AZRE May/June 2018

MAY-JUNE 2018

HEALTHCARE

TRENDS

INSIDE:

Downtown Phoenix p. 42 | Valley Partnership p. 81

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Jumping right in

T

o steal a phrase from the late, great Keith Jackson, “Whoa, Nellie!”

Jumping into the fastpaced, multi-faceted world of commercial real estate was sure an eye-opener. I am a newspaper veteran with more than two decades in the Valley, most of that time devoted to sports writing and editing. Driving to and from sporting events, it was difficult to not be aware of all of the buying, selling and building going on in our metro area. Little did I know when I took on the role of Associate Editor for AZRE, how deep the pool of talent was behind all of that activity in the Phoenix market.

As a sports writer, it was a pleasure to get to know the players and decision makers to learn what makes them successful when they take the court or field. In all of my dealings with those in the CRE industry so far, it’s become obvious why the Phoenix market is one of the strongest in the country. The Valley is full of top-tier CRE professionals. From the CEOs, brokers, builders and communicators, it’s been a pleasure getting acquainted with some of them over the course of my first month here at AZRE. One of my first introductions was with Cheryl Lombard, president and CEO of Valley Partnership, one of the most influencial trade organizations in the state. This issue includes our Valley Partnership supplement and in it you’ll read about some of the remarkable projects that Valley Partnership members are leading. You’ll also read about two Valley Partnership mainstays ­— the Friday Morning Breakfast series and the Advocates program — that influence current and future industry leaders.

We also profile healthcare trends related to senior living, including a look at a unique retirement community at Arizona State University, Mirabella. Also, we profile three of the best-selling master-planned communities in the nation right here in the Valley.

For you, AZRE will look like nothing’s changed. For this rookie, however, the learning curve is steep but I’m excited to be in the game.

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

2 | May-June 2018

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: Will Everett | Emily Gadberry | Sage Schneider Contributing writers: Chris Camacho | Suzanne Kinney Tim Lawless | Cheryl Lombard | Peter Madrid | David McGlothlin ART Art director: Mike Mertes Graphic designer: Bruce Andersen MARKETING/EVENTS Marketing & events manager: Cristal Rodriguez Marketing specialist: Gloria Del Grosso 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 | Thomas 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 HOME & DESIGN 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.

Whiskey Row Gilbert AZRE Red Award Best Retail Project

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2018

WINNER

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CONTENTS

FEATURES 2 Editor’s Letter 6 Trendsetters 10 Executive Profile 12 After Hours 14 New to Market 16 Big Deals

20 Legislative Update

24 CRE Law

64

28 Healthcare Building Trends 42 Downtown Phoenix

50 Masterplanned Communities

52 CCIM

14

56 IREM

58 AZCREW 63 Top Producers of 2017 81 Valley Partnership

81

On the cover:

Mirabella at ASU is being built on ASU’s Tempe campus at the southeast corner of University Drive and Mill Avenue.

4 | May-June 2018

GO TO store.azBIGmedia.com to purchase subscriptions, digital issues and plaques

28

TRENDSETTERS

for thought

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Phoenix’s

TOP 10 building permits of 2017 What were the largest construction permits in Phoenix in 2017? The research team at BuildZoom analyzed the data from our National Building Permit Database to identify the 10 most expensive building permits issued for Phoenix projects in 2017:

Grocery-anchored centers continued to be an attractive property type for investors in 2017, with sales volumes increasing by 5.3 percent, according to JLL’s Grocery Tracker 2018 report.

Here are grocery trends JLL says to watch in 2018:

MAJOR PROJECT: Alta Central is a 378,000-square-foot multifamily apartment complex under development at the cross streets of North Central and Indianola avenues.

5. Broadstone Midtown Cost: $33,592,763 Location: 240 W. Osborn Rd. 6. Camelback Subaru Expansion Cost: $33,529,610 Location: 1521 E. Camelback Rd.

1. Grand Canyon University Missouri Parking Garage Cost: $67,971,440 Location: 5346 N. 29th Ave.

7. Alta Central Multifamily Complex Cost: $31,274,742 Location: 4001 N. Central Ave.

2. The Stewart (Phase 2) Cost: $52,917,439 Location: 802 N. Central Ave.

8. The Willa Residential Apartment Cost: $29,988,146 Location: 1505 N. Central Ave.

3. 28th & Camelback Apartment Complex Cost: $42,804,765 Location: 2727 E. Camelback Rd.

9. Biltmore Spectrum Cost: $29,336,552 Location: 4640 N. 24th St.

4. City Center on the Park (Building A) Cost: $42,258,595 Location: 1313 N. 2nd St.

10. Liberty Logistics Center II (Building 2) Cost: $28,327,390 Location: 1500 S. 71st Ave.

Arizona is one of the best states for renters

one of the most renter-friendly states in the nation.

Rental laws vary considerably from state to state, so much so that certain states favor renters while others clearly favor landlords. And according to analysis from RENTCafé, Arizona is 6 | May-June 2018

• Arizona is one of only 17 states that have markedly renter-friendly legislation, coming in at No. 5.

• Apart from having the right to a 30-day notice for rent increases, Arizona renters can repair minor defects and deduct the costs from

• Smaller and more focused stores: Smaller footprints have more opportunities in urban locations and in mixed use projects. Grocers like Aldi and Trader Joes benefit from the flexibility to take smaller spaces in vertically integrated projects.

• Data driven technology: As shoppers demand more digital integration, retailers have new access to unprecedented amounts of data. This data will provide greater efficiency in operations and enhanced customization of products for consumers.

• Blockchain: For the grocery industry, blockchain has the capability of improving food safety, allowing products to be recalled more quickly, and improving inventory management.

• Partnerships and consolidations: The acquisitions with the greatest implications will occur between grocers and non-grocery companies, like Kroger’s potential partnership with Ace Hardware.

• Rapid checkout: Walmart is expanding Scan & Go mobile checkout to 100 more stores and Kroger’s Scan, Bag and Go will be in 400 stores in 2018. their monthly rent.

• The termination notice required for failing to pay rent is only five days.

If that sounds harsh, consider the case of Maryland renters: landlords in Maryland can file for eviction immediately, while Arkansas is the only state where tenants can face criminal charges for failure to vacate.

Online retailers making move to Scottsdale Fashion Square Two retailers that began as onlineonly marketplaces are setting up shop at Scottsdale Fashion Square. Morphe, a beauty brand, and UNTUCKit, a men’s clothing retailer, are part of a growing trend of digitally-native retail brands setting up brick-and-mortar locations.

“Scottsdale Fashion Square is globally recognized as the undisputed leader for luxury and contemporary brands in the Southwest,” said Michael Guerin, senior vice president of leasing for Scottsdale Fashion Square’s parent company, Macerich. “It makes sense that cutting-edge digital brands like Morphe and UNTUCKit chose Scottsdale Fashion Square for their exclusive presence in the market.”

Morphe was planning an April opening for its Scottsdale store. The company was born in 2008 and was the brainchild of sibling duo Chris and Linda Tawil. Morphe started with professional-yet-affordable brushes and quickly expanded into eyeshadow palettes, lip colors and more.

The Scottsdale Fashion Square store is among the first for the brand outside of California, with other planned locations including Las Vegas and Paramus, N.J. UNTUCKit’s opening is planned for later in the summer. UNTUCKit was the first to create a signature shirt specifically designed to be worn untucked. Since launching in 2011 with its signature men’s

shirt, UNTUCKit has evolved to outfit the whole family with the addition of lines for women and children. UNTUCKit was one of the most active e-commerce store expansion stories of 2017, opening 20 locations across the country, with plans to open an additional 25 in 2018, including an international expansion.

Other e-commerce brands are expected

to follow suit into the physical real estate realm. Lingerie retailer Adore Me is planning a major move to physical locations, with 200 to 300 stores expected in the next five years. Company CEO Morgan Hermand-Waiche told the Wall Street Journal that the first seven stores will open in 2018 in New York City, with 20 more expected to open in 2019.

Retail construction

consulting, development to retail tenants, and redevelopment to owners of retail real estate throughout the West. Cheatham notes that while new construction levels are steady at 1 million to 2 million square Dave Cheatham feet per year, smaller in-fill parcels are being redeveloped into new uses and are transforming some areas.

In 2017 there were 153 buildings constructed throughout the Phoenix market, totaling more than 1.75 million square feet.

Who is going into all of these buildings?

holding steady in Phoenix market After the construction boom in 20062008 that saw 7 million to 9 million square feet of new retail space each year, Dave Cheatham of Velocity Retail Group thinks Phoenix is experiencing what many major markets have already gone through.

Cheatham has over 30 years experience in the retail real estate industry. He is the President of Velocity Retail Group which provides a full range of commercial realestate services including leasing and selling of shopping centers, tenant representation, consulting, land brokerage, investment

■ Single-tenant or two to three tenant buildings make up 114 of those buildings.

Tenants such as Salad and Go, The Human Bean, Starbucks, Panera Bread and Dutch Bros are sporting new buildings in these in-fill areas.

■ Larger, single tenants occupy 35 percent of the new construction in 35 buildings.

Goodwill, Ace Hardware, EoS Fitness, CVS, Main Event, Dierks Bentley, Boot Barn and Dollar General make up a few of those.

■ Another 35 percent was from just five buildings: Fry’s Food and Drug opened three stores, Wal-Mart one, and At Home opened in Gilbert.

7

TRENDSETTERS

BIG-BOX

development is strong in the region with 3.4 million square feet completing construction, the most in over a decade.

New development will not subside anytime soon as over 2.3 million square feet is currently under construction.

market coming off strong 2017 Colliers International recently released its 2018 Big-Box Market Report and the Phoenix big-box industrial market had a great year in 2017, with the bulk of the tenant leasing activity, new development and building sales concentrated in the West Valley. Solid market dynamics, a good labor pool and new infrastructure development are contributing to the health of the Phoenix market. Freeway expansion of both the Loop 202 and the Loop 303 will improve access to a number of submarkets in the area and will continue to open up new industrial development opportunities.

Key Findings ■ The Greater Phoenix big-box market continues to post exceptional growth because of its proximity to a growing population, a strong workforce base, an expanded and modernized highway system and more attractive rental rates compared to markets in Southern California. Nearly five million people live in the metro Phoenix area, the 12thhighest in the U.S., and this number is

expected to grow to over 8 percent in the next five years, according the U.S. Census Bureau.

■ The Greater Phoenix market was one of the hardest hit by the subprime mortgage collapse and subsequent recession with overall vacancy rates for big-box product topping out at 30 percent in 2009. Much of that vacancy was occupied as the economy improved dropping to 9.9 percent in 2012, then escalating as new development increased with the rise in demand for e-commerce fulfillment centers.

The market finished 2017 with an overall vacancy rate of 15.4 percent, significantly lower than 2016’s 19.9 percent because of robust activity that led to record breaking net absorption.

To view the complete report, go online at http://colliers-2h2017bigbox.brandcast.com

BIG-BOX BUILDING INVENTORY

■ Nearly 5 million square feet were absorbed in 2017 thanks to a plethora of large transactions signed by Chewy.com, UPS and Amazon. These transactions showcase the growing demand from e-commerce retailers and transportation companies in the region.

Despite a double-digit vacancy rate, new

Who was named

Best of NAIOP? The Arizona Chapter of NAIOP recognized the best in commercial real estate at the annual Best of NAIOP event.

Here are the 2018 Best of NAIOP winners:

Architect of the Year: Butler Design Group Award of Excellence: Pete Bolton, The Pete Bolton Company Brokerage Firm of the Year: Cushman & Wakefield Developing Leader of the Year: Jenna Borcherding, JLL Emerging Broker of the Year: Chris Marchildon, CBRE Firm of the Year: Willmeng Construction, Inc. General Contractor of the Year: Layton Construction Healthcare Broker of the Year: Kate Morris & Vince Femiano, CBRE Industrial Broker of the Year: Andy Markham, Mike Haenel & Will Strong, Cushman & Wakefield Industrial Build-to-Suit Project of the Year: Conair Industrial Tenant Improvement of the Year: Huhtamaki Interior Architect of the Year: Phoenix Design One, Inc. 8 | May-June 2018

■ All signs point to continued growth in the Greater Phoenix big-box market in 2018. The region is competing with Southern California for new big-box occupiers because of its economic rents, strong labor force and pro-business environment. Because of these factors, activity will remain strong and will keep upward pressure on taking rents and sale prices and keep cap rates low for the foreseeable future.

Investment Broker of the Year: Eric Wichterman, Cushman & Wakefield Medical Office Project of the Year: Arizona Oncology Office Broker of the Year: Kevin Calihan & Bryan Taute, CBRE Office Build-to-Suit of the Year: Farmers Insurance Office Tenant Improvement of the Year (Less Than 30,000 SF): Integrate at The Monroe Office Tenant Improvement of the Year (More Than 30,000SF): Marina Heights Building 600 Owner/Developer of the Year: ViaWest Group Redevelopment Project of the Year: The Quad Retail Broker of the Year: Darren Pitts, Velocity Retail Group Retail Project of the Year: Alliance Bank - Gilbert Rookie Broker of the Year: Stephen Sonntag, CBRE Spec Industrial Project of the Year: PV | 303 Spec Building A Spec Office Project of the Year: The Grand at Papago Park Center - Building One Sustainable Project of the Year: Liberty Center at Rio Salado Building 3 Talk of the Town: Biltmore Center Tenant Improvement Contractor of the Year: Layton Construction Tenant Representative Broker of the Year: Pat Williams, JLL Transaction of the Year: Marina Heights

Phoenix climbs on list of best metros for commercial real estate investment Phoenix advanced three spots to No. 11 on the list of most attractive metros for commercial real estate investment, tying with San Diego, Minneapolis/St. Paul and Philadelphia, according to survey respondents of CBRE’s 2018 Americas Investor Intentions Survey.

The survey, which covered all asset types, shows that 88 percent of investors plan to either maintain or increase spending in 2018—up from 83 percent in 2017.

The survey also looked at how investors view each of the different asset types: • Industrial – Industrial is increasingly the preferred property type, cited by 50 percent of investors as the most attractive for investment in 2018, up from 38 percent in 2017.

• Multifamily – Cited by 20 percent of investors, multifamily is the next most attractive property types, though its share decreased from last year.

• Office – Fourteen percent of investors said they are planning to invest in office product in 2018.

• Retail – Despite competition from e-commerce, the retail sector improved modestly from last year (10 percent in 2018 vs. 8 percent in 2017).

“Commercial real estate investment

Survey finds distractions more crucial to production than space According to the 2018 Workspace Survey, conducted by the commercial real estate Website Commercialcafe. com, respondents were more concerned with constant interruptions, noise levels and overall lack of control over their environment than having a lot of space to work in. Also, co-working offices are a lot less popular with Millennials than Gen Z’ers. These are the things that have the most impact on worker productivity, according to the survey.

activity was healthy in 2017, reaching $8.8 billion,” said Jessica Glick, senior research analyst with CBRE Phoenix. “In line with national trends, industrial and logistics was the darling asset class for investors, with deal flow increasing 7 percent from 2016. This was followed closely by multifamily, then office and retail. Although there was a slight dip in the number of office deals last year, dollar volume increased yearover-year due to the execution of a few larger transactions.”

PREFERRED PROPERTY SECTOR 2018 2017

Industrial 50% 38%

Multifamily 20% 28%

Office 14% 18%

Retail 10% 8%

Other 4% 5%

Hotel/Resorts 2% 4% Source: CBRE

Industrial market on the upswing heading into 2018 The greater Phoenix industrial real estate market finished off 2017 with a strong fourth quarter, thanks to continued high tenant demand, according to Colliers International’s 4th quarter report. The report noted that the market had one of its most active years on record and the trend looks to continue in 2018 with several large leases already being signed. Investors are aggressively acquiring properties and the transaction activity spiked by more than 15 percent for the year.

Highlights of the report include: Net absorption topped 2.1 million square feet, bringing the total for the year to 9.2 million square feet. The vacancy rate retreated 140 basis points for the year, ending 2017 at 8 percent.

Asking rent prices inched down in the quarter, ending the year at $0.57 per square foot, per month. For 2017, rents rose 2.2 percent.

Approximately 1.2 million square feet of new space came online during the quarter, bringing the construction total for the year to more than 5.6 million square feet.

Construction activity has averaged 5.5 million square feet each year since 2013.

Investor market was robust for the year.

Sales velocity rose by more than 15 percent from 2016 levels, with median prices rising to $83 per square foot, and cap rates compressed to about 7 percent.

Which of the following impacts your productivity (if any)?

Interruptions from my co-workers

64.12%

It's loud

60.04 %

No privacy

43.62%

Everyone can hear everything

43.00%

People looking at my monitor

38.59%

Outdated workstations, furniture and equipment

33.41%

Poor ventilation and indoor air quality

33.18%

Poor overall lighting

33.13%

I have to talk to my colleagues even if I don't want to

32.08%

I have no control over the workspace

30.09% Source: Commercialcafe.com 9

EXECUTIVE PROFILE

Building Arizona’s future The Arizona Builders Alliance has a busy year ahead and the right man to help lead

By LISA WILCOX

M

arty Hedlund is going to be a busy man this year. Along with his day job as regional vice president of Sundt Construction, Hedlund is on the board of directors of the Greater Phoenix Chamber of Commerce, a member of the Discovery Triangle’s board of directors, on the national board of directors for the Design Build Institute of America (DBIA), as well as being part of the DBIA National Certification Board. To top it all off, he’s taking the reins as the 2018 chairman of the Arizona Builders Alliance (ABA).

Growing up in Phoenix, Hedlund says his affinity for science and math as a child is what led him to pursue a civil engineering degree at Stanford University. It was during those college summer internships where, by process of elimination, he found his calling.

