azre magazine jan/feb 2012

JANUARY - FEBRUARY 2012

4 8 0 - 9 2 1 - 7 0 8 0

We are your one stop resource for all of your property maintenance and

construction services needs.

1971 E. FIFTH STREETSUITE# 103 TEMPE, AZ 85281W W W . S V C L I N K . C O M

Full Service Property Maintenance Professionals

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Call Boe bergeson

at 602.302.7504

Sagewood LobbyMaravilla Scottsdale(In progress)

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THE NEXT 100 YEARS

TABLE OF CONTENTS January-February 2012

JANUARY - FEBRUARY 2012

AZRE on the Go:AZREMagazine.com

08 2806

COMING NEXT ISSUE » 2012 Annual Real Estate Outlook

» 7th Annual RED Award Winners

» Construction In Indian Country

CORRECTIONS » Tom Goderre is District Operations Manager

at Gilbane Building Company.

» Michael Tiffany closed HUD insured loans for

an aggregate amount in excess of $2B.

� Ongoing healthcare, education and hospitality projects (left) are an indication that the commercial real estate industry in Arizona is on its way back up as we look to the state's next 100 years. Full recovery, however, won't be felt for at least another 2 to 3 years, experts say.

FEATURES

4 Editor’s Letter Building momentum for the short- and long-term

6 New to Market Projects in the pipeline

8 Companies to Watch � irty companies that

could have an impact on the industry in 2012

18 Construction Public projects are providing

work for general contractors

20 School Work � e ABCs of renovating

two Valley specialty schools

22 Project News A health club inside Chase Field and a new movie theater

26 Industry Leaders � e best and brightest in their respective industry sector

28 Centennial Infrastructure key to growth in the next 100 years

2 | January-February 2012

Trusted partners,expert dealmakers

Banner HealthSteve Corney, Pat Williams, Andrew Medley and Vicki Robinson196,000 square feetChandler, Arizona

Bar-S FoodsJohn Pierson, Jon Lange, Steve Corney and Pat Williams34,000 square feet Phoenix, Arizona Dick’s Sporting GoodsBill Honsaker, Tony Lydon and Marc Hertzberg600,000 square feetGoodyear, Arizona

Prologis Marc Hertzberg and Tony Lydon302,000 square feetTolleson, Arizona

Schoeller Arca SystemsMarc Hertzberg and Tony Lydon154,000 square feetGoodyear, Arizona

Scottsdale Centre Dennis Desmond, Brian Ackerman, Don Mudd, John Bonnell and Brett Abramson164,000 square feetScottsdale, Arizona

SXC Health SolutionsPat Williams and Steve Corney66,000 square feetPhoenix, Arizona

ToyotaGreg Bast and Wally Hale 133,000 square feet Chandler, Arizona

TSYS Acquiring SolutionsGreg Bast, Wally Hale and Bill Honsaker104,000 square feetTempe, Arizona

Jones Lang LaSalle is proud to have represented some of Phoenix’s most prominent clients in 2011. Bringing together strong market expertise and perspective, our team provided smart real estate solutions spanning both geographic and industry sectors. We are deeply thankful to our clients for their trust and business, and look forward to delivering even greater results in 2012!

+1 602 282 6300 www.us.joneslanglasalle.com/phoenix

http://www.joneslanglasalle.com

AZRE: Arizona Commercial Real Estate is published bi-monthly by AZ BIG Media, 3101 N. Central Ave., Suite 1070, Phoenix, Arizona 85012, (602) 277-6045. The publisher accepts no responsibility for unsolicited manuscripts, photographs or artwork. Submissions will not be returned unless accompanied by a SASE. Single copy price $3.95. Bulk rates available. ©2011 by AZ BIG Media. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without permission in writing from AZ BIG Media.

3101 North Central Avenue, Suite 1070

Phoenix, Arizona 85012

(602) 277-6045 · www.azbigmedia.com

President & CEO Michael Atkinson

Publisher Cheryl Green

Vice President of Operations Audrey Webb

AZRE: ARIZONA COMMERCIAL REAL ESTATE

EDITORIAL

Managing Editor Michael Gossie

Editor Peter Madrid

Assistant Editor Kristine Cannon

Contributing Writer

Donna Hogan

Interns

Kaitlyn Carl | Hayden Harrison | Isabelle Novak

Erick O’Donnell

ART

Senior Graphic Designer Brandon Devine

Senior Graphic Designer Mike Mertes

DIGITAL MEDIA

Director Kim Milton

Web & Graphic Designer Melissa Gerke

Interns

Roxy Baldovin | Michael Owen | Clarice Wziatek

Valeria Andrews | Eric Shepperd | Jeff Webb

Cory Bergquist | Sterling Grey

MARKETING/EVENTS

Manager Whitney Fletcher

Intern Morgan Johnson

SALES

Account Managers John Abbey | Kevin Small

OFFICE

Special Projects Manager Sara Fregapane

Executive Assistant Kathy Mutschler

Database Solutions Manager Cindy Johnson

ARIZONA BUSINESS MAGAZINE

Senior Account Manager David Harken

Account Managers Michelle McBay | Shannon Spigelman

RANKING ARIZONA

Vice President / Sales & Marketing Lenore Grobstein

EXPERIENCE ARIZONA | PLAY BALL

Account Managers Lisa Grant | Bobbie Darzes

SCOTTSDALE LIVING

Account Manager David Silver

AZ BIG MEDIA EXPOS

HOME & FAMILY SUPER EXPO

HOME & LIFE SUPER EXPO

WOMEN'S SUPER EXPO

Exhibit Directors Kerri Blumsack | Sheri King | Tina Robinson

HOME & DESIGN IDEA CENTER

Showroom Manager Joanne Stanley

Account Manager Marianne Avila

Event Coordinator Sara Fregapane

Building Momentum for 2012

I wouldn’t exactly call it a construction boom, but drive around the Valley and it ’s evident that local general contractors are staying

busy as we enter 2012.Living near Downtown Phoenix, from my front door I can see

the crane at the Sundt-DPR construction site for the University of Arizona’s Health Science Education Building. Strol l into the downtown area and rising from CityScape is the Kimpton Palomar Hotel, which Hunt Construction Group is building.

There is even a construction site I pass each day on my way to and from work. At Third Street and Earl l, Layton Construction is building the new Cigna Medical Group Center. And on a recent trip to find inexpensive gasoline, I passed three construction sites on Baseline Road alone: company banners were f ly ing for Kitchel l, Adolfson & Peterson and LGE Design Build.

In this issue of AZRE magazine, we take a look at construction of public projects, which is keeping the industry busy.

As a wrap-up to our Centennial Ser ies, we look ahead to the next 10, and even 100 years.

Finally, we honor the Industry Leaders who were picked from our 2011-2012 People to Know publication, and we feature 30 Companies to Watch in Commercial Real Estate in 2012.

Here’s to 2011, with the hopes that 2012 is prosperous to al l.

Editor(602) [email protected]

MAGAZINE.COM


OUR CLIENTS INCLUDE: BMW OF NORTH AMERICALUCENT TECHNOLOGIESDELTA AIRLINES UNILEVERCOSMETICS INTERNATIONALS E I K O CORPORATION OFAMERICA CRATE ANDBARREL TIAA-CREF MORGANSTANLEY P E A R S O NE D U C AT I O N NOVARTISAT&T MCGRAW-HILLCOMPANIES TIME INC. TEJONRANCH SPORTCRAFTF E D E R A L E X P R E S SWYNDHAM GARDEN HOTELSL E H M A N B R O T H E R S BMW OF NORTH AMERICALUCENT TECHNOLOGIESDELTA AIRLINES UNILEVERCOSMETICS INTERNATIONALS E I K O CORPORATION OFAMERICA CRATE ANDBARREL TIAA-CREF MORGANSTANLEY P E A R S O NE D U C AT I O N NOVARTISAT&T MCGRAW-HILLCOMPANIES TIME INC. TEJONRANCH SPORTCRAFTF E D E R A L E X P R E S SWYNDHAM GARDEN HOTELSL E H M A N B R O T H E R S BMW OF NORTH AMERICALUCENT TECHNOLOGIESDELTA AIRLINES UNILEVERCOSMETICS INTERNATIONALS E I K O CORPORATION OFAMERICA CRATE ANDBARREL TIAA-CREF MORGANSTANLEY P E A R S O NE D U C AT I O N NOVARTISAT&T MCGRAW-HILLCOMPANIES TIME INC. TEJONRANCH SPORTCRAFTF E D E R A L E X P R E S SWYNDHAM GARDEN HOTELSL E H M A N B R O T H E R S BMW OF NORTH AMERICALUCENT TECHNOLOGIESDELTA AIRLINES UNILEVERCOSMETICS INTERNATIONALS E I K O CORPORATION OFAMERICA CRATE ANDBARREL TIAA-CREF MORGANSTANLEY P E A R S O NE D U C AT I O N NOVARTISAT&T MCGRAW-HILLCOMPANIES TIME INC. TEJONRANCH SPORTCRAFTF E D E R A L E X P R E S SWYNDHAM GARDEN HOTELSL E H M A N B R O T H E R S BMW OF NORTH AMERICALUCENT TECHNOLOGIESDELTA AIRLINES UNILEVERCOSMETICS INTERNATIONALS E I K O CORPORATION OFAMERICA CRATE ANDBARREL TIAA-CREF MORGANSTANLEY P E A R S O NE D U C AT I O N NOVARTISAT&T MCGRAW-HILLCOMPANIES TIME INC. TEJONRANCH SPORTCRAFTF E D E R A L E X P R E S SWYNDHAM GARDEN HOTELS

