close to single digits.”

Eric Wichterman, executive vP at Cassidy turley, says expect office sales volume in 2013 to be similar to 2012, marking the second consecutive year with fewer transactions than 2011, when lender-owned sales were at peak levels. he adds that 2012 represented a 20+% decline in square footage sold from 2011 levels. Metro Phoenix began to show signs of a modest shift, with respect to the type of seller, during the second half of 2012.

The market was not monopolized by the lender-driven sales of the past few years, Wichterman adds, but began to function more traditionally, moving towards an even ratio of seller types between REo and solvent owners.

“Expectations in 2013 are for a continued decline in the number of REo sales and an increase in the number of traditional sales,” he says. “owners who survived the recession with positive equity, have stable properties and are feeling optimistic about the economy and current market fundaments are more likely to opt to sell in 2013. With the shift from REo to more traditional sales, there will be an increase in average overall sale prices and a continuation of improving prices for Class A asset values. We expect to see more cap rate sales. buyers will come from all sectors

— institutional, REIt, owner/user and private capital.” tyson breinholt, senior vP at Commercial Properties Inc., agrees that the Phoenix office market is finally heading in the right direction.

“Phoenix ended 2012 with net positive absorption of 1.6 Msf, which was a much larger jump than the previous three quarters,” breinholt says. “vacancy in Phoenix also decreased for the fi rst time in recent years, falling under 20% to 19.4% overall at 4Q 2012.

Though there are many local projects that still struggle with high vacancy, Phoenix is seeing transactions increase, which in time will allow for stable improvement.” the 2013 Phoenix industrial market is poised to make modest gains over an improved, yet bumpy, 2012, says John soldo, vP of Industrial Group at CPI. “first quarter 2012 saw the market post negative absorption numbers after a strong 2011,” soldo says. “Th ankfully, the market posted a 2.5 Msf of positive absorption in 2Q 2012 and nearly 2 Msf in 4Q 2012 after modest gains in 3Q 2012.

“As the economy slowly improves in most business sectors, we all should expect this positive absorption to continue throughout 2013. While we are still in a ‘tenant/buyer’ market, it will not be very long before that pendulum swings into a ‘landlord/seller’ market,” he says. “Expect that to happen as we enter into 2014.”

VIEW FROM THE TOP >> Office: net absorption is forecast to reach 2.4 Msf in 2013, a modest increase from 2012 levels. vacancy will improve by approximately 150 basis points to 19.2%. With large blocks of Class A space becoming increasingly scarce, a few spec projects could break ground, assuming market rents can justify the costs of new development. >> industrial: Approximately 2 Msf of spec space will be delivered, in addition to a few large build-to-suit projects. net absorption is forecast to reach 6 Msf, up from 5.1 Msf in 2012. vacancy will continue to trend lower, reaching 11.5% by year end. >> retail: The strengthening housing and employment markets will support improving fundamentals in the retail market, with net absorption of 2.8 Msf forecast and vacancy expected to retreat to the mid-10% range. While the pace of new store openings will likely accelerate, there will also be closures as retailers adjust to changing consumer spending patterns. >> Multi-family: While multi-family completions will accelerate to approximately 3,000 units in 2013, absorption will outpace deliveries and drive the vacancy rate down to approximately 7.5%.

With vacancy improving and rents likely to push higher in 2013, perunit pricing should continue to record some upward momentum. >> Medical Office: one could argue that the medical office market 24 | March-April 2013

is undergoing the most significant change of any commercial property segment. Many physicians are moving to larger hospital groups, and moving to on-campus buildings. tahis marks a shift from prior years when many physicians chose to buy their own off-campus locations. >> land: land sales surged approximately 60% in 2012, as conditions for both the commercial and residential real estate markets improved. Developers will continue to secure land parcels to position themselves for the next growth cycle. >> economic Growth: Employment growth in Phoenix will continue to bounce back in 2013. last year, Phoenix was among the top-10 markets in the country for job growth, as more than 50,000 jobs were created. Jobs grew by 3% in 2012, more than double the national pace of expansion. similar gains are expected in 2013, supporting continued tenant demand for commercial and multifamily properties.

—– bob Mulhern Managing Director Colliers International

Welcome to the Phoenix industrial team

Bo Mills

Mark Detmer

Pat Harlan

Steve Sayre

Kyle Westfall

tel +1 213 239 6303 mobile +1 602 524 1104 bo.mills@am.jll.com

tel +1 602 282 6289 mobile +1 602 448 0900 mark.detmer@am.jll.com

tel +1 602 282 6298 mobile +1 602 549 6350 pat.harlan@am.jll.com

tel +1 602 282 6299 mobile +1 602 999 7720 steve.sayre@am.jll.com

tel +1 602 282 6297 mobile +1 602 451 3057 kyle.westfall@am.jll.com

Managing Director Industrial Capital Markets

Managing Director Industrial Capital Markets

Executive Vice President Industrial Leasing, Sales & Tenant Representation

Executive Vice President Industrial Leasing, Sales & Tenant Representation

Associate Industrial Leasing, Sales & Tenant Representation

We are pleased to announce our newest members of the Phoenix industrial team. These individuals will further strengthen our regional and local brokerage services and create real and exceptional value for our clients.

Jones Lang LaSalle 3131 East Camelback Road, Suite 400 Phoenix, AZ 85016 www.us.joneslanglasalle.com/phoenix

JLL_Welcome_Industrial AZ team_Ad_final_AZRE.indd 1

2/21/2013 1:30:59 PM

OUTLOOK 2013

by PEtER MADRID

HOT PROPERTY Arizona’s multi-family sector banking on momentum gain in 2012 to continue

T

he multi-family sector led the state’s commercial real estate recovery in 2012, and is expected to do so again in 2013, according to tom simplot, president and CEo of the Arizona Multihousing Association.

After a 3-year dry spell, when hardly any new units were built and the total net number of units declined, 2012 witnessed the addition of about 1,000 new units in Metro Phoenix. Thanks to pent-up market demand, 2013 looks even better, simplot predicts, with recent estimates of 3,000 new units coming on the market this year. Industry leaders such as Alliance Residential, Pb bell, Mark-taylor and trillium are fueling the stampede to break ground.

Although current estimates are nowhere near the 10,000 new units built in the early 2000s, the new-build success story is a relief and will likely absorb quickly into the market.

“The only potential dark cloud hanging over the industry is the introduction of approximately 2,000 single family homes throughout the valley to the rental market,” simplot says. “These homes were recently sold by fannie Mae to large investors and are expected to remain rental units for up to 24 months or longer. Depending on how they roll out, they may present an unexpected level of competition for the industry in the short term. long term prospects look very positive, however, with apartment owners buying for the long haul and not for quick turnarounds.”

The question is now how much activity will there be in the market and how long will the cycle last? brad Cribbins, executive vice president and Coo of Alliance Residential says the short answer is activity will remain high and the cycle will last as long as the 26 | March-April 2013

broadstone Camelback appetite for multi-family product remains strong. Investors placing capital for institutions and private sources continue to chase new development and acquisition opportunities. The focus, Cribbins says, is typically on core urban infi ll locations and premium suburban locations in major metropolitan cities nationwide, including Phoenix.

“The reason is pretty straightforward — the record number of families absorbing inventory pre- and post-collapse is the driving force behind the demand for continued development,” Cribbins says.

“Multiple reasons account for this notable spike in renters following the housing crisis — including some that are purely an economic reflection of the inability to qualify for a loan or provide a down payment.”

An increasing number are related to individuals choosing to rent due to the asset quality, amenities and location, Cribbins says, as well as the convenient lifestyle being championed by condo-quality rental housing. factors that may temper the current exuberance: >> Cap rate compression is placing pressure on overall pricing, as well as rent growth projections. >> Renewed competition in the lending arena from banks, life insurance companies and conduit lenders enhances the scrutiny of the soundness of certain underwriting fundamentals. “similarly, 2013 will see the first measurable increase in multi-family supply, which appears to coincide with firming single-family inventory and may influence the demand cycle,” Cribbins says.

Th is presents an open-ended question regarding when the group that can buy will return to single family at a level that will dramatically impact demand. Th is will

be heavily influenced by the job market, ongoing changes to historic low interest rates, significant student loan debt and delays in starting a family — all of which point to household and lifestyle preferences that are difficult to predict precisely because they continue to evolve.

Rent growth projections are anticipated to reach 5% in 2013 and occupancy is forecast to hold at 94% to 96%, which adds to a level of confidence. Permits are below the 15-year average for the city and 3Q starts are below forecast, ranking Phoenix at one of the lowest start rates in the country.

According to Cribbins, Alliance has roughly 1,000 units across four assets currently under construction, and four to six strong sites in the pipeline that the company expects to close this year.

“We actively build across the nation, but given our headquarters is located in Phoenix, we were particularly proud to secure a handful of fl agship sites where the product will be exceptional and demand will be strong — this only adds to our optimism regarding the Phoenix market,” Cribbins says.

And current fundamentals remain strong — Phoenix ranks fourth in job growth among large metro areas in the country, and unemployment is resting at a 4-year low and continues to gain ground. nationally, according to Costar research, twice as many multi-family units were delivered in 2012 as in 2011, and construction in 2013 is on pace to rise even further.

“If we were to look at it in terms of the multi-family market going forward, it’s a favorable cycle, but it might already be over,” says Dale Phillips, president of Mark-taylor.

“If you don’t have your land secure and permits in place, you might be too late to the dance.”

BROKERAGE: 2012 TOP TRANSACTIONS TOP FIVE SALES OF 2012 TYPE

PROPERTY NAME

CITY

SF

PRICE

BUYER (TRUE) COMPANY

SELLER (TRUE) COMPANY

OFFICE

Hayden Ferry Lakeside - II

Tempe

299,540

$86,000,000

Parkway Properties, Inc.

Sumitomo Corporation of America

CBRE

24th At Camelback

Phoenix

302,209

$81,000,000

Hines

GLL Real Estate Partners, Inc.

Eastdil Secured, LLC

Max at Kierland

Scottsdale

258,312

$79,000,000

Artis Real Estate Investment Trust

Clarion Partners

CBRE

FBI Regional HQ

Phoenix

210,202

$75,000,000

Artis Real Estate Investment Trust

Ryan Companies US, Inc.

CBRE

Tempe Gateway

Tempe

264,000

$66,100,000

Parkway Properties, Inc.

Vulcan Inc.

None

Riverside Ind. Center - II & III

Phoenix

1,207,021

$105,100,000

Industrial Income Trust, Inc.

KTR Capital Partners LP

CBRE

800 N 75th Ave-Bldg 2

Phoenix

1,267,110

$90,290,000

Industrial Income Trust, Inc.

The Buzz Oates Group of Companies

Cushman & Wakefield, Inc.

Hensley & Co

Phoenix

296,000

$47,000,000

Angelo, Gordon & Co.

Hensley Beverage Company

Cushman & Wakefield, Inc.

Riverside Industrial Center - Phase I

Phoenix

376,760

$26,562,000

Industrial Income Trust, Inc.

KTR Capital Partners LP

CBRE

Hensley & Company

Chandler

231,167

$26,500,000

Angelo, Gordon & Co.

Hensley Beverage Company

Cushman & Wakefield, Inc.

The Shoppes At Gilbert Commons

Gilbert

415,400

$64,776,600

SyWest Development

Donahue Schriber Commercial Real Estate

CBRE

San Tan Marketplace

Gilbert

285,000

$54,780,000

Cole Credit Property Trust III, Inc

The Macerich Company

Direct

INDUSTRIAL

RETAIL

Village Square at Dana Park

LISTING BROKER COMPANY

Mesa

310,979

$50,500,000

Whitestone REIT

Triple Five Development Corp.

Direct

Scottsdale

248,451

$46,575,000

RD Advisors

Westwood Financial Corp.

Lee & Associates

Lake Pleasant Pavilion

Peoria

179,557

$41,750,000

Excel Trust, Inc.

