AZRE magazine March/April 2012

MARCH-APRIL 2012

The Valley's multi-family market will be brisk in 2012 with projects such as Optima Sonoran Village in Scottsdale.

INSIDE 2012 Outlook by Industry p. 8 Valley Partnership Roundtable p. 28 AZRE's 7th Annual RED Awards p. 40

Building value for our clients, one deal at a time Congratulations to our 2011 Phoenix Top Guns representing the top twenty percent of all Top Achievers nationally

Steve Corney Managing Director Tenant Representation Group

Patrick Williams Anthony Lydon Managing Director Managing Director Tenant Representation Group Industrial | Supply Chain & Logistics Solutions

Marc Hertzberg Managing Director Industrial | Supply Chain & Logistics Solutions

Congratulations to our 2011 Phoenix Top Achievers representing all top performers nationally

James Sadler Executive Vice President Tenant Representation Group

Bill Honsaker Managing Director Industrial | Supply Chain & Logistics Solutions

John Pierson John Wyss Executive Vice President Senior Managing Director Tenant Representation Group Tenant Representation Group

In a complex and changing market, one thing remains the same: we create value for our clients We are proud of this track record and of our ongoing dedication to hiring the best in the industry. This includes the work of our 2011 Top Achievers. With their help, we continue our strategic expansion in Arizona and our exceptional level of service in the commercial real estate market. We look forward to helping you create value, one deal at a time.

+1 602 282 6300 www.us.joneslanglasalle.com/phoenix

Jon Lange Vice President Tenant Representation Group

TABLE OF CONTENTS March-April 2012

Optima DCH Development, Optima Construction and David Hovey & Associates Architect are the driving forces behind the 385,000 GSF, 493-unit Sonoran Optima Village being built at 68th St. and Camelback Rd. in Scottsdale.

2012 OUTLOOK FEATURES

4 Editor’s Letter

68 Construction

6 New to Market

Projects in the pipeline

72 Construction

8 Economic Development

77 Newsmakers

40 2012 Project Winners

78

60 2012 Merit Winners

It’s all about numbers

2012 outlook by industry sector

28

Valley Partnership

Federal issues roundtable

38 Events

Who, what & when

06

Tribes reach for retail dollars

» Valley Partnership 25th Anniversary » Kitchell Supplement 2 | March-April 2012

Top projects of the year

People & promotions

Project News

Education, healthcare projects

New FBI building officially opens

62 2012 OTY Winners

80 After Hours

Ensemble DevMan’s Bill Molloy

08

Top brokers, developer, architect and general contractor

78

CORRECTION

COMING NEXT ISSUE » Healthcare Development and Construction

RED | 7TH ANNUAL AWARDS

Expansion at Gila River casinos

» RSP was architect of the Musical Instrument

AZRE on the Go: AZREMagazine.com

Museum. One of SmithGroupJJR’s signature projects was Chandler City Hall.

CONSTRUCTION EXPERTS RESCUE OFFICE SPACE

Y

ou don’t get to be the largest private university in North America without leaving a few marks on building or a few scuffs in the hallway. With more than 800 faculty members and thousands of students running around your campus every day, it’s just part of the deal.

But what happens when a tenant such as University of Phoenix packs up and leaves? Suddenly there is more than 200,000 square feet of empty space and a seemingly endless list of small (and large) repairs.

Hernandez Companies, however, has put “classy” back in these old classrooms. This winter, the Phoenix-based construction services firm sent its award-winning technicians to the university’s former home along Interstate 10 and the “Broadway Curve” to tackle projects throughout – and underneath – Sky Harbor Towers. They are working alongside other outside contractors to revamp the campus.

The work has included everything from replacing carpet and applying fresh paint to replacing brilliant decorative steel paneling along the buildings’ brick facades. Hernandez crews also dredged storm drains and jetted the drainage system to keep the campus parking lots from flooding during heavy rainstorms, as well as the removal and replacement of several hundred feet of worn out cast iron.

Polishing Commercial Gems The Villages at Hayden is one of central Scottsdale’s most majestic,

Old World-style shopping plazas. But when real estate trends changed, Hernandez Companies shined up the buildings’ exterior finish and creatively opened up its interior space for different uses. Their award-winning maintenance and smart renovations will help attract new commercial tenants. That’s a business trend we can all get behind.

hernandezcompanies.com March AZRE 1-2 page.indd 1

Making Buildings Better

| 602.438.7825 2/1/12 6:49 AM

MAGAZINE.COM President & CEO Michael Atkinson Publisher Cheryl Green Vice President of Operations Audrey Webb AZRE: ARIZONA COMMERCIAL REAL ESTATE EDITORIAL Managing Editor Michael Gossie Editor Peter Madrid Associate Editor Kristine Cannon Contributing Writer Donna Hogan Interns Kaitlyn Carl | Stephanie Gonzalez | Michelle Lauer Kevin Ngai | Maria Thompson ART Senior Graphic Designer Brandon Devine Senior Graphic Designer Mike Mertes Contributing Photographer Cory Bergquist

It’s Always About Numbers

I

like to think of myself as a “numbers guy.” A lthough I wasn’t proficient at math in school, numbers played a huge role in my career as a sports editor. Points. Yards. RBIs. Height. Weight. You get the picture.

As editor of a commercial real estate magazine, numbers are even more important. Square footage. Rental rates. Vacancy rates.

Dollar amounts. Construction jobs.

He re a re some p e r t i ne nt nu mb e r s re l ate d to t h i s i s s ue of A ZRE magazine: 2012: A ZRE’s annual real estate outlook paints an optimistic picture for the new year as the industry bounces back from a crippling recession. Experts weigh in on page 8.

116: Record number of RED Award nominations received. The 2012 w inners and honorable mention selections can be found beginning on page 40.

25: A s Valley Partnership celebrates 25 years of advocating responsible development, members of its federal and legislative committees par ticipate in a v ir tua l roundtable d iscussion on issues important to Arizona. Look for that on page 28.

3: Number of Arizona tribes building major retail projects on Native American soil. Our annual look at Construction In Indian Country begins on page 68.

I’m counting that you will enjoy this issue …

Intern Mohammed T. Munir DIGITAL MEDIA Director Kim Milton Web & Graphic Designer Melissa Gerke Interns Samantha Belli | Lilia Ortiz | Shaima Shahin Julia Swem | Nick Cervi | Josh Estes Eric Shepperd MARKETING/EVENTS Manager Whitney Fletcher Interns Jennifer Hillman | Diane Luna SALES Account Managers John Abbey | Kevin Small OFFICE Special Projects Manager Sara Fregapane Executive Assistant Kathy Mutschler Database Solutions Manager Cindy Johnson ARIZONA BUSINESS MAGAZINE Senior Account Manager David Harken Account Managers Michelle McBay | Shannon Spigelman RANKING ARIZONA Vice President / Sales & Marketing Lenore Grobstein EXPERIENCE ARIZONA | PLAY BALL Account Manager Bobbie Darzes SCOTTSDALE LIVING Account Manager David Silver AZ BIG MEDIA EXPOS SCOTTSDALE SUPER EXPO HOME & LIFE SUPER EXPO WOMEN'S SUPER EXPO Exhibit Directors Kerri Blumsack | Sheri King | Tina Robinson

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

HOME & DESIGN IDEA CENTER Showroom Manager Joanne Stanley Account Manager Marianne Avila Event Coordinator Sara Fregapane

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. ©2011 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.

4 | March-April 2012

3101 North Central Avenue, Suite 1070 Phoenix, Arizona 85012 (602) 277-6045 · azBIGmedia.com

COLLIERS INTERNATIONAL CONGRATULATES ITS

2011 TOP PRODUCERS & ROOKIE OF THE YEAR

Keith Lambeth

Todd Noel, CCIM

William S. Littleton, SIOR

Don MacWilliam

Payson MacWilliam

Trevor Koskovich

Senior Vice President Office Properties

Senior Vice President Industrial Properties

Senior Vice President Corporate Solutions

Associate Vice President Multifamily Properties

Jeffrey Sherman Associate Vice President Multifamily Properties

ROOKIE OF THE YEAR

Senior Vice President Industrial Properties

Senior Vice President Office Properties

Paul A. Sieczkowski, SIOR Senior Vice President Industrial Properties

Cindy H. Cooke

Executive Vice President Multifamily Investments

Phillip M. Breidenbach, SIOR Senior Vice President Office Properties

Ryan Timpani Senior Associate Office Properties

Accelerating success.

Leading businesses around the globe have come to rely on Colliers International to advance their interests in real estate. With a greater sense of drive, coupled with teams of specialists around the world, we’ll help you move swiftly along the right track—to accelerate your success.

Phoenix +1 602 222 5000 | Scottsdale +1 480 596 9000 | www.colliers.com

NEW TO MARKET

EDUCATION

1 1  CENTRAL ARIZONA COLLEGE MARICOPA CAMPUS Developer: Central Arizona College General Contractor: CORE Construction Architect: SmithGroupJJR Location: SWC Bowlin Rd. and White Parker Rd., Maricopa Size: Phase One, 76,800 GSF; Site: 217 acres This new ground-up campus in Maricopa includes three new buildings and a new central plant. The $24M (Phase One) campus will provide a student services center, library, learning center, instructional spaces and indoor/outdoor cafeteria. Estimated completion is 1Q 2013.

1

MILITARY 1

1  HC-130J AERIAL CARGO FACILITY Developer: U.S. Army Corps of Engineers General Contractor: Streeter/Summit JV Architect: LEO A DALY Location: Davis-Monthan Air Force Base, Tucson Size: 25,000 SF Located adjacent to the base’s flight line, the $7.2M facility will be a pre-engineered metal, reinforced masonry structure with a sloping, standing seam metal roof. It will also have a 100-foot parachute drying tower, prep area, offices and mezzanine. It will pursue LEED Gold certification. Estimated completion is Q1 2013.

PUBLIC 1

1  TOWN OF GILBERT FIRE STATION NO. 10 Developer: Town of Gilbert General Contractor: Dean Douglas Development Architect: HDA Location: 1330 E. Guadalupe Rd., Gilbert 6 | March-April 2012

Size: 10,500 SF The $2.94M project will be a four-bay station with a single story structure and mechanical mezzanine. Subcontractors include Arizona Custom Millwork, Demers Glass, Harvey Land Surveying and Westar Environmental. Estimated completion is 3Q 2012.

NEW TO MARKET

MULTI-FAMILY 1

1  VILLAS AT THE COLONNADE Developer/Owner: Sun Health General Contractor: TBD Architect: TBD Location: Sun City Grand, City of Surprise Size: 1st phase 36 units (55,000 SF); total phases 252 units (400,000 SF) When all phases are complete, the Colonnade will be $60M senior living community in Sun City Grand. It is one of three life care communities owned and operated by Sun Health. At full build-out, the Colonnade will have 358 residential living units including the recreational village. Estimated completion is 2Q 2013.

2

2  OPTIMA SONORAN VILLAGE Developer: Optima DCH Development Inc. General Contractor: Optima Construction Inc. Architect: David Hovey and Associates Architect Inc. Location: 6895 E. Camelback Rd., Scottsdale Size: 385,000 GSF This luxury condo complex will include 493 residential units and 40,000 SF of retail space. The property will include five buildings arranged around two courtyards. Estimated completion is 4Q 2013.

INDUSTRIAL 1

1  DiCK’S SPORTING GOODS – WESTERN DISTRIBUTION CENTER Developer: Merit Properties General Contractor: Renaissance Companies (Scottsdale) Architect: Butler Design Group Broker: Jones Lang LaSalle Location: 4651 N. Cotton Lane, Goodyear Size: 600,000 SF on 50+ freeway-fronting acres The $40M structure is Dick’s first distribution building in the Metro Phoenix marketplace and will be the sporting goods retailer’s Western U.S. distribution hub. The project has the potential to expand to more than 1 MSF as the company grows. Estimated completion is late 2012 through early 2013.

2

2  BOCCIERI GOLF PERFORMANCE CENTER Developer: Boccieri Golf General Contractor: Linthicum Corporation Architect: David Parker and Janet Brooks Design (interior) Location: 15816 N. Greenway Hayden Loop #300, Scottsdale Size: 9,000 SF The $300,000 tenant improvement build-out features office space, research and development center, showroom and simulators. The style is a contemporary spin on industrial. Subcontractors include Wang Electric and Accent Design & Manufacturing. Estimated completion is 1Q 2012.

7

OUTLOOK 2012

BY DONNA HOGAN

2012 Annual Recovery is on the horizon, but industry experts cautious in their

Fountainhead OfďŹ ce Plaza A&B, a pair of 6- and 10-story Class A buildings, opened in July 2011 and is 100% leased to the University of Phoenix.

8 | March-April 2012

OUTLOOK 2012

Outlook forecast as economy slowly bounces back

ook ing at A r i zona’s recession-st a r ved commerc ia l rea l est ate indust r y a s a whole, 2011 wa s f l at a nd 2012 is t rend ing just sl ight ly bet ter. So say loca l e x per ts. But broken dow n into its va r ious compo nents, t here is a w ide d ivergence of at t it ude a nd opt im ism for t he rest of t h is yea r. A ZR E t apped key pl ayers f rom a va r iet y of rea l est ate -rel ated d isc ipl ines to c hec k t heir cr ysta l ba l ls a nd pred ict whet her commerc ia l rea l est ate w i l l soa r, slu mp or st ag nate i n 2012, a nd what factors cou ld t u r n t he t ide.

9

OUTLOOK 2012  INVESTMENT

 ECONOMIC DEVELOPMENT

A plethora of CMBS properties will come due in 2012,

Economic development directors by nature are always

and private owners of distressed properties may be more

upbeat about the future, and Chandler’s Christine Mackay

willing to sell, says Jennifer Pescatore, who oversees com-

has reason to be.

mercial real estate loans for Bank of Arizona.

There is plenty of money available for the right property in the right submarket and investors with the right credentials, she says.

But except for the multi-family sector and some industrial opportunities, Pescatore isn’t sure values have slipped enough to generate a significant number of sales or new development in 2012.

She’s anticipating relatively small loans — $2M to $15M — on income properties as standard 2012 fare.

But substantial job growth and improvement in the global economic picture could change that relatively pessimistic outlook, says Ryan Suchala, Bank of Arizona president.

“Arizona offers a unique opportunity, and it’s a great place to do business,” Suchala says.

“Activity level since the first of the year has gone through the roof,” she says.

Intel is constructing a new fabrication plant scheduled for completion in 2013 but already keeping a virtual army of construction workers busy. And when Intel ramps up, so do the tech giant’s customers and clients, Mackay adds.

Other healthy growth signals: EBay/PayPal is expanding, building out the fourth f loor of its Chandler facility.

In Januar y, San Diego-based developer Doug A llred Company broke ground at the NEC of Price and Willis roads in Chandler for Park Place, the Valley’s first spec office complex to rise from the dust of the recession since 2009.

Phoeni x has a lot more old of f ice proper ties to f i l l up before any spec projects are l i kely to appear on its planning agenda, but v ir tua l ly a l l t he big warehousing /d istr i-

This year could be better than expected, Suchala notes,

bution center space has been snapped up, and t he cit y is

but for measurable improvement in real estate values and

actively look ing for “shovel ready” spots where develop -

transactions, 2013 is a more realistic time frame.

ers can bui ld more, says Br uce MacTurk, deput y d irector

Allred Park Place, a 92,109 SF, 2-story office building in Chandler, is being built

by Willmeng Construction of Mesa and Balmer Architectural Group of Phoenix.

