Issue 7, 2017

Real Estate...

It’s All in the Family ABCs OF CRE

Playmakers and trends that shaped 2017 ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||

LIGHTS, CAMERA, ACTION! Memories from our Fall Forum and 10th Anniversary Celebration

CEM-AZ.COM • I S S U E 7, 2017

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RS NE EA D LI

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9 EXECUTIVE PUBLISHER Mandy Purcell mandy@mpmediaaz.com E D I TO R - I N - C H I E F Emily Gaudet emily@mpmediaaz.com SALES & BUSINESS D E V E LO P M E N T Karen Gallagher karen@mpmediaaz.com

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W E B E D I TO R & GRAPHIC DESIGNER Cassidy Trowbridge cassidy@mpmediaaz.com E D I TO R I A L Tim Randall Emily Gaudet Cassidy Trowbridge P H OTO G R A P H Y Emily Gaudet Cassidy Trowbridge Tony Elliot Carl Schultz

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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

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www.cem-az.com

PUBLISHER

Letter from the

A

s the year draws to a end, I would like to extend my gratitude to our readers, sponsors and supporters this holiday season.

Commercial Executive Magazine covers

the year’s top deals and companies in our eBlasts, website and magazine.

In our last issue of 2017, we continue the tradition of highlighting the year’s biggest transactions and dealmakers in our ABCs of CRE. From A (for the biggest apartment deals) to Z (for zoning trends), we’re proud to present 26 playmakers and trends that impacted 2017.

“There are far, far better things ahead than any we leave behind.”

– C.S. Lewis

Our cover features a commercial real estate family, the Harrisons.

Leading the way is Jim Harrison, president of Harrison Properties.

Alongside him are his two beautiful daughters, Brittany and Jennifer, and his wife, Alicia. All are real estate professionals.

Commercial Executive Magazine is also celebrating its 10th Anniversary! Since 2007, I feel blessed to have been able to cover the most influential executives within the Valley business community.

When I look to the future, I see Commercial Executive Magazine continuing to evolve, grow and adapt to the changing media

I enjoyed seeing you all for the 2017 Fall Forum!

landscape so we can better serve our readership.

Let’s look back fondly on 2017, raise a glass to all your hard work, and then gear up for 2018!

Enjoy, The magazine’s 10th Anniversary party was a hit!

Mandy Purcell

Executive Publisher

3 © Copyright 2017 by MP Media, LLC

WHAT DOES

$111 MILLION IN CHARITABLE GIVING FEEL LIKE?

ONE VICTORY AT A TIME. TIME AFTER TIME. IMPROVING THE QUALITY OF LIFE IN OUR COMMUNITIES is just one of the many missions of The Thunderbirds, hosts of the Waste Management Phoenix Open presented by the Ak-Chin Indian Community. Like MentorKids. Fresh Start Women’s Foundation. Boys and Girls Clubs. And countless others.

More than $111 million has been gifted to Arizona charities over 82 years, but the true impact can be expressed one story at a time. Thanks for your continued support of the Waste Management Phoenix Open.

Carlos Sugich, Thunderbird

For more Arizona success stories, visit www.thunderbirdscharities.org

THE

CRE of

2017

This year, Commercial Executive Magazine reflects on 26 outstanding playmakers, projects and trends that defined 2017.

While we weren’t able to include every deal and individual who contributed to a historic year, we hope this issue gives you insight and inspiration for 2018.

Š Copyright 2017 by MP Media, LLC

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ABCs of CRE:

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A APARTMENTS

The Standard apartments in Scottsdale sold for a record $320,896 per unit ($43 million for 134 units) in August by Tyler Anderson and Sean Cunningham of CBRE.

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ents are on the rise in the (21-27) indicated a main reason not to Valley. Asking rents are up pursue home ownership due to student 6.4 percent from one year debt or other loans. /// Investors ago to $987, according to a are feeling the effects of a strong Q3 Colliers International renter’s market. The median price in report. The report cited rents over the transactions spiked during the second past three years averaging growth of 5.8 quarter and during the third quarter percent annually. /// Reasons for renting rose another 8 percent to $125,800 per varies between unit, according Quarterly Rent Trends generations. to the Colliers Forty six percent report.

The of Baby Boomer median price renters (ages 52year to date is 71) said renting is $106,000 per more affordable unit, up from and 41 percent $103,900 per unit indicated buying in 2016. Various a home is not brokerage firms a priority for predict a healthy them, according demand that will to a 2017 Freddie keep cap rates Source: Colliers International 2017 Q3 Greater Phoenix Multifamily Report Mac report. near the year Interestingly, 43 percent of older average of 5.7 percent. /// The Phoenix Millennials (ages 28-37) said they are still market is looking at a strong close to saving for a down payment on a home, 2017 with an eye for sustainable growth while 35 percent of younger Millennials in 2018. â–

Š Copyright 2017 by MP Media, LLC

ABCs of CRE:

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THE BIGGEST APARTMENT DEALS OF 2017 A strong renter’s market has given the Valley an amazing group of multifamily sales this year.

Here are a few of the biggest apartment deals of the year:

THE HERITAGE AT DEER VALLEY The Heritage at Deer Valley in Phoenix sold for $125.5 million in October. The deal was brokered by Tyler Anderson and Sean Cunningham of CBRE. The 832-unit apartment complex was built in 1996 and 2000. It is located at the southwest corner of the Loop 101 and Interstate 17.

THE LOFTS AT RIO SALADO The Tempe complex sold for $75.5 million in August. Steve Gebing and Cliff David of Marcus & Millichap brokered the deal. The 466-unit project was built in 2004. The Lofts and Rio Salado are located off the Loop 202 Center Parkway exit.

THE STATION ON CENTRAL The 414-unit complex sold for $63.5 million in September. The deal was brokered by Brad Goff and Chris Canter of ARA Newmark. The complex, located at the northwest corner of Central Avenue and Indian School Road, was built in 1993.

© Copyright 2017 by MP Media, LLC

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BROKERS

OF THE

YEAR

ABCs of CRE:

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Our Broker of the Year recipients pose at the 2017 Fall Forum. From left: Brokers Sean Spellman, Mike Beall, Jeff Wentworth, Chris Walker, Cindy Cooke, Sean Cunningham and Alliance Bank presenter Paul Engler.

Each year Commercial Executive Magazine celebrates the best of the best in commercial real estate at its annual Fall Forum. This year, we presented three teams an award after a three-way tie. /// The teams included: Cushman & Wakefield’s Jeff Wentworth, Mike Beall, Sean Spellman and Chris Walker, who have a combined 63 years of brokerage experience; CBRE’s Sean Cunningham and Tyler Anderson, who have completed some of the Valley’s most notable multifamily deals this year; and Cindy Cooke of Colliers International, who is now a three-time Broker of the Year title holder. /// The award was presented

by Paul Engler of Alliance Bank in front of hundreds of attendees. /// Meet each of our Brokers of the Year and see how their unique talents and skills have put them on top.

© Copyright 2017 by MP Media, LLC

ABCs of CRE:

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CINDY COOKE SENIOR EXECUTIVE VICE PRESIDENT COLLIERS INTERNATIONAL

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indy Cooke is a three-time recipient of Commercial Executive Magazine’s Broker of the Year award. She previously won in 2011 and 2016 and now 2017. /// As Senior Executive Vice President in Multifamily Investments for Colliers International, Cooke has consistently ranked among the top producers for Phoenix and in the nation. “Receiving Broker of the Year is probably one of the biggest honors, because it’s your peers voting on you,” she said. “Integrity in this business is key. When I see the support I’ve received from my peers it uplifts me.”

© Copyright 2017 by MP Media, LLC

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ABCs of CRE: RECORD-SETTING CAREER /// Her real estate career spans 34

years and includes record-setting sales such as the largest multifamily transaction in Arizona history at 5,176 units for $427.5 million. /// Cooke said she has been blessed to know her calling, selling her first apartment building at just 23 years old. // Since then, she has been the #1 Multifamily Broker for Colliers International U.S. for 2016, 2015, 2014, 2010, 2009, and 2007. In addition, the Cooke Team was named #1 Producing Team Overall for Colliers International Greater Phoenix for 2014, 2012, 2010, 2009, 2007, 2006.

DEALMAKER /// Among her 2017 transactions, Cooke negotiated two deals each $71+ million. One in February for $71.45 million for 700 apartments in Mesa and another for $71.5 million for 432 apartments in Phoenix. Additionally, Cooke and her team were able to negotiate the sale of a 1,167-unit apartment portfolio in Tucson.

STAYING HUMBLE /// Bob Mulhern, Senior Managing Director of Colliers International in Greater Phoenix, said that Cooke stands out from the crowd because of her unique talent. “She finds details in the deal that

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no one else does,” he said. /// But Cooke remains modest about her accomplishments. She has seen many changes in the market and throughout those changes, her goal has always been to provide exceptional service to her clients.

Her real estate career began with the opening of a commercial brokerage firm, quickly adding a mortgage brokerage office and later included a development arm to create a full service company. By age 26, she was recognized by Senator John McCain and Secretary of State Rose Mofford as one of the Three Outstanding Young Women in Arizona--an award that she is still honored by to this date.

THE NEXT ADVENTURE ///

For the next leg of her career, Cooke said she is looking to raise her team further on the national level. /// “My focus is always to keep growing,” she said. “I have one of the best teams I’ve ever imagined-- I have a dream team.” /// Her team includes her son, Brad, who has worked with her since 2006. Since then, Cooke said her son has been able to help bring strategy and organization to the team. /// “I have an entirely new vision than I did before because of the way I’ve built my team,” she said. “It’s freed me to imagine more.”■

© Copyright 2017 by MP Media, LLC

ABCs of CRE:

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SEAN SPELLMAN, MIKE BEALL, JEFF WENTWORTH & CHRIS WALKER OF CUSHMAN & WAKEFIELD

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From left: Sean Spellman, Michael Beall,Christopher Walker and Jeff Wentworth of Cushman & Wakefield in Phoenix.

eff Wentworth, Mike Beall, Sean Spellman and Chris Walker of Cushman & Wakefield have been the top office leasing and development group in Arizona for the past five years. As 2017 recipients of the Broker of the Year award, Commercial Executive Magazine interviewed them on their 2017 achievements and 2018 outlook.

© Copyright 2017 by MP Media, LLC

Q: What made 2017 unique for the team? What are you most proud of this year?

A: This was two teams that merged in 2013 and there had been a number of projects and assignments that were still exclusive to each team. 2017 was unique in that the team is now fully integrated as one team with active participation from all team members. The nature of the brokerage business requires that there is a lead on any given assignment, and the team’s internal collaboration, market information and communication provide solid back up of each individual’s daily efforts.

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The team is proud of its track record in 2017 and while it was successful with a number of large transactions, the team takes pride in delivering sound advice and perspective on more than 110 transactions year-over-year.

As a team, it was able to grow its tenant representation business with a number of transactions in the Phoenix area.

Q: This team is the top office leasing and development group for Cushman & Wakefield going on five years. How do you maintain quality and success in each transaction?

A: The team is driven by a service philosophy that is based on core values of trust and integrity in every transaction. They never lose sight that the team’s value is only as good as the next deal, not the last.

With that in mind, they take a thoughtful approach when providing clients with advice and recommendations.

The team also takes a partnership approach with the client to build consensus while arriving at the right solution.

Q: What are some trends you are seeing in office leasing?

A: The millennial employee, combined with information technology, continues to disrupt the business on many levels including office space use, design, location and amenities. It’s all about the employee, more so than even management.

