The industrial market continues to be the major highlight in theSouthwest region. In fact, a new study from Kidder Mathewshighliegted the success in the market and the extended runwayahead. Then, the deals backed up the rest, with huge sales andpricing that continues to soar. Here, we take a look at whathappened across the political landscape this year. Here's a look atthis week's trends, announcements and deals that you may havemissed in Southern California, Utah, Arizona and Nevada.

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BY THE NUMBERS

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LOS ANGELES—The Los Angeles industrial market isn't slowingdown, and gains are expected well into the future, even asoccupancy costs rise. Net absorption was negative in Q2 at 128,433square feet, and this is the first quarter of negative absorptionsince 1Q16. The San Gabriel Valley recorded the most net absorptionwith 226,780 square feet of occupied space added to the market. Weexpect this to grow further with over 2.4 million of square feet ofconstruction looking to be added in the upcoming quarters. SouthBay recorded the largest negative absorption at over 300,000 squarefeet, which could be correlated to the lack of available inventory.Leasing activity stayed strong in Q2 increasing over 500,000 squarefeet from the prior quarter reaching over 5.8 million square feet.We believe that activity shall continue its growth in the upcomingquarters with the addition of 4.9 million square feet of newconstruction coming to market. Currently the vacancy stands at2.1%, which is a 10 basis point increase from last quarter and 20basis point increase from the year prior. The vacancy rate has beenranging between 1.9% and 2.1% since Q4 of 2015. With thisconsistent pattern we expect it to continue throughout the upcomingquarters. The average asking rental rate at the end of Q2 is $0.84per square foot on a triple net basis per month. Year-over-year,the asking rate is up $0.06 from Q2 2016, a 7.6% increase. Thecurrent asking rate is the highest on record and seems tocontinue.

|

(SOURCE: KIDDER MATHEWS)

|

NEW & NOTABLE

|

BEVERLY HILLS, CA— Zachary Gingold has joinedSonnenblick-Eichner Co. as an associate. Gingoldbrings to Sonnenblick-Eichner Company experience in underwriting,negotiation and closing of more than $300 million in real estatedebt transactions. In his new role, he will be responsible forpreparing investment and financing memoranda, as well as completingthe financial analyses and market research associated with eachtransaction. His responsibilities also will include managingthe due diligence process, evaluating potential investment andfinancing proposals, and helping with the closingprocess. Prior to joining Sonnenblick-Eichner Company, Mr.Gingold held internships at iBorrow LP, Rexford Industrial, andLatitude Management Real Estate Investors.

|

LOS ANGELES— CBRE has hired JonathanSchley as a VP in the firm's high-

|

street retail team. Based in the firm's downtown Los Angelesoffice, Schley will focus on tenant and landlord representation andcollaborate closely with SVP Andrew Turf. During his twelve-yearcareer in commercial real estate, Schley has worked on luxuryretail transactions in such cities as New York, Los Angeles, Londonand Paris. Prior to CBRE, Schley was owner and founder of Schley areal estate development, investment, and advisory company, with aprimary focus on the retail and hospitality sectors. Before thefounding of his own company, Schley was director of retaildevelopment at Tungsten Partners where his primary focus wasboutique hotel chain Ace Hotel.

|

DEALTRACKER

|

PHOENIX—Bascom Arizona Ventures has soldArcadia Cove Apartments in Phoenix to BH Equities for $71.5million. Bascom purchased the 432-unit property in 2013 for $40.72million, and made substantial improvements to the property.Upgrades featured a fitness room, an Internet café, and a clubhousewith iPads stations. Interior upgrades included two-tone paint, newcabinetry, granite countertops, energy-saving stainless steelappliance packages, modern light fixtures, vinyl plank flooring,and ceilings fans. The amenities brought the community up to moderndesign.

|

PHOENIX—NorthMarq Capital has provided the $23million refinance loan for Colter Park Apartments, a 120-unitmultifamily property located at 909 West Colter Street Phoenix,Arizona. Luke Donahue, senior vice president/senior director at thefirm, secured the funding on behalf of an unnamed borrower. Thefull term interest-only loan was funded by NorthMarq's Fannie Maeplatform.

|

TEMPE, AZ—Capstone Advisors has acquired DeMuroCorporate Square, a seven-building office and flex industrialproperty in Tempe, Arizona, from University CorporateSquare Associates, for $10.2 million. The investor hasplans to reposition the property to supply 'creative' office andflex–industrial space to today's contemporary firms looking for aunique work location in centrally located Tempe. The 88,837square-foot property is located at 1505-1575 W. University Ave.just a few blocks west of the Arizona State University campus, adynamic hub for entrepreneurship and innovation.

|

LAS VEGAS—Calmwater Capital has originated a$36.7 million loan on behalf of Remington Nevada to refinanceexisting debt and finance remaining construction of the MountainsEdge Marketplace in southwest Las Vegas. Once completed, the101,000-square-foot retail property will be located at the cornerof Blue Diamond Road and South Buffalo Drive, and will be anchoredby Albertsons. The Calmwater-provided credit facility comprises a$16.6 million senior secured term loan and a $20.1 million delayeddraw term loan for future construction costs, tenant improvementsand leasing costs.