CBRE will handle leasing when the building opens by the end of the year.

10 | March-April 2012

OUTLOOK 2012 for economic development.

It’s a good news-bad news scenario, he says.

ARE YOU READY?

By mid-Januar y, five large industrial users were looking at Phoenix, but the city had only two buildings with more than 500,000 SF of space available.

There’s even some good news about Phoenix’s languishing

BECAUSE WE ARE.

retail centers as owners are renovating to reposition the sites, MacTurk says.

W hile economic development leaders like MacTurk and Mackay are focused on job creation, the fallout from job growth is a healthier, more vibrant residential and commercial real estate scenario, they say.

 CONSTRUCTION “Compared to this time last year, it feels much better,” says Bo Calbert, McCarthy Building Cos. Southwest president. “ There are a lot more opportunities to pursue.”

McCarthy’s revenue is up 10%, he says. Key drivers for that spike are healthcare, renewable energy, schools and Native American projects, especially in hospitality and gaming.

But Calbert says he believes there is “more pain to come” before Arizona’s construction industry is back on a solid uphill track. “ To be an Arizona-only contractor is not sustainable,” he JERRY BUESING /// CEO /// BUESING CORP.

A LEADER IN MASS SCALE EARTHWORK CONTRACTING.

says. “ There is promise, and more opportunities are coming, but not enough.”

D.P. Electric Vice President Scott Muller says he has a backlog of healthcare and militar y projects to keep workers busy in 2012 — primarily technology upgrades.

And the company is detecting more interest from local property owners and developers, some hoping to entice California data

Education projects kept general contractors such as McCarthy busy in 2011.

Expect the same in 2012 as school bond elections were successful.

“Simply the Best” 3045 S. 7TH STREET /// PHOENIX, AZ 85040 (602) 233-3339 /// ROC 200645 CLASS A WWW.BUESINGCORP.COM

12 | March-April 2012

FennemoreCraig.Com

LAW THAT L EAD S ™

COV ER S MOR E GR OU N D

REAL ESTATE AND REAL ESTATE LITIGATION. FAR REACHING EXPERIENCE. POWERFUL REPRESENTATION.

For more than 125 years, our expansive real estate practice has covered every aspect of land use and development in the Southwest.

Our attorneys stand tough and stay focused. We protect and enhance our clients’ interests. And we keep them on solid ground. For information call Jay Kramer, Real Estate Chair, at 602.916.5341 or visit

FennemoreCraig.com.

OUTLOOK 2012 centers and manufacturing operations ready to make a move.

“We’re excited about 2012,” Muller says.

real estate sectors, even if the bounty won’t happen in 2012.

“We are seeing several developers looking at mixed-use

“Those in the real estate and construction industry understand that

office/retail/multi-family, especially along the light rail

the current market, compared to three or four years ago, has created a

line,” he says. “It’s not as much activity as in 2004, 2005 and

great opportunity to build, move or expand at a significant cost sav-

2006, but there are opportunities bubbling up. For two years

ings,” he says. “In 2012, we’ve seen an increase in our design-build/

previously developers were not talking to us. Now modestly

design-assist projects because this is where the best value is brought to

they are coming out of the woodwork.”

the owner/developer.”

LEO A DALY architectural firm just completed the Casino Del Sol Resort in Tucson and is currently working on a proj-

 ARCHITECTURE Data centers, specialized healthcare facilities and military installations are also on Mike Medici’s 2012 hot list.

ect with Davis-Monthan Air Force base, says senior architect Rod Armstrong.

There is no pent-up demand for shopping centers or new

“Technology is constantly pushing the limits of existing

office buildings, Armstrong says, but the international

buildings,” says Medici, managing director of SmithGroupJJR

architecture firm is “always in business development mode,”

Arizona Architects. “And a lot of hospitals are positioning for

and the signs are positive.

the future or catching up from the past.”

Architects are tapped for new projects at the conceptualizing stage, and Medici sees good news coming for all commercial

14 | March-April 2012

“We feel the increased level of commitment with potential clients. People are loosening up, and things will happen quickly. We’re hopeful for 2012,” he says.

OUTLOOK 2012

2011

Phoenix

S A L E S BY P R O P E R T Y T Y P E

Source: Cassidy Turley BRE Commercial

Focused on building strong relationships.

Carlson Real Estate Company is pleased to recognize the winners of its 2011 Rewarding Relationships program, a pointsbased incentive program designed to award commercial real estate brokers who represent new tenants into its portfolio.

Carlson Real Estate Company will continue to work creatively and collaboratively with its valued broker partners to complete lease transactions within its 1.3 million square foot portfolio of office, flex and retail space within the Phoenix market.

1ST PLACE

2ND PLACE

3RD PLACE

Jerry McCormick CBRE, Inc.

Mark Gustin Cushman & Wakefield

Kate Morris & Vince Femiano Transwestern

2012_AZRE_RR_Winners_PHX_F.indd 1

www.carlsonrealestate.biz

2/9/2012 9:31:24 AM

15

OUTLOOK 2012  MULTI-FAMILY W hile interest in and financing for new development remains limited in Metro Phoenix, one sector finding favor

M U LT I - FA M I LY P H O E N I X VACA N CY R AT E S

is multi-family, fueled by a limited supply and the singlefamily housing market collapse, says Tom Simplot, Arizona Multihousing Association president.

“Apartment owners are cautiously optimistic due to a rebound in values and rents,” Simplot says.

He doesn’t envision a lot more product coming online in 2012, but in select markets — in Scottsdale, A hwatukee, and along the light rail line — some projects are moving forward and could be under construction this year and available by 2013.

Luxur y condo developer Optima is betting Scottsdale is ready for more downtown-living opportunities.

“Optima Sonoran Village is in an advantageous position because it is the first new residential development in several years and builds on the economic, architecture and marketing success of Optima Camelview Village,” says David Hovey Jr., Optima vice president. “Construction has

Source: Cassidy Turley BRE Commercial

started on Optima Sonoran Village with occupancy second quarter of 2013.”

Hovey says financing is still tight and mixed-use projects are iffy because of existing over-supply of office and retail components, but, if there is “only a gradual increase in new product over the next few years, the luxur y unit market will remain healthy.”

16 | March-April 2012

A 240-unit complex is planned for North Scottsdale, with a completion date of late 2013. Developer of the $45M multi-family project is Plinth Venture. General contractor is MT Builders and architect is L.R. Niemiec Architects Inc.

DISTRIBUTION CENTERS

BUILD-TO-SUITS

FOREIGN TRADE ZONES

ROCKEFELLER GROUP DEVELOPMENT CORPORATION IS PLEASED TO BE REPRESENTED ON ITS CURRENT DEVELOPMENTS IN ARIZONA

BY THE FOLLOWING BROKERS: In Chandler and Gilbert

Phil Breidenbach, SIOR Paul Sieczkowski, SIOR Rob Martensen, CCIM, SIOR Lindsey Carlson Steve Larsen

Colliers International 2390 E. Camelback Road Suite 100 Phoenix, AZ 85016 602-222-5000 tel. colliers.com/phoenix

In Tucson

Peter Douglas, SIOR Rob Glaser, CCIM, SIOR

PICOR 1100 N. Wilmot Street Suite 200 Tucson, AZ 85712 520-748-7100 tel. www.picor.com

For information regarding current Rockefeller Group Development Corporation projects, please contact: Tom McCormick, SIOR, FRICS

Mark Singerman, LEED® AP

Senior Vice President and Regional Development Officer

Assistant Vice President and Regional Director - Arizona

RGDC-CA@rockgrp.com

RGDC-AZ@rockgrp.com

rockgroupdevelopment.com

OUR CLIENTS INCLUDE: BMW OF NORTH AMERICA LUCENT TECHNOLOGIES DELTA AIRLINES UNILEVER COSMETICS INTERNATIONAL S E I K O CORPORATION OF AMERICA CRATE AND BARREL TIAA-CREF MORGAN STANLEY PEARSON E D U C AT I O N NOVARTIS AT&T Chandler MCGRAW-HILL Corporate COMPANIES TIME INC. TEJON RANCH Center* SPORTCRAFT F E D E McClintock RAL E and XPRESS Desert GARDEN Breeze Blvd.

WYNDHAM HOTELS Chandler LEHMAN BROTHERS BMW OF NORTH AMERICA LUCENT TECHNOLOGIES Rockefeller Group DELTA AIRLINES UNILEVER Chandler Crossroads COSMETICS INTERNATIONAL Gilbert and Queen Creek Roads S E I K O CORPORATION OF Chandler AMERICA CRATE AND BARREL TIAA-CREF MORGAN Rockefeller PGroup STANLEY EARSON Chandler EDUCA T I O N 101 NOVARTIS AT&T MCGRAW-HILL Loop 101 at Chandler Blvd.

COMPANIES TIME INC. TEJON Chandler RANCH SPORTCRAFT www.rgdcchandler101.com FEDERAL EXPRESS WYNDHAM GARDEN HOTELS Rockefeller Group LEHMAN BROTHERS Gateway BMW North OF NORTH AMERICA Warner Road and Recker Road LUCENT TECHNOLOGIES Gilbert UNILEVER DELTA AIRLINES COSMETICS INTERNATIONAL S E I KRockefeller O CORPORATION Group OF AMERICA CRATE AND Gilbert Crossroads BARREL TIAA-CREF MORGAN Germann Rd. and Mustang Drive STANLEY PEARSON E D U C A T I Gilbert ON NOVARTIS AT&T MCGRAW-HILL Rockefeller COMPANIES TIMEGroup INC. TEJON Distribution SPORTCRAFT Center** RANCH F E D EAirport R A L Submarket EXPRESS WYNDHAM Tucson GARDEN HOTELS LEHMAN BROTHERS BMW NORTH *70,500OF SF NEW CLASSAMERICA A OFFICE LUCENT TECHNOLOGIES AVAILABLE; LEED–CERTIFIED SILVER DELTA UNILEVER **UP TOAIRLINES 101,800 SF NEW HIGH COSMETICS INTERNATIONAL CUBE WAREHOUSE AVAILABLE S E I K O CORPORATION OF AMERICA CRATE AND Rockefeller Group Distribution BARREL TIAA-CREF MORGAN Center has won First Place in the STANLEY A RAZRE SON Industrial CategoryPofE the E D U C 2010 A T I Red O N Awards.

NOVARTIS AT&T MCGRAW-HILL COMPANIES TIME INC. TEJON RANCH SPORTCRAFT FEDERAL EXPRESS WYNDHAM GARDEN HOTELS LEHMAN BROTHERS BMW OF NORTH AMERICA LUCENT TECHNOLOGIES DELTA AIRLINES UNILEVER COSMETICS INTERNATIONAL S E I K O CORPORATION OF AMERICA CRATE AND BARREL TIAA-CREF MORGAN STANLEY PEARSON E D U C AT I O N NOVARTIS AT&T MCGRAW-HILL COMPANIES TIME INC. TEJON RANCH SPORTCRAFT FEDERAL EXPRESS WYNDHAM GARDEN HOTELS

OUTLOOK 2012  HEALTHCARE

“Healthcare construction is tied to population, and there

Medical facilities needing upgrades or expansions to

is a great need to accommodate the baby boomer generation,”

keep up with changing technologies, aging baby boomer

says Steve Whitworth, Kitchell ’s Healthcare Division manager.

needs and unsettled health coverage issues, are provid-

Healthcare construction will see a “slight increase in 2012,

ing work for local real estate trades — a trend that will

as larger organizations prepare for healthcare reform,” he says.

continue throughout 2012.

Cancer- and pediatric-focused projects are already in progress, as are several clinics and rehabilitation centers aimed at bringing cost-effective healthcare into

Whitworth predicts a sharper focus on cost-cutting delivery methods and energy efficiency in 2012 both in new development and upgrades to existing facilities.

“Healthcare will remain healthy,” he says.

communities, says Sundt Construction’s Russ Korcuska, who has been piloting hospital construction projects in Arizona for two decades.

Still, some of the big players will “sit on the sidelines until the (November) election because of the tremendous effect that could have on healthcare and Medicare. The new congress will be pivotal,” Korcuska says.

Some upgrades can’t wait.

Fortitude-HalfPg_Layout 1 12/13/11 7:40 AM Page 1

Fortitude

A contractor’s reputation for excellence grows by completing projects on time, within budget, and by continually exceeding expectations.

Building Successful Arizona Projects for 26 Years

License B1-088897

18 | March-April 2012

480.497.2300 • fax: 480.497.9610 • www.bjerkbuilders.com

OUTLOOK 2012 Healthcare projects helped fuel many industry sectors in 2011. Gilbane Building Company was general contractor for the 104,000 SF Arizona Department of Administration Forensic Hospital in Phoenix (left and below).

ParadisoMarkIV-7.125x4.75Final.ai 1 12/15/2011 2:22:20 PM

C

M

Y

CM

MY

CY

CMY

K

19

OUTLOOK 2012 The largest photovoltaic system in Arizona is located at the APS Cotton Center Solar Station in Gila Bend. Built by McCarthy Building Companies, the $14.3M, 145-acre facility will generate 17MW of power.

 SOLAR Solar power was Arizona’s red-hot growth topic a year ago, with government leaders proffering incentives and touting the state’s virtues to the clean-energy companies looking for a place to grow and prosper.

Then mid-year, solar panel makers Solyndra and Stirling Energy Systems failed, and in December industry giant First Solar said it would slow progress of its under-construction Mesa plant.

So how do some of the state’s solar experts envision their industr y’s 2012 prospects?

SRP sees strong demand for solar upgrades in both commercial and residential uses even though it “slowed somewhat” from 2011 when monetary inducements were greater, says Debbie 20 | March-April 2012

Kimberly, director of customer programs and marketing.

“It’s encouraging to see this demand even at reduced incentive levels,” K imberly says.

She says she expects interest in solar to continue apace throughout 2012, especially in leased rather than purchased systems.

And APS’ 2012 outlook for solar is “overwhelmingly positive” based on continued strong customer demand, says Barbara Lockwood, the utility company’s director of energy innovation.

“We asked our customers,” she notes. “The customers want solar.”

Installers could second that.

“Our forecast is 100 percent growth over last year,” says Gary Held, Harmon Solar sales and marketing manager. “And last year was the biggest year we ever had on the commercial side.”

THE POWER OF NOW. The Alter Group thinks the moment is now. When corporations can access debt at historically low interest rates; when operating efficiencies and rental rates are driving relocation; when manufacturing and exports are picking up; when small businesses are hiring at a rate of 250,000 new jobs a month. This is the time for a developer with a 55-year track record and a balance sheet that hasn’t wavered over 5 recessions. The time for new Class A office at the intersection of opportunity and operational excellence. Like our new 1,000-acre Algodon Center in Phoenix, AZ, which brings premier corporate office space to the Loop 101.

To contact The Alter Group, call Kurt Rosene at 480.302.6630 or visit alterwest.info.

5 2 7+ Yea 012 Ye r L BR ar ea OK Le se ER as - 5 IN e- % C 5% CO EN + $ CO MM TIV 1 P M IS E SF MI SIO B O SSI N NU ON

OUTLOOK 2012 S

But that’s from the perspective of the companies that purchase and distribute solar energy.