Kornwasser Shopping Center Properties

Lucescu Realty

MULTI-FAMILY San Melia Apartments

Sonora Village

Phoenix

493,192

$68,750,000

AIMCO Holdings LP

Investment Property Associates LLC

Colliers International

Andante

Phoenix

512,616

$61,300,000

Waterton Residential

JPMorgan Chase & Co. Investment Management

CBRE

Skyline Lofts

Phoenix

327,954

$59,500,000

Weidner Apartment Homes

Wood Partners

CBRE

Palms on Scottsdale

Tempe

377,748

$54,080,000

UBS Realty Investors LLC

Bean Investment Real Estate

CBRE

The Canyons

Phoenix

475,623

$50,000,000

Alliance Residential Company

Continental Realty Advisors

Transwestern

» Source: Cassidy Turley BRE Commercial

TOP TEN INDUSTRIAL LEASES OF 2012 SF

PROPERTY NAME

CITY

LANDLORD NAME

TENANT NAME

LANDLORD'S BROKERAGE CO.

TENANT'S BROKERAGE COMPANY

259,200

Tolleson Corporate Park

Phoenix

First Industrial Realty Trust

MiTek USA, Inc

Colliers International

Colliers International

404,673

Westside Business Park

Tolleson

LBA Realty

Communications Test Design

Lee & Associates

Jones Lang LaSalle

237,176

Interstate Logistics Center

Phoenix

Wentworth Property Company

Exel

CBRE

Cushman & Wakefield Cushman & Wakefield

337,897

Elliot Business Park

Tempe

Transpacific Development Company

Clear Energy Systems

CBRE

155,794

Durango Commerce Center

Phoenix

Clarion Partners

Consolidated Terminals and Logistics Co.

Cushman & Wakefield

Lee & Associates

135,472

Westside Business Park

Tolleson

LBA Realty

Medline

Lee & Associates

CBRE

115,900

1640 S 39th Ave

Phoenix

Green Thelma

System Services of America, Inc

Jones Lang LaSalle

Lee & Associates

108,436

Papago Business Center

Phoenix

Myron Zimmerman Investments

OMCO

Myron Zimmerman Investments

Colliers International

108,195

Riverside Business Center

Phoenix

Duke Realty

Ulta Salon, Cosmetics & Fragrance

CBRE

CBRE

106,862

Freeport Center

Phoenix

Irwin Pasternack & Associates

Packaging Specialists Inc

Mandelbaum Commercial Real Estate

Newmark Grubb Knight Frank

LANDLORD NAME

» Source: Colliers International and CoStar Group

TOP TEN OFFICE LEASES OF 2012 SF

PROPERTY NAME

CITY

TENANT NAME

LANDLORD'S BROKERAGE CO.

183,000

2700 Corporate Center

Chandler

Regent Properties, Inc.

QBE Insurance

Lee & Associates

TENANT'S BROKERAGE COMPANY Jones Lang LaSalle

140,000

Papago Buttes Corporate Plaza

Tempe

Principal Financial

State Farm

Jones Lang LaSalle

Jones Lang LaSalle

139,404

Liberty Cotton Center

Phoenix

Liberty Property Trust

Aetna

Cushman & Wakefield

Jones Lang LaSalle

138,240

Four Gateway

Phoenix

LBA Realty

State Farm

Cushman & Wakefield

Jones Lang LaSalle

134,050

Canyon Corporate Plaza

Phoenix

Northridge Capital

Liberty Mutual

Transwestern

Studley

105,974

Two Gateway

Phoenix

Oaktree Capital

State Farm

Transwestern

Jones Lang LaSalle Jones Lang LaSalle

105,000

Concorde Commerce Center

Phoenix

A & B Properties, Inc

United Healthcare

Cassidy Turley

92,108

Allred Park Place

Chandler

Douglas Allred Company

Infusionsoft

CBRE

Commercial Properties, Inc

71,217

Anchor Centre East

Phoenix

Angelo Gordon & Company

Humana

Cushman & Wakefield

UGL Services

70,000

Papago Buttes Corporate Plaza

Tempe

Principal Financial

State Farm

Jones Lang LaSalle

Lee & Associates

» Source: Colliers International and CoStar Group

28 | March-April 2013

29

CONSTRUCTION IN INDIAN COUNTRY

BY LILLIAN REID AND PETER MADRID

BUILDING RELATIONSHIPS TO BUILD NATIONS Despite complexities and challenges, working with tribal governments to develop projects benefits everyone involved

A

s the saying goes, nothing that is worthwhile is ever easy. Th at can apply to a lot of industries in commercial real estate, including construction in Indian Country. some people compare working with a tribe to working with a foreign country. others say it is more like working with a small and closely-knit town. Whether it is learning completely new tax codes and leasing options or just knowing whom to talk to, development in Indian Country can often test one’s patience.

Attorney vince lujan works with salt River Devco and knows how complex and challenging the process of getting started can be, but he also knows that the end result is worth the time spent.

“It is an untapped market,” lujan says. “While it is a challenge to get your business up and running, over the long term you can do well on your investment.

“A lot of the time developers are plowing new ground,” he adds. “It’s not like in Phoenix, tempe or Mesa where you might have 10 Walmarts or Walgreen’s.

It’s a much smaller scale and you’re creating a new market for certain goods and services that didn’t exist before.” tribes that are in metro areas tend to be easier to work with because they have had more experience with outside developers. These tribes are also pretty open when it comes to working with outside companies, as the new Courtyard

by Marriott proves. salt River Devco partnered with 30 | March-April 2013

Marriott in 2010 to build the fi rst Marriott branded hotel on native American land.

Rural tribes will often take longer to work with because they have had less experience with outside developers, but they are learning from tribes such as the salt River Pima-Maricopa Indian Community.

“There’s no question that any tribe without experience in developing their lands need to move slowly and carefully, as well as to either employ or develop the expertise to assess the value of their lands for development,” says attorney Ed Rubacha.

Rubacha is a partner in construction litigation with Jennings, haug & Cunningham, and works regularly with clients who do business in Indian Country. Rubacha also has been bar Certified by several tribal governments, including Gila River and tonto Apache entities. to work closer with tribes, some companies have created new divisions within their fi rms for that exact reason. kitchell is one such general contractor.

Jeff begay is client services manager for the native American Division at kitchell, which currently has projects underway with five different tribes.

“We work with dozens of native American tribes, and agencies-havingjurisdiction differ from tribe to tribe,” begay says, “so you have to be knowledgeable of the specifics of the rules

and regulations of each distinct tribe.

The key to success is to maintain freeflowing, transparent and informationrich communication so the construction outcome matches the original intent.” tax codes can be unfamiliar, begay says. for example, even though a tribe may not pay sales tax, a developer/contractor working on reservation land sometimes has to pay a sales tax to the tribe. land requirements may be unfamiliar terrain for construction companies. sometimes, land parcels are owned by individual members of a tribe, referred to as “allotees.” If the community wants the land for a project, it has to get leasing agreements from each allotee. Th is can add time to a project, especially if there are several land parcel owners involved.

“While any of these scenarios are a challenge, and what construction project doesn’t have challenges, a successful outcome — a building fulfi lling a need, a building providing jobs to community members, a building that is a source of pride or all of the above — is the greatest reward. “ultimately, we see ourselves, as we adapt to existing tax codes and requirements, as playing a small but vital role in helping sovereign nations grow their economies,” begay says. “It’s about building nations. We take this very seriously. We have an obligation, to the tribes, to the state and to our industry, to provide the best quality and exceptional service.”

Courtyard by Marriott

GETTING STARTED >> Understand that tribes are sovereign nations. >> Remember that the federal government still has certain authorities over enacting laws that affect tribal governments and their land.

While the rules and regulations can quickly get complicated when dealing with the three governments — tribal, federal and state — there has been a recent move to make at least one of those processes easier.

The helping Expedite and Advance Responsible tribal home ownership Act of 2012 (hEARth Act), approved by the u.s. Congress in 2012, will help streamline how Indian tribes get approval to develop the lands that are held in trust for the them by the federal government.

“The hEARth Act promotes greater tribal self-determination and will help create jobs in Indian Country. under the Act, federally recognized tribes can develop and implement their own regulations governing certain leasing on Indian lands. upon secretarial approval of these tribal regulations, tribes will have the authority to process land leases without bureau of Indian Affairs approval,” according to the White house website. “Th is new authority has the potential to significantly reduce the time it takes to approve leases for homes and small businesses in Indian Country.”

“There’s no question the hEARth Act will facilitate development on the reservation.” Rubacha says.

Attorney Roger owers of kaibab law offices says that while the hEARth Act should remedy some of the long wait times, it doesn’t guarantee approval — especially for developments on allotted lands that will still have to go through

the bureau of Indian Affairs. “tribes may not get approval the fi rst time, but at least they will get direction from the b.I.A. within a certain time frame,” owers says. Th is means that at least the paperwork is moving along and problems can be fi xed more quickly so applications can be resubmitted for approval in a timely fashion. tribes have another way to help facilitate developments on their lands, making it more attractive to do business with them. lujan says tribes can make themselves more appealing to developers by having all of their laws available and transparent, and by having development areas already defi ned.

If a tribe has already set the base for development things become much easier for everyone involved and at that point a developer would just need to get a permit and then start working, lujan says.

“The key for tribes is to get ahead of the game, that way they can just bringing in a developer,” he adds.

After all, the benefits for doing business in Indian Country are what attract many developers and the bureaucracy is what can drive them away.

There are benefits for both the tribe and the developer that usually outweigh the problems. “for developers there are certain advantages to locating on tribal land that are not otherwise available off reservation or available to the extent

>> Do your research on the tribe you hope to work with. Visit their website, learn about their culture, and know what kinds of developments they have done in the past. Tribes tend to look for high quality developments that adhere to tribal values and aesthetics. >> After you have done all your background research, then approach the tribe. Usually the best place to start is with a tribe’s Department of Economic Development. >> When everything is starting to come together it wouldn’t hurt to have an attorney who knows the subject matter look over your project and contract to help you know what you are getting into.

Sources: Vince Lujan; Diane Humetewa

on-reservation,” lujan says. “for example, there are federal employment tax credits, accelerated depreciation, high visibility on the commercial corridor at salt River, competitive lease rates and unchartered territory open to one’s imagination.”

In turn, the tribe will benefit from new tax revenue, increased jobs, and retail services that weren’t there before. Money will stay on the reservation and the tribe will have access to services that they would have to drive off of the reservation for otherwise.

31

CONSTRUCTION IN INDIAN COUNTRY

BY LILLIAN REID

THE NEED FOR KNOWLEDGE Celebrating its 10th year, CIIC remains a key player in fostering relationships between Arizona’s tribes and developers

Wild horse Pass

M

ore than a quarter of Arizona land belongs to native American tribes, and for the past 10 years, Construction in Indian Country, a nonprofit organization, has played a large role in fostering understanding between developers and tribal governments.

CIIC was formed to help address the mistrust, misconceptions and misunderstanding that can take place between tribes and developers, says Diane humetewa, special advisor to the president of Arizona state university, Michael Crow.

“CIIC was envisioned as the honest broker,” humetewa says. “on both sides there was apprehension because of lore about doing business in Indian Country.

The vision was to bring all parties together to then start the discussion and to educate builders about what rules and regulations apply in Indian Country,” humetewa adds. “tribes only have a finite amount of land so they have to be resourceful, but they also have to be very scrutinizing.”

The cornerstone of CIIC, which operates in conjunction with Asu, has been its annual conference. The 10th annual event was held April 29-May 1 at

32 | March-April 2013

Wild horse Pass hotel & Casino on the Gila River Indian Community.

“It has provided tremendous value as an educational resource on how to appropriately work with tribal governments,” humetewa says.

The proceeds from the conference go back into the American Indian Construction Management Endowment fund. The endowment started 10 years ago when Jeff begay, vice president of the CIIC Advisory Council’s executive board, donated $100.

