JULY-AUGUST 2018
MOST
INFLUENTIAL
WOMEN 2018
IIDA Pride Awards p. 48
|
Arizona Builders Alliance p. 57
This one is special
W
hile our goal is to provide market-leading, engaging coverage in each and every publication we do, this current edition of AZRE really stands out. Personally, it stands out because it is the first edition of AZRE that I had a hand in from start to finish. Coming into this position mid-stream of our May-June edition was head-spinning. However, seeing the planning and production process all the way through eased any instability I may have felt. It also stands out because we unveil our latest Most Influential Women in Commercial Real Estate list, a true collection of leaders, innovators and groundbreakers. This project is a highlight for our company each year because of the outstanding professionals that we get to meet while working on it. This year’s group is no exception and was a treat to collaborate with. This edition also features our Arizona Builders Alliance supplement, highlighting the people, projects and issues that shape the construction industry in our growing state. Another thing that makes this edition pop is the International Interior Design Association’s PRIDE Awards. We highlight the winning projects and people that make our working and living spaces look great and function even better. We also take a look at some of the technological innovations in construction, as well as recap what was a busy legislative session down at the Arizona Capital. As you read this edition, please feel free to share any thoughts, or even send us some early nominations for next year’s Most Influential Women list. We appreciate the feedback.
President and CEO: Michael Atkinson Publisher: Cheryl Green Vice president of operations: Audrey Webb EDITORIAL Editor in chief: Michael Gossie Associate editors: Steve Burks | Jesse A. Millard Interns: Noelle Schon Contributing writers: Mark Minter | Suzanne Kinney Adrian Marsh | Tim Lawless | Cheryl Lombard Peter Madrid | Keyvan Ghahreman ART Art director: Mike Mertes Design director: Bruce Andersen MARKETING/EVENTS Marketing & events manager: Cristal Rodriguez Marketing specialist: Gloria Del Grosso Marketing designer: Justie Lim Marketing intern: Brenda Sanchez OFFICE Special projects manager: Sara Fregapane Executive assistant: Mayra Rivera Database solutions manager: Amanda Bruno AZ BUSINESS MAGAZINE Senior account manager: David Harken Account managers: April Rice | Tom Patterson AZRE | ARIZONA COMMERCIAL REAL ESTATE Director of sales: Ann McSherry AZ BUSINESS LEADERS Director of sales: Sheri Brown RANKING ARIZONA Director of sales: Sheri King EXPERIENCE ARIZONA | PLAY BALL Director of sales: Donna Roberts
Steve Burks Associate editor, AZRE steve.burks@azbigmedia.com
HOME & DESIGN Director of sales: Kim Bailey AZ BUSINESS ANGELS Director of sales: Cindy Kurtze AZRE: Arizona Commercial Real Estate is published bi-monthly by AZ BIG Media, 3101 N. Central Ave., Suite 1070, Phoenix, Arizona 85012, (602)277-6045. The publisher accepts no responsibility for unsolicited manuscripts, photographs or artwork. Submissions will not be returned unless accompanied by a SASE. Single copy price $3.95. Bulk rates available. ©2018 by AZ BIG Media. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without permission in writing from AZ BIG Media.
2 | July-August 2018
“ LIMITLESS.
GENUINE. ESTABLISHED.
– Kim Moyers, City of Chandler
LGE Design Build has been perfecting the conception and construction of the Valley's most iconic projects for more than 23 years. But don't take our word for it. Listen to how clients, influencers and officials define our work. And there's more to come as we plan out LGE's thrilling future. Look to our next defining moment this spring.
CONTENTS
FEATURES 2 Editor’s Letter 6 Trendsetters 10 Executive Profile 12 After Hours 14 New to Market 16 Big Deals
20 Legislative Update
48
27 Most Influential Women in Commercial Real Estate
38 Construction Technology 48 IIDA Pride Awards
16
57 Arizona Builders Alliance
57
On the cover: See page 27
4 | July-August 2018
GO TO store.azBIGmedia.com to purchase subscriptions, digital issues and plaques
38
TRENDSETTERS
E H T G N I KEEP
“People want retro tied into a modern look and you just can’t get that with LED’s,” said Identity Sign Group sales manager Shawn Britson. “I would push neon signs 10 times out of 10. Neon is so much cleaner.” Identity Sign Group, with Paisley as the driving force, has maintained its neon sign workshop and has been involved in neon projects all over the Valley, including the renovation of the Uptown Plaza monument signs. Paisley estimates that there are fewer than 150 shops that still produce hand-crafted neon signs in the United States. Paisley laments that neon sign production is becoming a lost art. Few people are interested in learning the intricate methods involved in heating and shaping the glass, injecting the metals and gases and sending electricity through it to create the unique, colorful glow. Paisley said he is fortunate that Identity
N O E N HT ON LIG
The glow from a neon sign cannot be replicated, and it appears that after years of trying to find the next neon replacement, builders and designers are re-discovering the appeal of the glowing tubes of light. Harkins Theatres, undergoing a major re-branding and renovation effort, is incorporating neon signs and accents, both on the interior and exterior of its theaters. The man in charge of creating all of that neon is Corey Paisley of Identity Sign Group in Phoenix, one of the few neon sign makers in the state.
Sign Group’s owner, Scott Mehlhoff, and Britson still believe in the appeal and value of neon signs. “Neon is eye candy,” said Paisley. “You’re not going to get the same colors with LED that you can get with neon.”
2018 AMA Tribute Award Winners Each year, the Arizona Multihousing Association gathers at its annual AMA Tribute Award Gala to celebrate the successes of the teams, individuals, volunteers and communities that are the best in the apartment industry. The winners were judged in a competitive process and the twenty-plus winners were selected from hundreds of nominations from around Arizona. Below are some of the Tribute Awards winners. A full list of winners can be found online at azbigmedia.com Industry Partner – Statewide: Dallin Tippetts, Rainforest Plumbing & Air Volunteer of the Year – Statewide: Noelia Doherty, P.B. Bell Maintenance Supervisor 200+ Units: Mandy Daniels, Greystar Real Estate Partners, LLC Assistant Manager: Stephanie Cook, Fairfield Residential Affordable Community of the Year: Madison Heights, Dunlap & Magee 6 | July-August 2018
Renovated Community of the Year: Madison Grove, Shelton-Cook Real Estate Services Developers Award for Best Community Design (Garden): District Lofts, Mark-Taylor Residential Developers Award for Best Community Design (Mid/Low Rise): Optima Kierland, Optima Realty Best Team & Community 2010-2017: Muse, Lennar Multifamily Communities, LLC Best Team & Community OTV: Legacy at Prescott Lakes, Shelton-Cook Real Estate Services
District Lofts
From REIT to RESTAURATEUR
Phoenix has
BIG POTENTIAL
in Central Business District According to a study commissioned by Commercial Cafe, Phoenix has plenty of room for development in its central business district. Phoenix ranked fifth among 25 urban areas included in the study, which tracked how much vacant, unimproved property was available in these urban core areas. The study also included a survey of people living and/or working in those 25 cities and asked them what their CBD needed. Tops on the list, according to the survey, were housing, homeless shelters, parks and community centers.
Total Vacant Land in Central Business District
(In Acres) 1. Dallas 86.37 2. Las Vegas 75.16 3. Austin 70.72 4. San Antonio 42.39 5. Phoenix 31.03 6. Minneapolis 27.13 7. Indianapolis 24.69 8. Salt Lake City 22.41 9. Atlanta 22.02 10. Tucson 18.11
Total construction in Central Business District since 2013
(In square feet) 1. New York 29,616,844 2. Dallas 8,506,240 3. Chicago 6,979,051 4. Houston 6,529,568 5. Los Angeles 4,973,752 12. Phoenix 1,592,330 25. Tucson 25,736
You could say Kellie Pruitt has seen it all. After starting her career in law enforcement, she moved into public accounting, eventually earning a CFO role and helping to list Healthcare Trust of America on the New York Stock Exchage. Then, after a month of “retirement,” she jumped into the restaurant business and opened PNPK Craft Slider+Wine Bar in Scottsdale, a dog-friendly spot focused on small bites and everything in a flight. So how is running a REIT different from running a restaurant? According to Pruitt: “Running a REIT involves managing investors, buildings, tenants and employees whereas the restaurant business is entirely focused on the customer experience – the atmosphere of the restaurant, the quality and value of the food and the excellent customer service provided by the staff.” “With a REIT, you are constantly reporting results to the public and investors, whereas with a restaurant, others are constantly reporting to you about their experience, preference, likes and suggested changes.” “Financial markets and investors determine how fast a REIT grows. But for restaurants, our
entire existence relies on customers.” “And perhaps most notably, running a REIT is a national business with no requirement for community involvement. Restaurants, however, must and should focus on being an authentic part of the fabric of the community they are in in order to build loyal, returning customers.” Visit Pruitt at PNPK daily from 11 a.m. to 10 p.m.
Office supply wave hitting the Valley According to a report from CBRE, there is nearly 3.1 million square feet of office space currently under construction in the Phoenix market, 2.5 million square feet of which is in the southeast valley. The majority of this new space will come online in 2019. Here are the largest projects currently underway in the Valley. Project, City Speculative or Build to Suit Orbital ATK, Chandler BTS The Grand at Papago Park, Tempe SPEC Freedom Financial Buildings 1 and 2, Tempe BTS Allred Park Place, Chandler SPEC The Watermark Tempe, Tempe SPEC Chandler Viridian, Chandler SPEC Block 23 at Cityscape, Phoenix SPEC Chandler Freeway Crossing, Chandler SPEC Discovery Business Campus, Tempe BTS SPEC Chaparral Commerce Center, Scottsdale Camelback Collective, Phoenix SPEC One Chandler Corporate Center, Tempe SPEC
Size 355,734 SF 352,481 SF 300,000 SF 270,000 SF 270,000 SF 249,217 SF 206,250 SF 153,370 SF 150,000 SF 120,000 SF 118,500 SF 114,000 SF 7
TRENDSETTERS Rommie Mojahed comes through in clutch As a man with cerebral palsy who was told he would not walk past the age of 18, Jason Rodie was familiar with overcoming obstacles. The latest obstacle Rodie faced came when the business he built was beset by property zoning issues and was unable to open. Rodie’s idea for Creating Vitality was to create a gym and rehabilitation center where influential athletes can work out alongside someone with a physical challenge. And just when it seemed like everything that went into his dream business was lost, in stepped Rommie Mojahed. As the director of leasing and sales investments for SVN Desert Commercial Advisors, Mojahed is a fine-tuned player in the commercial real estate game. He needed just a few days to help Rodie locate and lock in a new and larger space for Creating Vitality, as well as arrange for Volken Academy Movers to transport all of Rodie’s equipment when other movers were unable to come through. “Working with Rommie was awesome,” Rodie said “He took the time to find us a spot to ensure we could do both training and rehabilitation at the same location.” To learn more about the work Creating Vitality is doing in its new location at 2388 N. Alma School Road in Chandler, visit vitalitytrainingrehab.com.
Jason Rodie
MOVING IN
Phoenix is the market most likely to receive big inflows of new residents in the next year from expensive coastal markets, based on a new migration report from real estate brokerage Redfin. With these new residents, economic growth and rising home prices will likely follow, as experienced in Seattle and Denver. Phoenix was a top destination for both Seattle and Denver last quarter, and had the largest net gain of Redfin users looking to move to the area from elsewhere. This was up significantly—34 percent—from a year ago. Phoenix is also much more affordable, with a median home sale price of $257,000 as of April, compared to $415,000 in Denver and $580,000 in Seattle.
10 TOP
METROS
Net Inflow of Users and Their Top Origins
Rank, metro*
Net Inflow: †Q1 2018
Net Inflow: Q1 2017
Portion of Searches from Users Outside the Metro
Top Origin
Top Out-of-State Origin
1. Phoenix
4,117
2,744
33.6%
Los Angeles, CA
Los Angeles, CA
2. Sacramento, CA
3,169
4,089
39.5%
San Francisco, CA
Seattle, WA
3. Las Vegas, NV
2,925
2,476
43.6%
Los Angeles, CA
Los Angeles, CA
4. Atlanta, GA
2,713
1,506
26.3%
New York, NY
New York, NY
5. Miami, FL
2,295
1,202
27.7%
New York, NY
New York, NY
6. Austin, TX
1,807
1,189
26.7%
San Francisco, CA
San Francisco, CA
7. Dallas, TX
1,556
2,071
23.0%
Los Angeles, CA
Los Angeles, CA
8. Portland, OR
1,511
1,556
17.4%
San Francisco, CA
San Francisco, CA
9. Tampa, FL
1,187
878
43.9%
Washington, DC
Washington, DC
10. San Diego, CA
1,159
1,109
24.3%
Los Angeles, CA
Seattle, WA
*Combined statistical areas with at least 500 users in Q2 2018 †Negative values indicate a net outflow; among the one million users sampled for this analysis only 8 | July-August 2018
The Ultimate Vending Machine Tempe-based Carvana opened its largest car vending machine in Tempe along the Loop 202 near Scottsdale Road this June. This is the e-commerce platform’s 12th car vending machine, and its first in the firm’s home state. The car vending machine works as a pickup site for customers who purchased one of Carvana’s thousands of used cars through its e-commerce platform. The car vending machine, “is a pretty unique structure on its own,” says Ryan Keeton, Carvana co-founder and chief brand officer. “When you (have the structure) fully glassed in, and when you put 34 cars in it, and you light it up in a really cool way, (the car vending machine) definitely makes a statement.” When Carvana came up with the idea of a car vending machine, they didn’t want to create just a dealership in the sky, Keeton says. Carvana wanted to create a unique experience for customers. Now, Carvana customers in Arizona can pick up their cars from the vending machine. They only have to arrive on site, get their commemorative coin and put it in the slot to watch the car descend like they would watch a bag of chips or candy bar in a regular vending machine. Only this time, it’s their new ride.