W hile solar demand remains strong, supply is growing faster as solar producers and manufacturers ramp up, boosting competition and sending prices plummeting, Lockwood says.

The growing global glut in solar manufacturers is squeezing the industr y from that perspective, she says, as evident by First Solar’s slowdown and some companies folding.

Lockwood predicts prices will stabilize in 2012, and solar supply and demand will reach equilibrium.

Solar panels are a common site at Arizona State University, which is considered one of the most sustainable college campuses in the U.S.

NE of Val Vista Dr & Pecos Rd | Gilbert, AZ Minutes to Mercy Gilbert Hospital & San Tan Village Lease Rates Starting at $21 PSF Full-Service

3200 E. Camelback Rd | Phoenix, AZ 85018 | (480) 425-5500

www.SVNpartners.com

U.S. Renewable Energy Production and Consumption by Source Trillions Btu

9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0

’96

’98

’00

Hydroelectric

602-268-7877

Wind

’02

’04

’06

Geothermal

Wood

Waste

Sources: U.S. Energy Information Administration, Grubb & Ellis 22 | March-April 2012

’08

’10

Solar / PV Biofuels

OUTLOOK 2012

NOMINATIONS FOR PTK 2012-2013 I N COM M E RCIAL

R E A L E S TAT E

BEGIN MARCH 1ST Nominations for candidates are being accepted at: MAGAZINE.COM

For sponsorship and advertising information Call 602-277-6045 Y J O O S F ONE N E P O

X RICE E 3 EP

FO

H

RT

HOME & LIFE CELEBRATING 21 YEARS

The best in home & building, being green and living well in your prime!

Saturday, June 2 | 10am - 5pm, Sunday, June 3 | 10am - 4pm Phoenix Convention Center

SCOTTSDALE Spend the day touring hundreds of home, art and lifestyle vendors while tasting the best Arizona has to offer in food and wine!

Saturday, November 3 | 10am - 5pm, Sunday, November 4 | 10am - 4 pm WestWorld of Scottsdale

50% OFF tickets at ExposAZ.com or call 602.277.6045 23

OUTLOOK 2012  BROKERAGE Nobody h a s a h a nd le on t he i nt r ic ac ies of t he loc a l com merc i a l rea l est ate i ndu st r y l i ke t he brokers who

R E TA I L P H O E N I X VACA N CY R AT E S

buy, se l l , m a rket a nd lea se proper t ies. T hei r out look for 2012 i s g u a rded ly upbeat , depend i ng on t he t y pe of proper t y a nd it s loc at ion.

Phoenix’s overbuilt office market remains too over-supplied for new development, says Craig Henig, CBRE senior managing director.

In 2011, 1.8 MSF of office space was absorbed, dropping the vacancy rate to 25.5%, Henig adds.

And overall there was 5.9 MSF of “gross activity,” as plummeting rents prompted tenants to move to classier digs.

Most of the Valley’s Class A offices filled up in 2011, and Class B and C space could see an occupancy boost in 2012, whittling away at the surplus supply, says Chris Jantz, Cassidy Turley/BRE Commercial vice president of research.

But neither Henig or Jantz envision a big drop in overall office vacancy this year.

Empty industrial space was gobbled up in 2011, and that could spur development, Jantz says, but new properties likely won’t come online until 2013.

Source: Cassidy Turley BRE Commercial

Retail real estate has been the big laggard throughout the recession, and while Henig doesn’t expect much overall absorption in 2012, he foresees “musical chairs” as retailers reexamine their footprints based on recent consumer trends. For example, the surge in online sales may result in smaller, or at least different, brick-and-mortar space usage

I N D U ST R I A L P H O E N I X VACA N CY R AT E S

and bigger warehousing needs.

Henig also predicts that Phoenix area retailers will take advantage of still-sinking rents to move into better locations in 2012.

Tucson’s prospects are rosy.

“A ll signals are pointing up for Tucson in 2012,” says CBRE Tucson Managing Director Tim Prouty. “Our vacancies have improved. We see a positive absorption in industrial certainly, office probably, and some improvement in retail as well.”

A recent University of Arizona study predicting 2.35% average job growth in Tucson for the next five years — a boost of more than 52,000 jobs overall — is nurturing Prouty’s confidence.

And Tucson’s successful wooing of biotech businesses, such as Roche Group’s planned major expansion, “will be a big stor y in 2012,” Prouty says.

24 | March-April 2012

Source: Cassidy Turley BRE Commercial

BROKERAGE: 2011 TOP TRANSACTIONS TOP FIVE SALES OF 2011 TYPE

PROPERTY NAME

CITY

SF

PRICE

OFFICE

University of Phoenix

Phoenix

599,664

$170,000,000

INDUSTRIAL

RETAIL

BUYER (TRUE) COMPANY

SELLER (TRUE) COMPANY

LISTING BROKER COMPANY

Cole Real Estate Investments

Apollo Group, Inc.

None

Fountainhead Office Plaza

Tempe

439,070

$137,000,000

KBS Realty Advisors

USAA Real Estate Company

CBRE

Arizona Center

Phoenix

1,031,846

$136,500,000

CommonWealth REIT

GGP, Inc.

CBRE

PetSmart Corporate Headquarters

Phoenix

365,672

$102,500,000

Cole Real Estate Investments

Prudential Real Estate Investors

CBRE

Pima Center

Scottsdale

546,487

$60,000,000

Farallon Capital Management LLC

Bank of America Corporation

CBRE

Freescale Semiconductor

Tempe

892,790

$53,700,000

Northwood Acquisitions LLC

Freescale Semiconductor, Inc.

Cushman & Wakefield

Papago West

Phoenix

629,764

$33,250,000

Crexus Investment Corp.

Alliance Beverage Distributing Company, LLC

Colliers International

10 Chandler

Chandler

552,370

$30,450,000

Alliance Commercial Partners, LLC

RREEF America LLC

Cushman & Wakefield

Riverside Business Center

Phoenix

603,910

$24,000,000

Duke Realty Corporation

Lincoln Financial Group

CBRE

Pinnacle Park & Deer Valley

Phoenix

340,646

$23,900,000

Lincoln Property Company

Cornerstone Real Estate Funds

CBRE

The Promenade

Scottsdale

443,018

$110,025,000

Excel Trust, Inc.

Pacific Companies

Lucescu Realty

Shea Scottsdale Shopping Center

Scottsdale

277,253

$50,320,000

Karlin Real Estate

Herberger Enterprises, Inc.

Cassidy Turley/BRE Commercial

Tatum Point

Phoenix

173,529

$30,000,000

West Valley Properties, Inc.

Cornwell Corporation

Cassidy Turley/BRE Commercial

Village Crossroads

Phoenix

181,968

$29,239,595

Kimco Realty Corporation

ACF Property Management, Inc.

None

The Pinnacle of Scottsdale

Scottsdale

113,108

$29,000,000

Whitestone REIT

Westwood Financial Corp.

Lee & Associates

MULTI-FAMILY Pinnacle Peak Apartments

Phoenix

569,772

$76,000,000

Weidner Investments

Trillium Residential LLC

Hendrick & Partners

GlenEagles

Scottsdale

362,685

$55,422,000

AEW Capital Management, L.P.

Pillar Communities, LLC

CBRE

Red Mountain Villas Apartments

Phoenix

592,374

$46,000,000

Weidner Apartment Homes

Spruce Grove Inc

Sperry Van Ness

Windsor at Mountain Park Ranch

Phoenix

435,840

$44,550,000

Cornerstone Real Estate Advisers LLC

GID Investment LLC

CBRE

Residences at FortyTwo 25

Phoenix

332,854

$42,012,000

Lawrence Hess

Embrey Partners Ltd.

CBRE

» Source: Cassidy Turley BRE Commercial

TOP TEN INDUSTRIAL LEASES OF 2011 SF

PROPERTY NAME

CITY

1,267,110

Fowler Distribution Center

Phoenix

Undisclosed Buzz Oates Enterprises

TERM

LANDLORD NAME

404,673

Buckeye Logistics Center

Phoenix

Undisclosed Duke Realty

400,400

Home Depot

Phoenix

337,897

Interstate Logistics Center

Phoenix

302,640

Tolleson Distribution Center

Tolleson

283,358

Western Container Building

262,080

TENANT NAME

LANDLORD'S BROKERAGE CO.

TENANT'S BROKERAGE COMPANY

Amazon

Buzz Oates

Cushman & Wakefield

Amazon

Duke Realty

Cushman & Wakefield

Home Depot

Colliers International

CBRE

36 months Wentworth Property Company

Cornerstone Services

CBRE

CBRE

37 months ProLogis

T.J. Maxx

Jones Lang LaSalle

Studley, Inc.

Tolleson

Undisclosed Monmouth Real Estate Corp.

Western Container Corp

Monmouth Real Estate

Cushman & Wakefield

Goodyear Point

Goodyear

Undisclosed Green Thelma

Mach 1 Global Services Inc

Cushman & Wakefield

Lee & Associates

252,300

Honeywell Building

Glendale

Honeywell International

Jones Lang LaSalle

Colliers International

221,116

Papago Distribution Center

Phoenix

Undisclosed ProLogis

i/o Data Centers

ProLogis

CBRE

208,835

Reywest Commerce Center

Phoenix

18 months USAA Real Estate

CGB Enterprises

CBRE

Lee & Associates

5 years

8 years

Sealy & Company

Lexington Realty Trust

» Source: Colliers International and CoStar Group

TOP TEN OFFICE LEASES OF 2011 SF

PROPERTY NAME

CITY

TERM

LANDLORD NAME

TENANT NAME

LANDLORD'S BROKERAGE CO.

TENANT'S BROKERAGE COMPANY

205,130

One North Central

Phoenix

10 years

Mitsubishi Estate, LLC

Phoenix School of Law

Colliers International

Cushman & Wakefield

133,317

San Tan Corporate Center

Chandler

5 years

Wells Real Estate Funds

Toyota Financial Services

Jones Lang LaSalle

Jones Lang LaSalle

133,225

River Corporatge Center

Tempe

12 years

Piedmont Office Realty Trust

US Foods

Lee & Associates

CBRE

121,000

Biltmore Financial Center I

Phoenix

12 years

Florida State Pension Fund

Fennemore Craig

Lee & Associates

CBRE

119,681

Perimeter Center

Scottsdale

11 years

WDP Partners, LLC

Fender Musical Instruments

CBRE

CresaPartners

86,978

Galleria Corporate Center

Scottsdale

83,264

Riverview Point

78,286

24th at Camelback

Phoenix

73,000

Biltmore Financial Center III

Phoenix

8 years

72,494

Glendale Corporate Center

Glendale

6 years

Mesa

Undisclosed Helm Equities

McKesson Patient Relationship Solutions

Jones Lang LaSalle

CBRE

130 months R&R Riverview, LLC

Mitel Networks

CBRE

Grubb & Ellis Phoenix

Undisclosed GLL Real Estate Partners, Inc.

Greenberg Traurig, LLP

Cassidy Turley

N/A

Florida State Pension Fund

Wolters Kluwer

Lee & Associates

Collers International

Regent Properties, Inc.

Bechtel Corporation

CBRE

CBRE

» Source: Colliers International and CoStar Group

25

OUTLOOK 2012

 LAND After bottoming in 2009, land sales nationally picked up modestly in 2010 and remained level in 2011, according to Grubb & Ellis.

Through 3Q 2011, land sales were just about even with the same period in 2010 at $13.6B, but the sales mix was different. Through 3Q 2011, industrial land sales were up 133% as the industrial leasing and user-sale market improved to the point where developers began ramping up for the next expansion cycle. In 2012, according to Grubb & Ellis, expect a modest increase inland sales led by development sites for multi-family projects and distribution centers, which are further along the recovery cycle. Apartment sites near major employment

 KEY CONCERNS W hi le a l l t he players env ision a sl ight, if spott y, up tic k in A r izona’s commercia l rea l estate market, t hey say job g row t h and t he globa l economy are key concer ns deter mining 2012’s prospects.

A couple of local legislative issues also factor into the mix, says Nick Wood of Snell & Wilmer.

Tax assessments paid in arrears for commercial structures built in the mid-2000s that experienced severely plunging values in recent years could hamper sales and renovations of languishing real estate, Wood said. “ I f you look at va lues for 20 07, some of f ices h ave lost

Turning up the H.E.A.T. Identifying, understanding and leveraging Arizona’s “New Normal”

6 0% to 70% of t hei r va lue, a nd t here h a sn’t been a cor re spond i ng reduc t ion i n t a xes,” Wood says.

A nd recent rev isions to gover n ment proper t y lea se e xc ise t a x (GPLET ) rates for new com merc i a l st r uc t u res c a n ac t a s a deter rent to econom ic deve lopment , espec i a l ly i n dow ntow n a rea s, he says.

Healthcare

Energy

Aerospace

Technology

Spring Conference May 9 - 11, 2012 Hilton Sedona Resort and Spa Sedona, Arizona

For more information visit www.aaed.com or call 602 240 2233

26 | March-April 2012

azama.org

leoadaly.com

bankofarizona.com

mccarthy.com

brephoenix.com cbre.com chandleraz.gov dpelectric.com grubb-ellis.com

optimaweb.com phoenix.gov smithgroupjjr.com srpnet.com

harmonsolar.com

sundt.com

kitchell.com

swlaw.com

VALLEY PARTNERSHIP

BY PETER MADRID

A V

Y E L L

2012

Participants in the 2012 Valley Partnership Roundtable (front row, L to R): Paul Hickman, Arizona Bankers Association; Rusty Mitchell, Luke Air Force Base; Charley Freericks, DMB Associates Inc. (Back row, L to R): Michelle De Blasi, Quarles & Brady; Mary Peters, consultant and former secretary, U.S. Department of Transportation; Karrin Taylor, DMB Associates Inc.; Rob Anderson, Fennemore Craig. Photo by Cory Bergquist. Not pictured: Grady Gammage Jr., Gammage & Burnham 28 | March-April 2012

VALLEY PARTNERSHIP

PA R

TN

E

E

very real estate development company actively manages issues such as water quality, dust control and industry taxation/regulation at the city and state level. However, we must be more vigilant in watching the impact of federal regulation on the real estate industry. Decisions made by the federal agencies and our Congressional delegation have a long-term impact on our businesses.

RS

As a sector, we have a responsibility to advocate for fair and pragmatic regulation that allows the industry to be nimble and grow responsibly.

P R O U N D TA HI B L

The need to engage and monitor federal issues impacting the development community is greater than ever

Federal regulation and oversight have expanded over the past few years and some of these expansions in oversight could negatively impact Arizona businesses. Arizona’s climate, employment bases and natural resources pose unique challenges on the federal level, and we must ensure that our delegation is prepared to fight for our state’s future.

As it celebrates its 25th anniversar y, Valley Partnership, in conjunction with AZRE magazine, convened a virtual roundtable discussion on the need to engage and monitor federal and state issues that impact the development community. They include: » Expansion of the Clean Water Act; » Business taxes/workforce training credits/research and development tax credits » Military installations, including Luke Air Force Base; » Solar incentives; » Aerospace/defense industry, research.