In addition, the real estate industry and the relationship between the service provider and the landlord client is being transformed

with each party having the capability of wearing the same hat, whether that involves renewals, expansions, new leasing, or even project development.

Q: How would the team describe each other? What are everyone’s strengths?

A: The team members are best described as extraordinarily ordinary.

The strength of the collective team is the team member’s respect for one another. They share core values of trust, character and integrity on both a professional and personal level. This allows for a lot of open dialogue between all members as business challenges and problems arise allowing for an optimal solution.

There is not a primadonna on the team.

Q: What do you hope to accomplish in 2018?

A: The team would be blessed to have another year like 2017 and hopes to accomplish the same level of success in 2018.

As a team, it is in active pursuit of a several listings complimentary to its existing book of business.

Q: What is an interesting fact about each member of the team that people may not know?

A: Jeff Wentworth is a whirlwind with seven kids and is the idea man; Chris Walker is also known as “Talker” or “Walkerpedia;” Mike Beall is the salty dog; Nicole Lemon is sweet as a plum and sour as a lemon; and nobody dresses better than Sean Spellman.

The Cushman & Wakefield team accepts their 2017 Broker of the Year Award.

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© Copyright 2017 by MP Media, LLC

ABCs of CRE:

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SEAN CUNNINGHAM & TYLER ANDERSON VICE CHAIRMEN OF CAPITAL MARKETS, INSTITUTIONAL PROPERTIES

CBRE

From left: Sean Cunningham, Matt Pesch, Tyler Anderson and Asher Gunter of the Phoenix Multifamily Institutional Properties team.

S

ean Cunningham, Tyler Anderson, Matt Pesch, and Asher Gunter are part of CBRE’s award-winning Phoenix Multifamily Institutional Properties team. With over 90 years of combined experience, the team is recognized nationally as selling Class A and B communities in the Phoenix market as well as the Western United States.

Commercial Executive Magazine had the privilege of sitting down with the four men who are leading the way in multifamily brokerage and who earned the designation “Broker Team of the Year.”

“We’ve learned how to play to each other’s strengths. Mine and Sean’s relationships go back a long time, but a lot of people in the industry now are Asher and Matt’s age.”

- Tyler Anderson

Vice Chairmen Tyler Anderson and Sean Cunningham started at CBRE in 1983 and 1980, respectively. Senior Vice Presidents Asher Gunter and Matt Pesch started at CBRE in 2005 and 2008 respectively. Their addition allowed the team to expand their market reach and update techniques.

Sean Cunningham attributes their financial know-how to the group’s prosperity: “Tyler and I would not have been © Copyright 2017 by MP Media, LLC

as successful in the past decade without [Matt and Asher]. Their highly talented skillsets, work ethic, and financial expertise are unmatched by anyone in town. It would have been a challenge had they not been alongside us.”

Together, they have been one of the top revenue-producing teams within CBRE Multifamily nationally, closing over 250,000 units with a total value exceeding $26 billion.

“They’ve been remarkable mentors.

[Sean and Tyler] have the best relationships in the industry; when you see how they approach business every day it’s easy to see why. They always put clients first, focus on doing the right thing, and communicate honestly and effectively,” Pesch said.

With the variety of skillsets and contacts, the team has perfected its division of time and attention.

“We’ve learned how to play to each other’s strengths. Mine and Sean’s relationships go back a long time, but a lot of people in the industry now are Asher and Matt’s age. So it makes for a 13

ABCs of CRE:

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good balance, we have our relationships with senior people and organizations, and they have relationships with the younger sector.

As a result, our reach is much broader,” Anderson said.

DID YOU KNOW?

The three largest multifamily deals in the Valley this year have all been negotiated by CBRE Phoenix Multifamily Institutional Properties.

- Both Asher and Matt each have four children

First was Andante, an upscale apartment complex in Ahwatukee, which fetched $85.25 million earlier this year. They surpassed that transaction in October with the 832-unit IMT Deer Valley apartment complex in northwest Phoenix for $125.5 million. In November, the 676-unit Lakeview at Superstition apartments sold for $101 million ($149,408 per unit). They also broke the record for most expensive price per unit in Scottsdale with their closing of The Standard, a luxury 134-unit complex on Main Street.

- Tyler Anderson is a member of ULI’s Multifamily Council

The team attributes much of its success to personally interfacing with clients, which is made possible by their hard-working team of 10 at CBRE.

- Sean Cunningham was previously Senior Managing Director for CBRE’s Phoenix office closed 40 transactions totaling more than $1.85 billion. With CBRE moving offices this December, the team is excited about the fresh energy and says that the new space will encourage collaboration that has always been present.

“Over half of the team handles the administrative side of things, so the four of us can be out in front and hands-on with every deal.

Our key to success has been a focus on creating great outcomes for When asked how they keep their competitive edge, Tyler our clients and being responsive,” explained Anderson.

Anderson said “If you want certainty of execution, you hire us. We’re not focused on just being the ‘market leader,’ we’re So far, CBRE Phoenix Multifamily Institutional Properties has focused on client needs.” ■

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© Copyright 2017 by MP Media, LLC

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CANNABIS

ABCs of CRE:

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Taking the High Road

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egan Stone is on a mission to bring beauty and function to the medical marijuana industry. She is the founder of High Road Design Studio in Tempe, where she makes dispensaries more appealing to patients and the public.

SMOKING THE COMPETITION

Starting as a patient and then as an employee of dispensaries, Stone understood that the marijuana industry could be made more palatable. After she had a few projects under her belt, Stone founded High Road Design in 2013. /// Her business has transformed dispensaries in 16 states. One of Stone’s most notable projects, Level Up in Scottsdale, took home the Best in Show award for Visual Merchandising & Store Design Magazine’s 23rd Annual International Visual Competition. /// Taking a once cold, empty, and uncomfortable space and designing the dispensary into a safer and friendlier environment means less hesitance, shame and more positive transactions. “A lot of people still think that dispensaries are seedy or criminal, so I’m trying to change that mindset.”

© Copyright 2017 by MP Media, LLC

ABCs of CRE:

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Level Up Scottsdale, Arizona

First Place for VMSD Magazine’s 23rd Annual International Visual Competition (2017) VMSD’s Retail Renovation Competition (2017) Silver Award for Specialty Retailer in Shop! Design Awards (2017)

DOPE DESIGN

Stone chooses every element of the facility with patient needs and perspective in mind. Displaying the products in an educational, clear way; making sure that people have privacy for consultations and purchasing. /// Her artistic vision of melding feminine and masculine aspects have earned her attention and accolades in the design world.

dispensaries, they bring value to the area. Was the parking lot well-lit before? Was there a security guard out at all times? I’d argue that it improves neighborhoods.”

GROWING LIKE A WEED

There are 143,239 medical marijuana patients in Arizona, according to data released by Arizona Department of Health Services. 2016 saw a 29 percent increase in patients compared HIGH STAKES to 2015. Most interesting may be that 71 percent of these patients One challenge Arizona dispensaries face is navigating zoning are over the age of 31. /// Stone believes that people are becoming laws, with each city and town having different guidelines. Some more open-minded and willing to understand the benefits of of the restrictions include not medicinal marijuana. “The tide building near daycare centers, Arizona patients bought 29 tons of cannabis is shifting, perspectives are places of worship, and schools. changing. Those in the industry “I understand the uncertainty, products in 2016, according to the state believe that 2020 is going to no one wants dispensaries near Department of Health Services. The State be an exciting year.” /// People daycares. But when they lump in like Megan Stone will be even houses of worship, then it actually Treasury took in at least $29.5 million extra more integral to elevating the becomes difficult finding a spot,” experience for all involved as the from the sales of marijuana.

Stone explained. /// To those industry grows. As stigma and (Source: Phoenix New Times) who are reluctant about keeping misinformation surrounding dispensaries out of their area, she marijuana dwindles, Arizona postures, “Would you rather this business remain underground could further embrace the plant as part of the economy in the and criminal, or transparent and legal? If you look at renovated future. ■

tru|med Phoenix, Arizona

Finalist in 23rd Annual Association for Retail Environments Design Awards Competition (2016)

© Copyright 2017 by MP Media, LLC

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DEVELOPMENT

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The Ritz-Carlton Residences

PARADISE VALLEY

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hen Jerry Ayoub, owner of Five Star Development, moved to the Valley in 2001 he set his sights on a pristine 123-acre parcel of land located at the northwest corner of Scottsdale Road and Lincoln Drive. /// The land would be destined for his biggest undertaking yet. The Ritz-Carlton, Paradise Valley, is a master-planned project that will include a 200-room Ritz-Carlton hotel, luxury villas, estate homes, unbranded luxury townhomes and a 160,000-square-foot, high-end shopping and dining destination. When valued with land, construction and sales, the project value is estimated to total approximately $2 billion.

Š Copyright 2017 by MP Media, LLC

ABCs of CRE:

THE HISTORY

Ayoub’s quest to develop the site was no easy task. “When I moved here from Texas I saw the site. At first, I thought it was a state park or something,” Ayoub laughed. He called every month for over a year to inquire about the land. Finally, Ayoub got a call from Sinclair Oil, the company who owned the land, saying that the parcel was up for sale. But he was dismayed when it turned out the land was sold to Marriott. When Ayoub reached out, he was relieved to learn that the company did not intend to keep the property, but rather ensure that a Ritz-Carlton property would be built there.

The next two and a half years would be spent getting the land entitled in the Town of Paradise Valley, a challenging process.

After more than 50 meetings, Five Star Development finally received unanimous votes at the planning commission and the town council. But the very next day, Ayoub was notified that a referendum was underway to overturn the town council’s approval. With enough votes, the referendum movement was able to block construction and put the plan on hold for resident approval in the next election. What came after was eight months of adversity, campaigning and door-to-door soliciting. On Election Day November 2008, the project approval won by a landslide.

But the economy was now in the midst of the Great Recession.

Plans were sidelined for seven years. But Ayoub insists his dedication never wavered.

It wasn’t until 2015 that the Five Star Development team decided to revive the plan and redesign it to fit the current market.

In December 2016, nearly a decade later from his first call about the site, Ayoub had the entitlements needed to proceed in Paradise Valley.

He also received unanimous approval in Scottsdale to proceed with the retail portion. Completion is expected for the resort and residences by the end of 2018.

“It’s not just the project of a lifetime,” Ayoub said. “It’s a project of several lifetimes.” © Copyright 2017 by MP Media, LLC

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THE PROJECT

The Ritz-Carlton hotel will be spread out over 20 acres. The project boasts North America’s longest resort pool at just over 400 feet. The grounds will also include a 14,000 square-foot spa, a health and fitness center, meeting and event space, a citrus orchard, an herb garden harvested by the resort’s restaurants, and views of iconic Camelback Mountain.

The adjacent villas range from the mid $1 million to just over $5 million. Floor plans feature one- to four-bedroom residences that are fully serviced by the Ritz-Carlton hotel. Five Star Development has planned for 81 total villas.

The estate homes, also fully branded and serviced by the hotel, are a separate gated community. Ayoub said residents of the villas and estate homes will have access to services from the hotel such as house cleaning, concierge, 24-hour room service, private chef booking, food delivery coordination and private vaults, to name a few. The project is slated to include 39 homes. Additionally, the parcel includes a development by Shea Homes with prices starting around $2.5 million. Separate of the estate homes and villas, the development includes 66 homes in a gated community called Azure.

