NAIOP Commercial Real Estate Development 2015

2015

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NAIOP

BLOOD, SWEAT AND YEARS Chairmen’s expressions molded what chapter is today

By Amanda Ventura

A

Tom Johnston

t the helm of NAIOP Arizona, directing it into its fourth decade, is Voit Managing Director Tom Johnston. He has worked in commercial real estate for 19 years and been a member of NAIOP for most of them, he says.

“When I first became a member, it was a rocking four years. Everything was grandiose,” he says. “Through the downturn, we struggled through the recession, we built up out reserves, our events weren’t as well attended. Now, it has come back to life.”

Johnston has been a member since 2008 and prior to that was the chair

for Best of NAIOP, during which he worked to expand the scope of the awards and recognitions.

NAIOP has spent the last 15 to 20 years becoming financially stable. Now that it is, how has that influenced the caliber of programs and member opportunities IT OFFERS? You can look to the growing developing leaders program, to which we contribute some of our resources.

You can look at bringing back the signature speakers series. And, Night at the Fights is approaching the levels

we saw in 2006 and 2007. (For Best of NAIOP, we received a) record number of nominations this year, and we may have broken an attendance record.

On the education front is where some of these resources are being used.

But, most importantly, we as an organization and as a board support public advocacy. So we can make sure bills are passed or not passed. We use our resources to ensure our members are protected.

What is the next step in chapter growth? What keeps you a member?

LEADING LEGACIES

Megan Creecy-Herman Term: 2014 Legacy: Created education committee; first female chairman of chapter 52 | September-October 2015

Keaton Merrell Term: 2013 Legacy: Formation of philanthropic Dream Teams

John DiVall Term: 2012 Legacy: Formalized MRED and mentorship programs

Mike Haenel Term: 2011 Legacy: Developing Leader Group recognized as best in nation

Joe Ihrke Term: 2009 Legacy: Improved Board governance policies and financial reporting

Retail plays right into what we do. It’s just natural that retail would be mutually beneficial. It’s a win-win to have them a part of our group or membership...

Retail is going to be a big part of it.

It’s something we’re going to push for.

We’d like to attract more law firms, more lending institutions. We’re largely owners, developers and brokers. We have some title companies and we have the banks, but (a goal is) to grow our existing base. With the market improving, it’s naturally going to grow if we put on the right events for the right people.

NAIOP recently announced an initiative to include the retail sector in more of its marketing. How appropriate is that crossover to the Phoenix chapter?

It’s not just into the retail sector (that NAIOP National is expanding).

We support developers, so it’s all commercial development (we’re trying to reach), which includes multifamily.

What my goal is, and I’ve talked to

Chris Toci Term: 2008 Legacy: Instituted NAIOP Central Arizona Shelter Services homeless barbecue

a few of the retail people in town, is to have a roundtable discussion of their involvement in NAIOP. I think it’s natural when you look at Keirland, Esplanade and CityScape, there’s office and multifamily. Retail plays right into what we do. It’s just natural that retail would be mutually beneficial. It’s a win-win to have them a part of our group or membership, part of our future. There’s a lot of retail professionals out there who are already members of NAIOP — RED Development, for example, who does office and retail. Certainly, they have ICSC. What we feel is that through our education, we’d have a lot to offer as well as, and more importantly, on the public policy side. On the striker bill (Senate Bill 1241), working with Tempe, where they were going to add impact fees for the trolley system, the retail developers and owners benefit from our public policy efforts. Until we

Fred Stiles Term: 2007 Legacy: All-time revenue high, help on property tax reform

Kurt Rosene Term: 2006 Legacy: Political awareness of NAIOP, building better community

get some feedback from them, I can’t say exactly how they will benefit, I can say on a whole, retail will.

What makes NAIOP different from other industry groups?

NAIOP stands out. First and foremost, in my opinion, we’re the best at networking. We do a pretty good job at education, but we need to do a better job. One thing we’re really good at is philanthropy. This year, we founded a philanthropic foundation.

It’s a vehicle by which we can give back to the community. It’s not using any of NAIOP members’ money. It’s a way for us to collaborate with those people who want to get involved, even nonmembers, who want to get involved in an event that caters to some type of charitable organization. We’d be able to give to a charity without it going through the NAIOP membership channels. It’s being created under

Steven Schwarz Term: 2005 Legacy: Won National Chapter of the Year award, hired Executive Director Tim Lawless

Craig Coppola Term: 2003 Legacy: Implemented professional management and lobbying 53

NAIOP Right now, we’re focusing as an executive committee on how we can make education more meaningful. There are a lot of organizations out there that do a great job with education, but we want to be a strong education organization as well. my leadership, but it was fostered by (past Chairman) Keaton Merrell.

Lastly, what I think we’re most noted for and what we’re best at is public policy. We’re the group that goes to the Legislature to fight on behalf of our members, which are primarily developers. Whether it’s real estate taxes or taxes on energy uses, we band together and we use our resources for the benefit of our members.

Every chairman has left a unique mark on the organization. Did you achieve your goal? what do you hope is your legacy?

As the chair, I’m somewhat involved in all the committees — public policy, education and have an active role in Night at the Fights. The Best of NAIOP has been my baby. The Signature

Pete Bolton Term: 2000 Legacy: Successful fight against Sierra Club development ring 54 | September-October 2015

Speaker Series is something we’ve fostered under my term. This year, we had Dan Patrick and close to doubled in attendees. The other thing I have been involved with is our education. That’s one of the three legs of the stool. We’ve tried to build that. We sent a survey out in April, we had a good response.

The majority of the people wanted to see us improve our education platform, which is something Bob Hubbard will be focused on. Right now, we’re focusing as an executive committee on how we can make education more meaningful. There are a lot of organizations out there that do a great job with education, but we want to be a strong education organization as well.

The organization is not broken. I had some phenomenal predecessors.

Following Megan Creecy-Herman, those were some pretty big shoes to

John Strittmatter Term: 1999 Legacy: Met board’s goal for strengthening financial stability

David Krumwiede Term: 1998 Legacy: Introduced Night at the Fights

fill. She won NAIOP Chairman of the year, nationally. I believe if it’s not broken, don’t fix it. If someone asks, “What did TJ do?” I’d say if we can get this foundation created, that’d be something I’d like to see under my leadership. Given my history as a manager, I’m most proud of working and training younger people and promoting their careers and their desires. I helped organize revamping the mentorship program with the developing leaders, more of an educational format, where they receive a certificate of completion at the end. That’s something that was a tremendous success. The mentors loved it. The mentees really liked it.

