Issue 5, 2020

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Hines is Raising the Bar Industry Leaders Provide Sector Updates for 2020 C E M-A Z .C O M • I S S U E 5, 2020

SET T IN G T H E STAN D ARD F OR

Intelligent Real Estate Investments Around the Globe

Your business doesn’t stop working at night.

At Alliance Bank of Arizona, we don’t clock out until you do.

It’s not about making promises, it’s about keeping them.

That’s the kind of accountability you’ll get from Alliance Bank of Arizona.

Meet Your Local Banking Expert: Ericka LeMaster Senior Managing Director, Commercial Real Estate elemaster@alliancebankofarizona.com (602) 952-5452

alliancebankofarizona.com

Top 10 - Forbes Best Banks Alliance Bank of Arizona, a division of Western Alliance Bank, Member FDIC. Western Alliance ranks top ten on Forbes’ Best Banks in America list, five years in a row, 2016-2020.

IN THIS ISSUE

5 John DiVall CEM gets an update on what John DiVall has been up to.

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Sector Updates Industry experts provide an update on their sector.

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Q&A with Grady Gammage Jr. A special Q&A with Arizona icon, Grady Gammage Jr.

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Cover Story Hines is Raising the Bar in Arizona.

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Water Runs Deep Haydon Building Corp. talks water and infrastructure.

Emerging Professionals | 10 Ted Liles, Broker of the Month | 34 Spencer Nast | 42 Carrie Masters | 44 2

Š MPmedia, LLC 2020

Letter From The Publisher

– Manoj Arora

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n 1992, when I was studying at the Walter Cronkite School of Journalism and Mass Communication at Arizona State, I read a book which described four characters (2 mice and 2 tiny humans) who live in a maze and look for cheese to nourish them and make them happy. This simple book had a very basic message: Things constantly change, so we must adapt.

That book, “Who Moved My Cheese?” by Spencer Johnson, written in 1989, sold 30 million copies.

Adapt. The buzzword for 2020. The worldwide pandemic has forced us into a world which no one is familiar with. It has taken us out of our comfort zones, our daily personal and work routines, and has provided us with never-ending challenges. The team at CEM and I have learned quite a bit about the art of adapting. Our small business is weathering this storm with the help of our sustainable clients (you know who you are!) and dedicated readers who have provided us the opportunity to continue to publish our magazine, now digitally, and remain one of the leading sources of commercial real estate news in the state.

Many of the articles in this issue of CEM are about persevering, adapting and surrounding yourself with the best people you can during this unprecedented time. Our cover story featuring Chris Anderson, Brandon Dillingham and Robert Trujillo with Hines is inspirational to say the least. This team embodies what it means to be a family and is “Raising the Bar” in everything they do.

Please enjoy this issue and stay tuned for our new website early 2021. In reference to the quote above, CEM looks forward to the end of this pandemic and discovering a “whole new world” of possibilities. That is my wish for everyone this new year!

Happy Holidays,

Mandy Purcell

Founder & Publisher Commercial Executive Magazine

Mandy, Thomas and Julia Purcell © MPmedia, LLC 2020

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Team

Karen Gallagher

Celina Busse

karen@mpmediaaz.com

celina@mpmediaaz.com

Managing Director

Karen coordinates the many moving parts of Commercial Executive Magazine. Specializing in strategic planning, she ensures CEM’s readers and advertisers are happy. Contact Karen for information on advertising and general inquiries.

Editor-in-Chief

Celina keeps our readers up to date on the latest and greatest commercial real estate news in the Valley. She organizes and coordinates each editorial piece to perfection. Contact Celina for questions regarding editorial, copyright or purchasing commemorative plaques and PDFs.

There are a number of wonderful changes at CEM— please enjoy our new digital platform publication and watch for the rollout of an exciting new website in 2021!

FOUNDER & PUBLISHER Mandy Purcell, mandy@mpmediaaz.com MANAGING DIRECTOR Karen Gallagher, karen@mpmediaaz.com EDITOR-IN-CHIEF Celina Busse, celina@mpmediaaz.com SALES Karen Gallagher EDITORIAL Celina Busse, Tim Randall GRAPHIC DESIGN Lalo Reyes PHOTOGRAPHY Carl Schultz

All rights reserved. No part of this publication can be reprinted or reproduced without publisher’s permission. Opinions expressed are those of the authors or persons quoted and not necessarily those of CEM. 2920 East Camelback Road, #228 • Phoenix, AZ 85016 • 602-955-2899 • www.cem-az.com

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© MPmedia, LLC 2020

FOREWORD BY GRADY GAMMAGE JR. Last March, I did the following interview with CEM to run as a “Lunch with Grady” feature. It’s one of those reflections on a long career and the nature of Arizona and real estate development that we all read from time to time.

We were in the process of scheduling a lunch to take photos for the piece. And then, the coronavirus descended. We rescheduled the lunch a couple of times, and the magazine got postponed, and then was made virtual. Things were delayed through the summer and I wound up in the hospital for eight days on oxygen, where I lay in bed watching interminable episodes of “Property Brothers.” I’m OK now, I think. But the world feels vastly different than it did in March.

It is beyond cliché to say that 2020 was a terrible year.

It feels like a plot to tear us apart from one another. The virus requires us to distance, just as politics polarizes us further. Then, the nature of the virus itself became a feature of our political disagreements. Even the world of real estate seems to be bipolar: housing prices are surging while retail is withering. The new Gammage & Burnham offices I mentioned back in March are barely occupied as we all learn to live on Zoom. We suffered through a never

with Grady Gammage Jr. © MPmedia, LLC 2020

ending election, only to find that it doesn’t feel as though anything was solved. I may never get that lunch with CEM at Tarbell’s that was supposed to accompany the interview.

As we head into the holiday season and the end of 2020, things are still unsettled. The New Year won’t dramatically fix any of the current issues. But I’m struck by my quote in the interview about seeing change not as threat, but as opportunity. I still feel that way. That means opportunities currently abound — so long as we remember we’re all in this together. Happy Holidays!

— Grady Gammage Jr.

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ven though Grady Gammage Jr., founding member, Gammage & Burnham, has deep roots in Arizona and strong family ties to the community, he believes that the best part about our state is how we embrace people who move here. “Arizona is an enterprise built on population growth. We don’t have an exclusionary network built around families with connections who have been here a long time, like so many older places do,” says Gammage. “If we did, I’d probably be a beneficiary.

But I’m glad this place doesn’t work that way.”

Gammage’s list of endeavors is a long one.

Besides an extensive 40-year career in law, he is an author, professor, elected official and master developer. His law practice has focused on the political aspects of real estate, development and public policy. As a zoning lawyer, Gammage has represented dozens of major commercial projects including high-rise offices, major industrial and office parks, retail shopping centers, and tens of thousands of acres of residential projects, including some of Arizona’s most iconic master-planned communities.

Gammage has certainly built a legacy of his own in the Valley through his work in urban development, public and private projects, redevelopment, water litigation and public policy. His impact on the community will have a profound presence for decades to come.

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What was your first job?

I had a bunch of cool summer jobs when I was in high school.

One was for the First National Bank of Arizona, which was then in the 411 N. Central building that is now ASU. I was basically a gofer. One time, I got to walk $3 million in negotiable bearer bonds from First National over to the Valley Bank. It was only about a block, but it was still pretty cool to be trusted to do that.

Another summer, I worked for the Salt River Project and © MPmedia, LLC 2020

drove to all the dams and power plants to inventory filing cabinets. Sounds boring, but I got to see a lot of obscure locations in Arizona.

Did you pass the bar exam the first time you took it?

Yeah. I’ve always been good at tests. The standard line among Arizona lawyers is, “I had the fourth highest score,” which everyone can claim because they only announce the top three.

What has been your most interesting case?

I don’t generally think about “cases.” To me, that’s litigation lingo, and I don’t do much litigation. I tend to think more about projects. But having said that, I have a hard time picking out one thing. I’ve done a lot of different kinds of things: highrise buildings, master-planned communities, weird public/ private deals. Structuring the original Desert Ridge development with the State Land Department was really challenging.