PHOTO BY MIKE MERTES, AZ BIG MEDIA
9
EXECUTIVE PROFILE
Building business
Industry veteran George Forristall oversees first development for Mortenson with opening of Hampton Inn & Suites in Downtown Phoenix By PETER MADRID
A
s new buildings continue to rise among the downtown Phoenix skyline, a familiar name is leading his firm’s foray into strategically-based development in the Valley and across the Southwest – George Forristall of Mortenson. Mortenson recently promoted Forristall to director of real estate development to oversee those services in Phoenix. Forristall, a 20-year Mortenson veteran, previously worked in numerous leadership positions for the company’s construction business. The move has produced results. Joining the high-rise buildings in downtown Phoenix is an 11-story, 210-key Hampton Inn & Suites, the first Valley development project for Mortenson. It opened this spring at the intersection of N. 1st and E. Polk streets near entertainment and businesses, and is south of the downtown campus of Arizona State University. “Mortenson is really bullish on downtown Phoenix and saw the need for a limited-service line hotel,” Forristall said. “Once we secured the flag, we pursued the project. Mortenson has worked with the Hilton
10 | July-August 2018
product line nationally and we’re extremely happy with it.” Once the equity was secured, Mortenson began looking for the right location. The process resulted in the Hampton Inn & Suites’ newest Valley property. “We are seeing very favorable market fundamentals in Metro Phoenix being fueled by accelerating job, income, and population growth,” said Mortenson vice president of real estate development Nate Gundrum. “Mortenson offers a unique value proposition. The market has responded well to this value proposition, and with George leading development efforts, we have made significant inroads across geographic and market sectors throughout the Valley.” Forristall’s diverse background gives him the right perspective for his position. While on the construction side, he oversaw projects that included a wind farm in Hawaii, a data center in Tokyo, and a ski condo in the Colorado mountains. “I’m always open to a new challenge,” Forristall said. “My prior position has helped me grow into what I’m
PHOTO BY MIKE MERTES, AZ BIG MEDIA
doing now. I can take things that I learned while building a ski condo and apply them to building a wind farm. These experiences provide a diverse background to the solution set. “That’s what is unique to development; it’s a very creative process. There are a lot of barricades to getting development done. You are successful when you can take a different approach to the solutions,” Forristall said. Mortenson started its national development group in 1975 to provide another service for its clients, Forristall explained. It put the firm in position to provide turnkey developments, lease back opportunities, or act as construction manager. “We started to pursue real estate development here in earnest two years ago as the market started to recover after the Great Recession,” Forristall said. “The fundamentals of population growth and the drive for more density were in our favor. The new dynamic is people want to be downtown in an urban area. Ours was more of a business core and is now evolving into a live-work-play core.”
AFTER HOURS
Break time Here is what 10 female leaders in commercial real estate like to do with their time away from work By MICHAEL GOSSIE
W
omen in the commercial real estate sector have to work hard to succeed in the maledominated industry. So when it’s time to relax, some of Arizona’s most successful women have found a variety of ways to unwind away from work. In honor of this being the “women’s issue” of AZRE, here is how 10 female leaders in commercial real estate like to loosen up when they are away from the office. Tracy Altemus, CCIM, executive vice president, Ensemble Real Estate Solutions: “When I turned 40, I decided to run a marathon. I ran the Los Angeles Marathon that year. That was the first and last because I’m slow and it was plain old tiring.” Kelley Ahrens, CCIM, vice president, CBRE: “I have been somewhat of a daredevil. I raced an Indy car at the Texas Motor Speedway, surfed a killer wave in St. Martin and learned to ride a Harley Fatboy motorcycle.” Lorraine Bergman, president and CEO, Caliente Construction: “I enjoy spending quality time with family and friends, especially my grandchildren. We are very active and enjoy outdoor activities: hiking, biking, swimming and exploring the Arizona wilderness on our ATVs. Traveling the world is a close second.” Sue Cannon, managing director, Cushman & Wakefield: “I enjoy running in the morning to start my day, hiking with my husband on the weekends and relaxing at home.” Carla Consoli, partner and practice group leader, Lewis Roca Rothgerber
12 | July-August 2018
Christie: “I enjoy and can actually complete home improvement projects. Fix the kitchen sink? Rewire a light switch? Hang a door? I’ve done it. And no one got hurt.” Kimberly Davids, general manager, The Weitz Company: “I enjoy traveling to exotic locations and scuba diving with my husband. Words cannot express the majestic beauty of the ocean and the adrenaline rush felt when encountering a sea creature or swimming through a massive reef. It is truly humbling to be a visitor in the ocean’s habitat.” Sharon Harper, chairman, president and CEO, Plaza Companies: “My favorite activity is to spend time with my children and grandchildren, which also gives us the opportunity to travel a lot because they are spread around the world. We also enjoy spending our free time at our ranch in the Verde Valley.” Terry Martin-Denning, CEO and designated broker, NAI Horizon: “I enjoy doing almost every outdoor activity. My most relaxing and rewarding hobby is working in my backyard garden and hanging out with my chickens. I love to cook. Creating my own farm-to-table experience is very rewarding.” Shawn Rush, principal, Corgan: “I do my best work with a pair of garden clippers in my hand. I’m a farmer at heart, so when I’m not working you will find me growing things. It’s a beautiful gift being outdoors, working with your hands and seeing something you nurture bloom.” Alisa Timm, regional director of management, Ryan Companies: “Golfing, skiing, hiking and reading all are top of my list. Spending time outdoors is key to a good day for me.”
Tracy Altemus
Kelley Ahrens
Lorraine Bergman Sue Cannon
Carla Consoli
Kimberly Davids
Sharon Harper
Terry MartinDenning
Shawn Rush
Alisa Timm
Get the Deal Done Our team of nationally-recognized real estate attorneys provides a broad range of real estate services to clients across all industries. We offer a full range of services covering every aspect of real estate transactions. The result is the right combination of business advice and legal focus to get the deal done.
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13
NEW TO MARKET A
D
E
MIXED-USE A MESA MORMON TEMPLE REDEVELOPMENT DEVELOPER: City Creek Reserve Investments GENERAL CONTRACTOR: Porter Brothers Construction ARCHITECT: Dale Gardon Design LOCATION: 101 S. Lesueur, Mesa SIZE: 18,000 SF visitors center, 250 apartments, 12 townhouses, 12,500 SF retail space, underground parking with 450 stalls. VALUE: Unknown START: September 2018 COMPLETION: Late 2020 14 | July-August 2018
MULTIFAMILY B CRESCENT MIDTOWN DEVELOPER: Crescent Communities GENERAL CONTRACTOR: Chasse Building Team ARCHITECT: Davis Partnership (Denver, CO) BROKERAGE: Mike Lieb LOCATION: 3rd Street and Earll Drive, Phoenix SIZE: 335 Units VALUE: TBD START: November 2018 COMPLETION: November 2020
MEDICAL OFFICE C MERCY MEDICAL COMMONS II DEVELOPER: MedProperties Group GENERAL CONTRACTOR: Balfour Beatty ARCHITECT: Ware Malcomb BROKERAGE: Colliers International LOCATION: 3591 S. Mercy Rd., Gilbert SIZE: 56,000 SF PROJECTED DEVELOPMENT COST: $20 million START: 3rd Quarter 2018 COMPLETION: Estimated November 1, 2019
B
C
F
HEALTHCARE D THE MANOR VILLAGE AT DESERT RIDGE DEVELOPER: The Statesman Group GENERAL CONTRACTOR: TBD ARCHITECT:Â Biltform LOCATION: Deer Valley Road between 52nd and 56th streets SIZE: 287,000 SF (196 suites) VALUE: $50 million START: Winter 2018 COMPLETION: Early 2020
INDUSTRIAL E LOTUS PROJECT DEVELOPER: Conor Commercial Real Estate GENERAL CONTRACTOR: McShane Construction Company ARCHITECT: Deutsch Architecture Group and DLR Group (Phase I) BROKERAGE: Cushman and Wakefield LOCATION: Loop 202 and Kyrene Road in Chandler SIZE: 470,000 SF in Phase I and 216,000 SF projected in Phase II VALUE (ESTIMATED COSTS): Phase I budget is approx. $45 million START: September 2018 (Phase I) COMPLETION: September 2019 (Phase I)
MEDICAL OFFICE F AKOS MEDICAL CAMPUS DEVELOPER: National Cardiovascular Management, LLC GENERAL CONTRACTOR: Venn Construction ARCHITECT: Devenney Group BROKERAGE: NAI Horizon LOCATION: 10825 W. McDowell Rd., Avondale SIZE: 140,000 SF (two 68,000 SF buildings) START: July 2018 COMPLETION: March 2019
15
Arizona’s tallest building sells for $78.8 million By JESSE A. MILLARD
16 | July-August 2018
C
hase Tower, Arizona’s tallest building, was recently sold in a trustee sale for $78,800,000 to a partnership managed by Wentworth Property Company. Wentworth Property Company has plans to renovate Chase Tower and is putting together a team and designs for the 724,000-square-foot building. “We are big believers in downtown Phoenix. In fact, we recently moved our corporate offices into a downtown building we bought and renovated. We can’t imagine a building we would rather own in this
vibrant urban core than Chase Tower,” states Jim Wentworth, principal with Wentworth Property Company. Wentworth Property Company aims to continue the momentum of downtown Phoenix with its Chase Tower renovations
by restoring the tower to the “highest level of Class A buildings in the region.” Downtown Phoenix’s food and culture scene has been resurging for over a decade, attracting many people to move to the area. Lately, offices have been continuing the resurgence with assets like Renaissance Square undergoing renovations. Now, Chase Tower will become the latest office property to receive renovations. Wentworth states that this opportunity to renovate Chase Tower shows its belief that downtown Phoenix’s ongoing growth and revitalization is just the beginning for the area. The company states it’s excited to play a role in attracting more investors to downtown Phoenix as the area grows through its Chase Tower
acquisition and renovation. The 40-story Chase Tower is located in the heart of downtown Phoenix at 201 N. Central Ave. and was officially acquired by Phoenix — 201 North Central Avenue Property LLC. The parking garage across the street from Chase Tower was also included in the sale. Chase Tower, originally called the Valley Center, opened in 1972. Los Angeles-based architects Welton Becket & Associates (Ellerbe Becket) designed the tower with Phoenix-based architecture firm Guirey, Srnka, Arnold & Sprinkle. The Henry C. Beck Company was the contractor on Chase Tower’s construction. In 2007, Chase Tower was sold for $166.935 million to New York-based Crystal River Capital, according to Business Real Estate Weekly of Arizona.
Biltmore Resort sells for $403M
T
he Arizona Biltmore, host of every president from Herbert Hoover to George W. Bush, recently sold for a reported $403 million. The iconic resort, that first opened its doors in 1929, was procured by Blakstone Real Estate Advisors. It’s the largest real estate private equity company and is based in New York. Business will resume as normal at the Waldorf Astoria resort, according to a spokesperson. The Arizona Biltmore was designed by Albert Chase McArthur who brought Frank Lloyd Wright onto the project as a consultant. The resort was built entirely with “Biltmore Block,” a type of pre-cast block made from the surrounding desert’s sand, which drew inspiration from the base of palm trees. Shortly after opening, the Wrigley Family came to own the Biltmore and added its pool where Irving Berlin would write many of his famous songs, including “White Christmas.”
PHOTO BY MIKE MERTES, AZ BIG MEDIA
17
MULTIFAMILY/SALES
$95.1M | 555,023 SF
HANOVER MILL AVENUE 101 W. 5th St., Tempe BUYER: Goldman Sachs Asset Management LP SELLER: The Hanover Company BROKER: CBRE
$81.3M | 383,860 SF
CAPRI ON CAMELBACK 5115 N. 40th St., Phoenix BUYER: TIAA-CREF Investment Management LLC SELLER: The Blackstone Group BROKER: CBRE
$75.1M | 449,459 SF
GALLERIA PALMS 1600 W. La Jolla Dr., Tempe BUYER: TruAmerica Multifamily Inc. SELLER: AEW Capital Management BROKER: CBRE
$69.3M | 150,000 SF OLYMPUS STEEL YARD
155 E. Frye Rd., Chandler BUYER: Olympus Property SELLER: N/A BROKER: Marcus & Millichap
$64.8M | 357,424 SF
THE MET AT FASHION SQUARE 1 N. Hearthstone Way, Chandler BUYER: Bel Chandler LLC SELLER: Chandler Apartments LLC BROKER: Marcus & Millichap
RETAIL/SALES
$26M | 89,804 SF
THE BOARDWALK AT ANDERSEN SPRINGS 1949-1979 W. Ray Rd., Chandler BUYER: Westwood Financial SELLER: West Valley Properties BROKER: Cushman & Wakefield
$15.6M | 300,000 SF PHASE II 1004 N. Promenade
$11.3M | 90,496 SF MESA COMMONS
$14.8M | 100,812 SF GLENDALE CENTER
$8.65M | 50,000 SF CROSSROADS TOWNS CENTER
Pkwy., Casa Grande BUYER: Lamar Companies SELLER: Macerich Company BROKER: N/A
5016-5080 W. Olive Ave., Glendale BUYER: Glendale Center LLC SELLER: West Valley Properties BROKER: Phoenix Commercial Brokers
18 | July-August 2018
10603 E. Apache Trail, Apache Junction BUYER: Loren Worthington SELLER: PF Properties Mesa Commons LLC BROKER: N/A
2630 E. Germann Rd., Chandler BUYER: Southcenter Partners LLC SELLER: Vestar CTC Chandler Phase 3, LLC BROKER: N/A
It’s the big deals and the brokers who close them that make the market an interesting one to watch. Here are the top notabe sales for the months of April and May. Sources: Daniel Zawisha at Cushman & Wakefield Research.
OFFICE/SALES
$33.51M | 135,585 SF BUILDING A 5601 N. Pima Rd., Scottsdale
BUYER: Griffin Capital Essential Asset REIT, Inc.
SELLER: Ryan Companies BROKER: Cushman & Wakefield
$33.49M | 135,500 SF
BUILDING B 5701 N. Pima Rd., Scottsdale BUYER: Griffin Capital Essential Asset REIT, Inc. SELLER: Ryan Companies BROKER: Cushman & Wakefield
$18M | 220,949 SF
2700 TOWER 2700 N. Central Ave., Phoenix BUYER: DRA Advisors LLC SELLER: Pinnacle Property Management BROKER: N/A
LAND/SALES
$26.1M | 5.9M SF
W. WILLIAMS RD. & N. 95TH ST., PEORIA BUYER: Toll Brothers AZ Construction Company SELLER: Camino A Lago LLC BROKER: N/A
$23M | 1M SF 23233 N. 7TH ST., SCOTTSDALE
$16.7M | 66,756 SF 2225 S. PRICE RD., CHANDLER
BUYER: Samuel & Co. Inc. SELLER: Dunbar Real Estate Investment Management BROKER: JLL
$14M | 203,122 SF
ONE CAMELBACK 1 E. Camelback Rd., Phoenix BUYER: CD Camelback LLC & SS Camelback LLC SELLER: One Camelback Inc. BROKER: Cushman & Wakefield
INDUSTRIAL/SALES
$16.8M | 155,114 SF
CANAL CROSSING LOGISTICS CENTER 5670 S. 32nd St., Phoenix BUYER: AXA Investment Managers SELLER: Boxby Land Company BROKER: N/A
$15.6M | 130,551 SF
BUYER: K. Hovnanian Great Western Homes SELLER: Van Tuyl Companies BROKER: N/A
SOUTH BUILDING 2675 S. 16th St., Phoenix BUYER: Meritex Enterprises Inc. SELLER: Clarious Partners LLC BROKER: CBRE
$19.3M | 3M SF
$15M | 167,291 SF SOUTHWEST PRODUCTS
3357 S. 96TH ST., MESA BUYER: CyrusOne SELLER: Sunbelt Investment Holdings BROKER: Cushman & Wakefield
$17.97M | 13.3M SF W. CAMELBACK RD., GOODYEAR
11690 N. 132nd Ave., Surprise BUYER: N/A SELLER: N/A BROKER: Lee & Associates
$11M | 84,770 SF NATIONAL MALLFRONT BUILDING
BUYER: Sunbelt Land Holdings SELLER: N/A BROKER: N/A
901 W. Melinda Lane, Phoenix BUYER: N/A SELLER: N/A BROKER: Phoenix Commercial Brokers
$12.9M | 1.1M SF S. SIGNAL BUTTE RD., MESA
$10.5M | 104,430 SF 1020-1030 E. UNIVERSITY DR., TEMPE
BUYER: JEN Arizona 31 LLC SELLER: DMB Mesa Proving Grounds LLC BROKER: N/A
BUYER: HWD Properties SELLER: So No LLC BROKER: N/A
19
LEGISLATIVE UPDATE
Legislative session proves fruitful for CRE industry T
he 2018 state legislative session that adjourned on May 4 was very productive for the Commercial Real Estate (CRE) industry. The following is an overview of the great strides our industry made in protecting property tax breaks and shifts in an overall effort to maintain a competitive advantage for economic development within the State of Arizona.