The Palmeraie is a 160,000-square-foot ultra-luxe retail and restaurant mixed-use center. The company estimates that the project will be home to more than 60 luxury merchants and dining experiences. Five Star Development expects to break ground on The Palmeraie in 2018 with completion expected by the end of 2019. The retail center is also slated to include luxury residences.

Ayoub said he has researched and consulted with the best in the industry to make the retail experience at the Palmeraie unique.

“We have the shops set up so that the wife can drop off her husband at the ‘boy and toys’ section while she goes to the spa or shopping,” he said. “We’re planning for exclusive outdoor spaces for boutiques so you can have a glass of wine and shop in a private garden.” Ayoub has left no stone unturned in his quest to create the perfect hospitality, residential and retail experience. ■ 19

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EVEREST HOLDINGS

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resident and CEO of Everest Holdings, Joe Blackbourn, has seen his career climb towards the pinnacle of success. /// He has had direct involvement in investment transactions with an aggregate value in excess of $1 billion.

transactions are complex undertakings requiring extensive due diligence to ensure they offer investors superior returns. “We write a strategic thesis on each project and scrutinize the details in the office for months before making a decision,” he said. “We then have to locate capital resources from investors who are aligned with the project HEADED WEST /// Blackbourn was born goals.” and raised in Wisconsin. After he received his Bachelor of Science degree from the University SHARED VISION /// The firm’s investors are of Wisconsin-Madison in 1983, Blackbourn served at the core of the ongoing success of the company; as an intern for a Minneapolis-based company, a point Blackbourn learned amidst the depths of a Paragon. Blackbourn then headed west and opened financial crisis. “We were fortunate to have really the Phoenix office for Paragon. /// However, his big strong investors who shared our vision,” he said. break came in 1992 when he joined Pivotal Group “It takes conviction to buy land when homes are where he worked for a decade. as a principal and not selling, and purchase empty office buildings developed his expertise and core competencies when there is negative absorption.” /// With many of value investing. “I am an acquisition-oriented notable successful projects completed-- Hotel value analyst at heart,” he said.

Indigo Scottsdale, Crowne Plaza Phoenix, Highland Park Apartments, Foothills Corporate Centre A NEW SUMMIT /// In 2002, Blackbourn II and more--Blackbourn is not slowing down struck out on his own and founded Everest in his hunt for deal value. /// From a transaction Holdings, a Scottsdale-based company focusing perspective, Everest’s diversity in projects will on assets in the Southwest and a diversified real continue. Blackbourn admitted the hospitality estate investment and advisory entity. /// “First and sector is his favorite. “Hotels are the most fun,” foremost, Everest is an investor, not a developer,” he said. “There are so many ways to create value: Blackbourn said. “We take a multi-faceted execution, positioning, taste and design.” approach and decide which type of investment at any moment in time is right. It is not always the same sector and we want to have that flexibility.” /// In launching Everest Holdings, Blackbourn understood the firm’s approach would be highly differentiated from a developer methodology. “We have to be lean and nimble,” he said. /// Everest’s

NEXT STEPS ///

As Everest’s success continues, the advisory company is poised for superior growth. Blackbourn said he’s prepared for change, however it arrives. /// “There is always stuff to fix in good times or bad,” he said. “I have never been afraid to try and learn new things.” ■

© Copyright 2017 by MP Media, LLC

ALWAYS...

WORKING TOGETHER Our Team thrives on the ideas and stories behind the structures we have built, which have been possible by some of the most renowned Owners, Architects, Engineers and Contractors in the industry. We take pride in partnering with the best teams to build what starts as a simple concept and becomes a reality. Contact Suntec Concrete to discuss your next dream project.

Experience concrete like never before.

602-997-0937

•

suntecconcrete.com

FAMILY

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Meet the

Family © Copyright 2017 by MP Media, LLC

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ne of the most interesting families in Arizona real estate, the Harrisons are a blend of business professionals and outdoor explorers. The family has three horses, two dogs, and a goat named Remington. They camp, hunt, rope, and a few of them biked 3,100 miles across the country.

Commercial Executive Magazine sat down with some of the family. Meet Jim Harrison, President of Harrison Properties; his wife Alicia K. Harrison, a director on the boards at Ryan Companies and CCPT IV, a public nontraded REIT; daughters Brittany Harrison, an Associate at LBA Realty; and Jenna Harrison, the Property and Marketing Coordinator at ViaWest Group.

THE FAMILY BUSINESS Jim Harrison started in real estate 1983 working at CBRE, then later at Cushman & Wakefield. In 1996, he took the road less traveled and founded Harrison Properties, LLC. Now, the company owns, leases, and manages over 12 million square feet of industrial properties centered in southwest Phoenix, 2 million square feet in Salt Lake City, Utah and over 200,000 square feet in Albuquerque, New Mexico. With over 40 employees across the Southwest, Harrison Properties is a skilled, full-service company.

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Board. At first, I thought [ Jim] had set it up, because he thought I would have too much time on my hands. But Ryan Companies wanted a woman in the Southwest with a real estate and banking background, so the stars aligned.”

Brittany Harrison began her real estate journey at the University of San Diego, getting a Bachelor of Science in Business Administration and Real Estate. “I knew I wanted to get into real estate, but working for your dad in the summers is a little bit different than striking out on your own,” she explained. “I came home after undergrad and got into retail brokerage and tenant rep, but I felt that I wanted to focus more on the financial side of things.”

She earned her MBA, specializing in Real Estate at the University of Wisconsin-Madison. Now back in the Valley, Brittany works for LBA Realty, handling asset management, leasing, construction oversight for The Esplanade, and overseeing the leasing on some of the industrial projects.

Jenna Harrison got her Bachelor of Science in Business Administration at the University of Colorado Boulder, then went onto fashion school in Los Angeles, ultimately deciding that she wanted to pursue real estate. “There wasn’t a long-term career path or a lot of room to move up

Alicia was introduced to Jim through a mutual friend, Marty Zajac, from Arizona State University. After an avalanche took Marty’s life, they along with other friends and family started a scholarship at ASU funded by an annual golf tournament.

Alicia was also the final signer on the first property Jim purchased while she worked at Wells Fargo, a tenure that lasted 27 years. The two hit it off, bonding over their mutual appreciation for the outdoors.

“I grew up in Wyoming, so Jim and his lifestyle were a great fit. I needed someone I could take to bank dinners, but also someone who could be at home in Wyoming,” Alicia said. In 2012, she retired as Executive Vice President in commercial banking. “I had just retired, but two weeks later I got a call from a recruiter for the Ryan Companies

“He has a great reputation in the industry and is an amazing mentor we’re honored to be his daughters.”

-Jenna & Brittany Harrison

© Copyright 2017 by MP Media, LLC

23

ABCs of CRE:

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From left: Jim Harrison, Jenna Harrizon, Alicia Harrison, and Brittany Harrison.

in fashion. I wanted to live in Phoenix and be close to my family,” she explained. “When I came back, I shadowed my dad and realized real estate was what I wanted to do, so I got my real estate license and eventually landed at ViaWest Group.”

She now handles property management of the industrial portfolio and marketing for ViaWest. “I feel very lucky to be following in my dad and Brittany’s footsteps. I have so much respect and adoration for both of them and it feels good to have them in my corner, and to be a little competitive with them as well,” Jenna said.

“I wanted them to know how to cross over – you can be at a roping arena in the morning and a business meeting later that day.”

- Jim Harrison

FAMILY VALUES Brittany and Jenna are both thankful that their dad is supportive, and a great sounding board for industry advice. “My dad has the ability to praise me for what I’m currently doing, while also pushing me to do more and be the best I can be,” Brittany said. “He has been a rock, and 24

through each career decision he is the first person I turn to.”

“He taught us that we needed to be well-rounded individuals,” Jenna said. “You want to be as smart as you can be, but you also need to personable and connect with people.” Both daughters have backgrounds in sports, hunting, and athletics – all encouraged by their father.

Jenna proudly shared that she recently shot an antelope on the last family hunting trip.

Jim always felt it was important to keep them involved in a variety of activities: “I wanted them to know how to cross over – you can be at a roping arena in the morning and a business meeting later that day. Getting a wide range of skills and experiences allows them to transcend differences and be able to relate to anyone.”

Jim Harrison never pushed his daughters to join real estate, but he couldn’t be more proud of them. “Both © Copyright 2017 by MP Media, LLC

ABCs of CRE: daughters are getting high marks around the business that’s a great feeling,” he said. “Brittany has learned how to balance being tough, feminine, and smart; so Jenna has a great role model in the industry.”

The family also includes three sons who are currently out of state: Jimmy (30) Pricing Manager of Cargill in Wichita KS; Ryan (20) a college student at NYU; and Teddy (19) a student at University of Colorado Boulder.

Jim describes his daughters as bright and hardworking: Brittany is businessminded and driven, and Jenna is skilled in tactfully engaging with others. They describe their father as loyal, dedicated, sensitive, funny, and old-fashioned pointing out he still handwrites all his checks. Jim explained: “I like having the ability to draw a smiley face or write a note; it’s - Brittany the little things that people appreciate.”

The Harrisons are close-knit, regaling each other with stories from hunting trips, days at the cabin, and laughing about Jim’s mule-racing. Jim elaborated, saying: “My uncle used to race mules, and one day he put a mule in my truck and said it was mine. So there was a time where I went all over the country with a mule named Spiderman, racing him. It’s like a poor man’s racehorse, it was a lot of fun.”

F

“My dad has the ability to praise me for what I’m currently doing, while also pushing me to do more and be the best I can be.”

Harrison

Alicia describes Jim as someone who always strives to live life to the fullest. “He is adventurous, every day. As a spouse, he challenges me and supports me. I’m a little more logical, while he speaks from the heart. He pushes himself to have ‘5-star days’ - days with at least five activities.”

In between trips, games, and taking care of the animals, Jim and Alicia Harrison are looking forward to watching their family’s careers blossom. And while Brittany and Jenna are recognized by the Harrison name in the business world, they don’t mind. “He has a great reputation in the industry and is an amazing mentor - we’re honored to be his daughters.” ■

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25

GROWTH

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G

I

ROWING A LEGACY

n 1965, Buesing Corp. was founded with a bank loan of $11,680. Its revenues are now forecasted to exceed an impressive $40 million in 2017. /// For over 50 years, Buesing Corp. has provided the construction industry with best-in-class contract offerings including earthwork, trucking, dirt brokering, aggregates, shoring, shotcrete, crushing, recycling, and foundation drilling.

President and CEO Jerry Buesing, along with his brother, started the company in Minnesota with a trucking emphasis, hauling equipment for contractors in that state and North Dakota.

After paying off the initial loan, Buesing pushed ahead, adding excavation and shoring competencies to his repertoire.

In the mid-1980’s, much of the firm’s ventures involved construction projects in Northern Minnesota (and eight surrounding states), which were constantly bogged down due to excessive summer rains.

Undaunted, Jerry Buesing turned the meteorological setback into a long-term win for the company.

Working with a Denver-based contractor, Buesing Corp. bid and won its first project in Phoenix in 1986, the 91st Avenue Wastewater Treatment Plant.

“I decided to start a division in Arizona and moved about 25 employees and their families from Minnesota to Arizona,” Buesing said.

Buesing Corp. called Phoenix home permanently in 1988 and quickly developed a reputation as one of the most dependable construction specialty or subcontractors in the Valley.

“There is a resounding consistency to the messages we hear from clients about our professionalism and our team’s willingness to help solve problems,” said Vice President of Business Development Kevin Somerville.