Some of it turned out great, but some of it is a current problem for the Department. For lawyers, a really satisfying result can come from success based on what most people would regard as a “legal technicality.” I once got hundreds of referendum signatures against a project tossed out over a mistake of 2/72

and business school at ASU and trying to get students excited about the policy implications of urban growth.

What is a talent of yours that not many people know?

I like building stuff. Landscape, furniture, projects of all sorts.

I built a 5-foot-tall, 200-foot-long stone wall at my cabin. It took me about 25 years of summer weekends. Apparently, I don’t look like I’d be handy, because people are consistently shocked by this.

What is at the top of your bucket list?

Building a second cabin outside Payson next to the one we currently have. My wife, Karen, and I have two grandchildren who arrived last year, and we want to create a kind of family compound. Sort of a mini Adirondack camp.

Which one thing do you wish you’d done differently?

I went straight from undergraduate school to law school to working. I wish I’d have taken a gap year in there sometime to work, or travel or volunteer. I tell students all the time to slow down.

“I’ve never been someone who sees change as threatening; I always think it is an opportunity.”

—Grady Grammage Jr.

of an inch in the petitions. That sounds crazy, but it was the sort of victory that validates careful lawyering.

What keeps you up at night?

Two things: Coronavirus and indigestion. One hopes they are unrelated.

What brings you the most optimism?

The increasing diversity and thoughtfulness of the electorate in Arizona.

Reflecting on your 40 successful years in law and public policy, what are you most proud of?

I can’t pick one thing, so let me give you several. My association with the Morrison Institute for Public Policy, and the reports I worked on there. The two books I’ve written on Phoenix, trying to explain this place to people. Being president of the Central Arizona Project during the period of multibillion-dollar litigation with the federal government, which was positively resolved. Teaching in the law school © MPmedia, LLC 2020

As traditional law practice evolves, what industry changes have impacted you most?

The changes are staggering. I started in the era of typewriters and white-out. I still like to dictate into a recorder, and have it transcribed, but fortunately I can type pretty well. A lot of my generation can’t. A lawyer’s stock in trade is language, and the ability to create, edit and transmit written communications is so different today.

Gammage & Burnham is about to move its offices to a new space. We’re trying to put more people in way less space.

People work from home so much more, even before the coronavirus, just because it is easier and avoids traffic. So, it’s crazy to have a lot of large offices sitting vacant. There are also fewer staff per lawyer today because of technology. Clients aren’t in the lawyer’s office as much as they used to be. Because of this, we are experimenting to see how tightly you can pack lawyers together before they start killing each other.

Seriously, I’m excited about the firm’s future. I’ve never been someone who sees change as threatening; I always think it is an opportunity.

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JOHN DIVALL Principal, Regional Head of Acquisitions and Leasing Exeter Property Group

Ask any long-standing Valley commercial real estate professional about John DiVall and the responses are likely to include dedicated, client-centric, hard-working and honest. Another reply: Liberty Property Trust and his 20 yeartenure with the organization. “I built my career there, but in October 2019, I decided to make a change and join Exeter Property Group,” he says. “Many of the principals of Exeter, including our founding CEO, Ward Fitzgerald, were ex-Liberty Property Trust folks, so the chance to join the firm as a principal overseeing Arizona and Colorado and helping us grow in these markets felt like an organic move for me to make. With so many people I have known and respected, this was an opportunity I just could not pass up.”

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© MPmedia, LLC 2020

The relationships I built through Liberty continue to serve me well in my role at Exeter. As I often tell young people in the business, as your career moves on, it becomes slightly less about what you know and more about who you know.

North America,” he says. “We have approximately 6 million square feet in Arizona and anticipate solid growth both here and in Colorado.”

BACKGROUND

Until 2007, DiVall called Madison, Milwaukee and Chicago home, but then migrated west to the Valley and opened and ran Liberty’s Greater Phoenix office. “The relationships I built through Liberty continue to serve me well in my role at Exeter,” he says. “As I often tell young people in the business, as your career moves on, it becomes slightly less about what you know and more about who you know. So, I think that the relationships I have built over the years − from doing business, industry boards and being credible − are what help me the most.”

APPROACH

In business, DiVall operates with a predictability that clients and peers respect and appreciate. “We cannot make every deal, but the brokers in town know they can call me with deals knowing that I will be a straight shooter and also will give them any intel I can,” he says. “I am a deal maker at heart, which is what I like the most. I also think that I can sense a deal early on, whether it is a great location or a building that just needs some TLC, my experience helps me maybe see some things not everyone else can.”

INDUSTRIAL AND OFFICE

Working in both the office and industrial verticals, DiVall assesses the current pandemic landscape with an optimistic tone. “Industrial has been on fire with e-commerce and manufacturing-related users demonstrating a very robust demand for space,” he says. “On the office side, the question is more complicated. We believe that companies will eventually want to have people back together, possibly with more flexible work schedules, and they will want to be able to control their own space. Phoenix is very well positioned as a highly competitive market.”

OPPORTUNITIES

With more than a year under his belt at Exeter, DiVall is excited at the prospects for 2021 and beyond. “My main goals and objectives are pretty straight forward,” he says. “Continue to profitably grow our footprint in Phoenix and Denver in both of our product types, keep our spaces well leased, keep building our brand here and gradually add to my team.”

PERSONAL

STARTING POINTS

Started in 2006, Exeter is a real estate investment management firm specializing in the acquisition, development, leasing and management of industrial, office and related business park properties in 50 global markets. In addition to its portfolio of services, the firm also manages $10 billion in assets for investors. “The company is experiencing incredible success and growth with over 250 million square feet in © MPmedia, LLC 2020

As to work-life balance, DiVall is passionate about his family, he and his wife Sarah have been married for over 30 years.

“Our oldest is a firefighter in Central Arizona, our second daughter is a nurse, so we are very proud of them,” he says.

“Our youngest son just committed to play football at the University of Arizona, Bear Down! So, we are really excited to be at games and be involved with the program.”

FUTURE

Exeter certainly has the right individual at the helm as the company expands its footprint. “I think the future is bullish, we are just hitting our stride and expect pretty dramatic growth,” he says.

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Aaron Rocha Director Cushman & Wakefield Years in the business: 9+ years

Aaron has nine years of commercial real estate experience including over 10 million square feet of global lease and sales transactions. He previously served as the Head of Global Real Estate at Snap Inc. (the parent company of Snapchat & Bitmoji), and as a senior director with WeWork, a global coworking provider. In his new role as a tenant advisory specialist working with the Downey Team (Larry Downey, Brett Thompson, Candace Thrush) with Cushman & Wakefield in Phoenix, he will focus on new business development and help tenants to navigate and achieve their goals across multiple markets. He will also provide his expertise in lease negotiations, strategic planning and site selection.

“Commercial real estate puts you toe to toe with some of the smartest and most driven professionals in the world. The thing I like best is that I’m exposed to so many interesting people every day. It pushes me to be better.”

Dylan Whitwer Office Associate NAI Horizon Years in the business: 2 years

Dylan is a commercial real estate broker with NAI Horizon specializing in leasing, acquisition and disposition of office properties. Prior to commercial real estate, Dylan was an environmental consultant focusing on environmentally blighted properties. Dylan has completed more than 150,000 square feet of transactions including the disposition of more than 30 individual office condos in Troon North. Dylan works with a group of industry experts and considers Laurel Lewis, Don Morrow, Mark Wilcke and Mike Myrick to be his mentors.

Outside of the office, Dylan serves as a chair to the Valley Partnership Community Project and is actively involved in numerous non-profits around the Valley.

“One of the most exciting parts of working in the commercial real estate industry is the longevity of relationships that you form and build as a young professional. It’s an incredible process to be able to grow with your coworkers, clients and industry friends as you each progress in your own career.”