The endowment has grown to nearly $400,000 and provides scholarships to native American students in the Del E. Webb school of Construction Management.

In 2012, $45,000 from the CIIC Conference was deposited into the fund and 11 students were awarded an American Indian Construction Management grant totaling $16,500 for academic year 2011/2012.

Thanks in part to grants from CIIC, kammy harding graduated from Asu in 2012 with her bachelor’s degree in construction management.

“When I first started the program I remember seeing only about five or six native American students in my classes.

A couple years later I saw that number

increase to about 10 students,” harding says. “Growing up on the reservation, my dad, grandfather, uncles, aunts, cousins, almost everyone I know is a hardworking crafts/tradesman — but oddly we are disproportionally represented at the management and ownership level in the construction industry.” harding says that education is essential to a successful relationship between a developer and a tribe, and that the biggest misconception is often that all tribes have gotten rich off of casino revenue. “for most tribes the gaming industry profits help support only a portion of their communities’ economic needs — when you enter into a tribal relationship with tunnel vision you can lose sight of what the true needs, wants, and capabilities of a community are,” harding says. harding adds that the CIIC motto, “Growing our own,” ties in with the need for more well-educated native American construction professionals.

These individuals will help successfully manage and run the growing economic developments of tribes across the nation. for a full schedule and list of educational workshops at the 2013 CIIC Conference, go to ciic.construction.asu.edu.

CORENET GLOBAL ARIZONA

BY PETER MADRID

TOGETHER FOR THE

GREATER GOOD CoreNet Global Arizona champions best practices, creates awareness and unity

Corenet Global Arizona is one of the only organizations in the valley for true commercial real estate professionals that champions best practices; trying to reach more directors of real estate within companies. It also prides itself on being the only group capable of convening the entire industry.

Creating awareness is also important to the Arizona chapter. It’s this added value it brings that resonates with members, who come from industry sectors such as development, economic development, finance, brokerage, architecture, general contracting and utilities, to name a few.

Corporate office construction, both base building and interiors, is one of our key the markets for holder Construction, says keyvan Ghahreman, senior preconstruction manager.

“Corenet Global and the resources it offers keeps us informed of the most current trends in the corporate workplace and provides a great platform with which to engage with the corporate community,” Ghahreman says. “understanding these trends makes us aware of the issues and hot buttons that are top of mind with our key clients and design partners. by being such a great resource, Corenet Global ultimately helps us provide value to our customers.”

The Rockefeller Group has been developing buildings for lease or sale to corporate America for more than 80 years. Corenet Global helps his company stay current on state-of-the-art trends that its customers need in their buildings to serve their businesses efficiently, says Mark singerman, regional director Arizona.

“Corenet Global is one of the few real estate organizations we participate in that gives us the opportunity to interface with and learn from CRE professionals at the local, national and international level,” singerman says. “There are many real estate skills common to both developers of office and industrial facilities and CRE professionals. but the clear focus for the CRE practitioner is on utilizing these skill sets and best practices to meet end user needs.

“Real estate developers focus on meeting market demand for certain products such as office or industrial space that are designed for flexibility to meet a broad range of customers. As with any business, corporate real estate is based on relationships. Corenet Global gives end users and service providers a chance to get to know each other in a relaxed, low pressure environment.”

According to Chad Wentz, workplace designer at Gensler, Corenet Global provides his company a platform and network to share industry-leading research and expertise to those interested in maximizing their real estate.

“As a result of being an active member of the Arizona Chapter, we have seen an increase in our business by becoming the trusted advisor to several Arizona real estate professionals actively seeking 34 | March-April 2013

opportunities to optimize their assets. nine of the top 10 largest global companies are Gensler clients,” Wentz says. “our chapter has active real estate executives from many of the fortune-ranked companies. There is no other real estate organization in Arizona that provides this type of accessibility to these professionals.”

While attending Corenet Global summits in Chicago and san Diego, Wentz says, Gensler grew its Arizona relationships within major fortune-ranked companies by connecting with their peers from other markets. “by connecting with these individuals, it allowed us to better understand their real estate and business strategies, globally and locally,” he says. “As a result, we grew our local relationships which provided an increase in our business.”

Earlier this year, Wells fargo opened a new home loan operations Center in tempe to accommodate 900 team members. According to leo bauman, a vice president at Wells fargo and past Arizona Chapter president, his membership provided him with the opportunity to develop relationships with his counterparts at another major Arizona employer. The two entities collaborated to deliver this new home loan operations Center one full month ahead of schedule.

“As a member, I have enjoyed the opportunity to network with my counterparts at other companies,” bauman says, “including brokers, service providers and vendors in the commercial real estate community,” Corenet Global has also is one of the premier real estate education organizations in the industry. The research and development within Corenet provides insight into the real estate industry and the perspective of the corporate real estate user.

Keyvan Ghahreman “There is not another educational group in the industry that provides the perspective afforded by Corenet,” says kurt Rosene, senior vP for The Alter Group. “Whether you are a developer, architect, contractor, property manager, broker or other service provider, Corenet provides opportunities to enhance knowledge and increase business opportunities.

“It has always been the premier group for gaining access and relationships with corporate real estate executives.”

Chad Wentz

CORENET GLOBAL ARIZONA

Q&A

BOB GRACZ President

Q: As president, what are your goals for the chapter in 2013?

A: Continuance of the market presence and momentum we have managed to gain over the past year with programs, and drive more involvement with current Corporate Real Estate Executives of some of the larger companies within the valley. our program offerings are based upon quality not quantity and as such, subjects like workplace collateral factors — work talent, demographics; workspace specifics within flexible zones as in ergonomics, collaboration, mobility, and technology will all work to enhance the workforce. Address/review topics locally aligned to our area such as the McDowell Road Corridor. Additionally we want to maximize and increase our future young leaders to participate more frequently, thus understanding the true value of the local chapter. We have a specific committee focused on this that is headed up by Jamie swirtz, CbRE. leo bauman, Well fargo bank and I will host a luncheon with the young leaders to allow for one on one open discussions with current and future local chapter presidents.

Q: What must the Arizona chapter achieve

to move forward?

A: More of the same, as mentioned in my goal comments along with focus in key strategic areas i.e., programs, events and quality collaboration. Continue to critique some of the success factors with other local Corenet chapters to see what best practices we can learn from. I have a saying: “I like our position, I like what I’m seeing, I like what we offer - now let’s go out and market that with an emphasis on our ‘local brand’ of Corenet involvement!

We are family - We know most everyone on a fi rst name basis.”

Q: Do facilities costs remain an issue with member firms?

A: facility costs are always a focus, however, it’s more about productive space inclusive of usage, density, and meeting the needs of an ever changing workforce that is being driven to always do more. I would say that workspace efficiency is a term used to describe the most cost effective space that drives best value for your company. It does vary slightly upon type, such as office, warehouse, and manufacturing, build centers and industry sector. A CRE executive needs to be continually aware of his / her company needs and changing requirements in order to stay ahead of the curve.

Q: What do see as the benefits of being a

member of CNG Arizona?

A: The ability to be connected and network with the best of the best with Real Estate Executives who are in the know and part of the setting trend in our industry. It’s who you know, being able to interact with the most successful corporate real estate and workplace professionals in the world, thereby expanding your networks right here in Phoenix. I have great insight and perspective on corporate real estate and workplace infrastructure. Members grow

Bob Gracz is Vice President of Corporate Real Estate for Avnet, Inc. He is responsible for day-to-day operations for the North America portfolio as well as Avnet’s global portfolio.

Gracz is a native of Chicago and lives in Phoenix. He has been a member of CoreNet Global Arizona for 15 years.

personally and professionally through various programs, both at the local and global levels. you’ll feel part of and are in the know of much of what’s going on in the valley as well as nationally. sometimes we bring a cut sheet version of some of the national programs locally to our monthly programs. Great resources, such as our monthly programs, social events like the ballgame gathering allows you to network with the who’s-who of Corporate Real Estate within the Phoenix area.

Enhance your knowledge through in-depth one on one collaboration with people like leo bauman of Wells fargo bank, sunil Das of Intel, all the local development people as well as others, including myself.

Q: With the Great Recession in the

rearview mirror, what positive industry trends do you foresee?

A: I believe we are in a steady as she’s goes environment. our area seems to be one of those areas that appears to trend first, so we’re starting to see a positive gain in momentum … just more of that and I’m good with it. It’s hard to fathom ... but we’re going to be ok. We are getting back to a more normal predictable business growth trend. That’s manageable! The past years have been like a roller-coaster and I for one am looking forward to positive consistent business progression in a more manageable “small snippet” format. I think I’m ok if they bore me for a little while.

35

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STRENGTHEN COMMUNITIES

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They’re Good for Our Economy.

CORENET GLOBAL ARIZONA

Leo Bauman

Vice President & Manager Corporate Properties Group Wells Fargo Bank

Kelly McClellan

Sales Representative Knoll

Years at Wells Fargo: 26 Years at Knoll: 2 1/2 Years in CoreNet Global Arizona: Years in CoreNet Global 15 Arizona: 6

Q: Professionally, what does it mean to you to be a member of CoreNet Global Arizona?

A: This organization

continually provides me with knowledge and information regarding corporate real estate in an ever changing corporate and commercial real estate environment.

There are about 14,000 Wells Fargo team members here in Arizona and CoreNet provides an opportunity to develop contacts, knowledge, best practices and industry trends that helps further the Real Estate interests of Wells Fargo.

Q: Professionally, what does it mean to you to be a member of CoreNet Global Arizona?

A: As a member of CoreNet you have a common link to many real estate professionals in the Phoenix market.

These professionals have helped me grow my business and my career, I find that very worthwhile.

Q: What about the organization do you find to be the most rewarding?

A: I find the events and the learning opportunities very valuable. CoreNet’s Q: What about the organization relevant programs help to keep me very informed do you find to be the most and give me the most up rewarding?

A: The events and programs to date information on are informative, add value real estate trends in the workplace. to current topics, provide opportunities to meet people through networking, and are Q: Was there an “aha moment” when you realized rewarding. being a member of was invaluable?

Q: Was there an “aha moment” A: The network that I when you realized being a have built from being a member of was invaluable? member of CoreNet and A: The issues that we

a Board Member for four years in invaluable. As a member of CoreNet, I like the fact that I get access to Directors of Real Estate for some understand our challenges and of the most respected assist us to determine the best companies in Arizona.

face at Wells Fargo are many times the very same issues that my peers face at other organizations.

Networking and collaboration many times help us all to method toward resolution.

38 | March-April 2013

Tivon Moffitt

Don Rodie

Beth Scarano

Jamie Swirtz

Years at Colliers: 2 Years in CoreNet Global Arizona: 2 (7 total in CoreNet Global)

Years at C&W: 23 Years in CoreNet Global Arizona: 11

Years at Keyser: Firm founded in January Years in CoreNet Global Arizona: 10

Years at CBRE: 4 Years in CoreNet Arizona: 2

Q: Professionally, what does it mean to you to be a member of CoreNet Global Arizona?

Q: Professionally, what does it mean to you to be a member of CoreNet Global Arizona?

A: I have grown

Q: Professionally, what does it mean to you to be a member of CoreNet Global Arizona?

A: CoreNet has been a big

Vice President Colliers International

A: I feel it is important to be associated with an organization that has a strong local chapter and a great global organization.

Q: What about the organization do you find to be the most rewarding?

A: The quality of the people involved and their willingness to share their thoughts, ideas, and experience. CoreNet attracts corporate real estate decision makers that are constantly pursuing innovative solutions to help their company’s bottom line while also providing an attractive work environment.

Q: Was there an “aha moment” when you realized being a member of CoreNet Global was invaluable?

A: The process of obtaining my Master of Corporate Real Estate from CoreNet. The MCR provided a great education and helps me lead my clients to implement significant transformations that enable a more positive workspace while reducing costs.

Senior Director Cushman & Wakefield Arizona

professionally in ways I never imagined as a result of the MCR and SLCR curriculums and the wisdom shared by the most experienced professionals in their respective fields. You won’t get that anywhere else. Period.

