Issue 3, 2017 by Commercial Executive Magazine

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SPEAKERS

Dana Garmany Robert Sarver Robert Sarver Dana Garmany Owner & Managing Chairman & Chief Chairman Chief Executive& Officer Executive for TroonOfficer Golf for Troon Golf

Ken Kendrick Ken Kendrick Managing General

Owner & of Managing Partner ofGeneral the Arizona Partner Phoenix Suns Managing Partner of the Arizona Partner of Phoenix Diamondbacks & Chairman & CEOSuns at Diamondbacks &Western Chairman & CEOBank at Alliance Western Alliance Bank

Ray Anderson Ray Anderson Vice President &

Anthony LeBlanc Mark Detmer Anthony LeBlanc Mark Rising Detmer President, CEO & Phoenix

President, CEO & Vice President & for Alternative Governor Athletics Director Alternative Governor Athletics of the Arizona Coyotes UniversityDirector Athleticsfor at of the Arizona Coyotes University Athletics at Arizona State University Arizona State University

Phoenix Rising Co-owner and Board Co-owner and Board Member & Managing MemberJLL & Managing Director, Director, JLL

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EXECUTIVE PUBLISHER Mandy Purcell mandy@mpmediaaz.com EDITOR-IN-CHIEF Sarah Stecko sarah@mpmediaaz.com BUSINESS DEVELOPMENT Isabel Menzel isabel@mpmediaaz.com GRAPHIC DESIGN Crown Press, Inc. art@crownpress.com EDITORIAL April Atwood Josh Gordon Tim Randall Wayne Schutsky PHOTOGRAPHY Isabel Menzel Matthew Strauss Tony Elliot Carl Schultz

© 2017 BY MP MEDIA, LLC 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

“The secret of change is to focus all of your energy, not on fighting the old, but on building the new.” – S O C R AT E S

This quote remarkably illustrates today’s retail market. We all know the game is changing and the players are finding new ways to navigate the field. So, in this issue of Commercial Executive Magazine we are spotlighting the retail icons in Phoenix, and showcasing their instrumental strategies to adapt to the challenge of e-commerce. /// However, since most don’t reach their pedestals alone, we’ve targeted the crucial mentors and mentees relationships. Take the exceptional partnerships at Pollack Investments, for example, where three individuals with unique minds created an empire with the shared goal of improving the overall quality of life for communities. /// Our “Broker Team of the Month” at NGKF have also relied on creativity and hard work to emerge successful. They have listed more space than any other retail brokerage team in metro Phoenix. /// Additionally we’ve profiled a former U.S. Marine who entered the RE world in hopes to apply the skills he had already embodied during his time serving. One of his first projects was the master-planned Desert Ridge Marketplace, a project that is currently changing its stripes again with amazing renovation plans you won’t want to miss!

Mandy Purcell

Two years ago, in our “Retail Family Tree” issue that also appeared at ICSC RECon Las Vegas, we honored all the main branches and leaves we could to illustrate this amazing retail climate we’ve had in Arizona. From the history of Westcor to Scottsdale Fashion Square, Metrocenter, and all the other shopping malls that have contributed heavily to our economy, we had to reminisce at least once a year – and what better time than now? /// So of course, we brought back one of the forefathers, Jack Rasor, but with a twist. We got the in-depth story on his relationship today with one of his mentees, Brian Frakes. /// On that note of mentors, we couldn’t forget to commemorate Rusty Lyon once again and take it a step further by profiling his son, Scott, and his new brainchild, the highly anticipated Mountain Shadows Resort in Paradise Valley. See how he pays respect to his late father in his latest mixed-use project. /// Then, a not-so-talked-about part of our RE industry is the sleepy town of Queen Creek; however, that is all going to change. Check out the supplement that spells out how Queen Creek has been the underdog for too long and why the most proactive developers are setting their “sites” on it now.

Sarah Stecko Editor-in-Chief

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STORY

many know, Jack Rasor is one of the founding partners of Westcor Development Partners (WDP) and his mentor, Rusty Lyon, retail king and Founder of Westcor Partners, passed down his wisdom and values to Rasor and his WDP Partners. The veteran commercial real estate developer has shared his wealth of knowledge and experiences with a host of mentees over the years, including Brian Frakes.

THE CUTTING EDGE:

JAC K R A S O R & BRIAN FRAKES “Jack is extremely loyal, fair and trustworthy; he has helped so many people in this town. He was very gracious to understand what I wanted to accomplish when leaving WDP and starting Common Bond. He said ‘good luck, have fun, work hard & play hard.’” – BRIAN FRAKES

“Jack has such an amazing history of training people, and I am fortunate to be one of them,” says Frakes, former WDP Partner and now Principal at his own firm, Common Bond Development Company.

Rasor, one of the elder statesman of the industry with 45 years of experience under his belt, is still crafting extraordinary deals across Metro Phoenix and throughout the Southwest. “When I was very young my dad told me to love what you do or to find another career. And, fortunately, I still love what I do.” /// Westcor is at the heart of Rasor’s career trajectory with an impressive roster of projects, which define the Valley. “At Westcor we always tried to stay far ahead of the curve, and we had the opportunity to do that because we had great people executing the deals,” Rasor says. The key to Westcor’s success and its “staying power” was its ability to anticipate and react to growth. “Jack was the deal guy,” Frakes says.

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Partnership Frakes shined in his role as one of Rasor’s key tactical implementation experts at Westcor from 1999-2002, and subsequently as a WDP partner for over a decade. /// For Rasor and his WDP Partners, the choice to include Frakes in the WDP equation was an easy one. “He was talented, personable, honest and a hard worker – all of the qualities we look for in a partner.”

In any solid and longlasting relationship there is always a bit of

Lessons Learned The business lessons Rasor and his partners learned from Lyon, are still the guiding principles at WDP, and are the ones that Frakes has brought to Common Bond. “Jack taught me to be conservative in projections, utilize deal partners and not overleverage.” /// Underlying these tenets was another Westcor principle, which drives both of the firms to this day. “Rusty taught us that Phoenix is a small town, and that you are going to do business with the same people over and over again, so make fair deals, which are good for both parties,” Rasor says.

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New Business The name of Frakes business in some measure flows from the “common bond” relationship that he and Rasor share. In fact, Frakes and his wife are the Godparents of Jack’s 19-year-old daughter. /// With no signs of slowing down, Rasor still searches for the next great deal. “Retail has changed tremendously, but things are busy at WDP,” he says. As for the duo, both men still have the opportunity to collaborate together on projects.

HOW OFTEN DO YOU TALK NOW? JR: Only when absolutely necessary! BF: He still takes my calls when I need advice.

good-natured ribbing and competition, and

WHAT ARE YOU JEALOUS OF EACH OTHER?

Rasor and Frakes

JR: He’s 25 years younger… and he married a cute Doctor!

are no exception. The Commercial Executive Magazine team posed a few questions to Rasor and Frakes to reveal their lighter sides.

BF: Besides his bank account… His ability to listen.

HAVE YOU EVER FOUGHT? JR: Only over who pays for lunch! BF: Fights are typically things you think you can win….I knew better.

DID BRIAN EVER ASK YOU FOR A BIGGER CUT OF A DEAL? JR: He is not that stupid. He would have asked Rob, Wally or Bob for that. BF: Probably too often!

WHAT WOULD YOU SAY ARE EACH OTHERS’ FAULTS? JR: He overstayed his welcome… he should have left five years earlier… but thankfully he did not… and fortunately we still have Todd.

Wedding Celebrations

BF: His fault is “balance” or lack thereof. He always told me I had to have more “balance” in my life than just work. If anyone tells you they work too much, they’ve never compared themselves to Jack. 5

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STORY MENTORS & MENTEES

Ed Beeh & Dave Slaughter “The greatest good you can do for another is not just to share your riches, but to reveal to them their own.” — B e n j a m i n D i s r a e l i

MENTORSHIP Real estate was not a path Ed Beeh had paved for himself, he was pushed in the right direction from someone with the ability to see ahead and navigate the barren trail. /// Beeh had originally moved to Phoenix straight out of college and was introduced to Dave Slaughter through a family friend, Steve Bonnell. Although real estate was an unplanned career choice, he was ready to get his hands dirty. /// “He was very hungry and interested in the business,” Slaughter says. “It was hard not to recognize the qualities, he had everything I was looking for.” /// Slaughter taught Beeh that the best way to learn was to go out, get involved and ask questions. /// “I always believed the best way to learn is hands on and under fire,” Slaughter says. “That’s what was perpetuated.” /// Slaughter would take Beeh out on meetings regularly to allow him to start grooming relationships. /// “He taught me that this business is very relationship driven,” Beeh says. “He kept those relationships, even when they weren’t an active client, so when they did get busy again, we were the first they thought of.” 6 © Copyright 2017 by MP Media, LLC

Rusty, A.T. & Eddie...

Didot Head Thanks for the memories,

It’s been a Great Journey!

GEOFFREY HARRIS is a Senior Vice President with CBRE’s Capital Markets Debt & Structured Finance team. In this role, he maintains a nationwide focus on both net leased and other smaller loan financings while also offering clients the full array of CBRE Debt & Structured Finance loan programs. Mr. Harris brings nearly 16 years of experience to our Debt & Structured Finance team and has closed more than 2,000 transactions totaling more than $3 billion.

• NWC of Lincoln Drive and Scottsdale Road sold for $10.24 million to Alliance Residential, which will build 264 luxury apartment units.

Your Partners Forever: Roy, Lu, John, Rob, Wally & Jack

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HOW RETAIL HAS CHANGED When Beeh first started working with Slaughter the work was far different than it is today. Without specializing in tenant representation or project leasing, he had to wear multiple hats. He still laughs about the old days when leases were created and edited on typewriters and he had to drive all over town to deliver them. /// “When I first started, Dave was working on a Safeway / Walgreens

center in Ahwatukee. When we pulled the demographics, there was virtually no population count in the area,” Beeh says. “They shot an aerial photo and I had to manually count all the houses, so we could go to Safeway and Walgreens and say, ‘‘this is how many people live in the trade area.’ Whereas today, it’s just a push of the button.” /// The duo did a lot of work with grocery stores and drug stores. For their first decade working together, they were involved in the majority of the Walgreens transactions in Phoenix. Beeh completed Evergreen Devco’s first Walgreens transaction, which was

STORY

located in Mesa. /// “For one Walgreens assignment in Salton City, CA, upon arrival, there was nothing out there but sand dunes,” Beeh says. “I called Dave from my car phone and said, ‘I’m in the middle of a ghost town, there’s no one here.’” /// “Maybe we should have researched the demographics a little more before sending you out here,” Slaughter laughed. /// “Our business is such that it’s not that difficult to make one deal, but to make ten deals, now that’s a challenge, especially with the same client,” Slaughter says. “They’ve got to believe in you and trust you and you need to earn that.”

THE BUSINESS NOW “Our business is such that it’s not that difficult to make one deal, but to make 10 deals, now that’s a challenge, especially with the same client. They’ve got to believe in you – you need to earn that.”

Slaughter now leads D.L Slaughter Co., and states retail real estate is an industry that does not always present job security, however Arizona continues to grow and new opportunities will always present themselves if approached in an innovative way. /// “You need to be creative and ask what a site can give your clients,” Slaughter says. It’s always a matter of figuring out what the best fit is and what to do with it.” /// Beeh is the current Executive Vice President and Market Leader for SRS Real Estate Partners, which has 22 offices in the United States, one in Canada and one in Hong Kong. He states that although the landscape is changing, if you work hard you will make it in this business.

– Dave Slaughter

Beeh has been in the business now for 30 years and his relationship with Slaughter still feels like family. “I’ve never heard one undesirable thing about Dave,” Beeh says. “You always like to know you’re working with good people. He has a great reputation, was a great colleague and is still a great friend to this day.” Slaughter feels gratified by what Beeh has taken from their experience together. “I don’t think anyone stands out more than Ed because of his drive,” Slaughter says. “He would never give up on a project. He was always thinking of innovative ways to make it work, but always ethically,” Slaughter says. 8 © Copyright 2017 by MP Media, LLC

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“A mentor is someone that really takes an interest in your career and personal development, in your livelihood. The younger generation is always in need of someone to help them move through and advance their career...” – TIM FR AKES , Senior Vice President, Weingarten Realty Investors 10 © Copyright 2017 by MP Media, LLC

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nd he isn’t just espousing advice on the importance of finding a strong mentor, but speaking to the ways his life was meaningfully changed by finding his own. “I remember my first interview [with Mike Polachek] was at 6:45 in the morning …” Frakes says, as he describes his first formal meeting with Mike Polachek in 1990. This meeting drew his attention to the value of a solid work ethic, which was further developed under Polachek’s instruction. “I almost didn’t hire Tim because he went to U of A,” Polachek laughs. But he chose to overlook that one detail and Polachek and Frakes began their work together in retail real estate, while at the same time forming a lifelong bond that has proven to be mutually beneficial.

olid relationships are indeed essential to finding success in this market, and Frakes describes this as the second big lesson he learned through his years working with Polachek...