Tom McCormick, SIOR, FRICSSenior Vice President and Regional Development Officer

[email protected]

Mark Singerman, LEED® APAssistant Vice President andRegional Director - Arizona

[email protected]

rockgroupdevelopment.com

For information regarding current Rockefeller Group Development Corporation projects, please contact:

B U I L D - T O - S U I T SF O R E I G N T R A D E

Z O N E SD I S T R I B U T I O N

C E N T E R SChandler Corporate

Center*McClintock and

Desert Breeze Blvd.Chandler

Rockefeller GroupChandler Crossroads

Gilbert and Queen Creek RoadsChandler

Rockefeller GroupChandler 101

Loop 101 at Chandler Blvd.Chandler

www.rgdcchandler101.com(The ASU W. P. Carey Evening

MBA Program wil be located atChandler 101.)

Rockefeller GroupNorth Gateway

Warner Road and Recker RoadGilbert

Rockefeller GroupGilbert Crossroads

Germann Rd. and Mustang DriveGilbert

Rockefeller GroupDistribution Center**

Airport SubmarketTucson

*20,500 SF NEW CLASS A OFFICEAVAILABLE; LEED–CERTIFIED SILVER

**UP TO 62,500 SF NEW HIGHCUBE WAREHOUSE AVAILABLE

ROCKEFELLER GROUP DEVELOPMENT CORPORATIONIS PLEASED TO BE REPRESENTED ON ITS CURRENT DEVELOPMENTS IN ARIZONA

BY THE FOLLOWING BROKERS:

In Chandler and Gilbert

Colliers International2390 E. Camelback RoadSuite 100Phoenix, AZ 85016602-222-5000 tel.colliers.com/phoenix

In Tucson

PICOR1100 N. Wilmot StreetSuite 200Tucson, AZ 85712520-748-7100 tel.www.picor.com

Phil Breidenbach, SIORPaul Sieczkowski, SIORRob Martensen, CCIM, SIORLindsey CarlsonSteve Larsen

Peter Douglas, SIORRob Glaser, CCIM, SIOR

*6859 RGI-1114-AZRE 8x10.875 new photo:*3619 RGI5107 REF 8.125x10.4375 12/15/11 2:08 PM Page 1

http://rockgroupdevelopment.com

1 MCCORD HALL AT THE W.P. CAREY SCHOOL OF BUSINESSDeveloper: Arizona State UniversityGeneral Contractor: DPR ConstructionArchitect: Building design by Kohn Pedersen Fox Associates, New York; RSP Architects, TempeLocation: Adjacent to W.P. Carey School of Business facilities, Lemon St. and Normal Ave., TempeSize: 129,000 SFArizona State University broke ground on Homecoming Day in October on the $57M building and renovation of existing facilities at the W.P. Carey School of Business. McCord Hall will be environmentally friendly with less water and energy use than similar buildings and a solar array on the roof. Estimated completion is 2Q 2013.

2 ASU DOWNTOWN PHOENIX CAMPUS STUDENT RECREATION CENTERDeveloper: Arizona State UniversityGeneral Contractor: Sundt ConstructionArchitect: Gabor Lorant ArchitectsLocation: South of 350 N. 1st Ave., PhoenixSize: 70,000 SFScope of work on the $21M project will include a new 70,000 SF recreation facility dis-tributed over 4 levels, including a large gym, strength and cardio spaces, multi-purpose rooms, exercise nutrition and wellness educational spaces and a rooftop leisure pool. It will be pursuing LEED Silver certifi cation. Estimated completion is 2Q 2013.

3 MOHAVE MIDDLE SCHOOL CAMPUS REBUILDDeveloper: Scottsdale Unifi ed School DistrictGeneral Contractor: Chasse Building TeamArchitect: Brock, Craig, and � acker ArchitectsLocation: 5520 N. 86th St., ScottsdaleSize: 134,974 SF� e new facility in this $25M renovation project will include just two existing build-ings and be complemented with fi ve new buildings including a 2-story classroom, me-dia center, administration building and district annex to replace the aging structures on site. Amenities will include natural lighting, integrated technology features and alternative learning spaces. Estimated completion is 4Q 2013.

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NEW TO MARKET


EDUCATION

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1 PHOENIX-MESA GATEWAY AIRPORT TERMINAL EXPANSION PHASE IIDeveloper: Phoenix-Mesa Gateway AirportGeneral Contractor: Sundt ConstructionArchitect: DWL ArchitectsLocation: 5835 S. Sossaman Rd., MesaSize: 30,475 SF� e $9.9M project will include the expansion of departure gates from six to eight, increase the baggage claim area — including a more prom-inent arrival meeting space — and add additional restroom facilities. Expected completion is 4Q 2012.

1 GATEWAY 101Developer: FLW 101, LLCGeneral Contractor: JAVCON, Inc.Architect: Butler Design GroupBroker: Grubb & EllisLocation: NEC Loop 101 and Frank Floyd Wright Blvd., ScottsdaleSize: 34,200 SF� e $10M retail center has leases signed by Starbucks, Vitamin Shoppe, Bruegger’s Bagels, Teharu Sushi, PetClub, Jersey Mike’s, and Tide Dry Cleaning. Estimated completion is 2Q 2012.

2 STETSON WINERY AND EVENT CENTERDeveloper: Stetson Winery, LLCGeneral Contractor: Taylor’s Rolling � underArchitect: R Group Architecture and Planning, Inc. (Rex Ruge)Location: 10965 N. Moonscape Way, KingmanSize: 6,500 SF building with adjacent patios and gazeboA winery and event center located in a vineyard, this project in Kingman has been designed by the architect to fi t into the western Arizona landscape and surroundings. � e main building will include a tasting room, gift shop and wine-making area. � e facility can accommodate 350 people in the patio and tasting room area. Exterior amenities include a patio with a stone fi replace and a fountain. Expected completion is 2Q 2012.

1 CIGNA MEDICAL GROUP CENTERDeveloper: Clarius Partners, LLCGeneral Contractor: Layton ConstructionArchitect: Orcutt | WinslowBroker: CBRELocation: 3131 N. 3rd St., PhoenixSize: 93,500 SF� is new medical offi ce building will replace CIGNA’s current Clyde Wright Center, which opened in 1982. � e 3-story facility will be a state-of-the-art healthcare center, the shell of which will pursue LEED Silver certifi cation and will encompass outpatient surgery, family prac-tice, radiology and other specialties. Subcontractors include Caruso Turley Scott, ccrd partners, Taylor Rymar, Kimley Horn and Buesing Corp. Expected completion is 4Q 2012.

MIXED-USE

1 PHOENIX BIOMEDICAL PARKING STRUCTUREDeveloper: � e Boyer CompanyOwner: � e Boyer CompanyGeneral Contractor: DPR ConstructionArchitect: SmithGroup JJR/WatryLocation: SEC 5th St. and Fillmore, PhoenixSize: 1,250 parking stallsDPR is working with the City of Phoenix and developer � e Boyer Company on a design-build structure which will provide a minimum of 850 and as many as 1,250 park-ing stalls. It will serve the growing Phoenix Biomedical Campus. Currently the structure is planned for all stalls to be above-grade with a potential retail shell component. Estimated start is 4Q 2012 and completion of 3Q 2013.

MEDICAL

PUBLIC

RETAIL

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NEW TO MARKET

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Companies Companies Companies Companies Companies Companies to Watchto Watchto Watchto Watchto Watchto Watchto Watchto Watchto Watchto Watchto Watchto Watch

CommercialCommercialCommercialCommercialCommercialCommercialCommercialCommercialCommercialCommercialCommercialCommercialCommercialCommercialCommercialCommercialCommercialCommercialCommercialCommercialCommercial

2012

303030303030 inininininin

R eal EstateR eal EstateR eal EstateR eal EstateR eal EstateR eal EstateR eal EstateR eal EstateR eal Estate

A s the economy begins to show signs of improvement,

the commercial real estate industry in Arizona is

positioning itself to bounce back.