Hedlund quickly learned that the office scene wasn’t for him.

“What I really liked was being outdoors and near the projects that were being engineered or being built,” he says.

This realization led Hedlund to pursue construction over engineering.

A few more internships later and he crossed roads and bridges off his to-do list. Building buildings was going to be his thing and more than 30 years later, his love for all things construction is stronger than ever.

After college, Hedlund came home

10 | May-June 2018

to the Valley and soon found his place with a company that offered him boundless growth, Sundt Construction.

“I became a field engineer in 1984 and just Marty Hedlund kind of did all the different operational positions along the way,” he says, a path that led him to his current place as regional vice president of Sundt, one of the largest employee-owned construction companies in the United States.

When Hedlund talks about the family atmosphere that has kept him at Sundt, he’s isn’t speaking metaphorically. His brother Eric Hedlund is the Texas district manager for Sundt Construction and a former chairman of the ABA. Not only does this ensure that family requests to build backyard playhouses will receive competitive bids, but it makes Marty’s appointment historic. The two are the first set of brothers to hold the volunteer position.

Hedlund’s turn as chairman of the ABA isn’t going to be a cake walk though. First, he’ll be heading up the board the same year the organization is losing the only president it’s ever known. After 25 years of leading

the ABA, Mark Minter is retiring in 2018, leaving a significant hole to fill.

Making sure the next president has a big enough shovel to fill it is No. 1 on Hedlund’s to-do list. Knowing such a major transition won’t happen seamlessly on its own, his work as chairman will focus well beyond his one-year tenure.

“Strategic planning isn’t just about looking at this year or next year, it’s about ‘what are your long term plans?’”

Hedlund says.

Those plans include keeping the ABA’s vision strong, while increasing membership and education for all levels of the industry.

Another challenge Hedlund will face is making sure his industry utilizes the services offered by the ABA as Arizona continues to grow. Growth is good of course, especially for the construction industry, but it also creates a new set of problems. Most notably, Hedlund says, is not enough workers. Consequently, increasing a well-trained workforce is another top priority for the incoming chairman, as is leadership training.

“Educating not only craft, but management personnel to run the work, is a big challenge,” he says.

Hedlund explains that overwhelmed management can leads to serious, and sometimes fatal, growing pains.

For example, the divergence in time between paying employees and getting paid by clients can cause a cash flow problem, from which a company may never be able to recover. This is why encouraging members to take advantage of the ABA training and development programs is another of his top priorities.

As a man who likes to have a full plate in front of him, Hedlund also hopes to use his time as chairman of the ABA to help improve his industry’s face value. He says he’s well aware of the sweaty-guy-digging-a-ditch image that comes to mind when people think about construction, and he’s not arguing with it, “It is all those things, but it is also about really smart people coming up with incredibly creative ways to build cool things that help serve our communities, and ultimately can change the world.”

Longfellow Law Group, PLLC provides commercial real estate transaction legal services for all types of property including office, industrial, medical, retail, hospitality, mixed use and multifamily projects.

• Acquisition and Disposition • Due Diligence • Financing • Ownership Structure and Organization • Joint Ventures, Partnerships and LLCs • National, Regional and Local Leasing • Purchases and Sales of Businesses

Serving business and property owners, developers, real estate professionals and their clients.

AV-Preeminent Rating, Martindale-Hubbell®

COMING NEXT ISSUE Featured topics include:

• Meet the Most Influential Women in Commercial Real Estate • Get a look at the winners of the IIDA PRIDE Awards • Programs aim to attract more women to careers in construction • Arizona Builders Alliance members talk about industry trends • A look at some of the technological innovations impacting construction

For additional information, call 602.277.6045 or visit,

azBIGmedia.com

11

AFTER HOURS

Good sports

Some of Arizona’s top commercial real estate leaders boast amazing athletic accomplishments

Mike Bontrager

Casey Cartier

Craig Coppola

David M. Genovese

John Graham

John Kemper

Linda Lang

Terry MartinDenning

Andi St. John

Megan Sherwood

By MICHAEL GOSSIE

D

id you know that one of Arizona’s most respected commercial real estate developers once made an unassisted triple play and that another has been a member of the PGA for more than 25 years?

Here are just some of the secret sports skills that are displayed by Arizona’s most influential leaders in commercial real estate: Mike Bontrager, senior vice president, Adolfson & Peterson Construction: “I race road bicycles, which feeds my competitive spirit — even though I don’t finish all that well.”

Casey Cartier, president and CEO, Jokake Construction Services, Inc.: “I was a bull rider during my college years with the bright idea that I’d use my winnings to pay my tuition.

Unfortunately, I was only good enough to pay for gas to the next rodeo.”

Craig Coppola, founding principal, Lee & Associates: “I was drafted by and played professional baseball in the Minnesota Twins’ organization.”

David M. Genovese, principal and managing director, Avison Young - Arizona: “I am a competitive

12 | May-June 2018

cyclist. Training allows me quality time outdoors and valuable time to think and gain perspective.”

John Graham, president and CEO, Sunbelt Holdings: “I made an unassisted triple play playing Little League baseball.”

John Kemper, president, FirstService Residential Arizona: “I was a professional water ski racer when I was 12 years old.”

Linda Lang, president and CEO, Arizona Association of Community Managers: “I am a former NHRA alcohol funny car driver and have flown in an F-16 fighter jet.”

Terry Martin-Denning, principal and CEO, NAI Horizon: “I am a scratch bowler and participate in state and national tournaments.”

Andi St. John, managing director, CBRE: “There’s nothing more that I enjoy than downhill skiing. The challenge of the sport is electrifying and you just can’t beat a fabulous après-ski to finish off your adventure.”

Megan Sherwood, executive vice president of brokerage services, Plaza Companies: “I’m an avid golfer and currently have a 5 handicap.”

MOST INFLUENTIAL

WOMEN

IN ARIZONA

Join the celebration as we toast to the 2018 Most Influential Women in commercial real estate

August 23, 2018

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5:30 - 8:00pm | The Camby 2401 E Camelback Rd | Phoenix, AZ 85016

602.277.6045

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NEW TO MARKET A

D

E

HOSPITALITY A WESTIN TEMPE DEVELOPER: CAI Investments MANAGER OF SYNDICATION: Pinnacle Fund Management GENERAL CONTRACTOR: TBA ARCHITECT: RSP Architects ENTITLEMENTS: Sender Associates LOCATION: 11 E. Seventh St., Tempe SIZE: +/-212,000 SF, 18 stories, 290 rooms VALUE: $100 million START: February 2018 COMPLETION: Third quarter of 2019

14 | May-June 2018

HOSPITALITY B HOLIDAY INN EXPRESS AND HOME 2 SUITES DEVELOPERS: FHI Group, LLC and Granite Hospitality GENERAL CONTRACTOR: Canyon Building & Design LOCATION: 44th Street, just south of Loop 202 SIZE: Holiday Inn Express is four stories and 128 rooms; Home 2 Suites is four stories and 119 rooms START: March 2018 COMPLETION: Spring of 2019

RETAIL C YAM CIRCLE DEVELOPER: YAM Properties GENERAL CONTRACTOR: hardison/ downey construction BROKERAGE: YAM Properties SIZE: 17,800 SF LOCATION: Hayden Road and Northsight Boulevard, Scottsdale START: February 2018 COMPLETION: October 2018

B

C

F

MULTIFAMILY D PEARL BILTMORE DEVELOPER: The Morgan Group GENERAL CONTRACTOR: hardison/ downey construction ARCHITECT: CCBG Architects SUBCONTRACTORS: Blount Contracting, Hardrock Concrete, Hayes Mechanical, Ridgeline Framing, Coreslab, Hayden Electric, Stehl Corp, Re-Create Masonry LOCATION: 24th Street and Highland, Phoenix SIZE: 479, 832 SF (472 units) START: March 2018 COMPLETION: July 2020

OFFICE E THE RESERVE AT SAN TAN DEVELOPER: Orsett Properties GENERAL CONTRACTOR: Layton Construction ARCHITECT: Butler Design Group BROKERAGE: Newmark Knight Frank LOCATION: 343 E. Germann Rd., Gilbert SIZE: 145,000 SF START: February 2018 COMPLETION: Fourth quarter 2018

RECREATION F MARYVALE BASEBALL PARK RENOVATIONS OWNER’S REPRESENTATIVE: International Facilities Group GENERAL CONTRACTOR: Mortenson ARCHITECT: HKS LOCATION: 3600 N. 51st Ave., Phoenix SIZE: 82,000 SF VALUE: $60 million START: Late March 2018 COMPLETION: Spring 2019

15

BIG DEALS Partners, partners, partners

What happened behind the scenes of the $928 million Marina Heights sale?

By JESSE A. MILLARD

T

he $928 million sale of Marina Heights was a herculean effort involving a leaseback, a development agreement involving a property tax abatement, at least two partnership agreements, and, of course, “a typical real estate purchase deal.”

Transwestern Investment Group and JDM Partners purchased the 2 millionsquare-foot mixed-use development from State Farm in a sale leaseback at the end of 2017.

JDM Partners, along with a private partner, handled the equity side of the deal, and Transwestern Investment Group will provide management services, says Andrew Abraham, the lawyer who handled the equity side of the deal for JDM Partners.

“It was a very enjoyable transaction to work on and had a lot of interesting pieces to it,” says Abraham, who’s a president and shareholder at Burch & Cracchiolo.

JDM Partners and its partner had to work out a partnership agreement, and then they worked out a partnership agreement with Transwestern Investment Group, Abraham says. On paper,

16 | May-June 2018

Corporate Properties Trust III LP made the acquisition of Marina Heights.

Years prior to Marina Heights’ development, Arizona State University, Andrew Abraham which owns the land there, and the City of Tempe entered into a development agreement. This agreement, Abraham notes, dealt with the abatement of property taxes and was one of the most important elements that attracted State Farm and the new buyers of Marina Heights.

There’s a gradual property tax abatement for the development for 15 years, Abraham says. ASU does collect ground rent on Marina Heights, and this ground rent helps fund the public university.

“This transaction, not only from a pure private economic interest, was a strong transaction for the buyer,” Abraham says.

Marina Heights will house 8,000 State Farm employees at full capacity and has restaurant spaces and a gym located on the site.

The property was developed by Ryan Companies US, Inc. and Sunbelt Holdings. Construction on the project

IMAGE COURTESY OF RYAN COMPANIES

was finished in 2017.

The sale of Marina Heights was not a deal that lawyers worked on for many years, Abraham says.

“It was more of a 60-day deal from start to finish from the legal side,” he mentions.

Marina Heights was Transwestern Investment Group’s third sale leaseback with State Farm. The investment group also acquired State Farm office facilities in Dallas and Atlanta.

With the sale and leaseback over for Marina Heights, will Arizona be seeing another major commercial real estate undertaking, and eventual sale, of this kind?

The Valley may see many more of these types of deals where there’s a property tax abatement involved that heavily incentivized the investment, Abraham says.

Many parts of the Valley are being very creative with efforts to attract major commercial real estate investments. There is one snag, though. There just isn’t a lot of land availability like there was for Marina Heights, he says.

“Yes, I see more of these kinds of projects on the horizon, but probably not at the same volume in size,” as Marina Heights, Abraham says.

It’s the big deals and the brokers who close them that make the market an interesting one to watch. Here are the Top 5 notable sales for the months of February and March.

Sources: Cushman & Wakefield Research and Costar.

INDUSTRIAL/SALES

OFFICE/SALES

IMAGERY ©2018 GOOGLE

LIVING SPACES 6600 W. Latham St., Phoenix 437,234 SF; $36.3M BUYER: Cohen Asset Management, Inc. SELLER: Living Spaces Furniture LLC BROKER: JLL

SQUAW PEAK CORPORATE CENTER II 7720 N. 16th St., Phoenix 165,748 SF; $38.35M BUYER: Regent Properties SELLER: N/A BROKER: N/A

7102 W. ROOSEVELT ST., PHOENIX 153,600 SF; $11M BUYER: Forms + Surface, Inc. SELLER: Westcore Properties BROKER: Cushman & Wakefield

90 MOUNTAIN VIEW PHASE II 9999 N. 90th St., Scottsdale 92,562 SF; $30.5M BUYER: N/A SELLER: N/A BROKER: Cushman & Wakefield

CASA GRANDE BUSINESS PARK 87,275 SF; $9.2M 1221 W. Gila Bend Hwy., Casa Grande BUYER: Franklin Foods Holdings Inc. SELLER: United Dairymen of Arizona BROKER: N/A 295 E. OCOTILLO RD., CHANDLER 72,960 SF; $7M BUYER: CubeSmart SELLER: Dominion Real Estate Partners BROKER: N/A STELLAR AIRPARK 4013 W. Lindbergh Way, Chandler 55,090 SF; $5.4M BUYER: Pride Group, LLC SELLER: Turbo Resources BROKER: Cushman & Wakefield

THE SUMMIT 7740 N. 16th St., Phoenix 125,076 SF; $30M BUYER: Regent Properties SELLER: N/A BROKER: N/A CORRIDORS CORPORATE CENTER 2155 W. Pinnacle Peak Rd., Phoenix 132,061 SF; $25.66M BUYER: Regent Properties SELLER: N/A BROKER: N/A KIERLAND CORPORATE CENTER 7047 E. Greenway Parkway, Scottsdale 112,030 SF; $22.1M BUYER: Starwood Property Trust SELLER: N/A BROKER: N/A

17

BIG DEALS LAND/SALES

MULTIFAMILY/SALES

RETAIL/SALES

TEN01 ON THE LAKE 1001 E. Playa del Norte Dr., Phoenix 601,858 SF; $115M BUYER: PGIM, Inc. SELLER: The Picerne Group, Inc. BROKER: CBRE

PALMILLA CENTER 1533-1579 N. Dysart Rd., Avondale 84,137 SF; $18.9M BUYER: Brixton Capital AC LLC SELLER: Weingarten Realty Investors BROKER: HFF

BROADSTONE FASHION CENTER 555 S. Galleria Way, Chandler 298,820 SF; $84M BUYER: Starlight Investments SELLER: Alliance Residential Company BROKER: N/A

SAFEWAY 4750 E. Indian School Rd., Phoenix 57,618 SF; $18.3M BUYER: N/A SELLER: Fortress Investment Group LLC BROKER: Marcus & Millichap

56 NORTH APARTMENT RESIDENCES 21021 N. 56th St., Phoenix 330,000 SF; $77M BUYER: PrivatePortfolio Group LLC SELLER: Greystar Real Estate Partners BROKER: N/A

TALAVI TOWN CENTER 5715-5735 W. Bell Rd., Glendale 72,500 SF; $18.1M BUYER: N/A SELLER: N/A BROKER: N/A

VELA AT TOWN LAKE 555 N. College Ave., Tempe 254,354 SF; $73M BUYER: Pacific Development Partners SELLER: Transwestern BROKER: CBRE

745 GRAND AVE., PHOENIX 36,000 SF; $8.7M BUYER: Retail Realty Fund SELLER: SimonCRE Chisum LLC BROKER: N/A

IMAGERY ©2018 GOOGLE

WEST CAMELBACK ROAD & NORTH 91ST AVENUE, GLENDALE 16,681,302 SF; $35.8M BUYER: StoneHaven Residential JV LLC SELLER: John F. Long Family Revocable Living Trust BROKER: N/A ASANTE PHASE I - WEST ASANTE BOULEVARD, SURPRISE 1,383,758 SF; $17.6M BUYER: Lennar Arizona Inc. SELLER: He Capital 232 Phase I Property BROKER: N/A SWC MC 85 AND SR 85, BUCKEYE 30,099,960 SF; $14.77M BUYER: Ambian Dairy, LLC SELLER: N/A BROKER: Western Land Company 777-801 N. 59TH AVE., PHOENIX 1,938,420 SF; $14M BUYER: N/A SELLER: N/A BROKER: N/A SCOTTSDALE QUARTER 15125 N. Scottsdale Rd., Scottsdale 149,781 SF; $12.5M BUYER: Lennar Multifamily Investors LLC SELLER: Washington Prime Group BROKER: N/A

VELA AT TOWN LAKE: VELA at Town Lake is adjacent to the Tempe Town Lake marina and directly across from the new regional headquarters of State Farm and Sun Devil Stadium

18 | May-June 2018

CARLYLE AT SOUTH MOUNTAIN 5151 E. Guadelupe Rd., Phoenix 569,876 SF; $58.85M BUYER: Western Wealth Capital SELLER: FPA Multifamily BROKER: Cushman & Wakefield

41620-41650 W. MARICOPA CASA GRANDE HWY, MARICOPA 13,020 SF; $4.9M BUYER: N/A SELLER: N/A BROKER: Phoenix Commercial Advisors

ARIZONA’S AUTHORITATIVE MID-YEAR UPDATE & FORECAST AZRE magazine will host a panel of Arizona’s top commercial real estate experts, yielding in-depth discussions of economics, development and state of the industry.

Highlights include market analysis, all-star broker panels, networking and a cocktail reception.

Save the Date!

August 2, 2018 | 3:30-5:00 pm | The Camby INVITED PANELISTS Pete Bolton - Pete Bolton Company Leroy Breinholt - Commercial Properties Inc. Chris Camacho - Greater Phoenix Economic Council Bryon Carney - Cushman & Wakefield Molly Ryan Carson - Ryan Companies Kimberly Davids - The Weitz Company Keith Earnest – VanTrust Real Estate Grady Gammage Jr. - Gammage and Burnham Don Garner - Alliance Bank of Arizona

David Krumwiede - Lincoln Property Company Cheryl Lombard - Valley Partnership Scott Maxwell - Cresa Brian Mueller - Grand Canyon University Bob Mulhern - Colliers International David Sellers - LGE Corporation Cathy Teeter - CBRE Greg Vogel - Land Advisors Organization

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LEGISLATIVE UPDATE Backbone of Commerce: Transportation Infrastructure

I

t’s not news to anyone that transportation infrastructure is the backbone of commerce. Efficient movement of people and goods is critical to a healthy economy, not just Arizona’s. For years, the Arizona Association for Economic Development has understood this, and have acted as an advocate for infrastructure investment beginning with the Highway User Revenue Fund (HURF).