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Chad Kirkorsky Partner Citywide Commercial Years in the business: 4.5 years

Chad Kirkorsky is a partner at Citywide Commercial, a CRE firm providing property and site evaluations, investment strategies, building acquisition/disposition representation, lease review and negotiations for tenants and landlords across the Valley and U.S. Chad focuses on the sale and leasing of industrial and warehouse space, including investments and tenant relocations/expansions, with an emphasis on technology-savvy marketing, site selection and leasing. Chad began his brokerage career in Phoenix in 2016 as an agent. Since then, Chad has played a key role in developing Citywide’s significant book of business and his own reputation for extensive market knowledge, responsiveness and results. In 2020 alone, Chad closed more than 150 industrial transactions. He is also newly appointed to the CCIM – Central Arizona Board of Directors.

“Being a young broker is a challenge. People wonder, ‘Does this guy have the experience to represent my property?’

At the end of the day, the only way to overcome that is to deliver the kind of results that show what you can do in real time. That’s what builds the trust and relationships that a broker relies on.”

Alicia Duffy

Project Manager Mortenson Years in the business: 10 years A bold leader with 10 years of experience, Alicia Duffy, LEED AP, is project manager at Mortenson, with a B.S in sustainability. She has been integral in $151 million worth of work in her tenure. Beyond cultivating a collaborative spirit among her teams, Alicia embodies values that are integral for individual, company and industry growth. Her dynamic project experience has allowed her to optimize processes and outcomes on many of her projects. With a robust portfolio of complex projects, she has led the AlasksaUSA’s Glendale Operations Center renovation, the new Hyatt Place/Hyatt House Tempe Downtown in ASU’s Novus Innovation Corridor, as well as many projects for Salt River Project.

“I encourage young professionals to embrace the challenges they may face early in their careers. Personally, some of the most difficult challenges I’ve encountered have benefitted me the most and prepared me for where I am today.

Remember to listen, ask for help when needed and be open minded.” © MPmedia, LLC 2020

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Brokerage | Property Management

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We offer our agents the tools they need to stay ahead of the competition. We employ a full-service support staff of in-house specialists to assist our agents in critical areas including marketing, administrative functions and mapping/research so you can focus on developing and growing your business.

NAI Horizon is broker-owned and debt free. Our shareholders received two quarterly dividends in 2020 and we have retained 100% of our support staff. Ownership opportunities are available for like-minded agents who fit our company culture.

Click here to set up a confidential meeting to discuss elevating your business at NAI Horizon.

100 MILL

Tempe, Arizona

‘GOOD DESIGN IS GOOD BUSINESS’ Thomas J. Watson Jr. President, IBM

DAVIS has designed the most valuable Office and Mixed-Use properties in Metropolitan Phoenix

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For leasing inquiries, visit adelinedowntown.com

Raising the Bar Starting Points

Credit: Hines

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Much like the titled biography of the late founder and real estate legend Gerald D. Hines, Hines the privately owned global real estate investment firm has been “Raising The Bar� in the real estate and development industry for more than 60 years. Established in 1957, Hines has remained a family-owned partner-led company that has stayed acutely focused on providing best-in-class customer service to its investors, tenants and the communities it constructs its buildings in throughout the world. A long journey now from its first building along Richmond Avenue in Houston, Texas, a simple one-story 8,000-square-foot Š MPmedia, LLC 2020

Gerald D. Hines, 2016, photo by Annie Leibovitz Gerald D. Hines, 1985, photo by Helmut Newton

Š MPmedia, LLC 2020

structure, Hines now maintains a presence in 225 cities in 25 countries with over 4,800 employees worldwide. They leverage their extensive experience in investments across all property types, with a pioneering commitment to high design, sustainability and creating places that people want to see and touch. Over the course of its rich history, Hines has developed, redeveloped or acquired 1,426 properties, totaling over 472 million square feet, with $144.1 billion of assets currently under management and 165 developments underway around the world.

While certainly an impressive account of accomplishments to be recognized with as a firm, the local Arizona Hines team believes that the true legacy of Mr. Hines is most evident in his unsaid lessons that he translated through example every day. These are qualities such as kindness, charisma, an unwavering trust and loyalty, and a reputation he and his son Jeff Hines and granddaughter Laura have

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tirelessly forged over three generations of family tradition.

“I’ve never met anyone quite like Mr. Hines, who so naturally put people first in his life,” says Chris Anderson, senior managing director, partner and city leader for Hines Arizona.

“He was a mentor and influencer who embodied these qualities every day by the way he led his company. Losing Mr. Hines this year at the age of 95 was a heartfelt loss to me and everyone at Hines. We are very fortunate, though, to have such great leadership in place with Jeff and Laura to take us into the future. I often remind my team here in Phoenix that it’s our duty every day to come to work and embody that same entrepreneurial spirit. Most importantly like Gerry did, put your spiritual faith and your family first and always prioritize the people over the mission.”

Background

Like many seasoned veterans in this business, Anderson knows how competitive and fast-paced the commercial real estate business can be, and hence why he believes it’s so important to stay grounded in people and the relationships.

Before moving back to Arizona in 2013 to take the leadership

the Hines Arizona team have included Chandler Viridian, a 25-acre mixed-use project adjacent to Chandler Fashion Center, totaling more than 700,000 square feet; 24th and Camelback Class-A office towers (Phase I and II); American Airlines (currently ADP, formerly US Airways) headquarters; Renaissance Square Class-A office towers; The Vanguard Group corporate campus; and the Glendale Multi-Purpose Arena (home of the Phoenix Coyotes).

“The very first thing I did when I came back to Hines was to assemble the best team I could, to be integral in accomplishing the ambitious goals I had for the Arizona market.

Maybe even more importantly, I wanted to create a ‘work family’ that I could rely on, be creative and collaborate with, and whom we could laugh together and celebrate wins with,” says Anderson about his current development and construction team of eight individuals. “So far, my plan is working out.”

It Takes a Village

The first person Anderson recruited onto his team to embark on his goals for the Hines Arizona office was Brandon

“The very first thing I did when I came back to Hines was to assemble the best team I could, to be integral in accomplishing the ambitious goals I had for the Arizona market. Maybe even more importantly, I wanted to create a ‘work family’ that I could rely on, be creative and collaborate with, and whom we could laugh together and celebrate wins with. So far, my plan is working out.”

—Chris Anderson

helm for Hines as Arizona’s market leader, Chris was market leader for Forest City in Albuquerque, New Mexico, and prior to that a young rising star previously with Hines when it first established its Phoenix regional office in 1996. Since then, Hines Arizona has developed over 5 million square feet of real estate in Arizona and currently employs over 40 real estate professionals. The local team is currently under construction on 100 Mill, an 280,000-square-feet 18-story Class-AA trophy office tower in the heart of Tempe’s Mill Avenue and Tempe Beach Park district; Adeline, a 25-story 379-unit luxury residence with unparalleled amenities in the heart of the Downtown Phoenix; and G303, a two-phase 1.2 million-square-feet cross-dock industrial/logistics building(s) just off of the Loop 303 in Glendale. Other notable assets for

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Dillingham, managing director, partner and head of commercial development for Hines Arizona. “I brought Brandon over from Macerich,” says Anderson. “He was able to complement the differences I had in my work experience in highrise office and single-family master planning with his experience in the retail and regional mall side of the business that he garnered working for Macerich and Westcor.”

“Chris and I shared many common philosophies from the very beginning, both personally and professionally, and our work chemistry came very naturally,” adds Dillingham. “Our team’s success, much like the storied success of our firm over the years, really wouldn’t exist today without having our collective priorities in the right place. The people … the personalities … the wins and losses … the amazing creativity and raw © MPmedia, LLC 2020

Brad Kanwischer, Robert Trujillo, Brandon Dillingham, Chris Anderson, Andy Snedeker, Jim Bulsiewicz, Scott King.

Location: Mountain Shadows Credit: Hines

“The secret sauce of Hines has always been about creating exceptional places that people want to be.”