The company’s motto: “Simply the Best!” underscores a commitment to its stakeholders of superior quality work and unparalleled value at competitive prices.

“I always say you can have the best equipment, ideas and project opportunities, but without the best people you will not have success,” Buesing explained. “We have the finest talent in the industry and our leadership team respects the individuals who do the work each and every day.” © Copyright 2017 by MP Media, LLC

ABCs of CRE:

The roster of large-scale and noteworthy projects across the metro Phoenix is impressive: Chase Field, Talking Stick Resort Arena, One North Central, CityScape, Liberty Center at Rio Salado, Marina Heights, plus a host of projects in Tucson.

In addition to its core competencies in excavation, material transport, shoring, grading and shotcrete, the company has thrived in the solar energy market since 2010 during the Great Recession.

© Copyright 2017 by MP Media, LLC

providing, but performs.

In some respect, Buesing Corp. could be considered a onestop subcontractor with many specialties. The breadth of Buesing’s capabilities allows it to successfully serve over 10 market sectors and meet customer and project needs.

“I always say you can have the best equipment, ideas and project opportunities, but without the best people you will not have success.”

- Jerry Buesing

Buesing Corp. is known as a specialty contractor with a reputation for niche construction scopes such as basements/ below grade garages, and concrete and asphalt recycling.

However, many in the industry might be surprised at the variety of services that Buesing is not only capable of

G

growth.

With the multitude of market sectors Buesing Corp. serves, the variety of services it provides, and its ability to perform work in several Southwest states, Buesing Corp. is poised to continue its strong

Jerry Buesing has an optimistic outlook: “We are very bullish on the future, with an eye to continue to get better.” ■

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ABCs of CRE:

H

HFF

H Best Team on the Field

H

olliday Fenoglio Fowler, L.P. (HFF), one of the nation’s largest commercial real estate capital intermediaries, opened its Phoenix office in 2016.

The Arizona office is the company’s 23rd location in the U.S. With its focus on debt and equity placement as well as investment sales. /// With the new location comes a fresh and energetic team, passionate about helping clients find the best capital for their projects. Commercial Executive Magazine sat down with the team to get its views on notable projects it has worked on, team dynamics, and the Phoenix market.

TEAM TALK

“The opening of the HFF office here in Phoenix had been contemplated for a while. We were waiting on the right opportunity to create the initial team. The goal is to perpetuate the HFF culture, which is very important. What separates us from everyone else is the team and trusted advisor approach to business, and then being able to add local expertise,” said Jeremy Womack, who relocated from HFF’s Austin , Texas office. /// The group is in agreement that the team model is one of the best aspects of being a part of HFF. “We believe in something called ‘best team on the field.’ When a client brings us a question, a project, a concept, whatever it may be, we evaluate it and then build a team around what they want to do. It may include all three of us, maybe two out of three, or it may mean that we need to bring in people from the East Coast offices. It all depends

28 © Copyright 2017 by MP Media, LLC

ABCs of CRE:

on what the client wants,” Womack said. /// The team explains that locating each other’s weaknesses is difficult, but their strengths are easily identifiable. Womack is the capital markets expert with an excellent understanding of HFF culture. Brad Miner is the debt and equity expert, and Ben Geelan oversees sales and investments. Informally, the team shared that Brad is in charge of entertainment, no one has anything negative to say about Ben, and Jeremy’s presence is unmatched.

PROGRESS & PROJECTS

One of the team’s recent projects is High Street, a masterplanned community in the North Valley and one of the

H

largest transactions in the state. Located near Loop 101 and Tatum Boulevard, High Street features offices, up-scale eateries, and the corporate headquarters of Sprouts Farmers Market Inc. HFF orchestrated the original construction loan, financed the project, and closed the deal. The team attributes the success of High Street to patience and maintaining their national relationships. /// “Another project that we closed here recently was the construction of The Local, a 286-unit luxury apartment complex at the intersection of University and Ash,” Womack added, referring to the nine story live-work-play development with a Whole Foods Market 365 on the ground floor. “What HFF brought to the table was a national approach to capitalizing a project in Tempe. Because of the nationwide perspective and platform that HFF brings to Arizona, we were able to the scour the market and find investors who had never invested in Phoenix. Ultimately, we were able to create a capital stack that was most efficient for the developer and execute the project that had been contemplated for quite some time.”

LOOKING AHEAD

The HFF team feels optimistic about the future of capital in Phoenix and projects to follow. /// “If you talk to any debt guy right now, they’d say they’ve never seen capital as active as it is today,” Miner said. “Interest rates are still low and competitive, capital is abundant. Everyone - insurance, banks, and life companies - is trying to get money out and invest.” /// The team notes that it has become increasingly easier to attract capital to metro Phoenix for a variety of reasons. One reason is coastal gateway market yields are compressing significantly. They need to deploy capital and the Valley is a secondary market that they push into. Another reason is improved fundamentals: office, retail, multi-housing, medical offices, student housing – which justify the returns that groups need to deploy their capital here in the state. /// “The positive momentum Phoenix has is really exciting,” Geelan continued. “We have pentup demand of constrained development pipeline, vacancy rates continue to decline, and we’ve seen consistent rent growth across the Valley. I’m excited for our position in the western market.” /// For 2018, Womack says HFF ambitions include more growth and acquiring new types of projects, notably multifamily developments.

“Our goal in the Arizona market is to improve liquidity locally, through introductions to capital that has never invested here or seldom invest here. When you hire HFF, you hire a platform and a national firm. Having access to national and global capital, that’s where it resonates with local operators and real estate companies.” /// The group has a positive outlook for the next five years, and feels confident it can lead its clients to success. ■ © Copyright 2017 by MP Media, LLC

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ABCs of CRE:

I

INFILL

I

Graycor Talks Infill

and the Camelback Collective We spoke with Graycor Construction in Phoenix about its newest infill project, the Camelback Collective and trends in construction in the Valley. Rusty Martin, Project Executive, and Kyle Walker, Senior Project Manager, at Graycor shared their story.

Q: You only had half an acre of land on which to stage the entire Camelback Collective construction project. What was the hardest part of this challenge?

A: We had two project cranes that each needed ample area to work, so orchestrating the use of our large project equipment on a “postage-stampsized” site was one of our biggest challenges. To mitigate, we placed one crane in the hole that would become the below-grade parking garage. This freed up a significant portion of the half-acre staging area to allow for the safe movement of employees and materials. We also created strategies for the shared use of other large equipment. So that, for example, one forklift was being used cooperatively among multiple subcontractors, versus each sub bringing their own.

Being mindful of our corporate and residential neighbors was also a critical component of the project. This boiled down to early, detailed and

30

very consistent communication with all of our project vendors to ensure that everyone involved understood the residential logistics of the area and planned the staging, routing and timing of their deliveries accordingly. To control site congestion and potential overflow into residential areas, we also moved employee parking off-site, renting space (at Graycor’s cost) within a nearby parking garage.

Q: Was this the smallest staging parcel you had to work with, or have you handled even smaller areas for infill?

A: Graycor specializes in infill development. But for Phoenix, this was the smallest staging parcel that our team has had to manage.

Success on tight projects like this doesn’t involve magic but it does require early and concise planning through a design-build approach, where a company like Graycor is brought in at the earliest stage of the process so that we can put in place the logistics that a project needs to be successful.

The crane positioning at Camelback Collective, for example, had to be orchestrated during pre-construction and with guidance from our structural engineer. It’s not something you can

© Copyright 2017 by MP Media, LLC

ABCs of CRE:

I

arrive at the site and coordinate after construction has started.

Infill construction naturally lends itself to design-build because it works solutions into the design of the actual building. Traditional development doesn’t take all of these nuances into consideration at such an early stage, which can create challenges later, particularly on intricate infill jobs.

Q: What are trends you are seeing with infill developments?

A: In Phoenix, there is a definite move toward more infill development. Municipalities, developers and building owners are seeing success stories like downtown Phoenix and Gilbert – what happens when you rejuvenate and bring people back to the city centers – and that is creating interest and energy for more.

The rapid and sprawling way that Phoenix has developed over the years has left a number of parcels along its growth path vacant. This gives infill a lot of places to land successfully, not only for office, retail and residential development but also for closer-in industrial and warehouse projects that give last-mile and other logistics companies a more strategic location for quick delivery to people.

Q: For Phoenix, is redevelopment going to be a continuing trend?

A: We believe redevelopment will continue as long as the market is prospering and there is demand stimulated from growth. The Valley’s fairly significant inventory of vacant retail space will help to provide a number of opportunities on this front.

Q: Why do you think infill is important?

A: Infill keeps core markets alive and viable, versus moving into decline. Downtown Phoenix has been working to revitalize its core for years, and it is wonderful to see their progress. But success like this requires partnerships between city leaders, businesses and developers. Revitalization won’t happen if you infill just one parcel. Many Valley submarkets have recognized this, and have come together to create some very robust, walkable, millennial-friendly and transit-oriented urban communities with a real sense of place.

Q: Who do you envision in Camelback Collective?

Camelback Collective is a great example of this. The space here is truly Class A and designed for young professionals

© Copyright 2017 by MP Media, LLC

and contemporary businesses who thrive off of a central, efficient, high-amenity location. The AC Marriott Hotel markets to this same demographic with features like an on-site bar, fitness and pool amenities, a businessfriendly lobby and a board room. The rooms themselves are also designed for the modern traveler, with sleek interior finishes and high-tech features.

Q: The Valley has seen a lot of new mixed-use developments . How is Camelback Collective unique?

A: A lot of urban projects combine retail or restaurant with office space, but Camelback Collective’s combination of true Class A office (which GPEC has noted as being in very short supply in the Camelback Corridor) with a business hotel under the Marriott brand, is a big differentiator.

It allows for the recruitment of tenants like regional headquarters who rely heavily on hotels to service outof-state employees and visitors. The AC Marriot brand caters to these types of travelers. It includes a laundry list of amenities and a property designed for connectivity, including rooms with Wi-Fi access and six USB ports each, and a lobby and lounge peppered with the same.

The project is also within walking distance to a dozen restaurants and numerous neighborhood services.

Q: Since its founding, Graycor has taken on “hard jobs.”

Why? A: That tagline comes from our founding project in 1921, when Graycor demolished a retaining wall along Chicago’s Miracle Mile – surrounded by a live operating train and a very busy urban traffic corridor. No other general contractor or demolition company wanted to touch the project, but we did, and we were successful. That rooted Graycor around the idea of strong collaboration and looking at an entire project from the end forward. This is really the heart of the design-build concept, which brings contractors into a project at the earliest stage and empowers them to anticipate and design around challenges far ahead of time. We’ve been doing this for 95 years now. It is just the way that we build. ■

31

J J

JUNIOR

ABCs of CRE:

FATHER & SON:

THE FEENEYS 32

© Copyright 2017 by MP Media, LLC

ABCs of CRE:

I

n 1906, Patrick Feeney Jr.’s grandparents immigrated to the United States from Ireland. His grandfather was looking for a dry place to find work because of a muscular and joint problem.

After hearing about the desert town of Bisbee in a territory called Arizona, the Feeney’s planted their roots in the Southwest.

In 1917, the first Patrick Feeney was born, starting a tradition living on 100 years and counting.

Now, Patrick Feeney Jr. and Patrick Feeney III are carrying on the family name, as well as carving out a family business: commercial real estate.

Patrick Feeney Jr., Senior Vice President at CBRE, has worked at in the Phoenix office for more than 30 years.

especially because of our name.”

