Commercial Real Estate & Business News – May 28, 2015

Despite upbeat sales projections from retailers, strong consumer-confidence levels and a host of other positive-trending economic indicators, retailers are still struggling to find the best approach to funding growth in the new U.S. retail marketplace. According to BDO USA’s ninth annual analysis of risk factors cited by the 100 largest U.S. retailers in their most recent annual report filings, concerns over how best to spend on growth initiatives remain high, despite promising year-over-year performance across the industry... Read more »
More than 30,000 sales tags to redo. Hundreds of new products to stock. New signage to install, walls to be painted and displays to be changed out. And 200 workers and 40 hours to do the work. That's what it takes to convert a former Albertsons into a Haggen grocery store. The store on the southwestern corner of Carefree Highway and Scottsdale Road is one of three former Albertsons and Safeway locations... Read more »
Commercial real estate owners posted strong net operating income (NOI) growth last year. For the properties reporting year-end 2014 financials, NOI grew by 2.8% on average, compared to growth of 2.64% in 2013, according to Wells Fargo Securities. Wells Fargo based its analysis on NOIs reported by properties collateralizing loans in conduit CMBS transactions. More than half of those properties have now reported full-year 2014 financials... Read more »
As we come to the end of the second quarter, many are wondering if the tremendous volume of loans maturing in 2015 will have an impact on financing for commercial owners and investors. Loan maturities are expected to increase to more than $340 billion dollars per year for the next two years. This substantial increase (a hike of 72 percent from 2014 to 2015) is the direct result of loans that originated at the height of the market... Read more »
In 2009 and 2010, a lot was written about the calamitous effects that waves of CMBS maturities could have on the market. But by 2012, it appears, those ominous clouds hanging over the apartment industry were disappearing as a flood of capital cascaded into the market, bailing out many of the once-overleveraged borrowers. Right now, prices are 27% above the 2007 levels... Read more »

Commercial Real Estate & Business News – May 27, 2015

Multifamily Developers Favor Downtown, But Suburbia Holds Its Own

In the midst of the Great Recession, vacancy in the multifamily sector hit a cyclical high of 8.0 percent. Over the next several years, the vacancy rate nearly halved, reaching 4.1 percent in early 2014. Vacancy now stands at 4.2 percent as of the end of the first quarter, where it has plateaued for 12 straight months. What these figures don’t reveal is whether a disparity exists between the urban and suburban market segments... Read more »

Midtown Phoenix Apartments Sold For $8.7 Million

A midtown Phoenix apartment complex was sold for $8.7 million by San Diego-based firm Pathfinder Partners, LLC to Denver-based Capital Real Estate, according to a statement released Tuesday. The 96-unit complex, located near Seventh Avenue and Osborn Road, was initially bought in 2012 by Pathfinder Partners and Avenue North for $4.1 million... Read more »

Scottsdale OKs On the Waterfront Project

The planned On the Waterfront project, 4443 N. Scottsdale Road, has moved one step closer to completion with the City of Scottsdale’s Development Review Board (DRB) staff approving plans submitted on behalf of owner CF Waterfront Investments. Located at the northeast corner of Scottsdale Road and Shoeman Lane, the property will be a mixed-use development featuring a restaurant, bar and residential units... Read more »

Modest Growth Expected in Commercial Real Estate Markets

A stronger labor market and increasing household formation should keep commercial real estate demand on a gradual incline, according to the National Association of Realtors quarterly commercial real estate forecast. National office vacancy rates are forecast to slightly decrease 0.1 percent over the coming year as the demand for office space slowly improves. The vacancy rate for industrial space is expected to decline... Read more »

Gilbert Population Passes Glendale For No. 4 In Valley

One year after passing Scottsdale to become the community with the fifth-largest population in the Valley, fast-growing Gilbert has taken another victim, this time overtaking Glendale for the No. 4 spot, according to new U.S. Census Bureau estimates. Gilbert added nearly 9,000 residents between July 2013 and July 2014 to become the 86th most-populous community in the U.S... Read more »

Commercial Real Estate & Business News – May 26, 2015

From 'Ugly' Shopping Center To Retail 'Disneyland'

Before real-estate mogul Michael Pollack could transform an "ugly" strip mall he owned in Gilbert into something better, he needed to send his architect to Disneyland. Perhaps inspired by the small-town magic oozing from the theme park's Main Street, U.S.A., with a touch of Western flair from Frontierland, Pollack this week unveiled his most expensive renovation project ever, per square foot... Read more »

RCA: Maturity Wave Won’t Be a Tsunami

The wave of 10-year CMBS maturities is set to roll in beginning in 2016, and while it will be a massive wave, it’s not likely to come crashing ashore with tsunami-like force. Not according to Real Capital Analytics, which estimates that just over one-third of 2006- and 2007-vintage loans maturing in ’16 and 2017 will either require additional capital or be worth less than the original loan... Read more »