Q: What about the organization do you find to be the most rewarding?

A: The camaraderie and

the relationships I have been blessed by as a result of my affiliation with CoreNet have been rewarding and meaningful experiences.

Q: Was there an “aha moment” when you realized being a member of CoreNet was invaluable?

A: I’ve been an Executive Board member for eight years, chaired every committee and was Chapter President for two terms. As a result, I have had so many of those “aha moments,” it would be impossible to enumerate them all.

Project Management Services Keyser

part of my professional development and network both locally and nationally.

Q: What about the organization do you find to be the most rewarding?

A: The tremendous

networking and opportunity to meet the leaders in corporate real estate across the country. The ability to tap into the CoreNet Global resources — people and tools — provides access to information that is specifically focused on issues and challenges of corporate real estate.

Q: Was there an “aha moment” when you realized being a member of CoreNet Global was invaluable?

A: I was sitting in a meeting across from several of the local leaders in corporate real estate, like Bob Gracz of Avnet, Leo Bauman of Wells Fargo and Sunil Das with Intel, and realized I wouldn’t be sitting here today and able to call this amazing group my friends had I not been actively involved in CoreNet.

Sales Assistant in Tenant Advisory Services CBRE

Q: Professionally, what does it mean to you to be a member of CoreNet Global Arizona?

A: CoreNet has been a great place for me to learn and grow professionally. CoreNet has allowed me to build strong relationships with corporate real estate professionals who I might not otherwise have the opportunity to meet.

Q: What about the organization do you find to be the most rewarding?

A: I find that the monthly events provide the greatest benefit.

Not only have I met a lot of business people through these events, I have learned insightful information about new projects in the Phoenix area.

Q: Was there an “aha moment” when you realized being a member of CoreNet Global was invaluable?

A: I was impressed when I went to the first CoreNet Global meeting in Phoenix. It was educational and everyone was very welcoming. Chad Wentz was the first person I met and he was very helpful in introducing me to the group.

_07613

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1

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821796_07613 7.125x4.75 4c.indd 1

2/12/13 4:36 PM

Welcome to the Phoenix leasing team

Karsten Peterson Managing Director

Mark Gustin Managing Director

Dave Seeger Managing Director

Matt Gandolfo Associate

tel +1 602 282 6318 mobile +1 602 501 5455 karsten.peterson@am.jll.com

tel +1 602 282 6316 mobile +1 602 430 0605 mark.gustin@am.jll.com

tel +1 602 282 6317 mobile +1 602 319 5588 dave.seeger@am.jll.com

tel +1 602 282 6249 mobile +1 602 309 2500 matt.gandolfo@am.jll.com

We are pleased to announce our newest members of the Phoenix leasing team. These individuals will further strengthen our regional and local brokerage services and create real and exceptional value for our clients.

Jones Lang LaSalle 3131 East Camelback Road, Suite 400 Phoenix, AZ 85016 www.us.joneslanglasalle.com/phoenix

JLL_Welcome_Agency AZ team_Ad_AZRE.indd 1

2/21/2013 1:31:25 PM

PREsENTs ThE 8Th ANNUAl

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n Feb. 27, AZRE magazine hosted the 8th Annual RED Awards reception at the Arizona Biltmore in Phoenix to recognize the most notable commercial real estate projects of 2012 and the construction teams involved. AZRE held an open call for nominations and 102 projects were submitted by architects, contractors, developers and brokerage firms in Arizona. All the winners and honorable mentions are featured on the following pages.

Sponsored by:

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BEsT EdUcATioN PRojEcT AsU iNTERdisciPliNARy sciENcE & TEchNoloGy BUildiNG deveLoper: ASU contractor: SUNDT CONSTRUCTION, INC. arcHitect: EHRLICH ARCHITECTS/HDR, INC. siZe: 298,00 SF Location: 781 E. TERRACE RD., TEMPE

GATEWAy coMMUNiTy collEGE iNTEGRATEd EdUcATioN BUildiNG

coMpLeted: MARCH 2012

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collaborative effort led to the completion of project ISTB4, Arizona State University’s largest, and most advanced facility to date. Since lab buildings are known to use 10 times more energy than office buildings, the project needed extremely efficient systems to meet the university’s sustainability goals. ISTB4 strategies include variable exhaust and intelligent sensors, an enhanced air circulation system, energy resource system, and building information modeling (BIM), which limited construction waste. The project also enhanced efficiency by utilizing a campus loop to supply chilled water and steam to the building instead of creating it on-site which contributed to significantly less wasted material that would end up in a landfill. ISTB4’s rigorous recycling program also contributed to the project’s sustainability goals as well. The team averted 2,339 tons of waste from local landfills by recycling 78.4% of the construction waste. The 298,000 SF, 8-story building brings three distinct functions together under one roof: collaborative meeting rooms and offices, classrooms and auditoriums and a meteorite gallery; and its largest component — high-tech lab space including 166 modules. The project finished on a fast-track, 24-month schedule while meeting its sustainability goals.

deveLoper: MARICOPA COMMUNITY COLLEGE DISTRICT contractor: CORE CONSTRUCTION arcHitect: SMITHGROUPJJR siZe: 122,000 SF Location: 108 N. 40TH ST., PHOENIX coMpLeted: JUNE 2012

BEsT hEAlThcARE PRojEcT AdElANTE hEAlThcARE MEsA deveLoper: AXIS COMPANIES contractor: LGE DESIGN BUILD arcHitect: CAWLEY ARCHITECTS Broker: MEDICAL OFFICES BROKERS

FloRENcE hosPiTAl AT ANThEM

siZe: 43,000 SF Location: 1705 W. MAIN ST., MESA coMpLeted: NOVEMBER 2012

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delante Healthcare Mesa began as an idea: to be the first LEED platinum community health center in the country. The project’s toughest challenge was not getting the LEED

platinum certification; instead the biggest challenge was the project budget — a shell budget of $85 PSF and a TI budget of $75 PSF. Cawley Architects designed the exterior to include integral

deveLoper: FLORENCE HOSPITAL AT ANTHEM, INC.

color masonry, green reflective glazing and numerous metal details. The interior design of the

contractor: LAYTON CONSTRUCTION

building complements the exterior with free flowing light space, low-VOC paint and recycled

arcHitect: SWA ARCHITECTS

materials. Adelante Healthcare Mesa not only serves the environment with its green design facility, but also readily serves its patients with high quality primary and preventative healthcare.

The facility provides individuals a community meeting resource, nutritionists and a pharmacy.

Medical services include family medicine, internal medicine, pediatrics, women’s health and dental care, all within a peaceful and welcoming environment.

siZe: 94,000 SF Location: 4545 N. HUNT HWY., FLORENCE coMpLeted: JANUARY 2012

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BEsT hosPiTAliTy PRojEcT hoTEl PAloMAR PhoENiX deveLoper: RED DEVELOPMENT contractor: HUNT CONSTRUCTION arcHitect: SMITHGROUPJJR siZe: 175,000 SF Location: 2 E. JEFFERSON ST., PHOENIX coMpLeted: JUNE 2012

FAiRMoNT PRiNcEss BAllRooM EXPANsioN

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ocated at CityScape in Downtown Phoenix, the Hotel Palomar offers a variety of amenities including walking access to more than 15 restaurants and bars, more than 10 clothing and entertainment outlets and a signature restaurant, the Blue Hound Kitchen & Cocktails. A third-level pool deck bar and dining spot (Lustre) adds to the amenities available to guests.

The Hotel Palomar also meant nearly 200 contruction jobs to the downtown core. Its chilled water grid means no central air or heat help contribute to its sustainability efforts. The hotel prides itself on its EarthCare program, in which its employees take charge in the various operations. Employee ideas have contributed to sustainability efforts including suggestions to recycle wire hangers, which saves two tons of steel each year and a recommendation to provide phone books only upon request, saving about 130 trees a year ($10 of every daily room rate is donated to the Nature Conservancy and a tree is planted as part of Plant a Billion Trees). The hotel is committed to integrating the highest concentration of uses in the greatest density in all of Arizona.

deveLoper: FAIRMONT SCOTTSDALE PRINCESS contractor: HOWARD S. WRIGHT arcHitect: KOLLIN ALTOMARE ARCHITECTS siZe: 60,000 SF Location: 7501 E. PRINCESS BLVD., SCOTTSDALE coMpLeted: OCTOBER 2012

BEsT iNdUsTRiAl PRojEcT dicK’s sPoRTiNG Goods disTRiBUTioN cENTER deveLoper: MERIT PARTNERS contractor: THE RENAISSANCE COMPANIES arcHitect: BUTLER DESIGN GROUP Broker: JONES LANG LASALLE siZe: 724,455 SF

ciTy oF PhoENiX 27Th AVE. WAsTE TRANsFER sTATioN

Location:4651 N. COTTON LANE, GOODYEAR coMpLeted: SEPTEMBER 2012

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t took a collaborative effort of the developer, architect, contractor, and the City of Goodyear to meet deadlines of the aggressive project schedule for the Dick’s Sporting Goods Distribution Center. Breaking

ground in December of 2011 and a turnover of the warehouse in June 2012, the project met its goal to commence the shipping and receiving of goods by Jan. 1, 2013, to serve up to 150 stores in the Western U.S. The project achieved LEED silver certification for new construction through sustainable design

deveLoper: PUBLIC WORKS DEPARTMENT /SOLID WASTE DISPOSAL

practices including R-30 roof insulation, single-ply TPO roofing, insulated doors, 2% natural light through

contractor: LAYTON CONSTRUCTION

skylights, Energy Star appliances, motion activated lighting with daylight sensors and low-water use landscaping. The distribution center also purchases 70% of its power as Green-e renewable power. Adding elements of fun into the project design, the building includes a basketball court in the facility commons, a baseball diamond on the floor of the break room and yardage markers leading to fitness and training rooms express what the company does — sell sporting goods and promote an active lifestyle.

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arcHitect: HDR ENGINEERING siZe: 130,287 SF RENOVATION; 50,500 SF NEW Location: 7501 E. PRINCESS BLVD., SCOTTSDALE coMpLeted: 3060 S. 27TH AVE., PHOENIX

Squire SanderS iS proud to Support the red awardS For more than 30 years Squire Sanders has been a proud partner to Arizona’s businesses. Our real estate lawyers have a strong reputation for providing sophisticated legal counsel throughout the Southwest. We provide representation in all aspects of the purchase and sale, development, financing, construction, management, workouts, foreclosures and liquidations of real estate projects.

James S. Gibson +1 602 528 4037 james.gibson@squiresanders.com Steven L. Lisker +1 602 528 4023 steven.lisker@squiresanders.com Bart J. Page +1 602 528 4045 bart.page@squiresanders.com Justin D. Steltenpohl +1 602 528 4192 justin.steltenpohl@squiresanders.com

squiresanders.com

BEsT MiXEd-UsE PRojEcT

AK-chiN FAMily ENTERTAiNMENT cENTER deveLoper: AK-CHIN INDIAN COMMUNITY contractor: A.R. MAYS CONSTRUCTION arcHitect: NELSEN PARTNERS siZe: 165,000 SF Location: 16000 MARICOPA RD., MARICOPA coMpLeted: NOVEMBER 2012

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ith just four months of design and 10 months of construction, the AK-Chin Family Entertainment Center, also known as the Multientertainment Center at Ak-Chin Circle, opened to the Ak-Chin community and its surrounding communities. The $50M complex is built on 50 acres and is one of the largest and most highly advanced facilities of its kind. It includes a 12-screen, state-of the-art cinema with 3D capabilities and motion seats; VIP theater seating; full bar service and seat-food ordering; a 24-lane bowling center that includes an 8-lane section with fireplace and VIP seatings. It also includes an outdoor amphitheater built to help attract big-name performers and a 2-story laser tag and arcade; a sports bar including 13, 55-inch televisions, pool tables, darts and shueboard. A full-service restaurant seats 138 with outdoor dining and a glass water wall.