|

SAN DIEGO—San Diego's Mission Grove Office Park has traded handsbetween Radius Investments and CharlieJadallah for $10.3 million. The two-building,65,649-square-foot office complex has two multi-tenant officebuildings. Cushman & Wakefield's DerekHulse, Rick Reeder and BradTecca with the firm's San Diego offices represented theseller in the transaction. Nick Totah ofMarcus & Millichap represented thebuyer.
PHOENIX—Las Vistas at Papago Park, a 13-building apartmentcommunity at 1010 N 48th St., has been sold for $13.5 million to anaffiliate of Avenue North. The local buyer has plans to rename theproperty Proximity at Papago Park and update the multifamilydevelopment. Hahn, Trevor Koskovich and Jeff Sherman with ColliersInternational in Greater Phoenix negotiated the sale transaction.WWC XVIII LLLP, an Arizona limited liabilitypartnership sold the property to Avenue North,LLC. The apartment community was constructed in 1982 andcontains 13 buildings on 4.74 acres of land. The development offers200 apartments units totaling 134,000 square feet. Equally splitbetween one and two-bedroom units, the apartments range in sizefrom 620 to 720 square feet. More than 300 parking spaces areavailable at the development, which is located on 48th Streetbetween McDowell Road and Van Buren Avenue. The property was 90%occupied at the time of the sale.

|

NEWPORT BEACH, CA—HFF has closed the $42million sale Gateway Marketplace, a 127,861-square-foot shoppingcenter anchored by both Smart & Final and Aldi in the San Diegocounty community of Chula Vista, California. HFF marketed theproperty on behalf of the seller, a partnership between BrixtonCapital and ALTO Real Estate Funds. An affiliate of AmericanAssets Trust, Inc. purchased the asset free and clear of existingdebt. Gateway Marketplace was completed in 1997 and redeveloped in2016. In addition to the dual grocery anchors, the98.7-percent-leased center is also home to Party City, Hobby Lobby,Mattress Firm, Little Caesars and AT&T. GatewayMarketplace is situated on 9.95 acres at 40 North 4th Avenue inChula Vista, which is approximately seven miles from downtown SanDiego and Tijuana. The center is located at the northwestcorner of North 4th Avenue and C Street, which have combinedtraffic counts of 43,400 vehicles per day. Additionally, thecenter has direct east and westbound access to the South BayFreeway, which is trafficked by approximately 146,500 vehicles perday.
LOS ANGELES—Rexford Industrial Realty has acquiredthree industrial properties in three separate transactions for atotal of approximately $71.5 million. Additionally, the companyannounced the disposition of an industrial property forapproximately $18.7 million. Proceeds from the dispositionwere reinvested into a new acquisition, with the balance of thepurchases funded utilizing cash on hand and the company's line ofcredit. The Company acquired 14820-30 Carmenita Road and 13555Excelsior Drive located in Norwalk within the Los Angeles – MidCounties submarket for $30.7 million, or approximately $155 persquare foot. The property consists of one two-tenant industrialbuilding and two single-tenant industrial buildings containing atotal of 198,062 square feet on 12.01 acres. The buildingsare 100% leased to four tenants at rents that are approximately 17%below market. The two-tenant building features 30-footclear-height, high-image frontage and a favorable ratio ofdock-high loading. The two single-tenant buildings provide excessland for outside storage that is coveted by tenants in the market.The property is located on a major thoroughfare with immediateSanta Ana (5) freeway access. According to CBRE, the vacancy ratein the 109 million square foot Los Angeles, Mid Counties submarketwas 0.9% at the end of the first quarter 2017.

|

PHOENIX—The I-10 Distribution Portfolio in Phoenix has tradedhands between DCT Industrial and ColonyNorthstar for $39 million. JLL managing directors Bo Millsand Mark Detmer and Vice president Ryan Sitov led the JLL team onthe sale. The assets are located at 101 North 103rd Ave. and 101North 104th Ave., and are 279,186 square feet and 279,279 squarefeet respectively. Both buildings offer flexible space withcross-dock capabilities and the ability to accommodate eithersingle or multi-tenant layouts.

|

SAN DIEGO—Cushman & Wakefield announcedtoday that Elisabeth Awes Separate Property Trustand the Williams Family Trust have come to termson a long-term ground lease with developer 4th & J for aprominent 30,056 square-foot parcel at 372 4th Ave. in San Diego'sMarina District. As the new lessee, 4th & J,LLC plans to redevelop the parcel into a $60 millionsix-story, 168-unit multifamily project. The highly visibleproperty situated at the corner of 4th Ave. and J St. currentlyconsists of a 20,000 freestanding retail building formerly occupiedby Cost Plus World Market that will be razed to make way for thenew housing structure.