Participants are members of Valley Partnership’s federal and legislative committees, including: Rob Anderson (R A), Fennemore Craig; Paul Hickman

(PH), Arizona Bankers Association; Charley Freericks (CF), DMB Associates,

Inc.; Rusty Mitchell (RM), Luke AFB; Mary Peters (MP), consultant, former secretary, U.S. Department of Transportation; Grady Gammage Jr. (GG), Gammage & Burnham; and Michelle De Blasi (MD), Quarles & Brady.

— Karrin Taylor DMB Associates Inc

29

E

VALLEY PARTNERSHIP my project look like when I do?); and

There are huge risks for Arizona development in ignoring federal issues. We tend to either rail at the Feds, or just hope they’ll go away. The truth is, neither attitude is useful.

the possibility that the federal requirements will actually block you from developing at all. The first two risks are fairly pervasive in the development world already. The third risk is relatively rare but increasing, particularly in the area of endangered species where there

Q: The federal government’s growing regulation of water,

is tremendous pressure to list more spe-

environmental issues and endangered species has an immedi-

cies and protect more habitats. We also may see more of this as the

ate effect on private property owners and at the state and local

first two risks grow and become unmanageable. For example, if I do

levels. In the Western U.S., there can be tremendous unintended

not know when I can get a permit, and do not know what my project

consequences to these one-size-fits-all regulations promulgated

will look like at the end of the permitting process, how can I get

in Washington. What are the risks and/or potential impacts for

financing or raise capital to do the project at all?

the development community?

GG: There are huge risks for Arizona development in ignoring federal issues. We tend to either rail at the Feds, or just hope they’ll

Q: What can we (leaders in real estate) do to influence federal regulation and legislation?

go away. The truth is, neither attitude is useful. We need our federal

MD: Consistency and certainty in policy is crucial to develop

representatives to vigorously engage in explaining things that seem

and sustain any industry. It is difficult to have certainty without

obvious to us: like dry desert washes not being navigable, or the fact

having an energy policy in place. Some immediate initiatives that

that Arizona tends to be dusty. But we need to recognize that there

could provide certainty in the energy industry are: Build out/improve

is an appropriate federal role in environmental regulation, rather

access to transmission; remove redundancy/inefficiencies in permit-

than behave as though the EPA will go away.

ting; expand production-based incentives; and provide better/quicker access to federal land for project development

RA: The risks for the development community are three-fold: Increased compliance costs; increased uncertainties associated with

GG: The real estate industry needs to come together with

securing federal approval (When will I get my permit? What will

workable solutions on things like dust control of construction, and standards for developing in the desert that recognize circumstances where washes

Arizona is a state rich in land, most of which is managed by the federal government, the state, military installations or Native American tribes.

should be preserved or mass grading minimized. Constructive engagement means offering sensible alternatives for some federal involvement, that is climate and geography appropriate, for the arid West. There’s a lot of serious expertise in Arizona in dealing with these issues. The development industry will fi nd that Arizona’s cities are valuable allies in understanding the nature of development here, and why it is different from many other parts of the country.

RA:

Fol low re g u l ator y de ve lop -

me nt s t h rou g h a ge nc ie s of conce r n (EPA, the Cor ps of Engineers) and follow legislation through Congress. Do not hesitate to contact your congressman or 30 | March-April 2012

VALLEY PARTNERSHIP Federal dollars have made an impact in Arizona, including projects such as Sky Harbor International Airport.

congresswoman on issues of concern. Be active in trade associations that lobby in Washington, D.C.

CF: Real estate industry leaders and everyone in the community have many options for supporting Luke and the effort to secure the F-35 mission. First, participate in the Luke Forward campaign by registering your support (lukeforward.com), submit a letter from your company or community support organization, and spread the word by sending the link for Luke Forward to your colleagues and friends. Second, participate in the upcoming public hearings for the F-35 mission Environmental Impact Study (EIS) process. Dates, times and locations will be posted on the website to visibly show your support to the community and government representatives. Finally, write or email your local, state and fed-

Q: There has been significant scrutiny on federal and state incentives of certain industries recently. How do you think those incentives have impacted the Arizona job and real estate markets? Are the incentives needed to jump-start an industry and spur growth? Are they worth the risks?

MP: I am generally opposed to public-funded incentives that tend to distort the market. If a determination is made that public interest is best served by advancing an issue, the better way to proceed is to focus on the desired outcome rather than a specific technology.

In terms of developing alternative fuels for vehicles, for example, the outcome might be to reduce our dependence on foreign oil. Current policy provides public subsidies as an incentive to produce ethanol, and

eral elected officials and state your support for the F-35 mission.

the subsidies are provided largely to mid-west, corn producing states.

PH: Stay engaged. Coordinate multiple visits to members of

(DARPA) that encourages competition toward an outcome-based goal

The process used by the Defense Advanced Research Projects Agency

Congress and agency officials. Be active on responding to requests for

is far better than offering specific incentives. Arizona businesses and

comments on proposed regulations. Create “echo chambers” on issues

entrepreneurs could be very competitive in a DARPA-like competition

of vital importance to our state.

resulting in more Arizona jobs and real estate development.

Our Western state is rich in space, most of which is managed by some form of government (Fed/state/military/tribal). This requires our

MD: Incentives are necessary to help spur growth and develop

real estate development industry to engage in public/private partner-

infrastructure that benefits society as a whole, but should be imple-

ships. Our only alternative is not to grow our economy.

mented in such a way that they reward success. The incentive provides 31

VALLEY PARTNERSHIP the carrot, but should not provide the fuel as was the case with

MP: When members of Congress designate special projects as

Solyndra. Incentives provide the necessary framework to foster

part of authorizing or appropriation bills powerful committee chairs

economic development — job creation. Just as Arizona was feeling

are able to direct disproportionate amounts of funding to their district

the effects of a downturn in the real estate market, the incentives

or state regardless of the merits of the project. The so-called “Bridge to

available to the renewable energy industry helped spur the growth

Nowhere” in the 2005 Highway Bill is a prime example. I think, on the

of a burgeoning industry for Arizona. As more projects have come to

whole, Arizona and other states lose in this process, and our delegation

fruition, the economy has felt the impacts through the transition-

is right to take a stand against earmarks. A better way is for Congress to

ing of jobs and the influx of investment in renewable generation and

give the states their proportionate share of funding, and let state and

manufacturing. However, as an industry and state, one needs to be

local officials working with our Congressional Delegation decide how

careful not to incentivize an industry that will not survive into the future without incentives.

and where the funds should be spent. Arizona could then use those funds to build transportation infrastructure to support high-growth areas, such as the north-south corridor in Pinal County.

Q: The debate around “earmarks” and “pork” projects continues at the federal level. Some of Arizona’s federal delegation have earned national reputations for

GG: We couldn’t live in Central Arizona without federal projects.

Both SRP and CAP are examples of using the Treasury of the United States to make it possible to live in the arid West. Sky Harbor Airport

their stand against earmarks. What are the benefits or

and the interstate highway system are other examples. We should not

the losses to Arizona on this issue? Should Arizona’s fed-

oppose the use of federal dollars for these kinds of purposes. The evil

eral delegation work to bring federal dollars back to our

of “earmarks” is when ad hoc projects (think “Bridge to Nowhere”)

community? What kinds of projects does Arizona need?

are slipped into unrelated bills without any debate or being part of a

VALLEY PARTNERSHIP IS CELEBRATING 25 YEARS To honor this milestone, AZRE Magazine is publishing a special section in the May/June issue.

BE PART OF THIS COMMEMORATIVE ISSUE The special section will include:

» Q & A with Chairman Rick Hearn, Vestar » Profiles on some of the key members of Valley Partnership » The impact Valley Partnership has made on the development community through legislative initiatives » Valley’s Partnership and their work within the community through projects like Maggie’s Place

For advertising information call 602.277.6045

32 | March-April 2012

VALLEY PARTNERSHIP comprehensive program. Our senators and congressmen shouldn’t oppose the use of federal funds for worthy projects in Arizona.

They should oppose a process that disguises federal spending, that doesn’t invite public scrutiny, or that trades frivolous projects in one district for similar boondoggles elsewhere.

PH: We expect our members of Congress to fight for parochial projects that make sense. What some members of

If this crash of 2008 has taught us anything it is that the residential housing industry can’t drive an economy by itself. It has to have other sectors to support or it collapses.

our congressional delegation object to — properly in my view — is skirting the competitive process to do that. The losses incurred by the practice of earmarking redound to us as federal taxpayers, not necessarily Arizonans. When we engage in it we may win projects for our state, but as federal taxpayers we probably paid too much inferior projects or products.

crash of 2008 has taught us anything it is that the residential housing industry can’t drive an economy by itself. It has to have other sectors to support or it collapses.

Q: The Arizona Commerce Authority and local economic

We should be working with our congressional delegation as well

development groups such as GPEC have prioritized a number of

as the applicable federal agencies to get our projects included into the

industries for expansion and growth. Aerospace/defense, tech-

agency budgets, authorized by the congressional authorization commit-

nology and the solar industry seem to be major opportunities for

tees and approved by the members of the appropriations committees.

Arizona’s future. What role should leaders of the real estate devel-

We also need to partner with the global growth sectors of our economy:

opment industry play at the federal level in working to support

healthcare, energy, aerospace, and high-tech manufacturing. If this

these business expansion efforts?

West-MEC Aviation Technology Center Glendale, Arizona

Proud Partners with West-MEC 33

VALLEY PARTNERSHIP Bed Bug Detectives and Terminators® Mitigate Landlord/Tenant Liability

Nose Knows 480-370-4767 The One Stop Bed Bug Shop® Independently Certified to meet National Pest Management Association (NPMA) Best Management Practices (BMP) for Bed Bugs AZ OPM Business License #8917

Discreet*Certified*Licensed

NoseKnowsllc.com

MP: The AC A has defined aerospace/defense, solar/ renewable energy, science and technology, and Arizona innovation-small businesses and entrepreneurs as our four focus areas.

The areas provide the biggest opportunity to attract and retain high paying jobs and sustainable economic development for our state. The real estate development community can help support these focus areas by working together with organizations like ACA and GPEC to let our congressional delegation know when we are competing for federal funds and programs. An example is the funding now available under the Defense Appropriations Act in which the FAA will select sites for testing UAVs. The real estate development community can also assist in redeveloping areas such as the Williams Gateway and in ensuring that growth complements, but does not encroach on, our current military installations such as Luke AFB.

MD: The message has to be clear and provide certainty to foster meaningful industry growth. For the energy sector, the growth plan needs to be inclusive of a portfolio of energy resources. The support for renewable energy at the federal level needs to be based on a broad array of goals: jobs, diversity of energy sources, national security and economic development. The industry leaders should be advocating for production-based or back-end incentives where there are metrics requiring a certain level of project development to better ensure the long-term success of the industry.

Welcome

2012 BOARD MEMBERS

WE APPRECIATE YOU! PRESIDENT PAST PRESIDENT PRESIDENT ELECT SECRETARY TREASURER SPONSORSHIP PR/OUTREACH MEMBERSHIP SPECIAL EVENTS GOLF PROGRAMS DIRECTOR AT LARGE

Christine Hughes Karen Scislowski Tracy Meyer Amy Dattilo Christie Veldhuizen Karen Halpert Jackie Orcutt Christine Olson Val Marciano Tiffany Lauchlan Ericka LeMaster Vicki Williams

WWW.ARIZONACREW.ORG 34 | March-April 2012

Q: Arizona has long enjoyed the benefits of having major military installations, such as Luke Air Force Base, as part of our economic base. These installations create and sustain thousands of jobs and billions of dollars in economic impact.

What are the potential risks and rewards with selection of Arizona for the F-35 mission?

CF: The rewards are numerous — thousands of highly trained, educated and well-paid employees continue to thrive in the West Valley; billions of dollars in annual economic impact continue to flow into Arizona’s economy; and the community around Luke is bolstered by the consumption of goods and services from this amazing economic engine and the positive community contributions from the people of Luke. The mission for this advanced aircraft will sustain Luke for decades to come.

The risks are minimal, but important to keep in context. The military is subject to the ebbs and flows of federal military investment and resting after securing the F-35 mission would be a critical error. The state, especially those communities closest to Luke, have grown accustomed to, even dependent on, having Luke as a major

Lights. Camera. Kitchen!

Step “Inside the Chef’s Studio” for special master chef cooking classes in our own kitchen!

Expand your recipe repertoire in this fusion of demonstration and hands-on learning. You’ll add a chapter to your cooking story, and even get a signed celebrity chef’s cookbook.

MARCH -

APRIL -

Christina Tosi

Anna Getty

“Momofuku Milk Bar Cookbook”

”Anna Getty’s Easy Organic”

For more information about these events, contact the Arizona Biltmore at 602.381.7632 or 800.950.0086.

2400 East Missouri Phoenix, AZ 85016 800.950.0086 arizonabiltmore.com

VALLEY PARTNERSHIP

Above: Securing the F-35 mission for Luke Air Force Base is a high priority not only for the West Valley, but for the state of Arizona as well. The F-35 Joint Strike Fighter is the next generation of U.S. Air Force aircraft. Right: The F-35 Joint Strike Fighter — with engine retracted — demonstrating vertical takeoff and landing maneuvers.

employer and economic driver. As the West Valley continues to grow and evolve, it is critical to keep the economic development focus on highly-educated, high-income employment and to continue diversifying the number and types of industries represented. The risk of reductions in Luke’s mission are always a factor to be considered; and, the best solution will be a strong and diverse regional economy.

RM: If Luke AFB is selected as the second PTC, it is conceivable that it would remain a valuable national asset and an incomparable economic engine for decades to come.

The most recent study (commissioned by the state of Arizona) of Luke’s economic impact was approximately $2.17B. However, beyond the pure dollars involved, the men and women of Luke AFB are significant contributors to the surrounding community as school and church leaders, business participants as well as stable homeowners for the community. These men and women should be viewed not only as part of the economic engine, but equally as important, quality community participants and leaders.

36 | March-April 2012

602.247.7600

EVENTS & SEMINARS

TRADE ORGANIZATIONS

ABA

NAIOP

ABA

Arizona Builders’ Alliance Phx: 602-274-8222 Tuc: 520-881-7930 · azbuilders.org

ANNUAL GOLF TOURNAMENT

BEST OF NAIOP 2011

APRIL 13

MARCH 29

ACA

Arizona Commerce Authority 602-771-1100 · azcommerce.com

STONECREEK GOLF CLUB

THE PHOENICIAN

ACA

Arizona Contractors Association 602-246-8627 · azca.com

ACT

Alliance of Construction Trades 520-624-3002 · actaz.net

AGC

Associated General Contractors of America 602-252-3926 · agc.org

AIA

ULI RENTAL HOUSING IN THE NEW

DESERT CLASSIC VOLLEYBALL

ECONOMY

TOURNAMENT

MARCH 20, 3 P.M.