The complex has not only impacted the Ak-Chin community, but also the surrounding cities, primarily Maricopa. Construction created hundreds of jobs and the actual opening also created 350 jobs for which more than 1,400 applications were received. The Ak-Chin Family Entertainment Center provides a base in which the tribe and surrounding communities can build on for future economic development growth

BEsT MUlTi-FAMily PRojEcT MARAVillA scoTTsdAlE PhAsE 1&2 deveLoper: SENIOR RESOURCE GROUP contractor: THE WEITZ COMPANY arcHitect: ALLEN+PHILP ARCHITECTS/INTERIORS

hoPi AssisTEd liViNG FAciliTy

siZe: 640,000 SF Location: 7325 E. PRINCESS BLVD., SCOTTSDALE coMpLeted: MAY 2012

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he architectural character of the Maravilla senior living facility balances traditional and contemporary with a variety of details for visual interest and luxury senior living. Amenities on the 25-acre site include an indoor pool and spa, arts and crafts facilities, on-site health staff, Internet lounges, fitness center, movie theater and a multi-purpose facility. The project adheres to energy efficiency with enclosure insulation, low-E insulated glass windows, infrastructure for future solar hot water at the indoor pool and spa and carbon monoxide sensor switch. Water consumption is constrained by the use of substantially drought-tolerant landscaping and low-flow plumbing. Dining at Maravilla is a culinary experience: the main restaurant offers varied room experiences, an exterior courtyard for dinning, a cafĂŠ, and casual dining at the clubhouse. Aside from the numerous amenities, the buildings on-site are designed to offer views of the McDowell Mountains and TPC Golf Course. Design of the facility offers unique courtyards for a variety of purposes and provides residents an array of amenities, walking opportunities and superb sights.

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deveLoper: THE HOPI TRIBE contractor: BRYCON CONSTRUCTION arcHitect: JARRATT ARCHITECTURE siZe: 12,000 SF Location: 21 SENIOR LANE, upper viLLage oF Moenkopi (tuBa city) coMpLeted: DECEMBER 2012

Congratulations to winners of the 2013 RED Awards.

APS Solutions for Business salutes this year’s winners and nominees for their commitment to reaching energy efficiency goals.

Find ways your business can save energy at aps.com/businessrebates or call 866 277 5605.

The Solutions for Business program is funded by APS customers and approved by the Arizona Corporation Commission.

BEsT oFFicE PRojEcT FBi PhoENiX diVisioN deveLoper: RYAN COMPANIES US, INC. contractor: RYAN COMPANIES US, INC. arcHitect: AECOM siZe: 210,202 SF Location: 21711 N. 7TH ST., PHOENIX

iNFUsioNsoFT

coMpLeted: FEBRUARY 2012

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onsolidation of four FBI buildings called for not only a state-of-the-art facility with heavy security, but also a building that adhered to energy efficiency and the capacity to hold the GSA and FBI offices of Phoenix. The GSA administered a 20-year lease and named the building a “design of excellence.” Construction recycling was 85% to 95% and many of the new building materials were procured from regional sources, qualifying the project for LEED points for certification and energy savings. Desert themed landscaping was utilized across the entire site. Construction also utilized the services of an energy modeling consultant to determine the most efficient design configuration and components to utilize in the building, including an R-30 roof, high-performance glass and efficiently designed interior lighting.

Energy savings include performance utility agreements to achieve, maintain, and exceed the ENERGY STAR benchmark. The building also has a fitness center, kitchen/dining area and 527 secured parking stalls. The design team incorporated energy efficient elements, distinctive security and up-to-date infrastructure to meet the growing needs of law enforcement and security agencies such as the FBI.

deveLoper: DOUGLAS ALLRED CO. contractor: WILLMENG CONSTRUCTION arcHitect: BALMER ARCHITECTURAL GROUP siZe: 92,102 SF Location: 1260 S. SPECTRUM BLVD., CHANDLER coMpLeted: NOVEMBER 2012

BEsT PUBlic PRojEcT ThE sAlVATioN ARMy RAy ANd joAN KRoc coRPs coMMUNiTy cENTER

ocoTillo liBRARy + WoRKFoRcE liTERAcy cENTER

deveLoper:THE SALVATION ARMY contractor: HAYDON BUILDING CORP. arcHitect: DICK FRITSCHE DESIGN GROUP siZe: 147,000 SF Location: 1375 E. BROADWAY RD., PHOENIX coMpLeted: MAY 2012

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he opening of the Salvation Army Ray and Joan Croc Community Center in Phoenix heralded an endless amount of opportunities for the community that the center serves. The collaboration of the Salvation Army and Joan Kroc Corp. has four program components: worship, education, arts and recreation. The facility includes a 300-seat community/events banquet room, NBA-sized basketball courts, a full-service fitness center, aerobics/dance studio, locker rooms, and a family-oriented pool with a lazy river. The center adheres to energy efficiency with solar thermal panels, an elaborate filtering system in the aquatic center, an HVAC chilled system and low-voltage lighting. The center is one of the largest of the Salvation Army Ray and Joan Corps Community centers in the country.

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deveLoper: CITY OF PHOENIX contractor: JOHNSON CARLIER arcHitect: DURKIN + DURKIN ARCHITECTS siZe: 7,200 SF Location: 102 W. SOUTHERN AVE., PHOENIX coMpLeted: MAY 2012

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BEsT REdEVEloPMENT PRojEcT ENchANTMENT REsoRT deveLoper: ENCHANTMENT GROUP contractor: ENCHANTMENT GROUP arcHitect: DOUG FREDRIKSON ARCHITECTSP siZe: 16,000 SF MEETING SPACE; 30,000 SF CLUBHOUSE; 218 GUEST ROOMS

coNTiNUUM EXisTiNG MoToRolA BUildiNG RENoVATioN

Location: 525 BOYNTON CANYON RD., SEDONA coMpLeted: APRIL 2012

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ith a deep commitment to guests, the natural environment and Native American traditions, Enchantment Resort in Boynton Canyon completed an overhaul of renovations to the resort’s 25-year legacy. Renovations included a new virtual check-in station curbside, a redesigned clubhouse, three dining experiences, new retail boutique, refurbished guest rooms and indoor and outdoor seating areas. Lobby, restaurants and dining patios were all converted to one elevation, making access easier. Energy efficiency efforts were made by the installation of low-flow shower heads, toilets and faucet aerators to cut-down water use. The resort maintains its own waste-water treatment plant on-site, and fresh water leftover is used for landscape irrigation. Kitchen grease is converted to biofuel and 90 tons of recyclable material is kept out of landfills due to the resort’s ongoing sustainable practices. Guests have a 360-degree view of the canyon with the newly renovated lower-deck pool, which includes an expanded deck and terrace area, private cabanas, a whirlpool spa, pool bar and an adjacent game room and activity center. The resort stays true to its historical elements with 14-inch thick adobe brick, ceiling beams of Douglas fir featured throughout the space and sliding glass walls that offer unobstructed views of the surrounding area.

deveLoper: CAPITAL COMMERCIAL INVESTMENTS contractor: RSG BUILDERS arcHitect: PHARCHITECTURE siZe: 523,028 SF Location: 2501 S. PRICE RD., CHANDLER coMpLeted : NOVEMBER 2012

BEsT RETAil PRojEcT shoPs AT ToWN & coUNTRy

lo-lo’s chicKEN & WAFFlEs

deveLoper: RED DEVELOPMENT contractor: CHASSE BUILDING TEAM arcHitect: BUTLER DESIGN GROUP siZe: 55,000 SF NEW; 325,000 SF TOTAL Location: 20TH ST. & CAMELBACK, PHOENIX coMpLeted: OCTOBER 2012

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ell known to the City of Phoenix, as well as food and retail explorers, the historic shops at Town & Country underwent a revitalization. An open-air shopping experience offers a unique collection of national, regional, local shops, restaurants and services. Town & Country also hosts a schedule of community-based events. Over a period of 18 months, Town & Country experienced a venture in its redevelopment. The plans aim to build upon what consumers find special about the center and add new names to the already existing well-loved restaurants and shops. The team added 20,000 SF of new retail including Five Guys Burgers and Fries, Café Rio and a 35,000 SF Nordstrom Rack. The retail space at Town & Country is 100% leased and new retail is constantly being added.

Great location, great neighbors and great demographics contribute to the success of The Shops at Town & Country and plans to enhance the restaurant and retail mix are constantly being made.

deveLoper: LGE DESIGN BUILD contractor:LGE DESIGN BUILD arcHitect: CAWLEY ARCHITECTS siZe: 4,240 SF Location: 10 W. YUMA ST., PHOENIX coMpLeted : OCTOBER 2012 49

BEsT TENANT iMPRoVEMENT PRojEcT FENdER MUsicAl iNsTRUMENTs coRP. deveLoper: WDP PARTNERS contractor: LAYTON CONSTRUCTION arcHitect: WARE MALCOMB Broker: CRESA siZe: 110,000 SF Location: 17600 N. PERIMETER DR., SCOTTSDALE

child & FAMily sUPPoRT sERVicEs

coMpLeted: FEBRUARY 2012

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pread among three different buildings and separated by large parking lots, compartmentalization became an issue for Fender Musical Instruments Corporation (FMIC) in Scottsdale. Determined to change the dynamic with a cohesive real estate solution, FMIC agreed that the company needed its departments together under one roof. It found its solution with a 110,000 SF corporate headquarters.

Construction of the new HQ complied to energy efficiency. It utilized recycled materials, configuring an efficient lighting layout and using less wattage throughout the space with day lighting views for 90% of the occupants. Motion sensors also contribute to the energy efficiency. The building is centered on a 2-story, enclosed atrium designed to promote interaction between staff and visitors. The area is anchored by two, 35-inch high Stratocaster and Telecaster guitars. Portraits of musical artists that made the brand paramount decorate the walls. The atrium is made up of stages and platforms for meetings and jam sessions. Second floor offices open to an interactive forum for employees and the HQ is connected by two bridges. Conference rooms are named after Fender artists such as George Harrison and Stevie Ray Vaughn.

deveLoper: LGE DESIGN BUILD contractor: LGE DESIGN BUILD arcHitect: CAWLEY ARCHITECTS siZer: 23,643 SF Location: 10439 S. 51ST ST., PHOENIX coMpLeted: JULY 2012

MosT chAllENGiNG PRojEcT hEAlTh sciENcEs EdUcATioN BUildiNG oN ThE PhoENiX BioMEdicAl cAMPUs deveLoper: CITY OF PHOENIX/ARIZONA BOARD OF REGENTS

cENTURy hAll AT AsU PolyTEchNic

contractor: DPR CONSTRUCTION/SUNDT CONSTRUCTION arcHitect: CO ARCHITECTS/AYERS SAINT GROSS siZe: 265,000 SF Location: 435 N. 5TH ST., PHOENIX coMpLeted: JULY 2012

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he 6-story Health Sciences Education Building (HSEB) on the Phoenix Biomedical campus serves two end-users — the University of Arizona College of Medicine and the Northern Arizona University College of Health and Human Services. The facility has extensive building information modeling, laser scanning and blue-beam software capabilities. It includes 2,500 custom copper panels, which reflect a Grand Canyon type design. Aside from accommodating two end-users, the project has two owners, two contractors and two architects. The project faced multiple challenges including designing a facility that represents Arizona’s leadership in medical education by providing skills-based and simulation settings, health science inter-professional training programs and a planning process involving educators from the cross-section health science disciplines. The design allows optimal natural light into interior spaces while mitigating heat gain using building siting and advanced materials. The impact of the building has reached various aspects including educating nearly twice as many medical students and job creation.