The HURF is supplied by dollars that come directly from Arizona’s citizens.

Each of us pay tax on motor fuels and fees/charges associated with registration and operation of motor vehicles on our state’s public highways. Money from the HURF has been the primary, dedicated source of funds to maintain, improve or construct our highways.

In the past, funds were swept in part to help fund the Highway Patrol. However, in the past year, the Chairmen of the Arizona House and Senate transportation committees, Noel Campbell and Bob Worsley, both championed legislation through their committee’s that provide alternative sources for funding the Highway Patrol. We applaud them for their continuing support for state, regional and local highways and roads, and the funding they require.

There are plenty of others waiting to sweep funds out of the HURF, however.

Two years ago, the Arizona Association for Economic Development joined 40

20 | May-June 2018

IMAGE COURTESY OF ARIZONA DEPARTMENT OF TRANSPORTATION

Joyce C. Grossman AAED

other organizations, spearheaded by the Rural Transportation Advocacy Council, in writing to Governor Ducey and the State Legislators urging the stoppage of transfers of HURF monies to pay for other governmental programs. Since that time, Arizona has seen stop-gap measures put into place to shore up funding to local and county jurisdictions, but to no avail — the Arizona Department of Transportation (ADOT) continues to have their funding swept year after year.

The pain of these missing funds is felt intensely statewide: Arizona is in need of $53.3 billion for our state highway system - with only $22.8 billion revenue funds available, according to ADOT’s Long Range Transportation Plan Update with the State Transportation Board, released in February of this year.

We cannot continue to let our state’s

roads and infrastructure crumble around us. As economic developers, we know that if Arizona wants to attract and retain quality businesses, it must create and maintain a healthy infrastructure. If we are to have a strong and growing economy, it is critical that commerce be able to move through our state efficiently on wellmaintained highways. For Arizona to stay competitive for economic development projects, we need ADOT to be adequately funded for the safety, update and maintenance of our transportation systems.

This isn’t mere hyperbole: the National Association of Manufacturers have found for every dollar invested in sustaining infrastructure there is roughly a three-dollar return across the economy.

Consider contacting your legislator today to encourage he/she that we use HURF revenue as was intended. We must continue providing funding to the state and counties, but we should also ensure that ADOT is adequately funded, thereby protecting our commerce through well-maintained transportation infrastructure.

Joyce C. Grossman, AZED Pro Executive Director Arizona Association for Economic Development

GPLET compromise

DERBY ROOSEVELT ROW IMAGE COURTESY OF WILDER BELSHAW ARCHITECTS

keeps tool indefinitely

I

n late February, stakeholders involved in negotiations to both reform and retain the Government Property Lease Excise Tax, or “GPLET,” which provides an 8-year property tax abatement for city approved projects in a Central Business District or “CBD,” reached an agreement that was amended to HB 2126 (Rep. Vince Leach, Oro Valley) that is now moving through the State Legislature and expected to reach the Governor’s desk.

This compromise was the product of many months of negotiations between the advocates of reform of the GPLET tool, the cities who implement the tool, and the CRE industry including BOMA who benefit from the program.

BOMA strongly supports the use of GPLET but we also felt there were further reforms that needed to be addressed for the longer term viability of the tool and that HB 2126 will accomplish this.

Tim Lawless BOMA

BOMA would like to thank Rep. Vince Leach for starting these stakeholder meetings during the summer and continuing them through the last number of weeks. When a nearly unanimous GPLET reform bill was passed into law last year, HB 2213, all stakeholders agreed to take out “slum and blight” definitions and revisit this year.

Slum and blight definitions are important as they are the presumed nexus and justification for using an 8-year property tax abatement tool which is fairly extraordinary in the country. The need to revisit slum and blight was also made more pressing by the Goldwater Institute lawsuit early last spring involving Angels Trumpet Ale House and a 19-story apartment complex called the Derby Roosevelt Row in the City of Phoenix.

Early in our stakeholder meetings, we all quickly came to the realization that “slum and blight“ is often in the eye of the beholder.

On one side in the mind’s eye is Harlem 1965 or Detroit 2009 while on the other is downtown Tempe along the Rio Salado Parkway in 2018. These are two dramatically different visions of what constitutes slum and blight that are frankly not reconcilable among all the stakeholders which is why we needed a paradigm shift that was offered by the Arizona Multi-Housing Association (AMA) to instead focus on Central Business District (CBD) lines.

We applaud the consensus pivot to looking at CBD lines and view that as a win/win for all involved where the cities have agreed to go to a 2.5 percent limit of their land mass for the area where the 8-year abatement tool can be utilized in the future.

Theoretically, this 2.5 percent limit would only impact Tempe which is rubbing against the current 5 percent limit in law and Mesa which is about 4 percent. BUT this legislation gives both cities an indefinite grandfather to remain the same. All other cities including Phoenix and Tucson are presently well under this new 2.5 percent limit.

This is a bi-partisan bill for those who care about the adequate funding of K-12 and those who believe in tax equity/fairness.

Tim Lawless, Executive Director of BOMA of Greater Phoenix 21

LEGISLATIVE UPDATE

Valley Partnership at the negotiation table

T

hrough its year-round municipal advocacy, Valley Partnership maintains a constant connection with cities and towns to positively influence the local public policy process related to real estate development.

When issues arise that concern code or policy changes or cost increases, we stay at the table until a deal is reached that works both for our municipal partners and for the industry.

Recently, when the Town of Queen Creek announced that it expects to double its population by 2026 and, as a result, its development impact fees for new growth would more than double, Valley Partnership advocated for a holistic analysis of all fees related to new growth. This was critical, as the previously recommended fee-by-fee method would have given the Council a fragmented, inaccurate picture of the

22 | May-June 2018

Cheryl Lombard

Valley Partnership true effect of fee increases on the town’s ability to attract quality development.

In the competitive development environment of the East Valley, one community’s choice to out-price its neighbors would drive development – and the community infrastructure it brings – to nearby municipalities.

QUEEN CREEK TOWN CENTER IMAGE COURTESY OF SWABACK PARTNERS

Addressing this risk was necessary to protect existing investments and to encourage future investment in Queen Creek. As a result of Valley Partnership’s engagement, the resulting fees in the town are expected to be significantly lower than originally proposed.

The kind of growth the Town of Queen Creek is projecting isn’t surprising in the fastest-growing county in the nation, according to a report released by the U.S. Census Bureau in March of 2018. This dramatic in-migration will drive policy change at the local level for most Valley communities, directly impacting the cost and geographic path of development. That’s why Valley Partnership’s local advocacy is critical, to ensure the voice of responsible development is loud and clear at the negotiation table.

Cheryl Lombard, President & CEO of Valley Partnership

Business attraction requires ready access to qualified workforce

W

orkforce.

As commercial real estate developers and brokers, NAIOP members are frequently in contact with businesses that are considering Arizona for a new office or industrial facility. The availability of a qualified workforce is often an important factor for these businesses. A strong education system is the foundation for developing highly-skilled professionals needed by growing industries, such as high-tech, advanced manufacturing, and biomed.

This legislative session, the #RedforEd movement has dominated the agenda and led to the current statewide teacher walkout. The Legislature and Gov. Doug Ducey acted prudently in reauthorizing Proposition 301, a six-tenths of a cent sales tax approved by voters in 2000. By simply extending this sales tax for another 20 years, lawmakers provided schools with certainty for this important funding

Suzanne Kinney NAIOP-AZ

stream. However, this action did not go far enough in meeting the pent up demand by teachers to address chronic shortfalls in funding for salaries and other classroom needs.

K-12 education is the single largest expenditure of state revenues, representing 46 percent of all FY 2018 appropriations. Another 7 percent goes to our state universities. Significant cuts to education were made during the Great Recession and restoration

of those funds has occurred more slowly than many teachers and education advocates had expected.

As a high-growth state with a diverse population, Arizona faces a tall order finding sufficient resources for public education and ensuring funds are allocated effectively.

Growth infuses new resources in to the economy, and Governor Ducey’s 20 by 2020 plan relies in part on continued robust economic growth.

NAIOP members are on the front lines of business attraction. Strong public schools, community colleges and universities help with business attraction which, in turn, leads to the type of robust growth that provides the resources necessary to maintain the educational systems.

A highlight of Arizona’s public education system is the career and technical education (CTE) programs that are operating in 525 public high schools throughout the state and through Joint Technological Education Districts (JTED). Students enrolled in these programs receive training for occupations ranging from heavy equipment operations to nursing. CTE “concentrators” are 20 percent more likely to graduate high school than their peers. Within six months of graduation, 78 percent of these students are enrolled in postsecondary education, enlisted in the military, or employed. Devoting resources to these proven educational programs would further enhance Arizona’s reputation as a business location with a qualified workforce.

Preparing students for the exciting jobs being created by new and expanding companies will give Arizona an edge up in the dynamic world of business attraction. The current teacher walkout is testament to the complexity of finding sufficient resources for education while maintaining our state’s competitive edge on tax policy. Both are necessary for continued economic growth and prosperity and will help us build the future we all want for Greater Phoenix and throughout the state.

Suzanne Kinney is the president of NAIOP-AZ. 23

CRE LAW

Trends to watch in CRE law Some of the brightest legal minds in Arizona tell us what we should pay attention to throughout the next year

By MICHAEL GOSSIE

P

olitical and economic uncertainty has defined the past year.

With Arizona’s economy showing signs of growth amid low inflation, it seems like a crane casts a shadow over every intersection in downtown Phoenix.

But we are still dealing with an evolving and distressed retail segment and most pencil-pushers

24 | May-June 2017

are still struggling to understand the implications of President Donald Trump’s changes to the tax laws.

But that’s not the only legal issue we need to be watching. AZRE spoke with some of the great legal minds in commercial real estate to find out what trends and issues they say we should look at before making that next deal.

FENNEMORE CRAIG

Real estate leader: Don Miner, director History of success: Fennemore Craig’s real estate practice group is one of the largest in the Mountain West and encompasses all aspects of real estate, from acquisition and finance through development, leasing and sale. The firm represents a diverse contingent of clients, including developers of masterplanned communities, condominiums, apartment complexes, hotels, resorts, clubs, office buildings, industrial parks, shopping centers golf courses, and other residential and commercial projects. Fennemore Craig’s client representation extends to large landowners, including transactions involving federal and state agencies.

MIRABELLA AT ASU: This project will offer seniors urban access and resort-style venues in a 20-story retirement facility.

BLOCK 23: This mixed-use project in downtown Phoenix will be home to a Fry's, the area’s first grocery store.

Trend to watch: “Technology,” Miner says. “The need to adapt to and keep abreast of new technologies is vital so as to prepare today’s real estate professionals to more efficiently and effectively assist their clients, manage deals and generate new business.”

Recent project of note: A state-of-theart, 700,000-square-foot, oceanic and freshwater aquarium containing two levels and holding 2 million gallons of water, located on the Salt River Pima-Maricopa Indian Community.

The facility can accommodate 10,000 visitors daily and opened to the public Labor Day weekend of 2016 to throngs of people. The OdySea Aquarium is the largest aquarium in the Southwest and is believed to be among the five biggest in the United States.

GAMMAGE & BURNHAM

how Gammage & Burnham’s land use, real estate and financing teams work together to bring a client’s vision to reality. Mirabella at ASU is an innovative “Life Plan Continuing Care Retirement Community” on Arizona State University’s Tempe Campus.

Gammage & Burnham represented Mirabella at ASU through the zoning, transactional and financing process, which included $250 million in tax-exempt bond financing for the construction of this 20-story residential building.

Trend to watch: “One big issue we see facing commercial development is the disconnect between the price a user can pay and the rising costs of land and development. Another issue we see is the rise in opposition to entitlements, particularly through the use of social media, which requires an experienced team to help create an effective outreach and communications strategy as part of a successful entitlement process.”

STEIN LAW

Real estate leader: Grady Gammage, Jr., founding member History of success: Gammage & Burnham has the unique combination of a large land use group and a large real estate and financial transactions group that work together as one team of highly talented lawyers. While Gammage & Burnham is very efficient at routine matters, the firm is also known for being the firm to hire when a project has unique challenges or requires special skills.

Recent project of note: Mirabella at ASU is just one good example of

Real estate leader: Scott J. Stein, attorney History of success: Stein Law’s practice is focused entirely on commercial real estate transactions, but what makes the firm unique is that it regularly plays on both sides of the contractual field and represents a variety of both landlords and tenants, buyers and sellers, lenders and borrowers, and developers and end users. Stein Law also issues legal opinions. By wearing these different hats, Stein Law stays on top of the latest trends and maintains a clear 25

CRE LAW

Grady Gammage, Jr. Don Miner

understanding as to the full scope of competing interests in a given transaction to serve as the best advocate for its clients.

Trend to watch: “The pace of commercial lending is picking up,” Stein says. “Today, funds seem to be flying in a way reminiscent of some lending practices in place prior to the Great Recession’s collapse. Lenders and equity partners, however, have not forgotten about their losses suffered from the last market devastation and the result has been ever-expanding attempts to make a loan while minimizing downside risk. Consequently, borrowers and developers are forced to keep up and also grapple with these new approaches and face deeper underwriting, tougher construction loan terms, further reaching covenants and broader non-recourse carveouts on personal guarantees.”

Recent project of note: Stein Law considers itself privileged to have worked on a number of landmark deals for various clients. However, one that is particularly noteworthy is its representation of Irwin Pasternack in connection with the 60-plus-acre Estrella Vista Commerce Center and its development, leasing — including the leasing to Living Spaces, signage, the financing of the property and sale of the Living Spaces distribution center, as well as other pads within the center.

ODYSEA AQUARIUM: This facility is the largest aquarium in the Southwest.

26 | May-June 2017

Jason Morris

WITHEY MORRIS

Real estate leader: Jason Morris, partner History of success: Withey Morris focuses on a very narrow area of zoning and land use entitlements which has allowed the firm to assemble the most experienced and qualified team in that space. Although Withey Morris is a boutique firm, it prides itself on its sophisticated clientele and variety of significant projects.

Trend to watch: “From our perspective in land use and zoning, the greatest risk lies in community opposition and governmental obstacles to development,” Morris says. “While Phoenix has enjoyed some incredible infill development over the past

Scott J. Stein

decade, the amount of resistance to additional development in the city’s core and in existing neighborhoods may force developers back out onto the fringes, which is far less efficient.”

Recent project of note: Block 23, Red Development. “We were fortunate to be selected by Red Development to assist in the continuation of CityScape downtown through the development of Block 23,” Morris says. “From a zoning and land use perspective, this project was one of the most exciting and intricate projects of 2017. Logistically, it brings together the first downtown full-service Fry’s grocery store as well as luxury residential units and creative office space.”

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HEALTHCARE

SENIOR DAY Mirabella at ASU and other trending facilities allow the aging population to enjoy their golden years with campus-like energy

By JESSE A. MILLARD

28 | May-June 2018

T

he corner of University Drive and Mill Avenue has been a parking lot with a shuttered Chili’s restaurant on the edge of Arizona State University’s Tempe campus for ages.

Students would park their cars and pay the fee before running off into campus for a day of classes.

Soon, the parking lot will be transformed into a 20-story senior living facility known as Mirabella at ASU, which will provide the full continuum of care, from independent and assisted living to memory care, for older adults who will become life-long learners in the process. This facility will mix older adults in with the students and faculty at ASU, creating a

MIRABELLA AT ASU: McCarthy Building Companies started construction on the $167 million, 20-story senior living community in February. Mirabella at ASU is being built on ASU’s Tempe campus at the southeast corner of University Drive and Mill Avenue.

community that is truly unique.

“We are looking forward to a very dramatic impact by the inclusion of over two hundred households of vibrant, active seniors in our community,” says Todd Hardy, the senior economic development advisor with the Office of Knowledge Enterprise Development at ASU. Construction crews broke ground on Mirabella at ASU in February, and the 252-unit facility is set to be completed in 2020.

A two-way relationship will be built between the adults living in Mirabella at ASU and the university’s many students and faculty members.

The university could help teach

Mirabella residents about nutrition, and the school’s research could learn more about aging populations, Hardy says. Students could gain experience as IT support for the Mirabella at ASU residents, and performing arts students will have opportunities to perform for the nearly 500 residents that will live there.

Residents will also be able to attend classes, and there will be spaces where lectures can be held within the highrise senior living community. Those residents will be able to attend the wide variety of cultural events on campus as well, from the shows at Grady Gammage Memorial Auditorium to the art galleries and sporting events.

Mirabella at ASU residents will be bringing something to the table many ASU students don’t have yet: life experience.

The residents of Mirabella at ASU have opportunities to mentor students, whether it’s to offer advice to engineering students designing something, business students who are trying to get their business plans together, or life advice for those considering a change in major, says Hardy.

“We think the introduction of the experienced, active, community that they represent is going to be very beneficial and informative for our students when they engage with folks that have that level of experience and excitement and activity,” Hardy says.

ALREADY A SUCCESS There’s something else different about Mirabella at ASU other than the fact that it’s located on a university campus. The place has already sold 80 percent of its units.