I’ve agreed to be a part of it, going forward to grow it and becomes more meaningful in years to come. That’s something of which I’m proud.

Bill Petsas Term: 1997 Legacy: Membership recruitment

Bob Mulhern Term: 1996 Legacy: Recruited strong leaders to organization

NAIOP

WILL TO WIN THE EVOLUTION OF NAIOP ARIZONA PHOTO ILLUSTRATION BY MIKE MERTES, AZ BIG MEDIA

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AIOP Arizona’s events can draw a crowd. About 750 people attended the group’s signature Night at the Fights event in 2015.

However, commercial success was an effort of dozens of chairmen, formerly referred to as presidents. In fact, one former chairman joked that all you had to do was miss the wrong meeting to be “awarded” the role. Now, the list of chairmen, even from the early days, are accomplished and recognized industrywide for success.

“It’s the preeminent national real estate development organization and I believe then and now that I needed to be involved in the organization,” says John Strittmatter, chairman of Ryan Companies US, Inc., who

56 | September-October 2015

joined NAIOP-AZ in 1994, when Ryan Companies opened an office in Arizona. “I got more involved as this office became more active.”

John DiVall, senior vice president and city manager of Liberty Property Trust’s Arizona region, came from the Midwest to start business in a new region for the company.

“Nobody knew me or my company.

As much as I put into (NAIOP), it came nowhere near what I got out of it. I encourage people to get involved in our industry. As willing as you are to get involved, the more you get out of it. It helped me get integrated into the real estate community here.”

With a continuing goal of expanding membership, the chapter imported

events like Night at the Fights, borrowed from a successful Orange County chapter. The chapter was on a mission for a signature event that could raise resources for the group.

Now, it has multiple signature events.

“The goal wasn’t to make a lot of money, but to make a lot of friends,” Bob Mulhern says about the group’s first golf tournament, held at The Raven. “Over the next five years, we became the organization that offered bigger relationship-building events.”

David Krumwiede was talked into joining by his then-employer and former NAIOP President Tom Roberts in 1986.

When he eventually became president, akin to what’s now the role

NAIOP of chairman, Phoenix was coming out of the savings and loan crisis and considered an up-and-coming market.

It was time, Krumwiede says, for signature events. At the time, NAIOP had 40 members. Even Krumwiede’s secretary doubled as the organization’s admin during his presidency.

“We didn’t have a big budget, so we rolled the dice by throwing a big, signature event,” he recalls. That event was the first Night at the Fights.

The event was held at the Ritz and drew a crowd of 250 people. Many of which, Krumwiede says with some amusement, didn’t even know what to expect or had ever seen live boxing. At the 2015 Night at the Fights, the event capped out at 750 attendees.

“It was such a big event, if it didn’t go well, we weren’t going to be a chapter anymore,” Mulhern says.

“Some of us weren’t sure if it would be successful,” Strittmatter admits. “I was sort of on the fence about it and (Dave) Krumwiede always kids me on this ... If you look at who is in the organization and who is in the events, it’s people I deal with daily. It’s an opportunity for me to create and find resources for Ryan (Companies) to use.”

Events like Night at the Fights, that helped bring NAIOP-AZ into the black paved the way for a stronger legislative presence due to its ability to donate to The ring at the XIX Night of the Fights.

58 | September-October 2015

“I’ve been here a long time. The chapter has done a great job. From my perspective, I know the chapter back in the early ‘90s was struggling and there was competition and soul searching in what direction the chapter wanted to take. By the mid to late ‘90s, the chapter had grown exponentially and positioned itself as the go-to group for legislative issues for CRE in Arizona.

We’ve been fortunate for some great leaders in those chapters. Those things don’t happen by accident.”

- NAIOP CEO Thomas Bisacquino

PACs and lobby at the Legislature.

The chapter has a legacy of bringing in more than just figurehead presidents, Mulhern says.

“It’s like any business. It’s being seen a lot of places, doing a lot of stuff, volunteering. You become friends with all these people,” says Bolton. “When you call, they know who you are. Is there one person, is there one event?

Nah.” Bolton also brought one more important thing to the table — a recommendation for Tim Lawless.

Lawless has been the CEO for nearly 10 years.

“They really go in there and pour a lot of time and energy into it,” Mulhern says. “It just amazes me how much each person adds.”

The networking events are a gateway to NAIOP-AZ’s role as an advocate for commercial development.

When Craig Coppola was chairman of NAIOP, Arizona’s commercial real estate taxes were among the top five most expensive in the nation.

“We were at a distinct competitive disadvantage competing for new company relocations,” Coppola says.

“Additionally, the entire commercial real estate industry was disjointed, with each segment looking out for its own specific interests. NAIOP was the group that could organize, coordinate, and advocate for commercial real estate. At the time, this was our sole focus because it had so much impact on the future.”

Bolton recalls, in 2000, “the biggest, largest, most dreadful attack on commercial real estate in Arizona” was initiated by the Sierra Club. The group was attempting to put a development restriction ring around every municipality that had 2,500 or more citizens, akin to Portland.

“That was a huge referendum that NAIOP, along with many others, were able to get the real information out to the market, to the citizens and they voted no,” Bolton says. “That was the legacy ... (Arizona was the) only state in the country trying this. We beat them so handily, they dropped it in other places.”

Bolton was also the member who brought Lawless to NAIOP, whose main focus has been property tax reform.

“Our voice has adopted a consistent, focused, and reasoned approach to help make Arizona competitive in taxation and meaningful job creation,” Coppola says. “We have had some major wins for our industry, but those wins have really helped Arizona’s economy grow markedly. Within the organization, the average member knows that our collective efforts matter and are encouraged to be thoughtful business citizens. I think this results in a more effective and productive trade organization.”

NAIOP Three Decades of Support

NAIOP Arizona 1986-2016 NAIOP Arizona is the

7

Annually, it holds more than

th

largest chapter in the U.S.

40

events, half of which are dedicated to its Developing Leaders Program

For the last consecutive decade, NAIOP-AZ has been recognized with 17 major awards: Most Outstanding Chapter Most Outstanding Chapter Chairman Most Outstanding Communication Tool Most Outstanding Corporate Sponsorship Program Best Membership Program Best Developing Leaders Program Most Outstanding Chapter Executive Most Outstanding Volunteer Greatest Net Membership Increase Best Periodic Publication Best Magazine Supplement Capital Dome Award for Public Affairs Most Outstanding Social Event (Comedy Night) Most Outstanding Government Affairs Program

60 | September-October 2015

Membership growth: 800 700 600 500 400 300 200 100 0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

2013 2014 2015

In 2012, NAIOP-AZ was awarded for having the highest membership increase in the nation.