Both Feeneys experienced economic crises at the start of their careers. Feeney Jr. started at CBRE in 1985, and two years later the market took a turn for the worse on Black Monday.

Patrick III finished his runnership in 2007, right before the Great Recession. But the two believe that surviving the more difficult years have made them better at their jobs.

“You have got to wake up scared in the morning. If you ever wake up in the morning too comfortable, it’s not a good sign - ‘the wolf is always at the door’ in commission sales.”

- Patrick Feeney Jr.

Patrick Feeney III works at LBA Realty as leasing manager, adding another Feeney to the Phoenix real estate scene.

Patrick III remembers how visible real estate was in his childhood.

“We grew up with him throwing us kids in the back of the car Saturday mornings, buying us Slurpees, and then driving the market.”

When asked if he wanted to explore other careers, Patrick III said, “I didn’t look at any other industry when I left school. Real estate was always what I wanted to do. But, I didn’t want to work for my dad. I wanted to get out on my own and differentiate myself,

J

“You have got to wake up scared in the morning,” Feeney Jr. said. “If you ever wake up in the morning too comfortable, it’s not a good sign - ‘the wolf is always at the door’ in commission sales.”

Patrick III attributes his values and work ethic to watching his father. “He taught us to work longer and harder than everyone else. Our parents set us up with a good foundation, but it was up to us to make something of it. Watching my father work so hard growing up really instilled in us a great work ethic.”

For the Feeney’s, real estate is in their blood. Feeney Jr. prides himself on always being reachable, even on vacation. “I don’t even know how to spell ‘retirement’, it’s just not a concept I understand,” he said.

The two are looking forward to Phoenix’s prosperity and spending time with the family. And yes, if Patrick III has a son, he plans to carry on the name in the business. ■

Patrick Feeney Jr. pictured filling up on gas while driving Patrick III to college. © Copyright 2017 by MP Media, LLC

33

ABCs of CRE:

Executive Vice President of Investment Properties at Colliers International

A

s Executive Vice president of Investment Properties at Colliers International in Greater Phoenix, Mindy Korth is accomplished in all sectors of the investment commercial real estate market.

Korth’s real estate journey started in the 1980s. Though she was working as a certified public accountant, at 19 she got her real estate license and at 22 she received her brokerage license. After serving as Trammell Crow Company’s and CBRE’s executive vice president of investment properties for a combined 29 years, she joined Colliers in 2014 to lead her investment sales team.

When asked what is different about the industry today versus when she started, Korth explained, “There was a lot of development in the 1980s, but I used to say ‘we learned how to develop properties in the 1980s, we learned how to manage properties in the 1990s’, and our community has continued to improve with new development in the 2000s. So much has evolved since that time. Development has become more responsible, the quality of representation for clients and brokers has improved, technology has led to more savvy professionals, and Phoenix has emerged as a leader in creativity, innovation and sustainability.”

are very interesting to me.”

Korth has consistently been a Top 20 Producer since 2007.

Her secret? “I am a deal-junkie and a workaholic, but it’s always a bit of a balancing act, an act I have been practicing a long time. I like to merge the relationships and people-side of the business with strategy, knowledge and integrity into every deal.”

Korth is not planning on slowing down, sharing that she wants to live to be at least 110 years old. If she were not doing commercial real estate, Korth would like to be involved with development programs that teach parents how to instill self-esteem in children. Her involvement in Social Venture Partners confirmed with her the importance of early childhood education and learning resiliency skills.

“I’m a real estate nerd. I believe that knowledge is power.”

Korth’s experience in the real estate industry is vast, handling office, medical office, retail, industrial, as well commercial land and unique projects across Phoenix. She enjoys the wide array of projects she handles and says she would not want to be designated to just one sector. Her broad work experience provides her clients with a well-rounded broker that can handle any part of their transactional needs.

Her team closed a variety of deals this year and is under contract with its fourth data center. “It’s been a lot of fun working with data centers; technology-oriented companies © Copyright 2017 by MP Media, LLC

Her advice for young professionals: “Find your selfesteem and always adhere to your own personal value set.

I recommend finding a mentor. They do not have to be in your company or field. Find someone who unconditionally supports you, is willing to invest their time and wants only to see you succeed.”

MINDY KORTH

Mindy Korth

K

If Mindy Korth had to choose one word to describe 2018 it would be “enthusiastic”.

“At the end of the day, what are we here for? Life is about having fun and being exuberant, living like every day is your birthday.” ■ 35

L

LINCOLN PROPERTY COMPANY

ABCs of CRE:

36

L

© Copyright 2017 by MP Media, LLC

ABCs of CRE:

L

JOHN ORSAK:

MANAGING PROPERTIES & CHARITY John Orsak wears quite a few hats.

He was made Director of Real Estate at Lincoln Property Company in 2016, a title which encompasses a wide array of duties: lease negotiation and administration, acquisitions and dispositions, development and property management. “A little bit of everything,” said Orsak.

Orsak previously served as Director of Operations and Project Manager at Hines, and as Senior Director of Development for VanTrust Real Estate, where he specialized in development, acquisitions and property management.

“Having a property management background really helps when working on the development and acquisition side here at Lincoln Property Company,” he explained. “As you’re developing and acquiring buildings, it’s easy to look at a particular element like lobby design or a finish selection and say, ‘That looks great!’ But the key is being able to think a year ahead to consider whether these choices will actually work in the day-to-day management and long-term value of a property.”

This broad expertise also comes in handy when managing Lincoln’s variety of properties, which Orsak appreciates.

“Our portfolio encompasses historic, state-of-the-art, low rise, mid-rise, industrial, big-box, retail – really the gamut of property types. No day is the same.”

One notable property is Luhrs City Center, a downtown Phoenix mixed-use project which Lincoln acquired in December 2015. “Built in 1929, Luhrs requires its own set of skills to manage. There are historic preservation considerations involved, plus new capital projects at the site, where we have to figure out: ‘Do we blend the old with the new? Do we keep it period specific?’ There is a whole culture to the building that you have to consider.

It’s a historic, iconic asset.”

On the other end of the spectrum, Lincoln Property Company develops and manages state-of-theart properties like The Grand at Papago Park Center, which at build out will total 60 acres and 3.2 million square feet of mixed-use space and 1.8 million square feet of Class A office space north of Tempe Town Lake.

The four-building, Class A Waypoint office campus at the border of Tempe, Mesa, and Scottsdale is another Lincoln Property Company project.

“These properties are highly tech-oriented and very efficient. So much so that, if a maintenance issue arises, we can often manage it remotely - whereas at Luhrs, someone’s got to grab a wrench,” he explained. “I really like the breadth and depth of our properties.”

THE SPIRIT OF GIVING Seven years ago Orsak asked a friend if she knew a youth organization that could use Christmas gifts. What followed was a journey that would lead him to the founding of Santa’s Sak, a nonprofit that puts Christmas gifts into the hands of over 100 needy children each year during the holidays. Donations to Santa’s Sak go directly to children in state-sponsored care programs.

“The growth has been amazing. The first year there were 10 children, last year we gave to eight homes. Over the last seven years we’ve given about $50,000 in cash and gifts. I do the shopping, organize the wrapping party, and then deliver gifts to the facilities. Every child gets a stocking, two wrapped gifts, and the home gets items they need, like bookshelves, new furniture, gaming systems, DVDs, and so on. It’s been very rewarding and people inside and outside of our industry have truly inspired me in their willingness to get involved and donate.”

Orsak manages Santa’s Sak for Neighbors Helping Neighbors, a charitable organization with notable outreach efforts including Shop with a Cop and the Honor Flight program.

“For Honor Flight, Neighbors Helping Neighbors helped raise enough money to send every single World War II veteran in Arizona (that the organization is aware of) to the Veteran’s Memorial in Washington D.C.,” Orsak shared.

With the holidays in full swing, it is time for Orsak to change his hat yet again. “Because we manage buildings around town, we’ll be putting signs up in all the lobbies asking tenants to give to Santa’s Sak. All the funds collected will all go back to kids and their care facilities.”

Whether working at Lincoln Property Company or out in the community, Orsak is clear about what really matters.

“Doing good in the world is what you’ll be remembered for – whether it’s managing a deal or a property with integrity, or acting beyond yourself to help others. This is the only stuff that resonates.” ■ 37

© Copyright 2017 by MP Media, LLC

MILLENNIALS

ABCs of CRE:

38

M

What’s up with Millennials?

M

illennials. They’re trendy, they’re 18-37 years old, and they’re America’s largest generation. They’ve been blamed in the headlines for killing everything from craft beer to shopping malls. /// Besides being a hot topic in the headlines, they’ve shown how their lifestyles affect the retail, office and multifamily sectors.

Multifamily

Last year, Millennials led the way at 18.4 million of the estimated 45.9 million households that rent their home. /// They dominate the renter’s market, compared to 12.9 million Generation X and 10.4 million Baby Boomer households, according to the Pew Research Center. /// But you can’t count millennials out of home ownership quite yet. Between January and October this year Millennials accounted for 30 percent of mortgage applications in Phoenix, according to the Ellie Mae Inc.’s

Millennial Tracker. /// A recent study from SunTrust Banks found that dogs ranked among the top three motivators for first-time home purchasers (33 percent), cited by more Millennials than marriage or the birth of a child. /// Only the desire for more living space, 66 percent, and the opportunity to build equity, 36 percent, were identified by Millennials as reasons they purchased their first home. /// Whether it was Fido or financial security, older Millennials are looking to buy homes.

Top Metropolitan Areas for Millennials submitting mortgage applications

36% Yuma 30% Phoenix-Mesa-Scottsdale 27% Tucson 26% Sierra Vista-Douglas 21% Flagstaff 16% Lake Havasu City-Kingman 13% Prescott

© Copyright 2017 by MP Media, LLC

ABCs of CRE:

Retail

Millennials are demanding more flexible, mixeduse spaces. Instead of simply building one-offs independent of their surroundings, Millennials are in favor of building complete neighborhoods, according to ULI’s Emerging Trends report. They are looking for live-work-play destinations. /// For a

M

generation that loves to shop online, Millennials tend to focus more on experiences and entertainment than material goods. /// Millennials appear to be spending less on apparel and housewares, and a greater percentage of their incomes on dining out and entertainment.

Office

Millennials are looking for open-concept and collaborative offices.

The generation is looking for high-tech perks such as office hoteling (reservation-based unassigned seating) and flexible hours, according to the ULI’s Emerging Trends in Real Estate® 2017 report. /// A survey of 2,000 Millennials indicated further need for amenities such as rest areas, wellness facilities, green space, game rooms, convenience stores, and daycare facilities. /// Besides the ping-pong tables and sit-stand desks, Millennials are also leading the way in weird office features like nap rooms and choosing positive and “productive” color schemes for furniture.

© Copyright 2017 by MP Media, LLC

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NEW YEAR, NEW OPPORTUNITY

ABCs of CRE:

40

N

BROKER TEAM of the MONTH Ashley Brooks & Jim Bayless CEM-AZ.COM • I S S U E 5, 2016

CREATIVE PRINT AND ONLINE AD PACKAGES TO FIT ANY BUDGET C O N TA C T U S T O DAY (602) 955-2899 | karen@mpmediaaz.com | cem-az.com

© Copyright 2017 by MP Media, LLC

ABCs of CRE:

ABCs of CRE:

O

O

ORION SHINES IN RETAIL, LOOKS TO GROW IN LAND rion Investment Real Estate spent 2017 growing strategically, expanding its team, listening to its clients, and carving out its name in the Valley.