VICTORIES ■ The biggest victory for CRE was a grand compromise on GPLET reform where a unanimous deal was struck between developers, cities and tax watchdogs on the long-term retention of the 8-year property tax abatement and narrowing the application in the future to a capped land mass contained in a Central Business District (CBD) within a city. HB 2126 passed virtually unanimously and was signed into law by Governor Ducey on April 17th. The Arizona Multihousing Association (AMA), a key coalition partner with CRE, also played an instrumental role in advancing the compromise by proposing land mass percentage boundaries for a CBD rather than dwelling on subjective “slum” and “blight” definitions in the eyes of the beholder. ■ Another joint victory for CRE was on the education front with the passage 20 | July-August 2018
Tim Lawless
BOMA and CREED
of SB 1390 which extended the soon expiring 0.6% state sales tax rate for K-12 education (originally Prop 301 passed in 2000) to get more resources of every dollar expended into the classroom. That bill was signed into law on March 26th. ■ Speaking of K-12 education and getting more resources into the classroom, we supported the Governor’s 20 percent teacher pay increase contained in one of the budget bills, SB 1521/HB 2663. Significantly, this pay raise did not require that general taxes needed to be raised as was advocated by some groups because it will be financed through future expansion of our state economy. As we know, a general tax increase would likely hit small businesses harder than other
constituencies. Playing a constructive role in getting more state resources into K-12 gives our industry credibility to be at the negotiation table as calls to raise taxes next year will only get louder and we need this seat to protect our industry and keep our economy growing. ■ Another CRE victory was support for reform of the property tax appeals system which now prohibits a tax court from making a ruling where the property tax assessment for a home or business can exceed what the county assessor was originally seeking. HB 2385 was signed into law with an emergency clause (means retro) on March 23rd. ■ CRE had a major victory by amending the archaic prime contracting law for MRRA especially as it relates to the tax treatment of alterations and improvements. Originally the bill, SB 1409, was written to exclusively benefit the cities and general/sub-contractors at the expense of CRE owners as it would have raised taxes on owners
$50M per year. We fought this tax increase windfall and we struck a fairer compromise where the changes in TPT tax law will either be revenue neutral or a slight tax cut for owners while at the same time providing clarity and more simple compliance on alterations/ improvements for general and subcontractors. This bill was passed the last night of session by wide margins and awaits Governor Ducey’s signature at publication time. ■ Finally, CRE had a huge joint victory along with the AMA also on the last night of session by successfully opposing a major tax break proposed for selected elderly home owners who would have their property tax rates slashed in half (10 percent assessment ratio reduced to 5 percent) at the expense of businesses who would bear the cost shift implications. Not only was this potentially a violation of the State Constitution’s “uniformity clause” of taxation, it would have established a horrible precedent where the Legislature could pick winners and losers of our property tax system. This
bill, SB 1268, died with 11 votes in favor and 45 opposed and is now a good litmus test for future tax shift bills that come down the pike.
LOSSES ■ CRE had its only loss of the session by supporting HB 2280 which dealt with curbing the practice of ABOR to allow virtually unlimited property tax breaks to private developers whose projects are situated on university land. This bill was passed out of the House Ways & Means Committee but did not move to the floor and therefore died. Again, this bill is a major and growing property tax shift to other similar businesses which also unduly shorts K-12 education. While the bill died, the Arizona Tax Research Association (ATRA) did yeoman’s work in pointing out the policy and constitutional problems associated with this new and growing practice and momentum is only building for reform next year.
SUMMARY In general, property tax breaks and shifts are a major impediment
to solving the number one economic development challenge facing Arizona in growing high wage jobs and this is uncompetitive high real property taxes where we have among the top burdens for business in the United States. The primary coalition of BOMA/ CREED/AMA/ATRA along with the Arizona Chamber, NAIOP and Valley Partnership on selected issues, was a very effective team in looking out for the business community and taxpayer’s bottom line this past legislative session and should continue next session as well. Tim Lawless is executive director of BOMA Greater Phoenix and president of CREED. The Building Owners and Managers Association of Greater Phoenix (BOMA) represents some of the largest owners and property managers of commercial office buildings in the state. Commercial Real-estate Executives for Economic Development (CREED) members own more than 70 million square feet in Arizona and have more than 5,000 small business tenants spread across almost all product types. 21
LEGISLATIVE UPDATE
Lawmakers help make Arizona a leader in innovation
T
he Arizona Legislature gaveled its Regular Session to a close in the early morning hours of May 4th. While Red4Ed dominated the headlines in the waning days of the session, there were several other notable economic development bills that passed before the session closed. Here are some of the economic development highlights from the latest session of the Arizona State Legislature. Arizona became a national leader in helping establish and incubate financial technology (FinTech) start-ups. The passage of HB 2434 created what is known as the “FinTech Sandbox” in Arizona, allowing any start-up that wants to test a financial and/or blockchain technology product to do so without traditional regulations, while maintaining reporting requirements and adherence to consumer protections already in place. This legislation deals squarely with a highly complex issue and contributes significantly to Arizona’s innovation ecosystem. Transportation funding has been in the crosshairs of economic development for several years, as the Highway User Revenue Fund (HURF) has been repeatedly “swept” to pay for other spending within Arizona’s budget, such as the Department of Public Safety. The original purpose of the HURF was to provide an ongoing funding mechanism to improve state transportation infrastructure. Therefore, the HURF sweeps have resulted in continually diminishing funding for the maintenance and improvements of Arizona’s highways and other critical transportation needs. SB 1146 was signed into law and establishes a Highway Safety Fee to fund the Highway Patrol, freeing HURF dollars to be spent on what they were intended. Additionally, the passage of HB 2166 mandates that
22 | July-August 2018
Keyvan Ghahreman AAED
alternative fuel vehicles pay the same vehicle license tax (VLT) as traditional gas-powered vehicles. This will provide much-needed additional funding to the HURF, enhancing the efficient movement of goods and services throughout the state, which is so critical to economic success. The Government Property Lease Excise Tax (GPLET) is a tool used by economic developers to incentivize development in urban cores where “slum and blight” have been limiting factors for development opportunities. By abating property taxes for a defined period
of time, developers are more inclined to improve a property. In the absence of tools like tax increment financing (TIF), a GPLET can mean the difference between a property that sits unused or neglected for years-on-end and a property that generates tax revenue due to the presence of businesses or multifamily developments. The passage of HB 2126 provides a more complete and specific definition of “slum and blight,” which historically has been one of the major points of contention for those opposing GPLET’s. In addition to celebrating the legislation itself, the lawmakers responsible for economic development advances should be commended for their efforts to get opposing viewpoints to find common ground, and ultimately pass meaningful legislation that contributes significantly to Arizona’s economic success. Keyvan Ghahreman is the governmental affairs chair for the Arizona Association of Economic Development and the director of client & preconstruction services for Willmeng Construction.
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LEGISLATIVE UPDATE
NAIOP gears up for 2018 election Will support pro-business candidates who will help keep the economy growing
I
n the world of business, professional site selectors advise companies about where to locate their next office or industrial facility. In a similar fashion, laws enacted by the Arizona Legislature often have a meaningful impact on the state’s economic prospects and on its brand nationally and internationally. To commercial real estate (CRE), matters such as the quality of education, tax rates, and accessibility of infrastructure are all factors helping to determine where to invest. Electing candidates who understand commercial real estate and support pro-growth public policies will help our industry continue to thrive. This election cycle, NAIOP is initiating a multi-year program to make sure that pro-growth candidates get elected to public office. Our strategy includes several components. Starting in January when the legislature goes into session, NAIOP provides
24 | July-August 2018
Suzanne Kinney NAIOP-AZ
all legislators with a clear guide that outlines our positions on policy issues. This guide is also posted to our website at www.naiopaz.org/about-naiopaz/public-policy/. Our organization uses it to evaluate every bill that is introduced. Throughout the legislative session, we take positions on bills that touch the CRE industry, and we participate in
stakeholder meetings and negotiations to ensure positive outcomes. Recent examples include GPLET reform, contractor liability, construction sales taxes, and property tax valuation appeals. We work hard to cultivate strong, professional relationships with members of the legislature and to position NAIOP as a trusted expert on policy issues related to CRE. At the end of the legislative session, we carefully analyze how each representative and senator voted on the bills that mattered to NAIOP. We consider whether they were open to meeting with NAIOP’s staff, members and lobbyists to hear our concerns and ideas. This allows us to make informed, objective decisions about which legislators are our real champions. We also participate in a candidate interview process for non-incumbents. The Greater Phoenix Chamber of Commerce and Arizona Chamber of Commerce and Industry jointly host these interviews. The interview committee consists of representatives from all facets of the Arizona business community. NAIOP is there to represent the interests of commercial real estate. Through these interviews, we get to know new candidates and learn where they stand on important issues such as property taxes, infrastructure and workforce needs. Armed with all this information and data, NAIOP’s public policy committee delivers to our Board of Directors recommendations about which candidates deserve our support. Through our political action committee we provide financial contributions to the campaigns of those candidates who will make thoughtful decisions on matters of great importance to our state now and in the future. The 2018 election is just the beginning. Moving forward, we plan to grow our involvement and influence each election cycle, always making certain to act in a transparent and lawful manner. NAIOP is proud to support candidates who are true public servants. We look forward to helping elect thoughtful legislators who will lead our state into the future. Suzanne Kinney is the president of NAIOP-AZ.
That was a different legislative session than we thought T
he discussion at the start of the 53rd Legislative, 2nd Regular Session in Arizona was about water, but it ended with education. Along the way, the Arizona Real Estate industry negotiated its way to certainty on some important tools. In April, Valley Partnership proudly joined other business groups in supporting Arizona Governor Doug Ducey’s plan to provide teachers with a 20 percent raise by school year 2020. We joined these groups in press events and lobbying of our legislators. In the end, the Legislature passed the Governor’s plan with a few tweaks to provide more certainty to the revenue streams that will pay for the increase in teachers’ pay. This is a big win for our teachers, education system, and for our economy because education is our economic driver. Following up from my last article, Valley Partnership and other groups were able to fight back and stop 3 bills that would have taken tools out of our economic development toolbox: HB 2330 threatening cities that use Government Property Lease Excise Tax, better known as GPLET, to lose their shared revenue in certain cases. HB 2005, which violated the Arizona Constitution by limiting the definition of economic development and restricting city leases. And, HB 2280, which prevented Arizona public universities from utilizing their lands. All of these bills did not come up for final votes. To end the chaos and confusion being caused by legislation every session purporting to “fix” GPLET, Valley Partnership along with NAIOP, Arizona Multihousing Association, and the Arizona League of Cities and Towns worked closely with Arizona Tax Research Association (ATRA) on a compromise that preserves and improves GPLET. This is reflected in the final version of HB 2126 includes certainty as to what is a central business district, including its size and a legal definition of what is
Cheryl Lombard
Valley Partnership compact when drawing future districts. The existing central business districts which are slightly different from these new requirements in Tempe and Mesa were fully grandfathered in and now secure from any future litigation. As well, HB 2126 includes a time frame for
cities to recertify what is slum and blight. We are hopeful this will result in the dismissal of one of the remaining claims in the pending litigation initiated by the Goldwater Institute on GPLET. Finally, for the Session we thought was going to be all about water, no significant water legislation made it to the Governor’s desk. There is still uncertainty as to next steps for Arizona and the Colorado River and the Pinal AMA. Valley Partnership continues to engage with the Governor’s office, Central Arizona Project, Salt River Project, and our city partners to secure our water future. We are hopeful for a solution to the Pinal AMA modeling and numbers this summer. More to come later in 2018. Cheryl Lombard, President & CEO of Valley Partnership 25
THE MOST INFLUENTIAL
IN COMMERCIAL REAL ESTATE By MICHAEL GOSSIE
T
here is something lacking in the commercial real estate industry’s C-suites: Women. But this year’s list of the Most Influential Women in Commercial Real Estate are changing that. “Our Scottsdale headquarters is made up of an all-women executive team, many of whom have been with the company for more than a decade,” says Alana Mann, president and owner of The Statesman Group, which recently launched a nearly $200 million project near Desert Ridge. The project will include The Luxe at Desert Ridge, 223 condominiums, and The Montreux, 335 apartments. “The smartest professional decision I have made in my career was accepting the rare opportunity to expand my family company from Canada to the U.S. back in 1995,” says Mann, one of AZRE’s Most Influential Women in Commercial Real Estate for 2018. “Now, The Statesman Group is a diverse group of companies developing and operating real estate as a legacy family company.” Not only are AZRE’s Most Influential Women in Commercial Real Estate playing a significant role in today’s commercial real estate industry, their leadership, guidance and mentorship has helped the industry grow and diversify substantially within the past few years. There is also another characteristic that all the Most Influential Women share. “Integrity,” says Amanda Houghton, executive vice president of asset management for Healthcare Trust of America. “You have to know who you are, what you stand for and don’t compromise that. Not everyone will like it, but they will respect you for it.” Not only do these women command respect, the Most Influential Women in Commercial Real Estate for 2018 are working fearlessly to transform and redefine the industry as we know it.
MOST INFLUENTIAL WOMEN Jennifer Cranston Shareholder Gallagher & Kennedy
Background: Since joining the legal profession in 2000, Cranston has developed a unique practice focused on helping clients in three distinct areas: real estate litigation, insurance coverage analysis, and public utility regulation. Source of pride: “At this point in my career, I am very proud of my success in developing meaningful relationships and building a reputation for hard work and integrity. These attributes enable me to provide a higher level of service to my clients.” Surprising fact: “I don’t know if it’s particularly surprising, but according to an online quiz, my spirit animal is a sea turtle.”
Megan Creecy-Herman Vice president and market leader Liberty Property Trust
Background: Creecy-Herman manages Liberty Property Trust’s Arizona portfolio. She holds a B.S. from Arizona State University and a MBA from the University of Arizona. Source of pride: “Serving as the first female president of the NAIOPArizona Chapter in 2014 and receiving NAIOP’s National Award for Chapter President of the Year for the work I did during my tenure. I’m hopeful that by being the first woman to hold the position, I made it a little easier for more women to do so in the future.” Surprising fact: “I spent the majority of my childhood playing the saxophone.”