APRIL 14

SCOTTSDALE HILTON

SCOTTSDALE RANCH PARK AZTA/ADOT TRANSIT CONFERENCE

AMA EDUCATION CONFERENCE AND

APRIL 23 NAU, FLAGSTAFF

TRADE SHOW

TRIBUTE AWARDS MAY 10 PHOENIX CONVENTION CENTER

VP FRIDAY MORNING BREAKFAST MARCH 23, APRIL 20, 7:30-9 A.M. PHOENIX COUNTRY CLUB 25TH ANNUAL GOLF TOURNAMENT

BOMA MONTHLY LUNCHEON

AMA

MARCH 21, APRIL 18 RENAISSANCE PHOENIX DOWNTOWN MARDI GRAS ON THE GREEN

OTHER

ANNUAL GOLF TOURNAMENT

ARIZONA COMMERCE

APRIL 27

AUTHORITY

WILDFIRE GOLF COURSE

TUCSON MEETING MARCH 27 CONSTRUCTION IN INDIAN

ICSC

COUNTRY

RECON 2012

NATIONAL CONFERENCE

MAY 20-23

APRIL 24-25

LAS VEGAS CONVENTION CENTER

WILD HORSE PASS HOTEL & CASINO

ASA

American Subcontractors Association of Arizona 602-274-8979 · asa-az.org

AAED AZCREW

Arizona Association for Economic Development 602-240-2233 · aaed.com Arizona Commercial Real Estate Women arizonacrew.org Building Owners & Managers Association 602-200-3898 · bomaphoenix.org

CORE

CoreNet Global Desert Mountain 623-581-3597 · corenetdesertmtn.org

DPP

Downtown Phoenix Partnership 602-254-8696 · coppersquare.com

EVP

East Valley Partnership 480-834-8335 · evp-az.org

GPEC

Greater Phoenix Economic Council 602-256-7700 · gpec.org

ICSC

International Council of Shopping Centers 646-728-3800 · icsc.org

IFMA

International Facility Management Association ifmaphoenix.org

IREM

Institute of Real Estate Management 602-253-1852 · iremphx.org

LAI

Lambda Alpha International lai-phx.org

MPA

Metropolitan Pima Alliance 520-878-8811 · mpaaz.org

NAIOP PCA SMPS TREO ULI

National Association of Industrial & Office Properties 602-230-1645 · naiop-az.org Phoenix Community Alliance 602-254-7477 · phoenixcommunityalliance.com Society for Marketing Professional Services smpsarizona.org Tucson Regional Economic Opportunity 866-600-0331 · treoaz.org Urban Land Institute 480-449-7920 · arizona.uli.org

VF

Valley Forward 602-240-2408 · valleyforward.org

VP

Valley Partnership 602-266-7844 · valleypartnership.org

WEST 38 | March-April 2012

Arizona Multi-Housing Association 602-224-0135 · azama.org Arizona Planning Association 602-866-7188 · azplanning.org

APRIL 27, 8:15 A.M. WHIRLWIND GOLF CLUB

American Institute of Architects 602-252-4200 · aia-arizona.org

APA

BOMA

MAY 9-10 PHOENIX CONVENTION CENTER

AIA

WESTMARC 623-435-0431 · westmarc.org

O

n March 1, AZRE hosted the 7th Annual RED Awards reception at the Arizona Biltmore in Phoenix to recog ni ze t he most notable commercial real estate projects of 2011 and the construction teams involved. AZRE held an open call for nominations and a record 116 projects were submitted by architects, contractors, developers and brokerage firms in Arizona. All the winners and honorable mentions are featured on the following pages.

AWARDS 40 | March-April 2012

ANNUAL PRESENTS THE

RED AWARD

WINNERS

Sponsored by

602-264-6835 www.cbiz.com

602-264-6835 www.mhm-pc.com

41

BEST EDUCATION PROJECT

GRAND CANYON UNIVERSITY ARENA DEVELOPER: GRAND CANYON UNIVERSITY CONTRACTOR: PERINI BUILDING COMPANY ARCHITECT: ARCHITEKTON AND 360 ARCHITECTURE SIZE: 135,000 SF LOCATION: 3300 W. CAMELBACK RD., PHOENIX COMPLETED: SEPTEMBER, 2011

T

he Grand Canyon University Arena is the focal point of the school’s $200M expansion project. The 5,000-seat facility was completed in a little more than a year without disrupting students’ class schedules, events or parking availability. Amenities include five high-definition video boards, an outdoor balcony, five concession stands and a carpeted expansive concourse. Glass panels on the north and south sides of the arena provide onlookers a view of the various events taking place inside. The arena adheres to sustainability through its use of high-efficiency lighting, chillers and a Variprime system that operates with changeable water pumps depending on the amount needed. In addition, the design stays true to the campus architecture as the brick base of the arena ties it to the brick buildings of the historic 60-year-old campus.

HONORABLE MENTION

NAU HEALTH & LEARNING CENTER DEVELOPER: NORTHERN ARIZONA UNIVERSITY CONTRACTOR: MORTENSON CONSTRUCTION ARCHITECT: OWP/P CANNON DESIGN SIZE: 277,000 SF LOCATION: 105 E. FRANKLIN AVE., FLAGSTAFF COMPLETED: JULY, 2011 42 | March-April 2012

Congratulationsto to Congratulations thewinners winnersand and the finalistsof ofthe the finalists 2012RED REDAwards.

Awards.

2012 APS proudly APSSolutions Solutionsfor forBusiness Business proudly sponsors award sponsorsthe theSustainability Sustainability award and nominees inin andsupports supportsallallthe the nominees their goals. theirenergy energyefficiency efficiency goals.

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

The Solutions for Business program is funded by APS customers Solutions program is funded

by APS customers andThe approved by for the Business Arizona Corporation Commission. and approved by the Arizona Corporation Commission.

BEST HEALTHCARE PROJECT

P H O E N IX C H I L D R E N’S H O S P ITA L DEVELOPER: PHOENIX CHILDREN’S HOSPITAL CONTRACTOR: KITCHELL ARCHITECT: HKS ARCHITECTS, INC. SIZE: 760,000 SF LOCATION: 1919 E. THOMAS RD., PHOENIX COMPLETED: OCTOBER, 2011

P

hoenix Children’s Hospital is the largest pediatric hospital in the Southwest and one of the biggest in the country.

The facility values sustainability by maintaining air quality while utilizing recycled material. Additionally, energy is conserved through sun-shading screens in each room and cutting an overuse of paper through online distribution. PCH was built to keep up with the expected growing population in Maricopa County. The team produced a pediatric hospital four months early and $50M under budget. Inspection and renovations were completed at night to avoid disrupting the neighboring hospital.

Open forum meetings between the owner, architect and contractor with nearby residents contributed to the building productivity and swiftness. Before opening the facility, Kitchell executed an All-Systems Testing method that verified the effectiveness of every life-safety feature. The value and efficiency of this trial run led the Phoenix Fire Department Fire Safety Advisory Board to vote on implementing the All-Systems Test in every project that calls for a Fire and Life Safety Report. The project won the Valley Forward Merit Award — Environmental Technologies-Central Energy Plant and the 2011 Modern Healthcare Design Award.

HONORABLE MENTION

BANNER MD ANDERSON CANCER CENTER DEVELOPER: BANNER HEALTH CONTRACTOR: DPR CONSTRUCTION ARCHITECT: CANNON DESIGN SIZE: 133,000 SF LOCATION: 2946 E. BANNER GATEWAY DR., GILBERT COMPLETED: JUNE, 2011 44 | March-April 2012

by minimizing your taxes by saving you money by optimizing operational efficiencies

providing

solutions

challenging economy

in a

by implementing best practices by improving your profitability

by specializing in construction CBIZ & Mayer Hoffman McCann P.C. don’t just dabble in construction — we specialize in it — so you receive well-rounded industry knowledge to help you strengthen relationships with your banker, surety, insurance agents and other business consultants.

With more specialists possessing the Certified Construction Industry Financial Professional (CCIFP) designation than any other provider in the country, put our depth and breadth of expertise to the test.

ACCOUNTING, TAX & CONSULTING SERVICES © Copyright 2012. CBIZ, Inc. and Mayer Hoffman McCann P.C. NYSE Listed: CBZ. All rights reserved.

provided by CBIZ AUDIT & ATTEST SERVICES

provided by Mayer Hoffman McCann P.C., an independent CPA firm

Together, CBIZ and MHM are one of the Top Ten accounting providers in the country.

Cord D. Armstrong, CPA, CCIFP • 602.650.6274 Anthony M. Hakes, CPA, CCIFP • 602.650.6225 www.cbiz.com/cbizmhm-phoenix www.mhm-pc.com

BEST HOSPITALITY PROJECT WESTIN PHOENIX DOWNTOWN

I

t took collaborative effort from the team of architects, interior designers and contractor to adapt and renovate the Westin Phoenix Downtown in just a year and a half. Located inside the Freeport-McMoRan Center, the hotel occupies floors 11 through 18. Ordinary office space was transformed into the first 5-star property in Downtown Phoenix.

Amenities include a 3,000 SF ballroom, pool and deck, workout room and Province restaurant. During the renovations, employee safety and convenience was adhered to. Perini Building Company did not disrupt the DEVELOPER: NATIONAL REAL ESTATE ADVISORS routine of those in the building. The team CONTRACTOR: PERINI BUILDING COMPANY incorporated energy efficiency through the ARCHITECT: GENSLER (INTERIOR DESIGN)/SMITHGROUPJJR use of a key card to disable unused electricity. The interior design, provided by Gensler, SIZE: 185,000 SF evokes a natural feel, despite the unexpectLOCATION: 333 N. CENTRAL AVE., PHOENIX ed location for a boutique hotel.

COMPLETED: MARCH, 2011

CASINO DEL SOL HOTEL CONVENTION CENTER & PARKING STRUCTURE EXPANSION

HONORABLE MENTION

DEVELOPER: CASINO DEL SOL CONTRACTOR: MCCARTHY BUILDING COMPANIES ARCHITECT: LEO A DALY SIZE: 250,000 SF LOCATION: 5655 W. VALENCIA RD., TUCSON COMPLETED: NOVEMBER, 2011

BEST INDUSTRIAL PROJECT DEVELOPER: DUNN-EDWARDS CORPORATION CONTRACTOR: LAYTON CONSTRUCTION ARCHITECT: DEUTSCH ARCHITECTURE GROUP BROKER: THE HEATHCOTE GROUP SIZE: 340,000 SF LOCATION: 520 S. 67TH AVE., PHOENIX COMPLETED: DECEMBER, 2011 HONORABLE MENTION

DUNN-EDWARDS PHOENIX

D

unn-Edwards placed significant effort on energy efficiency in its new industrial warehouse by using recycled materials to build its facility. Upon completion, 31.7% of the supplies were recycled, equivalent to a savings of $772,255. The facility was built at a low cost, enabling the construction of a 3,000 SF laboratory and an 8,000 SF tank for harmful chemicals. The paint manufacturing facility was awarded LEED Gold certification. By combining various distribution facilities toward a central location, Dunn-Edwards cut its overall cost by more than 40%. It utilized new marketed products implementing robotics and worked with BIM.

CRESENT CROWN DISTRIBUTION DEVELOPER: LGE DESIGN BUILD CONTRACTOR: LGE DESIGN BUILD ARCHITECT: PHARCHITECTURE SIZE: 345,000 SF LOCATION: 1640 W. BROADWAY RD., MESA COMPLETED: DECEMBER, 2011

46 | March-April 2012

SQUIRE SANDERS IS PROUD TO SUPPORT THE RED AWARDS

Steven L. Lisker +1 602 528 4023 steven.lisker@squiresanders.com Justin D. Steltenpohl +1 602 528 4192 justin.steltenpohl@squiresanders.com 36 Offices in 17 Countries squiresanders.com

For 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 development, financing, construction, management, workouts, foreclosures and liquidations of real estate projects.

BEST MULTI-FAMILY PROJECT DEVINE LEGACY ON CENTRAL

D

evine Legacy embraces and upholds the Native American culture and encourages the residents of this housing development to do the same. Located on Central Ave., its close proximity to the light rail provides accessible and sustainable transportation.

Other nearby amenities include the Native American Community Service Center and the Phoenix Indian Medical Center. Devine Legacy is comprised of 65 studio, one-, two- and three-room units. The multi-family project is pursuing LEED Platinum certification.

Devine Legacy uses outdoor air ventilation, water fixtures, and preserved 31% of energy DEVELOPER: NATIVE AMERICAN CONNECTIONS through recycled materials. Devine Legacy CONTRACTOR: ADOLFSON & PETERSON CONSTRUCTION was deemed as an Outstanding Housing Initiative by the Arizona Department ARCHITECT: PERLMAN ARCHITECTS of Housing for energy preservation and SIZE: 100,340 SF high-density design.

LOCATION: 4570 N. CENTRAL AVE., PHOENIX COMPLETED: DECEMBER, 2011

HONORABLE MENTION

PHOENIX TOWERS TERRACE DEVELOPER: PHOENIX TOWERS COOPERATIVE CONTRACTOR: 180 DEGREES, INC. ARCHITECT: COLAB STUDIO, LLC SIZE: 2,400 SF LOCATION: 2201 N. CENTRAL AVE., PHOENIX COMPLETED: JANUARY, 2011

BEST OFFICE PROJECT DEVELOPER: USAA REAL ESTATE COMPANY/METRO COMMERCIAL PROPERTIES CONTRACTOR: SUNDT CONSTRUCTION ARCHITECT: DAVIS SIZE: 493,661 SF LOCATION: 1624 FOUNTAINHEAD PARKWAY, TEMPE COMPLETED: JULY, 2011 HONORABLE MENTION

FOUNTAINHEAD OFFICE PLAZA

F

ountainhead Office Plaza A & B in Tempe is comprised of 6- and 10-story Class A buildings.

The massive project, which is 100% leased to the University of Phoenix, began after the challenging task of altering a neighboring lake and tearing down three buildings and parking structures. Once these were complete, construction of a 493,661 SF plaza could commence.

The project sits on 12 acres and includes a parking structure that accommodates more than 2,000 vehicles. Fountainhead adheres to the significance of sustainability by incorporating an Energy Recovery Ventilator (ERV) that acts as a cleaner for incoming air. Fountainhead Office Plaza has achieved LEED Gold certification.

UNISOURCE ENERGY CORPORATE OFFICE DEVELOPER: RYAN COMPANIES US, INC CONTRACTOR: RYAN COMPANIES US, INC ARCHITECT: DAVIS SIZE: 200,000 SF LOCATION: 88 E. BROADWAY, TUCSON COMPLETED: NOVEMBER, 2011

48 | March-April 2012

BEST PUBLIC PROJECT DEVELOPER: ABIL CONTRACTOR: CALIBER CONSTRUCTION ARCHITECT: BALDINGER STUDIOS SIZE: 45,000 SF LOCATION: 5031 E. WASHINGTON ST., PHOENIX COMPLETED: NOVEMBER, 2011 HONORABLE MENTION

VIRGINIA G. PIPER SPORTS & FITNESS CENTER FOR PERSONS WITH DISABILITIES

T

he Virginia G. Piper Sports and Fitness Center was designed to fit the needs specifically for persons with disabilities and demonstrate the many possibilities achievable through exercise. As a result of ABIL, CalibeR Construction and Baldinger Studios, this facility completes the development of Disability Empowerment Center for Arizona. It is the first campus in the West that centers on the recreational and convalescent essentials for persons with disabilities.

It maintains comfort and security of not only those utilizing the center, but also offers the public the opportunity to contribute to this non-profit organization. Amenities include an indoor arena with seating for 700 spectators and a 1/10th-mile elevated running track. In addition to serving the disabled community, the center adheres to various energy-saving components.

Some include a high-efficiency heating and cooling central plant, interior/exterior lighting systems and condensing the use of VOC materials.