Story Time Frakes illustrates this dedication to personal relationships with a story about how, early on in his marriage, he and his wife found themselves with a newborn son and hardly any furniture to speak of. At that time, Polachek and his wife were clearing out their kids’ bedroom furniture after sending them off to college. Without hesitation, the mentor offered him the furniture and Frakes graciously accepted. This personal concern combined with professional guidance forged their strong bond over the years. Of course, Polachek notes, Frakes had to carry the furniture down from the second story of the house by himself. /// Within the walls of their shared workplace though, the two pushed each other to think differently, to develop new solutions to old problems. One of Polachek’s methods were to remind Frakes of an old colleague of his, an incredibly talented leasing agent who Polachek nicknamed “The Rocket” for his outstanding performance. But like many young kids trying to break out of the shadow of their older siblings, Frakes quickly grew tired of constantly hearing about this star performer who came before him. /// So one day, on Polachek’s mention of what “The Rocket” would of have done, Frakes decided it was time to establish his own unique place in Polachek’s mind, and he snapped, “Screw The Rocket! I’m a heat-seeking missile!”

Beyond the Work Days Even after they went their separate ways professionally, the two have maintained a close friendship, each giving other advice on business and personal matters. /// “We talk about both business and personal things that never go beyond the two of us. It might be evaluation of a deal, or if there’s an issue I don’t want people to know about but I want suggestions, I go to Tim,” Polachek says. /// Today the pair share a close dynamic that began when they started working together nearly 25 years ago. Passing on the invaluable experience of a strong mentor has inspired Frakes to give that same experience to others. /// “Retail especially is an ever-changing environment. I think it’s really valuable for younger people in the early stages of their career to have someone to help them navigate that – it gives them a good chance to succeed. Mike had a vested interest in my career; and now I’m at a stage where I have individuals I try to help mentor through their careers as well.”

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“Everything begins with a friendship,” says Bruce Pomeroy, Managing Principal/Executive Chairman

of Evergreen Development Company. “And the basis of that friendship is the complete, total and utter trust that I have in Laura.” /// The Evergreen name itself stands for the longevity and year-after-year success of being an industry leader. The secret to its impressive standing is its strong mentor/mentee relationships, and one of the prime examples of this is seen with Pomeroy and Managing Principal/President Laura Ortiz. /// Since 1994, Ortiz has been working closely with Pomeroy to build the Evergreen brand across all its platforms. Evergreen, since its inception in 1974 when Pomeroy co-founded the company with Andrew Skipper, has completed more than 500 development projects across the U.S. in more than 175 municipalities. And Ortiz has been a major contributor ever since she entered the world of commercial real estate at the ripe age of 23.

and

How it Began The backstories of relationships are often the most interesting, and for Pomeroy and Ortiz the case is no different. After graduating from the University of Arizona, Ortiz found herself in interviews with Evergreen and Bank One, and ultimately accepted the latter’s offer because it came first. /// A year later, Ortiz was pondering her future in the banking industry and received a welcome call from Pomeroy. “We had filled the position, but then needed to add a second spot,” Pomeroy says. “I said to Gregg (Alpert) and Skip (Andrew Skipper), my management team, I wonder if Laura is happy in banking.” /// That query led to a phone call discussion and the move by Ortiz to Evergreen. “I remembered those interviews with Bruce, Skip and Gregg and was so excited that they had an interest in me and had followed up a year later to bring me on board.”

Relationship Building The early years for the pair followed the reliable 12

mentor/mentee framework with the rising star tapping Pomeroy’s extensive reservoir of knowledge. “Real estate development is an

extraordinarily complex puzzle and requires people who are able to blend logical and creative thinking, are persistent, are committed to learning, and who have integrity – which is the basis of all relationships,” he says. “It was immediately clear that Laura had those and she was a very hard worker.” /// For Ortiz, the steep learning curve for a new, woman CRE professional was a challenge that she thrived on. “I was not intimidated and although Evergreen focuses on performance, the culture here was all about support, help and a fostering attitude.” /// That sense of drive and commitment is what Pomeroy appreciates most about his protégé. /// “She has the dedication to get it right, she is never, and I mean never, satisfied with ‘good enough’ and that is an impressive quality,” he says.

he, Ortiz, and Skipper have nurtured over time. “When Evergreen started we had no mentors; we had to learn everything one experience and one mistake at a time,” he says. /// To that end, Ortiz now takes on the mentor role for Evergreen’s many newcomers. /// With over 20 years working together, the duo look forward to increasing the footprint of Evergreen and extending its imprint on the industry into the future. “This has been the perfect fit, and I continue to learn and grow,” she says. “Even now I think, ‘What Bruce would do in this situation?’” /// For Pomeroy, the situation has also been an ideal one. “This relationship has played out even better than I ever expected.”

New Mentors & Mentees Along the way, neither can recall any major conflicts, but both remember the camaraderie and the respect for one another. “In the early years we even shared my office (desk!) two days a week when Skip and Bruce would travel from California to Phoenix. Tight quarters, but it made it easy to communicate,” she laughs. /// Pomeroy can also appreciate the culture that

Stratosphere Ride at ICSC (Las Vegas) in 2007

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“Now, this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” – WINSTON CHURCHILL

T he B eginning the best sustained businesses are those built on friendship .

Jim Pederson, Founder of the Pederson Group and Jeff Manelis, the company’s former President, have an extensive history together that is rooted in an undeniable bond much like that of a family. /// Leaving his career in finance back in Chicago, Manelis joined Pederson in 1990 and raves that Pederson’s impact has changed his life forever. /// “I was only 24 years old and I didn’t know retail real estate from a hole in the wall,” Manelis says. “Everything I have now is all because of the relationship I formed with Jim and the platform the Pederson Group allowed me to grow on.” /// Pederson, who formed the company in 1983 and led it

to become one of the most prosperous and prominent retail developers in the southwest, realized he needed a personality like Manelis’ in his company since their first interview. /// “People trust him,” Pederson says. “They have that immediate sense of chemistry with him and that’s his gift.” /// When he first began, Pederson advised him to go into property management so he could experience a well-rounded platform to learn from. He learned the backbone of the industry in all its facets. /// “The experience will humble you, show you how the projects operate and teach you how to communicate better,” Manelis says.

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STORY Shining Qualities

The qualities Pederson praised in Manelis played a big part in the success of his career. He was not only a hard worker, but he was exceedingly personable and easy to confide in. Pederson views himself as carrying a contrary persona. He describes himself as less approachable, but he states he couldn’t get the job done if it was the other way around. Together they formed a flawless partnership. /// “If people are intimidated by him it is because he is the head of the company,” Manelis says. “He was in politics, he was President of Valley Partnership. People have always looked at Jim as a larger than life celebrity figure.” /// Manelis states that Pederson operates in a very calm demeanor, but he always has a can-do attitude and thinks creatively so he can solve the problems that come his way. /// “It’s his attitude and how he conducts himself, that’s how I try to lead my professional career,” Manelis says. “Even in the worst markets we could survive and keep our reputation, because of our ability to handle ourselves the right way and do the right thing with our lenders and partners.” /// Pederson tends to always approach every project with a best-case scenario in mind, which is quite the contrast from Manelis. /// “I play the turd in the cheerios,” Manelis laughs. “But we talk through it and luckily we’ve never had a worst-case scenario.”

Business Approach Pederson is a big believer of a creative outlook and an assertive attitude. So much so that he has dismissed partners from his office when they told him something could not be done. Both him and Manelis don’t operate by statistics. They debate all the time whether a project is a good project, or whether a path is a good one, but at the end of the day their mutual respect and ability to think outside of the box allows them to have the dialogue that needs to take place. /// “Anyone can cut and paste, or develop by a formula, but when they put their own heart and soul into the project, it may not fit the norm, but they’ll surprise people in the best way,” Pederson says. /// Both still enjoy traditional face-to-face interaction and find that it is essential to make a real estate project flow smoothly. /// “You make money in the grey areas, not the black and white,” Pederson says. You need to get creative and really get a feel about what that project is all about. It’s the personal interaction you can’t get through email.” /// He states that putting a project in a series of to-do boxes is understandable, but not preferable. /// “You have to work on yourself to think different daily,” Pederson says. “I want to encourage people to know that if they have confidence in their ideas they can overcome any insecurity. They shouldn’t be afraid of advancing their ideas. The brokers that do that too often get their fair share of blame, but not their fair share of the success. You know how they say five percent of the people make ninety five percent of the money, that’s true to brokers as well. I need someone that’s willing to think outside of the box and roll ideas off me.”

A YOUNG JEFF MANELIS LEARNING THE ROPES UNDER JIM PEDERSON

Future Outlook Manelis’ strong work ethic was a defining quality, but eventually it got the better of him. In 1997, he became incredibly ill. /// “I would show up visibly sick, but I would use the job as an excuse,” Manelis says. “Two days after I got out of the hospital, I returned to the office with a vacuum cleaner attached to me and literally sucking an infection out of my body. Everyone thought I was nuts.” /// Pederson advised him to slow down to protect him. /// “It was the hardest thing I’ve ever had to do,” Manelis says. “I love the people there, I love Jim.” /// Today, Manelis is intending to transition his role again to a strategic advisor; to allow someone that is hungry and new to their own success. The bird always eventually flies, but for Manelis, he will always have a sense of place at Pederson Group and be there for Jim when he calls. /// “The reputation of the Pederson Group will drive that company for however long people want to work there,” Manelis says.

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Real estate development is in James R. Pederson’s blood, and he knew it from a young age. Rather than be intimidated by his father’s legacy, James always knew he wanted to follow his Dad into the business. /// That’s why after college in 2006 — after taking some time to help out with his father’s U.S. Senate bid — he joined the company and has had a positive impact on the company, due to both his talent for development and his remarkable reputation around the Valley. /// Aside from his dad, his other prominent mentors include Jeff Manelis, Tracy Follmer, Margaret Lloyd and Chris Gerardo. “James is well-liked around the community and that is really an asset,” says his father. “Trust is important in this business; we’re all the face of our company and it’s got to be a face that people can trust and rely on.” /// Jim Pederson would know. He’s a face that the Phoenix community has relied on for over 30 years – a time span that has seen his company develop over 30 shopping centers in Arizona. /// The father/duo is a great match for Pederson Group as James has mostly experienced the retail sector in the recession, giving him a unique tenacity, and Jim has the perspective and experience to help his son and the company weather the industry’s up and down swings.

• Grocery store-anchored centers are now seeing less soft goods

In terms of submarkets, the professionals at Pederson Group have identified several hot areas throughout Arizona, namely Queen Creek and Peoria.

• More quick service restaurants • More service-oriented retail uses • Increase in medical tenants like urgent care & dentists • Decrease in some other traditional fare such as bank branches

Queen Creek has strong income and family size demographics as well as great proximity to a travel corridor and technology jobs in the East Valley. “Some of the best housing growth is in Queen Creek right now,” Bassett says. Certain areas in Peoria also have great high growth and high income numbers, though the area is more difficult due to the topography and quantity of state land, according to Jim.

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joined the Pederson Group in 2015, as the Director of Development. Brian possesses almost 30 years of experience in the commercial real estate industry and oversees all aspects of company’s development activities, including the analysis and securement of sites for the company’s future retail projects, oversight of the entitlement process with various municipal bodies and officials, and “anchor-tenant” negotiations.

“Joining Pederson Group was a great fit, with seasoned veterans who are total professionals in their approach to the retail development business. A huge bonus is the reputation Jim and the organization possess in the community,” he says. Prior to joining Pederson Group, Harpel owned and operated The Harpel Company Inc., a Tucson-based brokerage firm focusing on retail shopping center development and national tenant representation. He began his professional real estate career with CB Commercial (now CBRE) as a retail broker before founding his own company in 2000.

ederson Group COO Rob Bassett brings a wealth of knowledge in the retail space to the company, having worked for Westcor and then Macerich for the past 18 years, where he focused on the development of a range of product types from entitlements to auto malls and regional shopping centers. Bassett began his career at Westcor in financial analysis before transitioning to development and both areas have served his career well. He’s also benefited from many successful mentors who have helped him along the way, including his father Perry Bassett of Bassett Property Company, Mike Treadwell of Vintage Partners and Jack Rasor of Westcor Development Partners. “Performing financial analysis for ground-up retail projects was a great place to cut my teeth and provided a solid foundation for my development career,” he says. After spending nearly two decades working for with Westcor and Macerich, Bassett made the transition to Pederson because of his desire to work with a more regionally focused company. He relishes the nimble entrepreneurial spirit fostered at Pederson Group.

New projects, new markets, new opportunities.

Trusted partnerships and strategic relationships provide us with the foundation to intelligently respond to our ever-changing market. We assess conditions, then adapt to create new opportunities. Shopping centers, single tenant and multifamily projects drive our expanding portfolio of developments.

Visit our booth at ICSC RECon | C74 Union Street | Central Hall

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Company

PROFILE

Frakes originally cut his teeth in real estate development at Westcor in 1999 until 2002 when Macerich acquired the company. At that point, he moved on to Westcor Development Partners (WDP) with a host of industry legends in Jack Rasor, Rob Ward, Wally Chester and Bob Mayhall. As the young gun in such an accomplished group, Frakes relished the opportunity to learn from those great mentors. “They’re heroes and they really are the best people,” says Frakes of his mentors.

SINCE INCEPTION IN 2014: SF DEVELOPED OR UNDERDEVELOPMENT:

365,000 SF

TOTAL STAFF: TOTAL PROJECTS:

Company

PROFILE

One of many retail center projects since inception, The Plant is a Sprouts-anchored shopping center in Chandler, AZ.

Frakes & Fox While at WDP and during the Great Recession, Frakes began developing real estate with his close friend and someone who does not require much of an introduction: Sam Fox. The two worked on The Yard concept at 7th Street and Missouri Avenue in Phoenix, turning an old motorcycle dealership into a thriving multi-restaurant experience. /// The rest, as they say, is history. The Yard in Phoenix is now a thriving property and was just the beginning for Frakes and Fox.