Entering 2012, here are 30 companies to keep your eyes on.

Most are established names, with a few newcomers to watch.

In general contracting … Adolfson & Peterson recently

completed Devine Legacy on Central, an aff ordable housing

development. It is the fi rst aff ordable housing community to open

along the Phoenix Metro light rail line. It consists of 65 urban

style apartments at the Campbell and Central light rail station.

The Weitz Company moves into 2012 with two large

Valley projects in progress; Sky Train at Phoenix Sky Harbor

International Airport as the design-builder with Bombardier

and Maravilla Scottsdale Resort Retirement Community as

the general contractor. Weitz's commitment to serving the

community will lead to the opening of the Sojourner Center's

newest residential duplex, The Weitz House, to shelter and

care for local victims of domestic violence.

In development … The Alter Group and John F. Long

Properties will jointly develop three major business parks in

West Phoenix totaling in excess of 1,500 acres. The parks will

offer every type of commercial space and are expected to drive

economic expansion for West Phoenix. The three parks com-

bined exceed the amount of acreage in the Scottsdale Airpark.

The land in the three West Valley parks includes substantial

acreage fronting both sides of the Loop 101 freeway.


COMPANIES TO WATCH

BY PETER MADRID

COLLIERSINTERNATIONAL

Adolfson & PetersonDevine Legacy on Central recently opened its doors. Devine Legacy, built by Adolfson & Peterson, is the fi rst aff ordable hous-ing community to open along the light rail. Adolfson & Peterson recently completed the renovation and expansion of two

specialty schools totaling more than 60,000 SF.

A-P.COM

� e Alter Group� e Chicago-based company is developing three major business parks in West Phoenix. When the project is fully built, an estimated 65,000 jobs will be created. � e land includes acreage fronting both sides of the Loop 101. � e Alter Group will also be pursuing healthcare projects in Arizona as that industry continues to remain hot.

ALTERGROUP.COM

Bjerk BuildersBjerk is a general contractor that works hard to improve commercial buildings, including medical and dental offi ces in Arizona. It’s most recent projects include Family Eyecare in Glendale and the Cardinale Mazda dealership in Mesa. Besides its medical/dental division, Bjerk off ers electrial and drywall services throughout Metro Phoenix.

BJERKBUILDERS.COM

Carlson Real Estate CompanyCarlson develops and manages commercial real estate in three states including Arizona. Developments in the Valley include Gilbert 202 Commerce Center. Carlson Real Estate also is helping develop and plan an industrial park in Buckeye. Its office proper-ties include Cotton Corporate Center in Phoenix.

CARLSONREALESTATE.BIZ

CBREWith more than 400 employees in the Phoenix market, CBRE serves real estate owners, investors and occupiers. CBRE off ers strategic advice and execution for property sales and leasing; cor-porate services; property, facilities and project management; mortgage banking; appraisal and valuation; development ser-vices; investment management; and research and consulting.

CBRE.COM

Chasse Building Team� is up-and-coming general contractor is taking advantage of a brisk school construction market. It is working on a $25M renovation and building project in the Scottsdale Unifi ed School District. � e Mohave Middle School campus rebuild inlcudes fi ve new buildings, including a 2-story classroom and a media center.

CHASSEBUILDINGTEAM.COM

Colliers InternationalWith offi ces in Phoenix and Scottsdale, Colliers is a full-service com-mercial real estate fi rm providing services to clients locally and glob-ally for more than 30 years. Its professionals specialize in the sale and lease of offi ce, industrial, retail, multi-family, investments, and land. Colliers provides asset resolution, property management, mortgage banking, and valuation and appraisal services.

COLLIERS.COM

Commercial Properties Inc.CPI has spent the past 30 years growing its market share and client base to become a leader in Metro Phoenix. Top 2011 deals: $3.7M industrial sale, 75,000 SF, Andy Jaff e; $3.46M industrial lease, John Soldo; $3.13M offi ce sale, 33,636 SF, Ken Elmer; $2.365M land sale, 140,000 SF, Donn

Kinzle; and $2.07M retail lease, Josh Gosnell and Trent Rustan.

CPIAZ.COM

9

COMPANIES TO WATCH

COMPANIES TO WATCH

D.P. Electric� is hometown business was founded in 1990 by Daniel J. Puente, a past winner of the W.P. Carey Spirit of Enterprise Gary L. Trujillo Minority Enterprise Award. D.P. Electric builds and provides electrical systems for commercial real estate proj-ects throughout Arizona. Recent projects include the Phoenix Convention Center and Sky Harbor International Airport.

DPELECTRIC.COM

Gensler� e Phoenix offi ce of this architecture, design, planning and consul-tanting fi rm boasts some impressive interior designs in Arizona. � is includes law offi ces at CityScape in Downtown Phoenix to the Walkup Skydome at Northern Arizona University in Flagstaff . In 2010, its designs for the Banner Health Primary Data Center and a Bank of America branch won AIA Arizona Merit Awards.

GENSLER.COM

GilbaneFrom its Western Region headquarters in Phoenix, Gilbane off ers construction and program management in pharmaceutical, criminal justice, higher education, K-12, sports, healthcare, life sciences, pub-lic assembly and aviation projects. One of its signature projects, set to open in February 2012, is the new Maricopa County Superior Court

Tower in Downtown Phoenix.

GILBANECO.COM

Hunt Construction GroupMajor construction projects include the new Chicago Cubs spring training facility in Mesa and the Twin Arrows Casino outside of Flagstaff . Arizona State's baseball team will likely play its games at the Cubs' new facility once it is built. Twin Arrows will be the Navajo Nation's fi rst Arizona casino. Hunt also is fi nishing construction on the Kimpton Palomar Hotel at CityScape.

HUNTCONSTRUCTIONGROUP.COM

IMCORA mechanical subcontractor based in Phoenix, IMCOR installs a vari-ety of systems in buildings throughout the Southwest. Its services also include general construction, air-conditioning and ventilation, and piping and plumbing. It recently helped make upgrades to Banner Good Samaritan Hospital in Phoenix. IMCOR also specializes in high priority scheduled shutdown projects within clean rooms, chill-ers, cooling towers, pumps, and boiler additions or replacements.

IMCOR-AZ.COM

Jones Lang LaSalleLarge industrial leases are the specialty of Jones Lang LaSalle's bro-kers. In the past 18 months JLL has brokered deals involving the 1.4 MSF Amazon lease and the 153,000 SF Scholler Arca Systems lease. JLL's Phoenix offi ce delivers custom solutions by leveraging its expert knowledge of the local market and the fi rm's resources. It prides itself on delivering winning strategies and solid execution.

JONESLANGLASALLE.COM

Keystone Commercial CapitalKeystone is a full service commercial mortgage banking company servicing $1.5B in commercial real estate loans. Recent transac-tions include a $59M manufactured housing community and $17M multi-family property. Keystone provides access to short- and long-term fi xed and fl oating rate loan programs as well as con-struction, bridge, mezzanine and joint venture equity placements.

KEYSTONECOMMERCIALCAPITAL.COM

KitchellKitchell’s presence in the commercial real estate market goes beyond general contractor projects. � e Phoenix-based company also special-izes in property management and real estate development. Its most notable project in 2011 was the Phoenix Children's Hospital, which offi cially opened last January.

KITCHELL.COM


FASTERFORWARDColliers International is charting the course as the first true alternative to real-estate-as-usual. As an investor, owner or occupier, your real estate strategy will never feel adrift. Our local specialists, throughout more than 500 offices in 61 countries worldwide, allow you to tap hidden opportunities, moving your business forward. Welcome aboard.

Navigating the seas of change.

www.colliers.com

Phoenix +1 602 222 5000 | Scottsdale +1 480 596 9000

As we approach the fi fth year of the downward part of the real estate state cycle that has included the “Great Recession” and the bust of the Phoenix metropolitan housing and commercial real estate markets, we have

identifi ed a number of trends in commercial property manage-ment that have and will continue to impact our industry.

Value ProtectionThe old mantra, of maximizing revenues, minimizing ex-

penses and thereby maximizing cash fl ows and values has now been replaced with managing to protect the investment and cash fl ows until the economy and markets recover. For the well-capitalized institutional owner, today’s depressed values are irrelevant as they are fortunate to be in the position that they do not have to sell. Their current strategy is two-fold, fi rst, reduc-ing costs through real estate tax appeals, vendor rebidding and scope modifi cations (i.e. going from janitorial service 5 days a week to 3 days a week), and second, focusing on obtaining and retaining tenants by agreeing to shorter term leases and lease restructures at today’s lower market rates.