Major legislative wins:

2005 2006 2007 2011 2011 2012 NAIOP-AZ made it a top priority to lower property-tax assessment ratio from 25 percent to 20 percent over 10 years.

State equalization property tax rate is abolished over three years.

Accelerated property tax assessment ratio decline over six years, rather than 10 years.

Jobs Bill (HB2001) passes.

Contains top three legislative priorities, including further ratio decline from 20 percent to 18 percent; corporate income tax rate cut below 5 percent.

Municipal impact fee reform bill passes (SB1525).

This narrows definition of necessary public services.

The chapter was a key financial contributor to two statewide proposals on the ballot. Prop 117 was meant to cap property tax valuations to no more than 5 percent a year. Prop 204 opposed a statewide permanent sales tax increase.

61

NAIOP

NAIOP Arizona’s Annual Roundtable N AIOP, a Commercial Real Estate Development Association, announced its decision to add retail to its foundation of office and industrial sector resources. This, among other topics, made it onto the table at the 2015 roundtable discussion held by leading members of the Arizona chapter. NAIOP-AZ members gather every year around a table, not necessarily a round one, to discuss the national and local issues and trends entering the commercial market. Here are the leading trends, promising statistics and market updates they’re watching.

Moderator:

Tom Johnston Voit Real Estate Services

Participants:

Molly Carson Ryan Companies US, Inc. 62 | September-October 2015

Matt Mooney Parkway Properties Larry Pobuda The Opus Group David Scholl Vintage Partners

Christopher Toci Cushman & Wakefield James Wentworth Jr. Wentworth Properties

Tom Johnston (TJ): What is different in July 2015 in our local commercial real estate industry FROM a year ago?

David Scholl (DS): With each

passing year, I believe we are seeing a strengthening real estate market from the Great Recession. There seems to be more activity and less fear in the

market. We are still not to the point in the cycle where there is much demand for new commercial development, but “chatter” is more about the search for development deals rather than buying existing broken deals. As employment continues to strengthen and the single-family residential market gets on firmer footing, I believe we will begin to see more pressure for new commercial development.

Molly Carson (MC): We are seeing continued growth from new companies entering our market, as well as expansion of existing firms.

Companies continue to invest in their people, which manifests itself in the creation of a more optimal work space; with open areas for collaboration as well as closer proximity to amenities (food, shopping, transportation).

New construction and the reshaping of existing offices continue to benefit from this trend. The continuance of

this requires ongoing improvement of our education; our ability to produce talent is a key factor — we need to keep this a top focus.

TJ: How would you compare our Metro Phoenix commercial real estate market to other major markets throughout the nation and, specifically, the Western U.S.?

Larry Pobuda (LP): Without question, Phoenix has had a slower recovery, yet I don’t look at this as a bad thing, and actually think of this in very positive terms. We have come out of the economic downturn with a more diversified economy, driven by growth in technology, healthcare and financial services. This economic diversification provides relief from the construction/ housing roller coaster that has steep inclines and correspondingly steep declines that have taken our breath away in past cycles. In many ways, our recovery is similar to other markets; no longer can you look at aggregated market-wide statistics and draw meaningful conclusions. The Valley has “hot pockets” within various submarkets. It is difficult to paint with just one brush.

MC: Our market was badly hurt by the collapsing of the housing market.

Today, we’ve come back stronger than before, focusing on diversifying our economic drivers. This, coupled with our universities’ focus on educating the best and the brightest, is resulting in progress, slow and steady progress.

(We’re seeing) a much different pace than Arizona’s past recoveries.

Chris Toci (CT): There is no question that the Phoenix real estate market was hit the hardest among national real estate markets and particularly those in the West. As such, it has taken longer for it to recover than most other markets. The silver lining rests in the fact that our delayed recovery means that, as a market, we have several more years of solid recovery. To use a baseball analogy, we are in the much earlier innings of recovery (4th or 5th) than most other major markets that we consistently hear are in the seventh or eighth innings.

Moderator

Tom Johnston

Panelists

Molly Carson

Matt Mooney

Larry Pobuda

Panelists

David Scholl

Christopher Toci

Western markets like Seattle, Portland, San Francisco, Orange County, San Diego, Austin, Dallas and Denver are in the later innings. Though several of these markets may undoubtedly go into extra innings, Phoenix is attractive due to its bridled speculative construction deliveries, healthy job growth and strong housing affordability.

James Wentworth, Jr. (JW): When looking at the office

and industrial segments, the other major markets in the western U.S. are outperforming Phoenix and seem to have much more wind in their sails.

Tenants, developers and investors have been much more active in markets like Seattle, Denver, Dallas and California.

All of those markets would be considered “great,” while Phoenix could be considered “good.” Having said that, we are still on an upward trajectory and seeing many encouraging signs.

Our positive performance is happening without the “turbo booster” of the home building that we have seen in previous cycles. We may continue on this path if we don’t see substantial increases in the new home permits.

James Wentworth Jr.

TJ: Where does Arizona stand in its economic development plans? Are we headed in the right direction or leave anything for the asking? Is Gov. Doug Ducey on the right track? Is the furor over K-12 spending and high university tuition an issue? Have we done well to diversify our economy?

Matt Mooney (MM): Coming out of the Great Recession, Arizona has made tremendous strides in its economic development efforts.

There are a lot of positives that have manifested themselves in wins like State Farm, Silicon Valley Bank and Northern Trust expanding here.

Further, there has been a strong trend of California-based firms looking to take advantage of Phoenix’s business friendly environment and have expanded their footprint in the region.

For instance, Zenefits, a fast growing human resources software company, recently announced it was expanding its presence in Tempe by leasing 135,000 square feet of new office space 63

NAIOP at Parkway Properties’ Hayden Ferry III development that will accommodate upwards of an additional 1,000 jobs.

GPEC and most of the East Valley cities in the Phoenix Metro have been very aggressive and deserve a lot of credit. That said, nearly every other state is at the same time growing more competitive, so we have a lot of work to do, and K-12 is appropriately in the spotlight from Gov. Ducey.

TJ: What has been most surprising about Arizona’s commercial real estate recovery?

MM: The amount of time it

has taken to recover has been the most surprising. The hyper growth between 2005 and 2007 was so disproportionately fueled by access to debt, instead of fundamentals, that the scars from that cycle took a long time to heal and in some instances still haven’t healed. We built a lot of product that should never have been built, and it is born out in our stubborn overall office vacancy rate.

DS: We are six years into the current recovery and, other than multifamily, there has really been no pressure for sustained ground-up development. I think Arizona’s recovery has lagged behind the nation and we are seeing delayed demand for new buildings.