—Robert Trujillo

© MPmedia, LLC 2020

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intelligence of the people I’ve worked with and learned from over the years in this business has been remarkable.”

Brandon’s latest endeavor and what keeps him busiest right now is his large project in Tempe, 100 Mill, a trophy high-rise office building currently under construction at the site of Old Monti’s restaurant at the southwest corner of Rio Salado Boulevard and Mill Avenue. Hines is developing the skyline-changing building with partners Cousins Properties, which started construction in 2018 and will deliver to the market January 2022. “The complexities of this project with all of the moving parts really showcased how important it is to master the relationship part of our business,” says Dillingham. “Whether it be establishing a rhythm and fiduciary trust with new investment partners, setting the vision and providing direction to the design and construction teams, or cultivating transparency and fidelity with City stakeholders and community members, it really is a remarkable feat that is more art than science. During grand opening

exceptional places that people want to be,” says Trujillo.

“Placemaking may be a commercially popular real estate phrase now, but Hines has been executing at a high level on this front for its entire history. It’s our job to continue to elevate those achievements, build on our legacy, and create new high-water marks in all of our markets”.

Trujillo is in the throes of turning that statement into a reality with his latest project under construction, the Adeline, a 25-story 379-unit ultra-luxury apartment high-rise across from the Phoenix Suns Arena on the corners of Jefferson Avenue and 3rd Street. “Phoenix continues to be one of the fastest-growing cities in the nation, as new residents are relocating here for good jobs, great climate and the many outdoor activities Arizona has to offer,” says Trujillo. “As downtown Phoenix matures with the critical mass of residences being constructed, new restaurants, bars and neighborhood retail will follow soon. We are bringing something truly unique to market with Adeline, a sense of place that we

“During grand opening ceremonies, I could literally spend hours thanking all of the many people that were truly integral in the success of any given project. It’s my favorite part of the business and I’m grateful for it.”

—Brandon Dillingham

ceremonies, I could literally spend hours thanking all of the many people that were truly integral in the success of any given project,” he says. “It’s my favorite part of the business and I’m grateful for it.”

anticipate being the premier destination for pampered living in Downtown Phoenix,” he says. The Adeline opens next fall at a time when the country and downtown Phoenix will be opening back up after a difficult 2020.

Placemaking is a State of Mind

Future

Perhaps the most important things that the Hines Arizona team takes pride in, after the people, is the “placemaking” they strive to create in every project. No person understands this better than Robert Trujillo, managing director, partner and head of multifamily development for Hines Arizona.

Robert joined the leadership team as a partner with Chris and Brandon in 2018, to head up all multifamily development for Arizona. “I was really excited to bring Robert to the team and bolster an important area of our business that, before him, we were heavily reliant on our out of market partners for,” says Anderson. “With his 20+ years of experience in apartments, condos, hotel and hospitality, we were able to add a muchneeded layer to our strategic vision here in Arizona. The chemistry among the three of us has been special.”

Trujillo shares a similar sentiment about the team and its mission to create game-changing projects to the market.

“The secret sauce of Hines has always been about creating

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“We’ve never had more tools to work with than we do now,” says Dillingham. “We have all the support and the sponsorship we need from our C-suite to pursue some of the biggest and boldest development opportunities in the state, and we have the right team in place to execute on them. My vision for our team is to be performing at a very high level in almost all asset classes, everything from Class-A office, high-rise and garden-style apartments, and industrial/logistics and all the way to the other side of the spectrum as well with selfstorage, single-family lot developments, and build-to rent communities.”

“To echo Brandon and Robert’s remarks, I’m very excited about what’s on the horizon for Hines Arizona. We have some very big, exciting projects coming to the market in 2021, and even more in the making on the heels of those,” says Anderson. “Our brand is more than a logo … it’s a living thing.

It’s a personality. It’s a culture. It’s our team Raising The Bar.” © MPmedia, LLC 2020

Chris Anderson, Robert Trujillo, Brandon Dillingham. Location: Mountain Shadows

© MPmedia, LLC 2020

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Celebrating over 20 years of Building More Than BuildingsÂŽ with Hines!

100 Mill Project | Tempe, AZ www.gilbaneco.com

updates In our final issue each year, CEM features an overview of each sector in commercial real estate. Without a doubt, 2020 has presented of number of unique trials, unforeseen challenges and a large dose of uncertainty. Nearly every sector has had to get creative to combat this changing environment.

If this year has taught us anything, flexibility and adaptability are key and “this too shall pass.”

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© MPmedia, LLC 2020

SECTOR UPDATES

CAN YOU PROVIDE A SUMMARY OF THE HIGHS/ POSITIVES IN YOUR SECTION THIS YEAR?

Lawrence Pobuda EXECUTIVE VICE PRESIDENT, THE OPUS GROUP SECTOR: INDUSTRIAL ONE WORD TO DESCRIBE YOUR SECTOR IN 2020:

Accelerating © MPmedia, LLC 2020

It’s difficult to find any positives with COVID-19, yet if there is one segment of commercial real estate that is shining brighter, it would be industrial. The year 2020 provided a spike in the e-commerce growth curve. As consumers, we opted for online channels as opposed to in-store experiences. As a result, warehousing demand is at record levels, and through the 3rd quarter, over 160 million square feet of industrial space has been absorbed nationally – an exceptional year! Blend this macro-economic trend with Arizona’s physical proximity to the ports of Southern California and you have a dynamic market here. This e-commerce impact is resulting in increased demand not only for distribution but also manufacturing facilities and data centers, too.

As a result of the user demand, investors are flocking to the industrial sector as well. Demand drives rental rates and keeps vacancy rates low. Industrial exit cap rates are setting records, both here in the Valley and nationally.

WE KNOW THIS YEAR HAS BEEN CHALLENGING, CAN YOU DISCUSS SOME OF THE HURDLES YOUR SECTOR HAS EXPERIENCED THIS YEAR?

Oddly enough, it is simply “keeping pace” that presented some of the most significant challenges. The e-commerce race is on, and the companies competing in this space require speed to market. This impacts every

part of the development and construction schedules – from gaining city approvals to constructing the project on a tight timeline.

WHAT IS YOUR PREDICTION FOR THE FUTURE OF YOUR SECTOR?

Many people have said that industrial is the new retail sector given the growth in e-commerce, and we may see the two sectors collide physically at the regional mall. E-commerce companies are exploring the creative re-use of vacant department store spaces as potential locations for their last-mile facilities. This has plenty of complications (zoning, in-line lease agreements, etc.) that need to be understood, yet it would bring the goods a step closer to consumers.

We also expect to see growth in the cold-storage industrial segment as consumers migrate to online grocery purchases. This is true especially in light of the COVID-19 vaccine and its need to be kept cold prior to injection. While the vaccine demand period may be 2-3 years as it is more broadly distributed, we expect online grocery to grow steadily in the coming years. As a result, the cold storage sector will be getting more attention from developers and investors alike.

Finally, we’ll also we see an increase in automation inside of the manufacturing and distribution facilities.

Robotic systems will increasingly be used to enhance output, and this includes the order fulfillment processes, making same-day delivery a reality in urban and rural areas of our country.

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SECTOR UPDATES

CAN YOU PROVIDE A SUMMARY OF THE HIGHS/ POSITIVES IN YOUR SECTOR THIS YEAR (NATIONAL)?

Cliff David EXECUTIVE MANAGING DIRECTOR INVESTMENTS INSTITUTIONAL PROPERTY ADVISORS (IPA)

Steve Gebing EXECUTIVE MANAGING DIRECTOR INVESTMENTS INSTITUTIONAL PROPERTY ADVISORS (IPA) SECTOR: MULTIFAMILY

Robust

ONE WORD TO DESCRIBE YOUR SECTOR IN 2020:

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National absorption hit the second highest total on record in Q3 2020 with 163,000 units filled. So far during the pandemic, national absorption has remained positive, reflecting the unrelenting demand drivers in the sector. A select number of markets continue to see rent growth remaining positive despite the national rate dipping negative by 1.3% in 3Q2020, with the Phoenix MSA near the top of the list. The high cost and limited inventory of singlefamily homes continues to keep many renter households from making the jump to owning, and the trends so far this year have only exacerbated this situation.