“We’ve never had (a senior living facility) pre-sale like what’s happened

here,” says Paul Riepma, senior vice president of sales and marketing at Pacific Retirement Services, the developers of Mirabella at ASU. Residents are attracted by the fact they will have a Mirabella at ASU student ID card, Riepma mentions, along with full access to nearly 400 classes and the millions of books within ASU’s library system. This community will also feature four restaurants, one of which will host ASU music performers each night, Riepma adds.

“That to me has been our secret sauce, this idea that we have tapped into a group of people who want to continue to learn, who want to be connected with a world-class, innovative university,” Riepma says.

The future residents of Mirabella want the arts and culture of the university, and they want to participate in the university lifestyle, he says.

And it shows that 80 percent of it has already been pre-sold.

The 252 units within Mirabella at ASU will range in size from 900 square feet to just under 3,000 square feet and will provide high-rise views of Tempe, Riepma says.

Mirabella at ASU will have a complete skilled nursing and rehabilitative center, along with a memory care unit. There will be an indoor pool, a rooftop community area, along with the large range of amenities the surrounding area provides.

Riepma says there aren’t many other senior living facilities like how Mirabella will be. There have been partnerships between universities and senior living communities, but none have been as involved as ASU plans to be, he says.

Since Mirabella sold many of its units in just five months, Riepma has been getting calls from his colleagues about how he’s done it. He imagines folks will want to copy what Mirabella at ASU is doing in the future.

ASU President Michael Crow has called Mirabella at ASU the “world’s coolest dorm.”

“There’s no reason everyone can’t be a college student and engaged in what this community has to offer for the entirety of their lives,” Crow said about Mirabella at ASU during its groundbreaking, according to ASU Now. 29

HEALTHCARE

THE LIFE-LONG LEARNER Senior living facilities are no longer just places to dwell for residents. Over the years, these communities have been vibrant places that help residents continue an active lifestyle in the future.

Mirabella at ASU hopes to do this through its many amenities and unique partnership with the school. Other communities like LivGenerations Ahwatukee Senior Living also provide a lifestyle that helps connect residents with the community, folks from a diverse range of ages and new learning opportunities.

“If we keep (residents’) lifestyle in focus as we design, and then surround them with a cultural environment that allows for optimal aging, then it’s going to nurture their lifestyle and allow them to stay connected with other generations and their family and friends,” says Eric Johnson, a partner at LivGenerations.

LivGenerations provides fitness

Michael Crow 30 | May-June 2018

programs, tea rooms, art rooms and a whole lot more that allows the residents to stay connected, Johnson says.

One thing that has been a smashing success at LivGenerations’ Ahwatukee facility is the Tuk Urban Kafe, which is a space that’s open to the community and residents. The café provides a place where LivGenerations residents can connect with the local community and a diverse range of age groups, Johnson says.

This idea of being a life-long learner into your sunset years is also being reinforced at LivGenerations communities. Each property has Elite Studies Rooms, that hosts an abundance of classes on many different topics, including culture, history and more, says Scott McCutcheon, chief operating office of LivGenerations.

These programs help residents stay connected, making friends and becoming much happier as a result, McCutcheon says.

Todd Hardy

Eric Johnson

TUK URBAN KAFE: LivGenerations Ahwatukee Senior Living is home to the Tuk Urban Kafe, which provides a space for the neighboring community and residents to gather and mingle with one another.

“We’re finding that those are really well attended in our current properties.

So, we’re trying to provide more and more of them,” McCutcheon says.

Many senior living properties have been engaging in this idea of having a robust and active lifestyle at senior living facilities. Gone are the places where there’s nothing to do but watch television. Now, there are senior living facilities that allow residents to begin a new chapter of their lives, whether that’s a facility like LivGenerations or Mirabella at ASU.

Scott McCutcheon

Paul Riepma

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HEALTHCARE

RETAIL THERAPY The healthcare sector takes a page from a different market sector in order to create facilities that better serve the consumer

By JESSE A. MILLARD

T

here is no question that the healthcare industry is in the midst of an ongoing transformation as business models shift towards keeping patients well and technological advances shake things up with new systems, procedures and treatments.

Healthcare facilities are aging, which has made renovations commonplace, and healthcare providers are finding new ways to meet the patients where they live and work through outpatient facilities.

In 2015, the U.S. spent a collective $3.2 trillion on healthcare, with about $9,990 of that going towards each individual, according to the Centers for Disease Control.

The way developers build facilities for the healthcare industry is changing dramatically and those changes translate into big bucks. More than $42 billion was spent in January 2018 alone on healthcare construction in the United States, according to the U.S. Census Bureau.

Arizona is certainly getting its share of the healthcare construction sector’s economic pie as developers renovate old buildings and build new healthcare facilities across the state and the Valley. And with the increased demand comes an increase in regulations and expectations as new projects must meet modern healthcare needs — from being accessible to the patients to keeping up with the latest technological advances.

32 | May-June 2018

HEALTHCARE COMES TO YOU Even before the Affordable Care Act brought a focus on reducing costs and making healthcare more efficient by focusing on keeping patients healthy instead of treating them when they’re sick, healthcare providers knew they’d have to transition to wellness care models.

With the implementation of the Affordable Care Act, providers started to focus on keeping everyone healthy before they become sick and need care in the emergency room or hospital, where it’s the most expensive.

To keep patients healthy, providers have had to take the initiative of being proactive and making it easier for the patients to get treatment, says Julie Johnson, principal at Avison Young.

Providers focused on keeping people healthy by moving healthcare away from the hospitals and into their neighborhoods, along with being more focused on primary care from physicians and urgent care clinics, Johnson says.

“That’s when the shift started towards providing healthcare that is not focused on making the hospital the center of the universe,” Johnson says. “Very often, there was a focus on keeping the doctors happy. Hospitals are now shifting toward more patientcentric healthcare rather than hospitalcentric or physician-centric healthcare.”

In order to accomplish this, there has to be a lot of real estate involved,

Johnson says. Providers started developing new facilities to supply spaces for the number of physicians who were leaving private practice to become employees, Johnson says.

And more urgent care facilities have been added along with new outpatient facilities, she says.

There’s also been the rise of microhospitals to help cut costs. Surgeries are increasingly becoming an outpatient procedure, Johnson says, so facilities were needed to provide patients a space when they only need to stay one night at the hospital after a procedure.

These micro-hospitals are smaller than your larger facilities and help lower both the costs and the possibility of exposure to infections that can happen in hospitals, Johnson says.

As providers implement the strategy of adding more urgent care and outpatient facilities, they have also been taking a page from retail when it comes to signage.

It’s hard to miss the growing number of flashy neon signs for urgent care facilities and the addition of these healthcare spaces in what were once traditional retail shopping strip malls. These spaces are being added near big box retail stores and within short distances of pharmacies.

The idea is to attract the patients within the community before they need help at a hospital or some other healthcare facility.

“Because retailers are trying to

Hospitals are now shifting toward more patient-centric healthcare rather than hospital-centric or physician-centric healthcare.”

WEST VALLEY PRIMARY AND SPECIALTY CARE CENTER: The $70 million facility will sit on 20 acres and be able to serve about 225 patients and visitors daily.

– Julie Johnson

appeal to the customer, all of those things retailers have used in the past are now being used by the healthcare industry because it is trying to appeal to ‘customers,’ which are the patients,” Johnson says. “The healthcare providers are now using signage, locating facilities within close proximity to freeways, whatever they can do to make it easy and accessible to patients.”

HOW THIS PLAYS OUT The best way to serve patients within their communities, it seems, is through these outpatient facilities that are almost retail in nature.

Cancer Treatment Centers of America is expanding its network in the Valley through the opening of two new outpatient care centers — one in North

Phoenix and another in Scottsdale.

There are also plans to open a third such facility in the Valley this year.

“Clinical advancements in cancer care have significantly changed the way in which we treat the disease, including offering patients access to the most advanced treatment options in a convenient, more cost-effective outpatient setting,” said Raj Garg, MD, JD, president and CEO of Cancer Treatment Centers of America. “CTCA Outpatient Care Centers will provide patients medical oncology treatment and integrative care at the hands of highly respected CTCA oncology experts.”

Arizona’s largest healthcare provider, Banner Health, is also pursuing these new types of facilities, having spent $425 million on construction and

equipment costs in 2017, according to its unaudited financial report.

Banner Health has nearly 400 active construction projects right now, says Kip Edwards, vice president of development and construction of Banner Health.

These projects are aimed at deploying care for patients within their communities with the addition of health centers, ambulatory surgery centers, urgent care facilities and soon, more imaging centers, Edwards explains.

Many of these projects involve “putting the care in the community close to the customers that we serve and just improving the ease of access and the distance and putting care where it most needs to be,” Edwards says.

There’s going to be much more of 33

HEALTHCARE

this, he says, and it will probably be the biggest, growing trend when it comes to new construction projects. But this doesn’t mean there won’t be any more hospitals, Edwards notes. There will always be hospitals as part of the delivery of healthcare, but there will be growth in investment for small clinics and urgent cares within retail facilities.

“Things that are close and easy to access are really much better for our patients,” he says. “They can get in easy, they can get in quickly and at a lesser cost, quite frankly.”

Banner Health is aiming to continuously evolve to be the strongest provider of care with the best locations and facilities, Edwards explains. The key piece of this puzzle is making healthcare easier for patients when it comes to access, he adds.

In 2016, Banner Health purchased 32 urgent care facilities across the Valley. The nonprofit healthcare provider has also been renovating and investing in its facilities.

Edwards says there has been a lot of investment into the infrastructure for Banner’s facilities. The company is in the process of a 10-year plan where it plans to continuously replace 36 | May-June 2018

infrastructure and refurbish facilities to keep them up to date, Edwards says.

Banner University Medical CenterPhoenix’s 700,000-square-foot emergency department and patient tower expansion project is one of the projects that shows how Banner is updating an older asset to fit in line with how care is delivered today.

The $418 million project is transitioning the entire hospital to private beds, while also creating a new emergency department for modern use. Edwards says the old emergency department was poorly configured and too small for many modern uses.

The $400 million Banner University Medical Center-Tucson project is also updating an outdated facility by adding a new patient tower and expanding the operating rooms. Edwards says the old operating rooms at the Tucson facility didn’t comply with modern building codes and the rooms were too small for modern machinery that’s needed in today’s operating rooms, so an update and upgrade was needed.

Another project that’s updating old spaces within Banner’s projects is the new emergency department for its Boswell Campus, Edwards says.

BANNER UNIVERSITY MEDICAL CENTERPHOENIX: 700,000-square-foot emergency department and patient tower expansion project is one of the projects that shows how Banner is updating an older asset to fit in line with how care is delivered today.

By building modern facilities, upgrading infrastructure at existing sites with the latest and greatest technologies and delivering care to the people through outpatient and urgent care facilities, Banner Health will remain a leader in the healthcare sector, Edwards says.

Ultimately, Banner is making the transition towards population health, or wellness care, and utilizing technology to deliver care where and when people need it.

HOW TO ACHIEVE WELLNESS CARE Healthcare is all about bringing wellness to the communities that need it and the Maricopa Integrated Health System is doing just that.

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HEALTHCARE

upcoming West Valley Primary and Specialty Care Center in Peoria is focused on treating the whole body in a community where these services aren’t readily available, says Kris Gaw, chief operating officer of Maricopa Integrated Health System.

After analyzing about 115 million claims from 2016, MIHS was able to determine that by placing this new facility in Peoria near Grand Avenue and Cotton Crossing, MIHS would be able to treat the greatest number of people from one location, Gaw says.

The $70 million facility will sit on 20 acres and be able to serve about 225 patients and visitors daily. There will be an urgent care, dental clinic, dialysis clinic, four operating rooms, two major procedure rooms, pre-operative and recovery bays, as well as sterile processing at the facility. It will also include behavioral health services, lab services and a retail pharmacy.

During the planning process for the facility, MIHS found that many patients were not seeing specialists for their health needs when directed.

MIHS hopes that the site in Peoria will help guide patients to the specialists they need by having everything under 38 | May-June 2018

one roof, Gaw explains.

“We don’t know exactly what those reasons are,” Gaw says, referring to the fact that too many patients aren’t seeing specialists, “but what we do know is that we needed to put access to those services in the West Valley.”

MIHS is focused on serving Medicaid patients, Gaw says, and this facility is filling a need for that underserved community and will work towards keeping those patients healthy in the community in which they live.

MIHS is also working with local municipalities to ensure that there’s access via public transportation by ensuring there are easy connections from key neighborhoods to the facility, Gaw says.

This isn’t the only way the Maricopa Integrated Health System is working to provide care to patients in areas that need it.

MIHS purchased the Maryvale Hospital that Abrazo Community Health Network had recently closed.

MIHS will reopen the emergency room at the Maryvale Hospital in order to continue serving the 40,000 patients who annually visit that ER, Gaw says. But, MIHS will also have 203

MARICOPA INTEGRATED HEALTH SYSTEM: MIHS will reopen the emergency room at the Maryvale Hospital in order to continue serving the 40,000 patients who annually visit that ER .

inpatient beds for behavioral health at the hospital.

“MIHS is able to check off two major community needs by purchasing that facility,” Gaw says. The health system will invest $59 million into the facility for renovations, bringing new life to it in a community that needs the investment.

HOW FACILITIES ARE DESIGNED AND BUILT With technology quickly evolving as to how patients are treated, facilities need to be agile and ready for change.

ARCHSOL, an architectural firm based in Scottsdale, works on many healthcare projects and works with clients to understand their current and future needs, which could have an impact on the way a space is designed.

Technology has changed a great deal and procedures that were normally

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HEALTHCARE

Kip Edwards

Hamilton Espinosa Kris Gaw

done in the operating room can now be be done elsewhere.

One example ARCHSOL mentions is how the design of a radiology department needs to allow a multidisciplinary team to work within it as procedures migrate from the operating room to the radiology department.

Consideration of the workflow needs to be taken into the design of healthcare facilities and now as ARCHSOL designs the space, it factors in the evolving need to accommodate new innovations and updated equipment.

Hamilton Espinosa, the National Healthcare Core Market leader at DPR Construction — the construction company behind the Banner University Medical Center-Phoenix emergency department — says that a push towards efficiency within healthcare facilities remains a constant.

Healthcare facilities must respond to many variables in today’s environment, such as an aging population, patient consumerism, healthcare reform, mergers and acquisitions, technology innovations and changing market conditions.

Departments are designed in order to create the optimal layout by placing supply areas closer to rooms, which, “allows staff to spend more time delivering care and less time moving supplies around,” Espinosa says.

While providers are creating more outpatient facilities, there is also a renewed focus on designing the best inpatient spaces so they can focus on capturing market share and improving the patient experience, he says.

40 | May-June 2018

Julie Johnson

Facilities do this by upgrading emergency departments, observation units, diagnostic imaging and treatment and transitioning semiprivate rooms into private rooms, he says. All of these things create better spaces that attract and retain patients, he adds.

“The biggest challenge faced by healthcare systems is that they must do more with less,” Espinosa says. And that means the way these facilities are

Raj Garg

being built has to be changed, too.

Utilizing advanced building methods like virtual design and construction, lean principles, co-location and prefabrication are great ways to address a project’s needs, Espinosa says.

“Throughout the Banner University Medical Center-Phoenix projects, the co-location of teams in one room has brought about a number of creative solutions to maximize space and building efficiency,” Espinosa says.

HEALTHCARE DESIGN TRENDS As every element of healthcare changes — from the delivery to the financial model — so, too, are the way healthcare facilities are designed. ARCHSOL shared some key healthcare design trends that are happening now: • The trend of more outpatient facilities being built within communities will continue to grow. These outpatient facilities will become more specialized and smaller.

• There will be a push to provide the right amount of care for the location. Healthcare providers are working to bring the proper amount of services for patients at the right location. Many outpatient facilities may vary in size and in services offered, and these spaces are going into communities that need that level of care.

• Providers will need to keep the environment hospitable. Design elements that make the patient’s experience more comfortable are being deployed. This is happening as more and more procedures become less intense outpatient procedures, but the patients can still be under a lot of stress.

• Physical and mental health awareness is rising. Mental health is increasingly being brought to the forefront and creating a therapeutic environment is an important goal for health design.

• Technology will keep advancing. Advancements in technology are continuing to transform the healthcare industry, which is changing the use of spaces within existing and new healthcare spaces. There’s a rising need to design spaces so that multiple disciplines can work together in the same environment for procedures.

DOWNTOWN PHOENIX

between the

Block 23 PHOTO BY MIKE MERTES, AZ BIG MEDIA

42 | May-June 2018

s

With more cranes than ever casting shadows, here are some of the projects that are reshaping Downtown Phoenix

By WILL EVERETT AND JESSE A. MILLARD

T

he city blocks between the sevens throughout downtown, midtown and uptown Phoenix are no longer day-time communities after more than a decade of investments into the area.

The region between Seventh Avenue and Seventh Street has become an urban epicenter, attracting jobs, restaurants, venues, events and residents as developers have refurbished and built new places for folks to live, work and play.

The midtown and uptown areas have grown exponentially in the past few years from commercial development, with more projects on the horizon. But downtown Phoenix is where the success story began, and it’s set to continue as developers work to change the skyline between the sevens with high-rise developments and mixed-use projects.

“There is a real economic transformation underway throughout the region, particularly the high density of projects in the urban center of Phoenix,” says Chris Camacho, president and CEO of the Greater Phoenix Economic Council.

Between 2005 and 2014, downtown Phoenix’s 1.7-square-mile redevelopment area has received $4.7 billion worth of investment, according to the City of Phoenix.

Phoenix defines this redevelopment area as the city blocks between Seventh Avenue and Seventh Street and McDowell Road and Lincoln Street.

Developers are working on projects like Block 23, which will bring the first Fry’s Food Store into Phoenix’s downtown urban core. The project will also include offices and multifamily components and is located right across the street from CityScape and Talking Stick Resort Arena.