In the two previous real estate down cycles (’89-’90 and ’00-’01), I remember the Arizona market recovering at a quicker pace. The positive in this is that we may see the current recovery in rental rates last a little longer than usual.

JW: The subdued pace of the recovery is the most surprising.

Phoenix has normally been a growth leader coming out of previous downturns. That simply is not the case so far in this cycle and we may act more like Denver did in the last couple cycles. The positive side of this is that we will hopefully not see the wild swing between peak and bottom in this cycle. The other surprising part of the recovery is how it has differed from submarket to submarket and by building type. For example, heavily parked office buildings in the Southeast Valley have outperformed the multitenant buildings in our historically 64 | September-October 2015

POSITIVE CHARGE: “We have come out of the economic downturn with a more diversified economy, driven by growth in technology, healthcare and financial services.” — Larry Pobuda, OPUS Group strong submarkets of Camelback Corridor and North Scottsdale, both of which have vacancy rates hovering at around 20 percent.

CT: The most surprising element about Phoenix’s recovery from the Great Recession compared with other post-recession recoveries is its lack of a “snap back.” The hockey stick, or “J” curve, recovery of aggressive rent growth witnessed from 2002 through 2006 after the September 11-induced recession is sorely missing from this current recovery. The current recovery is more indicative of the 1992 to 1996 post-recession recovery in which zero speculative office construction occurred, 75,000 to 85,000 jobs per year were added, and in excess of 1 million square feet of net annual office absorption occurred. It was during this five-year period that rents grew most aggressively prior to the market’s sustained delivery of consecutive years of speculative office space. The moderation of the ‘92 to ‘96 recovery cycle was predicated on no speculative construction during the early years, which ultimately led to a more sustainable nine-year period of growth that prevailed between the trough of 1991 and the trough of 2001. Similarly, a more moderate current recovery which boasts growth of 52,000 to 55,000 jobs per year, muted speculative office construction deliveries, and net office absorption averaging in excess

of 1.5 million to 2 million square feet per year all point to another sustained period of growth that may rival the recovery cycle from 1992 to 2000.

TJ: What is the current state of our Metro Phoenix office market and what needs to happen to push the office sector into continued recovery?

MM: The Metro Phoenix office

market is improving overall but remains very bifurcated in the strength of the recovery. Well-located new product with good access to transportation and amenities in the Southeast Valley and Scottsdale is approaching historic rents in many places — and certainly at rents that justify new development. At the same time, there is a lot of product in Metro Phoenix that is functionally irrelevant, due to location, parking constraints or inefficient floor plates.

Some of this inventory still doesn’t make sense to lease at current rental rates and probably should be converted or demolished. The biggest catalyst to continued improvement is simply continued office-using employment growth in diverse industries. We are all invested in the job growth story.

LP: It’s been a moderate and generally steady recovery, not overexuberant in any way. There is greater segmentation within the office market

NAIOP

ALL IN: “Adaptive reuse is often not as cost effective as building new, but is a very important element for creating, strengthening and maintaining a city’s culture.” — Molly Carson, Ryan between older (last cycle) suburban office buildings that are parked four per 1,000 square feet with vanilla finishes and new Millennial-driven work spaces that are open, collaborative, more heavily parked, with walkable amenities nearby. The key driver is still job growth, yet we need to recognize that these new jobs are different from jobs in the past, and they are not necessarily going to locate where our current office stock is located.

Ultimately, we cannot “push” the office sector into recovery. We can, however, exercise better judgement and discipline as it recovers.

TJ: Why does the Tempe submarket appear to be so hot right now and what is the next hot sub-market? Is it central Phoenix? Is light rail a driver?

LP: It is hot and it is a confluence of great academics, great business and a unique and vibrant downtown. It’s also difficult to overlook the inherent location advantages that Tempe offers — highway accessibility, proximity to Sky Harbor and workforce availability.

The City of Tempe has also made smart investments in its future – Tempe Town Lake, light rail and now the proposed street car. This, combined with the leadership and vision of Michael Crow at ASU, and Tempe is on fire. Phoenix is already strong and

66 | September-October 2015

getting stronger. The next hot submarket will be everything within the Loops 101 and 202, focusing “in” rather than focusing “out.”

MM: Tempe is the most urban city in the Phoenix Metro, and the majority of tenants across the country today are focused on urban locations as a means to recruit and retain talent, particularly Millennial workers.

Tempe can boast border-to-border light rail, Mill Avenue amenities, Tempe Town Lake, Sky Harbor Airport proximity, freeway proximity and a connection to tens of thousands of ASU students. It is a compelling story.

Several other sub-markets are already hot, particularly Chandler and south Scottsdale. If Scottsdale were to ever embrace light rail to connect its downtown, it could be even more compelling.

TJ: There’s a lot of buzz around adaptive reuse and redevelopment of downtown spaces, particularly in Phoenix. What significance does this development have to the industry? What have been some of the most important projects?

MC: Adaptive reuse is often not as

cost effective as building new, but is a very important element for creating, strengthening and maintaining a

city’s culture. This is a recent (and often challenging) trend for Arizona, one I hope continues to gain more traction. The last two years we have seen a number of innovative adaptive reuse projects not only come to fruition but thrive. Restaurants such as Fox (Restaurant Concept)’s The Yard and (Jim) Riley’s The Vig revitalized not only the buildings in which they occupy, but the respective neighborhoods. They’ve created gathering areas where previously there was none, bringing life to these older buildings. The redevelopment of the Monroe and Barrister buildings no doubt will bring life to downtown Phoenix.

TJ: What is the current state of our Metro Phoenix industrial market?

JW: The Phoenix industrial market

is healthy. We have seen strong activity trickle from large users to the mid-sized users. Well-located and functional product is leasing, and we are seeing growth in the rental rates. Similar to the office market, certain sub-markets and building sizes are performing better than others.

Vacancy rates are just above 10 percent with new development happening in select sub-markets. This development is much more controlled than in previous cycles.

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NAIOP “core” investors. Late 2015/early 2016 may induce additional core investors to the Phoenix real estate market as they continue to chase yields and are forced out of gateway markets.

TJ: What are the challenges for retail and what will the next five years look like?

How does this inter-play with adaptive reuse and mixed use more generally?

DS: The retail sector is facing a

MARKET MINDED: “Office buildings in the best locations with the best barriers to entry continue to emerge as a preferred asset class.”

— Chris Toci, Cushman & Wakefield

TJ: Is the Phoenix market ripe now for spec building?

If so, where and what type of building type?