Furthermore, the high numbers of young adults observed moving back home at the start of the pandemic have already begun to move back out on their own. The pandemic has also slowed new construction deliveries, which will give the market more time to absorb recently completed units.

Demand for apartments has remained strong throughout the pandemic in the Phoenix. That can be seen in the 3Q2020 vacancy rate, which is only 30 basis points higher than a year ago, at 3.9%. Furthermore, absorption has remained positive in all three quarters thus far in 2020. The region has continued to see migration from other states, albeit at slightly lower levels than pre-pandemic levels. This in-migration has maintained housing demand and kept rental rates positive

in 2020. As a matter of fact, in 3Q2020, Phoenix had the second highest rent growth nationally, behind the Inland Empire at 3.2%, according to Real Page. Furthermore, new unit deliveries could end up 20% lower than forecasted pre-pandemic as material shortages have impacted construction timelines for completions.

WE KNOW THIS YEAR HAS BEEN CHALLENGING, CAN YOU DISCUSS SOME OF THE HURDLES YOUR SECTOR HAS EXPERIENCED THIS YEAR?

The speed of the downturn was like no other ever experienced, which at first made it difficult to gauge the reaction in the sector. The uncertainty surrounding the election and ambiguity pertaining to potential policy changes (tax, 1031, etc.). Business travel for property tours and due diligence inspections have adjusted since the start of the pandemic.

WHAT IS YOUR PREDICTION FOR THE FUTURE OF YOUR SECTOR?

The multifamily sector has shown strong resilience as the renter profile has shifted over the past 12 years.

These shifts will continue expanding multifamily demand well into the future.

This means less demand volatility going forward and more distinctions between product types as profiles for properties become more diverse in age and incomes than the industry has ever experienced.

Š MPmedia, LLC 2020

SECTOR UPDATES

WE KNOW THIS YEAR HAS BEEN CHALLENGING, CAN YOU DISCUSS SOME OF THE HURDLES YOUR SECTOR HAS EXPERIENCED IN 2020?

The office sector has been largely put on pause in 2020. While we are fortunate to have a couple office developments underway nationwide, many projects planned for 2020 and 2021 have been put on hold — not canceled, put on hold.

The single-tenant office campus has been, and will continue to be, compelling for companies focused on growth, employee retention and recruitment.

CAN YOU PROVIDE A SUMMARY OF THE HIGHS/ POSITIVES IN YOUR SECTOR THIS YEAR?

Molly Ryan Carson

SENIOR VICE PRESIDENT, MARKET LEADER, SOUTHWEST, RYAN COMPANIES US, INC. SECTOR: OFFICE

Paused

ONE WORD TO DESCRIBE YOUR SECTOR IN 2020:

© MPmedia, LLC 2020

Highs/positives in 2020 for the office sector? I’m laughing as there haven’t been many “high points” for the office sector in 2020. If I am being honest, COVID-19 turned the office world upside down for a moment. However, some of the best ideas and ingenuity come from the depths of despair. On a positive note, we are beginning to see a very rapid progression of positive changes to the office sector. The market is really examining what is important to office users and how to adapt quickly in preparation for a safe return for employees.

WHAT IS YOUR PREDICTION FOR THE FUTURE OF YOUR SECTOR?

Office space will continue to morph as it has been changing for decades.

Companies have been focused on the following: how to utilize space, the

desires of employees, creation of collaborative environments (bringing different departments onto the same floor or into the same building to have more “chance” interactions), ways to increase productivity, environmental impact through sustainability goals and certifications, and lastly, recruitment and retention.

These will continue to be important factors as time progresses.

COVID-19 adds a heightened focus on employee safety and well-being. The office sector is exploring ways to evolve current working conditions through additional air purifying options, touchless entry and access options, reestablishment of personal space at workstations, and, of course, flexibility to work from home.

Flexibility will continue to be a key word for office development, now and in the future.

There is and will be a meld between working from home/elsewhere and working in the office. There will also be an increased desire for multiuse spaces.

For example, a cafeteria could double for an all-hands-on-deck meeting, or perhaps for a large training session. There will be enhanced HVAC systems, UV ray lighting, touchless entry, elevator protocols and other increased precautions.

People will continue to want to work for culturestrong companies, and office space has always been a place where a company can exhibit their true values. We will continue to see interest in office campuses and single-tenant buildings.

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SECTOR UPDATES

CAN YOU PROVIDE A SUMMARY OF THE HIGHS/ POSITIVES IN YOUR SECTOR THIS YEAR?

Kathleen Morgan MANAGING DIRECTOR NEWMARK KNIGHT FRANK SECTOR: HEALTHCARE

Surprising

ONE WORD TO DESCRIBE YOUR SECTOR IN 2020:

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The year 2020 started strong in the health care sector. Our first-quarter medical office investment sales volume hit nearly $89 million, with seven transactions totaling over $8 million.

In the same quarter, the vacancy rate increased due to new construction, and rental rates also continued to rise. Overall, medical office has weathered much of the COVID-19 storm.

Many tenants and landlords worked together to restructure rents and lease terms, as some medical and dental tenants needed rent relief due to forced practice closures. Sales transactions that were put on hold during quarantine have either closed in the third quarter or are expected to close in the fourth quarter.

The third quarter experienced a slight increase in the vacancy of medical office space, but most tenants were able to continue occupying their space. Rents continue to increase quarter over quarter.

WE KNOW THIS YEAR HAS BEEN CHALLENGING, CAN YOU DISCUSS SOME OF THE HURDLES YOUR SECTOR HAS EXPERIENCED THIS YEAR?

Because COVID-19 is a virus and is extremely contagious, according to the CDC, medical and dental practices have had to close their practices. Elective surgeries were also not allowed for a period of time. Hospitals were limiting beds to COVID-19 cases, while other necessary medical procedures were not performed. This year has

been challenging for health care providers, hospitals and patients. Perhaps the most important component of the three is the patient who may not have been able to receive timely non-COVID19-related health care, such as those who needed non-COVID-19 medical procedures. The potential long-term effects on the delay is hard to measure.

Health care providers navigated the restrictions as best they could; however, patients were unable to receive annual or regular doctor and dental checkups as the practices were required to close or reduce hours. Hospital systems and doctors lost substantial revenue, forgoing elective procedures, to focus on COVID-19 patients. Whether that lost revenue can ever be made up is unknown.

WHAT IS YOUR PREDICTION FOR THE FUTURE OF YOUR SECTOR?

My prediction for the future is that health care and real estate will continue to be a resilient sector. Health care providers need an office to see patients, as do hospitals and surgery centers to conduct procedures. While telemedicine is a thriving component, it does not take the place of an in-person exam. I think mask wearing and social distancing will be a part of all of our lives for the foreseeable future, especially when we visit hospitals, doctor and dental offices, and urgent cares.

Health care has responded incredibly well to the impact of COVID-19 and has been able to adjust and pivot during this challenging, unprecedented time. Š MPmedia, LLC 2020

SECTOR UPDATES

CAN YOU PROVIDE A SUMMARY OF THE HIGHS/ POSITIVES IN YOUR SECTOR THIS YEAR?

Regan Amato, Chris Hollenbeck, Brent Mallonee SENIOR DIRECTOR (AMATO), EXECUTIVE DIRECTOR (HOLLENBECK), SENIOR DIRECTOR (MALLONEE) CUSHMAN & WAKEFIELD SECTOR: RETAIL

Tested

ONE WORD TO DESCRIBE YOUR SECTOR IN 2020:

© MPmedia, LLC 2020

We have seen several national retailers plan expansion strategies, especially businesses that are somewhat pandemic proof and categorized as essential services (i.e., pharmacy, auto parts).