CBDG Frakes made the difficult decision to leave his mentors and WDP and venture off on his own in 2014. He started Common Bond Development Group along with strategic investors Fox and Andrew Cohn. /// While starting a business from scratch is no easy feat and Frakes admits it was somewhat intimidating, he trusted in his skills and his ability to build Common Bond into a thriving company. He hired current Development Manager Trevor Cohen and the two got to work continuing to build relationships with the community and industry. /// “It’s important to build relationships, because relationships build opportunities,” Frakes says.

Projects The company got off to a running start in 2014 with its first project, The Yard Tempe. /// The group’s second project involved creating the Flower Child restaurant at 90th Street and Shea Blvd. in Scottsdale, which is the strongest performing Flower Childs in the state. /// Since then, the company has had a hand in a slew of restaurant and retail center projects including a Sproutsanchored shopping center called The Plant in Chandler and a new The Yard concept in Tucson opening later this year. Next up for Common Bond is a 135,000 square foot Safeway anchored shopping center in San Tan Valley opening in 2018 and The Yard in the thriving Heritage District in Gilbert, Arizona also opening in 2018.

Success Much of the company’s success comes from its dedication to creating vibrant spaces, a cue Frakes took from Fox. /// “How can we really drive our architects and contractors to create an end product for us that the community deserves and that our tenants deserve?” Frakes says. “We feel that in the long run that is going to pay off.” /// Rather than creating spaces on the cheap or “churning and burning,” Common Bond aims to create high-quality spaces. /// Even the company’s name hearkens back to Frakes’ desire to find a “common bond” with the community, tenants and other invested parties in order to create something they can all be proud of. /// “I spent a lot of time thinking about [the name of the company] because I wanted it to be about more than just me or individuals,” he says. /// If the packed crowds at The Yard or the communities flocking to his shopping centers are any indication, Frakes is well on his way to accomplishing that goal. 19 © Copyright 2017 by MP Media, LLC

ICONS

Arizona

A Shadowing Legacy

Scott Lyon & Mountain Shadows M

uch like his late father, the famed Rusty Lyon, Scott Lyon is casting a wide shadow across Greater Phoenix. Where Rusty made his name in retail development, Scott has developed a reputation as one of the premier hospitality executives in the Valley. Westroc Hospitality, where Scott serves as CEO, boasts the stunning properties: Sanctuary on Camelback and Scottsdale’s Hotel Valley Ho. Now, with the addition of Mountain Shadows in Paradise Valley to its portfolio, Scott has reached new heights of success and stature in the commercial hospitality space. “Our efforts are to bring back some of the heritage and legacy of the historic Mountain Shadows property,” Scott says.

ICONS

Arizona

The signature “Mountain Shadows” lobby doors

entored in the commercial real estate sphere by his father at Westcor, the name everyone recognizes because of its iconic properties including: Metrocenter, Paradise Valley Mall and Scottsdale Fashion Square; Scott eventually found his niche in the hotel and resort sector. /// Scott was part of the initial team that eventually became Carefree Resorts, which gave him the opportunity to work on some amazing projects, including The Boulders in Carefree, Ariz.; The Peaks at Telluride, Colo.; Carmel Valley Ranch Resort, Calif.; and The Lodge at Ventana Canyon in Tucson, Ariz. /// After the sale of Carefree Resorts in the late 1990’s, Scott seized the opportunity to create his own mark on the Valley with the formation of Westroc Hospitality along with partners, Bill Nassikas (COO) and Pete Corpstein (CFO).

Mountain Shad ows As far back as 2004, Scott had his eye on the Mountain Shadows Resort, which first opened to the public in 1959. “We had tried unsuccessfully to acquire it when Marriott [International] closed the property,” Scott says. /// Scott and Westroc joined forces with Woodbine Development to pursue the acquisition of the project and formed a venture to develop the property. The team jumped at the opportunity when the owner, who outbid them years earlier, decided to sell the property after securing the zoning that depended on delivering a quality resort. /// “The zoning was already in place, so we designed the project around what the town wanted, which was a new vibrant resort and golf course,” Scott says. /// Standing at a height of 36 feet, Mountain Shadows adds to its already impressive historical legacy with Scott’s redesign. This is the first three-story commercial property approved in Paradise Valley. /// The vast property set against the

backdrop of Camelback Mountain has been completely rebuilt and exudes the charm and nostalgia of the original 1950s resort with modern amenities for guests. /// “We wanted to preserve the feeling of the original Mountain Shadows, yet update it with innovative design features for the ultimate guest experience,” Scott says. /// The hotel portion’s 183 rooms provide patrons with a range of luxurious choices including: Signature, Mountain, Garden, Cabana, Immerse and Camelback Guestrooms. /// “Mountain Shadows was always considered a perfect example of mid-century modernism,” Scott says. “We have recaptured that and blended in a contemporary redesign.” /// Beyond the hotel, 42 condo units are scheduled for a November 2017 completion. “The condos are really going to be stunners,” he says. “We have already sold a quarter of them and they’re not even built yet!”

ICONS

Arizona

Open

for Business

From the moment patrons enter the resort they are treated to a wealth of options and amenities to make their stay enjoyable and unique. From the “Hearth ‘61 Restaurant & Patio” to “The Living Room” and “The Bar at Hearth ‘61,” guests can already enjoy the finest cuisines and beverage options, all in a setting with a unique character and feel. /// “We built unique gathering and community spaces to encourage social connections, including the iconic sunken living room as a nod to the mid-century past,” he says. /// In addition to robust meeting areas and ballrooms, guests can enjoy “The Citizens Club Pool,” “The Citizens Club Fitness” and “The Citizens Club Juice Bar,” just outside the 5,000-square-foot fitness center.

The Short Course Known simply as “The Short Course,” Mountain Shadows’ 18-hole par three course is an exciting amenity at the property. “This is the only resort in Paradise Valley with a golf course,” Scott says. “When we purchased the property, it included a commitment to preserve the golf course. We have now invested over $3 million into its transformation.” /// The track is already a hit with local golfers, as there is already a Tuesday scratch skins game drawing in at least 120 local professionals and hotshots weekly.

Personal Touches Just a pitching wedge away from The Short Course, Scott pays tribute to his father with an outdoor lounge area/bar named “Rusty’s,” located at the 19th-hole so golfers can discuss their rounds while enjoying a drink. Known for his love of the game, it’s only natural that old photos of Rusty were incorporated into the design of this lounge. /// Throughout the resort, Scott, his design team, and long-time architect collaborator, Mark Philp of Allen and Philp, worked hard to emphasize the spirit of original architect Martin Stern, Jr. In fact, the property has a “butterfly roof” just like the ones Stern used in some of his earlier work. Stern has been credited with designing the first high-rise resort casinos in Las Vegas. /// Another unique offering is the lobby art that a professional curator selects for patron viewing and swaps out new pieces for each quarter. /// The new Mountain Shadows is a tribute to Valley history with a redesign that combines the best of the vintage years of the 1950s and 1960s with the dynamism of the 21st century. /// “This is a fantastic property and one that we are extremely proud of,” Scott says. “There is definitely some of the Westcor tradition and history put into the development.”

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E X C L U S I V E A G E NT Office:

James V. Camp

Mark Singerman, LEED AP

Senior Vice President and Regional Development Officer

Vice President Regional Director - Arizona

RGDC-CA@rockgrp.com

RGDC-AZ@rockgrp.com

Â®

www.rockefellergroup.com

Phil Breidenbach, SIOR phil.breidenbach@colliers.com 602-222-5073

Industrial: Paul Sieczkowski, SIOR paul.sieczkowski@colliers.com 602-222-5085

2390 E. Camelback Road, Rob Martensen, SIOR, CCIM Suite 100 rob.martensen@colliers.com Phoenix, AZ 85016 602-222-5082 602-222-5000 www.colliers.com

BROKER TEAM of the MONTH:

Trends Edition tim

joe

david

ryan

W E S T FA L L

HOYE

DOUCETT

GUIDO

MORONEY

ometimes it takes a team to break records. At the Newmark Grubb Knight Frank Phoenix office, a mixture of personalities and backgrounds all united by a belief in the growing strength of this market, collaborates to list an unprecedented 12.5 million square feet, Yuma to Flagstaff – more than any other retail brokerage team in metro Phoenix. /// Joe Doucett, David Guido, Tim Westfall, Joseph Hoye and Ryan Moroney make up this dynamic group, and are unanimous in their outlook for years to come. /// “Retail in Phoenix is as strong as it’s been since before the dark days of 2008,” says Doucett, the Senior Manager Director and lead of the retail team.

Broker Team of the As brands are seeing more challenges due to e-commerce, the real driver of opportunity will be the businesses that prioritize and enhance customer experiences. Furthermore, the Commercial Executive Magazine “Broker Team of the Month” is seeing more pad and restaurant opportunities throughout the Valley. /// Another trend driving growth is the remodeling and repurposing of traditional box stores that have

MONTH

been unable to compete in the digital era. /// “You’re seeing many of these vacant boxes being repurposed,” says Managing Director Tim Westfall. “Experience-driven retail is coming in and owners are having to get creative in finding ways to backfill space. I’d say our market is adapting to a fast-changing environment fairly well.”

“Collectively this team of CRE professionals is the most knowledgeable that I have had the pleasure of working with. We all know how ubiquitous retail is here, and between the 5 of them, they know all the owners, every corner, every tenant and more about what is happening virtually everywhere in the retail Valley submarkets.” – PETE BOLTON, Executive Vice President & Managing Director

David Guido

Joe Doucett

Joseph Hoye, II

Tim Westfall

Ryan Moroney

EXPERIENCE

17 years

14 years

9 years

3 years

TITLE

Managing Director

TITLE

Managing Director

Director

EXPERTISE

Capital Markets; Shopping Center Sales; Net Leased Sales & Infill Land Sales

Retail Sales & Leasing

Retail Investment Sales & Leasing; Retail Tenant Representation

AWARDS

5 Sales Recognition Awards & 2 National Achievement Awards

2015 Best of NAIOP: Retail Broker of the Year

Power Broker 2013

Associate Director

Broker Team of the

MONTH

A Lively Market While busy locations will continue to benefit from population density, being able to repurpose older corners and buildings will keep the Phoenix market lively. Learning how to repurpose those hard corners, the team says, will be essential to their continued success. /// One example of growth can be seen in Gilbert, where the team is working on the last piece of “Agrotopia,” which will be called “Epicenter.”

• 55,000 SF of retail and restaurant • + 275 high-end apartments • currently in pre-leasing phase • roughly 20-24 months away from opening

“What’s exciting for me is that there’s tenant expansion,” says David Guido, who describes how the collaborative nature of NGKF, and variety of practice areas in the company, has led to innovative tenant representation throughout the Valley. /// “We have a very strong medical office team and we’re seeing an expansion of medical offices in traditional retail

spaces, so we’re able to provide them alternative solutions that aren’t always apparent,” Guido says. /// This ability, to be able to look at assets from a variety of different points of view, can help to decide between a multitude of options, from redevelopment or more. Our creative approach is vital to our ability to create solutions for clients, and is what

keeps NGKF versatile as it grows. /// “The other is redevelopment of some of these properties where they were former retail centers or auto dealerships, and they’ve been converted into multifamily or high-density residential developments. Infill continues to be strong,” Moroney says.

OPTIMISM The promising growth of jobs in the Phoenix market lends to a spirit of optimism, as well as the shift in pricing for Class A real estate, which has reached an all-time high as far as price per SF. In fact, in 2016 this area set records on caprate compression. This, added to the need for high vacancy and the need for re-tenanting, have come together to form a moment of opportunity the team is happy to make the most of.

While the outlook is good, challenges are inevitable. The biggest challenge is the overarching one – the very landscape of retail real estate is changing.

“We’re seeing more infill redevelopment than growth on the outskirts,” Hoye says. “You’re seeing houses being built again. While we have been dealing with some inherent challenges to retail, it’s improving and the future looks bright.” /// The team points to the full-service nature of their business as integral to their success, noting that by utilizing the talents and expertise of all team members they are able to both see trends coming and react quickly to new challenges.

“THE ACHIEVEMENTS OF AN ORGANIZATION ARE THE RESULTS OF THE COMBINED EFFORT OF EACH INDIVIDUAL.” – VINCE LOMBARDI

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CREEK

Queen

“Well-behaved women seldom make history.” — L aurel T hatcher U lrich , P ulitzer P rize A warded H istorian

ueen Elizabeth I and II, Catherine the Great, Mary Queen of Scots, Victoria and Isabella I of Castile, all are names of women you recognize today for being long admired for their grace, public charm, dedication to philanthropy and political finesse.

As the kings in history often were in the limelight and their wives were underrated or took a back seat, it seems the town of Queen Creek has too been hiding in the shadows of its larger, surrounding cities. But just like how the female rulers of the United Kingdom, Scotland and Spain defied expectations, Queen Creek is now taking its rightful place on the throne. At just 27 years old, the predominately suburban town has an impressive top 10 school system with many strong housing options for residents. And with 300 people moving there per month, investors are definitely keeping a fixed eye on her.

So in “crowning” Queen Creek, the following pages will immortalize the town and its leaders for their vision of beauty.