Construction crews are also transforming Arizona Center with renovations and there are plans to add a high-rise, multifamily project and an AC Hotel by Marriott.

“With so much growth and change happening in downtown Phoenix, Arizona Center is the ideal place for an AC Hotel,” says LaPour Partners President Jeffrey LaPour. The AC Hotel will add another 200 hotel rooms to downtown Phoenix, while also creating more density within Arizona Center.

Then, there are projects like Circa Central Avenue, which is adding a mixeduse development that will include 229 apartment units and two creative office suites – adding more density and foot traffic to the growing neighborhood.

43

DOWNTOWN PHOENIX “Our team is eager to open Circa Central Avenue, a transitoriented, urban in-fill, mixed-use development in the dynamic city of Phoenix,” said Tyler Wilson, vice president of Ryan Companies US, Inc. These types of in-fill projects have been turning empty lots into homes for the growing population in the area, and cranes and construction crews have been working day and night to transform the once forgotten downtown Phoenix area between the sevens while taking advantage of proximity to the light rail.

“A simple glance across the skyline shows a number of construction cranes that are indicative of the maturing centerpiece to the Valley,” Camacho says. “The new development, much of which is anchored near light rail, is creating a modern sense of place in jobs, residences, art, culture and attractions for both residents and business alike.”

A

BLOCK 23

Developer: RED Development General Contractor: Whiting Turner Architect: Omniplan Location: 101 E. Washington St. Size: 800,000 square feet Value: N/A Start/Completion: August 2017 – Q4 2019

In the heart of Phoenix’s urban center, Block 23 will be home to the area’s first downtown Fry’s grocery store. The project has been sought after by residents and city officials for years. Slated for completion in 2019, Block 23 will also include approximately 330 apartments by StreetLights Residential, 200,000 square feet of creative office space, restaurant and retail uses along with above- and below-grade parking.

AC HOTEL BY MARRIOTT AT THE ARIZONA CENTER

Developer: LaPour Partners General Contractor: N/A Architect: N/A Location: Fifth Street, between Van Buren and Fillmore streets Size: 49,190-square-feet parcel, 15 stories, 200 rooms Value: N/A Start: April 2018

The developers behind the Arizona Center have contracted Las Vegasbased LaPour Partners to develop the AC Hotel Downtown Phoenix. It will be a 200-key upscale, urban-inspired selectservice hotel, and will soar 15 stories into the Phoenix skyline. LaPour Partners states that with the large amount of change taking shape in downtown Phoenix, an AC Hotel is an ideal addition to the area.

44 | May-June 2018

Chris Camacho

Jeffrey LaPour

A

B

PALM TOWER

(ARIZONA CENTER RESIDENTIAL TOWER) Developer: North American Development Group General Contractor: N/A Architect: Will Bruder Architects Location: Fifth and Van Buren streets Size: 39,970 square feet, 31 stories, 350 residences Value: $100 million Start/Completion: N/A

The renovation to the Arizona Center has been creating buzz around Phoenix and the addition of a $100 million, 31-story residential tower will reshape the property and the surrounding skyline. This tower will be the second tallest residential building in downtown Phoenix. The project will include 350 residences, ranging from modest studios to one-, two- and threebedroom units. There will also be a roof-top terrace on the sixth floor with a pool.

B

Tyler Wilson

DOWNTOWN PHOENIX C

D

E

F

C

CIRCA CENTRAL AVENUE

(FORMERLY THE WILLA) Developer: Ryan Companies US, Inc. and Tilton Development Company General Contractor: Ryan Companies US, Inc. Architect: Studio Meng Strazzara Location: 1505 N. Central Ave. Size: 283,000 square feet, 227 apartment units and 2 creative office units Value: $30 million Start/Completion: June 2017 – November 2018

Circa Central Avenue is a six-story apartment building under construction at Central Avenue and Wiletta Street. The building will feature 229 units within the top four floors, with the bottom two floors dedicated to parking, townhouses, and two creative office suites.

D

CITY CENTER ON THE PARK

Developer: Transwestern General Contractor: N/A Architect: N/A Location: 1314 N. 3rd St. Size: Initial phase includes 243 one-bedroom apartments, 76 two-bedroom units, 4,500 square feet of commercial space and 475 parking stalls Value: $100 million+ Start/Completion:

The premier mixed-use Class A transitoriented development in downtown Phoenix is located immediately on Margaret T. Hance Park. With close proximity to downtown Phoenix’s core and the light rail, City Center on the Park will be ideal for a Live/Work/Play environment while offering an exceptional culture area for office users.

46 | May-June 2018

E

THE STEWART

Developer: Aspirant Development General Contractor: UEB Architect: CCBG Architects, Inc. Location: 802 N. Central Ave. Size: 312 one- and two-bedroom units and 9,000 square feet of retail Value: $52.9 million Start: August 2017

The Stewart will rise 19 stories and have more than 300 apartments. The luxury apartment complex is built on the site of the Stewart Motor Company Building. Developers tore down parts of the old building and have integrated its shell, including the building’s distinct marquee, into the overall design of the development. Formerly, the Stewart Motor Company Building was the Circles Records building.

F

THE LINK PHX

Developer: CA Residential General Contractor: Urban Edge Builders Architect: Shepley Bulfinch Location: 702 N. Third St. Size: 400,000 square feet Value: N/A Start/Completion: Nov. 2017 – Aug. 2019

The Link PHX will add another high-rise to downtown Phoenix, standing at 30 stories.

The LINK PHX will include 7,000 square feet of retail space, half of which will be set aside for startups, nonprofits and artists. The Shepley Bulfinch-designed residential tower is being developed on part of a 1.3-acre vacant lot at the northeast corner of Third and Pierce streets. This lot is adjacent to the Phoenix Biomedical Campus and a short walk from the Broadway/Central Valley Metro light rail stop, clearly “linking” the business opportunities with the rest of bustling Downtown Phoenix.

DOWNTOWN PHOENIX

Welcome to ‘Wall Street West’ Attractive workforce draws financial services and financial technology companies to Arizona

By ERIC JAY TOLL

M

ore financial services and financial technology workers were hired in the Valley than anywhere else in the U.S. in 2017.

The U.S. Bureau of Labor Statistics says more than 127,000 Phoenix metro workers were hired by financial and insurance services. That’s more than Dallas, the leading metro for employment in the sector, and more than Wall Street.

In fact, Phoenix area hiring is on a pace by 2020 to claim more financial service workers in the Valley than on Wall Street.

“These are well-paying jobs,” said Christine Mackay, director of Phoenix Community and Economic Development.

“The average wage for financial service and financial technology workers is over $61,000 annually.”

It’s the workforce drawing companies to Phoenix. Where the metro was once known for starter call center jobs, the experience and ecosystem evolved into a full financial services center that stretches across the entire Valley. Employment concentrations adjoin the Price Corridor in Chandler, Loops 101 and 202 in Tempe, north Phoenix, Downtown and Sky Harbor submarkets in Phoenix, and Loop 101 in north Scottsdale.

The role of financial and insurance

48 | May-June 2018

services companies makes the sector a heavy technology industry. Charles Schwab, Charles Schwab, USAA and Northern Trust have all moved tech divisions into the Valley for developer enterprise systems, mobile applications and technology innovation.

“Phoenix was our go-to market,” said Brian Parks, USAA executive vice president for technology and workforce strategy. “We have an amazing facility to attract top level talent in the Valley and from the nation and West Coast.”

USAA is hiring more than 1,000 financial technology workers at its Deer Valley regional headquarters.

The addition brings the company’s Phoenix workforce to over 5,500, making it the 25th-largest employer in the Phoenix area.

Farmer’s Insurance is hiring nearly 500, Paychex is looking to add over 300 workers, and other major financial and insurance employers are adding staff in the area. One out of five financial service workers in the Valley commute to north Phoenix.

Deer Valley in north Phoenix is the largest concentration of financial services workers in Arizona. In a roughly three-mile radius surrounding the interchange of Interstate 17 and Loop 101, more than 23,000 hold financial services and financial

technology jobs. There are more than 400 companies in this sector located in north Phoenix. Almost 19,000 of those workers are employed by the 14 largest companies, according to the Maricopa Association of Governments.

“Companies recognize that workforce quality and diversity is the primary reason for selecting a location. BBC News, Fortune magazine and other global news media have reported that Phoenix is a top city for financial service and financial technology companies,” said Phoenix Vice-Mayor Thelda Williams.

“With one of the largest workforce concentrations in Arizona, the north Phoenix area connects employers with literally tens of thousands of job candidates within short commutes of office campuses in what’s becoming known as ‘Wall Street West.’”

Filling those roles comes from existing workforce in the metro area, but companies are also using the Phoenix quality of life and low housing cost as a draw. It seems to be working.

“Phoenix is a place that captures the fascination of our workforce. That’s one reason we’re excited about the expansion. The workforce is positive about expanding in Phoenix,” said David Travers, chief operations officer, Farmers Insurance Exchange, citing

one of the reasons the company picked Phoenix for its new regional facility.

Last year, Maricopa County has added more population numbers than any other U.S. county for the second year in a row, according to U.S. Census estimates. The demographic data point to in-migration being highest in the prime 25 to 44-year-old age group.

“Phoenix is a smart city, and its appealing to talent in California, Washington and Oregon,” Parks said.

The emphasis has been noted globally. BBC News, in a story entitled “Goodbye New York, Hello Arizona,” projected that by 2020 Phoenix would pass Wall Street in the number of financial services workers. At that point, Phoenix would be second to Dallas, Texas, in the number of financial services workers.

Christine Mackay

Brian Parks

David Travers

Thelda Williams 49

MASTER-PLANNED DEVELOPMENTS

BIG PLANS, small-town feel Eastmark, Verrado and Vistancia stand out from the master-planned community crowd

By STEVE BURKS

T

he idyllic charm and feel of a small town are hard to replicate on a master-planned scale, but developers have tried for decades, with varying degrees of success.

Three master-planned communities in the Valley have reached back into the past and found a formula that has worked.

“We used past experience and a commitment to a new vision for community building inspired by the town building principles used in the country’s best small towns,” said Dan Kelly, Senior Vice President and General Manager of Verrado, one of those three communities. “Verrado is truly a small town with a wide range of ages and life stages.”

Verrado, in Buckeye, along with Eastmark in Mesa and Vistancia in Peoria are three of the most sought after master-planned communities in the country.

According to the Robert Charles Lesser & Co. (RCLCO) list of top-selling master-planned communities of 2017, Eastmark ranked 6th with 919 houses sold, while Vistancia was 20th with 462 and Verrado 27th with 430. All three were ranked in the RCLCO top20 in 2016 and Eastmark and Vistancia were 7th and 12th, respectively, on that list in 2015.

“Given our experience with other communities around the Valley, we have seen how to connect commercial, retail and education within the heart of the community and how it builds fabric and makes the lifestyle more dynamic,” said Dea McDonald, Eastmark’s Vice President and General Manager. “We want those uses integrated, so it lives like a town.”

Eastmark, Verrado and Vistancia have struck the right chord with buyers,

50 | May-June 2018

despite being on the far reaches of the Valley. They’ve done this by checking off all of the boxes that turn a development into a community. These communities are big, but retain that small-town look and feel for each generation.

“One of the key benefits of living in a master planned community is that there is a diverse range of

home styles and options to allow for multi-generational living and growth throughout a family’s lifetime,” said Mark Hammons, vice president and general manager of Vistancia. “It is common to see grandparents, aunts, uncles and cousins all living in one of Vistancia’s three actively selling lifestyle communities.”

Eastmark

Custom home lots available: No, but there are gated neighborhoods within the community Total homes at build-out: 15,000 homes Is there a 55-and-over neighborhood: Yes – Encore is planned for 900 homes upon completion.

Commercial potential: Up to 20-million square feet.

Community amenities: Two top-ranked charter schools (one is K-12, one K-8) with a new high school expected to open in 201920 academic year; Community Center, 4,000 sq. ft. Community Pool, 96 acre Eastmark Great Park, numerous neighborhood parks, miles of trails and a wide variety of residentrun clubs and activities.

Total Acres: 3,200 Developer: D MB Associates in partnership with Brookfield Residential Year development began: Land Purchased in 2006; June 2013 Eastmark’s first 11 neighborhoods opened First homeowners moved in: September 2013 Homebuilders: Ashton Woods, David Weekley, Meritage Homes, Taylor Morrison, AV Homes (55 plus), Maracay Homes, Pinnacle West, William Ryan Homes, CalAtlantic Homes, Mattamy Homes, Shea Homes, Woodside Homes, Richmond American Homes built to date: More than 1,800 (more than 2,600 sold)

Verrado

Total Acres: 8,800 Developer: DMB Associates Inc. Year development began: 2003, Retail sales in Jan. 2004 First homeowners moved in: June 2004 Home builders present: AV Homes, K Hovnanian Homes, Mattamy Homes, Shea Homes, CalAtlantic Homes, Lennar Homes, Meritage Homes, Taylor Morrison, David Weekley Homes, Maracay Homes, Pinnacle West, William Ryan Homes Homes built to date: 3,652 Total homes at build-out: +/- 11,500 Are there custom home lots available: 289 custom lots made, five custom lots remaining in developers hands. 37 custom homes built to date Is there a 55-and-over (or 50-over) neighborhood: Yes – Victory at Verrado Commercial potential: 4,000,000 sq-ft allowable, 1,225,000 sq-ft sold or allocated to completed transactions; 171 acres sold for commercial purposes to date Community amenities: Two elementary

Vistancia

Acres: 7,100 Developer: Land Resources of Phoenix Year development began: 2004 (Grand opening was 4/4/2004)

schools, one middle school and one high school serve the community. Verrado also features a signature Main Street which serves as the hub of the community with restaurants, shopping, community space and apartments and townhomes. Other features include a

community center called Center on Main, Heritage Swim Park, Verrado Golf Club, 78 community parks, a dog park, 21 miles of paths and hiking trails and close proximity to the White Tank Mountain Regional Park and Skyline Regional Park.

First homeowners moved in: July 4, 2004 Home builders present: Ashton Woods, David Weekley Homes, Meritage Homes, Shea Homes, Toll Brothers, William Ryan Homes, Richmond American Homes

Homes built to date: 6,141 Total homes at build-out: 10,500 (30,500 residents) Custom home lots available: Yes and 6 remain 55-and-over neighborhood: Yes. Trilogy at Vistancia.

Commercial potential: Commercial Core at Vistancia currently has 320 acres Community amenities: Vistancia has two K-8 schools inside the community, with plans for a third K-8 school as well as a high school.

Vistancia residents can bike, rollerblade, run or walk the 3.5-mile Discovery Trail that connects the entire community. There is a 15,000 square foot recreational center called the Mountain Vista Club that includes indoor basketball gym, three swimming pools, four lighted tennis courts and other multipurpose space. The Foothills Center has a heated resort-style pool with six-lane lap area, children’s playground and outdoor activities area. Trilogy at Vistancia has an 18-hole golf course and Blackstone features a golf course, as well.

51

CCIM

Life after the pin CCIM’s educational opportunities, networking and resources elevate its members above the competition

By DAVID MCGLOTHLIN

C

ompetition throughout the commercial real estate industry can make it difficult for a professional to distinguish themselves from the countless others vying for deals, projects, clients and market share.

That’s why veteran, mid-career and aspiring CRE professionals are turning to one of the largest, most well-connected CRE networks in the world to help them stand out from the competition, advance their understanding of the industry, and bring greater value to clients.

The Certified Commercial Investment Member (CCIM) Institute was built on a foundation that has remained solid for 50 years: the best teachers of commercial real estate investment principles are experienced and successful commercial real estate practitioners. By combining the best minds to develop and teach the industry’s best practices on investment strategy, financial analysis and market analysis, CCIM has helped thousands of students propel their careers and

52 | May-June 2018

grow their businesses.

Today, almost 70 percent of designees hold the title of owner, partner, principal, or president, representing an exclusive worldwide referral network. In fact, people of similar age and experience in the industry with the CCIM Designation make between 25-30 percent more than a likened individual without the designation, according to studies conducted by the Institute.

Central Arizona Chapter President Tracy Altemus, executive vice president of healthcare brokerage services at Ensemble Real Estate Solutions, received her CCIM Designation in 2005 and saw an immediate return on investment.

In addition to new property listings and closing deals with other CCIMs, she says, “Because I work for a regional real estate office with a particular specialization, CCIM gives me a network of others to reach out to when needed, to help me best serve clients and evaluate other markets.”

Since 1967, CCIM Institute has evolved into a global organization with

more than 13,000 members and more than 50 chapters in 30 countries. There are also currently more than 8,600 designees, and over 9,800 candidates pursuing the designation, which has nearly doubled in the past five years and is expected to exceed 19,000 by year-end.

Upon completion of the program, designees gain access to additional resources such as a leading-edge demographics and mapping program known as the Site to Do Business or “STDBonline.” Used by more than 1,500 industry professionals daily, it allows entrepreneurial and mid-sized businesses to better compete with the largest multi-national providers.

Whether it’s for the education, networking or resources, Altemus wants more professionals to get involved and come try out the local CCIM Chapter. She adds, “Giving time and effort will be rewarded by increasing business opportunities and/ or resources.”

It’s often said, “You join CCIM for the education, and stay for the

CCIM EVENT: Jerry Colangelo was a presenter at the 2017 IREM-CCIM Economic Forecast event.

networking,” which is evident by the nearly 80 percent of designees that become CCIM partners to advantage of the many benefits from the Institute’s growing professional network.

Since the Central Arizona CCIM Chapter formed in 1982, its membership has grown to 182 professionals including brokers, leasing professionals, investment counselors, asset managers, appraisers, corporate real estate executives, property managers, developers, institutional investors, commercial lenders, attorneys and bankers.