LP: We’re already seeing spec

development, and I think this will pick up steam. The key drivers will still be great, irreplaceable location, more infill than ever before and strategic investments that have their finger on the pulse of business demand. The danger with spec development is when it is driven by the supply. We too frequently act like lemmings in our industry.

TJ: There’s more capital coming into the market right now. Where is this best invested? How is financing trending? What do the large pension funds think about our market for investment properties?

CT: Office buildings in the best

locations with the best barriers to entry continue to emerge as a preferred asset class. Most institutional investors remain under-allocated to industrial product and have a voracious appetite for new, state-of-the-art, functional and institutional industrial assets.

Long-term credit tenant leases with a minimum of 12+ years of lease term and annual lease rate escalations remain in strong demand as portfolio

68 | September-October 2015

managers endeavor to mitigate risk.

High street retail located within the best mixed-use developments in gateway urban centers continue to draw true “core” investors along with grocery anchored shopping centers.

Functionally obsolete regional malls and strip retail centers will continue to flag. Though still sought after, luxury multi-family is feeling long in the tooth. Debt capital markets remain very active with bank and life company loans most heavily sought after. CMBS (commercial mortgagebacked security) loans allow for higher proceeds but are restrictive if resale is a consideration within two to three years. Institutional capital views Phoenix very favorably as it is perceived to be in the earlier innings of recovery (4th or 5th) compared with almost all other investment markets that are believed to be in the latent cyclical recovery stages (7th or 8th innings). Though there continues to be good depth of bidding, there remains an element of fickleness among investors. They have very keenly defined investment parameters and are not easily persuaded to adjust their yield requirements. Heretofore, “valueadd” investors have been most active.

However, we are beginning to see the return of the “core-plus” investor as well. Only the Super-A, or trophy, assets will garner the attention true

number of coinciding challenges in the current recovery. First, the long predicted Internet sales impact is in full force. Many commodity retailers are struggling to survive and almost all large format retailers are studying smaller store sizes.

Changing demographic preferences and improved fulfillment systems have truly boosted the acceptance of Internet retailing. Second, there is an old saying in retail development, “Retail follows rooftops.” Until the Arizona housing market fully recovers and new homes and neighborhoods are being developed, we will continue to see softness in retailer demand for new Arizona stores. Finally, pure demographic forces are currently working against retail development.

Gen X (people born between 1964 and 1982) is roughly half the size of the Baby Boomers and Gen Y (Millennials). Now approaching peak earning years, Gen X simply cannot keep pace with the level of consumption our economy has grown accustomed to over the last 30-plus years. Until Gen Y gets into its peak earning years (early 2020s), we may be faced with a “new normal” in our consumer-based economy. One bright spot for retail development has been the recent demand for retail components in mixed-use projects.

A combination of a hot multifamily development segment, along with new planning models have created high demand for specialty retail and restaurant destinations in many mixed use projects that are in the planning stages. Once the office segment moves into the development phase of the current cycle, we may see similar demand for retail additions in commercial mixed use projects.

NAIOP

RETAIL IT LIKE IT IS

NAIOP extends arm to retail sector

By Amanda Ventura

N

AIOP, a commerical real estate development group, has historically focused on industrial and office sectors. However, the national organization is extending its membership benefits to more obviously include retail developers and similar commercial professionals.

“The organization really started shifting gears more than 10 years ago,” says Thomas Bisacquino, CEO of NAIOP. “It was in 2005 that the association held a big series of mixed use summits.”

In 2009, NAIOP dropped the words behind its acronym, which stood for National Association of Industrial and Office Parks. Now the group simply goes by NAIOP, Commercial Real Estate Development Association.

“The reason we did that is because the association was more associated with the process of development and ownership than any one product type,” Bisacquino says. “Our roots are in office and industrial, but our members are doing so much more.”

According to NAIOP’s membership data, 67 percent of its members are involved in retail development.

Likewise, 66 percent of NAIOP members also report work in mixeduse development. It’s not necessarily the mixed-use component that’s

70 | September-October 2015

grabbing Bisacquino’s attention. It’s the way the product mix has changed over the years. When mixed use projects were planned in previous decades, they led with office. Now, he says, they’re leading with multifamily and retail, to be followed by office.

“The industry was naturally headed in the direction of mixed use,” says Bisacquino. “The lines are starting to

blur between traditional urban and suburban development. Society is pushing the envelope.”

When it comes to pushing NAIOP’s envelope, members of the organization can expect something different than what the International Council of Shopping Centers (ICSC) offers, Bisacquino says. ICSC is the largest commercial real estate group solely

“The line between retail and office is getting more and more blurred with the increased popularity of mixed-use, infill developments.”

-Ed Beeh, executive vice president of SRS Real Estate Partners

focused on the retail industry. “(Retail) has been something we’ve been doing for quite some time but has unfortunately been the bestkept secret in town,” Bisacquino says. “We recognize there’s clearly a misperception it isn’t the home for the retail business when it is.”

Ed Beeh, executive vice president of SRS Real Estate Partners, a retail consulting and brokerage firm, has been a member of International Council of Shopping Centers since 1989.

Beeh says his ICSC membership is sustained by networking and educational events as well as access to political action committees. Though he’s not a member of NAIOP, he has attended the group’s social events.

“The ‘I’ and the ‘O’ (used to) stand for

industrial and office, so the perception is that this organization is not focused on or beneficial to retail,” he says.

The changing market, though, he says, could make NAIOP more attractive to the retail sector.

“The line between retail and office is getting more and more blurred with the increased popularity of mixeduse, infill developments,” Beeh says.

“Additionally, retailers need distribution and warehousing facilities, so there is obviously a connection between the retail and industrial disciplines.”

Brokers, however, are probably going to stay more involved in ICSC for now.

“NAIOP is a fine organization, and if they are going to include retail and be more inclusive with that industry we would consider (joining),” says

Dave Cheatham, president of Velocity Retail and member of ICSC since 1984.

“However, if they are going to continue to focus on warehouses and high rises and those matters concerning the office and industrial industry, then we would most likely not see a benefit.”

With the growth of mixed use properties, office and residential developments are increasingly including ground floor retail amenities for the sake of residents and employment base. This is where the brokers may see value, Beeh says. “(Joining NAIOP) would help build better relationships between the retail and office/industrial sector players and cause more collaboration,” he says. :This evolution we are experiencing is fairly recent, and I don’t know that 71

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NAIOP NAIOP members are involved in:

89 %

77 %

67 %

66 %

42 %

40 %

OFFICE

INDUSTRIAL

RETAIL

MIXED USE

NICHE

MULTIFAMILY

COURTESY OF NAIOP, “We are Commercial Real Estate”

retail building owners nor office/ industrial owners expanded outside their discipline very often, nor were any of them as interested in collaborating with the others on a platform such as NAIOP,” says Phil Breidenbach, executive vice president, Colliers International in Greater Phoenix, and 20-year NAIOP Arizona member. “That has obviously changed.”