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2000

2017

3,244

42,000

RESIDENTS

INFASTRUCTURE: Spent: $150M || Planned: $200M Traffic Signals: 20% increase

GREEN INITIATIVES:

2015

2020

47,881

51,391

2020 Avg. Annual Household Income:

72,325

• Cooking Oil recycling facilities at Fire Stations • “Preserve the QC” conservation program for Jr. high school students

AG 65+ 10.1%

UNDER

18.7%

40-64

10-24

26.2%

GES

• Hazardous Waste Removal

2015 Avg. Annual Household Income:

• Christmas Tree Recycling

Households with children: 49% College Graduates: 80%

• “Queen Creek Recycles” Earth Day Event

21.8%

25-39 23.2%

106,014

Queen Creek, Arizona

Draper, Utah

WDG Map

“WE INVEST OUR MOST IMPORTANT ASSETS INTO EACH PROJECT - OUR INTEGRITY AND OUR REPUTATION.” ~ KIP WADSWORTH

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D evelopment

N ote :

Q C S TATION Some of the latest and greatest news for the town of Queen Creek is the 44-acre master planned development of Queen Creek Station, an exciting mixed-use project that is bound to change the lives of not only its residents but surrounding cities forever. /// “QC Station has been a very important part of what we’re working on and arguably the catalyst. The development is in the key artery of Queen Creek and creating opportunities for positive investments,” says John Kross, Town Manager, Town of Queen Creek. /// The developers are looking to take full advantage of this prime opportunity to bring more entertainment and improve the overall quality of life by designing a “destination” for people to spend a lot of their leisure time. /// “Whether it’s a happy hour from employees within the office product, to wedding anniversaries and birthdays, people will want to go to either sit-down or fast-casual restaurants and will stay in the vicinity,” says Rommie Mojahed, representative of the developer, Director of Retail Sales and Leasing, SVN. /// The components of retail, office, hospitality and multifamily are all coming together and will be announcing official tenants any day now. To give you a glimpse, there will be more entertainment components, including one spot with a “The Yard”-like influence to it. In the same token, it will still embody the town’s present slogan of “Shop QC,” which encourages patrons to support local business. /// The QC Station destination will be highly visible as visitors drive in from Ellsworth Loop, there will be a symbol or landmark-type of marker to “welcome” the driver in, as well as other personal touches from the new tenants soon to come.

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DESIGN Award-winning Architect George Melara of Nelsen Partners has spearheaded the design of countless famous large-scale mixed-use developments, and Class A office buildings in impressive cities including Cairo, Egypt; Austin, Texas; Columbia, S.C.; Denver, Colo. – just to name a handful.

So why did Melara choose Queen Creek? “One word: Authenticity.”

“That is one similar trend we strive for in all our work and it’s there in Queen Creek,” he says. “Although, there’s not yet a lot of services being provided to residents that are offered in Scottsdale, Phoenix or even Gilbert, the opportunity of blending the farm-to-table concept with agri-business is uniquely presented. You can’t find that just anywhere.” /// Speaking of other submarkets in the Valley, Nelsen Partners is the name to thank for Kierland Commons’ design and Melara describes QC Station as exhibiting elements from it, but not as ultra-luxury, as well as keeping Downtown Gilbert’s feel as inspiration. /// “For Queen Creek Station, we’re combining its tradition of agrarian farming lifestyle with the modern trend of farm-to-table in order to create an experience but maintain the town’s character,” Melara says.

Specifics? “We’re encouraging a ‘pedestrian environment’ to improve its walkability. We’ve taken into account who the future users will be and planned for it by drawing out narrower streets (to promote slower driving speeds), convenient parking along the side of the roads, splash pad water features for kids that is far enough from traffic, planting groves for shade, bike-friendly paths and bike racks, and plenty of seating for ‘people-watching,’” he says.

FULTON HOMES INFLUENCE “Do it now” was Ira Fulton’s personal motto. This attitude has been with him since age 11, when he

started a paper route. It grew into a profitable venture that put him through Arizona State University. /// By the 1950s he held various marketing positions, launched his first entrepreneurial venture – a computer leasing company that automated several retailing leaders. This experience led him to buy his first retail establishments, two Eagleson’s “Big and Tall” stores that expanded into a 35-store chain. /// Fulton then found himself in the homebuilding business by accident. He bought the Aston Construction company from his nephews, intending to phase it out. To do this, he enlisted the help of his son-in-law, Norm Nicholls. Today, Nicholls serves as the President and has built approximately 25,000 homes. /// Under the guidance of Fulton and Nicholls, Fulton Homes has grown from a small construction company to one of the largest, most profitable private homebuilders in the country – and has set its sights on the not-so-sleepy town of Queen Creek. /// Fulton Homes has been a major part of the “waking up” of Queen Creek from the beginning. “What initially drew us in was our more suburban nature and picturing it as an extension of Gilbert, where we could continue to provide more trails and medium-density homes with acre lots to families, though Queen Creek is so agricultural and rural. So at first that presented a challenge, but as we began to come out and meet with more planners here over 15 years ago, we found enormous support,” Nicholls says. © Copyright 2017 by MP Media, LLC

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Queen Creek Station Site Plan

L “We like coming to towns like Queen Creek because we can see the long-term vision here & we’re proud to be a part of it. We’ve worked with many municipalities so we know which ones are just looking for more houses quickly & which ones are O.K. with slowing down a bit to first see how it will fit with the overall picture. This is why Queen Creek is a good match for us.” – NORM NICHOLLS, President, Fulton Homes

ocated at the high-traffic intersection of Ellsworth and Queen Creek roads, Queen Creek Station is offering a unique, yet fitting lifestyle for its future inhabitants. With more than three miles of hiking and jogging trails, the new 240-acre Fulton Homes development is actually closer than you’d think to all the best amenities. /// Residents of the 675-lot community can take advantage of being in close proximity to Phoenix–Mesa Gateway Airport, QC District and Queen Creek Marketplace. Proactive developers are realizing Queen Creek Station offers the best of both worlds in a great rural setting.

HOME PERKS: •

DIVERSITY: 3 series of homes & 26 different floorplans

•

All homes at Queen Creek Station are ENERGY STAR® certified and are the only homes in the town that are INDOOR AIR PLUS® certified.

•

Queen Creek Station is the first community in the country to offer a Compressed Natural Gas (CNG) filling station in all of the homes, (in partnership with Honda and Southwest Gas), called “Fuel Up At Home.”

•

Fiber-connected ULTRA HIGH-SPEED Internet

ON-SITE AMENITIES

“Tot Lots” Ramadas BBQs Basketball courts 5,000-SF outdoor pool

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Many consider farmers Mark Schnepf and Steve Sossaman two of the founding fathers of Queen Creek, as they established the town’s renowned agritourism industry. They, along with Perry Rea, have utilized Arizona’s warm climate to establish three unique farms that have blossomed into rich and indulgent culinary experiences, while continuing to use innovative approaches to grow their products and diversify their festivals. Together they make Queen Creek one of the top foodie destinations in Arizona. /// Mark Schnepf, the founder of Schnepf Farms and former town mayor, decided to transition his farm from traditional agriculture and evolve to an agritainment experience 25 years ago. The farm, which specializes in organic peaches, now has over a quarter million visitors a year, and hosts a variety of yearly concerts, festivals, U-pick gardens, and glamping experiences in one of his six vintage airstreams. /// “This is all about passion and loving what we do,” Schnepf says. “For me I feel like Walt Disney some days, because we can create these experiences for people and leave a legacy.” /// Sossaman Farms allows guests to fully immerse themselves in his heritage grains; guests can watch the production process and sample the fresh completed flavors of grain products such as beer, pizza, bread and pasta.

“Arizona is a fantastic place to do agritourism, you can grow pretty much anything,” Rea says. “Queen Creek is the new blue zone and we have the tourists.”

Rea, the founder of the Queen Creek Olive Mill, started his farm in 1997 for the opportunity to get back to his Italian roots. He left his automotive business in Michigan, and started a new life with his wife, three children and another one on the way. /// “‘Agriturismo’ was everywhere in Italy,” Rea says. “We wanted to bring that same feeling here.” /// He now hosts a variety of themed weekends such as the “Garlic Festival in the Grove” and “I Love Canada.” /// “You always have to be fresh,” Rea says. “So every year we change. We offer new tours, products and additions. Every year people continue to come back.” /// The trio offers a true authentic experience of farm-to-table, or even

blossom to bottle. They often host classes and chef demonstrations with food collaboration from all three farms. Guests can prepare pasta from scratch, they can get their hands dirty by adding fresh vegetables they picked themselves, and they can top it all off with olive oil in a array of flavors. It’s a food bloggers heaven. /// “The whole destination thing is what makes us successful,” Schnepf says. “Guests want to prepare their own food, they want to ride the choo-choo train – they want the experience.” /// Not only do the three work together to provide new and exciting products year after year, but they also integrate with other restaurants, brewers and distillers all over the state. 33

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Along with their shared passion for food, all three are committed to sustainability and teaching youth where their food comes from. Their educational tours teach visitors about which foods grow in Arizona, so that they have the tools to be selfsustainable if they desire. /// “A lot of older people grew up like this, so it’s very nostalgic for them and has true meaning,” Schnepf says. “They really have a wonderful experience and they love to bring their kids and grandkids out because they’re urban and have no clue.” /// Schnepf Farms hosts over 25,000 school kids in tours a year, and also offer traditional tours where adults have the opportunity to get to know their farmer. /// In addition, the farms are working to teach their guests about water conservation and energy efficiency such as the use of effluent landscaping and drip irrigation. They also use 100 percent earthwise energy with the Salt River Project (SRP). /// “We pay a premium for that, but we feel it’s an important message we can send to the public that the farm is green in many ways,” Schnepf says. /// Lastly, they are committed to using solar power as their main energy producer. /// “It’s not always initially the most economical thing to do, but it’s the right thing to do,” Sossaman says. “Someone needs to step up and do this, it’s part of the bigger picture and it will pay off down the road.”

The three boast that the town encompasses vast opportunities for developers, especially for lodging accommodations. Their goal is for Queen Creek to become a destination where families spend their whole lives. /// “Diaper to diaper,” Rea jokes. /// “A lot of other people around the country want to do agritourism but they can’t because their local jurisdiction does not approve of it,” Schnepf says. “We have a community that has embraced what we bring to the table. It’s exciting to feel like you’re supported from the community for what you do.”

mayor ’ s corner M AY O R G A I L B A R N E Y Gail Barney was appointed to fill a vacancy on the Town Council in January 2002 and was elected Mayor in June 2010 and again in November 2014. He served on the Planning & Zoning Commission from 1998 to 2002. A lifelong Queen Creek resident, to this day you can find him operating his family farm in the community.

“Every business that opens its doors out here says they should have come out here earlier.”

•

“I’ve lived in Queen Creek since 1948 so I’ve seen a lot of growth over the years. We have some great elected officials who are planning for Queen Creek’s growth in a way that some of the other cities haven’t.”

•

“Our main initiative right now has been our infrastructure, because we have a railroad track that bisects the town, and the airport, which is an economic driver for us, but we need roads connecting to it.”

•

“We’re balancing how to build more roads so more people can come here, without inconveniencing the taxpayers too much.”

REASONS TO CHOOSE QC: Business Climate & Regulations With CFO/Assistant Town Manager of Queen Creek Patrick Flynn as a main mentor and friend, Chris Anaradian joined the “QC train” as its Development Services Director in an effort to prepare the town for a new wave of investment and growth. /// Many recognize him as the former Community Development Director and Development Services Manager for the City of Tempe because Anaradian and his team had tackled the challenge of driving infill growth and reinvestment to Arizona’s first “landlocked” community. In fact, during his initial five years there, he managed the 220-acre Tempe Town Lake and 500-acre Rio Salado Project. /// Perhaps even more famously known as “The Regulator” of the Town of Queen Creek, Anaradian insists he has actually implemented looser “red tape” to promote for a business climate with an improved reputation. /// “There’s a lot of reformations that we’ve made over the past four years. We’ve updated the design development code, building codes and are improving the general plan (which is a major initiative because we’re bringing it to the voters next year),” he says. “We’ve been working on improving documents, policies, processes and technology significantly, so the data collection system is modernized. Our ability to prevent errors before they happen and cost people time and money has been greatly enhanced.” /// When a town goes from being considered small to now medium, as in the case of Queen Creek, it’s inevitable that there will be some growing pains. The regulation department is often the last and slowest to adapt, but not this time. It has already taken the zoning categories down to seven, and 500+ pages of regulations down about 200 pages. /// “We’ve hired many since the Recession; however, in the development department specifically, we’ve eliminated 50 positions and brought back 12 – but we’ve hired all ‘A students’ so they are more efficient and we don’t need as many,” Anaradian says. “It is the people that make it easier to undergo a new project and get permits passed, not the processes.”

Phoenix-Mesa Gateway Airport

Eco-Friendly Utilities

If you didn’t already know, just north of Queen Creek, the Phoenix-Mesa Gateway Airport in Mesa actually used to be an air force base. In fact, it is one of the most successful U.S. Air Force base conversions in the nation and offers aerospace companies a dynamic business location. Back in 2006, the airport had no commercial airlines – but a decade later, especially with the addition of Allegiant Airlines, the number of passengers was a whopping 1.4 million per year! This contributes to the growth of its surrounding cities significantly because the travelers likely stay for multiple nights and, of course, need hotels to sleep in and places to eat. Gateway Airport predicts a 3%-5% increase in passengers per year. /// “This projection is rather bullish because most airports are either flat lining or seeing a reduction in passengers,” says Shea Joachim, Business Development Director, Phoenix-Mesa Gateway Airport. /// Phoenix-Mesa Gateway Airport is already establishing itself as an internationally recognized aerospace center as it is home to more than 30 aerospace businesses including Cessna, Embraer, Able Engineering and International Air Response.