Kimberly Davids General manager The Weitz Company
Background: Davids began her career in the construction industry as a project engineer and worked her way up the ranks through every position, including superintendent, manager and executive. In 2017, she became the first female general manager in Weitz’s 163-year history. Source of pride: “I am extremely proud to have been named general manager of Weitz’s Arizona office after just 18 years in the industry. Loyalty, tenacity and hard work have helped me achieve this success early in my career. I am honored to lead such a great group of people.” Surprising fact: “I agreed to a goal of running 45 halfmarathons before turning 45.”
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CONGRATULATIONS TO ALANA MANN, ONE OF THE MOST INFLUENTIAL WOMEN IN MULTI-FAMILY DEVELOPMENT
What a Beautiful Way to Live
Statesman Group Scottsdale, Arizona (480) 248-3300 statesmanusa.com
MOST INFLUENTIAL WOMEN Sara Fleury
Corporate communications director Kitchell Background: Fleury joined Kitchell after spending most of her career managing clients at BJC Public Relations. Source of pride: “Long relationships. Before going in-house with Kitchell, they were a client for eight years. Our PR team has been together for a long time, and we maintain long, mutually respectful and valued relationships with our clients. These connections grow and expand even when our clients move to other roles.” Essence of leadership: “Integrity. It’s critical to be able to trust that a leader is going to act in the best interest of an organization, while balancing other very important traits such as listening, communicating and maintaining a strong sense of humor.”
Dawn Hart
Co-managing director, principal Gensler Background: With 30 years of experience, Hart plays a key role in growing Gensler’s presence in the local market and leading architectural interior design projects for both public and private clients. Source of pride: “My biggest accomplishment has been being recently named principal and co-managing director for Gensler’s Phoenix office. This new role is exciting because I get the opportunity to work more intimately with colleagues from other offices and support our client’s goals on a regional and global level.” Surprising fact: “I am the vice chair of the Tempe Historic Preservation Foundation, where I volunteer to help preserve and protect Tempe’s heritage structures and sites.”
Amanda Houghton
Executive vice president of asset management Healthcare Trust of America Background: Houghton is responsible for overseeing the building operations and leasing for over 24 million square feet of primarily medical office buildings in 33 states. Source of pride: “Creating one of the largest and best-performing dedicated medical office management teams in the country. It has been extremely rewarding to learn from the best practices in the industry and put them into practice at HTA.” Essence of leadership: “Integrity. You have to know who you are, what you stand for and don’t compromise that. Not everyone will like it, but they will respect you for it.”
Beth Katz
Founder and principal KatzDesignStudio Background: Beth Katz brings more than 25 years of commercial interior design expertise to KatzDesignGroup. She is active with AZCREW and UMOM New Day Centers. Best decision: “When we moved to Phoenix in 2003, I thought I left behind 12 years of clients. One of my Boston clients called: ‘Did you set up your own firm? We want to get started on five national call centers and we are working with you.’ My experience at my previous firm prepared me to roll, so I did. Fifteen years later, KDG is strong.” Surprising fact: “If I wasn’t designing restaurants and office space, I would be a scuba instructor.” 30 | July-August 2018
MOST INFLUENTIAL WOMEN Cherie Koester Principal and founder Earthworks Environmental
Background: Koester founded Earthworks Environmental, an experienced environmental consulting firm that specializes in dust control and storm water pollution prevention. Best decision: “Smartest decision? I haven’t gotten there yet. I feel as though I take educated risks and I trust myself. I make a choice and I stick with it.” Surprising fact: “Forty percent of teen mothers graduate high school; less than two percent finish college before age 30. I made it a life goal to break this trend. I had my daughter at 16, finished high school, received undergraduate and master’s degrees before I was 30. This fall, I will have four children enrolled at ASU.”
Alana Mann President and owner The Statesman Group
Background: Mann took control of her family’s 40-year-old business and expanded it from a residential developer based in Canada to a multi-divisional developer, builder, investor and manager.
Laurel Lewis
Senior vice president in office properties NAI Horizon Background: Lewis’ focus is landlord and tenant representation. She is actively involved with Valley Partnership and is a volunteer with Phoenix Youth at Risk. Best decision: “The smartest decision I made was to get out of a support role in real estate and take the plunge into a commissionbased, full-time sales agent position. Since I made that move 27 years ago, I have successfully completed transactions for my clients totaling more than $170 million.” Surprising fact: “I was a tomboy until the age of 12. I could beat all the boys in arm wrestling and foot races.”
32 | July-August 2018
Essence of leadership: “I strongly believe that the most effective leadership is not by way of dictatorship. We have a plaque in our staff room that says, ‘If you tell me, I will forget; please show me, and I will remember; however, involve me, and I will understand.’ This way of leadership has engaged our staff to be more empowered in their capacity and work towards what is best for the company to achieve greater success.”
Megan Creecy-Herman Market Leader | 480.860.3160
YOUR ARIZONA COMMERCIAL REAL ESTATE EXPERTS 602 955 4000 • naihorizon.com 33
MOST INFLUENTIAL WOMEN Stephanie Mitrovic
Science & Technology studio leader SmithGroupJJR Background: Mitrovic is best known for her unique ability to collaborate with clients to look at projects beyond their current needs. Best decision: “I decided to marry my love of design with an ambition to impact the world of research at the helm of my career. My mother is my inspiration.” Essence of leadership: “Humility. I have had the opportunity to work with incredible teams and amazing clients in the most surprising locations, and for that I am thankful.” Surprising fact: “I completed my capstone thesis on urbanism in Buenos Aires, Argentina. While abroad, I visited over 40 countries.”
Barbara U. RodriguezPashkowski
Chair of the real estate practice group Gust Rosenfeld Background: RodriguezPashkowski works with private companies and federal, state, and local governmental entities on a broad range of environmental issues related to real estate development, re-development, environmental due diligence and regulatory compliance. Source of pride: “Mentoring diverse students who are considering a legal career. It is rewarding to support and encourage pursuit of their dreams, helping them achieve those dreams, and share my perspective as a minority. In doing so, the legal community is further enriched with up and coming diverse talent.” Surprising fact: “I quit my first legal job after one year and went backpacking through Europe for three months.”
Darin Sender President and founder Sender Associates
Background: Sender is an AVrated zoning attorney. Sender and her team help clients obtain zoning entitlements for mixed-use, residential, commercial, and industrial projects, shaping cities across the state. Source of pride: “I am proud of the development projects I have worked on including Chevron stations and assisted living facilities, and The Union by Opus, The Local by Forum, and countless others. I find the most pride in teaching students about zoning entitlements and am grateful to be a small part of their successes.” Surprising fact: “I am a very proud new mom to beautiful twin girls, Sophia and Patricia.”
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Our Leaders Make Us Leaders Jennifer Cranston With 18 years of experience at Gallagher & Kennedy, Jennifer Cranston’s hard earned track record speaks volumes. In addition to her condemnation, insurance and utility law practice, Jennifer is chair
We excel at our business because we take the time to understand yours
of G&K’s Professional Women’s Group, president-elect for Arizona Commercial Real Estate Women (AZCREW), former steering committee co-chair for United Way’s Women’s Leadership Council, and former Maricopa County Bar Association (MCBA) president. In her professional capacity and through her community involvement, Jennifer strives to serve as an advocate and example for professional women.
Congratulations, Jennifer. We are proud to call you our colleague.
Phoenix | Santa Fe 602-530-8000 www.gknet.com
HEALTHCARE TRUST OF AMERICA (NYSE: HTA) IS PROUD TO CONGRATULATE ONE OF ITS OWN
AMANDA HOUGHTON Amanda has been with Healthcare Trust of America, Inc. (NYSE: HTA) since January 2010 and serves as Executive Vice President of Asset Management. She is responsible for overseeing the building operations and leasing for over 24 million square feet (sf) of primarily medical office buildings in 33 states.
Dedicated Owner of Best in Class Medical Office
HTA Corporate Headquarters: 16435 North Scottsdale Road, Suite 320 Scottsdale, AZ 85254
(480) 998-3478 | www.htareit.com
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MOST INFLUENTIAL WOMEN Cindy Thomas CFO Sun State Builders
Background: Thomas joined Sun State Builders in March of 2016, bringing extensive accounting experience, including construction and real estate development. Lesson learned: “Just pick one? Life is full of mistakes, we all have had our share. What I have learned is to accept that you have made a mistake, understand why you made it and take responsibility for it.” Essence of leadership: “Every leader should have a passion for what they do. It gives them a positive and productive way to enhance their ability to lead.” Surprising fact: “When I was a freshman in high school, I met my sweetheart. We were married and have raised four children over the years.”
Antonya Williams
Vice president for the Southwest region McCarthy Building Companies Background: Williams guides a large, multistate team delivering solutions for diverse and complex construction projects. Source of pride: “In 2017, I was named one of Engineering News Record’s National “Top 20 under 40,” a prominent construction and engineering recognition, around the same time I welcomed my daughter, Daphne, into this world. It was a special time both personally and professionally.” Surprising fact: “My passion for construction is a result of working in the field for my dad’s construction company in my youth. Some of my favorite memories are driving a dump truck, hauling heavy equipment and installing finish work.”
Marilyn Zenko
Natural and cultural resources group manager Terracon Background: As an emerging leader within Terracon, Zenko provides guidance to the next generation of scientists and engineers. She serves as president for the Society of American Military Engineers Phoenix Post. Source of pride: “I started at Terracon in 2013 when the Phoenix office did not have a natural and cultural resources program. I was able to build the program from a staff of one (myself) to six. As a team, we generated more than $1 million in revenue since 2013.” Surprising fact: “My twin sister and I were extras in ‘Beloved,’ starring Oprah Winfrey and Danny Glover and directed by the late Jonathan Demme.” 36 | July-August 2018
CONGRATULATIONS TO ONE OF THE MOST INFLUENTIAL WOMEN
IN COMMERCIAL REAL ESTATE
BETH KATZ We are grateful for your time and dedication championing our causes.
KatzDesignGroup.com | 602.312.9223
Kitchell salutes the most influential women in business, and especially this pioneering one. Betty Kitchell served in the unpaid role of secretary of Kitchell in 1950, in a two-room office in south Phoenix. She was the wife of Sam Kitchell, a visionary with an entrepreneurial streak and an influential force in the Valley’s growing commercial real estate industry. Her unwavering dedication to her family, to helping our company grow and to her community is an inspiration to all of us.
Kitchell.com twitter.com/KitchellCos facebook.com/KitchellCorporation
TOGETHER, BUILDING VALUE EVERY DAY.
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CONSTRUCTION TECHNOLOGY
More than just a pretty view Drone technology is providing construction industry with valuable data
I
By STEVE BURKS
nformation is the lifeblood of construction, and no construction professional worth their salt will say there’s such a thing as too much information. If information can help improve the pace of progress or the safety of the jobsite or the quality of the project, a builder will want it. No technology currently in use in the construction industry can gather more information, quickly and safely than unmanned aerial vehicles, or drones. Drone technology is progressing at a rapid rate and builders are taking full advantage of it. Drones are used to gather a wide array of information, including site topography, project progess and quality control.
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CONSTRUCTION TECHNOLOGY
KINDS OF DRONES
David Mettler, manager of construction technology for Renaissance Companies, uses various drone types for different tasks. Here are the kinds of drones Renaissance uses.
DIFFERENT VIEWS: Different drone cameras produce a variety of images, from infrared LiDAR images, top, to Photogrammetry 3D images, bottom left, and topographical images.
“The information we can provide to clients now includes detailed mapping and 3-D modeling, in addition to videos and still photos,” said Jason Wise, UAS program manager at Terracon. “Manned aircraft have always been able to provide aerial photography and mapping products, but unmanned aircraft are lower and cheaper, which means they can provide much more detail and fly much more often than manned aircraft.” Perhaps the most common use for drone technology is project monitoring and inspections. With a drone, builders can inspect all angles of a project on a regular basis to check on progress and quality. “Nothing excites an owner more than being able to see their project 40 | July-August 2018
underway at various stages, especially if they are unable to visit the job site on a regular basis,” said Wayne Bell, president, LGE Design Build. “Paired with site cameras that provide live feeds and are accessible from anywhere with WiFi or cellular coverage, LGE leverages drone technology to capture a 360-degree view of our projects.” According to Steve Berry, BIM manager for Kitchell Integrated Services, these regular drone fly-bys to gather information also help builders track material usage and document where hidden utility lines are so they can quickly find them in the future. Berry also noted that there are smaller drones being developed that fly like a swarm, with several small drones moving together. “If they do get smaller and smarter, that would be great to use,” Berry said. “Bring them in after hours when the site’s closed, you send them in on a path and they fly through a building, photographing everything. In one night you could have the whole thing
Matrice 210 RTK (Real Time Kinematics) Drone: ■ Camera – 4K Imagery (ultra high def imaging) ■ Ground Station (Arrowpoint) – drone and ground station speak to each other to create higher accuracy for the drone ■ Ground Control Points – provide ground control within a 2” accuracy
Inspire and Mavic Pro Drones: Safety and site QA/QC ■ Marketing Purposes ■
CONSTRUCTION TECHNOLOGY DRONE USE IN CONSTRUCTION According to Josh Marriott, VDC/field solutions engineer for McCarthy Building Companies Southwest region virtual design in construction department, drone technology is bringing efficiencies, accuracy and cost-savings to projects. Here are some major uses for drone technology in construction that McCarthy Building Companies utilizes. Site Mapping with Photogrammetry: This uses photos taken at specific georeferenced locations and elevations within a construction project. Software then stitches the photos, sometimes hundreds, into a single high-density, high-definition project map and 3D model.
Infrared Imagery drones: These types of drones provide the capability to view live or capture images of the variations in temperature on the surface of structures. This technology is helpful for scanning a building envelope to see temperature variations that may be caused by energy leaks or where moisture has penetrated a roof system causing a temperature variation. This is important for labs and hospitals where air-tight facilities are required for the work occurring within.
LiDAR drone scanning: LiDAR stands for Light Detection and Ranging. This technology provides the ability to get highly accurate topographical data quickly on a large piece of land even if the site is covered with dense vegetation or forest. This is particularly helpful for utility-scale solar projects McCarthy is constructing throughout the U.S. where trees and vegetation coverage can hide elements related to the site’s civil work.