Non-Traditional Asset / Property ManagersIn an effort to keep key staff in related fi elds where there is

little activity, owners are now having their acquisitions, devel-opment project managers and fi nance personnel act as asset managers. Additionally, they are taking on signifi cantly more assets which results in substantially less time to understand and

provide clear direction on the management strategy for each asset. This leads to down-sourcing many tasks to the property managers as a way to get it all done without hiring an army of consultants. Today’s property managers are assisting with loan restructuring, lease restructuring, tenant’s bankruptcy, collection and liquidation situations which is at levels not previously seen by traditional property managers.

Green Buildings/Energy Effi ciency InitiativesBeginning in the early 2000’s, there began a growing aware-

ness of green buildings and energy effi ciency initiatives which would lead to operational costs saving and therefore increased values. However, due to the economic downturn, owners’ focus was drawn away from these initiatives as they dealt with much bigger issues. President Obama is seeking to re-focus commer-cial building owners with his Better Buildings Initiative, which will reward those owners who invest in retrofi ts and energy effi ciency initiatives with generous tax credits and loan guaran-tees. The goal of improving the energy effi ciency of commer-cial buildings by 20% by 2020 would take green building to an unprecedented level.

Michael Mathews, President, and Leslie Sherrod, Vice President, of Main Street Real Estate Advisors, a commercial property management company in the Phoenix metropolitan market that specializes in institutional quality offi ce, retail and mixed-use projects, including the commercial associations affi liated with the management of those projects. For more information, visit www.msrea.net

Trends in Commercial Property Management

MainStreet.indd 1 2/18/11 8:55:23 AM

MEDIA SPONSOR

Richard R. HubbardPresident & CEO

Find Out More At:

www.valleypartnership.org

• Represents the Industry at City and County

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Special Insert

68 March-April 2011

CENTENNIAL SERIES

AZRE_MA11_49-72.indd 68 2/24/11 4:02:33 PM

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http://www.colliers.com

http://www.valleypartnership.org

COMPANIES TO WATCH

Lawrence & Geyser Development� is Tempe-based company is behind the renovation of the NEC of Seventh Ave. and McDowell in one of Phoenix’s historic neigh-borhoods. � e majority of Lawrence & Geyser projects are in the Metro Phoenix area, although it has developed sites around the state of Arizona, California and Oklahoma. It has developed and re-developed more than 1.2 MSF in more than 40 properties.

LAWRENCEANDGEYSER.COM

Layton Construction� is Utah-based general contractor recently broke ground on a new, 93,500 SF building in Phoenix for Cigna Medical Group. Nationally Layton is the ninth largest healthcare contractor in the U.S. In 1987, Layton opened its Phoenix offi ce to diversify geographically. Major projects include the $70M Mesa Arts Center, hotel projects for the Marriott Corporation and a major facility at Sky Harbor Airport.

LAYTON-CONST.COM

Mark-TaylorMark-Taylor has developed more than 15,000 apartment units in the Southwest. One of its Valley projects is the $44M, 383-unit Parcland Crossing in Gilbert, scheduled to open in late 2012. Mark-Taylor, one of Arizona’s largest apartment develop-ers, was founded by Jeff rey Mark and Scott Taylor, who have deep roots in the apartment development and management markets.

MARK-TAYLOR.COM

McCarthy Building CompaniesMcCarthy is more than a leading general contractor in healthcare and K-12 school projects. It recently celebrated the opening of Casino Del Sol’s 250,000 SF casino expansion and 215-room, 10-story hotel tower in Tucson. McCarthy’s Southwest Division recently completed its largest project to date, a 17-megawatt solar photovoltaic plant in Gila Bend.

MCCARTHY.COM

McShane Construction CompanyMcShane is the general contractor for First Solar’s 1.3 MSF manufacturing facility in Mesa. It will be the fi rst develop-ment at the former General Motors Proving Grounds. Based in Chicago, McShane projects include multi-family and aff ord-able housing communities, public and private healthcare facilities and corporate and governmental offi ce buildings.

MCSHANE-CONSTRUCTION.COM

NAI HorizonNAI Horizon is brokering some large industrial sales. Recent deals include the off -market sales of two West Phoenix distribution and manufacturing buildings totaling 244,295 SF. Besides industrial properties, NAI Horizon also specializes in investment, land, medi-cal, multi-family, offi ce, property management, retail, special asset solutions and valuation services.

NAIHORIZON.COM

Commercial Real Estate Services Worldwide

Plaza Companies� is developer, the City of Peoria and BioAccel formed a part-nership for the Peoria Incucelerator. It will be a host for biosci-ence startup companies with the goal of attracting high-paying jobs. Plaza Companies specializes in the development, acquisi-tion, management and leasing of medical offi ce properties, senior living communities and bioscience/biotech centers in Arizona.

THEPLAZACO.COM

RED DevelopmentRED recently completed the fi rst phase of CityScape, the 1.1 MSF mixed-use project that has changed the landscape of Downtown Phoenix. Currently, RED is also shaping the largest retail develop-ment between Dallas and Oklahoma City — Rayzor Ranch Town Center. RED is also developer of choice for retailers, including Fresh & Easy Neighborhood Market.

REDDEVELOPMENT.COM


C o m m e r C i a l D e v e l o p m e n t W i t h v i s i o nSunbelt Holdings is a large scale real estate management, investment and development company. Since 1979, we have been involved in real estate activities from commercial real estate and land development to residential communities. Our ability to produce award winning projects which strengthen the local community and improve the quality of life has assured our longevity. Our projects are diverse in nature and serve as valuable partners in the community in which they reside. We invite you to peruse SunbeltHoldings.com. There you can learn about our history, our projects, our people and our partners.

6720 North Scottsdale Road • Suite 160 • Scottsdale, Arizona 85253-4424

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At Carlson Real Estate Company, we are focused on maintaining world-class standards in all that we do. Our portfolio is high quality and we match it with the same level of customer service. By constantly considering the best interests of our tenants and partners, we achieve winning results for all. With more than 20 years of experience in the Phoenix market, we have the foundation to uphold these standards well into the future.

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SmithGroupJJROne of Arizona’s premiere architecture, engineering and planning fi rms is now SmithGroupJJR. Formerly a SmithGroup subsidiary, JJR is a specialist in landscape architecture, planning, urban design and civil engineering. � e award-winning Musical Instrument Museum in Scottsdale is one of SmithGroupJJR's signature projects in recent years.

SMITHGROUPJJR.COM

Speedie & AssociatesAnalyzing the earth under construction sites is what Speedie & Associates is all about. � e fi rm helps clients adapt their buildings to their geological environment. Speedie & Associates serves a variety of clients, including offi ce buildings, factories, schools, airports, and power generators. Speedie & Associates is headquartered in Phoenix with offi ces in Flagstaff and Tucson.

SPEEDIE.NET

Sunbelt HoldingsAlong with the City of Peoria and the Greater Phoenix Economic Council (GPEC), Sunbelt Holdings unveiled plans for a 500-acre commercial development between Vistancia and the new-ly-opened Loop 303. Sunbelt Holdings is building a 1.5-mile stretch of road to connect the Loop 303 from Vistancia. � e Lone Mountain Road project is being paid for by Sunbelt.

SUNBELTHOLDINGS.COM

Sundt ConstructionSchools, fi re stations, freeways, light rail facilities all have one thing in common in Arizona: the Sundt Construction stamp of superior workmanship. Projects from the Tucson-based general contractor are also prevalent worldwide. Currently under construction by Sundt (a joint venture with DPR) is the University of Arizona's Health Sciences Education Building in Downtown Phoenix

SUNDT.COM

� e Weitz CompanyIn 2012 Weitz will complete the Maravilla Scottsdale Resort Retirement Community in Scottsdale; move into the next phase of the PHX Sky Train as the design-build partner with Bombardier; and focus on tenant improvements and opportunities in solar, hospitality,

education and healthcare.

WEITZ.COM

Wood/PatelUnder extreme weather conditions, survey crews from this civil engi-neering company worked night and day to help set the foundation for a home in the northeastern Arizona town of Pinon, that was featured on ABC-TV’s “Extreme Makeover: Home Edition.” Wood/Patel and 75 sub-contractor consultants combined on the Yazzie family residence.

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» McCarthy Southwest, a division of McCarthy Building Companies Inc., hired Shad Bowman as director of busi-ness development and promoted Steve Gotschall and Shawn Ingram to vice president of operations within the Water Services team. Bowman has 13 years of experience in environmental and water

resource issues at both the program and project levels in positions with American Water, Earth Tech, Tetra Tech and the ADEQ. As VP of operations, Gotschall and Ingram will be responsible for ensur-ing projects are delivered in a true collab-orative envi-ronment that leads to the projects being on time and under budget.