Paul Gardner, Utilities Director for Queen Creek, plans on attracting new development by making the town more aesthetically pleasing and eco-friendly. His team plans on extending Queen Creek’s current multi-use trail to a 12-mile loop throughout the town. In addition, he plans to work with developers to establish several lakes throughout. /// “We send nearly two million gallons a day to a sewer plant and by the time it comes out it’s almost drinking water quality and we have to move that water every day and do something with it as we’re required by law,” Gardner says. /// The first lake will be six acres and located at the West Park site, a 30-acre park currently under development. The lakes will be ideal for landowners and future developers because they act as a reservoir and can then be used on nearby flora at a drastically reduced cost. /// “If you have lakes in the desert, you have a different quality of life in the communities, all of a sudden you have businesses and restaurants wanting to be next to one,” Gardner says.

CREEK

Queen

Arizona State University Polytechnic Campus “The ASU Poly Campus, which of course is home to thousands of science and engineering students, is a substantial piece of the puzzle because high-tech employers are looking for the highly educated workforce and they will find that here in the ‘Silicon Desert.’”

— MARK STAPP, Executive Director

MRED/Fred E. Taylor Professor in Real Estate, ASU

QC DISTRICT (Phoenix Commercial Advisors)

A Note From the Economic Director “The town is very committed to investing and reinvesting in itself,” says Doreen Cott, Economic Development Director, Town of Queen Creek. /// The town has a highly educated population with high median incomes, which is driving investment in businesses and restaurants. It is an area that is ready for employment expansion. /// “Queen Creek has a variety of programs to help nurture and grow small businesses, such as the facade improvement program.” Businesses in the Town Center can apply for this program if they want to update their exterior. If approved, the town will match their investment for up to $20,000.”

Picking up a lot of speed already is the QC District located across the street from Queen Creek Marketplace at Ellsworth Loop Road and Rittenhouse Road. The 20-acre development by Thompson Thrift, leased by Phoenix Commercial Advisors, is also strategically placed where the median household income within a three-mile radius is over $80,000 annually. Plotted to be in the underserved market for retail and entertainment type users, yet the projected total amount that households in that three-mile radius will spend is about $214,000,000 per year. /// The QC District has been leased and includes well-known retailers such as Sprouts Farmer’s Market, HomeGoods, Red Robin, Cafe Rio, Orange Theory Fitness and more.

QC CROSSING Queen Creek Crossing is a proposed 330,000-SF regional retail shopping center that will feature an array of national and regional retailers with shops, fast-casual dining cafés, sit-down restaurants and a mixed-use component that is intended to provide a unique amenity and venue package to the community. It’s the latest project by Accelerated Development Services in a joint venture partnership with the Wadsworth Development Group. /// The new SR-24 extension has bolstered additional traffic down Ellsworth Road into the town with significant increases in traffic volumes that continue down into San Tan Valley. /// This new 40-acre retail project will be the northern gateway into Queen Creek adding a vibrant, new shopping center experience to this rural, yet up-and-coming urban community. The first phase is set to open in early to mid-2018,” says Trey Eakin, SVP, Accelerated Development Services.

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Everyone who works in the Commercial Real Estate field in the Greater Phoenix Metropolitan area has heard of developer/redeveloper and philanthropist, Michael Pollack. His signature black and yellow signs are prominently displayed on his properties throughout Arizona, California and Nevada.

L-R: Patrick Cassidy, Michael Pollack & James DuMars

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ollack began his real estate career in 1973 with $1,000 and values he inherited from his father: loyalty, integrity and a strong work ethic that he still brings to every relationship and every business deal. His loyalty has helped to shape his relationships with business partners and devoted friends, Patrick Cassidy and James DuMars.

Patrick Cassidy & Michael Pollack in San Jose, California, 1976

PA T R I C K CA S S I D Y In 1976, The Cassidy Company had a creative presence in San Jose, Calif., specializing in marketing, public relations, article writing and graphic design. One day Cassidy drove up to an under-construction apartment complex and approached the construction supervisor, Pollack, to inquire about marketing needs for the property. Their initial meeting lasted only a short time with the promise of a potential future working relationship that could benefit both men. Cassidy later returned with a proposal and Pollack hired him on the spot. /// “He had a proposal that was very well put together,” Pollack says. “It was organized, concise and very creative. He earned his spot on my team.” /// The rest was history as Cassidy has worked as Pollack’s marketing, public relations and leasing director for over 40 years, and now as the Designated Broker for Pollack Investments. /// Pollack has built an empire over the years and his name has become synonymous with income-producing property with the help of Cassidy’s marketing expertise. /// “If you find something you enjoy, you look forward to each new day.” Pollack says. “Retirement is not really an option for me by choice.” /// Although the pace of their professional careers has slowed down, they are still intently focused on their work and their drive to positively impact communities and

revitalize neighborhoods. /// “We go into a project thinking we’re going to make a positive difference in a community,” Pollack says. “If we can’t accomplish that, I want nothing to do with the property. There was a time when I would take on a project because I wanted to demonstrate to myself and others my ability to make a difference in any property I was involved in, but today my goal is to make a positive difference in the communities I work in by bringing pride back into neighborhoods.” /// Cassidy now takes his love for helping others one step further, and volunteers as a missionary around the globe including Europe, Caribbean, South America and Russia. /// “I work with some of the world’s most venerable and courageous people,” Cassidy says. “They have nothing, yet they have everything.”

“Opportunity is nothing more than preparation. Because if you are prepared and the opportunity presents itself, you can take it.” — Michael A. Pollack

J A M E S D u MA R S DuMars also describes Pollack as a man who genuinely cares about his business and personal relationships. “No matter how big or how small the tenant is, everyone is treated with the same professional respect.” /// DuMars started at NorthMarq in 1994 and soon after he began seeking relationships for his lenders he immediately thought about Pollack. His professional reputation preceded him as a man who others thought of very highly. After connecting with Pollack’s finance person, he was advised that they could not do business at that time, for Pollack was very loyal to his current business relationships. /// “I was okay with that” DuMars says. “But I told them that I’m there for them, whether it was tomorrow, or a few years from now.” /// A week later Pollack actually got the chance to take him up on that offer and requested he do a $250,000 loan as his current loan services were not comfortable with the small size of the transaction. /// “Brokers tend to forget that every deal is important,” Pollack says. “There is no such thing as a deal too small.” /// DuMars happily obliged and now 20 years later, and more than 100 transactions later, Pollack has the utmost trust for his judgement and word. /// “Michael is a very loyal man, you can’t take a relationship like that for granted.” DuMars says. “We have a wonderful business relationship built on honesty and respect. 39

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T HRO U G H TH I C K & THI N Their strong work ethic has allowed them to push through even during the harshest times of the “Great Recession.” /// “It wasn’t a recession, I don’t care what anybody says,” Pollack says. “If you were based in Phoenix from 2009 to 2012 and you were involved with any type of income-producing property, we did not go through a recession, we went through the worst kind of absolute, unequivocal depression.” /// Reflecting on the past, he saw the high interest rates of 1979 with 17 percent mortgage rates, he persevered through the gruesome RTC days, but nothing came close to the hard-hitting times of the recession. /// In the end, Pollack stood with only a handful of real estate owners who could honestly say they never paid late on a single loan or asked for any special considerations from lenders. /// “The one thing about James that makes him different is that he has never promised he could get a loan and not delivered. If he committed to a rate, he has never adjusted it,” Pollack says.

Pollack’s realist attitude and flawless financial judgement, Cassidy’s creative marketing approach and DuMar’s ability to make the borrower/lender relationship as seamless as possible, has helped to make Michael A. Pollack Real Estate Investments one of the most recognized and respected CRE companies in the Valley.

“I was told once many years ago that it’s better to be lucky than to be smart, but I can promise you it’s better to be both,” Pollack says. “A smart man knows the harder you work, the luckier you get.” 40 © Copyright 2017 by MP Media, LLC

J A M E S D U M A R S O F N O R T H M A R Q C A P I TA L P H O E N I X S I N C E R E LY T H A N K S

Michael A. Pollack We are honored you have entrusted us with your financing needs for the past 20 years!

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An Insider’s Look:

of Desert Ridge Marketplace

DESERT RIDGE MARKETPLACE’S $15 million renovation will be its first structural redesign since its opening in 2001, and ultimately reflects the growing population that the shopping destination was first intended for:

According to David Larcher of Vestar, the company mastermind behind many of Arizona’s popular shopping centers, including this one and Tempe Marketplace, it’s only natural that renovations should track along with that original client base. And as millennials grow into their 20s and 30s, the features will correspondingly speak to the adult need for spaces separate from the kids, as well as a date night destination that will always have something exciting to experience.

“2016 is the 15-year mark of the project opening, & we feel it is time for a refresh,” Larcher says.

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Structural changes to the 1.2 million square feet of retail space will incorporate more natural elements, including wood, desert tone colors, water features, fireplaces and more green spaces. All of this will be done in an eco-friendly manner, the most obvious of which being the green spaces built with artificial turf instead of grass, which will require no water and will last for between 10 to 15 years, according to Larcher.

/// The design update will also address a common complaint among Arizonans: the heat. To combat the heat that often deters shoppers from visiting an outdoor space during those three-digit degree temperatures, Larcher says their plans include planting more palm trees to offer more natural spots of shade, and of course, installing misters as many other customer-oriented developments essentially see as being a requirement in the summer. /// In addition to structural changes, the refresh will bring in new faces to the retail and restaurant offerings at the marketplace. Want a hint? Retailers offering women’s ready-to-wear will be among the new offerings, along with more local boutiques, specialty retailers, chefdriven restaurant concepts, and health and wellness spots.

/// Ultimately, the refresh will bring in the feeling of a fun nightlife, in addition to the fun daytime activities already offered at the space. The retail and architectural changes are all aimed at cultivating a more elegant, sophisticated atmosphere where adults can enjoy an evening in an “adult space” separate from the kids. /// As part of preparation for the project, the Vestar team did extensive market research and resident surveys to understand what locals and Desert Ridge regulars wanted out of the space and what would make the most sense to draw in new visitors. ///

”Some of the feedback we received was that people wanted more shade elements, more green areas, more areas to relax and hang out, and be separated from where the kids are,” Larcher adds. /// However, not to fear, there is no segregation when it comes to enjoying the live music show that the marketplace will continue to host multiple evenings per week. Additionally,

around 300 free events per year will be implemented to attract more crowds. Because of its high demand, Vestar is upgrading the central performance stage and installing the latest technology in LED video screens. /// The ongoing schedule of programming gives people a reason to stop by, and the renovations from Vestar will give visitors a real reason to

stay awhile and enjoy the scenery. Whether it’s to see a movie or have a cup of coffee or go on a shopping spree, the updated space will feature a welcoming, modern environment. /// Vestar expects the work to complete in June, and invites local area residents to come out and enjoy the refreshed Desert Ridge Marketplace.

WATCH

Executive-to-

Today, Craig Esslinger is a successful Senior Project Manager at Wadsworth Development Group, yet he did not take the conventional path to his career. His success has been fueled by discipline and strong work ethic developed at a young age.

Following in his father’s footsteps, Esslinger went into the U.S. Marine Corps after graduating from the Air Force Academy. His responsibilities increased quickly, and he became second in command of a 250 man unit in the Gulf War during the Desert Storm Operation. /// “I almost left the Marine Corps after Desert Storm but was offered a position in Washington D.C. where I escorted foreign dignitaries and other VIPs for Dick Cheney, Colin Powell and for the Commandant of the Marine Corps.” /// Esslinger

felt gratified for his experience and service, but he wanted to take his family and career in a direction that offered security and new challenges. /// His wife, Colleen, had roots in Phoenix. They decided to settle here, start a new life, and Craig pursued a career in commercial real estate. /// “I wanted a career where I could apply what I learned in the Marines (hard work, team work and mission focus) and where I could be rewarded for what I accomplished,” he says.

photo captions 44

left :

Craig in Oman ;

center :

Craig near DMZ in South Korea ;

right :

WATCH

Executive-to-

“I wanted a career where I could apply what I learned in the Marines (hard work, team work & mission focus) & where I could be rewarded for what I accomplished.”

NEW REWARDS Esslinger was groomed in the business through the help of friends and mentors. One in particular, Bill Graham, helped him get acquainted with leaders in the field, and it wasn’t long before he got recruited to Cushman & Wakefield. /// “While I was a broker, I met some prominent real estate executives that had also been Marines,” he says. “One of them was Lee Hanley from Vestar. Between Vestar and Opus [Group], I worked with some of the sharpest real estate people in the business.”

During his time with Vestar, his first project was Desert Ridge Marketplace where he assisted David Larcher and he feels fortunate to look back at the experience that symbolizes strong team work and sound execution. Even when he visits the location today, he still feels in awe of its transformation.

“It was 15 years ago, but when I visit the project today, something comes over me. Just to see it become what it is – it’s a good feeling.”

Craig with children in Bangladesh

This year, Desert Ridge is once again undergoing a $15 million renovation with Vestar.

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Executive-to-

WA D S WO R T H D E V E L O P M E N T G R O U P In 2016, Esslinger proudly joined Wadsworth Development Group, which specializes in retail developments, along with office, industrial and hospitality. The company was established 20 years ago and has evolved into a very successful, regional real estate firm that operates in nine states.

“It’s a family business,” he says. “The two leaders, Kip Wadsworth and Nate Ballard, are both very talented. They’ve built a very strong team that can execute.” /// Esslinger raves that the company will be a front-runner in retail and commercial development in the coming months and years. It recently repositioned a former “Just for Feet” building in Glendale and those tenants are now open. In addition, the company opened the first phase of a 110,000-square-foot retail center in Queen Creek with Goodwill. /// Other projects that Wadsworth is developing in Arizona include a 20-acre grocery anchored project in Sahuarita, Ariz. as well as a 40-acre power center in the Southeast Valley of Metro Phoenix. /// “We’re fortunate to be working with Accelerated Development Services as our development partner on these two projects,” he says.