Bisacquino adds that ICSC is transaction-oriented, whereas NAIOP is solely focused on development issues.

“For the first time, we’re seeing a more interesting nexus between industrial and retail,” he adds, in a nod to the transition Beeh mentioned.

“Many NAIOP members expanded

Ed Beeh 74 | September-October 2015

their portfolios as some of the lines blur between industrial and retail, thanks to e-commerce,” Breidenbach says.

Velocity Retail Senior Vice President Mike Fitz-Gerald, says he feels that retail and office will integrate further and there will be a need to have a more integrated organization that is equal parts retail, office and industrial. FitzGerald estimates it will be closer to five or 10 years before this happens.

“As our market changes and the retail market evolves into more integrated projects that this association will certainly need to incorporate retail on a higher level,” he says.

The Arizona chapter, according to 2015 Chairman Tom Johnston,

Thomas Bisacquino

Phil Breidenbach

managing director at Voit Real Estate Services, plans to host a roundtable discussion about retail’s involvement in NAIOP. “There’s a lot of retail professionals out there who are already members of NAIOP,” he says, adding that NAIOP’s recent advocacy benefitted retail development through fighting impact fees for the trolley system in Tempe.

“Until we get some feedback from them, I can’t say exactly how they will benefit.

I can say, on a whole, retail will.”

Johnston, a third-generation Arizonan, lives in downtown Phoenix, as does his daughter, and he says he constantly sees room for development in the urban core that will bring together the office, retail and multifamily sectors.

It’s not a hard sell.

“I think for the sophisticated owner, broker and developer, I think they see the benefit in joining and the collaborative effort with office and industrial developers,” Johnston says.

Breidenbach adds that NAIOP-AZ’s advocacy also benefits the retail sector.

“NAIOP also played a key leadership role in passing legislation signed by the governor that prevents cities from enacting ordinances that require property owners from tracking and publicly reporting their energy usage so owners can be shamed or face significant monetary penalties for reporting noncompliance,” he says. “This would have been especially onerous to shopping centers and larger retail boxes who often have to keep their air conditioners on for longer periods than say a comparablesized office building, given their working hours with customers.”

Dave Cheatham

Tom Johnston

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NAIOP

Where obsolescence ends, new trend begins

By Amanda Ventura

A

flour mill, a bowling alley, a former shopping mall. All of these retail centers have one thing in common — they’re fated to become creative office space.

The life expectancy of older office buildings hangs in the balance along the streets of Midtown and other sub-markets in Arizona that saw extensive growth in the mid-80s. Now, developers and building owners are faced with finding innovative ways to either save or re-purpose these sites.

Will developers take the pre-1990s structures into the 21st century by raising the ceilings and perking up the interiors? Or will they be razed and given a new purpose?

Office vacancy rates are the highest of any other commercial sector at 20 percent in Tucson, according to CBRE’s second quarter office report, and just

over 20 percent in Phoenix. Despite the numbers, Class-A office is in high demand, as Cushman & Wakefield reported in its second quarter release.

Even with high vacancies, Class-A leasing is high and nearly 5 million square feet of new office is under construction in the Valley. New supply is expected to exceed historic average by 58 percent in 2015, DTZ reports.

“The current and future trend of office leasing will focus on amenityrich environments located in areas of strong labor pools,” reads Cushman & Wakefield’s report. The key to unlocking the death sentence on older, obsolete buildings is just that — amenities.

That brings the story back to the flour mill, bowling alley and shopping centers mentioned earlier. All of these spaces are near amenities. The Hayden

BEFORE AFTER

Nexus 76 | September-October 2015

Flour Mill is next to Tempe Beach Park and the Mill Avenue District, as well as Arizona State University.

The bowling alley. And the office space next to Fiesta Mall are literally walking distance from an amenityfilled shopping center.

“For reasons of timing and price, there’s a perception these will be cheaper than new builds,” says Lee & Associates Principal Andrew Cheney, who adds that even Fortune 500 companies are willing to look at adaptive reuse if it’s a time-sensitive enough situation.

“There are some companies that just have to have new space,” he says.

“Other companies that don’t. Other companies don’t want to wait for new build, so they are willing to look at existing product.”

According to DTZ, about 66 percent

NAIOP

BEFORE AFTER

Connexion of new construction is build-to-suit.

The existing space, though, Cheney says, isn’t necessarily Class-A. In fact, many of the adaptive reuse projects around the Valley are Class-B by typical standards.

“It’s tough to say they become Class-A,” Cheney says. SkySong was a complete scrap of its former, failed shopping mall and Circuit, a repurposing of a manufacturing center, is a single story. Even Discovery and Continuum, Cheney says, are Class-B with Class-A build-outs.

“For right now, the supply of good space will not meet up with the demand,” Cheney says. “At 20 percent (vacancy), that still hasn’t happened yet. There just won’t be enough nice space and right prices for new construction … the prices between re-purposed buildings and new construction aren’t as great as they once were. The gap isn’t as big at only $2 per square foot more.”

Big tenants such as InfusionSoft, General Motors, Amkor, GoDaddy, Shutterfly, Northern Trust, Isagenix and Crown Castle have entered the market as build-to-suits. However, these projects don’t fix vacancy rates, as DTZ Executive Managing Director Jeff Wentworth says.

“Office tenants are evolving and owners have to evolve as well,” Cheney says. “That’s why Discovery (Business 78 | September-October 2015

Campus) did so well. They redid that project and it happened before the tenants showed up.”

This is particularly important for Arizona tenants, Wentworth notes.

“The companies coming from out of state or northern California can envision this,” Wentworth says of repurposing obsolete buildings. “When you walk through the property with these tenants, they look at the space

and say you’re going to tear this down and leave the walls and fireplace. If you take the local tenants that are used to value office, they walk in and generally speaking don’t get it. It’s a safer bet to go to something newer like a suburban value office near good employment.”

When it comes to speculative projects, like Discovery Business Campus or Anchor Centre, it’s up to the owner to capture the image. KBS Real

What makes a building functionally obsolete? ● Built in the ‘80s or earlier The workforce was radically different in the 1980s, when most of Phoenix’s previous Class-A office space was constructed. ● Low parking ratios In the ‘80s, a parking ratio of four per 1,000 square feet was acceptable.

Now that employees are working in half of the square footage than they were allotted in the ‘80s, a more appropriate parking ratio is six per 1,000 square feet.