» Todd Folger joined CBRE’s Retail Services Group as a fi rst vice president. Folger comes to CBRE from SRS Real Estate Partners, formerly Staubach Retail, where he has worked since 1999. During that time, he gained considerable experience in tenant representa-tion, acquisition, development, strategic planning and disposition.

» � omas Beck joined Westwood Professional Services’ land group. Beck will lead civil engineering and site development eff orts from Westwood’s Scottsdale offi ce and will be responsible for pro-viding overall civil design and project management services on land and energy development projects throughout the Southwest. Beck has more than 30 years of civil engineering experience on a variety of public infrastructure and private land development proj-ects in Arizona, California, Colorado, and Guam.

» Michael Kasulaitis and Aric Adams joined Voit Real Estate Services’ Phoenix offi ce. � e duo joins Voit from Cushman & Wakefi eld. Kasulaitis is a member of NAIOP and the Arizona Commercial Brokers Association. Adams has been in the commer-cial real estate business since 1999.

» Laura Smith was named area man-ager for the Arizona region of Dominium, an apartment development and manage-ment company. She will assist Dominium in maintaining current relationships and growing the company’s regional market share. Smith previously was with NRP Group in Houston.

» Steve Wilson was hired as a project superintendent and Melinda F. Jones, CPSM, was hired as business development manager at W.E. O’Neil Construction. Wilson is a 16-year vet-

eran of the construction industry with projects throughout Arizona. Jones joins the firm with more than 11 years of mar-keting and business development experience in the architectur-al/engineering/construction industry.

» Longtime employees Mike Hoover and Eric Hedlund were promoted to serve as dual COOs at Sundt Construction. � e pro-motion will split the management of operating entities between Hoover and Hedlund, creating an optimized organizational struc-ture for the company. Scot Bennett joined Sundt to serve as a business development representative in the Southwest District.

» Lindsey Carlson was promoted to associate vice president–Offi ce Properties Solutions Group at Colliers International in Greater Phoenix. Carlson joined Colliers in 2003 as an intern. Carlson is a leader of the Colliers’ Blue Innovation Group, whose focus is to enhance the knowledge, exper-tise and skills of young brokers.

» Jeff Miyaoka was named regional director of proper-ty management at Vestar Property Management. He will be responsible for all property management functions for Vestar’s California portfolio. Prior to joining Vestar, Miyaoka held positions with Developers Diversifi ed Realty, Kimco Realty, � e Irvine Company, Madison Marquette and Trizec Hahn.

He is an active member of ICSC and is a certifi ed CSM.

» Phoenix architect Lawrence Enyart, FAIA, of LEA-Architects, LLC received the Silver Medal from the AIA Western Mountain Region at its awards gala in Las Vegas. � e Silver Medal is the region's highest AIA honor.

» Jeff Raymond joined Land Advisors Organization as a Resort and Golf Properties Specialist. Raymond specializes in the sales and marketing, and development strategies of master planned resort communities and high-end properties.

» Martin Mondejar, Valerie Robinson and TJ Chasty were promoted and Arnaud Longeau joined Hobbs+Black Architects. Longeau, RA, PMP, LEED AP BD+C, joined Hobbs+Black as vice president and director of the Arizona offi ce.

» Johnson Carlier, Inc., welcomed back two senior-level fi eld employees, Randall Tisai as project superintendent and Dean Badger as senior project manager.

» Ward Simpson was hired to lead the project management division of Rider Levett Bucknall. Simpson has managed the eff orts of architectural, engineering and management consulting fi rms for more than 37 years, 25 in Phoenix.

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17

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CONSTRUCTIONBY DONNA HOGAN

Of the 15 Arizona school districts that asked voters in November to approve bonds to build or renovate educational facilities, 11 got the go-ahead despite the lingering recession.

� at’s good news for many of the state’s con-struction companies that have relied on publicly-funded projects to boost business and keep workers employed as private invest-ment in new buildings plummeted with the economy.

And for public entities with the need and the seed money, it’s a good time to snag a good deal in a highly competitive market for construction materials and services. But while public projects have helped, government spending has not been the great savior of the industry, according to Arizona’s construction company leaders.

The recession has taken its toll on public building plans with shrinking tax revenue sopping up funds pegged for new schools, city halls, police stations or libraries. And as abso-lutely essential projects get checked off the list, public spend-ing is expected to dwindle. However, at least some projects are still getting budgeted and built, says Bo Calbert, president of McCarthy Building Companies’ Southwest Region.

“From 2003 to 2007, we probably had our best market in decades, but by 2008, everybody knew we were in trouble,” Calbert says.

“Private (projects) stopped overnight. Public work continued.”Citing a recent market outlook report for Phoenix-Mesa-

Scottsdale, Calbert says overall construction value slipped 40% in 2008 from its 2007 high, tumbled another 23% in 2009 and 27% in 2010. � e report predicts 2011 value will increase 40% when the fi nal numbers are compiled, but will sag slightly this year (2012) before heading back up in 2013.

BUILDING DURING THE RECESSIONMuch of the 2011 increase is a result of federal stimulus fund-

ing for schools, infrastructure, solar-fueled projects and other green upgrades, Calbert says.

Among the infrastructure projects McCarthy landed is construc-tion of the $140M, fi rst phase of the PHX Sky Train, a people mover

Current ly under cons t ruct ion is the f irs t phase of the PHX Sky Tra in (above) ; comple ted public projects include (opposi te page) the Mar icopa Count y Super ior Cour t Tower and Chandler's new Ci t y Hall .


Going PublicGovernment-funded and school bond projects keep Arizona construction companies busy during economic downturn

19

pegged to connect Phoenix Sky Harbor International Airport visitors and employees to the terminals, light rail system and parking lots.

McCarthy’s usually packed education division had a 2011 workload valued at about $110M, Calbert says. � at‘s down from a high of $170M in 2008. And about 40% of the 2011 business was out-of-state work as McCarthy took jobs in New Mexico to make up for Arizona’s shortfall.

“Public work has kept us going, but we had to go beyond Arizona,” he says. Among the school projects McCarthy snagged during the recession is a $25M addition and renovation for Barry Goldwater High School, says Terry Bohl, the company’s education services direc-tor. Parts of that multi-faceted project were completed during summer 2011 break, and other non-disruptive work is still ongoing, he says.

During the summer break, McCarthy completed 600,000 SF of school construction in Metro Phoenix, including new buildings, reno-vations and mechanical upgrades. Still in the works is a new, $12M, 80,000 SF elementary school in Chandler, Bohl says.

Chandler is one of the few Arizona cities able to aff ord other-than-school public projects during the downturn. � e city broke ground on a $74M city hall complex in mid-2009. After leasing, saving and bud-geting for 25 years, Chandler didn’t have to borrow money to build it, says spokeswoman Jane Poston. Best of all, Chandler’s project came in $10M under original budget thanks to the sagging economy.

“We had signifi cant cost savings building in a recession,” Poston says. Designing a much-needed fi rehouse as solar-fueled and LEED-certifi ed helped Gilbert land a $3M federal grant from the American Recovery and Reinvestment Act, says spokeswoman Beth Lucas.

Maricopa County also saved a bundle by opting to build during the recession, says � omas Goderre, district operations manager for Gilbane Building Company.

Gilbane teamed with Ryan Companies US on a 700,000 SF supe-rior court tower in Downtown Phoenix (construction value $260M).

“� e Maricopa County Court Tower project was bid and construct-ed at the perfect time for Maricopa County, Gilbane/Ryan and the subcontractor community,” Goderre says. “� e county was able to realize construction cost savings in the range of $15M to $20M com-pared to a normal construction climate, while Gilbane/Ryan and the local subcontractors were able to put a lot of people to work during a very tough economic downturn.”

The court tower was completed in November. That, along with a new Phoenix Police precinct and four ASU student rec-reation centers, are among the publicly funded projects that “helped us weather the storm,” Goderre says.

LOOKING FOR NEW OPPORTUNITIESIn Arizona, about 75% of Gilbane’s business has been publicly

funded projects, he says, but Goderre sees that changing as public money dries up and private investment returns to the market.

Sundt Construction vice president Jeff Fairman says he also believes privately funded projects will take over more of his compa-ny’s resources during the next few years as cities and school districts continue to get squeezed.

Tempe-based Sundt bills about $1B in a normal year. Business has dropped overall during the recession, but the company’s 50/50 ratio of public/private business has so far remained static, Fairman says.