Power of the pin Craig Coppola, founding principal of Lee & Associates Arizona, earned his pin in just 13 months as soon as he became a broker 34 years ago. Since then, he made a name for himself as the top producing office broker in Lee &

Associates’ 39-year history, completing over 3,600 transactions that total over 13 million square feet and valued in excess of $3.5 billion.

“Brokers with the CCIM Designation have a different skill set, vocabulary and understand the business from a professional perspective,” he explains.

“The education and skill set, plus the experience, helps us give our clients a unique advantage in transaction analysis and negotiations.”

As a result, Coppola has been recognized as the 23-time top producer for Lee & Associates Arizona, 23-time finalist for NAIOP Office Broker of the Year and 6-time winner.

Described as the equivalency of a master’s degree in commercial real estate, the CCIM Designation is earned by completing an extensive curriculum of 200 classroom hours taught by other CCIMs, a comprehensive resume of qualifying experience and a six-hour exam. Upon completion, designees are given their CCIM pin and may use the CCIM accolade in their professional titles.

TOP 5 SALES

by Central Arizona CCIM Chapter members

James Keeley

Company: Colliers International Number of deals: 15 Total SF: 58,133,403

Todd Noel

Company: Colliers International Number of deals: 14 Total SF: 69,056,736

Nick Miner

Company: ORION Investment Real Estate Number of deals: 13 Total SF: 21,010,000

Terry Kass

Company: GPCI Multifamily Number of deals: 10 Total SF: 7,850,000

Barbara Lloyd

Company: NAI Horizon Number of deals: 10 Total SF: 34,089,000 53

CCIM

Tracy Altemus

Andrew Cheney

Dave Tornell, vice president of commercial sales at Chicago Title Agency, is currently working towards his CCIM pin, which he describes as being valuable in many ways.

In addition to learning the different perspectives of the users, investors, lenders and brokers and the decisions that need to be made during the acquisition, ownership and disposition stages, Tornell says, “The CCIM curriculum allows you to identify key players and key markets that are important when making real estate investment decisions.”

The current NAIOP-Arizona Chapter President Andrew Cheney agrees, adding, “It’s a great calling card for brokers who want to get in front of decision makers.”

Cheney, a principal at Lee & Associates Arizona, earned his CCIM pin in 2007 after starting classes three years earlier, and noted several occasions when he received referrals and new business from other brokers across the country after recognizing his CCIM Designation.

As a result of the confidence, credibility and more sophisticated thought process attained from earning his designation, Cheney has completed more than 1,200 transactions in over 20 states and three continents at a value in excess of $1 billion.

He explains the decision to join CCIM after realizing “the most successful person in the business had a CCIM Designation.” That person 54 | May-June 2018

Craig Coppola

Laura Pogue

was Coppola who later invited Cheney to join what is known today as “The Coppola Cheney Group.”

New class Earning the CCIM Designation is no small task, which is why no time frame is given for when candidates must complete the classes, resumé and final exam by to earn their designation.

Instead, candidates can proceed as their schedules permit, which can be as quick as a year or long as several.

At the moment, 78 candidates between Arizona’s two CCIM chapters — Southern Arizona and Central Arizona — are currently in pursuit of the CCIM Designation, but at various stages in the process.

Among those is Laura Pogue, senior associate at Colliers International, who has already taken two of the four courses and plans to take “CI 103: User Decision Analysis” next. She’s also the Central Arizona CCIM Chapter’s recipient of this year’s David S. Miller Endowed Scholarship.

Pogue decided to pursue the designation for many reasons, but says, “The primary one was to add value for my clients. This is an opportunity to differentiate myself.”

So far, her favorite part has been “the fact that I can use what I’m learning,” she adds.

Pogue finds herself constantly learning new things about business and different ways to look at CRE through the CCIM classes despite having already

David Tornell

founded and built her own national online technology firm in 2001 on top of her multiple degrees, including a Bachelor of Business Administration and Master of Business Administration from the University of Michigan as well as a Doctor of Management from the University of Phoenix.

“It’s not just textbook knowledge,” she explains. “It’s information that you can use immediately for your clients to add value.”

Pogue admits the program can be challenging to complete while doing deals and day-to-day work, but says, “it’s certainly complimentary.” In fact, Pogue has already capitalized on deals courtesy of the relationships formed with other CCIM candidates while currently taking her classes in Los Angeles.

While it’s not uncommon for CCIM candidates to take their courses in a target market instead of their hometown market in order to form other relationships with or for prospective clients, Pogue strategically picked Los Angeles “because of how many industrial buyers and investors from California desire to enter the Greater Phoenix commercial real estate market.”

“You get out, what you put in,” Pogue explains. “There’s a level of confidence, knowledge, professionalism and respect from peers that you earn when becoming a CCIM and that grows the longer you’re associated with other CCIMs.”

INSTITUTE OF REAL ESTATE MANAGEMENT

IREM’s RISING STAR

Coughlin adds a new perspective to Greater Phoenix Chapter

By STEVE BURKS

A

s a young professional starting with CBRE in Southern California, managing a portfolio of Class A office and industrial assets, Tom Coughlin moved his family to Arizona. It was a place that held a special place in his heart.

“I was just working,” said Coughlin of his six years in the real estate management business in California, where he went to high school and where his parents were living. “Moving out to Arizona was a personal choice.

I met my wife at the University of Arizona and we always wanted to end up in Phoenix. We had one kid and we wanted another one. And we wanted the house, and we wanted the lifestyle, and in Southern California it’s kinda hard to do, even if you make a good amount of money.”

In 2014, Coughlin landed a job at Optim Property Solutions, Inc., in Phoenix. Karlene Politi, owner of Optim Property Solutions and three-time president of the Greater Phoenix Chaper of the Institute of Real Estate Management, saw Coughlin’s enthusiasm and experience and hired him as a Property Manager. Coughlin credits Politi with encouraging him to become an active member of IREM. “She said this IREM would be a really good opportunity for me to network and grow opportunities and grow within my career and meet some good people who are in my situation,” Coughlin said.

“IREM has done all of that.”

Following his Optim experience, Coughlin was hired by Lincoln

56 | May-June 2018

Property Company. In three years at Lincoln Property Company, Coughlin has consistently delivered exceptional tenant satisfaction, high tenant retention and lowered operating expenses throughout his portfolio all while earning his Certified Property Manager (CPM) designation and being promoted to Senior Property Manager. Lincoln Property Company’s Executive Vice President, David Krumwiede, has been a passionate supporter of Coughlin’s full engagement in IREM. For someone new to the Valley, IREM was a true blessing for Coughlin.

Through it, he developed a network of industry experts, people who, like him, were, “trying to build their networks and have a lasting impact on up and comers,” he said.

“I was just someone who is passionate about the career and wanted to be involved in all of that.”

Coughlin graduated from the University of Arizona in 2008 with a B.S. in regional development with a minor in business administration and Spanish.

His involvement in IREM led him to attain his CPM designation in 2017.

Coughlin said that the contacts that he’s made and networking that he has done through IREM has provided him with a deeper understanding of the real estate management profession.

“What I’ve learned is, if you enjoy your career and you have a passion for something, why not take it to the next level and grow personally and professionally and grow the

leadership skills and build your network,” Coughlin said. “You can build opportunities to help create success for the upcoming generation.”

Over the past few years, Coughlin has become fully engaged with IREM and currently serves on the IREM Board as the Chair of the Social Committee. The Social Committee is responsible for planning quarterly events to promote networking and relationship building amongst property managers, asset managers, building engineers and industry partners as well as inspiring a mentoring mindset with IREM members.

“IREM is an older group of industry experts, so part of them asking me to be on the board and take on a leadership role is to bring some more energy and some new ideas,” Coughlin said. “Some of the veterans do add some good value onto what currently works for IREM. I just kind of add that younger touch.”

Throughout his career, Coughlin has valued the people who have helped him along the way.

“Whatever I can do to help others succeed in this business and lead other real estate professionals to be all they can be is something I take pride in.” Coughlin said, “If you are in commercial real estate and not part of IREM, you are missing a prime opportunity to grow in your career!”

In the end, Coughlin is most proud of his wife of nearly eight years (Jacqueline) and his two kids (Payson, 5; and Hunter, 2).

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AZCREW

58 | May-June 2018

Leading by Example For almost 4 decades serving in commercial real estate, Anna Riley has mentored and helped women advance

By PETER MADRID

Mentor: an experienced and trusted advisor. Anna Riley: See the definition of mentor.

Since it was founded in 1985, AZCREW has connected senior-level executive women in the Metro Phoenix real estate community.

Over that time, Anna Riley has served as a pioneer and more importantly, a mentor, to hundreds of industry women through her association with AZCREW. Anna Riley

59

AZCREW I always felt mentoring was critically important to help women advance in their careers, whether it was on the leasing and brokerage side, finance, or property management. There were opportunities out there. What was missing was guidance, support and networking.” – Anna Riley “I view mentoring as critical because I had mentors myself,” says Riley, who recently retired after more than 35 years in commercial real estate, her final 13 years at Ryan Companies US as Regional Director of Management.

“I realized how important they were when I was starting my career. They guided me and got me to where I wanted to be.”

Riley was one of AZCREW’s founding members in the 1980s. It was an alliance of women who got together over lunch – and a much-needed forum to share experiences and develop relationships, she says. Men in other industry sectors had organized groups; not so for women.

“It evolved into WICRE – Women In Commercial Real Estate,” Riley recalls.

“We used to meet for lunch, share stories; have resources to share with each other. I always felt mentoring was critically important to help women advance in their careers, whether it was on the leasing and brokerage side, finance, or property management.

There were opportunities out there.

What was missing was guidance, support and networking.”

WICRE grew and became part of the CREW Network, the industry’s premier coalition dedicated to advancing the success of women in commercial real estate. Today the CREW Network membership totals more than 10,000 professionals in more than 70 major global markets.

“Anna and I were involved in early meetings in Arizona in the late 80s to bring women in commercial real 60 | May-June 2018

estate together,” says Alisa Timm, regional director at Ryan Companies.

“Thirty-plus years later we share an appreciation and love for supporting women through AZCREW. Anna exemplifies a true professional and we have all gained through her leadership.”

Riley has also been active with the Building Owners and Managers Association (BOMA); International Council of Shopping Centers (ICSC); and Valley Partnership, serving on boards and committees. She holds the designations of Real Property Manager (RPA), Certified Shopping Center Manger (CSM), and is a LEED Green Associate.

However, it’s her work with AZCREW in which she has been a true influence.

“Anna is an amazing advocate for professional development for women,” said Carol Schillne, a first vice president at CBRE and chair of AZCREW’s Professional Development Committee. “She is passionate about growing and learning to improve her own skills and those of others.”

Schillne moved to Arizona from California, where she was a member of the CREW Network. She has been in AZCREW for 5 years and said she met Riley at one of the group’s first lunches, “but really got to know her better over the past couple years as we serve on the board together.”

How does Riley view the importance of an industry group such as AZCREW to increasing visibility and opportunities for women in commercial real estate?

“Because AZCREW is specific to

women (it does have a few members who are male), women really identify and relate to other women and how they are advancing in their careers,” Riley says. “It really exposes you to a realm with which you are more comfortable.

Women can relate to your issues.

“For instance, you might have a young woman trying to strike a balance between parenting and work It reaches those barriers placed there by gender. Women are not always viewed as being serious about their career. AZCREW supports us in our careers and reinforces that our careers are important.”

In Riley’s oversight of Ryan’s Southwest Region’s portfolio of office, medical, retail, and industrial properties, she mentored, trained, and supervised the team’s management and engineering professionals. She was also responsible for the implementation of customer, community, and industry relationships; new business development, strategic planning, best practices, and departmental profitability.

Riley will leave big shoes to fill at Ryan. Words of advice for those following in her footsteps?

“There is a lot to be said for a really strong work ethic and commitment,” she says without hesitation. “You can’t excel without putting your heart into it. You have to be proactive in how you learn the industry. You can’t sit back. You have to really be motivated and reach for the stars. If this is really something you love doing, you will excel at it.”

Riley said she intends to remain active in AZCREW. “I am still on the Membership and Legacy committees and I will certainly attend AZCREW’s great events.”

To which her one of her fellow AZCREW members said: “Anna is rewiring, not retiring.”

Riley adds: “I’m leaving the industry that I loved to support the people that I love.”

61

AZCREW

4

questions about AZCREW

Association president outlines plans to boost opportunities for women in CRE

By PETER MADRID

Cindy Winters, CSM, CPM, is the principal and owner at Eagle Commercial Realty Services. She is also the president of AZCREW.

Q: A:

Q:

What is AZCREW doing to identify the next generation of commercial real estate professionals and encourage their participation in the community?

A:

We are in the early stages of creating a CREW Careers Program that we would like to launch in the fall of 2018 for a program to be held in the spring of 2019. In collaboration with Arizona State University’s W.P. Carey Master of Real Estate Development (MRED) program and ASU’s Recruitment, Outreach and Student Engagement Department, we will identify area high schools where we will create a curriculum to promote and highlight the multifaceted disciplines in commercial real estate.

Our hope is to build a pathway to the student’s future and success by offering a program that educates them and makes them aware of opportunities available to them in commercial real estate. This would be for both their post-secondary education and as a career path. Students enrolled in the MRED program will help implement the CREW Careers Program. With this engagement, AZCREW will identify and develop students at both levels to inspire them on their path to their future in commercial real estate.

62 | May-June 2018

AZCREW also participated in UMOM’s weekly literacy program reading to children who reside at the shelter. Along with our monthly happy hour mixers and frequent book club offerings, we are in the planning stages for our 8th annual Black & White Affair to be hosted in early November.

A portion of the proceeds provide scholarships for students enrolled in ASU’s MRED program. Over the past several years AZCREW has awarded $38,000 in scholarships with a goal to award another $10,000 in 2018.

Cindy Winters

What new programs is AZCREW undertaking?

Our Legacy Committee is hard at work on our 2nd annual Divas & Darlings event with a new Pay It Forward program. Our goal is to create a Legacy Circle of members in which industry influencers identify the next generation of rock stars to inspire and encourage as they journey through their careers.

Q:

Q:

A:

A:

What events have highlighted AZCREW’s networking and community efforts?

As part of our Professional Development series, we held our 2nd annual Women in Action event led by Kathy B. Dempsey, CSP, RN, MED about shedding and how change is more effective when individuals identify, embrace, and celebrate change. Kathy facilitated the program by helping attendees focus on how to move their organizations ahead with forward thinking, focused on new behaviors. We also held our 17th annual Golfiesta at Moon Valley Country Club benefiting AZCREW and the YWCA. We anticipate proceeds from this event and the Caddie Auction will net approximately $30,000.

What would you like AZCREW’s legacy to be in the community and in the industry?

We would like to be known as the premier resource, referral and business networking organization whose members are acknowledged as business generators and leaders. Our mission is to be an organization that cares about its community and gives back to its membership by developing them into industry influencers.

Our vision is to be recognized as the premier commercial real estate organization that is a leader in the advancement and success of women within the commercial real estate industry. We will accomplish this through leadership, professional relationships, education and excellence.

AZRE honors the commercial real estate brokers from Arizona who closed the most business in 2017

TOP PRODUCERS

PRIME TIME PLAYERS Here are the brokers who closed the most — or biggest — deals over the past year

By MICHAEL GOSSIE

64 May-June 2018

It’s no secret that things are good in commercial real estate.

“The Phoenix operation had a record year in 2017,” said Bryon Carney, market leader of Cushman & Wakefield Phoenix.

“Each of our talented top brokers continue to provide our clients with vast knowledge and resources to enable them to make the most informed real estate decisions.”

From big industrial deals, to blockbusters multifamily transactions to continued interest in the Valley’s urban core, Metro Phoenix brokerage firms have had a lot to celebrate since things started turning around after the Great Recession.

“We celebrated many successes in 2017, a strong year for NAI,” said CEO and President Terry Martin-Denning.

“I’m proud of our achievements as a firm and the success of each of our agents.

We are on track to make 2018 another banner year.”

And things are only looking to continue on a positive path. NAI Horizon expanded its presence in the Valley with the addition of six agents.

So who stood out in a year packed with standout deals? Here are the top performers for 2017, broken down in alphabetical order by brokerage.

65

TOP PRODUCERS ABI Multifamily Large/Institutional Apartment Group 2017 sales volume: $337 million Number of units transacted: 3,397 Units Team members: John Kobierwoski, senior managing partner; Alon Shnitzer, senior managing partner; Rue Bax, senior managing partner; Doug Lazovick, partner; Eddie Chang, partner

Mid/Small Apartment Group 2017 sales volume: $94 million Number of units transacted: 1,082 Units Team members: John Klocek, vice president; Patrick Burch, vice president; Royce Munroe, vice president; Ryan Smith, vice president; Nathan Bruer, vice president

NOTABLE DEAL:

ABI Multifamily brokered the deal for Alta Fillmore (now Pure Fillmore) at 601 W. Fillmore St., Phoenix.

CBRE 1.

1.

3.

3.

5.

6.

7.

7.

7.

7.

(tie) Tyler Anderson (tie) Sean Cunningham (tie) Kevin Calihan (tie) Bryan Taute Brad Anderson Asher Gunter (tie) Jim Trobaugh (tie) Rob Marsh (tie) Chris Hook (tie) Mark Seeley

NOTABLE DEAL:

CBRE represented The Boyer Company in the deal for Rio2100 – Freedom Financial, 2100 E. Rio Salado Pkwy., Tempe.