360 degree Camera technology: With this, McCarthy can take 360 degree spherical photos or videos of project rooms or areas at various points during the construction. These photos capture an entire room, all walls, floors and ceiling in one image. What direction the viewer sees in the image can be manipulated or panned around on a computer screen, phone or tablet using augmented reality.
documented. Then the next night, you could do the same.” Project progress tracking is the most common use for drones, but they can also gather information on parcels of land before they are selected for development. Drones with LiDAR technology will fly over an area and scan the landscape. This technology can gather topographical information of the land, even if it’s covered in vegetation, to reveal any hidden issues. “Unknown civil and earthwork requirements on a large site can be a large risk for both the project owners and the contractor,” said Josh Marriott, VDC/field solutions engineer for McCarthy Building Companies Southwest region virtual design in construction department. “Having LiDAR technology allows us to mitigate some of the risk on these projects.” Once the site is selected and surveying is ready to begin, drones can provide surveyors with more data, which is then passed on to the builder. “We use the software to drive the surveying process of a site,” said David 42 | July-August 2018
Mettler, manager of construction technology for Renaissance Companies. “We will mark points in the field that we gathered our data of the topography from for estimating and share this with the surveyor so they use it in the construction process.” Wise and Terracon are developing their own drone technology to generate 3-D models of rock formations so engineers can analyze the site stability, map large parcels of land for environmental work and produce thermal infrared photographs of buildings. Some thermal infrared technology is already in use by drones, who fly close to buildings and scan them to pick up any temperature changes caused by air leakage. “We do a lot of hospitals, and leaking is not allowed in hospitals,” said Scott Root, managing executive at The Kapture Group in Tempe. “We go to the Nth degree to make sure the exterior cladding is put on perfectly, and the drone allows us to do that.” Using this technology is not as simple as buying a drone, strapping on
a camera and getting it up in the air. All drone pilots must be certified to fly. They cannot fly the drones over people or in busy airspace without permission. The pilot is required to keep the drone in sight at all times, which can be challenging around buildings. Besides the practical challenges, drone technology is limited by short battery life, radio interference and mechanical failures. Plus, companies now have to come up with ways to analyze and store all of the data being gathered. All of those issues are minor compared to the benefits companies are seeing from using drones in the field. “Where the real advantage is right now in construction is safety,” said Root. “An example would be checking roof conditions. If you can get up there with a drone, you don’t have to send someone up there to actually inspect. You can get up there, investigate the condition and come up with a plan to solve whatever the challenge is. And do it without sending someone up on a lift or a ladder.”
CONSTRUCTION TECHNOLOGY
Closer to reality Augmented reality technology progressing, but still not ready for wide-spread construction use By STEVE BURKS
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n nearly every construction job site, there is a large, thick, well-worn book of detailed drawings. These design plans are the instruction book for the project. They are complicated, they are hard to carry around a busy job site and they are on their way out if augmented reality technology can reach its potential. “Construction is complicated and construction documents aren’t intuitive,” said Eric Cylwik, virtual construction engineer senior for Sundt Construction. “Augmented reality takes the complexity of construction and makes it as natural as looking around a project.” In the past, when faced with a problem with a construction element, project managers would have to consult the plan documents, often back in the control trailer. With augmented reality, that project manager can put on a headset, look around the problem area and see exactly what the plans call for. Contemporary planners, engineers, designers and architects use some sort of Building Information Modeling (BIM) software in their work to create the plans for whatever projects they
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are designing. That BIM information produces detailed, 3-D plans for the structure. Those BIM plans are then uploaded into the augmented reality software and when a worker puts on the AR glasses or uses a tablet with a camera, they can see the plans come to
“Augmented reality takes the complexity of construction and makes it as natural as looking around a project.” – Eric Cylwik life before their eyes. “Augmented reality shows the design intent within the context of what currently is,” said Cylwik. “AR accomplishes this by layering new information over what you see, whether a 3-D model or other data.” For example, someone can look around an unfinished building and the AR technology will highlight where
vital electrical conduit or water pipes or ventilation ducts will go. A user can look around an empty space and see where walls will be framed in and where plumbing lines will be connected. Another example is in a multi-story building that has steel reinforced concrete floors. When workers need to drill through the floor to run mechanical lines, they need to be precise. Using AR would allow them to see exactly where the holes in the floor would go and they can mark those spots. “Instead of critical information about components and locations being spread across a series of printed documents, augmented reality shows a user exactly what they need to know when they need to know it,” Cylwik added. “A simple question like ‘how many light switches and outlets should be in this room?’ versus ‘is there a plumbing cleanout in this wall?’ will lead one to many different parts of the construction documents. In augmented reality, one just needs to look around the room.” Virtual reality is also used in conjunction with the BIM software. Virtual reality is different in that the
IMAGE COURTESY, DALUX
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CONSTRUCTION TECHNOLOGY
SEEING WHAT'S NOT THERE: Tablets with cameras, top, are capable of utilizing augmented reality software to show a user where electrical, plumbing and HVAC lines will be located on a worksite. Below, is an AR image of what the framing for a pre-fabricated room will look like.
headwear fully covers the eyes and computer-generated images are all the person can see. A user can load the BIM plans for a building into a virtual reality program and throw on the VR glasses and see what the building will look like. The client can walk through their space before it even begins,” said David Mettler, manager of construction technology for Renaissance Companies. “We then use a 360-degree camera on our hard hats that takes pictures as you walk the site and compiles them into a 3-D image that clients can virtually walk through as the project progresses. This is very helpful for clients who are out of town and some are located all over the world.” Augmented reality utilizes headwear that has transparent lenses and the computer images are projected onto the lens to create a mix of real and computer generated images in the users field of vision. If the worker is using a tablet with a camera, they can pan the camera around the room and the AR software will project the building plans onto the screen. “We can use this technology right now using tablets,” said Scott Root, managing director of The Kapture Group in Tempe. “But that doesn’t allow you to use your hands so it has its limitations.” On-site limitations are what is holding up the AR revolution in construction. Both Root and Cylwik cited hardware issues as a major factor in limiting AR usage on a wide scale. Currently, the Microsoft HoloLens is the leading AR hardware component. However, it is known to be fragile and 46 | July-August 2018
it is difficult to wear a safety helmet with a HoloLens, so that limits its use. Also, Cylwik said that the HoloLens tends to fail when exposed to the sun in heat above 105-degrees, something that is common on construction sites in Arizona. “The hardware fails to consistently deliver in the extreme environment of construction,” Cylwik said. Another factor working against AR usage is workflow and personnel acceptance. Root points out that
construction professionals have their traditional workflow patterns and anytime a new technology is introduced, it causes that flow to be stymied while the workforce learns how the new technology works. “You are trying to get the same productivity or better productivity from your people, and that’s really hard to do in the average construction job with all of the variables,” Root said. “It’s coming, though, and I think it’s going to happen really soon.”
THE BEST WAY TO PREDICT THE FUTURE IS TO CREATE IT. |PETER DRUCKER|
renaissancecos.com
@AZRenaissanceCo
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INTERNATIONAL INTERIOR DESIGN ASSOCIATION
DESIGN EXCELLENCE IIDA recognizes best in the region at PRIDE Awards By STEVE BURKS
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n April, the International Interior Design Association’s Southwest Chapter gathered to pay tribute to the best people and projects of 2018. The 22nd annual IIDA Professional Recognition for Interior Design Excellence (PRIDE) Awards highlighted some of the best work in the industry. There were 20 different projects that received awards in one of 10 categories, as well as an overall Best in Show project. The PRIDE Awards recognize the transformative work being done by architectural firms in IIDA’s Southwest Chapter. In addition to those honorees, IIDA gave recognition to four individuals and two companies who stood out during the year. The IIDA organization has more than 15,000 members worldwide and is active in 58 countries. The group is dedicated to enhancing the quality of life through excellence in interior design and advancing interior design through knowledge, value and community. A
BEST OF SHOW
Project: CBRE Phoenix Office, Firm: Gensler Team members: Beth Harmon-Vaughan, Dawn Hart, Melissa Holm, Meghann Duran, Manrique Umana, Jessica Little, Craig Chapple, Adam Strong, Garrett Smith, Drake Hoffman, Luis Cruz-Martinez, Amber Ferguson, Denita DeRuso, Victor Irizarry. Also, Layton Construction, Energy Systems Design, PK Structural Engineers, Jensen Hughes. Through a highly collaborative process, the client and design teams worked together to develop an interior design narrative that embodies the client’s well-developed brand and innovative workplace of the future strategies, while also incorporating many unique design elements inspired by the local context.
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COMMERCIAL OFFICE UNDER 10,000 SF B
DESIGN EXCELLENCE AWARD
Project: Farmers Stockmans Bank Renovation Firm: Cuningham Group, Team members: Marcene Kandra, Jefffrey Mandyck, Shaun Jennings, Pete Mikelson, Brittany Johnson, Heather Adams, Sukreet Singh, Paul Hutton The transformation of William Pereira’s 1951 Farmers & Stockmans Bank remains a registered historical landmark and continues to inspire as offices for an international architectural firm.
AWARD OF MERIT Project: Forward Tilt Office, Firm: Evolution Design, Team members: Roberta Thomas, IIDA; Erin Goldsmith, IIDA; Darbi Elkins
The subdivision is a community-centric property composed of 14 identical buildings in four clusters. Each building floor plate is designed to be open and flexible to allow for a variety of uses, no matter what business occupies the space. COMMERCIAL OFFICE 10,000-25,000 SF C
AWARD OF MERIT
Project: NRG, Firm: DLR Group Team members: Megan Duffy, Shelby Guddeck, Ann Van de Wille, Ben Foth, Amy Hoffman The building’s design replicates a power grid on the perimeter of the building with an emphasis on organic liveliness at the core, reflecting the vitality of life as a result of energy.
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Christine Shaw, LEED AP (Project Interior Designer); Amy Krone, Green Associate (Interior Design).
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The design creates a fluid environment for both corporate staff and call center employees. The single location reflects the energy and vibrancy of brand while embracing and encouraging the company’s innovative and collaborative culture. HOSPITALITY, RETAIL AND RESTAURANT
AWARD OF MERIT
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AWARD OF MERIT
Project: Wentworth Property Headquarters Firm: RSP Architects, Team members: Joe Tyndall, AIA (Principal-in-Charge); Alissa Franconi, Assoc. IIDA (Design Studio Lead); Dawn Brown, AIA, LEED AP (Project Manager); Christine Shaw, LEED AP (Project Interior Designer). The 11,000-square-feet building in the Downtown Phoenix Redevelopment Area allowed the company to be a part of revitalizing and enhancing the community. COMMERCIAL OFFICE OVER 25,000SF
DESIGN EXCELLENCE AWARD Project: CBRE Phoenix Office, Firm: Gensler Team members: Beth Harmon-Vaughan, 50 | July-August 2018
Dawn Hart, Melissa Holm, Meghann Duran, Manrique Umana, Jessica Little, Craig Chapple, Adam Strong, Garrett Smith, Drake Hoffman, Luis Cruz-Martinez, Amber Ferguson, Denita DeRuso, Victor Irizarry. “Modern, fresh, and innovative” were words used by the judges to summarize this Desert Metropolis. They feel the subtle mix of materiality, color, and texture makes for a wonderful space. E
DESIGN EXCELLENCE AWARD
Project: Carvana Corporate Headquarters Firm: RSP Architects, Team members: Joe Tyndall, AIA (Principal-in-Charge); Alissa Franconi, Assoc. IIDA (Design Studio Lead); Dawn Brown, AIA, LEED AP (Project Manager);
Project: Sun West Federal Credit Union Firm: SmithGroupJJR, Team members: Casey Potash, Mark Adams, RID; Tim O’Dowd, John Tran, AIA, LEED AP; Michelle Goodlive, LEED AP; Brooke Waldron, Michael Faulkner, RLA, ASLA; Evan Tatabe, Jon Silhol, PE, LEED AP BD+C; Melissa Bowers, Jyotsna Bhamidipati, Stanley Mah, PE. The incorporation of more glass than historical locations, cool tone complimentary floor and wall surfaces and warm metal storefront accented by a curved copper wall allows peekaboo views to the outside desert landscaping, portray a modern, yet timeless design. F
DESIGN EXCELLENCE AWARD
Project: Alliance Bank, Firm: Davis Team members: Rory Carder, IIDA The minimalist architecture clad in black steel plate, evokes a secure banking environment. A concrete feature wall delineates public and secure realms, revealing a luminous lobby.
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AWARD OF MERIT
Project: University of Arizona Student Recreation Center, Firm: Gensler Team members: Beth Harmon-Vaughan, Jeffrey Maas, Craig Chapple, Jay Silverberg, Robert Himmelberger, Melissa Holm, Breckenridge Group, Lloyd Construction Taking themes traditionally found in hospitality design, the updated space includes refreshed finishes, the latest in locker-room planning, impactful wall graphics, and a forwardthinking layout.
DESIGN EXCELLENCE AWARD Project: El Mirage City Hall, Firm: Architekton Team members: Rachel Rosso, Chris Kelly, Joe Salvatore, Glen Wollenhaupt, Daniel Childers, Ryan Grabe, Eric Sterner The new complex replaces the old “storefront” City Hall with state of the art municipal offices while providing a new public gathering plaza anchored by a Veterans’ Memorial with a large monument honoring the five branches of the armed services. ON THE BOARDS
AWARD OF MERIT Project: Indeed, Firm: Corgan 52 | July-August 2018
Team members: Azarel de la Cruz, Alexandra Ayers, Karah Tennyson
John Kane, Chris Kelly, Eric Sterner, Ryan Grabe, Tom Reilly, Kristen Keane, Glen Wollenhaupt
The design includes an open office design and offers employees a large cafe, a barista and juice bar, beers on tap and a fitness center with a yoga studio and a variety of collaboration spaces to expand on the culture of Indeed and its values.
The land on which the environment lies possess unique views to iconic mountain ranges. The interior environment seamlessly grabs every opportunity to entwine itself to the outdoor setting.
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AWARD OF MERIT
Project: The Grand, Firm: Davis Team members: Rory Carder, Amy Dooley, Hannah Massarat The project is a state-of-the-art lobby and amenity center designed for a ground up nine-story office building. The marble floor is designed intentionally as an uninterrupted monolithic surface.
DESIGN EXCELLENCE AWARD Project: Helios Education Foundation Headquarters, Firm: Architekton Team members: Rachel Rosso, Justin Trexler,
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DESIGN EXCELLENCE AWARD
Project: Mountain Park Health Center Firm: SmithGroupJJR, Team members: Casey Potash, Scott Ross Steffes, Lyle Steely, AIA, LEED AP; Fred Aidoo, Assoc. AIA; Eric Martin, PE, LEED AP BD+C; Chris Tarango, Matt Hess, AIA, NCARB; Rick Jones, ASLA, LEED AP; Sophia Escontrias, Craig Passey, AIA. From the expansive reception and waiting area, emphasizing community in a colorful and nature-connected environment, to the animated and textured staff-centric breakout spaces, this clinic breathes diversity and promotes both individuality and collaboration.
Historic Farmers & Stockmens Bank Building Renovation Cuningham Group Office, Phoenix
ARCHITECTURE INTERIOR DESIGN URBAN DESIGN LANDSCAPE ARCHITECTURE
CUNINGHAM.COM
THANK YOU TO OUR FANTASTIC CLIENTS & INDUSTRY PARTNERS FOR COLLABORATING WITH US ON AWARD-WINNING DESIGNS! www.gensler.com
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Project: Dakota State University Beacom Institute of Technology Firm: SmithGroupJJR Team members: Mark Adams, RID; Mark Kranz, AIA; Carrie Perrone, AIA; JB Pham, Pat O’Keefe, AIA LEED AP; Jeff Stanton, AIA LEED AP BD+C in association with TSP, Inc.