This sometimes can present a problem for older buildings that do not have that flexibility in available land. Some buildings, like Papago Tech Center, have

chosen to reduce an existing building size to make space for parking. ● Low ceilings Some developers have opted to literally “raise the roof” in obsolete office buildings to make suites more appealing to future tenants. ● Lacking amenities Access to amenities is a huge asset for an office building. The live-work-play dynamic may be an overused phrase, but the concept is still very relevant. Just don’t say it aloud too much, lest you see eye rolls.

NAIOP

BEFORE AFTER

San Tan Tech Center Estate, which purchased the Anchor Centre for $85 million in 2014, blew out the previous building suites to raise the ceilings, add more glass windows and walls as well as trendy designs and pops of color. The group also installed a shared meeting space complete with a kitchen, flexible conference room and billiards for tenants to use to unwind or host clients.

Adding to Arizona’s advantage, Phoenix’s Class-A properties tend to lease around $30 per square foot.

This is more than 50 percent off what northern California companies are looking at for speculative space in the Bay Area.

“It’s not that (adaptive reuse is) a trend, but it’s the start,” Wentworth says. “If you see success, you’ll see more people doing it.”

For the last five years, ViaWest 80 | September-October 2015

company has been purchasing assets that Founding Partner Steven Schwarz says weren’t performing at their highest level.

“It can be simply buying a property where the ownership doesn’t have capital to make it sing,” he says. “Or it can be identifying a market opportunity that other people don’t see.”

A recent project ViaWest has taken on is Nexus, previously owned by a semiconductor company, and built in the ‘80s. The company, NXP, stayed for three decades, but downsized, leasing half its building to Wells Fargo and later completely moved out because its equipment rendered obsolete by technological advancements.

“The cost of retrofitting the research and development space and clean rooms would be extraordinary,” Schwarz says, adding that they bought

it anyway (when the price was right).

“It was ignored in the marketplace for its lack of functionality but by working with ASU’s Research Park, we were able to enhance the asset.”

ViaWest demolished the interiors, built a snazzy lobby area, did some creative site work to boost the parking ratio and adding in glass to make for a classier, updated property. ViaWest currently has 2.5 million square feet under management.

“For a while, we were focused on things with financial issues or suffering from velocity in the market,” Schwarz says. ”Those opportunities are more gone than they’re here. The ones that really make sense now have that element of repositioning of taking something that is not working in its present state and figuring out how to modify it.”

81

NAIOP

DOUBLE VISION Protégés, mentors take developing leaders program to new level

By Amanda Ventura

L

ast year, NAIOP Arizona received national attention for its Developing Leaders program.

“It’s a great program, because you overcome the lack of common ground with more seasoned professionals,” says Robert Guerena, vice president of development at Seefried Properties and 2015 chair of the developing leaders program. “You don’t know the right questions to ask a 30- to 40-year veteran.”

The purpose of the mentorship program is to find a common ground for the two experience levels.

NAIOP Arizona’s young leaders program has about 230 members — 30 percent of its membership — who are under the age of 35 and active in the developing leaders program, which was launched in 2009 by former Chapter Chairman Megan Creecy-Herman. Over the years, the group has hosted events meant to bring together the young and experienced, including “Rookies and Rock Stars,” which allowed 50 under-35 members to invite someone with more than 10 years of experience to a black tie affair for free.

Now, the group is taking an even more selective step with its 10-month mentorship program. Every year, the developing leaders committee selects 12 applicants to take the role of protege with 12 mentors. Last year, the group tested a new program that pitted three teams of four against one another in

Jenna Borcherding John Divall 82 | September-October 2015

Robert Guerena

case studies of real, developable sites around Phoenix.

“The biggest challenge was creating a curriculum captivating of the proteges but also understanding they have fulltime jobs to commit to,” says Guerena.

John DiVall, a mentor whose team won last year’s competition, has worked closely with expanding the mentorship program and formalizing NAIOP’s Masters of Real Estate Development (MRED) program with ASU. “I wasn’t so much surprised as impressed with how sharp some of the young people are in our industry,” says DiVall, senior vice president and city manager for Liberty Property Trust’s Arizona region.

DiVall and three other mentors guided their four proteges through the process of developing a building from start to finish. He says they spent a good amount of time together and was blown away by how coachable all of the proteges were.

“I could see all of them working for me,” he says.

Jenna Borcherding, director of business development at Jokake, has been the chair of the mentorship program. She says seeing the first class

SHOW TIME: Top: Developing Leaders program participants strike a pose among fellow super humans. Above: A group of developing leaders present a site plan for the program’s final competition. graduate gave her energy to take the helm for the last four years.

“We had a protege from two years ago who (still) has a mentor two and a half years later,” Borcherding says. “They’re still meeting. (Proteges and mentors will) get their spouses together and build relationships.”

“We need to think about the future,” DiVall adds. “(We need to) think about

the kids with bright resumes who get their masters from ASU and we want them to stay. Reaching out to them to more formally meet people and intern for them is a great start to that. It’s the same thought with the mentorship program. They’re already here, but it increases the chance of them staying in Arizona. We’re still such a young market and state.”

83

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NAIOP

NAIOP members’ office and industrial projects Project profile criteria per NAIOP: · Property must be owned or have non-refundable earnest money in escrow by 8/1/15. · Property must have a color site plan and color rendering completed. · Property must have proper zoning in place. · Property must be bigger than 100,000 square feet

 Amkor Headquarters

Developer: Ryan Companies US, Inc. General Contractor: Ryan Companies US, Inc. Architect: PHArchitecture Location: 2045 E. Innovation Circle, Tempe Size: 101,949 square feet; 7.26 acres Brokerage: CBRE; DTZ Value: $15.5 million

Start: April 2014 Completion: January 2015 Subcontractors: Delta Diversified Electrical, Ace Asphalt, J D Sun, Ryan Mechanical, RCI Systems, Stone Cold, Phoenix Pipeline, Saguaro Steel, Scuderi Tile, Suntec Concrete, Sun Tech Glass and Aspen Construction

Ascend at Chandler Airport Center — Buildings A-D

Developer: Irgens General Contractor: Chasse Building Team Architect: Balmer Architecture Group Location: NWC of S. Cooper and S. Germann roads, Chandler Size: +400,000 square feet Brokerage: Cushman & Wakefield of Arizona Value: WND Start: Building C, July 2015 Completion: December 2015 86 | September-October 2015

Chandler Viridian

Developer: Hines General Contractor: TBD Architect: RSP Architects Location: W. Frye Road at S. Galleria Way, Chandler Size: ±240,000 square feet Brokerage: CBRE Value: $80 million Completion: Q1 2017 Subcontractors: TBD