The pandemic forced retailers to focus on priority markets, and Phoenix usually falls into that category.

Suburban submarkets flourished. The old adage that “retail follows rooftops” is as relevant as ever. There’s been an explosion in the restaurant category, with operators wanting to integrate driveup/ drive-thru offerings. The potential for increased sales with these capabilities was in progress pre-COVID, and the pandemic accelerated that.

There are a lot of positives in the retail investment market. Single-tenant investment with safe assets stayed strong. Retail asset pricing hasn’t decreased, but the pool of qualified buyers is smaller than pre-pandemic times, so they feel like they have a better chance to make those deals.

WE KNOW THIS YEAR HAS BEEN CHALLENGING, CAN YOU DISCUSS SOME OF THE HURDLES YOUR SECTOR HAS EXPERIENCED THIS YEAR?

Many established national clients expressed more operational and HR challenges than sales. Most saw a decrease in sales early on but rebounded and captured pent-up consumer demand during Q3 and Q4. Fullservice, sit-down restaurants have been hit the hardest and are most at-risk for closure.

Restaurants that had an

established delivery/takeout component prior to the pandemic have weathered the year better. Restaurants that didn’t and were incapable of implementing them have struggled or closed.

Transparency between landlords and tenants in terms of sales volume challenges and COVID relief has been challenging.

Both sides want the other to succeed, but there is inherent opposition between them.

Further complicating their conversations is the fact that there’s often a third party that needs to be included in the discussions, like the landlord’s lender.

WHAT IS YOUR PREDICTION FOR THE FUTURE OF YOUR SECTOR LOOK LIKE?

There has not been a lot of available retail space to flood the market, especially in Class A and B properties. We foresee some space hitting the market as incentives wear off and we move past the holiday shopping season, but not enough to have a drastic impact on rental pricing.

We will see a continued resurgence of suburban submarkets and more land intensive requirements, including driveup/drivethru uses. We are optimistic that with the vaccine, we’ll see a return to the urbanization of Metropolitan Phoenix that was gaining traction in key submarkets.

We believe that the future for retail investment is very strong. As long as interest rates stay low, people continue to move money to Arizona from places like California and our population continues to grow, Arizona will be in a good position for retail investors.

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SECTOR UPDATES

CAN YOU PROVIDE A SUMMARY OF THE HIGHS/ POSITIVES IN YOUR SECTOR THIS YEAR?

John Kinser

SVP, DIRECTOR COMMERCIAL REAL ESTATE ENTERPRISE BANK & TRUST SECTOR: BANKING & FINANCIALS SERVICES

Uncertainty ONE WORD TO DESCRIBE YOUR SECTOR IN 2020:

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Despite the challenges that the pandemic has brought to the industry, the bank had a very productive year. Enterprise never stopped lending in 2020, as we wanted to ensure that we continued to serve our clients and communities during these times of uncertainty. We have a talented group of CRE professionals and a thoughtful credit team, which was able to evaluate each opportunity on its own merits and underwrite around any special issues that the current economic conditions created.

From an asset class perspective, multifamily, self-storage and industrial real estate continued to outperform in 2020. With the ongoing shift to e-commerce retail, a growing population and a continued supply imbalance in residential real estate, it is expected these asset classes will continue to perform through 2021.

WE KNOW THIS YEAR HAS BEEN CHALLENGING, CAN YOU DISCUSS SOME OF THE HURDLES YOUR SECTOR HAS EXPERIENCED THIS YEAR?

I could write a novel here.

COVID-19 affected nearly every CRE asset class, in some way, during 2020. Most severely impacted were our hospitality and retail partners.

Until we achieve some level of herd immunity and travel/ entertainment can resume, this will continue to be a challenge in the near term. We are working closely with our clients to navigate through these challenges.

Perhaps more importantly, with stay-at-home orders, the switch to remote work, and the general disruption to our

lives and livelihoods, maintaining a healthy work-life balance and overall wellbeing has been a challenge in 2020. It is, by far, my greatest concern for my colleagues, clients, friends and family.

WHAT’S THE KEY TO OVERCOMING THESE HURDLES AS A BANK AND FOR YOUR CLIENTS?

Communication, communication, communication.

Market conditions have been impacted in new ways during this pandemic, some temporary, some systemic. It is important that both banks and their borrowers keep the lines of communication open to address any issues as they arise. Better to work through options with your banking partners in advance, before the situation becomes severe and options become limited.

It is easy to do business/ make loans in the good times.

In the not-so-good times, it is important that CRE investors work with a banking partner who understands their markets and their clients’ business plans.

WHAT IS YOUR PREDICTION FOR THE FUTURE OF YOUR SECTOR?

There will be near-term disruption as we work through some of the issues created

by COVID-19 and related economic consequences. That said, I believe the Phoenix CRE sector, as a whole, is in a good place. We were late to build coming out of the Great Recession, Phoenix has no real oversupply issues, and, most importantly, people continue to move here in great numbers.

We will feel some pain, but I suspect our market is poised to lead out of this current disruption. © MPmedia, LLC 2020

SECTOR UPDATES

CAN YOU PROVIDE A SUMMARY OF THE HIGHS/ POSITIVES IN YOUR SECTOR THIS YEAR?

Sharon Contorno

ASSOCIATE BROKER INSIGHT LAND AND INVESTMENTS SECTOR: RAW/SPEC LAND

Explosive

ONE WORD TO DESCRIBE YOUR SECTOR IN 2020:

© MPmedia, LLC 2020

I have been selling spec land in Arizona for approximately 35 years and watched the trends in pricing repeat year after year, depending on the economy. Seller financing allows buyers the opportunities to finance directly from the owner without qualifying, which allows a larger number of people able to invest.

Land is a great investment, and there is only a limited supply available. Only 17% of Arizona land is privately owned; the balance is owned by the State of Arizona, Bureau of Land Management and Indian reservations.

Good water management and the Central Arizona Project is the state’s single largest renewable water supply and serves 80% of the state’s population, which solves one of the biggest issues of growth in rural areas. Despite the COVID-19 pandemic, and relative to other economic areas, land sales and prices have been steadily increasing.

Because many Arizonans seem to want to move to the outer areas, as well as a high number of people who are migrating from other states, a good spec land market has survived well.

Just as families began moving to the outer areas of Rio Verde and New River 25 years ago and are reaping their profits today, others are seeing the same opportunity of investing in land in the far West Valley and other outer areas.

WE KNOW THIS YEAR HAS BEEN CHALLENGING, CAN YOU DISCUSS SOME OF THE HURDLES YOUR SECTOR HAS

EXPERIENCED THIS YEAR?

Even though there was a slow start in 2020 from COVID-19, there have not been any drastic changes in this market. Buyers can buy land and hold it for short term or long term, and sellers can capitalize by financing the land themselves, making it a win-win for both parties.

WHAT IS YOUR PREDICTION FOR THE FUTURE OF YOUR SECTOR?

Next year will begin a new wave of growth in the far West Valley. Access to I-10, the Sun Valley Parkway and SR 303, which connects the far west and northwest to Phoenix, adds to the appeal of living in the outer areas. Access to downtown Phoenix, as well as Sky Harbor, is within an hour. Builders are building entry-level homes and manufactured home dealers are buying lots to for their homes. Because of easy access to freeways, affordable gas prices and home affordability, people are choosing to move further from the center of Phoenix.

In addition, with the higher cost and shortage of homes and land costs rising in the greater Phoenix area and so many people from all over moving to Arizona, entrylevel housing in Tonopah and the far West Valley is becoming an alternative for small builders to test that market. Buckeye, which is within 15 minutes of Tonopah and the far West Valley, is one of the fastest-growing communities in the country. Almost all necessary services, including schools, are available within 20 minutes.

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Broker of the Month Presented by Willmeng Construction

In the realm of competitive volleyball, a winning point typically depends on a good pass, great set and a kill.