Project: Western Window Systems Corporate Headquarters Firm: Ware Malcomb Team members: Joshua Thompson, Kevin Evernham, principal; Niki Ward, studio manager, interior architecture and design; Amanda Wells, designer
Technology rich learning environments and laboratories are cradled around a two-story Collaboration Center that opens itself to the street and creates a new student hub for the campus.
The office area caters to the client’s vibrant and innovative company culture with a fun, yet technologically cutting edge creative office design.
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DESIGN EXCELLENCE AWARD
Project: Mayo Medical School Medical Education Center Firm: Ayers Saint Gross Team members: Michelle Kollmann, Assoc. AIA + IIDA, LEED AP; Dana Dixon, AIA, LEED AP; Eric Zobrist, AIA, LEED AP; Jack Black, AIA, LEED AP; Nathan Korkki, AIA, LEED GA. The 1990s office building was re-imagined to support an engaging and inspiring academic experience with connections to the natural environment through large, open views to the mountains.
AWARD OF MERIT
DESIGN EXCELLENCE AWARD Project: University of South Carolina 650 Lincoln Student Housing Residence Hub Firm: Ayers Saint Gross Team members: Michelle Kollmann, Assoc. IIDA + AIA, LEED AP; Eric Zobrist, AIA, LEED AP; Julieta Dorame, Assoc. AIA, LEED; Kevin Jones, RA, LEED AP BD+C; Nathan Korkki, AIA, LEED GA. This ground-level space hosts various sized program elements for learning, working and gathering, to encourage student connections and engagement. The space is conceived as
a series of volumes, emphasizing materiality and proportion. STUDENT
AWARD OF MERIT Project: Fender Sound School: Arizona State University Student: Stephanie Hernandez, student IIDA At Fender Sound, the sculptural sound wave curving from the exterior to the interior is the visualization of sound, extruded as the architectural shell to connect the past and future of both Fender and the site’s historical buildings.
DESIGN EXCELLENCE AWARD Project: OFS Headquarters School: Arizona State University Students: Allison Laak, student IIDA and Emma Phillips, student IIDA The firm incorporated sustainable and crafted designs that connect the user back to their origins — the tree. The central corridor of the building includes a tree trunk that connects the space and activates the core.
SPECIALTY AWARDS INDUSTRY APPRECIATION: Tammy Shust,
OUTSTANDING SERVICE AWARD: Erica
Industry IIDA
Freshley, Industry IIDA
GRADUATE CHAPTER AWARD: Allison
PATRON OF THE YEAR AWARD: Hardison
GENERAL CONTRACTOR OF THE YEAR AWARD: DBSI LIFETIME ACHIEVEMENT AWARD:
Laak, Student IIDA - ASU
Downey
Gretchen Wilde, Airpark Signs & Graphics
Tammy Shust 54 | July-August 2018
Allison Laak
Erica Freshley
Hardison Downey
Gretchen Wilde
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2018
ARIZONA BUILDERS ALLIANCE
Construction industry aims to grow as state organizations recruit, train more females By ADRIAN MARSH
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hen you think of construction, you might think of a man wearing a tool belt. Picture this instead. A single mother of three, who started as a painter in 1994, found out she could learn carpentry through a free class, earn college credit and double her hourly wage. That is what Iris Bost, a 41-year-old woman from Globe, is doing through Construction Academy, a program sponsored by the Arizona Department of Transportation. The academy has more than 400 participants this year, 40 percent of which are women, according to Corey Foster, workforce program development manager. In addition, Arizona State University is encouraging more women to go into management in the construction business. The university has an Advancing Women in Construction (AWIC) club with about 40 active members. The efforts of the Construction Academy and AWIC are changing the face of construction in Arizona. And it needs to, say construction experts. “Eventually, I hope it’s just standard that you see a female on the job site,” said Cassidy Hunter, a construction management major at ASU. “I hope that it becomes more routine or more normalized.”
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CONSTRUCTION ACADEMY Bost takes Construction Academy classes through Gila Community College. The program, which has been around almost four years, offers construction training and mentoring for minorities, women, veterans and disadvantaged individuals. “Mike West is a great instructor,” she said. “He walks us through it, helps us through it. Makes me want to continue in the construction business.” Foster has overlooked the Construction Academy for almost two years. In 2014, the program started off with 105 participants. Thirty eight were women, he said. Foster added that he has seen more women playing an active role, especially because the program is customized to help people enter the construction industry with on-thejob training, skill development,
mentorships and linking individuals with contractors. Training is offered nearly all hours of the day, including weekends, he said. And all courses are customized from learning barriers to even language barriers. “We literally hold your hand and get you connected to the contractors,” he said. “We create opportunities and we are trusted advocates for individuals. I like what we do and how we do it.” Bost said she learned how to build houses and windows and wants to earn certification to be a flagging instructor through the Occupational Health and Safety Administration (OSHA). Bost also said her children are completely supportive of the opportunity and are at the age where they can contribute in the house or make dinner while she is in evening classes. “It’s hard as a single parent doing
CONSTRUCTION ACADEMY 2018
2017
2016
2015
Women: ± 40% | Men: z± 60% Total: 400+ | Employment rate: 80% Women: 73 | Men: 88 Total: 161 | Employment rate: 52.8%
Women: 170 | Men: 32 Total: 202 | Employment rate: 84% Women: 55 | Men: 97 Total: 152 | Employment rate: 73.7%
anything,” she said. “Doesn’t matter what field you’re in.” Patricia McKinley, 39, is also a single mother who has taken advantage of ADOT’s programs. After becoming overwhelmed with the health profession and trying to finish her nursing degree at Grand Canyon University, McKinley said she came across an article that mentioned the Construction Academy. “What really drew me in was how easily accessible it was to obtain work,” she said. “There are so many opportunities to learn a new skill, especially for people trying to change professions.” She said that in the future, she would like to own a construction company and partner with the state to help foster children learn a new skill. In 2018, 80 percent of Construction Academy participants have gotten jobs right away, 65 percent of which are in heavy highway construction, according to Foster. The 2018 rate has increased slightly from 2015, when about 74 percent of participants were hired for heavy highway projects, he added. 59
ABA ABA: Women are trained on flagging techniques at the ADOT Construction Academy.
ADVANCING WOMEN IN CONSTRUCTION AT ARIZONA STATE UNIVERSITY Kristine Sorensen, a senior at Arizona State University, is president of the university’s Advancing Women in Construction (AWIC) club and overlooks about 40 active members. “Our overall mission is bringing women together and letting them feel like they have a community that surrounds them and supports them,” she said. Sorensen emphasized AWIC’s mentorship program, which half of the active members participate in. The program provides students with an industry mentor in their desired field of construction who will help them network and develop relationships with other companies. Sorensen said her passion is in commercial construction, and she wants to build hospitals and hotels with complex mechanical, electrical and plumbing systems. In addition, she will be working toward a project manager position while pursuing her MBA. Cassidy Hunter said she meets with her mentor over lunch and figures out which route she wants to take in the industry. She said that in five years, she hopes to be at least an assistant project manager in the commercial construction or multifamily field. “Some of the biggest struggles are sometimes people thinking we don’t know what we’re talking about,” according to Sorensen. “We’re just 60 | July-August 2018
another participant on this team trying to see that the project goes smoothly.”
‘I KIND OF LIKE BEING UNDERESTIMATED’ Sundt Construction is one of the largest general contractors in the nation that specializes in transportation and industrial, building and concrete work, according to its fact sheet. “We’ve really made an effort in the last three to four years to be a little more organic about diversity hiring,” said Chandra Reilly, project executive of Sundt. “Putting women in managerial and executive positions.” Sundt’s intern population this year is 24 percent women, according to Reilly. “Our goal is to have the industry reflect the diversity that’s reflected in our clients,” she said. “Our clients are men and women of all ages and cultural backgrounds. That’s exactly what our staff looks like too.” On the professional side, Sundt’s Southwest District is 23 percent female, Reilly said, with 15 percent non-minority women and 6 percent minority women. Including the admin and craft workforce, Sundt is 11 percent female. Craft workforce alone, 2 percent of workers are women and more than half of them are Native American, she said. Reilly said she has been with Sundt nearly five years. She said that the more time she spends in the industry, the more she realizes the problems of women in the construction industry are not as large as people perceive them to be.
She said it is nice to see momentum building around the subject, but part of her is very cautious. “It is real,” she said. “There are challenges. The last thing we want to do is set ourselves so apart that integration becomes harder.” Jennifer Donaldson, project manager at Stacy and Witbeck, Inc., has worked in the industry for 18 years and been a project manager for two. She said she started as a field engineer, an entry level position, and worked her way up through different roles on projects and various safety, leadership and management training. Currently, Donaldson is overlooking a $116 million job including expansion of the light rail in Mesa, she said. As the project manager, she said she is typically onsite a couple hours each week. The project has around 30 office staff and 200 workers onsite, according to Donaldson. Often, people mistake her for a secretary or human resources specialist, she said. “I kind of like being underestimated,” Donaldson said, and then added that it’s nice when people realize what she can really do. “I don’t take offense to it, because it’s not personal.” She said that at a recent company meeting, she and a co-worker gave a presentation on women and recruiting women into the industry. Women make up half of the population, she emphasized. “For that reason alone,” she said. “It’s worth broadening the perspective of who can be in construction.” Aside from that reason, Donaldson said women are often detail-oriented, bring a different, softer-side perspective and balance to the workforce. While there are many girls who aren’t interested in construction, there are some out there who would be if they knew what the industry offered, according to Donaldson. And Arizona programs are promoting the awareness and opportunities one academy, club and company at a time.
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ABA
CREATING THEIR OWN FUTURE Companies finding success with in-house training programs
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By STEVE BURKS
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lance around the Phoenix market and you see construction is booming. Big projects are underway in all parts of the Valley as the current building boom rolls on. While it seems there is nothing holding back this flow of commercial construction projects, there is one factor that could dam up the river. “According to research that NCCER (the National Center for Construction Education & Research) did, the projection is that by 2020, we’ll be 2 million people short in construction professionals,” said Dan Haag, senior vice president and chief administrative officer for Sundt Construction. “Can we fill those openings with current population? Probably not. We need an influx of people. But we also need to improve the education programs for folks to go into.” While organizations like the Arizona Builders Alliance have outstanding training and certification programs in place, individual companies have been pushed to develop training programs of their own to make sure they can keep up. Companies are investing in inhouse training and education programs for their workforce so they can be more efficient and deliver better results with a smaller number of professionals in the field. In Arizona, one of the more unique training program is operated by Sundt Construction. Sundt’s Center for Craft Excellence (CCE) is bursting at the seams with craft professionals being trained in the core skills that Sundt needs on projects that it self-performs, areas like pipefitting, welding, construction carpentry, pipe welding, concrete and structural work. The CCE is located at Sundt’s former Arizona headquarters in south Phoenix. The concept was developed in 2013 when Sundt’s executives could see
that the craft workforce was aging and the economy was rebounding. “We believed we needed to do this since there was a severe lack of commercial craft professional programs in the State of Arizona,” said Haag. “We needed to create our own future to be successful.” All new employees at Sundt come through the CCE for safety training and orientation. Those employees interested in advancing or getting certification can take classes at the CCE, which are offered at times that allow participants to work while going through training. “It’s hard to pull craft employees off the job to do training, so we’re focusing on high-potential employees,” Haag said. “Starting in July, we’ll offer classes at night. Participants will take one week of carpentry, one week of pipe fitting, one week of welding. In the welding classes, we had 14 or 15 signed up and we hadn’t even advertised it. “The opportunities and interest are there, but you’ve got to be flexible. You can’t say we’re only going to do training Monday through Friday from 7 to 4 o’clock, because you’re going to lose the majority of them.” Workers who come through the CCE get the training and education that allows them to get certified, something that means a higher paycheck and quicker advancement. The center has classrooms and computer labs for instruction and testing, but the majority of the training goes on outside, either at the CCE or on a job site. “I don’t want someone to sit in a booth, all day, welding. I don’t want training to be just theory based,” said Sean Ray, Sundt’s director of craft workforce development. “Anything that we have them doing, we try to make it like the things they will see in the field, so there’s not a shock and awe when they get into the field and say, ‘I didn’t 63
ABA SEAN RAY: Sundt’s director of craft workforce development shows off his pipefitting training wall at Sundt's Center for Craft Excellence.
JOSUE PONCE: Sundt’s Center for Craft Excellence welding subject matter expert.
know it would be anything like this.’ “ At the CCE, Sundt has five full-time employees and the company has 22 certified trainers who offer instruction in the field and at the center. One of Sundt's most valuable instructors is Josue Ponce, who is a welding subject matter expert and industrial instructor. Ponce is a certified quality manager and trains all of Sundt’s welders at the center on the procedures that they 64 | July-August 2018
use. If it’s being welded by a Sundt craftsman, Ponce instructed that person on how to do that weld. Arizona is a state that does not require a journeyman license for many construction skills, like pipe fitting, but Sundt trains its workers through the CCE so they become certified journeyman pipe fitters or iron workers or welders. “Now we can say, this person is NCCER Certified or Certified Plus,” said Ray. “Workers get $2.50 an hour more for being Certified Plus.” Haag said Sundt started 2017 with zero craft professionals with the Certified Plus designation, but through the CCE training, ended the year with
96. In 2018, the goal was 100 Certified Plus craftsmen and Sundt was well on its way to that goal with 59 by May. “We should end up with 200 Certified Plus professionals by the end of the year,” Haag said. “It’s about productivity, quality and safety, not necessarily in that order. And we have people who know what they are doing and we have confidence in our core craft professionals in the field.” Haag said the CCE’s current facility will soon give way to a new one, as Sundt is in the initial planning stages for a new Center for Craft Excellence, one with more indoor work space so training can go on during the hot summer months. “We repurposed the building and now it’s full of people running the workforce development programs and the building is serving its purpose for the moment, but we’re growing out of it,” Haag said. “This will probably be all knocked down and in the next year or two, we’re going to build a brand new Center for Craft Excellence.” Another Sundt workforce development initiative has been helping Central Arizona College build its Industrial Construction Program from the ground up. In the summer of 2017, Haag, Ray and other Sundt executives met with Central Arizona College to propose a simple apprenticeship program for heavy equipment operators. After the initial meeting with CAC president Jackie Elliott went well, Haag decided he would see just how much he could pile into the program. “On their drive back to Mesa, they must have said, ‘hey, that president, she says yes to anything, so let’s go back and ask for something else,'" Elliott said. “So they came back and Dan so subtly slipped in and said, ‘have you ever thought about maybe we could do concrete forming and pipefitting and pipe welding and industrial construction,’ and I said, ‘sure, we could do that.’ “
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ABA JTED: During a major university hospital construction tour, students were able to to speak with workers and project managers.