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deveLoper: INLAND AMERICAN COMMUNITIES GROUP contractor: CORE CONSTRUCTION arcHitect: RSP ARCHITECTS siZe: 84,657 SF Location: 5937 S. BACKUS MALL, MESA coMpLeted: JULY 2012

MosT sUsTAiNABlE PRojEcT

coloNEl sMiTh MiddlE school deveLoper: FORT HUACHUCA ACCOMMODATION SCHOOL DISTRICT contractor: TURNER CONSTRUCTION COMPANY arcHitect: EMC2 GROUP ARCHITECTS PLANNERS siZe: 88,693 SF Location: 5651 E. SMITH AVE., FORT HUACHUCA coMpLeted: JUNE 2012

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collaborative relationship with the design and building team, Army base leadership and regional school district put forth a unique effort to complete the first Net Zero educational facility in Arizona. The facility is built on an active military base and sets a new facility standard with a living lab delivering a STEM (Science, Technology, Engineering, Mathematics) curriculum and delivering vast strides in sustainability efforts.

These include concrete metering of light with HVAC and plug loads on a building-by-building basis to verify that the campus operates according to the whole-building energy model; energy efficient LED lighting; lighting monitors that ensure minimum

electricity usage; T5 fluorescent lights and motion sensors that ensure lights are off when not needed. Lighting is expected to be 80% less than a standard school building. Windows in every regular-spaced room provide natural daylight to enhance student learning. Students are encouraged to monitor energy usage and production in real time with energy dashboard monitors throughout the building and mobile apps. Water harvesting water tanks irrigate native trees and shrubs, which students can monitor using the energy dashboard components. Colonel Smith Middle School is a prime example of Net Zero Education by both building standards and curriculum offering.

sciENcE REsoURcE MANAGEMENT BUildiNG deveLoper: NATIONAL PARK SERVICE contractor: LOVEN CONTRACTING arcHitect: CIVIL DESIGN & ENGINEERING siZe: 8,800 SF Location: GRAND CANYON NATIONAL PARK coMpLeted: DECEMBER 2012 52 | March-April 2013

MERiT AWARd: AdAPTiVE RE-UsE

disTRicT MEdicAl GRoUP childREN’s REhABiliTATiVE sERVicEs

deveLoper: DISTRICT MEDICAL GROUP

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arcHitect: KNOELL & QUIDORT ARCHITECTS

t more than 55,000 SF, this facility is the largest multi-disciplinary pediatrics/children’s clinic in Phoenix. It is a prime example of adaptive re-use — it occupies the original JC Penney at Park Central Mall. It was built in a record fast-track time of 82 days from demolition to certificate of occupancy. The clinic now has the capacity to treat 16,000 patients each year. It serves children up to 21 years of age who have some of the most serious health conditions within the AHCCCS Network.

contractor: CALIBER CONSTRUCTION

siZe: 56,530 SF Location: PARK CENTRAL MALL, PHOENIX coMpLeted: SEPTEMBER 2012

MERiT AWARd: cUlTURAl

MccEllANd iRish liBRARy

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he McClelland Irish Library is a one-of-a-kind building designed to replicate a 12th Century Norman tower castle. The entrance was inspired by the St. Brigid’s Church on Inis Cealtra in County Clare. The archway is made of Irish Blue Limestone and weighs 8.9 tons. The greatest architectural challenge was integrating the design requirements into a cohesive structure and making it function on a very small site. The greatest construction challenge was dealing with the death of general contractor Bernardo Velez, who passed away 6 months after the start of construction. The building includes a library, archive, exhibition gallery, meeting and music practice rooms and reading rooms. The “Castle on Central” adds to the downtown arts and culture community.

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deveLoper: IRISH CULTURAL & LEARNING FOUNDATION LIBRARY contractor: DOUBLE AA BUILDERS arcHitect:JOHN PAUL AHERN ARCHITECT siZe: 16,000 SF Location: 1106 N. CENTRAL AVE., PHOENIX coMpLeted: JUNE 2012

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BRoKERAGE TEAM oF ThE yEAR: lEAsiNG CBRE

KEViN cAlihAN

SENIOR VICE PRESIDENT

ToM AdElsoN

EXECUTIVE VP

jiM FijAN

EXECUTIVE VP

jERRy RoBERTs

EXECUTIVE VP

Leasing detaiLs: 117 TRANSACTIONS TOTALING 2.1 MSF (SALES/SF: 11/1.4 MSF) $303M IN VALUE (SALES: $177.3M) Largest singLe transaction cLosed in 2012: 225,000 sF

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ith 87 combined years of experience, this team of respected leaders is innovative, knowledgeable and committed to creating strong customer relationships. They have received every NAIOP Office Brokers of the Year award for Arizona from 2005-2011. Calihan, Roberts and Adelson are members of the Phoenix Thunderbirds, charitable hosts of the WM Phoenix Open. Fijan serves on multiple boards and contributes to the Soutwest Autism Research Center. He and Adelson both are involved at the Diabetes Research Center, and Roberts participates at the Sun Angel Foundation. Together, they are one of the most successful teams at CBRE.

BRoKERAGE TEAM oF ThE yEAR: sAlEs CBRE

TylER ANdERsoN VICE CHAIRMAN

sEAN cUNNiNGhAM VICE CHAIRMAN

34 ariZona transactions (63 NATIONALLY) $1.12B vaLue in ariZona ($2.33B NATIONALLY) Largest singLe transaction cLosed: $179.25M Largest singLe asset saLe: $61.3M

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ith combined experience of more than 62 years and sales exceeding $13B, the team of Anderson and Cunningham remains prominent in the multi-family sales market. This is also a “3-peat” for the duo. Together, they have earned dozens of awards for teamwork and performance and are consistently in the top 3% at CBRE. They participate in the National Multi-Housing Council, the Arizona Multi-Housing Association and the United Way Alexis De Tocqueville Society. Anderson also participates at the Urban Land Institute and Multifamily Blue Council. Cunningham serves on the board of Childhelp USA and is a member of the Phoenix Thunderbirds. Their commitment to their clients, community and industry is exemplary.

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Innovation

Plaza Companies, AMO® is proud to be a finalist for the prestigious RED Award for BioInspire.

BioInspire is a Peoria-based premiere incubator of companies developing medical devices. Together, through a partnership between BioAccel, Plaza Companies and the City of Peoria, we are defining the future of innovation and economic development in biotechnology facilities in the Valley.

BioInspire’s location at Plaza del Rio Medical Center I is part of a high-profile, energizing, mixed-use 185-acre medical hub that houses physicians, dentists, research, biotechnology, and training facilities.

Plaza del Rio Medical Center I, II and III

13260-13460-13660 N. 94th Drive Peoria, AZ 85381 Located off Thunderbird, 1 mile west of Loop 101

For more information about this premiere property, contact: An Accredited Management Organization (AMO®)

www.theplazaco.com

Margaret Lloyd

623-344-4558 margaret.lloyd@theplazaco.com

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BRoKER oF ThE yEAR: lEAsiNG jAy hosElToN SENIOR DIRECTOR CUSHMAN & WAKEFIELD

Leasing detaiLs: 23 TRANSACTIONS TOTALING 574,849 SF $138.4M IN VALUE Largest singLe transaction cLosed in 2012: $80.4M

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or more than 37 years, Jay Hoselton has impacted commercial real estate in both management and brokerage. He has won multiple awards for his exceptional production and customer service. In an effort to improve the firm and to aid young industry talent, he holds business planning classes and mentors through the NAIOP Arizona chapter. He has worked tirelessly to raise money for Hospice of the Valley for 14 years and participates in the Greater Phoenix Urban League.

BRoKER oF ThE yEAR: sAlEs ERic j. WichTERMAN EXECUTIVE VICE PRESIDENT, CAPITAL MARKETS GROUP CASSIDY TURLEY

Leasing detaiLs: 35 TRANSACTIONS TOTALING 2.8M SF (LEASES/SF: 43/350,725) $159M IN VALUE (LEASES: $31M) Largest singLe transaction cLosed in 2012: $27M/200,000 SF

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ichterman’s knowledge of the market and his strategic thinking have greatly impacted the Valley. In 2012 he implemented a business plan to address challenges in turning around distressed buildings to recover attainable value. He serves as an expert advisor to local and national commercial real estate, lender and REO companies and is a licensed CCIM and a member of NAIOP and ULI. He and his wife have dedicated themselves to the Arizona Humane Society and Phoenix Children’s Hospital.

58 | March-April 2013

ARchiTEcT oF ThE yEAR BUTlER dEsiGN GRoUP

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utler Design Group’s passion for an unparalleled commitment to client service has made it one of Arizona’s leaders in the retail and industrial specialty marketplace. That was especially true in 2012 with its work on a pair of 2013 RED Award category winners, Dick’s Sporting Goods Distribution Center (industrial) and the Shops at Town & Country (retail). Dick’s Sporting Goods was the fourth distribution center of its kind for BDG, but utilized a design vocabulary that combined the feel of its retail outlets, the function of the distribution warehouse, and the operations of a 20,000 SF office support group. At Town & Country, BDG helped carry out the theme of rebirth. Since the firm’s inception in 1996, it has designed and completed more than 20 MSF of office, industrial, retail, and specialty projects.

Winner oF Best industriaL proJect: DICK’S SPORTING GOODS DISTRIBUTION CENTER Winner oF Best retaiL proJect: SHOPS AT TOWN & COUNTRY

GENERAl coNTRAcToR oF ThE yEAR sUNdT coNsTRUcTioN Winner oF Best education proJect: INTERDISCIPLINARY SCIENCE & TECHNOLOGY BUILDING 4

Winner oF Most cHaLLenging proJect: HEALTH SCIENCES EDUCATION BUILDING

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ducation was at the forefront of local projects in 2012 for Sundt, which completed Arizona State University’s Interdisciplinary Science and Technology Building 4 (ISTB4) and the Health Sciences Education Building (HSEB) on the Phoenix Biomedical Campus.

The state-of-the-art ISTB4 unites office, public outreach and high-tech laboratory spaces, and the systems that support them, in ASU’s largest research building — a noteworthy construction accomplishment. Also impressive was Sundt’s role in helping the ownerHOTEL achieve PALOMAR $14M in cost PHOENIX savings without reducing the project’s scope, and containing the total cost of ownership through increased energy-efficiency while maintaining first-cost affordability.

Collaboration was key to Sundt’s work on the HSEB with joint venture partner DPR. The striking, copper-clad building, a crowning addition to Downtown Phoenix, is expected to help the state address a growing need for educating healthcare professionals. The team developed numerous programs to achieve world-class quality and significantly reduce rework and waste. As a result, the landmark facility was able to open 26 days early to accommodate the University of Arizona’s class schedule.

HOTEL PALOMAR PHOENIX

60 | March-April 2013

Building the Future

Turner A Promise Delivered With a commitment to improve project outcomes through the integration of innovative practices and technologies, Turner presents a unique opportunity to introduce the more than 40,000 subcontractors working on Turner projects to the principles and methods of Lean construction. Turner not only educates project team members about Lean material management, the company also communicates a vision for the future of Lean at Turner and throughout the industry.

For more informaƟon, please contact: Turner ConstrucƟon Company 637 S. 48th Street, First Floor, Tempe, Arizona phone 480.557.4700 | Lic. No. ROC 071159 www.turnerconstrucƟon.com

61

dEVEloPER oF ThE yEAR

REd dEVEloPMENT Winner oF Best HospitaLity proJect: HOTEL PALOMAR PHOENIX

Winner oF tHe Best retaiL proJect: SHOPS AT TOWN & COUNTRY

I

HOTEL PALOMAR PHOENIX

HOTEL PALOMAR PHOENIX 62 | March-April 2013

n 2012, RED Development completed Phase I of the redevelopment of Town & Country, which included the addition of a new Nordstrom Rack and 20,000 SF of new shop space which is 100% leased. This spring, a new Whole Foods will open and RED will start work on Phase II of the redevelopment. RED also opened Hotel Palomar Phoenix, a Travelocity top-rated 242-room boutique hotel at RED’s signature project, CityScape. Construction on the apartments at CityScape has begun as this dynamic mixed-use project continues to take shape. With national reach from its headquarters in Phoenix, RED guides a high-quality portfolio of more than 35 retail, commercial and mixed-use properties totaling more than 17 MSF across 11 states. Over the past two years, RED has significantly grown its presence in Arizona through the acquisition of well-positioned real estate properties.