Canadian Investor Enters Market With $36.2 Million Purchase Of Peoria Apartments

Rock Canyon Investment LP in Vancouver, B.C., Canada (Alfonso Ergas, principal) paid $36.2 million ($122,297 per unit) to purchase the 296-unit Pillar at Rock Canyon apartments located at 14300 N. 83rd Avenue in Peoria. The seller was Pillar at Rock Canyon LLC, a company formed by Pillar Communities LLC in Seattle, Wa. (Jim Almon, principal)... Read more »

Scottsdale Advances $8.6M Mustang Project

The City of Scottsdale’s proposed $8.6M Mustang Transit Center Project has moved one step closer to completion following a recommendation for plan approval submitted to the Development Review Board. Detailed plans for the transit center project, a series of improvements on the 90th St. corridor between Shea Blvd. and Mountain View Road, were developed by Dick & Fritsche Design Group of Phoenix... Read more »

After Riding Apt. Value Wave, Investors Taking Long Look at Cashing Out, Diversification

The multifamily markets in most metros are well into the late expansion phase of the real estate cycle, while other product types, notably office and retail, are still in the early stages of their expansion in most U.S. markets, according to CoStar's First Quarter 2015 Multifamily Market Review and Forecast. As apartment rents and occupancy growth begin to taper in the face of new supply, owners of multifamily properties may be considering selling.. Read more »

Commercial Real Estate & Business News – May 22, 2015

Mayo Medical School has received licensure by the Arizona State Board for Private Postsecondary Education for its $150 million Arizona branch campus. This nod of approval will allow Mayo to expand its medical school to its Mayo Clinic campus in Scottsdale and allow medical students to train at Mayo Clinic Hospital in Phoenix beginning in 2017... Read more »
“We see great potential in the Arizona ecosystem,” said Wasabi Ventures General Partner Tom “TK” Kuegler. “The combination of strong universities, visionary government leadership, plus an active and increasingly cohesive ecosystem full of strong talent gives us great confidence that the Silicon Desert is a great place to be”...Read more »
A company formed by JDM Partners LLC in Phoenix (Jerry Colangelo, David Eaton, Mel Shultz, principals) paid $38.084 + million ($150.73 per foot) to buy a 252,650-square-foot data center located within the Papago Park Industrial Center at 424 S. 56th Street in Phoenix. The seller in the sale/leaseback transaction was State Farm Mutual Automobile Insurance Co... Read more »
Leelanlau Properties LLC sold the retail building at 1311 E. Bell Rd. in Phoenix, AZ to Smith's Food & Drug Centers, Inc. for $6.05 million, or approximately $117 per square foot. The 51,667-square-foot former auto dealership sits on 12.2 acres in the East Phoenix Retail submarket of Maricopa County. The buyer plans to demolish the existing building to create a 123,000-square-foot Fry's Food Store on the site... Read more »
According to a development plan announced earlier this year, construction is slated to begin in August on the redevelopment of Mountain Shadows Golf Resort in Paradise Valley, which will include a 180-key hotel and 31 hotel-condominium units. Improvements continue to move ahead, as Kristopher Harman, Vice President at Woodbine Development Corporation, has submitted an initial renovation plan update and a conceptual plan for major renovations to Paradise Valley Town Manager Kevin Burke... Read more »

Commercial Real Estate & Business News – May 21, 2015

This week's International Council of Shopping Centers (ICSC) RECon convention saw the strongest turnout in years, with at least 35,000 deal-makers attending annual retail property conference in Las Vegas. With retail sales edging back up and a lack of suitable sites, expanding retailers are prompting a fledgling wave of new development activity... Read more »
Retail landlords are finally sighing in relief as leasing begins to pick up in earnest. This year’s RECon show in Las Vegas has been marked by an across-the-board optimism about tenant activity, with both owners and brokers reporting a spike in meetings about new store openings and expansions... Read more »
Property valuations are expected to increase 5% over the next three years for a total of 15%, according to the RICS US Commercial Property Monitor for Q1-2015, which RICS is set to release Wednesday morning. That is the upper end of what might ordinarily be expected, as property values tend to grow in line with the economy, Simon Rubinsohn, RICS' chief economist tells Read more »
The rising volume of CMBS issuance has some in the industry questioning whether there is enough investor appetite to consume all those loans. After all, nearly $300 billion in conduit CMBS loan balance is set to mature in 2015, 2016 and 2017, more than 2.5 times the amount that matured from 2012 to 2014, according to research firm Trepp LLC. However, there appears to be abundant buyer demand to meet that growing supply... Read more »
A vision for a downtown health complex led by Arizona State University and the world’s wealthiest doctor could be approved May 19 by the city council after the first public presentation of the plan for expansion on the Phoenix Biomedical Campus. The council will consider amending ASU’s downtown lease or approving a new agreement to include about seven acres of undeveloped city land for a health-solutions project. The project would include labs, offices, academic institutes, clinical and manufacturing facilities, and monitoring and command centers...Read more »
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