CULTIVATING CREATIVITY /// If there’s one word Spiro and Stutzman say they would be using to describe 2018, it’s creativity. /// “We’re listening to our clients, and bringing new ideas for mixed-use projects,” Stutzman said. “We don’t like to box ourselves in and we let clients bring their creativity to the table.” ■

ORION

PUTTING THOUGHT INTO RETAIL /// Ari

Spiro, President of Orion, said the year has brought mixed-use and creativity to the retail space. /// “Retail is our bread and butter,” Spiro said. “We’re paying attention to how retail is shifting and becoming more experiential.” /// Spiro said his company and clients are making sure they are focused on tenants that will bring individualized and personal experiences. /// “There has to be thought behind these projects,” Spiro said. “The days of just dropping a project on a lot are gone.”

TECHNOLOGY TRENDS /// Sean Stutzman, Principal, said

Orion is focused on expanding the company’s business and staying on the cutting edge of marketing. /// “Technology and the Internet have completely changed our industry and we’re always exploring new ways to market our products,” Stutzman said. /// The company currently provides print and web marketing, online management, social media and brand strategy, with an open mind towards new platforms.

LOOKING TO LAND ///

Notably, the company also hired a lead for their land team this year. /// Larry Kush, a 35year industry veteran, was brought on as Senior Vice President. /// Stutzman said that each hire has been a calculated addition to the team, in order to keep the shop collaborative and open. /// “We hired Larry, already we’re seeing how he has collaborated with other departments in deals,” Stutzman said.

Ari Spiro © Copyright 2017 by MP Media, LLC

Sean Stutzman

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P PARK CENTRAL

ABCs of CRE:

42

P

Diamond in the Rough HOW SHARON HARPER AND STAN SHAFER ARE TRANSFORMING A FORGOTTEN PHOENIX GEM

I

n the 1950s, brothers Ralph and A.J. Burgbacher purchased the 46-acre Central Avenue Dairy in Phoenix. The plot of land was two miles north of the state Capitol and came to be known as “Uptown” Phoenix, pushing the edges of the city at the time. /// It was there in 1957 they constructed Phoenix’s first shopping mall, Park Central. It was an open-air mall, with its anchor tenants being Goldwater’s department store, Diamond’s, and a J.J. Newberry store. /// Over the years, Park Central Mall has witnessed the expansive development of Phoenix while slowly falling out of function. /// But 60 years later, there is new spark of life for Park Central, thanks to its sale in 2017 to Plaza Companies and Holualoa Companies - two enterprises passionate about reinvigorating the area’s vitality and culture. © Copyright 2017 by MP Media, LLC

ABCs of CRE:

P

Stan Shafer, COO of Holualoa Companies, and Sharon Harper, president & CEO of Plaza Companies, in front of a Park Central rendering.

“If this were five or six years ago, you would have looked at Park Central and said ‘this needs to be torn down, you need to build something nice and new’ – but the office market has evolved.

Now, office tenants are looking for creative, authentic space,” said Stan Shafer, COO of Holualoa Companies. “This was a vibrant community landscape, that’s what we want to bring back.”

“I think everyone in the commercial real estate industry has looked at Park Central and said ‘This is the most strategic location in town, how can we make it work?’ Our team will make it work,” said Sharon Harper, President & CEO of Plaza Companies.

only thing missing was people. Now, the people are here, and that development is growing up Central Avenue.”

With the help of historic societies and the ASU Public History graduate program, the hidden gems of history at Park Central are being preserved and catalogued. Harper says during construction, they have found original blueprints, advertisements and photographs from the mall’s origins, as well as old newspaper clippings saying Park Central mall is too far north and “will never work.”

The team of Plaza Companies and Holualoa Companies has already garnered acclaim with SkySong, The ASU Scottsdale Innovation Center. The project, voted “Best of NAIOP,” has been invaluable in attracting cutting-edge technology and innovation companies to Metro Phoenix, as well as more than 2,000 jobs.

SkySong has received considerable recognition for its efforts in green building and sustainability.

An important outreach effort for the developers is including the creative community in the process. “Arts and culture is such an important part of a neighborhood,” Harper said. “We’re very excited to be working with a number of art groups who are committed to collaborating with the commercial sector to bring best practices here.” Park Central has earmarked spaces for the arts and culture community to contribute their work, including three large walls that will be turned into murals.

“Partnering up again for Park Central was natural, especially with our track record at SkySong,” explained Harper. “Our companies have the same set of values and goals; we respect the tenants, have great relationships with municipalities, and strive to have good relationships with the arts and culture community. We both admire each other’s companies.”

The two developers are in agreement that they have something special with Park Central. “There are beautiful high ceilings, high-end amenities, light-rail, existing parking – it is exactly what tenants are looking for,” Shafer said. “It’s going to take work to make it more attractive, but we have a great design team with richärd+bauer.”

At the intersection of Central Avenue and Earll Drive, the area is prime for redevelopment. ULI Arizona members voted the nearby intersection of Central Avenue and Camelback Road the “hottest intersection” in Metro Phoenix in 2017, citing its thriving work-live-play amenities.

Holualoa Companies and Plaza Companies aim to make Park Central a modern office campus: creative workspaces, connectivity throughout the area, attractive amenities, gathering spaces, and art – to attract a younger, newer workforce.

Shafer thinks that Park Central will play a large role in revamping the area. “Our vision is that the urban environment of downtown will extend to Central Avenue. Downtown is going through a huge transformation; it has all the components of an urban environment: arts, culture, sports, and employment – the © Copyright 2017 by MP Media, LLC

“The new component of fabulous office spaces is great bones: spacious, open rooms; good restaurants close-by; in-door and out-door meeting spaces; neighboring multifamily residences and historic neighborhoods - that’s what draws people, and companies as well,” Harper said. “Everything ground-up development is trying to do, we have right here at Park Central.”■ 43

ABCs of CRE:

Q

Q &A WITH

JAMES DUMARS Senior Vice President & Managing Director at

I

Q&A

t’s been just over 10 years since the last wave crested for the capital markets. Veteran financier James DuMars looks back and compares then to now.

Q: What is similar?

A: Capital is flowing and nearly every lender wants to deploy more capital than the year prior.

Consequently, it’s an extremely competitive environment and spreads are very low.

CMBS was the driver in the last boom with all the “WMD” such as “CDS” and “CDOs”.

This go around I have to give the award to the agencies and banks as the drivers. The agencies are continually exceeding $100 billion per year and this isn’t expected to change anytime soon.

Large profit margins on new construction are driving new developments. An example is a multifamily project that just opened. It cost $140,000 per unit to build and just traded for $210,000 per door to an all cash buyer.

This news spreads quickly and breeds more exuberance.

Q: What’s different with underwriting?

A: The underwriting for permanent loans is still pretty sound since everyone has skin in the game. In the last cycle, CMBS lenders were getting the junk pieces rated AAA and selling the entire traunch with no downside to them. Not this time.

The agencies have some limited exposure as do the actual DUS licensees. The banks and life companies have 100 percent exposure. We’ve seen some banks dial back to 60-65 percent LTC on new construction as their balance sheets became too heavy with new apartment loans.

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NorthMarq Capital

Q: What’s the most and least popular property type?

A: Lenders are somewhat on edge when it comes to big box retail. E-commerce and its unknown long term impact have caused some to simply be more aggressive to win loans on alternative property types to retail while others seek limited guaranties or reserves to offset the unknown risk. Always lots of questions when we take a retail deal to market.

Q: What the most sought after asset class?

A: Low leverage, Class A multifamily is probably the most sought-after asset type. Followed by institutional grade multi tenant industrial. Flex office and suburban office are not as attractive but are still getting financed.

Q: Where are we in the cycle?

A: It’s really anybody’s guess. But most would agree we’ve been in a falling interest rate environment for 20 years and we’ve all reaped the benefits. Low rates have helped us raise our standard of living even while incomes stayed relatively flat.

Low rates with abundant cash stashed during the 2008/2009 era have contributed to cap rate compression and we’ve seen new historic highs (in terms of values) in certain property types.

On a macro basis, despite the record level of national debt, the U.S. Dollar continues to hold the top spot as the number one currency reserve in the world which bodes well for all of us.

What’s similar: Cycles come and go and it seems there’s always an unknown catalyst that causes the bubble to form and eventually burst. Be prepared and accept that this is part of the industry. ■ © Copyright 2017 by MP Media, LLC

ABCs of CRE:

R

RETAIL

R J

oe Compagno took an interest in commercial real estate in college and pursued it head-on after graduating from Arizona State University. After years of perseverance, Compagno now leads CBRE’s Net Lease Property Group Phoenix, which is ranked one of the top investment sales teams in the country. He and his team specialize in the sale of single and multi-tenant investment properties in Phoenix and throughout the U.S. Commercial Executive Magazine sat down with CBRE’s First Vice President of Investment Properties to learn about his path and what he’s experiencing in the market.

© Copyright 2017 by MP Media, LLC

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ABCs of CRE:

R

Kneader’s Bakery & Cafe Portfolio $30 million in 10 properties

Walmart Supercenter $14.4 million

Q: How did you get your start in the industry and at CBRE? A: I first got into real estate because it would give me the ability to control my own destiny based on a commission income. I started at Marcus & Millichap in 2004 and transitioned to CBRE over five years ago.

The retail space interested me from the get-go, so when I was given the opportunity to lead the netleased team at CBRE, I accepted. Being here at CBRE, I always say, “Why be anywhere else? CBRE is the largest investment sale platform in the world.”

Q: Who were your mentors?

A: Dave Wetta has been a key mentor for me over the years. Joe Blackbourn from Everest Holdings has also been instrumental, we connected through ULI. Q: What trends or headlines are you noticing in the industry?

A: The 1031 exchange has been a key area of focus in 2017 for the commercial real estate community.

There’s been discussions around it being eliminated through tax reform. Currently, Section 1031 of the U.S. Internal Revenue Code allows investors to sell assets and reinvest the proceeds in “like-kind” properties to defer capital-gains taxes. The 1031 exchange is the best tax benefit available to investors, and without it, activity would likely slow. An update put out by CBRE recently suggested that the 1031 Exchange will be 46

Starbucks Portfolio 3 locations in Mesa, Phoenix and Flagstaff

staying in place, however, that will not be confirmed until tax legislation is finalized.

Q: What is the future of retail, especially considering “the Amazon effect” coming from online shopping?

A: The retail industry is feeling the competition of e-commerce, especially big box and junior box properties. Anything that e-commerce impacts is a topic of conversation with buyers. I will say, there is good demand for brick-and-mortar retail, especially for restaurants and service-based concepts. I have had great success in setting record low cap rates this year for tenants like Walmart, Starbucks, Kneader’s, Freddy’s, Pei Wei, Red Robin to name just a few.

Q: How do you see the outlook of Phoenix?

A: Phoenix is one of the best markets to invest in right now and in the future.

The market is seeing tremendous employment growth and led all other markets for population growth from 2015 to 2016.

Q: What are you passionate about?

A: Investment sales has always interested me, and I am grateful to be able to do what I love. Outside of commercial real estate, I enjoy spending time at home with my wife and two kids.

While studying abroad in Florence, Italy, in college, I picked up the travel bug. My wife and I love to travel around Europe and the U.S. as much as we can. ■ © Copyright 2017 by MP Media, LLC

ABCs of CRE:

In June, Berkshire Hathaway purchased a 9.8 percent stake in STORE Capital. Commercial Executive Magazine interviewed Chris Volk, President and CEO of STORE Capital, on the new investment and what it means for his company.