While Elliott may have been enthusiastic about the program, CAC didn’t have the budget to fund it, so Sundt stepped in and provided tools and equipment as well as instructors. The program is unique because it includes teaching soft skills like timeliness and other basic functions of an effective employee. It’s also Occupational Safety and Health Administration (OSHA) embedded and offers stackable credentialing programs. “We co-designed the program to deliver the skills that companies want,” Elliott said. “We call it education at the speed of industry.” The first year program had more than 100 participants, with 30 graduates. Of those 30, all were immediately hired. “We have a hard time keeping our students in the welding program because they are in such high demand,” Elliott said. “Companies are lining up to hire them.” Ray said two of the students in the welding program were hired by Brycon Construction in Chandler, Journeyman welder pay at 20 and 21 years old. “We’re in it to help the industry,” Haag said of the CAC program, one he’s working to expand to other colleges in Arizona and Texas. “We’re competing with all of the companies to hire these graduates. This is what we need in order to grow the talent for our future.” While the Sundt programs are unique for Arizona, it is not the only company working hard to fill the craft profession with a well-trained workforce. Here are what two other companies are doing:
MCCARTHY BUILDING COMPANIES According to Justin Dent, vice president of operations for McCarthy Building Companies Southwest Region, his company focuses on three primary areas when it comes to its workforce development programs: Development of a Future Workforce, Recruiting and Training New Employees and Training 66 | July-August 2018
and Retention of Employees. McCarthy’s Development of a Future Workforce initiative focuses on engaging youth and high school students and their parents to highlight how rewarding a career in construction can be and that young people have options to college. These efforts include: - Skills USA - McCarthy is a teamwork competition host of this national program for high school, college and middle-school students, which through competition, prepares our future workforce. - STEM hands-on construction curriculum developed by McCarthy for elementary and middle-school students, where they see first-hand how to apply STEM lessons in building. - Construction Career Days sponsor of this annual event where students from across the state participate in an interactive event that introduces students to careers in construction. - JTED program recruitment and teaching where McCarthy employees support recruitment efforts and serve as guest instructors at Metro Tech, WestMEC, etc. - McCarthy attends more than 50 community outreach events nationally, focused on educating parents, students and faculty about construction careers. The Recruiting and Training New
Employees efforts provide training and employment opportunities to individuals who have an interest in pursuing a career in construction. McCarthy engages interested individuals in entering construction, trains them on projects and hires qualified candidates to join the firm. - Apprentice programs with JTED and Community Colleges where students receive internships at McCarthy and are invited to participate in its apprentice program. This summer alone, McCarthy is hosting at least a dozen craft worker interns on projects. - Training Within Industry (TWI) is a national program whereby people with no experience in construction receive training necessary to begin a career in solar construction. Many of McCarthy’s recruits through this program live in rural communities and work in fast-food, retail or other low-earning jobs. TWI is a training program that introduces non-construction industries to entry-level field work in construction where new skills are acquired in a growing industry, and provides workers with the ability to transition into a fulltime employee at McCarthy. -Greater Phoenix Chamber of Commerce Foundation workforce recruitment program is marketing to potential candidates, sharing opportunities for careers in
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ABA construction at McCarthy, as well as other firms. McCarthy invests significantly in the professional development of its employees through its Training and Retention of Employees program. This training program is available to employees at all levels, and provides a road map for long-term success. - McCarthy is a Top Training Firm, and has been recognized nationally for many years as one of the top training firms in the country. Last year, McCarthy was inducted into Training Magazine’s Hall of Fame. - Craft Certifications: McCarthy invests in the training of craft labor, ABA Apprenticeship Programs at EVIT include: • Electrical apprenticeship • Heavy equipment operator • Diesel mechanic • Welding • Surveyor assistant
ABA'S ELECTRICAL APPRENTICESHIP: Under the supervision of a qualified Journeyman Electrician, students learn and practice.
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including forklift, scissor lift and boom lift training as well as safety training in fall protection, use of power tools, saws and blue print reading. - Women in Construction conference sponsors, where McCarthy women engage in various conferences throughout the year and across the nation to highlight their expertise and promotes mentorship.
DP ELECTRIC Just in its third year, DP University is delivering measurable results for Tempe-based DP Electric, an independent electrical subcontractor. “Back before the recession, we did $32 million in work with an average of 265 staff electricians,” DP Electric owner and founder Dan Puente said. “Now, we’re doing $68 million with 300. We’re just so much more efficient. That was an upside to the recession, it forced you to refine processes and look at everything to be more efficient.” DP University is a data-driven program that ties job performance with training. Performance reviews are tied to job descriptions which are tied to the employee development program. Recruiting and talent management director Steven Brown is DP’s numbers guy. He takes the performance reviews from the foremen in the field and
crunches the numbers to come up with what classes need to be offered. “The foremen, the ones working with these young men and women everyday, they are basically grading them on how well they perform the tasks for their job,” said Scot Rager, DP Electric’s education manager. “So then Steve uses that data.” “Once we figure out what those areas of opportunity are, that’s where Scot comes in,” said Brown. “He has the knowledge when it comes to the electrical skills, the education needed, so he’s on the curriculum development side.” Once areas of opportunity are pinpointed, DP will offer classes to help its employees improve their knowledge and skills in those areas. Puente said employee involvement is extremely high, with veterans willingly coming in on Saturday’s to train the up-andcoming electricians in the company. Many classes fill up and second and third classes have to be added. Puente said the company is also in the planning phase for a scholarship program for high school students interested in the industry. The idea is to go out to the schools to find interested high school students and bring them in and educate and train them, both in a classroom setting and in the field. “We want to see if they're interested, if they’re mechanically inclined and if they can cut the mustard,” Puente said. “We want to put them out on a job site, at noon in the middle of summer, and see if they don’t run away.” Those who show the desire to work in the industry will then have an opportunity to train in the ABA apprenticeship program. Puente said the company will pay for the apprenticeship program as well as pay them to work. So after getting paid to work and having the cost of the ABA apprenticeship program covered, they can become a journeyman electrician at no cost. “We’re trying to piggy-back off of what we’re doing internally and trying to expose what we do to the youth and get them engaged with the industry,” said Puente, who hopes the DP program can grow to 30 or 40 participants in two years. “We’re just going to do something to feed our pipeline.”
ARIZONA BUILDERS ALLIANCE
CRAFTING THE FUTURE Young Builders Council molds the next generation of construction professionals By JESSE A. MILLARD
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ith eyes set on cultivating the future leaders of Arizona’s construction industry, the Young Builders Council has been working to mold the minds of the future through meetings, education and attraction. In an industry that is seeing many baby boomers retire, and a lack of manpower and talent, the Arizona Builders Alliance group is focused on showcasing Arizona’s construction industry, says Jeremy Keck, chairman of the Young Builders Council and director of preconstruction at Chasse Building Team. The Young Builders Council focuses on four pillars to tighten young
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construction professionals’ connection with the industry, which include: • Education • Social events • Advocacy • Outreach With these four pillars in mind, the Young Builders Council hosts meetings to provide a path and opportunity for young construction professionals so they can become future leaders, Keck says. There are meetings where construction veterans share years of industry knowledge and young builders are given opportunities to get involved with legislative advocacy and outreach to the local community. “It’s really fun to get to know those
folks within the industry and really see the power of when folks come together to accomplish a common goal, it’s really impactful when you see that take place,” Keck shares. Since the recession, Arizona’s construction industry has lost a lot of talent over the years. And the industry faces old perceptions that years of technology innovations have changed. Keck says the Young Builders Council is working to rebrand construction by showing that the industry isn’t just hammering nails, but it’s technologically advanced and highly collaborative. The group reaches out to students within Arizona to get younger folks interested in the trades and that there’s a viable career path in construction, Keck says. Eric Pach, immediate past chairman of the Young Builders Council and a commercial insurance broker at Minard-Ames Insurance, helped found
ARIZONA BUILDERS ALLIANCE
the Arizona Builders Alliance group. He helped create the group to get young construction professionals in the same room more often, so they could learn and collaborate. The Young Builders Council was founded around the idea of, “what if you had some of the most ambitious, young construction people all in a room? What would you do? How would we influence Arizona construction in a positive way?” Pach asks. They’ve influenced the industry through the council’s four pillars, growing to over 100 members, he says. The council has worked on reaching out to local universities and connecting newcomers to Arizona’s construction industry with a variety of resources. Pach has had the opportunity to hear the effect of the council from the Arizona Builders Alliance board of directors. “There are board members, lifetime board members and board members who have been involved in the ABA for decades, and they’ve never seen as much young involvement in the ABA since we started this group,” Pach says. The group was officially established in 2016. The Young Builders Council also provides a place for its members to network by getting to know more people within the industry, says Jared Kredit, Young Builders Council vice chairman and executive vice president at K2 Electric. The council is involved in the 72 | July-August 2018
community by working to attract more folks to the construction industry, which is facing labor shortages, Kredit says. Members in the council work to change the image of the industry by showing young professionals that highwage jobs exist within the industry. The council is, “helping people to understand (construction) really is a well-run, professional industry, (construction) is not just slogging it out there in the heat,” Kredit says. The Young Builders Council is also focused on providing a variety of experiences for its members by hosting many events, says Brianna Verderame, marketing chair for the Young Builders Council and director of visual media at Small Giants. Many young members aren’t in a place in their careers where they can leave the office early to go to a meeting, so the council addresses attendance challenges by hosting many events to give young professionals many opportunities to collaborate and gather, Verderame says.
Jeremy Keck
Jared Kredit
Panel discussion: Members of an ABA Young Builders Council panel speak at a quarterly meeting of the group.
The council also helps young, future leaders stay in touch with this changing industry by having opportunities to listen in on the latest trends from each segment of the construction industry. “There are so many different pieces within one construction project, and I feel like the YBC has components from each of those,” Verderame says. “It’s really nice to build those relationships in each of those layers.”
HOW TO JOIN Young construction professionals can join the Arizona Builders Alliance Young Builders Council by completing a nomination form online. Nominees must be from an ABA member company in good standing, under the age of 40 and pay annual dues of $250. Contact Erica Lange at elange@ azbuilders.org to learn more.
Eric Pach
Brianna Verderame
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DRIVEN TO BUILD JE Dunn’s Brad Schenck growing division with focus on people By STEVE BURKS
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hen Brad Schenck began his career in 1989, his focus was on building the tangible. His thoughts were on steel, concrete and glass and how they fit together to form a structure that functioned just as the client ordered. Nearly 30 years later, Schenck is still driven by building, but his focus is more on the “who” than the “what.” “I would say that at this point in my career, the thing that drives me the most is the people, especially the people here in our office,” said Schenck, the senior vice president of operations for the Southwest Division of JE Dunn Construction. “I’m just surrounded by some really talented, great people. I get a lot of energy seeing them be successful, helping them be successful building and doing what we do down here.” Schenck is entering his second year as head of the Southwest Division for JE Dunn. Based in Kansas City, Mo., JE Dunn works on construction projects for a wide base of industries, including healthcare, higher education and government. The privately owned company has 20 offices nationwide and reported $3.2 billion in revenue in 2016. Schenck’s arrival in the Arizona office has helped it grow from $70 million in revenue in 2017 to projections of more than $100 million in 2018. “We’ve got good diversity in the kinds of projects we’re working on,” Schenck said. “We’ve picked up some healthcare work, hospitality work and office work. Our revenue is growing.”
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Schenck began his career with JE Dunn at the company base in Kansas City, Mo. He started as a field engineer in 1989 after graduating with a construction engineering degree from Iowa State University. Schenck’s interest in construction and engineering was fostered at home. His father was an electrical engineer and his father’s family operated a construction company in Omaha, Neb. Schenck was initially interested in the architecture side of the industry, but didn’t have confidence in his artistic abilities. “I liked art growing up and architecture and thought maybe there’s an opportunity there,” Schenck said. “When I walked into the architecture building at Iowa State, I was a bit intimidated by all of the art. I’m OK at art, but not an artist, so that kind of scared me away. They directed me over to the construction engineering. “It was a good blend of the two things; the construction side like my dad’s side of the family in Omaha, and the engineering piece.” Schenck worked his way up to project manager before moving to Denver in 1998 to work for GE Johnson Construction. He rejoined JE Dunn in its Denver office as a senior project manager in 2001. In 2006, Schenck was at a career crossroads. He enjoyed his role as an on-site leader, but had an opportunity for promotion as a director of preconstruction, which called for less on-site work and more office time. “I didn’t want to let go of the field,” Schenck said. “I enjoyed being out there in the trailers, I enjoyed interacting with the foremen and I felt like that was something I knew and was good at.
“Leaving that to go to something I haven’t done before, that was a tough change. I think for me that stressed me a little bit but it was a good change.” That move propelled Schenck upward in the JE Dunn company, leading him to his current role as division head. For Schenck, the Arizona market has offered a different set of challenges than he faced while working in Denver for 19 years. Schenck said that he feels the region’s construction market is migrating away from a focus on residential building and towards commercial. “There’s a lot of technology work, a lot of higher ed; you’ve got major campuses around, and with that it brings different types of firms to the market, so you have to evaluate what you’re good at and how that intersects with the market,” said Schenck. “The labor market is really tight down here and it’s in front of mind for everyone that builds in this market.” Schenck said his focus at this stage of his career is on building a team that can thrive and meet the changing demands of the market. “When you continue to grow in your career, it’s really about how you motivate others and how you build a high-performing, highly-integrated team and that’s where your role as a coach is,” Schenck said. “That’s the thing that drives me; growing people, helping them in their careers, helping them be successful and watching them be successful. I want them to feel like they are part of growing our team and our office so that in 10 years from now when we’re doing $300 million a year, they can look back and feel they were an important part of building this.”
PHOTO BY MIKE MERTES, AZ BIG MEDIA
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Builders Roundtable
T
hey are the leaders of their companies and some of the most knowledgeable men in the business, so why not turn to them for some insight on the state of the commercial construction industry? These Arizona Builders Alliance members took the time to share their thoughts and visions for the industry and give some advice for the future workforce.
procurement times to increase due to demand. The market demand has brought in a new and inexperienced workforce which has threatened safety. Experienced tradesmen and superintendents of the baby boomer generation are also nearing retirement. There is also a gap of construction workers due to the recession and limited hiring within the industry. Other areas of impact include threats of tariffs and rapid increase of inflation.
keeping a safe workplace and building a culture around safety, for everyone. We also need every effort made to train the next generation of leadership in order to build and improve upon the great legacy of the construction industry. Certainly being involved with local and national legislative issues, and having a voice of influence to the industry, is vital so that we can continue to provide a pro-business, open competition environment.
WHILE WORKFORCE ISSUES REMAIN A BIG CONCERN, WHAT OTHER ISSUES ARE CURRENTLY AFFECTING THE CONSTRUCTION INDUSTRY IN ARIZONA?
Steve M. Grauer: Price fluctuations and escalations with common building materials (concrete, metals, drywall, piping, etc) are still a big concern in the construction industry. With market uncertainty, commodity products like steel, cooper, aluminum, etc. are changing weekly, which is causing trades to be more conservative and drives the cost of construction, and in turn an owner’s ability to stay within budget. With the labor shortage, base wages continue to increase. Some projects are offering incentives for certain trades to work on their projects.