After serving in the Marines, Esslinger moved to Phoenix and pursued a career in commercial real estate.

79 Years of Experience & Success

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40th St. & Indian School Rd. – Neighborhood Retail Shops Silverstone Marketplace – Sprouts Anchored

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Parker – Build to Suit, Retail Development Littleton – Mixed Use, Retail, Hotel Broomfield – Mixed Use, Retail, Hotel

IDAHO

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LOUISIANA

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Project-to-

THE WATERMARK A decade in the making, Tempe’s first vertically integrated mixed-use development, “The Watermark | Tempe,” is poised to stamp its signature on the Greater Phoenix skyline as construction begins in the second quarter of 2017.

“The whole project was benchmarked to be one of the best in the Valley in terms of design, finishes and amenities,” says David Norouzi, President of Fenix Development, a Los Angeles-based real estate investment and development company. “Our goal was to break all of the barriers and create something unique, special and highend.” /// Situated along the north bank of Tempe Town Lake and just south of the 202 Freeway, Watermark boasts a 1.9 million-square-foot robust offering that at build-out includes 600,000 SF of Premium Class A office space, 43,000 SF of restaurant and boutique retail service space, 360 multifamily units, and a 170-room business-class hotel. Developed in multiple phases, Phase I of Watermark includes a 250,000 SF office tower, 43,000 SF of restaurant and retail space, the multifamily units and hotel. Future phases include a second 360,000SF office tower and an additional 20,000 SF of restaurant and retail space. /// “This is really an urban infill site,” Norouzi says. “Phoenix is used to horizontal sprawl, and what makes this project unique is its vertical positioning creates a blended and cohesive mixed-use.” © Copyright 2017 by MP Media, LLC

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Project-to-

The stunning upcoming development will add to an already dazzling mix of construction along Tempe Town Lake, most notably the massive State Farm campus offices. “We became involved in the property in 2007 and began the master plan in 2015. We were patient and saw everything that was happening on the south side of the lake, which inspired and motivated us to raise the bar,” Norouzi says. “My vision for Watermark Tempe is a destination landmark project with stunning design in a vibrant location for people to work, live and play on the banks of Tempe Town Lake.” /// Stunning architectural design may be the most intriguing component of the Watermark development. Phase I of Watermark breaks ground this year and is expected to deliver in fall of 2018. The first phase of development includes two buildings: a 15-story building with premium Class A office space that starts on the eighthfloor and extending to the penthouse space on the 15th floor. The office space sits on top of a parking structure that includes two levels of below grade executive parking with express elevators and seven floors of garage parking. Full height floor-to-ceiling glass around the entire building will allow spectacular views of the Valley. The street level of the office building features ±18,250 SF floor restaurant and retail space that overlooks the Watermark plaza and splash pad water feature. The second building includes an additional seven level parking structure with an additional ±25,565 SF of restaurant and retail space with street level frontage along Watermark’s main driveway entrance and prominent exposure facing Scottsdale Road. /// “Our intent with the “stacked” parking arrangement with the office component sitting above was to allow office users to enjoy spectacular views of Tempe Town Lake from every level of the office building,” explains Norouzi.

Future tenants will enjoy extraordinary views of Tempe Town Lake from the eighth story patio.

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Project-to-

Level eight is where the office complex begins, and a powerful sense of arrival is achieved with an impressive Sky Lobby that houses an array of tenant amenities such as the Sky Game Room, Sky Fitness Center, Sky Lounge, Sky Conference Center and Sky Terrace. Moving upwards to the level 15-penthouse floor, tenants will find full floor to ceiling wrap around glass and 360-degree unobstructed views. Each floor plate, nine through 15, will have approximately 31,000 SF of office capacity. /// Another exciting component, a 90-foot Skywalk connecting the north parking structure to the eighth-floor Sky Lobby of the office building, stands 80 feet above the ground floor retail and parking. /// “There is no other project in Arizona with that feature,” adds Sean Spellman of Cushman & Wakefield, who is part of a five-member team handling the office leasing for Fenix. “The Skywalk Bridge will be lit at night and display public art. Fenix wanted guests to experience an ‘Instagram’ type of moment when crossing.”

MI XE D-US E PAN OPL Y While the office may hold the largest footprint in the Watermark development, the retail piece is critical to Norouzi. “Retail is a smaller component relative to the overall square footage, but is the heart and soul of Watermark. The splash pad in the center plaza of the development is a focal point and we anticipate a place for people to gather, and I believe the retail component will really attract and

benefit the community the most.” /// To that note, Brent Mallonee of Cushman & Wakefield, who is leading the retail leasing, sees a wealth of potential for premier tenants at the site. “The level of design, detail and quality that Fenix has put into this project really sets it apart from anything else Valley-wide,” he says. “This provides us an opportunity to attract a level of quality of restaurateurs and retailers that Tempe has not seen yet, equivalent to those found in the Scottsdale, Kierland or Arcadia areas.” /// As to the hospitality portion of the mixed-use giant, Norouzi is taking a calculated approach to the decision on a future partner. “We

have had a number of offers from national players,” he says. “We have been selective in finding a developer who shares our vision in terms of the brand that we want on the site, and we are confident that we will land with someone who complements the overall mixed-use project atmosphere. We used a similar approach in securing the right developer for the multifamily portion. We are fortunate to have found Trinsic, who will be building an 85’ tall building with luxurious penthouses facing the lake.” /// The multifamily component is part of the first phase of the development, and will include 360 units of luxurious living quarters.

WATERMARK PART II Future phases of the development are in process with no definitive timeline set on delivery to market. /// “The site will be unmatched and unparalleled, with ease of access and freeway visibility,” Norouzi says. /// With a buzz swirling around the development, Watermark has the potential to be the next major landscape-altering project along the lake, to be talked about for decades to come. /// “This is much more of a regional destination than just a Tempe one,” Spellman says. “Its proximity to the 101 and 202 freeways makes the site a most attractive hub.” /// As for Norouzi, the Watermark build may very well be his company’s crowning achievement. “This is a legacy project for David and his family” Spellman adds. “And this project will stand out because of the pride of design by Fenix Development.” 50 © Copyright 2017 by MP Media, LLC

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Eric Wichterman

Chris Toci

TOP PRODUCERS

Mike Coover

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cushmanwakefield.com 2555 East Camelback Road, Suite 400 Phoenix, Arizona 85016 | ph:+1 602 954 9000

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Project

SPOTLIGHT

The Eisenberg Family, father Craig and son Jason, have kept their development, leasing and management pipeline highly active since their last appearance in Commercial Executive Magazine in early 2015. The portfolio, which encompasses projects and operations across seven states is built on strong fundamentals and a commitment to a client-centric approach.

Project

SPOTLIGHT

W H AT ’ S T H E A P P R O A C H ? Craig, President and Designated Broker, and Jason, Vice President of Development and Acquisitions, have built an impressive footprint geographically. “Typically we do grocery anchored shopping centers, and we build toward serviceoriented users such as restaurants, doctors, nail salons, medical and others,” Craig says. /// This methodology has allowed the firm to largely mitigate the impact of the e-commerce trend that is drastically changing the face of product retail. “These are not the same retail centers from 10 years ago,” Jason says. “Back then, you could get away with building 50,000 square feet of shops, but today 15,000 to 20,000 SF is the sweet spot.” /// The mentality to focus on grocery and service has served the company well, as their projects seek to capture customers who still enjoy a hands-on purchasing transaction. /// “Most folks still like to shop for their groceries,” Craig says. “And people will always want to have access to options in their shopping and entertainment experience,” Jason adds.

P R OJ E C T S O N T H E R A DA R While the push-and-pull over brick-and-mortar and e-commerce continues, the big box retailers are trying to figure out the right model and composition. Well, Eisenberg Companies has perfected their niche with a significant project in Idaho that is anchored by a Fred Meyer grocery store. Also, they built a Sprouts-anchored center at Silverstone Marketplace last year in North Scottsdale which they sold for a record setting number per SF. /// Additional opportunities in Louisiana, Colorado and Idaho following the company’s familiar pattern are in the works. “We have several grocery anchored built to suit projects in Louisiana and completing our final phase in Idaho,” Craig says. “In Louisiana we have been able to forge a great relationship with a local grocery chain posed for growth,” Jason adds. /// We’ll just have to wait and see!

A company with more than 70 years of success, Eisenberg Company, grew out of the Leo Eisenberg & Company, which Craig’s father Leo began in 1946 and built into a national brand that capitalizes on retail shopping

B AC K H O M E Not ones to forego opportunities in their own backyard, the Eisenbergs are tackling some ambitious projects in addition to their bold stroke at Silverstone, which was 100 percent leased when they sold the project in mid-2016. Perhaps one of the most talked-about developments near the Camelback Corridor now is at 40th Street and Indian School Road and it is presenting the firm with a chance to diversify its traditional offering. /// “The building is primarily restaurant-based specialty construction. We are creating a very unique experience and are using purposeful architecture and design to attract clientele,” Jason says of the retail center he is spearheading.

center development. Craig, who opened its Phoenix office in 1978, acquired the whole company in 1992 and never looked back.

Craig keeps a shelf in his office to reminisce on his father, Leo, & other memories. 53

Project

SPOTLIGHT

40 TH ST PROJECT: The highly talked-about retail center in the Biltmore/Arcadia neighborhood was completed in April. (PHOTO DATE: 3/21/17)

The approximately 61,000-SF site with a 14,000-SF structure just completed in April. The first wave of tenants includes: Even Stevens Sandwiches, Masterpiece Donuts & Coffee, Radi8 Yoga, and Tacos, Tequila, Whiskey. /// “People are going to enjoy the experience; it is going to be somewhere fun to go,” he says. The Arcadia neighborhood infill site will also be the future home to a Cold Beers & Cheeseburgers location. /// Some of the most exciting design elements are 12- by 14-foot reclaimed wood doors, 32-foot high ceilings, 14-foot glass windows, and the first-ever commercial retail use in Arizona of the roof material, CastleTop. /// “CastleTop is a unique material with kind of a blue snake scale look,” he says. “We are trying to create something that has never been done here.”

W H AT ’ S N E X T ? Another exciting venture in the Valley will be a refurbishment of the Gold Spot Building at 3rd Avenue and Roosevelt Street. “This is a historic building that will make for an interesting infill project,” Jason says. “There is a Lola Coffee and Pita Jungle there now and a vacancy space in the back part of the property, which we will repurpose for a great restaurant play. Of course we will keep the historic look and feel.” /// For the father and son duo, investments in the Phoenix market are strategic and well-planned. In the case of certain locales such as Gilbert Road and 7th Street, both highly popular now, the scenarios are not in line with their blueprint. /// “Those areas were underserved for so long and now it feels like we would be late to the party in an oversaturated market,” Craig says. /// Furthermore, the partners are focusing their efforts in the higher income areas of the valley and have a few projects on the horizon that they are not ready to divulge. /// “We are going to have a couple of very interesting local projects that we will be announcing over the next few months,” Jason says. /// If the next quarter century for Eisenberg Company are as successful as the first quarter century in Phoenix, the firm will only strengthen its brand as a development leader in Phoenix and their selected metropolitan areas. /// “We have a great development and leasing team in place with Scott Spier and Ryan Amato, which gives us the capacity pursue multiple opportunities is multiple markets,” Jason says. /// “We have opened up in several new markets and always try to be ahead of the cycle,” Craig says. 54 © Copyright 2017 by MP Media, LLC

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SELF-STORAGE The Principals of Wentworth Property Company (“Wentworth”) had 40 years of commercial real estate experience in Arizona when they purchased a former semi-conductor manufacturing plant in Scottsdale in 2015. Although the company had developed over 7 million square feet of commercial office and industrial space, they felt the best use for the former plant was a self-storage facility, something they had no experience with. But one of Wentworth’s Principals, Tim Chester, remembered one of his oldest and best friends knew the self-storage industry well: Dave King. After strategically advising Wentworth on how to most efficiently transform the Pima & Thomas project he was offered a job to head up their new self-storage division. /// Since joining the company in June of 2015, King and the Wentworth team have been working diligently to build their self-storage division through a mixture of existing acquisitions, new builds and conversions. The company closed on over $180 million of self-storage projects since mid2015 when the Wentworth self-storage division began. Currently Wentworth’s self-storage portfolio includes over 1.4 million net rentable square feet and they are either under contract or evaluating another 1 million square feet of projects nationwide. The Arizona portion of that portfolio includes 650,000 net rentable square feet with over 6,000 rentable units. /// “Arizona and Maricopa County is a unique market for self-storage,” King explained. “The majority of the existing product here is pre-2000, even pre-1990. The storage business nationwide saw very little product built between 2008 and 2014 and that was definitely the case in Arizona.” According to King there was some development in Arizona between 2000 and 2008 but it was very limited. “Companies that maintained through the recession and were ready to move when it ended realized Arizona was a great place to build Class A product because there was pent up demand.” /// Tenants are appreciative of the new, high quality self-storage properties. “It’s not uncommon for a new tenant in one of our properties to tell us that they didn’t know storage could look this good,” King says. “Having safe, clean and secure self-storage space has never been more important than it is today.” /// When taking on a value-add acquisition, the Wentworth self-storage team will purchase older storage properties that need capital improvements, such as property maintenance or a fresh coat of paint. They then invest heavily into marketing the improved property to the local community.