MARICOPA COUNTY DOWNTOWN COURT TOWER DEVELOPER: MARICOPA COUNTY CONTRACTOR: GILBANE BUILDING COMPANY IN ASSOCIATION WITH RYAN COMPANIES US, INC. ARCHITECT: GOULD EVANS ASSOCIATES/AECOM SIZE: 700,000 SF LOCATION: 175 W. MADISON ST., PHOENIX COMPLETED: NOVEMBER, 2011

BEST REDEVELOPMENT PROJECT DEVELOPER: ONE WORLD DEVELOPMENT CORP. CONTRACTOR: LGE DESIGN BUILD ARCHITECT: CAWLEY ARCHITECTS BROKER: MEDICAL OFFICE BROKERS SIZE: 29,096 SF LOCATION: 15351 W. BELL RD., SURPRISE COMPLETED: DECEMBER, 2011 HONORABLE MENTION

ADELANTE HEALTHCARE SURPRISE

A

once-vacant project known as Bell Road Plaza, this collection of three frontage retail buildings and one office building was redeveloped and transformed into Adelante Healthcare. In less than nine months, LGE Design Build and Cawley Architects expanded 12,000 SF to accommodate 30,000 SF of contiguous space. The healthcare facility includes 28 exam rooms, specialty waiting rooms, wood look-alike VCT floors and a central break cafe. To maintain energy efficiency, Adelante includes 14 seer HVAC and a 1-inch foam roof to the current building. The project was 100% vacant and being sold through bankruptcy.

Thanks to the project’s innovative team, Adelante Healthcare has the capacity and resources to provide medical assistance to the residents of Surprise.

50 | March-April 2012

THE Q BUILDING AT PARADISE VALLEY COMMUNITY COLLEGE DEVELOPER: PARADISE VALLEY COMMUNITY COLLEGE CONTRACTOR: JOKAKE ARCHITECT: SMITHGROUPJJR SIZE: 69,700 SF LOCATION: 18401 N. 32ND ST., PHOENIX COMPLETED: JANUARY, 2011

z .weit www

.com

Boe

r. on, S s e Berg

Busi

De ness

v e lo

tM pmen

e anag

2.302 r, 6 0

.7504

BEST RETAIL PROJECT

IPIC THEATER / TANZY / SALT DEVELOPER: IPIC THEATERS CONTRACTOR: A.R. MAYS CONSTRUCTION ARCHITECT: TK ARCHITECTS

T

his $6M retail project, an innovative movie and dining experience, took less than five months to complete at Scottsdale Quarter. The construction team overcame sev-

eral challenges to produce a unique retail experience, including limited scheduling, and weight restrictions involving acoustic concrete slabs. Working with an out-of-state architect and owner on this new prototype also presented challenges for the construction team. Changes were made from the beginning until almost

SIZE: 50,000 SF

opening day. Amenities include LED lighting around the radius

LOCATION: 15257 N. SCOTTSDALE RD., SCOTTSDALE

of the shimmer screens, which adds to the theatrical ambiance.

COMPLETED: JANUARY, 2011

At Salt, patrons sit at an oval-shaped bar set before a 28-foot-tall backlit wine bottle display.

HONORABLE MENTION

AMERICAN SPORTS COMPLEX — RETAIL CENTER DEVELOPER: CITY OF AVONDALE CONTRACTOR: SUNDT CONSTRUCTION, INC. ARCHITECT: SMITHGROUPJJR SIZE: 20,000 SF LOCATION: 755 N. 114TH AVE., AVONDALE COMPLETED: SEPTEMBER, 2011 52 | March-April 2012

DEPENDABLE PEOPLE design build collaboration dpr construction cannon design group gilbane building co. mechanical systems inc.

Pima Psychiatric Hospital; Tucson, AZ Completed 2011

204,000 sq ft addition to existing hospital campus created a teaching hospital and 24-hour crisis response center brings specialized mental health services not previously accessible to pima county residents increased the total hospital bed count by fifty percent created over 150 new medical and administrative positions in the tucson market

DEPENDABLE PERFORMANCE PHOENIX TUCSON SINCE 1990 www.dpelectric.com

DP ELECTRIC

BEST TENANT IMPROVEMENT PROJECT

LIMELIGHT NETWORKS DEVELOPER: VULCAN REAL ESTATE

L

imelight Networks is a high-tech company that combined several locations into one main facility. As the fi rst tenant in Tempe Gateway, the Limelight team expanded its project

to provide for a 24/7 Network Operation Center and 150 SF of

CONTRACTOR: LAYTON CONSTRUCTION

office space for each employee. DAVIS and Layton Construction

ARCHITECT: DAVIS

incorporated updated technology and improved floor layouts.

BROKER: ROSS BROWN PARTNERS SIZE: 57,300 SF

The project team observed sustainability techniques, such as Greenguard and CRI Green Label Plus Certifications. The carpeted area is 37% reused content and the ceilings contain 85%

LOCATION: 222 S. MILL AVE., TEMPE

recycled material. Motion sensors and water conservation were

COMPLETED: JULY, 2011

also implemented to promote the value of energy efficiency and progress of Limelight’s tenant improvement.

HONORABLE MENTION

GAP FULFILLMENT CENTER DEVELOPER: N/A CONTRACTOR: JOKAKE CONSTRUCTION SERVICES ARCHITECT: K&I ARCHITECTS BROKER: CUSHMAN & WAKEFIELD SIZE: 412,000 SF LOCATION: 2225 S. 75TH AVE., PHOENIX COMPLETED: MAY, 2011 54 | March-April 2012

MOST CHALLENGING PROJECT

SALT RIVER FIELDS AT TALKING STICK DEVELOPER: SALT RIVER PIMA-MARICOPA INDIAN COMMUNITY (SRP-MIC) CONTRACTOR: MORTENSON CONSTRUCTION ARCHITECT: HKS ARCHITECTS, INC. SIZE: 279,635 SF LOCATION: 7555 N. PIMA RD., SCOTTSDALE COMPLETED: JANUARY, 2011

T

he first major league spring training ballpark to be built on Native American land, Salt River Fields at Talking Stick is a sports complex engaging community involvement while embracing the values and culture of the SRP-MIC. The challenge was to meet an aggressive construction schedule in anticipation of the start of spring training for the Arizona Diamondbacks and the Colorado Rockies. Sitting on 140 acres, the project’s centerpiece is an 11,000-seat stadium. The design and building process took less than two years as a result of a complete team effort between Mortenson Construction, HKS and the tribe. The team at Salt River Fields also placed emphasis on energy and water preservation. Water-saving techniques reduced usage by more than 45% and the energy savings of 23.5%.

HONORABLE MENTION

ARIZONA SCIENCE CENTER PHASE III REMODIFICATIONS DEVELOPER: ARIZONA SCIENCE CENTER CONTRACTOR: BRYCON CONSTRUCTION COMPANY ARCHITECT: ARCHITEKTON SIZE: 17,000 SF LOCATION: 600 E. WASHINGTON ST., PHOENIX COMPLETED: JANUARY, 2011 56 | March-April 2012

SRP CONGRATULATES THE 2012 RED AWARD WINNERS AND NOMINEES FOR THEIR OUTSTANDING PROJECTS. Whether you’re breaking ground or looking to enhance your current property, SRP can help. For rebates to make your next project as energy efficient as possible, visit savewithsrpbiz.com.

Ranked #1 in Arizona Construction

CORE Construction, Inc. | 3036 East Greenway Road | Phoenix, AZ 85032 | P: 602-494-0800 | F: 602-494-9481 www.COREConstruct.com

57

Cushman & Wakefield Honors It’s

2011 TOP PRODUCERS

RED Award Finalists

Jay Hoselton

Chris Toci

Jerry Jacobs

Dave Seeger

Tenant Advisory Services

Investment Properties

Larry Downey

Mark Detmer

Bo Mills

Karsten Peterson

Mike Sayre

Mark Gustin

Corporate Services

Industrial Properties

Industrial Properties

· Arizona Science Center Phase III Modifications · SubZero Warehouse/Office Fit-Out · Cesar Chavez Skate Plaza

Office Properties

Office Properties

Office Properties

Cushman & Wakefield of Arizona, Inc. 2555 East Camelback Road Suite 300 Phoenix Arizona 85016 602.253.7900 phone cushmanwakefield.com

(480) 785-9911 www.Brycon.com ROC 092326B-01

Office Properties

Office Properties

AZRE | Red Award

Brokerage Firm of the Year 2009 Follow us on

CushWakeAZ

© 2012 CBRE, Inc.

So trust our brokerage professionals to bring them to you.

And deliver the resources you need to close the deal.

#1 in real estate serViCes worldwide T 602.735.5555 | cbre.com/phoenix T 520.323.5100 | cbre.com/tucson

59

SPECIAL MERIT AWARD: EDUCATION

P.L. JULIAN ELEMENTARY SCHOOL

P

.L Julian Elementary School is a learning environment that provides safety and comfort while embracing the historical designs of a 40-year-old building. The renovation of the school led to the inclusion of new Smart Board technology, solar sensors and the P.L. Julian Taskforce Committee that ensures the application of all these innovations. An important task is to incorporate the site’s agricultural past and surround the students with its history. The ultimate goal was to provide an educational facility that also integrates the traditions and values of the community.

DEVELOPER: ROOSEVELT ELEMENTARY SCHOOL DISTRICT CONTRACTOR: MCCARTHY BUILDING COMPANIES ARCHITECT: ORCUTT | WINSLOW SIZE: 54,000 SF LOCATION: 2149 E. CARVER DR., PHOENIX COMPLETED: SEPTEMBER, 2011

SPECIAL MERIT AWARD: HEALTHCARE

OASIS HOSPITAL

O

ASIS Hospital specializes in orthopedics and spinal care while offering patients and employees state-of-the-art technologies and comfortable recovery rooms. The introduction of Skylight is a secure, interactive Web-based computer system that is specialized for each patient’s procedure and recovery process.

Other amenities include Image Stream that produces advanced healthcare technologies and operating rooms designated for orthopedic and spine procedures. “Laminar Flow” is a feature that generates a low-velocity air blanket to ensure a sterile operating room.

Each of the 64 patient rooms is equipped with movie entertainment and 24-hour care from the hospital staff.

60 | March-April 2012

DEVELOPER: CLARIUS PARTNERS, LLC CONTRACTOR: JE DUNN CONSTRUCTION COMPANY ARCHITECT: ASCENSION GROUP SIZE: 94,000 SF LOCATION: 750 N. 40TH ST., PHOENIX COMPLETED: APRIL, 2011

BROKERAGE TEAMS OF THE YEAR: LEASING

CUSHMAN & WAKEFIELD THE TEAM: MARK DETMER & BO MILLS LEASE DETAILS: 64 TRANSACTIONS TOTALING 5.115 MSF $112.7M IN VALUE Mark Detmer

LARGEST TRANSACTIONS CLOSED IN 2011: 1.267 MSF, $49.9M, 10 YEARS, CONFIDENTIAL INTERNET RETAILER

Bo Mills

M

ark Detmer and Bo Mills completed the largest industrial lease in Arizona during 2011 at more than 1.2 MSF. Their lease is considered one of the largest industrial deals in the country in the past four years. Additionally, this team also closed the four largest leases in the Phoenix area since 2009. Aside from respected real estate brokers, Detmer and Mills are involved in several community organizations. Mills is the incoming president for SIOR Arizona and has been on the NAIOP Board of Directors since 2006. Detmer is a board member of CSCMP and a leading member of the C&W National Industrial Investments Board. Both support Phoenix Children’s Hospital, the Boys & Girls Clubs and Tumaini, a Kenyan orphanage.

BROKERAGE TEAMS OF THE YEAR: SALES

CBRE THE TEAM: TYLER ANDERSON, VICE CHAIRMAN & SEAN CUNNINGHAM, VICE CHAIRMAN

Tyler Anderson

T

Sean Cunningham

yler Anderson and Sean Cunningham defended their title as RED Awards Brokerage Team of the Year for sales. Their total dollar amount for the year exceeded $1B nationally; $520M in Arizona. They have received numerous awards for their valuable work and esteemed partnership. The team continues to be active members in the National Multi-Housing Council and Arizona Multi-Housing Association. Anderson is involved with the Urban Land Institute Multi-Family Blue Council and United Way. Last year Phoenix St. Mary’s High School inducted Cunningham into its Hall of Fame. Cunningham is also a member of the Phoenix Thunderbirds.

62 | March-April 2012

SALES DETAILS: 26 TRANSACTIONS IN ARIZONA (42 TOTAL) $520M IN VALUE IN ARIZONA ($1.08B TOTAL)

BUILDING ARIZONA FOR 83 YEARS Sundt has a long and proud history of building projects that have contributed to Arizona’s growth and prosperity. Today, the company is entirely employee-owned and is committed to keeping Arizona a great place to raise a family or grow a business.

Arizona Contractor License Nos.: ROC068012-A; ROC068013-B01

Captions clockwise from top: Chandler City Hall; Dial Corporate Headquarters & Research and Development Facility; Finova at Portales; Arizona State Capitol, West Wing; Arizona Biltmore Hotel, Paradise Wing; American Sports Complex and Retail Center (top); Fountainhead Office Plaza (below); Phoenix Central Library; Arizona Public Service Deer Valley Mission Critical Operations Building; U.S. Bank Center

2620 S. 55th Street Tempe, Arizona 85282 (480) 293-3000

www.sundt.com

BROKERAGE INDIVIDUALS OF THE YEAR: LEASING

JAY HOSELTON CUSHMAN & WAKEFIELD LEASING DETAILS: 16 LEASE TRANSACTIONS $60.3M IN VALUE LARGEST SINGLE TRANSACTION CLOSED IN 2011: 205,300 SF, $43M, 10 YEARS, PHOENIX SCHOOL OF LAW

A

s Senior Director for Cushman & Wakefield of Arizona, Jay Hoselton has served more than 36 years in the com-

mercial real estate business. He represents local and national firms, participates in the local NAIOP chapter and also mentors the young talent in the industry. Hoselton is an active member of the Florence Crittenton Society as well as a fundraiser for Hospice of the Valley and participates in the Greater Phoenix Urban League.

BROKERAGE INDIVIDUALS OF THE YEAR: SALES

KEN ELMER COMMERCIAL PROPERTIES INC. SALES DETAILS: 10 SALES TRANSACTIONS $9.3M IN VALUE

K

en Elmer began his sales career more than 22 years ago. During that time with Phoenix Metropolitan

Real Estate, he has closed at least $435M in real estate. In December 1999, he co-founded EBS & Associates until it joined with Commercial Properties Inc. 10 years later. His colleagues recognize Elmer for his extensive work relationships with clients and understanding the buying side of transactions through personal experience. In 2011, Elmer completed more than $9M in sales and his single largest transaction was more than $3M. 64 | March-April 2012

ARCHITECT OF THE YEAR DAVIS

D

Limelight Networks

AVIS, an architecture and design firm that has designed more than 75 MSF in Metro Phoenix area, celebrated its 20th anniversary in style. Last year the firm successfully executed projects such as Starwood, Limelight, CantaMia, Fountainhead Office Plaza, and UniSource. A few DAVIS project highlights include the design of Limelight’s 57,300 SF new Tempe corporate HQ and Fountainhead Office Plaza, consisting of a 10-story and 6-story Class A office building, with a parking garage achieving LEED Gold certification. Additionally, DAVIS undertook UniSource, Tucson Electric’s new 530,406 SF, LEED Gold certified corporate HQ. DAVIS’ long standing client relationships, exceptional team members and reestablishment of humanity in the architecture are what make it a successful firm.