For Ted Liles, Principal of Industrial Services at Cresa Global, Inc., that winning point came during his senior year at California State University, Long Beach. “I found myself getting burned out playing collegiate volleyball, and knew I was not going to pursue a professional volleyball career overseas,” he says. “When I made the decision, I inquired with the booster foundation to see if there were internship opportunities at a commercial real estate firm. Doug Shea, friend and mentor, was a huge supporter of the volleyball program and managed INCO Commercial. He took me under his wing to start learning the business.”

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Starting Points

Cresa, an industry leader in tenant representation, serves over 2,000 clients within an ecosystem of 80 global offices and 1,000 team members. Liles, an expert in transportation, logistics and transaction management who also Co-Chairs Cresa’s North American Industrial Team sees extraordinary opportunity in the market.

“Industrial has been such a growth sector over the past several years, and it is exciting to be a part of a segment of the economy that has been on fire – it has been a wild ride,” he says.

© MPmedia, LLC 2020

© MPmedia, LLC 2020

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Background

While Doug Shea may have opened the door to CRE for Liles, his first introduction came years earlier. “Real estate is in my family, and it has always been something I found interesting. My father is a master plan developer in Vail, Arizona and my mother is a residential real estate agent,” he says. “I realized that while I enjoyed being exposed to real estate at a younger age and the lifestyle it can provide, I did not care much for the personal nuances in residential real estate. I found CRE intriguing because the real estate serves a function for a company’s growth.”

Industrial

With the office, brick-andmortar retail and hospitality segments under stress from COVID-19 concerns, industrial has been the clear winner as e-commerce sales have accelerated since March 2020. According to the U.S. Department of Commerce, a quarter-by-quarter analysis of online shopping reveals a 44.5% increase in activity in Quarter 2, 2020, as compared to Quarter 2 in 2019.

Likewise, Quarter 3 of 2020 pushed web sales ahead by 36.7%, as compared to Quarter 3 of 2019. “Due to social distancing, stay-athome orders and people wanting to be safer, online consumer spending has increased dramatically, resulting in an explosion of e-commerce,” he says. “This has not only dramatically increased demand for all kinds of industrial facilities – distribution center, warehouse, etc. – it has also increased the demand for the ancillary businesses that service those facilities.”

Logistics, infrastructure and last-mile delivery certainly have boosted the industrial space, but a renais-

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© MPmedia, LLC 2020

sance in manufacturing has also propelled the space in recent years. “The resurgence of manufacturing is under way, and it is great to see products being manufactured again in Arizona and the United States,” he says.

Tenant Representation

According to the Certified Commercial Investment Member (CCIM) Institute, between 3% and 10% of commercial brokers practice solely in the tenant representation space. Liles, a distinguished member of the Society of Industrial and Office Realtors (SIOR), takes his commitment to tenant representation seriously.

“There is no conflict of interest. I know my fiduciary obligation is serving my client exclusively, which is important to me and a differentiator in the CRE business,” he says. “In addition, the market is changing so rapidly, and a tenant rep advisor can help occupiers strategize their real estate, create leverage in a landlord’s market, navigate the many pitfalls in a deal while mitigating issues that can be costly during occupancy.”

Opportunity

With the CRE industrial sector booming, Liles is extremely optimistic about the future for his clients in the Valley and across the country. “Most people do not realize it, but industrial real estate is a core component of what keeps the economy ticking, and how people get goods across the United States. I am grateful to play a role in that process and to be able

© MPmedia, LLC 2020

to help companies figure out how to use real estate to their advantage,” he says.

“It is not just real estate either. That is a piece of the puzzle, but I also get to help companies look at the bigger picture – supply chains, manufacturing, distribution.

It is all fascinating.”

For Liles, success at Cresa emanates from a strong work ethic, collaboration, dedication to clients and a commitment to continuous improvement. “I pride myself on being the first person in the office each day and sticking to my daily and weekly schedule,” he says. “I am also incredibly thankful for my team (Marissa Dichiara and Cody Folts) and have been impressed how consistently they step up to help our team achieve our goals.”

Personal

As 2020 closes, Liles takes time to reflect on a period unlike any other. “March through May were some of the most challenging days of my career and personal life. Deals were imploding or getting pushed with little money coming in,” he says.

“Additionally, when you are confined to a small home with a working spouse and young children needing to do schooling from home, focused worktime is a challenge and work/family/life balance doesn’t exist.”

Future

With the Valley economy resilient, Liles is excited at the prospects for many spikes in the tenant space in 2021. “I do not see any signs of industrial slowing locally or nationally,” he says.

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Haydon Building Corp., one of the region’s premier commercial and heavy civil contractors, abides by 31 Fundamental Behaviors, as central to their organizational culture of Service, Accountability, Value and Integrity. There is one that stands out amid the global pandemic: Find a Way. “Our mentality, from the specialized trade team members to executive leadership, has always been to do what it takes to ensure our clients and partners receive best-in-class service,” says Joe Malone, civil division director of operations. “With COVID-19, our professionals understood that we needed to keep construction moving.

This industry drives the economy, and maintaining operations in a safe and responsible way, while getting the job done, is priority one,” he says.

STARTING POINTS

Founded in 1991 by Gary Haydon, president, the firm began with three employees, and 30 years later boasts over 450 talented professionals. “In the beginning, Haydon primarily served as a vertical contractor,” says Malone. “As the company grew, our competencies expanded. Now, the portfolio of services encompasses not only commercial across market segments, but a robust infrastructure footprint in transportation and utilities.”

CIVIL AND INFRASTRUCTURE

The Haydon civil division, started in 1998, has now developed into many different self-performing craft disciplines.

“We now have a large civil portfolio, which covers above and below-ground infrastructure including roads, bridges and water,” he says. “We self-perform 80% of this heavy civil work and continue to expand our presence across the Southwest.”

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According to the Council on Foreign Relations, the U.S. faces an infrastructure deficit of $2 trillion by 2025. Further, infrastructure spending can expand GDP growth, create jobs and mitigate costs due to deteriorating assets. “The nation cannot function without a highly effective infrastructure,” says Malone. “Infrastructure and construction are integral components in the circle of economic growth. Haydon is poised to benefit from infrastructure development, because of our integrated capabilities, which differentiate us from competitors.”

From the Arizona perspective, Malone is particularly energized about water infrastructure, given the population migration into the state. “Water conservation and treatment © MPmedia, LLC 2020

Joe Malone

will remain an important fixture across the Valley,” he says.

“Haydon possesses the unique ability to connect communities to water from source to spigot.”

PARTNERS

Jackie A. Meck Water Campus in Buckeye

“We take on municipal and infrastructure projects with a strong and lasting sense of responsibility to work safely, add value and improve the communities in which we work.”

— Joe Malone

© MPmedia, LLC 2020

Do What is Best for the Client, Deliver Excellent Customer Service and Go the Extra Mile are three additional Fundamental Behaviors that Haydon practices. They are the key to building a roster of exceptional clientele, including Arizona State University, Town of Gilbert, City of Peoria, City of Phoenix and Banner, among many more. “Our team is extremely proud of the repeat business we secure. It is a testament to the way in which we conduct our trade,” says Malone.

The commitment to Do Quality Work is front and center during COVID-19. “Haydon reacts quickly and adapts to the economic environment,” says Malone. “With the support of our public and private partners, construction projects are advancing in a safe and responsible way.”

That approach, Make Safety a Priority, is the reason that Haydon is the nation’s only general contractor to earn status from HealthyVerify, “the country’s only independent medically based, scientific and professional full service certification company helping to minimize the risk of disease,” according to the company’s website. “HealthyVerify is the gold standard, and it says a lot that our procedures, communication protocols and utilization of technology are the best in the industry,” says Malone. “Throughout the pandemic, we have been able to execute our plan and keep construction active.”

FUTURE

Create Win/Win Solutions. Haydon has embraced this Behavior since day one, and the results speak volumes. “We are excited for the company’s prospects and serving our clients and partners now and in the future,” says Malone.

Look Ahead and Anticipate.

