Trendsetters

ARIZONA CONTINUES TO SEE GROWTH IN SEMICONDUCTOR INDUSTRY

FUJIFILM Electronic Materials, U.S.A., a leading supplier of chemicals and advanced materials for the semiconductor industry with four manufacturing and R&D sites across the U.S., completed its $88 million expansion of its electronic materials facility in Mesa. The added 80,000 square feet to the existing facility includes five new buildings to expand Chemical Mechanical Polishing (CMP), high-purity solvents and process chemicals manufacturing capacity, warehousing, R&D and quality control laboratories, office space, and bulk chemical handling and storage. The expansion increases FUJIFILM’s manufacturing capacity by 30%, and the company plans to add 120 new positions in chemistry, engineering, manufacturing, warehousing and maintenance, by the end of 2024.

Phoenix claims 7 spots in Top 100 most expensive office submarkets

The life sciences subclass of office space has seen considerable growth during the last two years, which means successful life sciences startups are driving demand for a growing number of specialized office properties. And life sciences has been red-hot in Metro Phoenix, with the region claiming seven spots in the Top 100 most expensive office submarkets, according to Property Shark. Here’s how Metro Phoenix markets rank: 60 | Phoenix-North Gateway 64 | Peoria 65 | Phoenix-Deer Valley 66 | Gilbert 86 | Chandler 95 | South Scottsdale 100 | Scottsdale Airpark

PEORIA AMONG TRENDIEST DESTINATIONS FOR GEN Z RENTERS

The only generation to record an increase in renting activity in the past year, up by 21%, Gen Z is playing a big role in the urban revival. And Peoria is among the trendiest destinations for Gen Z renters. Peoria ranks 11th among the Top 20 Trending Cities for Gen Z Renters in 2022, a 43% increase in its share of Gen Z renters over 2020.

NAIOP honors Krumweide for excellence

David Krumwiede, a 36-year veteran of the commercial real estate industry and senior executive vice president for Lincoln Property Company, will receive NAIOP Arizona’s 2021 Award of Excellence at the Best of NAIOP awards ceremony on June 9 at the Arizona Biltmore.

“I cannot think of anyone more deserving of the prestigious NAIOP Award of Excellence than Dave,” said Rusty Kennedy of CBRE, NAIOP Arizona 2022 board chairman. “He has had, and continues to have, a tremendous impact on Arizona’s commercial real estate community. Dave’s numerous contributions to NAIOP and the Metro Phoenix market span nearly four decades, and his influence and leadership have positively affected many.”

KEEPING IT TOGETHER FOR 50 YEARS

Copper State Bolt & Nut Co., an Arizona-based construction and industrial supply company, is celebrating its 50th anniversary this year. Since 1972, Copper State Bolt & Nut Co. has evolved in support of its customers.

It was founded as — and remains — a family-run company, and that includes how it treats its workers. Copper State doesn’t just hire workers, it helps them succeed, even if it means helping new employees buy work boots or get bus vouchers to make it to and from work. This long history of helping workers succeed and valuing work ethic more than anyone’s background is why Copper State has employees who started at entry level positions and are now upper management. Founded with six employees in a 6,000-squarefoot warehouse, Copper State now supports more than 20,000 customers with more than 30 company facilities in nine states and more than 500 employees.

The Phoenix industrial market by the numbers

Here’s a look at the numbers for the red-hot Phoenix industrial market, according to a report from Kidder Mathews. 38.5 million

The Phoenix industrial construction pipeline posted a staggering, record high of 38.5 million square feet in the first quarter of 2022, more than 20 million square feet from two years ago pre-pandemic.

0.73

Average industrial asking rental rates in Metro Phoenix soared to a historical record high of $0.73 per square foot on a triple-net basis, the first time it has reached past the $0.70 per square foot mark.

3.4 million

The largest project currently underway is CapRock West 202 Logistics, a 183-acre speculative infill development that adds 3.4 million square feet to Phoenix’s industrial portfolio.

2

Metro Phoenix ranks second in the nation for industrial construction activity, breaking past Inland Empire, the nearby industrial market giant in California.

164

The strong buyer competition has put an upward pressure on pricing as industrial sale prices averaged an all-time high of $164 per square foot in the first quarter.

A closer look at Larry Downey

Larry Downey is one of a select few nationally to earn the title of vice chairman at Cushman & Wakefield. He is a founding member of Cushman & Wakefield’s Tenant Advisory Group, former global chairman (2013-2017) and current Pursuits Committee chair. Downey has been involved in over 4,550 lease and sale transactions, totaling more than $10 billion in consideration.