WINNER OF BEST OFFICE PROJECT: FOUNTAINHEAD OFFICE PLAZA WINNER OF BEST TENANT IMPROVEMENT: LIMELIGHT NETWORK

t hed av i se x per ience.com

HONORABLE MENTION FOR BEST OFFICE PROJECT: UNISOURCE ENERGY CORPORATE OFFICE

GENERAL CONTRACTOR OF THE YEAR

KITCHELL

K

itchell’s contracting of the Phoenix Children’s Hospital’s new 11-story pediatric tower enables it to serve its pediatric patients with 168 new beds, as well as high-quality outpatient care in new clinics housed on site. Modeled on a night-blooming desert flower and visible from throughout the Valley, the building is visually striking. However, it is the inner workings of the hospital that are most remarkable — all designed and built with the highest quality patient care, comfort of patients and families, and proximity of specialties in mind. The project also includes a new central plant, renovations, and two parking garages, which had to be built in a highly active environment in a busy metropolitan area. Kitchell also implemented an AllSystems Test that will potentially be a staple in the construction of future structures requiring Fire and Life Safety Reports.

The Phoenix landmark was completed four months ahead of schedule and $48M under budget.

WINNER OF BEST HEALTHCARE PROJECT: PHOENIX CHILDREN’S HOSPITAL HONORABLE MENTION FOR MOST SUSTAINABLE PROJECT: PHOENIX CHILDREN’S HOSPITAL

k itc he l l .com

65

DEVELOPER OF THE YEAR

BANNER HEALTH HONORABLE MENTION FOR BEST HEALTHCARE PROJECT: BANNER MD ANDERSON CANCER CENTER

B

a n ner Hea lt h cont i nued it s st rateg ic i nvest ment i n hea lt h-

E x pa nded it s ped i at r ic u n it at B a n ner T hu nderbi rd add i ng 16

c a re du r i ng 2011 s pend i ng hu nd red s of m i l l ion s of dol-

bed s. T he $1. 5M e x pa n sion i s pa r t of a $29 0M c a mpu s e x pa n-

l a rs to en su re t he hea lt hc a re need s of A r i z on a resident s a re

sion projec t t h at h a s added nea rly 20 0 bed s; O pened a 10 0,0 0 0

met. I n Se ptember, B a n ner Hea lt h opened ph a se one of it s

SF, $21M ne w emergenc y de pa r t ment at C a rdon C h i ld ren’s

sig n at u re $10 9M B a n ner M D A nderson C a ncer Center on t he

Med ic a l Center i n Mesa w it h 10 3 pat ient s paces; B ega n a $71M,

B a n ner Gate way c a mpu s i n Gi lber t . T h i s 130,0 0 0 SF fac i l it y

136,0 0 0 SF m i l l ion e x pa n sion of B a n ner G ood Sa m a r it a n

u shered i n a ne w era of c a ncer c a re i n A r i z on a . I n 2011, B a n ner

Med ic a l Center ’s Su rg ic a l Ser v ices de pa r t ment .

Hea lt h a l so: B ega n con st r uc t ion i n M a r icopa on t he 8 0,0 0 0 SF B a n ner Med ic a l Center, a publ ic /pr ivate pa r t nersh ip w it h t he c it y, c reat i ng $130M i n econom ic i mpac t over t he ne x t dec ade;

66 | March-April 2012

ba n nerhea lt h.com

www.caliberconstruction.com

SpoFIT by Baldinger Architectural Studio IM AZRE ¼ MarApr 0211A 2/3/2011

HVAC . Sheet Metal ❖

Plumbing . Process Piping ❖

HVAC & Plumbing Service and Repairs ❖

Maintenance Agreements ❖

Renewable Energy / Solar Innovations ❖

CAD / BIM Design ❖

Building Automation Systems ❖

Firefighters Breathing Air Systems

interstate mechanical corporation 1841 East Washington Street . Phoenix, AZ 85034 602-257-1319 . 800-628-0211 . Fax 602-271-0674 www.imcor-az.com

Building the Southwest since 1974

with major commercial, industrial, civic and medical projects

General Contracting B-01 ROC094734 . AC & Refrigeration L-39 ROC073195 Sheet Metal L-45 ROC073196 . Plumbing L-37 ROC084435 . Process Piping L-04 ROC084436 Rescue Air System K-05 ROC225789

67

CONSTRUCTION IN INDIAN COUNTRY

BY PETER MADRID

SHOPPING SPREE

Arizona tribes pursuing retail projects as economic engines as well as entertainment and shopping options for their members ith gaming and hospitality reaching closer to a saturation point, many Arizona tribes are choosing to invest in markets where traditional retail developers and lenders have shied away from during the current economy.

In Metro Phoenix, three tribes have major retail projects in the works: — The Gila River Indian Community just signed a lease with the Simon Property Group for the Phoenix Premium Outlets adjacent to Wild Horse Pass Hotel & Casino in Chandler.

— The Ak-Chin Indian Community is building the 185,000 SF Ak-Chin Family Entertainment Complex in Maricopa.

— The Salt River Pima-Maricopa Indian Community is getting a Courtyard by Marriott in Scottsdale plus a possible Tanger Outlet Mall.

“Th is (Phoenix Premium Outlets) development represents the next steps toward economic self sufficiency for our community,” says Gila River Gov. 68 | March-April 2012

CIIC

Gregory Mendoza. “It’s going to complement this area.”

The outlet, to be located off of I-10 and Wild Horse Pass Blvd., is expected to create 500 construction jobs and 800 to 1,000 fullor part-time jobs, according to the tribe. The 360,000 SF center will include 90 high quality and name-brand stores. It is scheduled to open in 2Q 2013.

Developers can find a real benefit to working with tribes on reservation land as development fees and lease rates can be very competitive and can be areas of high visibility and underserved areas, according to Kari McCormick, business development manager for Kitchell’s Native American Division.

“There are progressive tribes such as the Ak-Chin who recognized a need in the community in which their own members lived and worked and were underserved by the local market and realized they have the resources to fulfi ll a need within the community and complement their existing enterprises by adding the entertainment venue,” McCormick says.

The 185,000 SF, $35M-$40M Ak-Chin facility will consist of a 12-screen movie theater, 24-lane bowling center, arcade, laser tag arena, restaurant and concession area along with 23,000 SF of retail and 45 acres of site work. A.R. Mays Construction is the

The Gila River Indian Community recently signed a lease with Simon Property Group for the 360,000 SF Phoenix Premium Outlets adjacent to Wild Horse Pass Hotel & Casino.

A 185,000 SF family entertainment and retail project is being built in Maricopa by the Ak-Chin Indian Community. It will include a 12-screen movie theater and a 24-lane bowling center.

69

CONSTRUCTION IN INDIAN COUNTRY

The $35M-$40M Ak-Chin Entertainment Complex in Maricopa is scheduled to open in November.

general contractor and Nelsen Partners is the architect.

Retail outlets and entertainment venues are nothing new to tribes, but what they are seeing is “bigger, better, more diversified developments in Indian Country,” McCormick says.

“For many tribes the stand-alone C-stores and gas stations still remain very profitable enterprises, but tribes are seeking ways to create destination sites and expanding their customer base in a competitive market,” she says. “Although each tribe has very different reasons for getting into the retail market, usually it is a variety of reasons that leads them to take the plunge to diversify as their gaming market becomes more saturated.”

Some of the most important reasons for diversification include: » Expand their existing market base — increasing the foot traffic to the existing gaming facility, especially if it is focused on a client base they may not otherwise draw to their gaming facility. » Expand services for their existing client base, lengthening the “stay and play” for an existing customer. It is the theory of “something for everyone” where a couple goes to a casino, and only one of the partners enjoys gambling; that individual is more inclined to stay longer and play more if they know their significant other has separate activities to keep them happy. » Create a greater market for their gaming property by creating a complementary draw — especially if it is high recognition brands or 70 | March-April 2012

unique brands not located everywhere. » Create an economic driver for tax revenues. » Create jobs for the tribal members. » Create opportunities for tribal entrepreneurs. » Provide a local service for tribal members and local community (buy local/buy Indian).

Just as with any successful retail development location, visibility, access and parking require careful consideration, McCormick adds. An added consideration for retail development for tribes is any new development must complement and create spillover to the existing gaming facility. In the end, the key to success in any retail development is that it increases foot traffic, but does not detract or disrupt the existing gaming enterprise.

“Kitchell recognizes the importance of tribal sovereignty, workforce development within the community and honoring the unique culture of each tribe,” McCormick says. “Tribes have become one of the leading investors helping to stimulate the economy in our state with developments that are creating jobs.

“We are very proud and honored to be a part of the exciting growth and construction opportunities that we are seeing. We believe that the impact tribes will have within our state and nationally will be unprecedented, as they seek to diversify and expand their existing enterprises.”

9TH ANNUAL

CONSTRUCTION IN INDIAN COUNTRY

NATIONAL CONFERENCE APRIL 24-25, 2012

NEW WILD HORSE PASS HOTEL AND C ASINO | CHANDLER, ARIZONA

Presents

Best Practices: The Right Tools for the Times

UP-TO-DATE TOPICS RELATED TO THE HOUSING, HEALTHCARE, EDUCATION, GAMING, HOSPITALITY, AND RETAIL INDUSTRY, INCLUDE: // Renewable Energy Development // Sustainable Development // Transportation // Pre & Post Construction // Codes & Inspections

// Partnering & Collaborating // PLANNING 101 // TERO, Labor Relations & Workforce Development // Doing More With Less // Tribal Politics

CONFERENCE FEES

EXHIBIT FEES

Early (by 3/2/12)

$800 Exhibit

$495 American Indian $595 Industry Regular (by 4/13/12)

$545 American Indian $645 Industry On-Site (Day of Event)

$595 American Indian $695 Industry

// // // // //

Finance & Funding Legal Issues Housing Cultural Presentations CONSTRUCTION 101

GOLF MIXER*

REGISTER BY APRIL 13 & SAVE! EXCELLENT SPONSORSHIP OPPORTUNITIES AVAILABLE.

APRIL 23, 2012 WHIRLWIND GOLF CLUB GOLF MIXER FEES $150 Per Golf Player $1,500 Golf Corporate Sponsorship SPONSORED BY

HOTEL INFORMATION NEW WILD HORSE PASS HOTEL & CASINO 5040 Wild Horse Pass Blvd.

Chandler, AZ 85226 Call: 520.796.4900 for reservations Or visit: www.wingilariver.com/wild-horse-pass

Discounted Rate: $110 single/double Cut off date: April 13, 2012 Be sure to reference the “Construction in Indian Country Conference” to get your discounted rate.

FOR MORE INFORMATION: WEBSITE: http://construction.asu.edu/ciic EMAIL: ciic@asu.edu PRESENTED BY

CONSTRUCTION IN INDIAN COUNTRY

BY MICHELLE LAUER

Harrah’s Ak-Chin Casino in Maricopa underwent a major renovation last July, adding 300 rooms and other customer-friendly amenities.

Back in the Game CASINO AND HOSPITALITY CONSTRUCTION AGAIN SWELLS ON TRIBAL LANDS he Gila River Indian Community is building two new hotels totalling more than 200 rooms, a new, 70,000 SF casino, and a conference center. The Navajo Nation is building its fi rst Arizona casino near Flagstaff. “(Construction in Indian country) is actually one of the market sectors that is really thriving,” says Roger Owers, an attorney with Andante Law Firm, whose specialty is construction law in Indian country. “Whether it’s design, construction, or brokering the real estate deals, cash flows into the industry as a whole.”

In Tucson, a new 44,500 SF convention center and a 1,120-car parking structure opened at Casino Del Sol in November. Harrah’s 72 | March-April 2012

Ak-Chin Casino increased its guest capacity to 300 rentable rooms, and renovated its restaurant in July.

As several Arizona tribes reveal major hospitality and casino construction projects, one thing is a sure bet — 2012 is shaping up to be another jackpot year.

The Arizona Department of Gaming reports that tribal casino revenues steadily declined from 2008 to 2010, but returned to the green in 2011. During this period, hospitality and casino construction in Indian country slowed.

Talking Stick Resort, which opened its doors on the Salt River Pima-Maricopa Indian Community in 2010, was the last significant Native American casino and hospitality project in almost a year.

Today, several sizable construction projects in Indian country are underway or open for business. The largest, a multifaceted

you have to start meeting like this.

there’s nothing quite like casino del sol resort for meetings & events… anywhere.

Casino Del Sol Resort Hotel welcomes you to a new era of fun and excitement as we unveil a new place to gather unlike any other in Tucson, Arizona. Now, attendees can enjoy 215 elegantly appointed guest rooms and suites, five great restaurants, a unique pool, and a spa & fitness center. Our new Conference Center features a beautiful and flexible 18,000 sq. foot Grand Ballroom which divides into five individually accessible meeting rooms, accommodating corporate events from 30 to 1800 and banquets and receptions of up to 2000 guests.

Casino Del Sol Resort Hotel also hosts outdoor events with distinction and grace. A 13,500 square foot deck winds through the palms surrounding the terrace and pool, resplendent with roomy poolside Cabanas, and a 29,000 sq. foot lawn adorned with a wedding gazebo. It’s all new and it’s all spectacular…raise your expectations for your next meeting at the new Casino Del Sol Resort Hotel!

Book Now!

Call 520.324.9403 for sales infomation or visit us at casinodelsolresort.com TUCSON, ARIZONA

resort | spa | conference center | amphitheater

i-19, exit valencia west, 6 miles | tucson, arizona | 855.sol.stay | casinodelsolresort.com enterprise of the pascua yaqui tribe Please play responsibly. If you have a gambling problem, please call 1-800-639-8783.

CONSTRUCTION IN INDIAN COUNTRY

McCarthy Building Companies and LEO A DALY combined their talents on a major building and renovation project at Casino Del Sol in Tucson.

undertaking by the Gila River Indian Community, includes a new 90-room hotel and the demolition and remodel of Vee Quiva Casino in West Phoenix, plus a new conference center, 130-room hotel and restaurant at Lone Butte Casino in Chandler.

The Gila River Indian Community, going all in, also is reportedly opening a new hotel at Toka Sticks Golf Course in Mesa, which is a short distance from Phoenix-Mesa Gateway Airport.

The construction venture at Vee Quiva is still in its developmental stages, according to Melody Hudson, public relations manager for Gila River Casinos. It is expected to open in the summer of 2013 at a cost of $135M. “Rebuilding Vee Quiva Casino is part of a strategic plan the Gila River Indian Community has set in place to refresh our casinos while ensuring the long-term sustainability of the Community and creating new job opportunities in Arizona,” says Anthony Villareal Sr., Casino Expansion Owners Team chairman.

After its reconstruction, Vee Quiva Casino will total nearly 175,000 SF — almost double its original size.

Further north, the Navajo Nation broke ground last March on Twin Arrows Casino outside of Flagstaff, its first casino in Arizona.

The 320,000 SF, $150M casino, scheduled to open in July, will include a hotel and conference center. General contractor is Hunt Construction and the architect is Friedmutter Group.

Some casinos, on the other hand, already have their cards on 74 | March-April 2012

the table. Casino Del Sol and Harrah’s Ak-Chin opened their newly renovated facilities in 2011.