66 May-June 2018

2017 TOP PRODUCERS CONGRATULATIONS!

A+

Todd Noel, CCIM

Cindy Cooke

Sr. Executive Vice President Multifamily Investments

Ryan Timpani

Don MacWilliam

Executive Vice President Office Properties

Payson MacWilliam

Rob Martensen, SIOR, CCIM

Jim Keeley, SIOR, CCIM

Brad Cooke

Mindy Korth

Tim Dulany

Philip Wurth, CCIM

Paul Sieczkowski, SIOR

Brian Woods

Matt Fitz-Gerald

Executive Vice President Industrial Properties

Executive Vice President Investment Properties

Senior Vice President Retail Properties

Executive Vice President Industrial Properties

Senior Vice President Healthcare Properties

Executive Vice President Office Properties

Sr. Executive Vice President Founding Partner Scottsdale

Executive Vice President Office Properties

Executive Vice President Industrial Properties

Executive Vice President Multifamily Investments

Sr. Executive Vice President Industrial Properties

Vice President Office Properties

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

TOP PRODUCERS Colliers International Todd Noel, CCIM: Office properties Cindy Cooke: Multifamily investments Ryan Timpani: Office properties MacWilliam Team: Industrial properties Rob Martensen, SIOR, CCIM: Industrial properties

Jim Keeley, SIOR, CCIM: Industrial properties Brad Cooke: Multifamily investments Mindy Korth: Investment properties Tim Dulany: Healthcare properties Philip Wurth, CCIM: Office properties

NOTABLE DEAL:

Colliers International brokered the deal for an East Valley 3 Portfolio that included Arcadia Cove, 2252 N. 44th St., Phoenix (pictured); Tuscany Palms in Mesa; and MIDTown on Main in Mesa.

Commercial Properties, Inc. 1. Leroy Breinholt 2. Eric Jones 3. Tyson Breinholt 4. Matt Zaccardi 5. Ken Elmer 6. Ron Schooler 7. Brandon Koplin 8. Jeff Hays 9. Darin Edwards 10. Shane McCormick

NOTABLE DEAL:

Commercial Properties, Inc. brokered the deal for Southbank Business Center, 3249 and 3259 E. Harbour Dr., Phoenix.

68 May-June 2018

DRIVING SUCCESS CELEBRATING NKF PHOENIX

2017 TOP PRODUCERS

Providing client-focused advisory services through intellectual capital and world-class resources.

MIKE GARLICK, SIOR

Executive Managing Director

TIM WESTFALL Managing Director

CHRIS KREWSON

Senior Managing Director

MIKE MCQUAID, SIOR Senior Managing Director

TRISHA TALBOT, CCIM Managing Director

KATHLEEN MORGAN, CCIM

MICHAEL CRYSTAL Managing Director

Managing Director

BRAD GOFF

Executive Managing Director

Pictured in order of ranking

GROWING WITH

EXPERTISE

Bringing on the best to meet the needs of our clients.

CJ OSBRINK

Executive Managing Director

TOM ADELSON

Executive Managing Director

BRETT POLACHEK Senior Managing Director

2398 E. Camelback Road, Suite 950, Phoenix, AZ 85016 602.952.3800

ERIN MCCLURE Associate

JIMMY HOSELTON Associate

ngkf.com

TOP PRODUCERS CRESA 1. Gary Gregg 2. Jason Wery 3. Mike Gordon 4. Ashley Snyder 5. Eric Walker 6. Chris Walton 7. Ted Lilles 8. Scott Maxwell 9. Ryan Burkett 10. Rod Beach

NOTABLE DEAL:

CRESA represented the tentant, Govig & Associates, for their deal on 7150 E. Camelback Rd., Suite 555, Scottsdale.

Cushman & Wakefield 1. Eric Wichterman: Capital markets – office 2. Michael Hackett and Ryan Schubert: Capital markets – retail 3. Mike Haenel, Andy Markham and Will Strong: Industrial services 4. Mike Beall: Office services 5. Jeff Wentworth: Office services 6. Chris Hollenbeck: Retail services 7. Chris Walker: Office services 8. Jim Crews: Capital markets – multifamily 9. David Fogler and Steven Nicoluzakis: Capital markets – multifamily 10. Sean Spellman: Office services

NOTABLE DEAL:

Cushman & Wakefield brokered the deal for the iconic Park Central Mall, 3121 N. 3rd Ave., Phoenix.

70 May-June 2018

TOP PRODUCERS JLL (In alphabetical order) Ryan Bartos: Tech Mark Bauer: Data centers John Bonnell: Office John Cunningham and Charles Steele: Multifamily investment Pat Harlan and Steve Sayre: Industrial Keith Lammersen: Tech/office Steve Larsen: Industrial Andrew Medley: Tenant representation Tyson Switzenberg: Retail Pat Williams: Tenant representation

NOTABLE DEAL:

JLL represented the tenant, Freedom Financial, for its deal on Freedom Financial Network at Rio2100, 2100 E. Rio Salado Pkwy., Tempe

Kidder Mathews 1. Eric Bell and Mike Ciosek 2. Darren Tappen 3. Fletcher Perry and Michael Dupuy 4. Matt Ault 5. Aric Adams 6. Mike Kasulaitis 7. Michelle Gardner 8. Jenette Bennett 9. Rachael Thompson 10. Dylan Scott

NOTABLE DEAL:

Kidder Mathews brokered the deal for Pinnacle Peak Commerce Center, 23751 N. 23rd Ave., Phoenix.

72 May-June 2018

TOP PRODUCERS Land Advisors 1. Greg Vogel 2. Waseem Hamadeh 3. Ben Heglie 4. Kirk McCarville 5. Michele Pino 6. Bret Rinehart 7. Chad Russell 8. Mike Schwab 9. Ryan Semro 10. Bobby Wuertz

NOTABLE DEAL:

Land Advisors brokered the deal for Lake Pleasant Heights in Peoria.

Lee & Associates 1. Craig Coppola, Andrew Cheney: Office 2. Stein Koss, Tom Louer: Industrial 3. Bill Blake, Colton Trauter: Office 4. Ken McQueen: Industrial 5. Rick Lee: Industrial 6. Bob Kling: Industrial 7. Matt Hobaica: Industrial 8. Adam Tolson: Office 9. Andy Ogan: Industrial 10. Mark Linsalata: Industrial

NOTABLE DEAL:

Lee & Associates brokered the deal for One and Two Renaissance Square, 2 and 40 N. Central Ave., Phoenix.

74 May-June 2018

TOP PRODUCERS Marcus & Millichap 1. Peter Katz 2. (tie) Steve Gebing and Cliff David 4. (tie) Mark Ruble and Jamie Medress 6. Hamid Panahi 7. Pete Te Kampe 8. Josh Tammen 9. Rich Butler 10. Sanford BurstynΊ

NOTABLE DEAL:

Marcus & Millichap brokered the deal for The Ledges at West Campus, 2162 W. Speedway Blvd., Tucson.

NAI Horizon 1. Russ Warner: Investment sales (manufactured housing and RV parks) 2. Mark Wilcke: Industrial 3. Tyler Smith: Office 4. Barbara Lloyd: Investment sales 5. Lane Neville: Investment sales 6. Rick Foss: Industrial 7. Chris Gerow: Retail 8. Shelby Tworek: Retail 9. Denise Nunez: Investment sales (Self storage) 10. Isy Sonabend: Industrial

NOTABLE DEAL:

NAI Horizon brokered the deal for Pointe Business Plaza, 7227 N. 16th St., Phoenix.

76 May-June 2018

TOP PRODUCERS Newmark Knight Frank 1.

2.

3.

4.

5.

6.

7.

Mike Garlick, SIOR: Office Christopher Krewson: Office Mike McQuaid, SIOR: Office Kathleen Morgan, CCIM: Medical office Tim Westfall: Retail Trisha Talbot, CCIM: Medical office Michael Crystal: Office

ARA, A Newmark Company 1. Brad Goff: Multifamily

NOTABLE DEAL:

Newmark Knight Frank brokered the deal for El Dorado Tech Center, 2299 W. Obispo Ave., Gilbert.

SVN | Desert Commercial Advisors 1. Rommie Mojahed (closed $55 million in transactions in 2017 — sales and leasing) 2. Danny Lee 3. Justin Horwitz 4. Mary Nollenberger 5. Paul Borgesen III 6. Carrick Sears, CCIM, MBA 7. Beau Flahart 8. Jonathan Levy 9. Chip Kloppenburg, CCIM, CEA 10. Vicente Cantua

NOTABLE DEAL:

SVN | Desert Commercial Advisors brokered the deal for Los Compadres Apartments, 3518 W. Dunlap Ave., Phoenix.

78 May-June 2018

Congratulations to Our 2017 Top Producers!

The broad range of specialties represented in NAI Horizon’s Top Producers of 2017 is a testament to the collective success of professionals from industrial, retail, office, and investment sales.

local knowledge global reach broker owned

NAI Horizon’s broker ownership platform allows our agents an opportunity to play a direct role in the company’s future. This creates a culture in which our agents can maximize their own business while benefiting from the resources of a global commercial real estate brokerage firm.

Russ Warner

Rick Foss

Mark Wilcke

Chris Gerow

Tyler Smith

Shelby Tworek

Barbara Lloyd

Denise Nunez

Lane Neville

Isy Sonabend

Investment Sales (MH & RV Parks) Industrial Office

Investment Sales Investment Sales

Industrial Retail Retail

Investment Sales (Self Storage) Industrial

Interested in joining our team of commercial real estate experts? Please contact: Terry Martin-Denning, CEO | terry.denning@naihorizon.com

Brokerage • Property Management

Phoenix | 602 955 4000

79

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2018

VALLEY PARTNERSHIP

RISING AGAIN Technology, improved transportation and a solid vision for the future drives the rebirth of Mesa

82 | May-June 2018

By STEVE BURKS

V

ery few people can match Karrin Taylor Robson’s connection to downtown Mesa.

Young Karrin Kunasek grew up on 2nd Avenue and celebrated her only birthday party as a child at Pioneer Park.

Her brother Andy was born at Southside Hospital, which is now home to Benedictine University’s Mesa campus.

Taylor Robson remembers rushing around downtown Mesa as a girl of 11 or 12, making deliveries for one of her father’s pharmacies. That particular pharmacy, Lewis Drug, was located where the Mesa Arts Center, the crowning jewel of downtown Mesa, now stands.

“Growing up, the Valley was PhoenixMesa,” said Taylor Robson, the founder and president of Arizona Strategies. “But at some point in time, the Mesa kind of got dropped off. There were a couple decades there where Mesa became a sleepy bedroom community. And then Mesa had a reawakening.

“Today, the stars are all aligning at a time when the Valley has regained our stride as a region and Mesa, if you ask most real estate groups where the next place that will be popping is, most will tell you it’s Mesa.”

Taylor Robson, a member of the Valley Partnership’s Honorary Board of Directors, is playing a big role in why Mesa is an exciting place to be. She is a principal in a development group behind a downtown Mesa mixed-use development project called The Grid. That project is just one of several currently in the works throughout the city. From the

83

VALLEY PARTNERSHIP

far west side of Mesa to the PhoenixMesa Gateway Airport in the East, development in Mesa is popping.ng.

THE ROOTS OF THE BOOM Mesa mayor John Giles, like Taylor Robson, is a Mesa native. He too remembers when the whole East Valley would come to downtown Mesa.

“Chandler didn’t have anything, Gilbert didn’t exist, Tempe, outside of ASU, was nothing, so downtown Mesa was the urban core,” Giles said.

“As shopping malls became a reality, freeways became a reality, little by little, downtown Mesa went from a thriving economic area to kind of the opposite. I saw some dark days.”

The project that turned the tide was the Mesa Arts Center. The idea was hatched in 1998 but the building didn’t open until 2005.

“I was on that council back in 1998 that went to the voters to build the arts center,” Giles said. “The city started reinvesting in downtown.”

After the success of the arts center, more downtown activity followed, 84 | May-June 2018

most importantly, the Valley Metro light rail line. That was followed by an influx of higher education to downtown in Benedictine University, opening the door for projects like bringing an Arizona State University building downtown as well as commercial and residential projects like The Grid.

“Mesa’s time has come downtown and I think the light rail is playing an important part,” Giles said. “When we talk about Arizona State coming downtown, they’ll tell you, if it wasn’t for the light rail coming downtown, we wouldn’t be having this conversation.”

WEST TO EAST DEVELOPMENT Count Craig Krumwiede, president and CEO of Harvard Investments, as a believer in the momentum in Mesa.

Harvard Investments currently has two major developments in the city.

In the West, Harvard Investments and Lincoln Property Company are involved in a joint development called Waypoint. In the East, Harvard Investments is developing Cadence, a

THE GRID: CO+HOOTS will be the anchor tenant and occupy 13,500 square feet of space at the $60 million The Grid project.

464-acre master-planned community that will eventually feature up to 3,500 residences, as well as retail, office, educational and commercial properties.

“I’ve been in business for 35 years and those are our first two projects in Mesa,” said Krumwiede. “We’ve been all over and all of the sudden, it seems like it’s Mesa’s time.”

Waypoint features 435,000 square feet of office space located just east of Mesa’s Riverview Park. Of that space, more than 75 percent is currently leased.

“The project was very well received,” Krumwiede said. “It went really nicely with the city, which has been great to work with.”

As the light rail line has continued to be developed eastward, that left some development opportunities along the line in west Mesa. Plans are currently being made for a mixed-use development

VALLEY PARTNERSHIP at the old park and ride near West Main Street and Dobson Road. The project, Sycamore Station, would sit on more than 20 acres and feature residences, retail and office space.

“In planning terms, we call that a zoning bank and that was a portion of property for future development to grow,” said Jessica Sarkissian, founder and principal at The Planning Center and a member of the City of Mesa Planning and Zoning Commission.

“Mesa has really taken advantage of those spots along the corridor. They’re just trying to find a happy medium between high-density commercial and mixed-use properties and the existing single-family residences that have been there a long time.”

Cadence sits just east of PhoenixMesa Gateway Airport, another part of Mesa that is seeing a rush of development plans.

“When we bought out Cadence project, Gateway was big for us,” Krumwiede said. “It was on our map

86 | May-June 2018

for all of the things that are bringing jobs to the Valley.”

Other developments near Gateway have been thriving or are just getting rolling. Eastmark, owned by DMB, is one of the largest-selling masterplanned developments in the nation.

Sunbelt Holdings owns 270 acres that make up Mesa Elliot Technology Park in the Mesa Elliot Technology Corridor.

Apple, Niagara Bottling and EdgeCore are already operating or have broken ground on large facilities in the corridor.

The most tantalizing economic development for the Gateway area is Skybridge Arizona, the nation’s first international air cargo hub that will streamline the customs process for air shipments between the United States and Mexico.

Put simply, Skybridge will be a joint venture between the two countries, with Mexican customs officials working out of the Skybridge center to pre-clear all of the cargo so that it can fly direct to one of the hundreds

of airports throughout Mexico. The projected impact is enormous: 17,000 new direct and indirect jobs, an increase of 2,000 cargo flights per year from Gateway (reaching 10,000 flights by 2036), a need for 2 million square feet of warehouse space, 1 million square feet of office space as well as 900,000 square feet of light industrial and flex space, operations facilities, hotels, retail and restaurants. The 15-year build out plan also includes infrastructure improvements at and around the airport to accommodate this increase in commerce flowing through.

“Skybridge is a game-changer, not just for Mesa but the state of Arizona and the Southwest region as a whole,” said Bill Jabjiniak, Economic Development Director for the City of Mesa. “It’s WAYPOINT: A half-million-square-foot office campus runs along the Loop 202 corridor and adjacent to the 250-acre Mesa Riverview mixed-use development.

VALLEY PARTNERSHIP

going to bring e-commerce companies with large warehousing space needs, a demand for office and industrial spaces for growing industries.”

CITY CENTER While the Mesa Arts Center, light rail and the arrival of Benedictine University were the catalyst for a downtown Mesa rebirth, projects like The Grid aim to take the area to the next level.

The $60 million project is a joint venture between Palladium Enterprises, where Taylor Robson is a principal, the City of Mesa and Benedictine University.

The Grid will feature 75 urban flats, 196 apartments as well as 15 street-level row homes. It has already landed its first tenant in CO+Hoots, a leading collaborative coworking company based in Phoenix. CO+Hoots will occupy more than 13,000 square feet of space and will partner with Benedictine’s entrepreneurial leadership program and students will study and work at the facility.

Chris Brady 88 | May-June 2018

John Giles

There will also be retail and dining spaces as well as more office space to make The Grid a place people can work and live.

Taylor Robson is confident that The Grid can stand alone, but also knows what kind of impact adding an ASU building to the downtown core would have.

“The energy that comes with putting students in this environment is good for everyone – you don’t need to look any further than downtown Phoenix to see what ASU’s presence means to an area,” Taylor Robson said.

While the ASU project isn’t done and delivered, the city and university have reached an Intergovernmental Agreement. Mesa City Manager Chris Brady’s office is now working with ASU on a lease agreement and a construction budget.

Shortly after Mesa announced that agreement with ASU, Caliber, The Wealth Development Company, purchased eight buildings in downtown Mesa with the intent of renovating them.

Craig Krumwiede

PHOENIX-MESA GATEWAY AIRPORT IMAGE COURTESY, PHOENIX-MESA GATEWAY AIRPORT AUTHORITY

“They’re smart people,” Giles said of Caliber. “It was inevitable, frankly, because people are going to make money in downtown Mesa.”

While making money on The Grid is part of the plan for Taylor Robson, it’s not the sole motivation. Her motivation was more personal. She wanted to breathe new life into an area she holds an affinity for.

“I’ve been at this for 24 years now and doing it for other people and loving every minute of it,” Taylor Robson said.

“Professionally, I love driving around town and saying I had a little piece in that or a little bit to do with that. It’s fun to be able to physically look at your work.