Chasse

Get in the Know with

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64 | March-April 2013

Event Sponsor:

2013 A TRUE BUildER

p. 66 p. 70 p. 72 p. 73 p. 78

Community Builder Making the Grade Diversifying with Solar Projects Projects Q&A: Bo Calbert PUBLISHED BY

MccARThy BUildiNG coMPANiEs

BY PETER MADRID

COMMuNiTY

builder FROM NEW PROJECTS TO TIs, McCARTHY IS A TRUE BUILDER

S

elf performance. Safety. Success.

McCarthy Building Companies prides itself on being a true builder — no matter the size of the project. Whether it’s renovating a school auditorium, constructing its portion of PHX Sky Train or building a healthcare facility, McCarthy views itself as the right general contractor for the job.

“We self perform a lot of our projects,” says Bo Calbert, president of McCarthy’s Southwest Region. “We find that the more we can self perform, the better we can control the schedule and quality of the job. We can control the outcome better.”

“It’s been the McCarthy culture for as long as I’ve been here,” Calbert adds. “Because we are the builders, as opposed to subcontracting out all of the project, McCarthy is accountable and delivers quality to the owner. We take pride in doing the work the right way.”

66 | March-April 2013

McCarthy also prides itself on core values including integrity, learning, excellence, people, community and dedication. Those core values are evident in McCarthy projects, according to its clients.

McCarthy has worked with Banner Health on at least four of its healthcare facilities, including Banner Estrella in Phoenix.

Kip Edwards, vice president for development and construction at Banner, says McCarthy was selected for the Estrella project based on the skills and experience of the firm and the team that it proposed.

“They presented a team that had worked together and had consistently delivered hospital projects of this magnitude and type, safely, with high quality and on time, while helping to achieve the best cost,” Edwards says.

McCarthy also prides itself on the diversity of its projects.

While it excels at K-12 school construction, McCarthy has delivered projects as diverse as the $75M Casino del Sol Hotel

Construction continues at a brisk rate on phX sky Train

and Conference Center in Tucson and the $231M Lake Pleasant Water Treatment Plant.

“We are always looking to diversify ourselves,” Calbert says.

“In the scheme of things, Arizona is not that big a market.

That’s why diversity is important. Making it through the downturn and weathering it, that was our strategy. We don’t want to be jack of all trades and master of none. We want to be experts in all sectors. It’s important to develop great skill sets … best practices across all our business units and help each other grow.”

The waste water project opened a national market for McCarthy, Calbert says. It is taking its expertise to six other states, he adds.

McCarthy’s safety record is another source of pride. Dennis Tucker, an executive vice president who’s been with the company for 30 years, says putting a premium on safety is a priority. According to Tucker, McCarthy has gone 3 years in a

row without a recorded incident in the region.

Recently the Arizona Division of Occupational Safety and Health (ADOSH) Consultation department acknowledged McCarthy for its accomplishment of acquiring the Voluntary Protection Program (VPP) STAR designation, at the Palo Verde Nuclear Generating Station. McCarthy received the honor as a result of its safety team collaborating with the Palo Verde project team to establish safety and health management systems standards, which resulted in successfully completing more than 280,000 man-hours on 3 projects over 3 years without incident or lost time.

“McCarthy underwent a rigorous onsite evaluation by our team,” says Jessie Atencio, assistant director and VPP coordinator of ADOSH. “The Management Safety and Health systems put in place have helped them maintain a remarkably safe workplace, one we are very proud of.”

Adds Tucker: “A lot of general contractors say they have 67

MccARThy

Steel frame construction at PHX Sky Train

great safety records, but a lot of them don’t self perform and have their own crews. We are very proud of it and have worked hard to maintain a good record. It’s the human element; the employee being aware of his environment and thinking about his surroundings.

“Our goal is safety first and then production. We embrace that because they go hand in hand, and you’re going to have better production a better work environment and be more successful.”

As in any industry, technology is constantly changing in the construction field. As a major player competing for a diverse range of projects, McCarthy is ahead of the game. Its diversity of projects makes venturing into new technological advances a given, says Chris Jacobson, vice president of business development.

Building information modeling (BIM), the use of iPads and tablets at job sites, QR codes to identify building parts and project mock ups are just a few of the technological advancements that McCarthy utilizes. But that technology goes beyond what McCarthy employs. It must also work with new technology available to its clients, such as those in healthcare.

“Technology is changing even from one day to the 68 | March-April 2013

next,” Jacobson says. “We really spend a lot of time on the technological integration of a project. We have to do all the front line coordinating and installation.”

Banner, for instance, is using cutting edge technology as it relates to imaging and the use of telemedicine. It is incumbent, therefore, that McCarthy be at the forefront of this technology. And whether it’s a $1M or a $100M healthcare project, Jacobson says working with clients as early as the preconstruction phase is crucial.

“We spend a lot of time figuring out the technological pieces and what the client is asking for,” Jacobson says. “Our job is to give them what they want.”

Whether it’s working with a school district on a junior high or a joint venture with another GC on a project the scale of PHX Sky Train, McCarthy is all in when it comes to its partners, employees and clients.

Collaboration is a priority — whether it’s with the City of Phoenix, Banner Health, APS, the Pascua Yaqui Tribe or the Scottsdale Unified School District, “At the end of the day,” Calbert says proudly, “delivering the best and most successful project is what McCarthy is all about.”

MccARThy

BY PETER MADRID

P.L. Julian Elementary School

When it comes to K-12 construction, McCarthy helps guide schools hen it comes to its K-12 educational projects, it’s pretty safe to say that McCarthy Building Companies is at the head of the class.

McCarthy created an accelerated scheduling model for school projects. These projects require an intense building schedule that has successfully delivered for several districts..

Work is completed over the summer so students are not impacted by having to be relocated and saves districts money as well.

“When the time frame is this tight, it raises the bar for everyone involved,” says Jim Migliorino, associate superintendent of fiscal services at Deer Valley School District.

“McCarthy addresses the schedule challenges using double shifts, making sure there is no need to play catch-up. The project team also starts long before the first demolition worker steps foot on the campus. This is another key factor.”

As educators are challenged to balance cost with the demand for quality learning environments, they seek answers to tough questions — and guidance to make the best decisions. For more than 20 years, McCarthy has worked hand in hand with school districts in public school construction to help administrators, staff and communities manage this.

Nationally, McCarthy has completed more than $3B in K-12 education construction projects. Justin Kelton, senior vice president of educational services in McCarthy’s Phoenix office, says the process starts with the general contractor using a selfperforming building approach.

“We go into a school with a certain understanding,” Kelton says. “We build our schedules and take into consideration the resources to give schools what they want and to save money. We don’t work around what McCarthy wants. We work around what the each district wants. The kids are the real priority.”

In order to meet the changing demands of today’s elementary, middle and high school construction requirements, McCarthy starts early in the process. It works closely with the architects and district personnel to examine all options in order to effectively balance district needs with the construction budget available.

McCarthy makes every effort to begin its projects at the start of summer. If demolition work is part of the plan, it’s much safer when students are on break. McCarthy also will 70 | March-April 2013

implement double shifts in order to get in more construction time.

Where it might take a job 10 months, McCarthy can do it in four, Kelton explains. He adds that McCarthy has done that five or six times recently. At least the past two summers.

“McCarthy’s fast-track approach proved to be less stressful on students, parents and staff, and saved our district on transportation costs associated with the temporary location of our students,” says Dr. Jacob A. Chavez, Cartwright School District superintendent.

“While completing a projects three days early may not sound like a big deal, it was huge for us and allowed our teachers more time to prepare for the start of school. Having McCarthy on site virtually around the clock over summer break, including Sundays, to make our project a reality before the start of school, was critical.”

The construction business is all about relationships and working with owners and designers to successfully deliver great projects. According to Kelton, that’s how McCarthy’s educational services unit begins the process.

“It’s what we have a passion for,” Kelton says. “McCarthy has the right people for that. It’s important for my guys. They approach it as community-based building. These are not great times for schools (funding cuts and tight budgets). “What’s also important is we make sure they get a quality building project,” adds Kelton, who has been working on K-12 projects for 10 of his 15 years at McCarthy.

Last year McCarthy won the first RED Awards Merit Award for its work at P.L. Julian Elementary School is the Roosevelt Elementary School District. McCarthy embraced the historical designs of a 40-year-old building, and renovation of the school led to the inclusion of new Smart Board technology, solar sensors and the P.L. Julian Taskforce Committee. The ultimate goal was to provide an educational facility that also was integrated into the traditions and values of the community.

“That is something that is near and dear to my heart,” Kelton says.

Now that’s passion — and an A+ for McCarthy.

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MccARThy

BY PETER MADRID

APS Chino Valley

POWer TO THe PeOPle

McCarthy diversifying its portfolio to include solar projects

A

s America looks to a future utilizing alternative sources of energy, McCarthy Building Companies is also looking to diversify its project-type portfolio.

With an abundance of sun in the Southwest, McCarthy is focusing on the solar market.

Last year Arizona Public Service chose McCarthy to engineer, procure and construct (EPC) its 14 megawatt Hyder II solar power plant in Hyder, which is located in Yuma County.

Construction of the Hyder II facility is expected to begin in April, and will have more than 71,000 photovoltaic panels on single-axis trackers. It will provide energy to power 3,500 homes in Arizona. It is scheduled to become operational late this year.

According to Dennis Tucker, a senior vice president at McCarthy, the company has been in the solar market for about 4 years. And while the delivery method referred to as power purchase agreement (PPA) has been predominant, McCarthy prefers EPC. “The utilities weren’t hiring contractors direct; instead they were hiring solar developers,” Tucker says. “With utilities

72 | March-April 2013

owning the plants, EPC contractors are now delivering them.

That is now becoming seen as more efficient.”

“Both delivery methods are in use,” Tucker says, “but with APS starting to own and operate its plants, we are able to contract direct with APS. Utilities are now making agreements with contractors that say, ‘I will buy if you build.’

As diverse a project as a solar field is, Tucker says the EPC delivery method allows McCarthy to develop designs for optimized energy generation using in-house resources.

McCarthy has an expert in the design and construction of solar fields with a team underneath him, Tucker adds.

McCarthy recently completed its third utility-scale project, APS Chino Valley. SunEdison is the developer, but it is owned

by APS. It is a 21.7 megawatt ground-mount, single-axis track PV system. It is spread out over 300 acres.

“One of the biggest challenges in designing and constructing a solar field is you have to be able to mobilize large crews in remote desert areas,” Tucker says. “Actually, that fits us well.”

MccARThy PRojEcTs Hayden Ferry Lakeside pHase ii and parking garage

Developer: SunCor Development Architect: DAVIS locAtion: NEC of Mill Ave. and Rio Salado Pkwy., Tempe Size: 323,108 SF vAlue (conStruction coSt): $59M completeD: May 2007 SubcontrActorS: Sun Valley Masonry, Rosendin Electric Inc., Powers Steel and Wire, Climatec Inc., ISEC Inc. Hayden Ferry Lakeside was the first private commercial project to break ground on the banks of Tempe Town Lake. It consists of 500,000 SF of Class A office buildings with retail and restaurant space on the plaza level. Three separate buildings house 350 luxury condominium units along with all associated infrastructure. The 1,800+ car parking structure consists of nine levels, seven abovegrade and two below. In addition, a below-grade link connects the garage and the two office buildings. McCarthy completed phase II of the project representing 323,000 SF of space and a parking garage.

FourtH avenue JaiL

Developer: Maricopa County Architect: The Durrant Group locAtion: 201 S. 4th Ave., Phoenix Size: 561,400 SF vAlue (conStruction coSt): $105M completeD: March 2004 SubcontrActorS: Hellmuth, Obata + Kassabaum, Strand Associates, Gilbane Building Company, Able Steel Fabricators, Norment Industries, The Conwest Group, Wilson Electric, Sun Valley Masonry This state-of-the-art facility is considered to be one of the most secure and technologically advanced jails in the nation.