Sundt has about $500M worth of public work in progress right now, but most of that is in multi-year projects, he says.

Both the volume of new business and overall construction value have shrunk as pre-recession plans that weren’t shelved were at least downsized. “� e bells and whistles went away,” he says.

Besides building the new Chandler City Hall complex, Sundt landed a potpourri of publicly-funded projects during the economic downturn including K-8 and higher education buildings, municipal infrastructure projects, a federal courthouse and a U.S. Marine Corps simulator facility in Yuma.

Mesa-based Caliente Construction has specialized in upgrading or repurposing existing facilities during the downturn, says CEO Lorraine Bergman. The company is renovating old post office space to accommodate a student center for ASU’s Downtown Phoenix campus. Caliente has several projects completed or ongoing to make security, technology or mechanical improvements in public buildings from schools to prisons, Bergman says. “It’s come down to necessity. You can’t let the buildings fall apart,” she says.

Kitchell president Jim Swanson says the public sector produces “a sizable piece of our business,” typically employing about 30 percent of the company’s workforce in Arizona and California.

Commercial construction work is down for nearly all of Kitchell’s business segments, Swanson says. And public projects in no way take up the slack, he says. Instead, he’d give props to the healthcare indus-try for keeping his business healthy.

calienteconstruction.comgilbaneco.comkitchell.com mccarthy.comsundt.com

CONSTRUCTION

CONSTRUCTION

Transforming existing building space into classrooms presented a great chal-lenge for two specialty school projects in the Valley.

But in selecting Adolfson & Peterson Construction as general contractor, Arizona School For the Arts and the Arizona Agribusiness & Equine Center knew they turned to the right folks.

ARIZONA SCHOOL FOR THE ARTS� is renovation was a three-phased project that

spanned more than three school years. � e work on Phase I included complete interior demolition of 14,000 SF of previous offi ce space and renovated to include four science classrooms, four piano classrooms, four orchestra and strings class-rooms, a teachers workroom, two conference rooms, administration

support offi ces, and two main offi ces; one for the princi-pal and one for the assistant principal.

� e work on Phase II consisted of roughly 4,000 SF of interior space demolition and renovation of offi ce

space into classrooms. � is phase included the build-out of four class-rooms, and four administration offi ces. � is phase also included complete roof replacement, HVAC replacement and some on site improvements.

� e main feature of this phase is the storefront glass wall at the main entry to the administration front desk on the west side of the building and the matching storefront glass wall at the east end of the same cor-ridor. � ese have become the iconic and hallmark feature of the school.

Phase III — the largest scope of the three — consisted of complete interior demolition of a 20,000 SF, two-story office building and renovating it into classrooms, ballet dance rooms and office space, as well as a new 1,500 SF masonry restroom tower and new on-site improvements.

One of the distinct features of this phase is the complete

removal of the existing masonry and punched windows face of the building to now include a new glass curtain wall system on the entire north face of the building on the second f loor so as to provide more natural light into the dance studios and provide an architectural feature that ties the phases together.

ARIZONA AGRIBUSINESS & EQUINE CENTER� e AAEC Coronado campus consisted of the conversion of an exist-

ing medical plaza into classrooms for the specialized charter school.� e project included the full buildout of four buildings at the

existing plaza. � e fi rst building was converted to a front offi ce with staff offi ces and classroom space; another included multi-purpose space and additional classrooms; the third consisted of four class-rooms; and the fi nal included a biotechnology lab, computer tech-nology classrooms, prep room, science labs and lecture space.

The ABC's of renovation & conversionTwo Valley specialty schools tap local resource for its expertise

BY PETER MADRID

Arizona School for the Arts

Size: 39,500 SF

Cost: $3.6M

Architect: Orcutt | Winslow

AAEC Coronado campus

Size: 22,000 SF

Cost: $1.5M

Architect: DLR Group


SF of previous offi ce space and renovated to include four science classrooms, four piano classrooms, four orchestra and strings class-

removal of the existing masonry and punched windows face of the building to now include a new glass curtain wall system on removal of the existing masonry and punched windows face of


Size: 39,500 SF



Size: 22,000 SF


ransforming existing building space into classrooms presented a great chal-lenge for two specialty school projects

But in selecting Adolfson & Peterson Construction as general contractor, Arizona School For the Arts and the Arizona Agribusiness & Equine

� is renovation was a three-phased project that spanned more than three school years. � e work on Phase I included complete interior demolition of 14,000 SF of previous offi ce space and renovated to include four science

's of renovation & conversionTwo Valley specialty schools tap local resource for its expertise

spanned more than three school years. � e work on Phase I included complete interior demolition of 14,000 SF of previous offi ce space and renovated to include four science removal of the existing masonry and punched windows face of

of renovation & conversionTwo Valley specialty schools tap local resource for its expertise


Size: 39,500 SF

Cost: $3.6M



Size: 22,000 SF

Cost: $1.5M



Size: 39,500 SF

Cost: $3.6M



Size: 22,000 SF

Cost: $1.5M


For more information,call 602.277.6045

SUBSCRIBE TODAY!

AZREmagazine.com

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JANUARY-FEBRUARY 2011

About 180,000 vehicles

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InsIde

2011 CRe Leaders, new Faces p. 12

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demand for data Centers p. 42

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Chandler 101: Chandler 101: Chandler 101: Chandler 101: Chandler 101: Chandler 101: Chandler 101: Chandler 101: Chandler 101: Chandler 101: Chandler 101: Chandler 101: Chandler 101: Chandler 101:

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‘a sense of place’‘a sense of place’‘a sense of place’‘a sense of place’‘a sense of place’‘a sense of place’‘a sense of place’‘a sense of place’‘a sense of place’‘a sense of place’‘a sense of place’‘a sense of place’‘a sense of place’‘a sense of place’‘a sense of place’‘a sense of place’‘a sense of place’‘a sense of place’

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ACA: Has it made an impact? p. 8'Stealth' healthcare construction p. 16AIA-Arizona: The best and brightest p. 30

Grand Designs

INSIDE

100 Years of Arizona's Architectural Achievements

The University of Arizona Stevie Eller Dance Theatre was designed

by Gould Evans and built in 2003.

21

http://www.laytonconstruction.com

http://www.AZREMagazine.com


CONSTRUCTION: PROJECT NEWS

SCOTTSDALE’S SONORA VILLAGE GETS NEW ANCHOR� e newly enhanced Sonora Village, 15515 N. Hayden Rd.,

Scottsdale, landed a new anchor with the construction of Studio Movie Grill (above). Developer for the $6M, 42,000 SF theater was Westwood Financial. VCC was the general contrac-tor; DVA was the architect. Merrill Companies is handling bro-kerage services. Studio Movie Grill is a 9-screen, upscale the-ater that features fi rst-run movies, complete dining and a bar.

D.L. WITHERS, DLP GROUP RENOVATING CHANDLER PREP SCHOOL� e Chandler Unifi ed School District High School Prep

Academy, 1150 W. Erie St., is undergoing a $7.8M, 73,000 SF ren-ovation by D.L. Withers Construction and the DLR Group. Work includes renovation of an existing 52,466 SF elementary school, construction of a new gym with lockers and restrooms, new stu-dent parking lot, a new high school soccer fi eld and outdoor bas-ketball court. Expected completion is 2Q 2012.

MOUNTAINSIDE FITNESS BUILDING CLUB INSIDE CHASE FIELDBrycor Builders of

Chandler is the general contractor for the Mountainside Fitness cen-ter that will become the nation’s fi rst fi tness club inside a Major League Baseball stadium at Chase Field, home of the Arizona Diamondbacks. Saemisch-

DiBella Architects is architect of the $650,000, 12,000 SF project. � e club will occupy 10,000 SF along the main concourse, includ-ing a cycle room with glass windows visible to patrons inside the ballpark. Mountainside will also occupy a mezzanine level to be used as a cardio studio. Expected completion is 1Q 2012.

DPR CONSTRUCTION GIVING KARSTEN MANUFACTURING A FACELIFTDPR Construction is providing construction management and

general contractor services for PING (Karsten Manufacturing) as part of the club maker’s Campus Master Plan Renovation. Phase 1 is a build-out of 94,000 SF of offi ce space; Phase 2 is construction of 135,000 SF of warehouse/offi ce tower; Phase 3 is relocation of manufacturing into Building 113; Phase 4 is construction of 40,000 SF of offi ce space to house test facility groups; and Phase 5 is demolition of multiple buildings and construction of a test facility (driving range). Architect is Weiss/Magness Architects.

TOWN OF PARADISE VALLEYOn November 10, 2011, the Town of Paradise Valley Town

Council approved the 2012 General Plan update. � e plan will be voted on by the public at the March 13, 2012, election and will be identifi ed as “Proposition 438.” For more information: paradisevalleyaz.gov.