Ron Harman: Workforce issues will remain the biggest concern for the construction industry. The lack of drivers is already affecting material costs and delaying the completion of projects. It’s a constant challenge to keep up with the pricing and availability of raw materials and to incorporate that into prices. Beyond the workforce issues is how companies respond to new health and safety regulations. An example of this is how companies deal with silica dust exposure for their employees. At Coreslab, we have been proactive in implementing enhanced training, monitoring employees’ exposure
Robert F. Hart: Rising Cost of Material, infrastructure and soft costs associated with the development. Barry Chasse: Project delays are currently affecting the construction industry. Architects and engineering firms have been faced with increased workloads and municipalities with numerous project submittals. The busy market has also caused vendor 76 | July-August 2018
Ken Kortman: First and foremost,
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Robert F. Hart Executive Vice President & Regional Manager, Hunt Construction
Barry Chasse Chasse Building Team
to silica dust and bringing in new equipment and tools.
HOW HAS THE INDUSTRY EVOLVED IN THE LAST 10 YEARS SINCE THE ECONOMIC DOWNTURN OF THE LATE 2000’S? BC: The industry has become accustomed to running more efficiently and leaner due to companies having to be more competitive in the downturn combined with the shortage of skilled labor and managers as the market increased. The industry is delivering more with fewer resources. The increase of urban development has also changed the market for more dense and complex construction projects. SG: Only speaking of the Arizona market, Lean Construction has taken a strong hold of the industry and is improving reliable work and helping the craft to trust each other more and building relationships. Prefabrication, kitting and racking of several trades materials together has increased and helped decrease craft in the field and tighten up schedules. With less craft available, these items are helping us do more work with less people. Moving out of what feels comfortable and looking into industry sectors and exploring new project delivery methods that we might not have normally ventured into. KK: In the downturn, we all became better business people as we learned 78 | July-August 2018
Steve M. Grauer VP, Western District Manager, Hensel Phelps
Ken Kortman President & CEO, Kortman Electric
to be more resourceful, make tough decisions, and reset vision. Like any discipline, it’s never enjoyable at the time, but we look back and recognize the value of building character and strength within our team. As the economy has ramped up again, the industry is forced to find the most efficient means to meet budget, schedule, and client expectations in order to stay in front of growth and backlog. Harman: During the last decade, every construction company was forced to become more efficient and create less waste. Lean and green has become the norm. Coreslab Structures in one of only 100 precast concrete plants that is active in the North American Precast Concrete Sustainable Plant Program, keeping a constant eye on how we use our resources.
HOW DO YOU SEE THE INDUSTRY CHANGING IN THE NEXT 10 YEARS? Hart: We are expecting a slowdown in the white hot residential marketplace throughout the West which would normally cycle into a more traditional commercial market. We believe that the evolution and collaboration between architects and contractors will continue in the development of the integrated model and we’ll see new applications for services associated with the model. We will also continue to see more building components manufactured offsite and brought “pre-
Ron Harman General Manager for Coreslab
assembled” to the jobsite to accelerate installation timeframes. SG: We see the silica requirements that are now in effect forcing the industry to continue to innovate on better products and ways of performing work without creating silica dust. We see general contractors helping coordinate more and more with prefab/modular construction as the owners want projects turned over faster. We believe we’ll see an overall reduction in the workforce due to younger individuals not entering and increasing the skilled labor work force, along with automation, robotics, and prefabrication becoming more efficient essentially slowly eliminating needs for manual labor. KK: We’ll continue to see a trend towards technology and the delivery of power over ethernet. This is a real game changer, and both designers and tradespeople are going to have to learn to adapt and understand this. Another key area is finding efficiencies through prefab solutions, using this as a means to lower costs, increase quality, mitigate risk, and expedite schedules. Harman: We can only dream how technology will transform the construction industry. I do believe the industry will continue to embrace over arching concepts like Lean Construction and digital processes that will transform the way we communicate and work together as a team in the field.
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Construction will likely become one of the highest paying careers for individuals to enter. – Steve M. Grauer
WHAT CHALLENGES HAS YOUR COMPANY FACED IN ORDER TO STAY COMPETITIVE IN THE BUSY PHOENIX MARKET? Hart: We continue to see overall fee structures lower than prior to the downturn in the 2000’s limited resources in terms of qualified personnel to match the construction demand in the Phoenix market. BC: With the labor force being so stretched, we are seeing fewer skilled tradesmen. As a result, the risk for poor quality and unsafe methods has drastically increased, resulting in more management time. SG: One of the biggest challenges has been competing with competitors who go in with low general conditions (staffing) and low fees. We feel these competitors will make it up in change orders as the project progresses, or just understaff the projects in order to maintain a budget. Another challenge has been losing employees to companies that did not maintain enough staff during the downturn and as work comes available are now short staffed. These company’s are offering higher initial base salaries and sacrificing the long term deferred compensation benefits. KK: Not to chase every opportunity. Taking the time needed to vet out the best opportunities, the best client relationships, and understanding where our services best suit the needs of the client’s project. This 80 | July-August 2018
The industry is delivering more with fewer resources. The increase of urban development has also changed the market for more dense and complex construction projects. – Barry Chasse
sometimes results in passing on other good opportunities. Also, the pace of learning and educating on new technology is challenging, and it continues to influence how we deliver service to our clients. Harman: Coreslab Structures’ biggest challenges are twofold. The first is getting more developers aware of the benefits of our fast-paced prefabrication process and the other is reaching out to prospective new employees. Our business is all about the people. We are dedicated to putting the right people in the right seat.
WHAT IS YOUR ADVICE TO YOUNG PEOPLE JUST ENTERING THE INDUSTRY? Hart: Work hard and get out in the field and experience what the business is all about. BC: Three ideas for new people who are getting into the industry: Create a Network: Attend mixers and meet people with whom you can share ideas, project leads and opportunities. Find a Mentor: Ask someone you have a great level of respect for if they would be your mentor. This should be someone who understands what your job and responsibilities are and can also share their experience and level of expertise. Join Organizations: Seek out organizations that are related to your industry. Sit on some of the
We also need every effort made to train the next generation of leadership in order to build and improve upon the great legacy of the construction industry. – Ken Kortman
committees and attend their monthly meetings. By joining committees, you get a better understanding of the organization and get closer to key people on the committee. Construction is a GREAT industry and viable career for young individuals. If you enjoy building things, working with dynamic teams, and shaping the community in which we live, then this is the industry for you. Construction will likely become one of the highest paying careers for individuals to enter. SG: Understand that you are entering an industry that goes to where the work is. Whether the work is in California, Arizona or Florida, people in the commercial market generally move to their project locations and the employers expect this. Have a positive attitude, willing to learn (humble), willing to travel and understand that we work 10-12 hours per day (or longer) and your career will start off on the right foot. Be patient and always look for opportunities to improve yourself and better those around you. KK: The construction industry provides a great pathway to a rewarding career. Be willing to learn as much as you can about the trade or services your firm provides. Reach outside your role and support your peers in an effort to understand the bigger picture. See every challenge as an opportunity to learn a little more, understand a little better, and become a better leader. Share ideas, and listen. Lead, and follow. Be eager, and patient.
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Joy, sadness and a lot of pride By MARK MINTER
I
t was with a mixture of joy and sadness that I retired from my role as President of the Arizona Builders Alliance. There is joy from knowing that my wife, Jacki, and I will have more time for travel, adventure and grand kids. There is sorrow since I know I will miss the great people and interesting challenges my career has afforded me. A sincere “thank you” to all my friends and colleagues with whom I have worked over the years to improve the commercial construction industry. Arizona has changed dramatically in that 40-year span and the industry has changed with it. When I started in the 1970’s the construction and development industry was a vastly different entity than what we see today. There were half a dozen major general contractors who dominated the Arizona market. The subcontractor community was exemplified by small businesses with limited geographical scopes. Most of the generals and subs were being run by the local founders, whose name was still on the front door. What a change to today! Billion dollar national and international firms with corporate structure, employee ownership and impressive financial and managerial capabilities dominate today’s market. These firms, collectively, are capable of building increasingly complex projects that their predecessors could only have dreamed of. On the individual level the change has been just as dramatic. The construction industry has always been a career where a tradesman could make it and ultimately own their own profitable business. That is still true today. At the same time, colleges, universities, and the on-going efforts of groups like ABA, have produced a
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generation of managers up to the task of completing today’s mega-projects. Thank you for the opportunity to serve this great organization and industry. Leading the ABA and representing you for over 40 years has been the most rewarding experience of my professional life. Your efforts truly help improve our society and peoples’ lives. In my daily travels, it is almost impossible to stop at an intersection and not see a building on which our members worked. Those buildings provide employment, health care, education and entertainment to our society. It could not happen without your talents and willingness to take risk. I hope that over the years the efforts of myself and others have helped to raise the level of professionalism in the industry and diminish some of those risks. I also hope that along the way we have made the lives of individuals in the industry more productive and fulfilling. Each year the
ABA graduates dozens of new future leaders. Our leadership classes, project manager programs and a myriad of other programs are producing the future leaders of the industry. Those leaders are being joined by the next crop of journey workers who have graduated from our apprenticeship programs. Together these great people are turning the plans and specs of an owner’s dream into the reality of a completed project. In the political world the changes have been as dramatic and equally successful. The ABA has been the focal point for change in nearly every part of Arizona statutes that impact contractors. We have developed and improved the statutes affecting the lien law, prompt payment, labor and public works improvement. It is not unusual for other states to copy the legislative successes of the Arizona Builders Alliance. Of course, the actual existence of the ABA is something of a success itself. We are one of only two states where chapters of the Associated General Contractors and the Associated Builders and Contractors have merged. A lot of vision and leadership was necessary to make that merger happen. I am confident that skill set continues in the volunteer leaders of ABA and the great staff of the association. Finally, a task force from the ABA’s board of directors has directed a succession plan to identify my successor. We conducted a nationwide search that produced nearly 60 resumes. We received many resumes from talented people interested in filling the President’s role at ABA. I am pleased that we have hired Tom Dunn to be the next President of ABA. Tom has previously served as the VicePresident of ABA for Southern Arizona. Mr. Dunn brings an impressive background of professional accomplishments, political involvement and community service to his new job. Along with the rest of the staff at ABA I am sure the organization, and the commercial construction industry, has its best years ahead of it. Mark Minter retired on June 30 from his role as President of the Arizona Builders Alliance. Minter held that position for 40 years.
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Dunn to bring energy, expertise to job New ABA president wants to build on current momentum in industry
Quick Facts about Tom Dunn
Married to Jane, a cancer infusion nurse Two adult children, Madison and Samuel ■ Graduate of Oregon State University with a B.S. in marketing ■ Board member and past board president for MHC Healthcare/Marana Health Center ■ Chairman of Pima Bond Advisory Committee ■ Trustee for Operative Plasterers & Cement Masons Union Pension ■ ■
By STEVE BURKS
H
e’s not going to re-invent the wheel, but Tom Dunn does want to add a little momentum to keep the Arizona Builders Alliance rolling into the future. Dunn, who has served as the vice president for Southern Arizona for ABA since 2011, was recently named president of the organization, replacing the retiring Mark Minter, who held the president’s role for 40 years. “Mark and I have had a great working relationship and I’m aware of what the duties of the job are,” said Dunn. “He’s done a great job of focusing on statewide issues and making sure no one is overlooked. That’s what I’ve been telling our members, I want to make sure no one is overlooked and if I do miss something, to let me know.” Dunn brings a background in business and politics to the job, two key elements he’ll need as ABA president. Dunn owned mortgage brokerage firms in Washington state for 15 years from 1993-2008, but he, “got tired of the rain and paying extra to live in the rain,” and moved to Marana, where his parents had relocated. In 2008, Dunn served as the press secretary for Tim Bee, who was running for congress, and then was the campaign manager for Marana mayor Ed Honea for three successful campaigns. “At Associated Builders and Contractors they have a saying: ‘get into politics or get out of business,’
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so it’s important that the industry has a voice,” said Dunn of the value of knowing how Arizona politics works. “When talking to politicians or government staff, my experience helps me understand their perspective and what they want to know.” For Dunn, the first order of business when he took over as president was to hit the road and meet with as many ABA board members as he could. He viewed these face-to-face meetings as vital to making sure that the ABA staff clearly understood what the membership was looking for. “I just want to get their input on where they see the ABA going and what are the needs of the membership,” Dunn said. “I always want an open line of communication. I want to be as transparent as possible and get as much work done as possible. I’m energetic, have a positive outlook on things and I’m a team builder. “I want to represent the members in a way that they want to be represented.” For Dunn, that open line of
communication with the ABA membership is vital, especially for the smaller, independent companies who don’t have the resources that some of the larger, nationwide firms have. “What we try to provide for the membership is to be a resource to them so when those things happen, we help them,” Dunn said. “We want to make sure that our members have as an effective workforce as possible, so that they can maintain things if and when the economy shifts.” Another source of inspiration for Dunn is his predecessor, Minter, who took the same path from VP of Southern Arizona up to the Valley and into the president’s role. Minter found success in that role and was a true advocate for the construction industry for 40 years. As he moves up to the Valley, Dunn hopes to forge the same kind of relationships he has built for the past 13 years in Southern Arizona. “I build relationships with folks that I truly value and that will continue here in Phoenix,” Dunn said. “We have great people in the commercial construction industry, people that really build things. It’s really refreshing for me coming from a mortgage broker background. My membership builds things for people to use.”
BUILDING COMMUNITY ON PURPOSE. Sundt is a proud supporter of the Arizona Builders Alliance. Thank you to the ABA for your commitment to developing future industry leaders, training our craft workforce, connecting businesses and advocating for the construction industry.
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ABA Member Projects THE LOCAL MIXED-USE DEVELOPMENT Developer: Forum Real Estate Group General Contractor: JE Dunn Construction Architect: Humphrey’s & Partners Urban Architecture Location: 204 W. University Dr., Tempe, AZ 85281 Size: 585,423 SF Value: $68.2 million Start Date: July 2017 Completion Date: Jan 2019 Subcontractors: Schnabel Foundation Systems, Blount Contracting, Suntec Concrete, Stone Cold Masonry, SECON, HACI Mechanical, E&K, Diversified Interiors, Kovach, Otis Elevator CAMELBACK INN BALLROOM EXPANSION AND MEETING ROOMS REMODEL
Owner’s Representative: Rider Levett Bucknall General Contractor: Concord General Contracting Architect: PHX Architecture Location: 5402 E. Lincoln Dr., Paradise Valley, AZ 85253 Size: 36,000 SF Value: $13.4 million Start Date: July 2017 Completion Date: June 2018 Subcontractors: Irontree Construction, Commercial Air, Echo Canyon, Hobbs Masonry
SCOTTSDALE AIRPORT TERMINAL REDEVELOPMENT Developer: City of Scottsdale Aviation Department General Contractor: JE Dunn Construction Architect: DWL Architects + Planners, Inc. Location: 15000 N. Airport Dr., Scottsdale, AZ 85260 Size: 91,231 SF Value: $22.1 million Start Date: July 2017 Completion Date: July 2018 Subcontractors: Bell Steel, Berg Drywall, Complete Aviation Fuel Systems, Delta Diversified, Kovach, Ricor, Suntec Concrete, Sutter Masonry
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THANK YOU TO OUR VALUED TRADE PARTNERS 2000 West University Drive, Tempe, AZ
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