This facility was part of the largest county jail expansion project in U.S. history, supported overwhelmingly by the taxpayers of Maricopa County. Fourth Avenue has a capacity of 2,064 beds of which 288 are specifically designed to house the highest security level inmate in the system. The project included a 7-story detention tower with 1,116 cells and 1,360 beds. It also included improvements to Jackson Street.

desert ridge MarketpLace

Developer: Vestar Development Architect: SGPA Architects locAtion: 21001 N. Tatum Blvd., Phoenix Size: 705,847 SF vAlue (conStruction coSt): $56M completeD: November 2001 SubcontrActorS: Able Steel Fabricators, CSW, Wilson Electric, TriCity Mechanical, Hard Rock Concrete Desert Ridge Marketplace sits on a 110-acre site and features 5 distinct shopping districts ranging from 150,000 SF to 300,000 SF and linked by a series of pedestrian promenades. With outdoor fireplaces and unique water features throughout the center, Desert Ridge Marketplace delivers an interactive shopping, dining and entertainment experience in a vibrant, high-energy outdoor setting.

73

MccARThy PRojEcTs

ariZona state university FuLton center

oWner: Arizona State University Architect: Architekton locAtion: University and College avenues, Tempe Size: 155,000 SF vAlue (conStruction coSt): $33M completeD: January 2005 SubcontrActorS: Schuff Steel, Corbins Electric, Bel-Air Mechanical, PCI, B&B Glass, Kone This higher education project included a 6-story, 140,000 SF office building, a 1,200-space parking structure, and a 2-story 15,000 SF retail component. The ASU Foundation used nearly 46,000 SF of the office building to consolidate its business operations and staff.

Approximately 90,000 SF is leased to ASU, providing the university with much needed on-campus office space, and reducing the need for off-campus leasing. This McCarthy project obtained a green building LEED certification. Today it is named in honor of the Fultons, is the home of the Foundation, university administration and the College of Liberal Arts and Sciences administration.

casino deL soL HoteL and conFerence center

Developer: Pascua Yaqui Tribe Architect: LEO A DALY locAtion: 5655 W. Valencia Rd., Tucson Size: 161,000 SF vAlue (conStruction coSt): $75M completeD: November 2011 SubcontrActorS: Blount Contracting, McCarthy, Sun Valley Masonry, Schuff Steel, Meyer & Lundahl, MKB, Progressive Roofing, Sun Mechanical Casino Del Sol Hotel & Conference Center features 215 luxury hotel rooms along with a conference center that can accommodate 1,500 in performance and theatrical configurations or up to 800 for dining configurations. The expanded facility also features a fine dining steakhouse with seating for up to 100, an international buffet with seating for up to 250, a lobby lounge and bar, a fully equipped exercise facility with a full-service spa, an outdoor pool and sun deck and a 1,120-car, multi-level protected parking structure.

74 | March-April 2013

arcadia neigHBorHood Learning center

Developer: ScottSDAle uniFieD School DiStrict #48 locAtion: 811 N. 44th St., Scottsdale Size: 62,000 SF vAlue (conStruction coSt): $14.8M completeD: October 2012 SubcontrActorS: Echo Canyon Electrical, Stone Cold Masonry, TD Industries, Hardrock Concrete This K-8 school campus includes a 2-story academic building with classrooms, a gymnasium, kitchen, multi-purpose room, administration building and media center. The new campus includes diverse learning spaces, such as outdoor garden and performance areas and an endangered species habitat. A tile mural was preserved from the old campus and is now featured as the entry monument with school signage. Due to height concerns from the surrounding Arcadia neighbors, the team decided to situate the classroom building and gym 3-4 feet below street level, which required extensive excavation work. The team also agreed that no rooftop equipment and minimal parapets would be used, which maximized views of Camelback Mountain.

Lake pLeasant Water treatMent pLant

Developer: City of Phoenix enGineer: Black & Veatch locAtion: 37000 N. New River Rd., Phoenix Size:80 MGD water treatment plant vAlue (conStruction coSt): $231M completeD: June 2007 SubcontrActorS: Ludvik Electric, Aims Construction Inc., Harris Rebar, University Mechanical This McCarthy civil construction project includes an 80 MGD water treatment plant featuring an innovative ballasted flocculation process for high-rate sedimentation, ozonation, deep-bed monomedia filters, post-filtration granular activated carbon contactors and ultraviolet disinfection. This construction effort included a raw water intake and pump station, 1.5 miles of large-diameter pipeline and 40 million gallon on-site storage reservoir and pumping of finished water. As the largest DesignBuild-Operate (DBO) water project in North America, the Lake Pleasant Water Treatment Plant encompasses 285 acres and has a capacity of serving 400,000 homes in the growing northwest area of Phoenix.

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MccARThy PRojEcTs

tHe pHoenician

cotton center soLar station

The 250-acre resort located at the base of Camelback Mountain is characterized by several exclusive landmarks, including the historic pueblo-inspired Jokake Inn, one of the area’s first hotels, and a twoacre Cactus Garden. It boasts 643 guest rooms, nine swimming pools, 11 tennis courts, numerous boutiques and 10 restaurants and lounges. In creating this resort, no expense was spared and no detail was overlooked. From exquisite Italian marble imported for use throughout the resort, to an exclusive $25M art collection, to a lush tropical landscape created by natives from the Kingdom of Tonga, the Phoenician remains a masterpiece of architecture and design.

This project represented the installation of the largest (18 megawatt) photovoltaic ground-mounted solar tracking system in Arizona.

McCarthy installed the photovoltaic racking system, modules and electrical system for the solar station. The plant sits on 145 acres formerly used for agriculture. The 75,000 solar panels needed to transform sunlight into electricity were arranged in 1,566 rows connected to 108 single-axis trackers. This design enables the solar panels to follow the sun across the sky, making the plant more efficient than static-mounted panels typically seen on rooftops.

On sunny days, the project is expected to produce enough energy to meet the needs of 4,500 residential customers at APS.

Developer: Crescent Hotel Corp.

Architect: Killingsworth, Stricker, Lindgren, Wilson & Associates locAtion: 6000 E. Camelback Rd., Scottsdale Size: 1.387 MSF vAlue (conStruction coSt): $151M completeD: October 1988 SubcontrActorS: University Mechanical, Cannon & Wendt, Pete King, Paddock Pools, ISEC, Meyer & Lundhal

sky HarBor internationaL airport terMinaL 4

Developer: City of Phoenix Architect: DWL Architects and Planners locAtion: 3400 Sky Harbor Blvd., Phoenix Size: 1.65 MSF vAlue (conStruction coSt): $99M completeD: November 1990 SubcontrActorS: Able Steel Fabricators, Cannon & Wendt, University Mechanical, Pete King Corp., TPAC Terminal 4 was built for growth and represents one of the largest structural capital improvement projects in Phoenix. Construction began on the terminal core and three concourses — two for use by what was then America West Airlines and one for international arrivals — but prior to completion, a route expansion by Southwest Airlines required that it too be located in Terminal 4. Two more concourses were added and the building opened with five concourses and 44 gates.

In its first year of operation, the terminal handled 15.4M passengers or 705 of Sky Harbor’s total traffic. McCarthy completed 450,000 SF of multi-use baggage handling, baggage claim, ticketing and passenger levels as well as a 1.2 MSF parking garage with 3,385 spaces.

76 | March-April 2013

Developer: SOLON Corp./APS locAtion: 45625 Old U.S. 80, Gila Bend Size: 145 acres vAlue (conStruction coSt): $14.3M completeD: December 2011 SubcontrActorS: Blount Contracting, Buesing Corp., Schuff Steel Management, Ironco, Delta Diversified Inc.

Banner tHunderBird renovation and soutH toWer eXpansion

Developer: Banner Health Architect: NTD Architecture locAtion: 5555 W. Thunderbird Rd., Glendale Size: 329,000 SF vAlue (conStruction coSt): $140M completeD: May 2009 SubcontrActorS: Delta Diversified, Miller Bonded Inc., AmFab Inc., Western States Fire Protection, E&K, ISEC and Wholesale Floors The Banner Thunderbird expansion and tower addition included the renovation of the hospital’s main entrance, central plant expansion, and a new patient bed tower on the south side of the building. The lobby portion of the project represented 29,000 SF and included expanded dining, new administration department, information desk, gift shop, family library and surgery waiting.

The South Tower expansion represented 300,000 SF, which included two rooftop helistops, 200 patient beds including ICU, medical surgery and telemetry, 84-bed emergency department, and basement back of house space with expanded loading dock.

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MccARThy

Q&A

PHOTOGRAPHY BY LILLIAN REID

Robert “Bo” Calbert PREsidENT

MccARThy BUildiNG coMPANiEs soUThWEsT REGioN

Q: iN yoUR 30 yEARs WiTh MccARThy, WhAT PRojEcT ARE yoU MosT PRoUd oF?

A: I’m really proud of so many of our projects. It is pretty amazing to collaborate with project teams to overcome challenges and build world-class projects that form the communities throughout Arizona. A major point of pride for me was working with the city of Phoenix to complete the Lake Pleasant Water Treatment plant. It was significant not only because of the technical and challenging nature of the project, but because it was the first alternative delivery of Design/Build/Operate for the city, which required McCarthy to take on significant risk on a large project that was guaranteed on 15% design documents. Ultimately, this project model became a foundation for expanding our water division into new markets, and has proven to be highly successful endeavor nationally.

Q: is ThERE A sEcToR iN Which MccARThy hAs MAdE iTs MARK iN ARiZoNA?

A: Arizona is a relatively small market, particularly recently with the economic challenges. As a result, we have been aggressive in establishing deep roots with highly specialized teams in four major market sectors: Solar, Education (K-12 and higher education), health care and water services. These sector teams have developed new proprietary technologies, scheduling methods and mechanical expertise that we are bringing to projects throughout the region.

These advancements have helped us to establish our mark in all four sectors.

Q: hoW is ThE UsE oF TEchNoloGy iMPAcTiNG ThE coNsTRUcTioN iNdUsTRy?

A: Technology is bringing a wide range of efficiencies to the construction industry, helping us to deliver better projects faster. At McCarthy, we implemented two tools in the past year that are bringing significant advantages to our clients and project teams. The first is our Autodesk BIM 360 software program, which is being used on every McCarthy project. Using iPads, it allows project teams to track 78 | March-April 2013

progress, resolve job site issues, manage punch-lists and complete equipment and safety inspections, all in real-time. Entire project teams are linked, resulting in more efficient team collaboration, structured workflow, better tracking and performance analysis, and facilitating owner participation. Another advancement that is bringing value to our clients is our QR code tracking system for mechanical systems. It links building system maintenance logs and product data to codes on corresponding equipment, allowing owners to access equipment data, information and maintenance history any time. It eliminates the need for traditional product manuals.

Q: WhAT is MccARThy doiNG To REMAiN A ToP FiRM iN ThE soUThWEsT?

A: One key factor for us is that we are remaining true to our roots, and maintaining our expertise as true builders. While others have decided to commoditize construction through the use of subs, which puts them in a position where they are relying on the construction knowledge of others, we are investing in programs to ensure that our people have the technical construction skills and knowledge necessary to build projects. This has been a clear differentiator, particularly when we can offer clients our self-perform capabilities. In these cases we are able to ensure top quality, control the schedule and ultimately better manage costs. Also, McCarthy’s philosophy is that there is never a best practice. Across projects our teams share experience and continuously strive to further improve, develop and adapt building techniques for our clients.

Bo Calbert oversees operations in Arizona, Nevada, New Mexico, Colorado and Utah. During his nearly 30 years with the company, he has worked in four of McCarthy’s regions on projects in healthcare, education, water/wastewater plants, hospitality and office.

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速

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