“This one will be different because it’s my first development project where I’m a principal in the deal, it’s my hometown and it’s literally where I grew up.”

Jessica Sarkissian

Karrin Taylor Robson

VALLEY PARTNERSHIP

A ‘Rio’

runs through it The Rio Salado Project is a grand vision for civic identity in the Valley

By PETER MADRID

I

n the Valley’s storied history of community and economic development, it’s unlikely there has been a project of this magnitude.

Six municipalities. Two Native American communities. Arizona State University. Salt River Project.

Businesses and business organizations such as Valley Partnership. The U.S. Army Corps of Engineers. The U.S. Environmental Protection Agency.

Maricopa County.

and provide economic benefits, our partners are relishing our role in the long-term project.”

Arizona Sen. John McCain has provided the leadership to move this initiative forward. “The Rio Salado Project has the potential to transform the Salt River bottom and realize an

Phoenix Mayor Greg Stanton. “We are taking that restoration to the next level – working with the federal government, regional partners, and ASU to tie all of our efforts along the river together.”

RIO REIMAGINED: WHY NOW?

All of those entities are collaborating on the Rio Salado Project, a grand vision for civic identity – an iconic landmark for the Valley which fosters significant economic, recreational, and regional water management value of a long-ignored lifeline.

“This will be one of the most ambitious initiatives in the 31-year history of Valley Partnership,” says President and CEO Cheryl Lombard.

“Based on our involvement in the Valley and our mission of responsible development to enhance quality of life 90 | May-June 2018

untapped Valley treasure,” he says.

The project encompasses portions of the Salt and Gila rivers and confluence with the Agua Fria. Plans call for it to extend more than approximately 45 miles along the river’s corridor and up to a mile wide. It will span the cities of Buckeye, Goodyear, Avondale, Phoenix, Tempe, and Mesa plus the Gila River Indian Community and the Salt River Pima-Maricopa Indian Community within Maricopa County.

“What a fitting legacy to fulfill Sen. McCain’s vision to allow this incredible asset that we are lucky enough to have throughout all of our respective communities to come to life,” says

In 1966, ASU dean James Elmore and his architecture students decided that something needed to be done about the large and barren dry bed of the Salt River. The students began working on design concepts to better utilize the vacant space.

The concept was basically to develop a series of channels in order to create an inland seaport. It incorporated a plan to create a linear greenbelt with buildings, recreational areas, and other developments along the river.

Fast forward to 2018. Initial project boundaries now extend approximately 58-plus miles long by one mile wide and encompass more than 78,000 acres extending from SR-85 to Granite

Reef Dam. It is envisioned that the river corridor will integrate multiple objectives such as public open space, environmental and water quality, housing, transportation, economic development, workforce development, and community sustainability.

“When you look at the Rio Salado, it’s an expanse that runs through the Valley, multiple Indian communities, and entities that have jurisdiction or passion for the land that goes where the Rio Salado is concerned,” says Christine Mackay, community and economic development director for the City of Phoenix.

“It wouldn’t have made sense for one overarching entity to take the lead.

ASU thoughtfully has over the past few months brought together the different

municipalities, the Indian communities, Valley Partnership, and others. It really feels like a project that can happen,” Mackay adds.

Mackay says it is the largest project with multiple entities in which she has been involved. It will change the face of the Valley, she says. Mesa Mayor John Giles predicts the same for his city.

“The Salt River has shaped Mesa’s story from the time of the Hohokams to the founding pioneer families of the 1870s,” Giles says. “This is a unique opportunity to embrace our rich history and use it to

shape our future. We applaud Senator John McCain’s leadership for pushing this project forward. We are excited to collaborate with our neighboring communities to fully utilize the potential of the Rio Salado.”

Adds Steve Chucri, chairman of the Maricopa County Board of Supervisors: “This is a project worthy of a world-class

INITIAL PRESENTATION: The initial public presentation of the Rio Salado Project took place on March 9., 1967 in the ASU Memorial Union. The presentation boards show the overall master plan, plus the overall topographical model of the 40 mile proposed development concept. Source: ASU Archives

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VALLEY PARTNERSHIP

community, a proven catalyst for economic development, engineering innovation, and regional pride. The county looks forward to working with our regional partners to support this vision of the future.”

’THE RIVER CONNECTS US’ The tribal communities view themselves as the spiritual, cultural, and historical backbone to the Rio Salado Project.

“There is so much opportunity.

We are all connected economically, socially, culturally geographically … a project such as this affords us the vision to mobilize the moral leadership to bring us all together for one vision on behalf of the community,” says Gov. Stephen Roe Lewis of the Gila River Indian Community.

For many decades, corporate, institutional and community leaders as well as allied elected officials and concerned stakeholders have been involved in exploring ways to reconnect the attributes of the Rio Salado to the residents of the Valley while maintaining flood protection and safety.

92 | May-June 2018

“The project has been relevant for decades,” says Buckeye Mayor Jackie Meck. “The conditions of the Gila River and our motives for restoring the river are much different than other sections of the proposed project. Buckeye’s interests are to prevent fire and flood, improve the wildlife habitat, and conserve water. Those are our motives in this project and we’re making progress slowly.

“Salt cedar trees have flattened out the channel creating flooding problems and their flammable chemistry compounds the threat to homes, farms, and critical infrastructure like our waste water treatment plant. Alleviating flood hazards would be a good start to the impact, but it’s hard to estimate what the economic impact will be although it can be nothing but positive,” Meck adds.

Says SRP President David Rousseau: “Sen. McCain’s vision to develop opportunities that enhance the economic vitality of the Rio Salado and its surrounding communities recalls the foresight of early Phoenix settlers who more than 100 years ago, banded together to support

TEMPE TOWN LAKE: Artist Julian Clark's 1997 rendering of Tempe Town Lake as construction begins. Source: Scheatzle

construction of the Roosevelt Dam and secured a prosperous future for the Salt River Valley.”

RIO REIMAGINED: THE FUTURE A scar moving through the Valley and turning it into an international destination. That’s the description the City of Phoenix’s Mackay gives for what the Rio Salado Project could become.

The Del Rio Brownfields Area could be the first to get the Rio Salado Project off the ground. A gravel pit and landfill, it lies on the south bank of the river between 7th and 16th streets. “It’s a pretty cool land site,” Mackay gushes.

She foresees open spaces, parking, buildings, “and connectivity to the community. This is an area that needs a lot of attention it hasn’t had in decades.”

“Like many of you, I have traveled to every corner of this great state and found that cities with impressive features tend to attract many visitors,” says Cindy McCain, the senator’s wife.

VALLEY PARTNERSHIP

“The Grand Canyon – our most visited landmark – generates millions from tourism every year. The Sedona Red Rocks, Havasu Falls, and Monument Valley draw people from far and wide.

“Right here in the Valley, thousands head to Tempe Town Lake every weekend to enjoy everything from boating and kayaking to shopping and dining. I firmly believe we can continue the work that ASU started in the 60s to transform the remaining

40 miles along the Rio Salado and build a preeminent destination,” Cindy McCain says.

While the Rio Salado Project will benefit generations of Valley residents to come, its roots run deep.

“I grew up enjoying everything the Gila River had to offer – fishing, hiking, bird watching. It truly was a blessing,” Buckeye’s Meck says. “I learned a lot about life and to respect wildlife because I had those experiences.

LAKE CONCEPTUAL DEVELOPMENT PLAN - 1995. Source: City of Tempe

Christine Mackay

Cindy McCain

David Rousseau

Greg Stanton

Steve Chucri

John Giles

Cheryl Lombard

John McCain

Jackie Meck

Stephen Roe Lewis

94 | May-June 2018

“Today it hardly resembles a river.

In some places it looks like a dumping ground. My interest is in restoring the river so future generations can enjoy it like I did, and in the process, I believe the river will bring tremendous opportunity to not only Buckeye, but to the entire Valley as well.”

VALLEY PARTNERSHIP

Recipe for success Valley Partnership Advocates program finds right formula to produce well-rounded professionals

By STEVE BURKS

I

f you browsed her resume back in 2015, you would think Jessica Sarkissian would be the kind of expert in her field that would be a guest speaker for a class of young professionals. But there Sarkissian was, with her Masters degree in Administration and Community Planning and her job as a senior planner for a national firm like Bowman Consulting, learning things about the real estate development industry she never even considered from her point of view as a planner.

“Attending those meetings, you hear from one side, either the public or private side or from the view of an architect, and then you’re also hearing what the opinions are of the other side,” Sarkissian said. “It really makes you understand why things are done a certain way and what to take into account on your projects.”

Those meetings Sarkissian attended were part of the Advocates program of the Valley Partnership. The program is for young (35 and under) professionals from all parts of the real estate development world. The class is limited to 25 participants who take part in monthly meetings with various industry experts and government officials. Advocates learn about the development process, network with industry leaders, tour development projects, and create business relationships with their classmates.

The program started in 2014 and part of that initial class was Kristina Locke, the director of business development for Coe & Van Loo Consultants, Inc. “I jumped at the chance to be involved,” Locke said about hearing about Valley Partnership’s new

96 | May-June 2018

“mentorship” program. “None of us knew what to expect, so I believe it was a learning experience for everyone involved.”

The Advocates program is quite different than a standard mentorship program. The most striking difference is the make-up of the class. There are planners, architects, lawyers, construction engineers, brokers and developers who bring their expertise to the table. When the class meets with a city leader, for example, about a development issue, each member of the class can add to the discussion, which means everyone involved can better see the entire picture.

“As a transactional commercial real estate and corporate attorney,

I only see deals at a certain point in the process (for purchases, sales, financings or developments),” said Nicole Hanson, an associate at Squire Patton Boggs in Phoenix and a member of the 2017 Advocates class.

“The Advocates program showed me the other players and at what stage in the process they become involved.

It presents a lot of interesting and

ADVOCATES ON HELICOPTER: Jessica Sarkissian, left, and Hayley Smith snap a photo during a helicopter ride as part of their Valley Partnership Advocates program. Sarkissian and Smith were part of the 2015-16 Advocates class.

PHOTO BY JESSICA SARKISSIAN

MEMBERSHIP BENEFITS

Education & Networking

Annual Community Project

Advocacy

Recognition

Join today! Visit valleypartnership.org

VALLEY PARTNERSHIP

GRADUATING CLASS: Members of the 2015-16 Valley Partnership Advocates class pose for a picture during their graduation event. PHOTO BY JESSICA SARKISSIAN

valuable information (and contacts) in a fun and upbeat setting.”

For people just getting their careers off and running, the Advocates program is a valuable tool. Aside from the practical and professional information it provides, participants have access to 24 contacts that they develop strong personal and professional ties to.

“At first, I was intimidated,” said Dylan Whitwer, an associate in the Office Properties Division at NAI Horizon in Phoenix.

“It was a group of young men and women who seemed to be established in their careers,” Whitwer said of the Advocates class of 2017. “I soon realized that most of them were like me, in the sense that they were trying to find their place in their careers and were looking for relationships to help develop them in that journey.

98 | May-June 2018

“The Advocates program taught the value of building career-long relationships. I can count on the advocates to provide me knowledge in their area of expertise as well as help provide leads to further grow my business.”

In the original 2014 Advocates class with Locke was Nicole Maas,

“The Advocates program showed me the other players and at what stage in the process they become involved. It presents a lot of interesting and valuable information (and contacts) in a fun and upbeat setting.”

– Nicole Hanson

vice president of marketing and communications for Kitchell. Maas became the first Advocates graduate to earn a spot on the Valley Partnership Board of Directors this year.

Sarkissian was part of the 2015 class and shortly after her time

in the program she moved into a leadership role with The Planning Center as Principal Planner for the company’s Phoenix office. The Planning Center is a planning and landscape architecture firm that has established a solid reputation in land planning, community visioning and urban design.

Sarkissian has served on the Valley Partnership panel that selects class members for the following years and speaks glowingly of the value of being an Advocate.

“I’ve actually partnered with other Advocates on projects we have coming up,” said Sarkissian. “I think because we have that connection and that experience, we worked together, even if it was just through Advocates. I think that the work dynamic is a lot stronger.

“Being in the Valley Partnership and Advocates definitely helped in just getting out networking and helping me build The Planning Center, because that was a huge impact.

One of the first things I did when I started The Planning Center, I wanted to make sure we were part of Valley Partnership as a sponsor, I knew how valuable it is.”

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Networking, relevant industry panels benefit Valley Partnership members at Friday Morning Breakfast series

By PETER MADRID

T

here’s a buzz of activity from those who arrive early. They grab a quick cup of coffee, make their way to a table, and survey the room.

Partners spot guests or newcomers and make them feel at ease.

Introductions are made. The clinking of water glasses and silverware becomes more audible. A handful of panelists and the moderator make their way to the dais.

Welcome to the monthly Valley Partnership Friday Morning Breakfast.

Networking. Topics crucial to development. An entertaining recap of the year in Arizona business and politics. All are elements that have made this event a trademark and highlight of Valley Partnership.

Since it was founded 31 years ago, Valley Partnership has been hosting a gathering of partners and their guests the last Friday morning of each month.

A panel of industry experts — with a moderator controlling the tempo and pace — discuss a specific topic and offer insight.

“It’s hard to remember not attending the Friday Morning Breakfast,” recalls Heidi Kimball of Sunbelt Holdings, who has been attending for more than 20 years. “The breakfast always has had a strong program and great content. I think it’s become tighter and more professional over time. And of course, the panels have become more diverse – but we still have a way to go in that regard.”

100 | May-June 2018

For years the Marriott Phoenix Airport was home to the Friday Morning Breakfast. It moved to the Phoenix Country Club, went back to the Marriott, and is now hosted permanently at Phoenix CC. “The breakfasts have always been a good indicator of what’s important in our industry, and Valley Partnership has been a premier organization in bringing experts and partners together,” says Terry Martin-Denning with NAI Horizon. “Over time, the breakfasts have expanded to include more diverse topics which appeal to a broader audience, attracting more attendees.”

The monthly breakfast is also an ideal occasion for networking.

Numerous business relationships have been forged over the years.

“It’s a great place to meet someone for the first time or be assured you can touch base with a key leader or network contact,” says Chuck Reynolds of Terracon, a relatively new attendee.

Heidi Kimball

Michael Martin

“If you are a newcomer it is a fabulous place to start building a network.

“The diversity of people and timely topics are the heart of the Friday Morning Breakfasts. It’s a nice combination of industry veterans mixed with a fantastic group of young energetic newcomers,” Reynolds says.

Sponsorships have also played a key role in the success of the Friday Morning Breakfast. After years of offering sponsorship opportunities to various partner companies, APS was tabbed the signature FMB sponsor.

“Through its Friday Morning Breakfasts, which APS is proud to sponsor, Valley Partnership has the perfect forum for highlighting its advocacy, discussing relevant topics led by expert panelists, and giving its partners a great opportunity to network,” says Mike Martin, director of Economic Development for APS and a Valley Partnership board member.

In recent years the Friday Morning

Terry MartinDenning

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VALLEY PARTNERSHIP

GRANT WOODS: Former Arizona Attorney General speaks at the Valley Partnership's Friday Morning Breakfast.

FRIDAY MORNING BREAKFAST: Industry leaders sit in on a panel discussion at a Friday Morning Breakfast event.

Breakfast has taken on more of a political stance as local, state, and federal politicians have addressed the audience. The one “must-attend FMB” is the December event. Former Arizona Attorney General Grant Woods gets top billing — and hardly ever disappoints.

His language is colorful and no one is spared. And he hardly disappoints.

Woods has been the December speaker for a dozen years or so, he recalls. He says he has plenty of fodder each year.

“I debated some goof on immigration at a previous meeting and since we got that resolved they invited me back,” he says. “It just took off from there.

Valley Partnership is really my kind of crowd, so I guess that’s why it’s been such a success.

“They are common sense leaders in our community and they appreciate straight talk and funny stories,” he says.

“Mainly we have fun because Arizona is such a target-rich environment for politicians behaving strangely.”

A few years ago, Woods was introduced by Sen. John McCain, “thinking that would calm me down.

I felt the pressure since he is a hero and mentor of mine. But I still cracked on him with a Depends joke and, as I thought, he laughed harder than anyone.”

How do partners describe the evolution of the Friday Morning Breakfasts from the time they began attending them to the present?

“They have certainly got larger as our industry has grown, but they have also drilled down on more issues that are timely and relevant to our current market,” says Curt Johnson of Coe & Van Loo Consultants, who has

102 | May-June 2018

The FMB is 7 a.m. worthy AZRE Magazine asked a handful of Valley Partnership members to describe the popular Friday Morning Breakfast in one word. Here are some of our favorites: • 7 a.m. worthy (They begin at 7 a.m.)

• Informative • Reunion • Insightful • Enlightening • Awesome networking • Intriguing • Early (They begin at 7 a.m.)

attended the breakfasts for more than 20 years.

“The breakfasts have come a long way,” says Doug Singer of Sprayfoam Southwest Roofing/Roofing Southwest.

He has been attending for more than 10 years. “The topics are more nuanced and relevant to what is happening in the market.

“The audience has grown substantially. For a number of years, we were under 100 attendees and now we are pretty consistent around the 200plus mark. There are more committees to choose from and participate in depending on who you want to get in front of,” Singer says.

Cathy Teeter of CBRE has attended the Friday Morning Breakfast for 15 years. She says the depth of industry knowledge panelists and guest speakers possess is always impressive.

“The monthly breakfasts serve as a crash course on current trends that the commercial real estate and development communities are talking about,” Teeter says. “Valley Partnership has historically brought together community leaders and market experts. Under Cheryl Lombard’s leadership, the subject matter features current, relevant topics and panels of experts that provide insightful and entertaining commentary.”

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