S

Q: How has the $377 million investment affected your company?

A: The investment in STORE by Berkshire represents a vote of confidence in our business model and leadership team by the best-known value investor in the country. The investment definitely served to raise our profile.

Q: STORE Capital was founded in 2011 and has experienced a prosperous beginning. To what do you attribute your success?

A: I guess you could say that we are a near-term success that has been over 30 years in the making.

STORE is the third net lease company I have helped to bring public.

Our leadership team has learned from every company we have run and we think that STORE is the finest company we have ever created.

Q: The 2nd annual Inside Track Forum is around the corner, in conjunction with The Waste Management Phoenix Open. How did Inside Track Forum come to be, and why is it important to STORE Capital?

A: Our revenue comes from owning a highly diverse pool of profit-center real estate that is leased to companies on a long-term basis.

In turn, our real estate ownership results from our tenants’ preference of having a landlord rather than a banker. Because, by renting from us, rather than by committing equity to real estate and borrowing from a bank, our tenants have the chance to gain wealth by lowering their cost of capital and improving their balance sheet flexibility.

With such a value-added proposition, we have naturally looked upon our tenants as customers. The Inside Track Forum is an educational event that we conceived with Arizona State University to provide a day of education to our customers to help them with their continued success. © Copyright 2017 by MP Media, LLC

The idea was to offer up a handful of actionable ideas that can help them over the next year or two to gain the inside track. Pairing this educational event with the opening round of the Phoenix Open, the most highly-attended event on the PGA Tour, just adds to the overall customer experience.

And it always helps that we are located in the closest office building to the Phoenix Open.

Q: What is STORE Capital’s outlook for 2018, especially considering the investment?

A: For the past three years, our investment activity has approximated $100 million a month.

This year, we have paired that investment activity with some assets sales, so we have been targeting a net investment activity for the year of $900 million, which is what we estimated in November of 2016. In our third quarter earnings call this year, we guided to a similar net number for 2018.

STORE CAPITAL

STORE CAPITAL’S PRESIDENT & CEO ON BERKSHIRE HATHAWAY INVESTMENT

S

Ours is a flow business, with an average investment size in the area of $10 million, so it takes a lot of transactions to get to gross investment activity of $1.2 billion and net investment activity of $900 million.

We make this commitment because we have confidence in our customers, the industries they are in and in the overall economy in which they operate. ■ 47

ABCs of CRE:

T

T A

ECH COMPANIES:

TECHNOLOGY

FOCUSING ON THE EMPLOYEE EXPERIENCE

48

ttracting technology companies has become one of the most important goals for the Valley. /// Commercial Executive Magazine sat down with two technology leasing experts at JLL, Keith Lammersen and Ryan Bartos, to learn how they are marketing to tech firms and bringing big names into Arizona.

Lammersen serves as Senior Vice President and Bartos as Executive Vice President for JLL.

PROVIDING THE EMPLOYEE EXPERIENCE

Technology companies relocating to the Valley are putting an emphasis on location and amenities focused on attracting and sourcing talent over any other criteria. /// “It’s becoming less about the brick and mortar and equally, if not more important, to focus on the employee experience,” Lammersen said.

DIPPING A TOE IN THE MARKET

Recently Indeed.com, a worldwide employmentrelated search engine for job listings, signed a sevenyear lease for 53,000 square feet at the Scottsdale Galleria. /// Lammersen represented the company. /// Indeed originally sub-leased 25,000 square feet in the building before agreeing to the long-term lease. “They dipped their toe into the water, so to speak, and then expanded from there,” Lammersen said. “We’re seeing this a lot and this is a deal that really articulates that.” /// Lammersen explained that within months of Indeed’s sublease they were committed to expanding their space in Scottsdale due to the amenities nearby that helped attract and retain talent.

TRENDING TECH OFFICES IN PHOENIX Who: FinTech company from San Francisco providing a consumer credit platform Where: Downtown Phoenix Who: Publishes crowd-sourced reviews about local businesses Where: Scottsdale Who: Global rideshare and transportation company Where: Downtown Phoenix Who: Employment-related search engine for job listings Where: Scottsdale

additional 200 employees by the end of 2018. /// “We were able to find them space where they could grow and were near so many walkable amenities,” Bartos said.

BECOMING THE NEXT TECH HUB

“We are on the precipice of become something like Austin,” Lammersen said. Bartos said companies like Zenefits and State Farm, which hired hundreds of young employees in Tempe, are bolstering the area for tech companies to settle. /// “We’re a long way away from being the next Silicon Valley,” Lammersen said. “But it’s not a stretch to say that we offer a very attractive alternative for tech companies.” ■ Keith Lammersen

TAKING THE PLUNGE

Bartos recently helped Upgrade, a financial technology company from San Francisco, relocate to downtown Phoenix. The company now has offices in San Francisco, Phoenix and Montreal. /// The new office totals 38,000 square feet as Upgrade looks to acquire 100 employees. /// The company said it Ryan Bartos intends to hire an

Source: JLL Tech Office Trends | Fall 2017 © Copyright 2017 by MP Media, LLC

Uptick

ABCs of CRE:

U

(noun): a small increase

We’ve compiled data that shows how the Phoenix market has seen some upticks in various markets.

Office

Source: JLL Q3 2017 Office Insight: Phoenix

Retail The marketwide average asking lease rate increased from $0.64 last quarter to $0.65 NNN per sq. ft. (monthly) in Q3 2017. Rent growth was most signifcant in Southwest Phoenix and Northwest Tempe submarkets (where available space is limited), climbing 25.6 percent and 19.7 percent, respectively.

UPTICK

Although absorption slowed slightly in the third quarter, it is still the 17th straight quarter of positive net absorption. The average asking rent in Phoenix increased just 0.4 percent from the previous quarter.

Source: CBRE Research Q3 2017

Industrial The Phoenix retail market’s average asking lease rate ended the third quarter at $17.11 per sq. ft. (NNN). Marketwide, the average asking rent increased 5.0 percent year over year. The Scottsdale and North Scottsdale submarkets continued to lead the market with the highest asking rents due to relatively low vacancy rates and favorable demographics.

Source: CBRE Research Q3 2017

© Copyright 2017 by MP Media, LLC

49

ABCs of CRE:

V

“In Vizzda, you can zoom around a map and easily see what every commercial property has sold for, as well as see all of the new projects coming out of the ground.”

VIZZDA

-Kris Thompson Co-Founder of Vizzda

V

izzda is a Tempe-based company focused on providing real-time data on commercial real estate transactions. We spoke with Kris Thompson, co-founder of Vizzda, about the company’s start, how it’s helping clients by generating leads, and its new market expansion.

Q: How does Vizzda work from a client perspective?

A: We like to think of Vizzda as Zillow for commercial real estate (minus the “For Sale” properties). In Vizzda, you can zoom around a map and easily see what every commercial property has sold for, as well as see all of the new projects coming out of the ground. /// In addition, Vizzda offers a robust suite of tools, from realtime alerts and comp reports, to saved property alerts and data exportability—that allows our professional clients to connect quickly with the most active people and properties in the market.

Q: What event in your life inspired you to cofound Vizzda?

A: When the recession hit in 2008, I was working in commercial real estate brokerage. I began systematically tracking every commercial property going to auction in Phoenix and compiling the information in a spreadsheet. /// Initially, I was emailing an updated version of the spreadsheet to a few clients each morning but as word spread, the list of recipients began snowballing. Within a few months, the list had grown from five, to 10, to several hundred, and then over a thousand recipients. Soon we began charging for access to the list, and thus

50

PropertyLogix was born. /// Later, I had the good fortune of merging PropertyLogix with my late partner, Hadden Schifman, and his property database, IBIS. The merger allowed Hadden and I to create the property database we had dreamed of during our days in brokerage.

Q: How many active users is Vizzda serving?

How many companies/firms?

A: Vizzda currently provides data to more than 1,000 professionals from the best firms in Phoenix’s commercial real estate industry, including CBRE, Cushman & Wakefield, Marcus & Millichap, DMB, Harvard Investments, Kitchell, Weitz, Okland, and hundreds of others.

Q: How much is a monthly subscription?

A: Vizzda has five subscription tiers based on the number of users and an annual discount for yearly subscribers. /// Anyone on the fence about using Vizzda can try it completely free for the month of December by signing up at www. promo.vizzda.com.

Q: We hear you’ve launched into Florida. Tell us about why you chose that market and what it’s been like expanding there.

A: In 2017, Vizzda evaluated 15 of the largest Metropolitan Statistical Areas in the United States. We used a weighted matrix of 10 criteria to determine the best market for Vizzda’s expansion. It came down to Seattle and South Florida. /// South Florida’s data architecture is more similar to Maricopa’s, so we moved in that direction. In hindsight, we couldn’t have picked a better market than South Florida to prepare us for our eventual goal of national expansion. ■

© Copyright 2017 by MP Media, LLC

ABCs of CRE:

Photo courtesy of Visions in Photography

E

More than 20 contractors worked on-site to prepare the land for the event. This year’s community project was co-chaired by Kim Kleski, principal landscape architect at Kleski & Associates, and Todd Leslie, senior manager of land development at EPS Group.

It was an inspiring few months of work – fundraising, engineering, planning, design, and installation with hundreds of volunteers and families – all culminating in a new urban farm that will be used to grow food, develop workforce skills and ultimately help clients find work and homes.

In addition, state-of-the-art irrigation and shade awnings were installed to extend the growing season.

Future plans call for hydroponic gardens in two Mobile Mini shipping containers that were donated.

ach year, Valley Partnership selects a nonprofit organization that can benefit from the skills, efforts and supplies provided by its partners to renovate and enhance facilities for children and those in need. For 2017, Valley Partnership’s 30th Community Project transformed a long-vacant parking lot into the third urban garden location for The Society of St. Vincent de Paul.

“Valley Partnership is about giving back to the community, working with city partners and networking,” said Cheryl Lombard, President/CEO of Valley Partnership. “We look for charities that relate to what is happening in our community, and this year St. Vincent de Paul was the ideal candidate.”

A cornerstone of Valley Partnership is community service – the organization has now contributed more than $4.5 million to the community through these projects. © Copyright 2017 by MP Media, LLC

Hundreds of volunteer hours went into building raised planter beds, laying pavers, building a chicken coop, an outdoor classroom, and a meditation area; and planting fruit-bearing trees.

As the recipient of Valley Partnership’s 30th community project, St. Vincent’s believes that the enhancement of the Urban Farm will further their mission.

Ryan Corry, Development Officer with The Society of St. Vincent de Paul explained, “This project impacts our ability to improve health, food sources, wellness education, and connection to employment for our most vulnerable populations. We couldn’t be more proud to be working on these important initiatives with Valley Partnership.” ■

WORKING TOGETHER

W

W

51

ABCs of CRE:

X

XERISCAPE

X

52

Xeriscaping is a style of landscape design requiring little or no irrigation or other maintenance, used in arid regions.

More than 10,000 Valley households, businesses and HOAs have swapped grass for desert landscaping through city-funded programs that encourage water conservation.

An acre of turf uses almost 70 percent more water than an acre of xeriscaping, according to the Arizona Municipal Water Users Association.

Š Copyright 2017 by MP Media, LLC

ABCs of CRE:

outh

Outreach

CATHY TEETER TAKES ON NEW CHALLENGE WITH BOARD OF DIRECTORS POSITION

C

athy Teeter, Senior Director, Sales Management for CBRE’s Southwest Market Area, has taken on new role outside of work: bettering the lives of at-risk youth in the Valley.