CITY OF SCOTTSDALE� e Federal Emergency Management Agency is in the

process of updating fl ood insurance rate maps for North Scottsdale. � e new maps identify approximately 700 proper-ties north of Lone Mountain Rd. within a special fl ood hazard area. � e new maps are open for public appeal prior to adop-tion in late 2012 or early 2013. For more information, contact Ashley Couch, City of Scottsdale Stormwater Manager and Floodplain Administrator, (480) 312-4317.

CITY OF SURPRISE� e City of Surprise City Council will consider a new fee

for permits to replace water heaters and water softeners at the January 17, 2012 Work Session. For more information, call (623) 222-3070.

TOWN OF GILBERT� e Town of Gilbert is in the process of reviewing the Town

Code in order to off er new opportunities for businesses to pro-mote themselves. � e code change would allow small-scale, pro-motional and community events as temporary uses, not requir-ing a special events permit. For more information, contact the Town of Gilbert public information offi cer, (480) 503-6766.

P&Z co lumn by Da ve Coble and Kar l Woodard , MEUP, wi th Coe & Van Loo Consul tants Inc . cv lc i .com

NEW ARENA FOCAL POINT OF GCU’S $200M EXPANSION PROJECTA 5,000-seat, 135,000 SF arena (above), the focal of Grand

Canyon University’s $200M expansion eff orts, was a fi nancial boon to Arizona’s construction industry with its $40M price tag. GC was Perini Building Company. Subs included Aluglas, Cannon & Wendt, Coreslab, E&K of Phoenix, Facilitec, Harris Arizona Rebar, Kimbrell Electric, Kovach, Meyer & Lundahl, Progressive Roofi ng, Schuck & Sons, Sun Valley Masonry and TD Industries. Architects were Architekton (Tempe) and 360 Architecture (Kansas City, Mo.)

CONSTRUCTION P&Z

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2012 BOARD MEMBERS

23

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AttorneysMICHAEL E. TIFFANYManaging AttorneyTiff any & Bosco

“� e real estate market recovery start-ed with the acquisition of existing Class A apartments. Healthcare has also been a strong sector, followed by industrial. � e

real economic benefi t has been caused by the construction of new projects, which started in a meaningful way in 2011. Homebuilding has been a part of this, but not at the usual level. Initially, the source of funding was government insured lenders. However, many of the traditional lenders have returned to the market. � e increased employment from new construction gives a signifi cant boost to the economy. � e major uncertainty is the fi nancial crisis in Europe. � e recovery will continue to be weak until there is a long-term solution to that problem. Bottom line, I am optimistic.

BrokersANTHONY J. LYDONManaging Director-Industrial/

Supply Chain Logistics SolutionsJones Lang LaSalle

“We are seeing — and will continue to see — energy/HR-centric industrial employers choose Metro Phoenix for our strategic loca-

tion near California, our right-to-work environment and our low risk of natural disasters. Employers who are Foreign Trade Zone-qualifi ed will reap additional and substantial real estate and equipment cost savings that stack up competitively against any other state in the country. Arizona’s sustained demographic growth and relatively young population reinforce these benefi ts. � ese inherent strengths will remain key drivers for compa-nies that are seeking industrial space solutions and will help Arizona win those corporate space commitments.”

BY PETER MADRID

INDUSTRY LEADERS

Architects/EngineersMICHAEL MEDICI, AIAPresidentSmithGroupJJR

“Arizona is primed to make huge eco-nomic development strides. Utilizing our natural resources and demographics, Arizona is positioned well for continued

growth. SmithGroupJJR has a broad range of market focus areas: workplace, education, healthcare and science and technologies. � is diversity has positioned us to be at the ‘right place at the right time.’ For example, Arizona’s healthcare systems are still trying to catch up with the tremendous growth over the past 15 years. Our exper-tise in local, regional and national design of healthcare facilities has our team servicing several key providers throughout the region. On the other end of the spectrum, Arizona provides a tremendous set-ting for both the solar and data center industries. Our integration of architects and engineer, provides the perfect combination for our technologies studio, which specializes in the design of mission criti-cal facilities and renewable industries.”

W e are impressed by the many individuals who are passionate about Arizona’s

commercial real estate industry. Each year AZRE magazine pays recogni-

tion to a group of industry leaders who rise above the norm. � is year those

leaders were chosen from the 10 industry sectors identifi ed in our annual People to Know

publication. � ese leaders were announced and honored at a reception on Nov. 10.

For our fi rst issue of 2012, we asked: What trend or growth area in your particular

industry do you foresee aiding economic development in Arizona in 2012?

AttorneysDON J. MINERDirectorFennemore Craig PC

“Some silver linings can fl ow from the dark clouds of economic diffi culties. � e high numbers of foreclosures and failed condominium projects have helped cause

an increased demand for multi-family housing. In 2012 in Arizona we will see benefi ts from the increased demand for multi-housing in the form of increased values for apartment projects and we may even see some openings for planning and development of multi-family housing in underserved areas. In 2012 I believe we will also see an expansion of the trend of fi rming up of offi ce rents that will help landlords. Both those trends should help improve economic expansion in our state.”

No. 1 in Their FieldAZRE honors the top leaders of 2011-2012

I N C O M M E R C I A L R E A L E S T A T E

nomic development strides. Utilizing our natural resources and demographics, Arizona is positioned well for continued

dark clouds of economic diffi culties. � e high numbers of foreclosures and failed condominium projects have helped cause

Supply Chain Logistics Solutions

— energy/HR-centric industrial employers choose Metro Phoenix for our strategic loca-

ed with the acquisition of existing Class A apartments. Healthcare has also been a strong sector, followed by industrial. � e


Economic Development/ City Planners

CHRISTINE MACKAYEconomic Development DirectorCity of Chandler

“Arizona has made signifi cant in-roads over the past few years as a force to be reckoned with as a location opportunity

for both corporate expansions and early stage companies looking for a place to grow. In 2012, I expect we will continue to see the glut of inventory on the market reduced by these companies looking to take advantage of the business platform they fi nd in our market. Further, the economic downturn has taught cities how to be more collaborative and open to new, creative ideas and I expect we will see this expand in 2012 as communities work to grow their employment base.”

Finance/AccountingWILLIAM L. SPARTSenior Vice PresidentWells Fargo Bank-Real Estate

“Within the commercial real estate fi nance industry there are more institu-tions entering the fi eld as values stabi-lized. In 2011 we witnessed tighter spreads while advance rates increased a bit versus

2009/2010 time period. � is trend appears to be continuing in 2012. As a result there are more participants in the market taking advantage of historical low prices as values are starting to stabilize. Until supply is in equilibrium with demand, construction of new product will be a fraction of pre-2007 levels. � e creation of jobs is the key to long-term absorption and ultimately the return of price appreciation.”

General ContractorsHAMILTON ESPINOSANational Healthcare LeaderDPR Construction

“A path to a better future for con-struction must aid in Arizona’s economic development eff orts. DPR is focusing on supporting our clients’ needs, to do more

with less. We are able to do this using lean construction techniques to minimize waste, Integrated Project Delivery, and a number of increas-ingly high-tech tools, to increase effi ciency and quality. With these tools, we, and Arizona, may off er a company considering relocating or expanding here, the best deal in cost, speed to market and value.”

Property ManagersMARK STROMGREN, RPAVice President, General Manager

of Real Estate ServicesNorthMarq

“Technology appears to be the big fac-tor to aid in economic development from an operational perspective. Property

managers are virtually never away from their computers with smart phones. � is leads to faster solutions to problems and greater tenant satisfaction. � ere is also new Internet-based software for tenants to call in service orders any time of day or night. A better bottom line also encourages more real estate investment.”

SubcontractorsDANIEL PUENTEFounder & PresidentD.P. Electric Inc.

“Our success throughout the recession can be credited to the strong relation-ships that we have built with our trusted general contractors. Arizona’s real estate

industry was hit the hardest in this recession. But I also think it will be the fi rst to come back and slowly carry us out of this recession.”

Up and ComersKIMBERLY MICKELSONMarketing AssociateSmall Giants

“Social media is becoming a large factor in aiding economic development, particularly in commercial real estate and within the architectural, engineer-

ing, and construction industry. � e emerging trends I see are pro-moting local and regional businesses, linking job seekers to jobs, strengthening or rebranding a fi rm’s image, and creating an aware-ness to a larger targeted audience.”

Developers/InvestorsKURT ROSENESenior VPAlter Group

“I believe that there will be three key factors to watch in 2012:

Government: “On the local level, Arizona has made signifi cant strides over the last

year to become competitive in the job attraction arena. New funds have been appropriated, allowing the state to compete to attract jobs, coupled with the introduction of the Arizona Commerce Authority this now plac-es Arizona in the competitive arena with other Sunbelt states.”