Leadership vision: “I believe that being a leader means ‘paying it forward’ through mentoring. As a leader with Cushman & Wakefield’s Tenant Advisory Group, I have mentored emerging broker talent for nearly 15 years. I also mentor students through the Franke College of Business at Northern Arizona University job shadowing program.” Surprising fact: “In 2011, my wife and I were on Southwest Flight 812 from Phoenix to Sacramento when a fuselage ruptured mid-flight. We were seated directly below the six-foot hole in the roof, looking at blue sky, as the plane made an emergency landing at an abandoned military air base in Yuma.”

Stream Phoenix looks to growing office leasing platform

Stream Realty Partners has hired a new vice president of office leasing for its Phoenix operation to focus on expanding the growing service line in the region. Nick Bialkowski will work with Executive Managing Director and Partner Tiffany Winne and National Head of Office Investor Services and Partner Preston Young to advance the national real estate services, development and investment company’s leasing platform.

Newmark hires Scott Scharlach to join Capital Markets team

Newmark hired real estate industry veteran Scott Scharlach as managing director. Scharlach joins the Phoenix Capital Markets team, where he will partner with Executive Managing Director CJ Osbrink. With more than 15 years of commercial real estate experience, Scharlach has substantial expertise in all aspects of real estate investing including underwriting, due diligence, financing, leasing and asset management. “His extensive experience and relationships throughout the capital markets segment will be a valued addition to our growing team,” says Greg May, executive vice president and West Region market leader.

Schillne retail team joins ORION Investment Real Estate

ORION Investment Real Estate, one of the leading commercial real estate brokerages in the Valley, continues to expand with the recent addition of The Schillne Retail Team, an experienced retail tenant representation brokerage team. The partnership is led by senior industry leader, Carol Schillne and her son, Cole Schillne. Carol brings more than 34 years of experience in the industry and as a team, they work with national brands, franchise concepts, local entrepreneurs and restaurateurs.

ARIZONA’S COMMERCIAL REAL ESTATE MID-YEAR UPDATE & FORECAST

Save the Date! August 4, 2022 at The Camby

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.

CALL TO SPONSOR 602.277.6045

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The American dream personified

European Granite and Remodeling started in 2008 — one of the most difficult times economically in Arizona. But that didn’t stop Ana Paola Bravo and Marian Bujor, its founders. Not only were they able to keep their business afloat, but they moved to a bigger space in 2012 and hired more employees. This year, they celebrated the 10th anniversary of the company’s move by expanding into San Antonio.

“Anything is possible when you set your mind to it,” Bujor says. “You just have to work hard, adapt, and never give up.”

Bravo and Bujor are both immigrants from Mexico and Romania, respectively. Newly married and with a baby on the way, they started from the bottom, educated themselves by attending conferences and webinars, and developing innovative ideas to succeed.

“We look forward to new accomplishments and challenges that will help us become better and stronger,” Bujor says.

SUCCESS STORY: Ana Paola Bravo and Marian Bujor.

WHAT YOU NEED TO KNOW ABOUT SHORT-TERM RENTALS

In Arizona, Airbnb remitted more than $63 million in tourism taxes in 2021, an increase of 120% over 2019. Those eye-popping numbers show that short-term rentals are big business in Arizona, but what do do people need to know about the laws governing them?

WHERE IT’S ALLOWED: “About six years ago, a state law was passed that essentially made it unlawful for a city or a town to enact a code or an ordinance prohibiting short-term rentals,” says Ben Gottlieb, co-founder of MacQueen & Gottlieb. “But if you lived in an HOA, you could bypass that law … So it became this big thing because if you live in an HOA, you can have a situation where there will be no short-term rentals. But if you don’t, there’s a state law that ties the hands of cities and towns.”

TREND TO WATCH: “We see a lot of people coming in for short-term rental arbitrage,” says Patrick MacQueen, co-founder of MacQueen & Gottlieb. “Say I rent your house for $5,000 a month and I’m the tenant. I go and find a bunch of short-term renters to come in and use my time that I’ve rented your home. Now, your home becomes a short-term rental. I’m paying you $5,000, but I’m bringing in $10,000 a month on a short-term rental basis. Short-term rental arbitrage is the no-money-down way to be in the industry. So we’re seeing a lot of investors doing that.” Want to learn more? Check out “Real Estate Pulse with MacQueen and Gottlieb” at azbigmedia. com to learn about all the things you need to know about short-term rentals and the law.