This fall, she was appointed to the Board of Directors at New Pathways for Youth, a nonprofit organization whose mission is to empower youth to reach their full potential through mentoring and life skill development.

Teeter has been involved with New Pathways for Youth for years, attending fundraising events with her husband and making charitable contributions to the organization.

“Hearing mentee’s and mentors’ stories of hope and inspiration and witnessing firsthand New Pathways for Youth’s impact on the youth in our community moved me to action,” Teeter said. “You can change children’s lives simply by being present and helping them see the possibilities ahead of them.”

New Pathways for Youth provides a curriculum of intentional programs through which youth, with the support of their mentors, acquire and effectively apply knowledge, attitudes and skills.

Their programs include life skill development workshops, one-to-one mentoring with a trained adult, enrichment activities, parenting workshops, service learning projects, homework and college application help, as well as intensive camps and retreats.

© Copyright 2017 by MP Media, LLC

Most children involved in New Pathways for Youth are identified through counselors at school, who recognize the student’s potential but see they may need some intervention. Started in 1989, the 501c3 has positively impacted the lives of more than 5,500 young people around Greater Phoenix.

“Sometimes it’s hard to break outside of our bubbles to see how other people live. Good and bad, we all have been through circumstances that have shaped our lives.

It’s important to show young people that they can break down barriers and create new paths in life,” Teeter said.

In 2014, Teeter joined CBRE as Regional Director of Operations, where she drove process consistency and scalability by realigning management and support into functional areas.

She was promoted to Sales Management in 2015 and became one of seven leaders with overall responsibility of the Southwest Advisory & Transaction Services operation.

YOUTH OUTREACH

Y

Y

“When I was first approached by New Pathways, I was filled with self-doubt, wondering if I have what it takes to make an impact. But, the other women board members encouraged me to embrace the challenge and become more involved in a meaningful way. It’s so important to carve out time to give back, especially to an organization that’s as worthy as this one.” ■ 53

ABCs of CRE:

Z

RISING FROM THE ASHES:

PHOENIX FACES ZONING CHALLENGES

ZONING

Stephen Earl, Paul Gilbert, Michael Lieb, and Jason Morris contribute their expertise on the current climate of zoning and development in Phoenix.

T

he Valley is currently experiencing an increase of development, redevelopment, and housing projects to keep up with Phoenix’s evolution as a major urban city.

While the three largest cities in the country - New York, Los Angeles and Chicago - lost population between 2015 and 2016, Phoenix experienced an almost two percent growth according to the U.S. Census Bureau.

The Phoenix area needs new multifamily development to support this population growth, especially in Central Phoenix. Booming retail areas, like the 7th Street corridor between Bethany Home Road and Camelback Road that has seen 11 restaurants come to town in recent years, need housing options to support these new infill businesses.

Despite a growing demand for luxury multifamily housing in the Phoenix Metro, many developers are facing resistance from neighborhood groups who oppose the changing landscape.

Z

Often, the loudest voices are those from nonaffected areas. These activist groups seek to stop most infill and redevelopment projects such as restaurants, multifamily, retail, and office spaces. While these groups yield little power in stopping projects, the animosity and misinformation they generate takes a toll on attitudes towards new development.

The protest groups attend neighborhood meetings as well as council meetings on new proposals, even though some may not live nearby. They use online tools to sway the opinion of residents in the area with exaggerated claims in order to pressure elected officials to oppose projects

54

that would increase property values; replace blighted areas with new, vibrant projects; and bring construction jobs. Their claims argue that high-end multifamily developments will lower home values in affected areas, when quite often the reverse is true.

While the average five-year property value appreciation in Maricopa County between August 2012 and June 2017 was $90,000, sales comps surrounding Biltmore on Camelback, built in 2013, have an average appreciation of over $106,000, according to data by Michael Lieb, a major player in Phoenix infill development.

Misleading arguments about property values presented by activist groups appeal to older residents who vote in high numbers. These residents tend to be longtime home owners who are resistant to seeing their community undergo change. Often, single family home owners’ voices seem to be valued more than the voices of renters, condominium and apartment residents, and neighboring business owners.

Despite nostalgia for a less-developed Phoenix, the need for newer properties and housing persists. A recent study by Arizona Multihousing Association and the National Apartment Association found that the Phoenix area will need to add over 150,000 new apartment units by 2030 in order to keep up with demand.

Until recently, there had been a flight out of the central city with little new development. That has changed with the exciting uptick in redevelopment.

The demand is largely being driven by the Millennial generation, which as a whole prefers to buy homes later, or not at all, in favor of renting. © Copyright 2017 by MP Media, LLC

ABCs of CRE:

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Paul Gilbert Co-Founder Beus Gilbert, PLLC

Jason Morris Founding Partner Withey Morris, PLC

Michael Lieb President Michael A. Lieb, Ltd

Stephen Earl Partner Earl, Curley & Lagarde, P.C.

For over four decades, Mr. Gilbert has been the lead lawyer on many of the most high profile zoning and land use matters in Phoenix.

Throughout his career, his practice has been exclusively in land use, planning, zoning, and administrative law.

Deemed the ‘King of Infill’, Lieb has been a key player in the development of thousands of acres located in urban and rural areas throughout Metro Phoenix.

Earl has concentrated his practice in zoning and land use law for over 30 years.

Multifamily developments and Class A apartments are becoming increasingly popular options due to the unique amenities offered by modern, sophisticated complexes.

“Millennials don’t want to move way out to the cotton fields, they want to be where the action is: the city. Zoning this can be difficult, because it’s a matter of squeezing something new in, or tearing something down to build something new,” said Michael Lieb.

The decrease of outward expansion is leading to more urban developments, and consequently, more people are affected by construction. Zoning attorneys like Jason Morris of Withey Morris, PLC note that decades-old developments are crying out for redevelopment, but neighborhood groups as well as cities are reluctant to agree to high-density areas. “It makes zero economic sense to tear down old office buildings and apartments, only to build a two-story building… allowing density is the way to revitalize these areas,” Morris said.

FOSTERING COMPROMISE

Regarding neighborhood groups that are adjacent to and affected by new projects, developers are more than happy to work together to improve the community. “A lot of the time, the job is really answering questions so people understand what you’re really proposing. Adjacent owners have legitimate concerns about building height, access, view corridors, the height of trees, landscape buffers, and so on; that collaborative process with surrounding owners is valuable,” said Stephen Earl, an attorney at Earl, Curley, & Lagarde P.C. On some occasions, Earl has even invited concerned people in the surrounding community to recently completed developments

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to show them what the finished project will look like and how it will work with their properties. After seeing the high-quality, stylized projects, many of those people become supportive of new developments.

Paul Gilbert of Beus Gilbert PLLC says that opposition towards new development can be reduced by sitting down with the affected neighborhood and exchanging ideas. “Being patient, rather than adversarial, leads to productive meetings.” Gilbert notes that many times, neighborhood groups can be placated by developers making projects eco-friendly or LEED-certified.

Developers should keep open dialogues with surrounding owners and residents to resolve potential concerns about things like setbacks, landscaping, vehicle access and parking and make necessary changes to avoid disrupting the fabric of the location that they are building in.

Frequently, the key to understanding development proposals is the contextual environment surrounding a proposed project. If a project takes away the uncertainty of blighted or vacant property and will replace it with a beautiful new development, then that acts as a catalyst for more beneficial improvements.

Those in the business community believe that if citizens are willing to embrace the vision of what Phoenix could be in five years and beyond, they should elect pro-growth representatives to public office.

By keeping affected neighborhood groups in the loop on projects, developers can replace properties that have outlived their useful life with vibrant new apartment communities, restaurants, or retail venues that will respond to emerging trends and benefit residents and the city for decades to come. ■ 55

Company Milestone: Cushman & Wakefield’s Centennial

C O M PA N Y M I L E S TO N E

CUSHMAN & WAKEFIELD CELEBRATES 100 YEARS

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Company Milestone: Cushman & Wakefield’s Centennial

Phoenix office at the 2017 Cushman & Wakefield Symposium with Chief Executive of the Americas Tod Lickerman and John Cushman III. From left to right: Sue Cannon, Bryon Carney, Tod Lickerman, Will Strong, Andy Markham, John Cushman III, Christie Veldhuizen.

C

elebrating its centennial this year, Cushman & Wakefield made its debut in Phoenix over 45 years ago. The firm opened a local office in 1970 to handle the leasing and property management for the Valley National Bank building, now known as the Chase Tower.

Having been in the Phoenix office for almost 30 years, Industrial Executive Managing Director Jim Wilson said, “Locally, it has been exciting to see the firm grow from a small remote office to a regional powerhouse that touches most of the major developments, clients and submarkets in Metro Phoenix.”

Cushman & Wakefield has grown to become the second-largest commercial real estate brokerage in Metro Phoenix, handling deals worth $2.89 billion in 2016, including 1,143 leases and 290 sale transactions. Phoenix’s property management division is the third-largest property management company as of the end of last year, with a local portfolio of 27.6 million square feet.

Chris Toci, Capital Markets Executive Managing Director in Phoenix, said, “Cushman & Wakefield has identified six star performing markets going into 2018 including New York, Florida, Texas, Canada, Atlanta and Phoenix. Cushman & Wakefield research shows that 60 percent of global sales activity occurs in 30 cities, Phoenix being in the top 25, making it an exciting market to watch in 2018.”

The company got its humble beginnings when J. Clydesdale Cushman and Bernard Wakefield co-founded the Cushman & Wakefield property management firm in New York in 1917.

The 1960s served as a period of national expansion and acquisitions for Cushman & Wakefield, opening offices across the U.S. In 1969,

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RCA Corp. acquired Cushman & Wakefield and seven years later sold its stake to the Rockefeller Group. This catapulted the firm’s success and by the 1990s, the firm established partnerships with major real estate firms in the Americas, Europe and Asia.

In 2015, Cushman & Wakefield merged with Chicago commercial real estate firm DTZ in a $2 billion deal, keeping the Cushman & Wakefield name and creating one of the largest real estate service firms in the world, with a presence in 70 countries, an annual revenue of $6 billion and more than 45,000 employees.

As part of Cushman & Wakefield’s global initiative focused on the firm’s corporate real estate strategy (workplace productivity, flexibility and employee wellness/engagement) Phoenix recently consolidated its operations in March of 2017.

The Phoenix office built out a modern, collaborative and hightech 34,000-square-foot office space located in the iconic Esplanade complex in the Camelback Corridor. “Moving to Esplanade put us in the perfect position to define who we are and who we want to be as a brand to our clients, the industry and Metro Phoenix,” said Bryon Carney, the firm’s local managing principal in Phoenix.

The roll out of the open-office floor plan, offering different ways to work, has enriched the company’s high-energy culture and enhances collaboration and camaraderie.

“We are proud that we have created a welcoming space that not only serves as a hub for our people and clients but fosters talent and creative solutions. I’m proud to have the best and brightest talent in the industry in an energizing space that encourages retention and bolsters recruitment,” Carney said. ■

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Lights, Camera, Action: Fall Forum 2017

LIGHTS, CAMERA, ACTION!

FALL FORUM 2017

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Lights, Camera, Action: Fall Forum 2017

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Lights Camera Action: 10th Anniversary Celebration

Lights, Camera, Action!

10

Commercial Executive Magazine’s

60

th

ANNIVERSARY

CELEBRATION

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Lights Camera Action: 10th Anniversary Celebration

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