The Circuit Tempe

Developers: EverWest Real Estate Partners: CarVal Investors General Contractor: RSG Builders Architect: Gensler Location: 615 S. River Dr., Tempe Size: 190,000 square feet Brokerage: Cushman & Wakefield of Arizona Value: $6.5 million (renovations) Start: November 2014 Completion: May 2015

Coldwater Depot Logistics Center – Phase 3

Developer: Trammell Crow Company, Clarion Partners General Contractor: The Renaissance Companies Architect: Butler Design Group Location: NEC 127th Avenue & Van Buren Street, Avondale Size: 187,000 square feet Brokerage: CBRE Value: $10.5 million Start: December 2014 Completion: June 2015 Subcontractors: Progressive Roofing, Sunnyside Masonry LLC, A.M.E Electrical Contracting, Gunsight Construction Companies, Hardrock Concrete Placement Co., Levake Construction, Inc. and Saguaro Steel, Inc. 87

NAIOP Corridors Industrial Park

Developer: Trammell Crow Company General Contractor: D.L. Withers Construction Architect: Butler Design Group Location: SEC 23rd Avenue and Alter Way, Phoenix Size: 221,000 square feet Brokerage: CBRE Value: $18.7 million Start: July 2015 Completion: January 2016 Subcontractors: Suntec, Gunsight, Western Underground, S&W Engineering, Panelized Structures, Mirror Works Glass, Specialty Roofing and ATS Electric

Estrella Medical Plaza 2

Developer: Plaza Companies General Contractor: Okland Construction Architect: Butler Design Group Location: SWC of W. Thomas Road and 93rd Avenue

The Grand at Papago Center

Developer: Lincoln Property Company General Contractor: JE Dunn Architect: HKS Architects; Kendle Design Collaborative Location: W. Washington St., Tempe Size: 450,000 square feet Brokerage: CBRE Value: $65 million Start: Q4 2016 Subcontractors: TBD 88 | September-October 2015

Size: 131,900 square feet Brokerage: Plaza Companies Value: $24 million Estimated start and completion dates: TBD Subcontractors: TBD

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89

NAIOP Hayden Ferry Lakeside III

Developer: Ryan Companies US, Inc. General Contractor: Ryan Companies US, Inc. Architect: The Davis Experience Location: 40 E. Rio Salado Parkway, Tempe Size: 265,000 square feet Brokerage: CBRE Value: $42 million Start: May 2014 Completion: September 2015 Subcontractors: Able Steel, Aero Fire, Blount, Comfort Systems, EF Charles, JF Ellis, Kelley Bros, NKW, Performance Contracting Inc., Phoenix Pipelines, Stone Cold Masonry, Yesco, Kovach, Ceco Concrete, ISEC, Stockett Tile & Granite Company, Scuderi Tile, WJ Maloney, ThyssenKrupp Elevator, AAA Landscape, Roofing Southwest and Firestop Southwest

Mach One

Developer: Trammell Crow Company General Contractor: Willmeng Construction, Inc. Architect: Butler Design Group Location: 2222 and 2290 E. Yeager Dr., Chandler Size: 210,000 square feet Brokerage: CBRE

Nexus @ ASU Research Park

Developer: ViaWest Group General Contractor: RJM Construction Architect: PHArchitecture Location: 8375 S. River Parkway, Tempe Size: 120,000 square feet Brokerage: JLL Value: $4 million Start: November 2014 Completion: August 2015 Subcontractors: Various

90 | September-October 2015

Value: $40 million Start: February 2015 Completion: January 2016 Subcontractors: Suntec Concrete; Hawkeye Electric, Inc.; Pro Steel Erectors II, Inc.; Redpoint Contracting; Sutter Masonry, Inc.; and Artic Air Heating & Cooling, Inc.

91

NAIOP

ďƒŠ One | Hundred | Mill

Developers: Douglas Wilson Companies; Hensel Phelps Development LLC General Contractor: Hensel Phelps Architect: Shears Adkins; Rockmore Architect Location: 100 S. Mill Ave., Tempe

ďƒŠPark Ladera at Spectrum Ridge

Developer: Trammell Crow Company General Contractor: D.L. Withers Construction Architect: Butler Design Group Location: 750-850 E. Covey Lane, Phoenix Size: 220,000 square feet Brokerage: CBRE Value: $18.6 million 92 | September-October 2015

Size: 260,000 square feet Brokerage: Cushman & Wakefield of Arizona Value: $190 million Start: 4Q 2015 Completion: 2017

Start: December 2014 Completion: June 2015 Subcontractors: Suntec Concrete, RAPI, Panelized Structures, Specialty Roofing, Carlson Glass, Harmon Electric, Aero Automatic, Pete King Construction, Juarez Contracting, Milling Machinery, Stone Cold Masonry and Westar Environmental

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93

NAIOP

Park Lucero — Phase 1

Developer: Trammell Crow Company General Contractor: D.L. Withers Construction Architect: Butler Design Group Location: 220-340 E. Germann Rd., Gilbert Size: 210,000 square feet Brokerage: JLL Value: $18.3 million

Start: August 2014 Completion: April 2015 Subcontractors: M&J Construction, Suntec Concrete, Western Underground, Structures Group, Specialty Roofing, Cutting Edge Fabricators, Harmon Electric, Stone Cold Masonry, Mirror Works, Pete King Construction, Aero Automatic, and Westar Environmental

Park Lucero — Phase 2

Developer: Trammell Crow Company General Contractor: TBD Architect: Butler Design Group Location: Gilbert Size (SF): 421,000 Brokerage Firm: JLL Value: $31 million Start: December 2015 Completion: July 2016 Subcontractors: TBD

San Tan Tech Center

Developer: ViaWest Group General Contractor: Sonoran Crest Architects: Ajanta (shell); McCarthy Nordberg (interior) Location: 145 S. 79th St., Chandler Size: 120,000 square feet Brokerage: DTZ Value: $650,000 Start: August 2014 Completion: March 2015 Subcontractors: Various

SkySong, The ASU Scottsdale Innovation Center — SkySong 4 Developer: Plaza Companies General Contractor: DPR Construction Architect: Butler Design Group Location: 1355 N. Scottsdale Rd., Scottsdale Size: 150,350 square feet Brokerage: Lee & Associates Value: $30 million Start: August 2015 Completion: July 2016 Subcontractors: TBD

94 | September-October 2015

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So, whether you’re looking to meet potential business partners, nurture existing relationships or close a deal, NAIOP gets you to your goal.

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