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WATCH

OUT WITH THE OLD… Conversely, the conversion and repurposing projects the Wentworth self-storage team has undertaken are seemingly both more interesting and more complex. Old buildings such as industrial or large retail spaces, like a Kmart building, are ideal targets to transform into modern self-storage properties. /// King explained, “We will buy the building and leave the shell but redo the inside to create storage units. Not only does the work go faster, but the location is often better.” /// Obviously, a former retail building is often situated in a retail-heavy area that experiences a lot of traffic. Additionally, because those types of stores often have a great deal of parking lot space, they can lease or sell off pads in the parking lot to retail uses to make the most of the space.

“We’re seeing more and more conversions of retail and industrial buildings to self-storage facilities.” King says. “Mid-sized boxes that are dark or struggling – we now know exactly what we can do with them.” Dave King leads the self-storage division of Wentworth Property Company.

IN WITH THE NEW… When considering a new build, however, King says they consider the density of population in the surrounding area. Markets with more people per household are high on the team’s radar screen. Perhaps unsurprisingly, when there are more residents per home, the need for storage is markedly greater, and this research helps them to identify the most receptive areas to new storage options. /// The hardest part of a new build, however, is the timing. From zoning, entitlement risks, to finally breaking ground, most of the current new-build projects are about five to six months behind

what the team’s preferred schedule would be. /// “We thought ground up development would move faster. Unfortunately, since construction costs are rising, we’re seeing ourselves having to prepare for a longer path to opening on a new development,” King says. /// The Wentworth Self-Storage divisions’ typical range for finished facilities is between 45K to 120K SF and they prefer to keep projects simple. The less moving parts, the better. The storage business is experiencing a lot of growth currently and King explained that they don’t want to start doing unnatural things to make

deals pencil. /// “Storage is definitely on the list of things people can live without; it’s definitely not recessionproof but it has shown resistance for sure,” he says.

“Historically it’s performed well through good and bad times. Any type of life event, good or bad, can be the catalyst for someone to need storage space.”

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WATCH

PROJECTS Today, the Wentworth Self-Storage team is working on a new build on 19th Avenue and Glendale Road in Phoenix, across the street from one of their other, older storage properties. In Tempe, King and his team have converted an old furniture showroom into a modern, climate controlled two-story storage facility that features approximately 700 units ranging from 5x5 to 20x40. They also recently opened a conversion on Frye Road in Chandler of about 85k NRSF. The newest project is Pima 101, 120,000-square-foot self-storage facility they are developing east of the Loop 101 Freeway and Pima Road. And even though it’s his line of work, King still enjoys the small pleasures of visiting his storage unit, something he now does with his wife every now and then, because it symbolizes an opportunity to get out of the house with their 2 and a half year old.

“There’s something cool about having all your excess items in a place away from the house,” King says.

“It’s fun to poke around, to visit your memories, and be able to store seasonal items like holiday decorations and camping gear that you don’t need access to on a daily basis,” King says. It’s that same idea that the Wentworth Self-Storage team believes keeps the demand for storage space on the rise.

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Perfect

PARTNERSHIPS

A key to the team’s success is building the organization out of dedicated professionals with complementary skill sets. Many business leaders tend to hire people with their same skill set, which short-changes the organization. Making a conscious effort to assemble diverse skill sets is a little more complex, but is a necessary process to build a best of class organization. /// Cheatham likens the team’s dynamic to organized sports: “If we interview people because we’re trying to fill a certain position, but they have skillsets that are not a fit, then we say ‘you are a talented player, but not a fit for what our team needs right now,’” Cheatham says. /// Cheatham and Pitts started together in the 1990s at CBRE and brought Arlia on at the recommendation of their former managing director, Mike Fitz-Gerald. /// That turned out to be a timely recommendation, though it took a process that included their performance coach for them to find out exactly how Arlia’s strengths could best be utilized. /// Now, nearly 20 years later, they have been able to instill an attitude of teamwork and family in the company and its employees. The team is so close, in fact, their relationship extends well beyond the business environment. You would regularly see the trio together at each other’s families’ graduations, weddings or funerals. /// “We clearly understand the importance of our relationship outside of the office and how to support each other in our personal lives as well,” Pitts says. 60 © Copyright 2017 by MP Media, LLC

Perfect

PARTNERSHIPS

SUPER POWERS

JACKS of ALL TRADES

In the office, Arlia is the backbone at Velocity Retail, working behind the scenes to make sure that client requests are handled. She’s also a jack-of-all-trades type, who can fill in for a variety of capacities if the company is short-handed. /// “Sometimes I feel like I am on a trivia show. Whatever random question no one else can answer, I usually am the one to know,” she laughs. /// Her dedication to being the “air-traffic controller” allows Cheatham and Pitts to focus on serving current clients and executing deals, and on bringing in new clients. Cheatham, again alluding to sports, defines his role as the closing pitcher on a baseball team while Pitts is the starter. /// That means Pitts takes care of a lot of the early work, including cold-calling, initial client introductions, and coordinating site selection. He brings a unique skill to those tasks in that he has an almost photographic memory when it comes to remembering significant street corners in many of the cities where Velocity Retail operates. /// Arlia describes it as Pitts’ “super power.” /// Cheatham then takes the handoff from his partner, negotiates and closes deals, and takes care of back-end client issues. He is also the mentor in the group, who has imparted invaluable knowledge onto Pitts and Arlia as well as a host of other professionals working at Velocity Retail and throughout the industry. /// “I think he is one of the best negotiators I have ever seen,” Arlia says. “To the point where there is a formula to getting a deal done in order to be most advantageous for the client. I have learned so much from sitting in the room and watching these negotiations produce results.”

Of course, the team members’ roles are not as cut and dried as the sports analogies might make them seem. There is plenty of back and forth in which each member contributes at different stages of both a deal and company operations. /// But even that back and forth is a product of the teamwork and chemistry the leadership team has emphasized for two decades. Everyone at Velocity Retail is open to operating in multiple roles rather than pigeonholing themselves into one box. /// “When you’re in a small company, you have to be worker, not just a delegator. All three of us have always been aligned with an intense work ethic,” Cheatham says. /// Though there might be challenges in any business, the trio has continued to innovate with new best practices and create solutions where others might have stopped short.

“For our entire careers, retail has constantly been evolving and reinventing itself. Our passion is retail. It’s fun, it’s exciting and it’s always changing. But no matter how you achieve success, it is never done alone,” Cheatham says.

Phoenix

hoenix Commercial Advisors, a brokerage company specializing in retail real estate, was formed in 1994 by Dan Gardiner along with a partner after he left CB Richard Ellis after 10 years. The company’s began to expand when Greg Laing, also from CB Richard Ellis, joined as a partner, and it became a part of Chainlinks Network, the largest retail brokers network in the country. Today, PCA is a market leader in tenant representation, project leasing and sales. With its total staff of 23, including 15 brokers who bring 250+ years of specialty retail experience, the company has grown to represent over 90 retailers such as Sprouts Farmers Market, TJ Maxx, Costco, Bed, Bath & Beyond, Chick-fil-A and Starbucks. PCA quickly moved into the ground up leasing of 11 power centers of over 400,000 square feet between 2000 and 2008, representing some of the top retail developers in the West. Today, it represents over 12 million SF of retail.

With fewer ground up retail projects built over the last 10 years, PCA adapted to the changing market and has continued developing technology and information system that cater to tenants’ and landlord needs alike now more than ever before. /// PCA also moved into the sale of improved shopping centers with Chad Tiedeman heading the department. The team sold over 35 retail properties last year with a value of over $260 million. /// Today, PCA has approximately 15 new projects in various stages of development. One of the most notable is the retail portion of the planned mixed-use project in Tempe that is a joint venture between Arizona State University and Catellus: ASU Athletic Facilities District.

Dan Gardiner & former partner create PCA

Broker first In & Out Burger in AZ

Starbucks is represented by PCA in its first Arizona store

Greg Laing becomes a partner. PCA Joins ChainLinks Retail Advisors

Zach Pace joins the PCA & goes on to become a market leader

Torrey Briegel & Lance Umble join PCA

Dan Gardiner becomes Chairman of Chaink Links

First of 11 Power Centers brokered between 2001-07 Represents Sprouts first store opening

Reps Chick-fil-A’s 1st AZ location & 10 Kohl’s that opened in 1 day Land sold for Power Center with Kitchell at 99th St. & McDowell Rd

PCA brokers land + 1M SF in Yuma Palms Center development

Cameron Warren & Teale Bloom join PCA Hired Chad Tiedeman & goes on to head a top retail team

“PCA has been a great fit for me because of its culture, comradery, openness and willingness to share market trends with each other. It’s been a smooth transition and a good decision to bring my skill set of more mixed-use urban retail to this retail-focused company.”

“People do business with those they like & trust. Understanding our clients’ needs to make informed decisions, we strive to present the very best information by people they like & trust.” — GREG LAING, Principal

Represents developer in landing Bass Pro store in Mesa Phil Dagostini joins PCA to head research

Market peaks and begins fall Chris Schmitt starts at PCA to head GIS Number of deals at PCA fall 50% from 2006

“I have had leaders of other retail brokerage companies ask us how we do it. It’s our people. Our team is very close-knit, in part because of our deliberate assessment process of hiring with a focus on integrity and team players. Over half our salespeople have a tenure of 12+ years.”

– COURTNEY AUTHER VAN LOO, Associate Vice President, who joined on Feb. 1

— DAN GARDINER, Principal

INVESTMENT TRENDS:

LEASING TRENDS:

“There’s a risk-off tone with institutional buyers right now — they are focused on higher quality while the private client buyers are trending toward higher yield investments mainly because of the anticipation of higher interest rates.”

“Our adaption on the leasing side is being driven by tenant demand, the grocery-anchored, service-provider properties and restaurants. It’s also been a combination of being involved in quality third-party listings and focusing on quality development brokerage.”

– Chad Tiedeman, Senior Managing Director

– Zach Pace, Senior Vice President

Former CB broker & restaurant developer, Steven Underwood, joins Investment Team

Greg Laing voted on Board of Directors of Chainlinks Retail Advisors John Schweikert joins PCA

Danny Gardiner joins PCA investment team

“I learned the real estate market from Dan in Phoenix back in 1986 (during the downturn), so I knew what to expect when I came back in 2009 to add my senior experience to the Investment Team here. Keeping in touch with Dan after my years at CB turned out to be a smart move!” — STEVEN UNDERWOOD, Senior Managing Director, former restaurant developer who joined the team in 2009

Investment Team tops $260M in total investment sales PCA brokers 200th Starbucks deal

Hired Nick DeDona, Courtney Author Van Loo & Drew Butler With a record 2016, PCA represented more new retail deals between 2000-2016 than any retail brokerage division in Arizona

Executive

SPOTLIGHT

RAR Hospitality Developer/Owner of several Hilton, Marriott and InterContinental (IHC) hotels as well as many other branded and independent hotels across North America, Robert A. Rauch has become a prime example of anything is possible with hard work and perseverance.

ounder and CEO of RAR Hospitality, Rauch’s name has arguably become as well-known as the hotel properties he develops or operates. However, he sure did not start at the top. Rauch first dipped into the hospitality industry when he got a job as a banquet dishwasher in 1974 at a Ramada Inn in Champaign, IL. /// Through unbreakable ambition and desire to aim higher, he climbed the ladder from Manager Trainee, Sales Manager, Food and Beverage Manager, and then eventually promoted to General Manager within a span of just five years, making him the youngest GM for Ramada in the country at the time.

“I admit that in the early years of my career I was consumed with work — I have always loved serving others and hospitality is the best way to do it while earning a living,” Rauch says. 64 © Copyright 2017 by MP Media, LLC

Executive

SPOTLIGHT

Founder and CEO of RAR Hospitality, Rauch’s name has arguably become as well-known as the hotel properties he develops or operates. However, he sure did not start at the top. Rauch first dipped into the hospitality industry when he got a job as a banquet dishwasher in 1974 at a Ramada Inn in Champaign, IL. /// Through unbreakable ambition and desire to aim higher, he climbed the ladder from Manager Trainee, Sales Manager, Food and Beverage Manager, and then eventually promoted to General Manager within a span of just five years, making him the youngest GM for Ramada in the country at the time. /// “I admit that in the early years of my career I was consumed with work — I have always loved serving others and hospitality is the best way to do it while earning a living,” Rauch says.

The years following the start of his young promising career consisted of a role as Manager of Restaurants at Hyatt Regency Phoenix, gaining the late Bert Springer as a mentor, and then opening a 228-suite Granada Royale Hometel for London-based developers on Oct. 1, 1981. Two years later, he had it converted to an Embassy Suites, and it stands today as Holiday Inn & Suites Phoenix Airport North at 44th Street and McDowell Road in Phoenix. /// By 1984, Rauch’s professional life once again elevated when he went on to become Director of Education & Training for Best Western International, Inc. and trained owners and GMs of over 2,000 North

American hotels. /// Zoning in more on the Valley of the Sun, he found himself back here as opening GM of Hilton Pavilion in Mesa where he also served as Founding Chairman of the Mesa Convention & Visitors Bureau and President of the local hotel association, then called Valley Innkeepers Association. /// Just a few years later, Rauch held another management position but at Deloitte & Touché, Hospitality Practice in Phoenix, and he broadened the scope of his work by adding lead consultant, feasibility study writer, experienced researcher, lead diagnostic review expert, and economic forecaster to his résumé.

What was once opened by Bob as the Granada Royale Hometel in 1981, stands today as Holiday Inn & Suites Phoenix Airport North at 44th Street & McDowell Road.