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MAKING HIS MARK IN COMMERCIAL REAL ESTATE

Two states and 22 hours is the distance between where Spencer Nast, principal at Lee & Associates, currently resides and where he grew up in Downtown Seattle.

In 2011, Nast left his hometown and moved to Phoenix where he attended W.P. Carey School of Business at Arizona State University.

“It was exciting leaving Seattle and moving to a place that I was unfamiliar with.

But I saw it as an opportunity and I was excited to embark

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on a new chapter in my life,” says Nast.

During his senior year, Nast was introduced to Fred Darche, managing principal at Lee & Associates. “Like everything in this business, I had a relationship with Fred and he decided to give a kid from the Northwest a shot,” he says.

Nast took an internship at Lee & Associates where he worked with Darche and John Cerchiai, both principals focusing on office tenant and landlord representation. © MPmedia, LLC 2020

“Spencer took the initiative to become valuable to our team by really diving into the business and learning all aspects of brokerage,” says Darche. “If he wasn’t at school, then he was driving the market or chatting up other principals in the office. He made sure everyone knew who he was and how excited he was to learn more about the industry.”

After graduating from W.P. Carey in 2015, Nast went on to work at Lee & Associates, partnering with Darche and Cerchiai.

Growing up working with two parents to successfully build and run their own businesses, Nast knew the amount of hard work it would take to make a mark in the commercial real estate industry. He set his sights on becoming principal by age 30, and beat that goal by two years.

DIFFERENTIATING THE APPROACH

“Many kids starting out may not have a clear view or a mentor who is willing to take the time to coach them on how to be successful as a broker, causing them to burn out quickly and move on to something else,” says Nast. “You have to appreciate the journey of becoming successful in the industry and see the value of starting from the bottom and working your way up.”

Nast figured out how to differentiate himself and his business strategy quickly.

“Lee & Associates truly believes in development of younger associates, and many brokers are willing to share their guidance or provide insight,” says Nast. “With such an open and collaborative office environment, I was able to build rapport with other brokers in the office and support them with whatever © MPmedia, LLC 2020

I could. All of this helped to provide a more rounded view of the industry and insight into how they were able to successfully grow and maintain their business.”

When Nast wasn’t in the office, he was walking every building in town and driving the market.

“Being a kid from Seattle, I knew I needed to learn everything about The Valley if I was going to compete in the industry. I figured out quickly that information is key and would add value and credibility to my name.”

“Getting started in this business, you make very little to no money at all. My first six months, I worked for free,” Nast laughs. “I knew I had to eat, so I started valeting at night. While valeting doesn’t sound like the most glamourous side gig, I think it teaches you to roll with the punches. Like everything in this business, if you want it, you have to work for it.”

After working for four years as an associate for Darche and Cerchiai, Nast was promoted to principal, making him the youngest principal in the history of the Arizona office. Nast has had the opportunity to work on a number of premier assignments throughout the Valley. One of the most important pieces of advice that Nast has received is that brokerage is a lifestyle, not a job.

“Technology is changing the way we do business, and you need to stay on the cutting edge to remain relevant,” says Nast.

“Working with two seasoned veterans, I was able to show them new processes that made their daily tasks more efficient, and new ideas for marketing.”

Another piece of advice that Nast mentions is creating relationships among other young brokers in the community. “There are classes in the CRE industry, which ultimately means people at your peer level,” says Nast. “These are the brokers you will work with your entire career. Get to know these brokers and build relationships with them professionally and personally.”

“Prior to the pandemic, I hosted a number of happy hours exclusively for young office brokers. The goal was to create a space outside of work that helped us get to know each other better. I would also invite younger associates as a way to help make introductions so they could begin building their own network.”

“I figured out quickly that relationships, hard work, and persistence are key to this business,” Nast says. “If you continue to work at and incorporate those three things into your daily habits, I guarantee we will be hearing your name next!”

INSIGHT FOR THOSE STARTING OUT

LEE & ASSOCIATES CELEBRATES 30-YEAR MILESTONE

“If I could share anything with those wanting to get into the industry, it would be that commercial real estate is a long-term career, so don’t be short-term focused,” says Nast. He continues to stress the importance of creating value on your team. Figure out where there might be a weakness and be the strength.

Lee & Associates offers an array of real estate services tailored to meet the needs of the company’s clients in all facets of commercial real estate brokerage.

Our Phoenix office was established in 1991 and is celebrating our 30th anniversary in 2021.

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C A R R I E

M A S T E R S

Building from the ground up. Carrie Masters of LGE Design Build perfectly embodies this principle during her tenure with the company. “I submitted my resume for a receptionist role through Craigslist and, lo and behold, I was offered the job on the spot,” she says. “I grew into the executive assistant role within three months. Over the last 18 years, I assumed many other positions including office manager, HR director and chief administrative officer before becoming the chief operating officer.”

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© MPmedia, LLC 2020

STARTING POINTS

Founded in 1994 by David R. Sellers, LGE has grown into one of the most distinguished commercial real estate contractors and designers in the region. “LGE offers an integrated construction, architecture, entitlement services and development partnership platform” she says. “To that point, we are the only large-scale commercial general contractor in Arizona that has both design and construction capabilities under the same roof.”

BUILDING A CAREER

At 23, Masters did not know that CRE would be her profession, but she embraced the opportunity. She continues to add value and impress clients, peers, colleagues and team members with her expertise, enthusiasm and commitment to excellence. “I could not imagine myself in any other industry,” she says. “I am most proud of my journey. I have endured many struggles and roadblocks along the way, but without them I would not be where am I today.”

most recently, high-end custom homes, debuting their first ground up home in 2021,” she says. “However, with e-commerce booming, we see an immediate need to improve the way industrial buildings look and function across the Southwest.”

Mention team and culture at LGE and Masters exudes excitement. “I have a huge place in my heart for LGE and our family. My favorite part of each day is coming into the office and collaborating with everyone,” she says. “Culture is one of the things I am most passionate about. LGE has a terrific culture unlike any other in the industry.”

FUTURE

Masters is building the future of LGE with the same optimism and determination on display in her own life and career. “I am so bullish on the success of LGE, and our team of hard-working, passionate and driven people,” she says.

“When you have great people, all working toward the same goal, the sky is the limit.”

OBSTACLES

Masters’ work ethic and perseverance to succeed developed long before her start at LGE. “I was raised by parents who struggled with drug addiction in an environment where abuse was rampant. I lived a childhood filled with setbacks, heartbreak and challenges,” she says. “I knew I wanted something better and I never gave up. Then and now, no matter the challenge, big or small, personal or career-related, I tackle them with the same mindset: This does not define me. I will get through it.

I will not give up.”

While the challenges Masters faced would derail others, she has used them as motivation and fuel throughout her life, and now finds herself in a special position. “I have a passion for giving back to those that are less fortunate.

“Having grown up homeless, I have a deep empathy for the millions of children who face abuse, neglect, illness, homelessness or lack of education, or who live in impoverished circumstances,” she says. “I head up the David R. Sellers Foundation, which allows me to connect, partner and give back to a variety of nonprofits that touch my heart.”

“I COULD NOT IMAGINE MYSELF IN ANY OTHER INDUSTRY. I AM MOST PROUD OF MY JOURNEY. I HAVE ENDURED MANY STRUGGLES AND ROADBLOCKS ALONG THE WAY, BUT WITHOUT THEM I WOULD NOT BE WHERE AM I TODAY.” —Carrie Masters, COO, LGE Design Build

LGE

Since inception, LGE’s design and build projects total over 1,200 with a 22-million-square-foot imprint. Since 2000, David E. Sellers has served as president and CEO. Along with Masters and a talented team, the company boasts an impressive portfolio of properties. “LGE’s focuses on office, retail/restaurant, medical, education, mixed-use, adaptive re-use, tenant improvements, industrial and, © MPmedia, LLC 2020

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T h e O f f i c e s At

NEW YORK LIFE REAL ESTATE INVESTORS IS A DIVISION OF NYL INVESTORS LLC