Healthcare: “On the federal level, healthcare reform, if adopted, will greatly accelerate the need for medical offi ce facilities. We will see a need for additional medical offi ce space and ancillary mini-hospital facilities reaching out to the local level of services closer to the roof tops.”

Technology: “Both the offi ce and industrial markets in Phoenix are experiencing growth due to the technology sector. Growth in distribution is being fueled by Internet shopping. Many of the large offi ce deals are companies directly related to technology.”

factors to watch in 2012:

has made signifi cant strides over the last

struction must aid in Arizona’s economic development eff orts. DPR is focusing on supporting our clients’ needs, to do more

factor in aiding economic development, particularly in commercial real estate and within the architectural, engineer-

of Real Estate Services

tor to aid in economic development from an operational perspective. Property

can be credited to the strong relation-ships that we have built with our trusted general contractors. Arizona’s real estate

City Planners

over the past few years as a force to be reckoned with as a location opportunity

fi nance industry there are more institu-tions entering the fi eld as values stabi-lized. In 2011 we witnessed tighter spreads

27

INDUSTRY LEADERS

28 �January-February 2012

How Phoenix looks in the next 10 or even 100 years depends on a strong economy and infrastructure such as the light rail (right). Photos courtesy of GPEC. Arizona in the future () might include taking advantage of solar shades over our interstate freeway system. Gensler rendering.

29

CENTENNIAL � SERIES

Cranes, Trains and AutomobilesA r i z o na ’ s e c onom i c s t re ng t h a nd g row t h t h e n ex t 100 y ea rs d epend o n t h e c re a t i o n o f n ew bu i l d i n g s a nd n ew i n f ra s t r u c t u re | B y Pe t e r Mad r i d

A high-speed train between Phoenix and

Tucson. Toll roads on I-10 and I-17. A new

shopping mall. Three outlet centers. A

major development in West Phoenix.

New casinos. Solar manufacturing plants.

A light rail that extends from Phoenix to

Gilbert. A new interstate — I-11 — linking Phoenix and Las

Vegas. State-of-the-art sports facilities.

Reality or wish list?As Arizona looks ahead to its next 100 years, the future

of the commercial real estate industry hinges on new infra-structure to keep the state’s economic engine churning while meeting the demands of a growing population.

Since the recession unloaded on the commercial real estate industry in the mid-2000s, it’s been an uphill climb for those

in the industry, including general contractors, architects, engineers, subcontractors, developers and brokers.

“We will see a population shift to urban areas with a focus on transit- oriented development,” predicts Bryan Dunn, senior vice president at Adolfson & Peterson Construction. “Commercial property will need to be re-purposed into alternate uses due to the glut of vacant space in the real estate market.

“We will need to find creative ways to own and operate buildings in the future. There is a growing demand for public/private partnerships for municipal and educational facilities, similar to what has been done in Europe,” Dunn says.

AZRE magazine asks some experts in commercial real estate how they see the industry changing in Arizona over the next decade and beyond. Here are their responses:

Planning and Development“In the next 10 years, Arizona will fi nally adopt Tax Increment

Financing (TIF) to remain competitive in the business world. � e new normal is for less reliance on homebuilding as a jobs industry. Two more high rise offi ce buildings with mixed uses on the lower fl oors will be built in Downtown Phoenix. In the next 100 years, high-speed rail will run between Phoenix and Tucson in the Sun Corridor and a new, man-made lake/reser-voir will be created north of Phoenix to collect upstream snow melt and serve the needs of Metro Phoenix.”

— Jon Froke, Planning Director, City of Glendale“During the next 10 years, smaller developments that require

less off -site infrastructure and result in lighter commitments from homebuilders are likely. Infrastructure requirements/costs will be lower and fi nancial commitments will be small-er, both of which are desirable to fi nanciers and homebuilder shareholders recovering from the recent downturn.

“In the next 100 years, development and homebuilding will undergo some of the most rapid changes ever. In Metro Phoenix and the Tucson area, densities will undoubtedly increase dramatically; we will grow upward rather than outward, as large metropolitan areas eventually do. The materials builders use will change dramatically, looking and feeling different. There will be stronger and lighter materials. Although hard to imagine, many unique, innovative homebuilding products that will be used the homes of the future have already been developed, we continue to wait for them to be rolled out to consumers.

“The continued development of solar technologies is going to have huge impact on all types of commercial development in Arizona. Imagine buildings - retail, office, industrial, homes - not needing to be hooked up to the grid because they produce all of the energy necessary for their usage. The development of 'net-zero' facilities in this market, where sun is plentiful, will have a dramatic positive effect on Arizonan’s lives.”

— Jim Belfiore, President, Belfiore Real Estate Consulting

Brokerage“The beginning of the change is going on right now. The

exchange of ownership has and will have an impact on our industry in the next 10 years. In the RTC days it took about 15 years to fully recover, this current cycle will take 5-7 years to process all of the inventory and for the next wave of own-ers to re-trade the properties. Banks, special servicers and the FDIC will be in charge of real estate for the long term and all

30 � January-February 2012

of the assets that are currently under their control won’t make it back into private hands in total for 10 years.

“The medical use of retail space will be in full force; everything about this makes sense. Retail buildings, namely big box spaces, have the power, the lower rents and the parking already in place to handle a medical user. This will create truly mixed-use locations.

“Internet sales fulfillment centers will hit a critical mass, even if and/or when the state begins to charge them sales tax, even at a much lower rate. Phoenix is well located; we have a growing economy and it makes a lot of sense that those are now starting to pop up here.

“In the next 100 years, buildings will be far more energy efficient; materials to build buildings will be so much more advanced than we can even imagine. In commer-cial buildings, there will be more bodies per square foot, more technology, less employees, smaller office size requirements. Thousands of new businesses will be created.”

— Pete Bolton, Managing Director/Exec. VP, Grubb & Ellis

“Real estate growth over the next decade will be far more restrained than in the boom period in the 10 years before the onset of the recession. During that time, commercial prop-erty inventories routinely expanded by anywhere from 3% to 5% annually, driven by growing tenant demand for space and rents that steadily pushed higher. A return to that environ-ment is unlikely anytime soon.

“Forecasting out over the next 100 years presents a pretty daunting challenge … but all of the demographic trends show Arizona will remain a growth market over the next century and population growth will spur demand for both commercial and residential real estate. Beyond demographics and quality of life factors, we believe global economic patterns will sup-port growth in Arizona.”

— Bob Mulhern, Managing Director, Colliers International

Architecture“All industries, including commercial real estate and archi-

tecture, will need to continue to evolve and adapt to emerging technologies — specifically in the fields of alternative energy and sustainability. I believe the next few years of those 10 years a lot of attention will need to be spent on repurpos-ing existing buildings and facilities. We will obviously need to remain flexible to adapt to the process of becoming sta-bilized.

“Because technology and technological advances are changing at an exponential rate, I think the next 100 years is beyond reasonable comprehension. Who would have thought 100 years ago that we would be where we are today? However, architecture and real estate haven’t significantly changed over the past 100 years, but we also have not had the multi-

plying pace of technology at our disposal. Who knows, things like tele-transporting may be a reality over the next century, which of course would drastically change architecture and commercial real estate.”

— Patrick Hayes, President and CEO, PHArchitecture

Legal“For approximately the first third or half of the next 10

years, commercial real estate will need to focus on absorption and modification to meet current needs of those projects that resulted from overbuilding during prior ‘blow and go’ times in our industry. Arizona will need to adapt its economy to more self-sustaining business that is not so dependent upon growth and real estate development. Thus, over the next 100 years Arizona will need to modify its tax and development schemes to accommodate more industry and manufacturing."

— Don Miner, Director, Fennemore Craig PC

Construction“The impact construction will have in Arizona will start

with job creation. As the market comes back, the industry will be a leader in putting people back to work. We will need people to fill both direct construction jobs, and jobs that are indirectly related to construction. Every $1B spent in con-struction results in a total of 20,000 direct and indirect jobs. These jobs will help the middle class, the hardest hit in the last few years in terms of job loss."

— Eric Hedlund, Executive VP/COO, Sundt Construction

Finance“Financing will always be a key part to Arizona’s growth.

How products and services will be delivered will continue to evolve. As the market heals more competition enters into the marketplace thereby giving more investors access to capital. Assuming the economy has healed and is robust, I see a lot more choices for investors, developers and consumers in the next 10 years in terms of the availability of financing."

— William L. Spart, Senior VP, Wells Fargo Bank �

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