BRANCHING OUT With his skills and his confidence boosted, Rauch went on to form his own firm based in both Phoenix and San Diego, and from 1990 to today, RAR Hospitality’s portfolio has grown to have some of the most enviable clients of hoteliers including: Del Mar Marriott, Calif.; MGM, Las Vegas; Keating Hotel, San Diego, Calif.; Tempe Mission Palms; Best Western Station Inn, Anaheim, Calif.; and Phoenician Resort, Scottsdale among many more. /// His first client was actually the Tempe Mission Palms, where he teamed up with Commercial Executive Magazine’s January “Broker of the Month,” Bill Murney of Hospitality Real Estate © Copyright 2017 by MP Media, LLC

Counselors (HREC). The partnership positioned the hotel for sale to a firm and still owns the property 25 years later. /// Today, RAR owns or manages a total of 24 hotels, five of which are in the Phoenix Metro area. The company gets its name out there even more by hosting an Annual Life Conference in March that provides a forecast of the U.S. Lodging Industry with a focus on California, and this year’s featured a trends report from a Walt Disney representative. /// His countless individual accolades range from Hilton Garden Inn’s “Developer of the Year” in 2008 to the City of San Diego naming “Robert A. Rauch Day” on July 13, 2006. /// “I’ve served as an expert witness, court-appointed receiver, developer, operator and just about every position in a hotel from dishwasher on up,” he says. “To this day, I can truthfully say I enjoy each role.”

Executive

SPOTLIGHT

“I’VE SERVED AS AN EXPERT WITNESS, COURTAPPOINTED RECEIVER, DEVELOPER, OPERATOR & JUST ABOUT EVERY POSITION IN A HOTEL FROM DISHWASHER ON UP. TO THIS DAY, I CAN TRUTHFULLY SAY I ENJOY EACH ROLE.” – ROBERT A. RAUCH

The Rauch Family

PERSONAL Following in his father’s footsteps as a professor, Rauch has been lecturing and teaching Hospitality and Tourism Programs at Western International University in Tempe, Hospitality Entrepreneurship at Arizona State University’s main campus since the late ‘80s, and an MBA class, Hotel Asset Management at California State University San Marcos. Prior to that, from 2001-2009, he taught similar subjects at San Diego State. He also finds time to serve as Publisher and Editor of his quarterly website newsletter, Hospitality Innsights, which he has been running since 1984. /// When asked how he balances all his personal and professional endeavors, Rauch admits being very organized and focused is key.

“I enjoy everything I do so I don’t ever feel like I’m working.” But, when he does take a break from working, he and his wife enjoy traveling, relaxing by the beach, and having dinner together every evening possible. One of their favorite spots for a quick getaway is Sedona, where he had proposed to her. Rauch also keeps active by playing golf and competitive sports like basketball, senior Olympic sprinting, and baseball tournaments. /// As for his close knit family, his wife Linda, who received her MBA from University of Connecticut, provides digital marketing services to RAR’s family-owned hotels, while their daughter Melissa, who is a Walter Cronkite School graduate, is employed with Social Tables, a cloud-based event-planning software company in Washington D.C. Their other daughter, Meredith, who attended Colorado State, now works for Screen Pilot, a Denver-based Hotel Marketing Agency. Both daughters are constantly selling dad on how great their company is and how much RAR would benefit from using their services!

Conveniently, Rauch’s passions do overlap into the hospitality industry, and he has been an active member of the Arizona Lodging & Tourism Association since 1983, and sits on the ASU Tourism Advisory Board. /// Rauch commutes to Arizona quite frequently as he is interested in acquiring hotels or identifying sites and partners for future development in the Phoenix market. /// For hospitality industry forecasts and opinions on all subjects from leadership to digital marketing and everything in between, check out Rauch’s blog at HotelGuru.com.

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Enterprises Investments & Development

has announced a three-building project of 78,000+ square feet of new office and industrial space near the I-17 at 2005, 2015 and 2025 W. Deer Valley Rd. that just broke ground in March. The Enterprise Deer Valley project is ideally located near the Deer Valley Airport and many well-known companies including Xerox, Honeywell, Discover and Safeway, and is scheduled for completion October 2017.

Mike Ciosek (Kidder Mathews), Nick Davis (Davis Enterprises), Jenifer Davis Lunt (Davis Enterprises), Mike Forst (Sun State Builders) & Dylan Scott (Kidder Mathews).

the

groundb reak in

“The property is special to my family because it has been in our portfolio for more than 30 years, originally as a build-to-suit for the Bureau of Land Management and then most recently, the U.S. Army occupied the building for 10 years,” says Jenifer Davis Lunt of Davis Enterprises. “We are now redeveloping the five-acre site into its highest and best use for mid-bay industrial tenants in the Deer Valley Airport submarket.” With ample parking throughout the three projects, Building A will have suites available ranging as small as 3,200 SF-4,000 SF with Deer Valley Road frontage, while Building B and C Conceptual rendering: Subject to change during and SF structures with suite sizes from 3,600 SF and private will havedesign two 27,000 to conform with building fenced yards.specifications All three have the advantages of 18’ clear height, evaporative cooled warehouses, and 12’x14’ grade level warehouse doors. Spec Suites will be available for occupancy October 2017. /// Davis Enterprises has teamed up with Sun State Builders as Design-Builder for the project, and Kidder Mathews to market the available space for lease. “What’s really great about this project is that its Deer Valley Road frontage allows for a good retail/ wholesale-type aspect, and it offers tenants secured outdoor yard space, which is unique for its size,” says Mike Ciosek of Kidder Mathews. “This project supports the need for small and mid-bay demand in this submarket. It also has C3 zoning which allows for a wide range of uses, including heavier industrial tenants, providing the utmost flexibility and opportunity.” 68 © Copyright 2017 by MP Media, LLC

REPORT

The

ICSC 2017

NATIONAL

REPORT

By: Margaret O’Leary, CRE Phoenix Analyst, CoStar

he U.S. retail market remains on its stable, slow-burn recovery with vacancies down and rents moving up very modestly. Yet indications of a 2017 slowdown are emerging. Retailer comparable-store growth has stalled and another wave of closures is scheduled for the coming year, which could cause overall demand to slide and vacancies to stagnate. However, that’s not to say that a sinking tide lowers all boats, as strong locations should remain healthy and likely unmet by new supply.

AVAILABILITY: •

Poorly performing assets will continue to be a drag on their owner’s wallets.

•

The top 25% of retail properties, as ranked by CoStar’s Location Quality Score, accounted for 40% of total leasing volume over the past three years despite having very little availability.

•

Retailers have shown little to no appetite for the bottom half of retail properties and marginal interest in the middle.

•

Demand is likely to contract in many low-density and overbuilt trade areas.

•

Landlords may need to continue cutting rents indefinitely to maintain occupancy.

MALL TRENDS: • Mall demand will struggle in 2017, aside from those in prime locations. • In weaker locations, deficient performance could set off a reaction of in-line tenant productivity losses and further tenant defections. • Between Macy’s and Sears, about 18 million SF of mall space is expected to be returned to the market this year. • Malls in better locations, may benefit from opportunistically offering anchors an easy out of their leases to trade up for a more productive, or nontraditional anchor.

SMALL RETAIL: • Local retailers which typically occupy the inline portion of strip and neighborhood centers, are ramping up while public retailers are retrenching. • Many smaller tenants lack access to public debt capital and must borrow against personal possessions to finance operations. • With the housing market back in business, small retail is growing drastically. • Strip and neighborhood centers have led all retail subtypes in terms of percentage demand growth over the past two years. • Small-format shopping centers should remain strong as long as the housing streak continues.

THE MIDWEST: • Even prime locations don’t offer as much promise in the Midwest; store locations tend to offer little growth over time. • To determine what is a prime location, CoStar developed a proprietary metric, Location Quality Score, to quantify the effects of demographics, CRE density, and competition on a given center. • In this region, the correlation between locational strength and performance appears to be broken. © Copyright 2017 by MP Media, LLC

RECAP

Event

The 4th Annual MRED-REIAC/Rockefeller Group Challenge didn’t disappoint this year. Four teams consisting of graduating students from Arizona State University’s W. P. Carey School of Business and Masters of Real Estate Development (MRED) program competed this year.

MRED-REIAC/ROCKEFELLER GROUP By Peter Madrid | MadridMedia

his year’s project consisted of a mixed-use development at Dorsey Lane and Apache Boulevard in Tempe. It featured six separate parcels including a new school for the arts; a retail center at the NWC of Dorsey and Apache; retail/ office space at the NEC corner of Dorsey and Apache; and three parcels of vacant City of Tempe land. /// Spire Development’s winning project, Third Space, was a four-phased master plan that included multifamily space of 70 apartments, 50 flats, 43 lofts, 16 studios and 13 townhomes; a new school for the arts; a restaurant; a gym; and retail, office and community space. “Our approach, after discussion with our financial mentor, Joe Blackbourn of Everest Holdings, was to go the realistic approach,” says Anna Sepic, a Spire Development team member (pictured right). “The best take away from Joe’s mentorship over the past two months is that real estate is not just about thinking of grand designs; it is understanding that a piece of property will ‘tell’ you what it should be.” /// The greatest challenge for Spire Development in putting together the development project was the financials. The team was given financial hurdles of 20 percent IRR and 2.0x Equity Multiple. “Regardless of how much you may envision something, it may not be financially feasible,” she says. “My personal mentor, Don Becka, gave the second greatest piece of advice: You have to make each portion of your project stand alone in case things don’t work out as planned. This was another lesson that we implemented in the final proposal – allowing each phase to stand independently on its own, yet cohesively creating maximized value for Third Space.” Also on the financial challenges side, the research showed a significantly depressed immediate demographic, high vacancy, as well as issues of crime and transients in the immediate area. Originally, the team went with the bare minimum. It did not include doing a deal with the charter school, nor did it include the complexity of the mixed-use project. /// “We met with various individuals including Mike and Casey Treadwell, Mark Stratz, Josh Simon, Pete Te Kampe, Eric Brown, Ben Hall and Shelby Tworek, as well as our instructors from the MRED program,” she says.

Overall, the last month was the biggest learning curve and culmination of learned information over the entire ninemonth program for the team. /// “We came a long way as a team and even more so through our own new learned skills as a result of this competition. We want to personally thank all of the mentors and our instructors, especially Michael Bronska, Mark Stapp and Victor Sidy, who continually challenged us throughout this project,” Sepic says.

PHOTO CREDIT: Carl Schultz

SPIRE DEVELOPMENT

captured the honor, garnering $1,000 each for members Anna Sepic, Jay Van Tussell and Kyle Trent.

THE OTHER TEAMS’ PROJECTS: CRESCENDO DEVELOPMENT – The Beat on Dorsey, a project to attract tech savvy millennials in a transit-oriented walkable environment with public art installations and 7,000 square feet of open pavilion space. COLLAGE DEVELOPMENT – Collage at Dorsey Station, a project that’s the “character and soul of a community; a project that inspires us,” according to the presenters. It features dining, retail, office, a school for the arts, and artist loft space. CED DEVELOPMENT – Joule: An Innovation District. This master-plan design is intended to “build off the momentum of the light rail and Tempe street car.” It is designed for those in the trade classes, engineering, and software design. It features creative space, maker space, co-working space, row houses, condos and contemporary restaurants. Each team was allotted 10 minutes to present a development solution followed by questions from the audience. Audience members chose the winning team immediately following the presentations.

Discussion:

WATER

Water C hallenges & Solutions NAIOP Market Series held a presentation regarding Arizona’s water sustainability; its ownership and how to use it in an efficient manner. The presentation featured Grady Gammage, Jr., Founding Member, Gammage & Burnham, and Sarah Porter, Director, Kyl Center for Water Policy, Morrison Institute for Public Policy at ASU, with moderator Mark Stapp, Executive Director MRED at ASU.

POPULATION GROWTH: Will Arizona have the water to sustain higher populations? •

Arizona is one of the top three states that people will move to if coastal areas become flooded.

•

Arizona is the second largest user of reclaimed water in the nation.

Our planet has four commodities: air, water, sunshine and land. Should water be considered a public or private good? •

Water should be regarded with a mix between government control and market control. It’s not a commodity that can be managed on economic principles.

Should Arizona extend coverage of the groundwater management act? Is the lack of groundwater management an existential threat to our resources? •

There is an increased demand for the expansion of Active Management Areas (AMAs.) Without AMAs, there is no guarantee for 100 years of ground water, therefore the water in areas that are not in AMAs are more vulnerable to unsustainable water usage. Developers are seeking these regulations for added security.

•

A change to the ‘Rule of Fortitude’ as farmers don’t get rewarded for using less water.

•

A need for more efficient allocation of water, for example using litigation credits to create a more sustainable supply. Solving allocation issues would save the state money in the long run and inspire water users to think more proactively about what is the most efficient and cost effective use of their water.

•

Implement the use of grey and purple water pipes/price water at different levels. Grey and purple water could be used for major water consumers that do not require fully treated groundwater such as golf courses and data centers.

•

Use affluent, or dry cooling instead of wet cooling in data centers.

Is agriculture an effective use of water in our state? •

Agriculture gives water management flexibility, while other uses do not.

•

Some of the highest water consumers are almonds, which take one gallon of water per almond to produce, and beef, which requires 441 gallons of water per one pound of beef.

•

We are an agricultural exportation country. Our food security makes less vulnerable as a nation.

•

Our limit is not land in Arizona, it is water. The state needs to dedicate a block of water to agricultural use.

SETTING THE PACE Agility Responsiveness

INNOVATION

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