The Pascua Yaqui Tribe renovated and expanded Casino Del Sol’s hotel and convention center in Tucson to the tune of $75M. The additions included 215 new rooms, a conference center, a parking structure and a spa. It is the second phase of the tribe’s ongoing hospitality and casino refurbishment project. McCarthy Building Companies served as GC and LEO A DALY was the architect.

McCarthy project manager Kurt Nyberg says construction went smoothly because the tribe first commissioned his company in 2003.

“What helped with this expansion is that the Casino Del Sol had gained building experience when both firms worked on the original casino project,” Nyberg says, “so the process was not entirely new from the owner’s perspective.”

Another big player in Arizona, Harrah’s Ak-Chin Casino and Resort, finished its hotel and restaurant renovations in July after 11 months of construction. Lead designer Jason Ploszaj of RSP Architects says the construction was vital, because the “hotel was turning away guests nightly.”

The expansion, a $20M, 5-story hotel tower, doubled the number of rentable rooms at the Maricopa resort.

“In order to better serve guests, Harrah’s decided that after more than 10 years of success, an expansion of 152 new hotel rooms was necessary to refresh the hotel experience,” Ploszaj says.

CONSTRUCTION IN INDIAN COUNTRY

REGISTER NOW You Can Consider Delta Diversified for Any Project with Confidence We are proud to be the electrical contractor for the Twin Arrows Casino and Resort the Navajo Nation is building east of Flagstaff as well as the full-service healthcare community built by the San Carlos Apache Tribe in Peridot. Whether it’s a hospitality venue, a state-of-theart healthcare facility or any other electrical need in the Southwest, you can always depend on Delta Diversified for the best electrical solutions on time and on budget.

Our Experience, Attitude and Enthusiasm Make the Difference.

Courtesy of Friedmutter Group & Navajo Nation Gaming Enterprise

Industrial | Commercial | Healthcare | Institutional Retail | Hospitality | Solar Energy

New Construction | Maintenance | Service 425 W. GEMINI DRIVE | TEMPE, AZ 85283 PHONE 480-831-0532 | FAX 480-838-1268

WWW.DELTADIV.COM Licensed in Arizona, Nevada, New Mexico and California

76 | March-April 2012

NEWSMAKERS

BY STEPHANIE GONZALEZ

Steven Schwab

Chuck Salt

» Sundt Construction hired Steven Schwab as project director to support business development efforts relating to civil and industrial construction. He will be based out of the Tempe office. Schwab brings three decades of design and construction experience. Sundt also announced the hiring of Chuck Salt as area manager. He will focus on mission critical facilities and corporate office projects. » D.P. Electric promoted Gabe Hernandez from senior project manager to vice president of operations. Hernandez brings more than 20 years of management experience as a subcontractor and general contractor. He will be responsible for oversight and management of the Project Management team, Field Superintendent and Safety Department. » Commercial Properties Inc. (CPI) announced the hiring of Matt Zaccardi. His areas of specialization include office, medical/dental and industrial properties. CPI also announced the hiring of Carl Cunningham. He specializes in listing and selling distressed commercial properties, and land for The Matt Zaccardi U.S. Bankruptcy Court, U.S. Small Business Administration, banks and private parties in Arizona.

Diane Haller

» Anthony Jeffers was named project manager at Tempe-based Johnson Carlier. He is the fifth new team member to join the company last fall. Johnson Carlier also announced the hiring of Michael Fischer (senior project superintendent) and Elizabeth Theim (project engineer).

» Quarles & Brady’s national law firm announced that it has named Diane Haller a partner in the firm’s Phoenix office as chair of its National Real Estate Practice. Haller has extensive experience in multiple aspects of commercial real estate development and serves on the boards of the Phoenix Community Alliance and Valley Partnership. » Grubb & Ellis announced that Ken Skinner has rejoined the company as a senior vice president, investment services. As a member of the Land Practice Group, he will focus on land sales. Skinner began his career with Grubb & Ellis in 1978. Most recently, he spent six years leading private investment and development opportunities in Arizona and New Mexico. » Colliers International announced that Michael Dupuy and Fletcher Perry have joined the Phoenix office as senior associates.

Dupuy and Perry specialize in office tenant representation with a strong emphasis on medical and healthcare-related users. The team previously was with GBC Investment Realty in Phoenix. » Jennings, Haug & Cunningham announced that six of the firm’s attorneys were named to The Best Lawyers in America® in the areas of Construction Law, Construction-Litigation and Arbitration. The firm’s attorneys recognized include Mark Barker, James Csontos, William Haug, Kim Lough, Edward Rubacha and Chad Schexnayder.

» Dan Pierce was named president of Kitchell Contractors, Inc. one year after being promoted to senior vice president. He takes the helm of KCI as it closes its best year in the company’s 60-year history. Pierce has been instrumental in building the company’s healthcare division, nurturing the medical technology planning division, FDI Planning Consultants, Inc. and expanding Kitchell’s Virtual Construction group. » Alliance Project Advisors hired Beth Scarano as vice president of Project and Developments Services Market in Phoenix. Scarano will be responsible for positioning and branding APA in the Phoenix market, expanding and developing client relationships and new business development. She has more than 25 years in the design and construction industry.

Tom Richards

» Voit Real Estate Services added Tom Richards to its brokerage team as an investment sales specialist.

Richards brings with him extensive knowledge in all areas of the Phoenix retail, office and industrial markets.

Jeff Seaman

Bryce Terveen

» CBRE announced the promotion of Jeff Seaman and Bryce Terveen to the position of vice president. Seaman has more than seven years of industry experience; Terveen joined CBRE in 2005. » Adolfson & Peterson announced that Quinn Gormley will direct the firm’s Multi-Family Housing efforts within the Southwest.

He has 17 years of commercial real estate development experience. » Rossmar & Graham announced it has appointed Kenneth Olson as senior VP over its Lifestyle and High Rise Division. Olson brings more than 25 years of management experience.

77

CONSTRUCTION: PROJECT NEWS

Phoenix-based FBI personnel will call this 210,202 SF building at 21711 N. 7th St. home for the next 20 years.

 NEW CLASS A OFFICE BUILDING TO RISE IN CHANDLER

 KITCHELL, ORCUTT | WINSLOW TO CONSTRUCT NEW PATIENT TOWER

San Diego-based Douglas Allred Company plans for the second phase of Allred Park Place with construction of a 92,109 SF, 2-story office building in Chandler. The project, which broke ground at the end of January, is the first speculative office construction to take place in the greater Phoenix area since 3Q 2009. Mark Krison and Scott German of CBRE’s Phoenix office will handle leasing of the Class A office building. The CBRE team also has the marketing assignment for Allred Park Place Phase I, three Class A office buildings totaling 261,860 SF, of which 52,742 SF is available.

Balmer Architectural Group of Phoenix is the architect; Willmeng Construction of Mesa is the general contractor. Expected completion is 4Q 2012. Future plans for Allred Park Place include construction of several additional office buildings, which will eventually exceed 1 MSF.

Kitchell and Orcutt | Winslow have been selected to design and construct a new patient tower at Chandler Regional Medical Center, a member of Dignity Health. The $125M project will expand capacity, enhance key service lines, and drive new office and medical development in the East Valley. The 5-story inpatient tower is anticipated to remove capacity constraints with the addition of 96 in-patient beds. Site work began last December with vertical construction of the tower scheduled to begin in 4Q 2012. At the peak of construction, it is estimated that the project will have a workforce of more than 200. It is expected to be complete by 3Q 2014.

The patient tower follows a recently completed $10M cardiovascular department expansion, also built by the team of Kitchell and Orcutt | Winslow, including two cardiac catheterization laboratories, an additional nine-bed pre/post cardiac short stay unit and ancillary support infrastructure.

 NEW PHOENIX FBI OFFICE BUILDING OPENS ITS DOORS The U.S. General Services Administration (GSA), the U.S. Department of Justice Federal Bureau of Investigation (FBI), and commercial builder/developer Ryan Companies US, Inc. officially opened the 210,202 SF facility that Phoenix-based FBI personnel will call home for the next 20 years. The facility at 21711 N. 7th St. is built and owned by Ryan Companies and replaces the FBI’s four previous Phoenix locations, allowing expansion and consolidation of agency operations and personnel through a long-term lease agreement. The project created more than 1,500 construction jobs and was completed within more than 500,000 “safe man” hours. The GSA required that the facility achieve a minimum of LEED Silver certification. Ryan Companies used Energy Savings Performance utility agreements to achieve, maintain and/or exceed Energy Star benchmarks.

78 | March-April 2012

 CHICAGO CUBS’ SPRING TRAINING FACILITY UPDATE With the spring training facility for the Chicago Cubs scheduled for completion in 3Q 2013, there is much speculation about what the stadium will look like and how the new general manager of the Cubs will make his mark. Last October, Jed Hoyer was named GM of the Cubs. As his new role, Hoyer will have a “tremendous amount of impact in the design of the facility,” says Bob Hart, vice president of Hunt Construction, the project’s general contractor. (Populous is the architect). As for design of the stadium, there is no word on whether the facility and its surrounding area will have similarities to Wrigley Field or Wrigleyville. “The conceptual design has not yet been determined,” Hart says. “We are expecting the bulk of the design to start in the near future and will last (until) the middle of

CONSTRUCTION 2012.” One major decision that has been made regarding the new stadium is that the Arizona State University baseball team will be entering in a contract with the City of Mesa to share the facility with the Cubs. ASU and the Cubs plan to begin play there in 1Q 2014.

 SRP, SUNPOWER TO BUILD SOLAR PLANT ON ASU POLY CAMPUS SRP, ASU and SunPower Corp. have agreed to build a 1MW solar photovoltaic power plant at ASU’s Polytechnic campus in Mesa. The facility will be the first commercial deployment of SunPower C7 Tracker technology, a solar photovoltaic tracking system that concentrates the sun’s power seven times designed to achieve the lowest levelized cost of electricity (LCOE) for solar power plants. SunPower is engineering and building the plant on the SEC of the Polytechnic campus. Under a purchase-power agreement, SRP will buy the entire output of the solar plant, and in a separate agreement, ASU will purchase all of the energy attributable to the plant for its use at the campus. Construction is contingent on a number of factors, including receipt of all applicable permits.

 $12M VETERANS INITIATIVE APARTMENTS BREAK GROUND Madison Pointe Apartments, a $12M, 79,785 SF housing project designed to give veteran residents convenient access to medical care and veteran services, broke ground in February at 4134 N. 9th St. in Phoenix. Developer is the NRP Group; general contractor is NRP Contractors LLC; and architect is Todd & Associates. Colliers International will provide brokerage services. The project was financed with funds from Bank of America, the Arizona Department of Housing, and the City of Phoenix. Madison Pointe will be a short walk to the Carl T. Hayden VA Medical Center, Vietnam Veterans of American and the U.S. Department of Veteran Affairs. Estimated completion is 4Q 2012.

 DPR, WINSLOW | ORCUTT TEAM UP FOR HOSPITAL LOBBY RENOVATION The lobby at John C. Lincoln North Mountain Hospital is undergoing a $4M renovation project with DPR Construction as the general contractor. Architect for the 12,840 SF renovation is Orcutt | Winslow. The project consists of exterior and interior renovation and expansion of the existing main entrance and lobby. The area will include a welcome/greeting desk, admitting office, gift shop, new coffee bar, for service area, along with an indoor/outdoor meditation area. Expected completion is 2Q 2013.

 MCCARTHY COMPLETES 17MW SOLAR STATION FOR APS McCarthy Building Companies recently completed the $14.3M, 145-acre APS Cotton Center Solar Station in Gila Bend. The project involved installation of the largest photovoltaic system in Arizona.

It included a racking system, modules and electrical system for the 17MW facility. Subcontractors included Blount Contracting, Buesing Corp., Schuff Steel, Ironco and Delta Diversified.

CONSTRUCTION P&Z  CITY OF AVONDALE A draft of the City of Avondale General Plan 2030 update is available online at avondale.org/generalplan. The updated General Plan is scheduled for public vote on the Avondale Ballot Aug. 28, 2012.

 CITY OF MESA The City of Mesa is updating its impact fee schedule as required

by SB 1525. The updating process will continue until Aug. 1, 2014.

The first stage of this update reduces impact fees by 10%, removing fees that do not meet the definition of “necessary public services.”

 CITY OF PEORIA The City of Peoria is updating its impact fee schedule as required

by SB 1525. The updating process will continue until Aug. 1, 2014.

The first stage of this update reduces non-utility impact fees by 9% in the North District, and 21% in the Central District, removing fees that do not meet the definition of “necessary public services.” The non-utility fees in the South District have increased by 7%.

 TOWN OF PARADISE VALLEY The Town of Paradise Valley Town Council approved the 2012 General Plan update, and the plan will be voted on by the public at the March 13, 2012, election identified as “Proposition 438.” For more information about the General Plan update, visit paradisevalleyaz.gov.

The Town is exploring the option of adopting the International Code Council 2012 building codes. It is also looking at adoption of the International Green Construction Code as a voluntary program.

 CITY OF SCOTTSDALE The City of Scottsdale is conducting a study which may result in the change of City water and sewer rates. For 2012, the City does not anticipate a rate increase for water service, but proposes a 3% rate increase for sewer service. For more information, visit scottsdaleaz. gov/water/rates. Recent text amendments to the zoning ordinance include, (1) aligning temporary sign regulations with 2011 State law, (2) vehicles and dealerships, and (3) elimination of the Volume development standard for the Commercial Office District. For more information, call Kira Wauwie at (480) 312-7898.

 MARICOPA COUNTY The Maricopa County Zoning Ordinance is being amended, updating protected development rights within precise plans of development and final plats, and requiring a plan of development submittal concurrent with application for a military compatibility permit within the Military Airport and Ancillary Military Facility Overlay Zoning District. For more information, visit maricopa.gov/planning.

P&Z column by Dave Coble and Karl Woodard, MEUP, with Coe & Van Loo Consultants Inc. cvlci.com 79

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 BY BRIAN FISKE

Bill Molloy

Managing Director, Ensemble DevMan of Arizona Born in Brooklyn, N.Y. Attended Cornell University, where he received B.A. in 1972; and MBA and MHA in 1974 Founded the DevMan Company, a medical and healthcare real estate brokerage firm, in 1981; merged his company with Ensemble Real Estate in 2008.

Accomplishments

Being a member of Cornell’s 1971 NCAA championship lacrosse team and completing more than 20 marathons, including Boston and New York.

Responsibilities

Molloy leads the company’s brokerage operations in five states and is responsible for various aspects of new business development.

What would people be surprised to know about you?

Competing with my border collies in the sport of dog agility. I have won the North American dog agility competition and qualified and competed in more than half a dozen national championship events. When my youngest dog, Cork, is not competing, she volunteers for a local hospice as a therapy dog.

Favorites

SPORTS TEAMS: Arizona Cardinals ACTIVITIES/ DESTINATIONS: Anything outdoors. Some of his favorite moments include climbing the Grand Tetons and Mt. Rainier, crosscountry skiing around Mt. McKinley in winter, and rafting the Grand Canyon.

Advice

RECEIVED: It’s not the places you see … it’s the people you get to know.

TO SHARE: Find a speciality area such as retail, office, land, and focus on it.

80 | March-April 2012