|

BUILDING BLOCKS

|

PHOENIX—Cawley Architects of Phoenix recentlycompleted a 9,130-square-foot surgery center for SpectraEye Institute at the newly redeveloped 36,959-square-footheadquarters of Retinal Consultants of Arizona along I-17. CawleyArchitects collaborated with G2 Capital of Scottsdale and GCON ofPhoenix on redeveloping the original building, located at 15401 N.29th Avenue in the Arizona Business Park in Phoenix. The buildingwas first constructed as a large fitness center. Upon being vacatedby the original owner, the two-story concrete building fell intodisrepair and

|

OCEANSIDE—Shopoff Realty Investments has sold4.8 acres of land it previously entitled for the ground-updevelopment of 70 townhomes and 3,000 square feet ofneighborhood-style retail space. The townhomes will range from1,708 square feet to 2,215 square feet, and will feature roof-toppatios. The site is ideally situated within the El Corazonmaster-planned community in Oceanside, California, just a few milesfrom the Pacific Ocean. The community will feature a vast array ofparks, tournament sports fields, hiking trails, commercial, retailand housing.

|

SAN DIEGO—Badiee Development has commencedconstruction on the Escondido Victory Industrial Park, Escondido'sfirst, new industrial development in more than a decade. Thissignificant milestone was celebrated today with a groundbreakingceremony hosted with City of Escondido Mayor Sam Abed and dozens ofother distinguished community and business leaders. The91,000-square foot Escondido Victory Industrial Park is located at2005 Harmony Grove Road, Escondido, CA (92029) and will becompleted in the spring of 2018. The project is comprised of twomodern industrial buildings, which are suited for one to twosubstantially sized companies. The project will featurecontemporary building design including outdoor areas that open tothe Escondido Creek, high clear height ceilings and mezzanine spaceamong other features.

|

The industrial market continues to be the major highlight in theSouthwest region. In fact, a new study from Kidder Mathewshighliegted the success in the market and the extended runwayahead. Then, the deals backed up the rest, with huge sales andpricing that continues to soar. Here, we take a look at whathappened across the political landscape this year. Here's a look atthis week's trends, announcements and deals that you may havemissed in Southern California, Utah, Arizona and Nevada.

|

BY THE NUMBERS

|

LOS ANGELES—The Los Angeles industrial market isn't slowingdown, and gains are expected well into the future, even asoccupancy costs rise. Net absorption was negative in Q2 at 128,433square feet, and this is the first quarter of negative absorptionsince 1Q16. The San Gabriel Valley recorded the most net absorptionwith 226,780 square feet of occupied space added to the market. Weexpect this to grow further with over 2.4 million of square feet ofconstruction looking to be added in the upcoming quarters. SouthBay recorded the largest negative absorption at over 300,000 squarefeet, which could be correlated to the lack of available inventory.Leasing activity stayed strong in Q2 increasing over 500,000 squarefeet from the prior quarter reaching over 5.8 million square feet.We believe that activity shall continue its growth in the upcomingquarters with the addition of 4.9 million square feet of newconstruction coming to market. Currently the vacancy stands at2.1%, which is a 10 basis point increase from last quarter and 20basis point increase from the year prior. The vacancy rate has beenranging between 1.9% and 2.1% since Q4 of 2015. With thisconsistent pattern we expect it to continue throughout the upcomingquarters. The average asking rental rate at the end of Q2 is $0.84per square foot on a triple net basis per month. Year-over-year,the asking rate is up $0.06 from Q2 2016, a 7.6% increase. Thecurrent asking rate is the highest on record and seems tocontinue.

|

(SOURCE: KIDDER MATHEWS)

|

NEW & NOTABLE

|

BEVERLY HILLS, CA— Zachary Gingold has joinedSonnenblick-Eichner Co. as an associate. Gingoldbrings to Sonnenblick-Eichner Company experience in underwriting,negotiation and closing of more than $300 million in real estatedebt transactions. In his new role, he will be responsible forpreparing investment and financing memoranda, as well as completingthe financial analyses and market research associated with eachtransaction. His responsibilities also will include managingthe due diligence process, evaluating potential investment andfinancing proposals, and helping with the closingprocess. Prior to joining Sonnenblick-Eichner Company, Mr.Gingold held internships at iBorrow LP, Rexford Industrial, andLatitude Management Real Estate Investors.

|

LOS ANGELES— CBRE has hired JonathanSchley as a VP in the firm's high-

|

street retail team. Based in the firm's downtown Los Angelesoffice, Schley will focus on tenant and landlord representation andcollaborate closely with SVP Andrew Turf. During his twelve-yearcareer in commercial real estate, Schley has worked on luxuryretail transactions in such cities as New York, Los Angeles, Londonand Paris. Prior to CBRE, Schley was owner and founder of Schley areal estate development, investment, and advisory company, with aprimary focus on the retail and hospitality sectors. Before thefounding of his own company, Schley was director of retaildevelopment at Tungsten Partners where his primary focus wasboutique hotel chain Ace Hotel.

|

DEALTRACKER

|

PHOENIX—Bascom Arizona Ventures has soldArcadia Cove Apartments in Phoenix to BH Equities for $71.5million. Bascom purchased the 432-unit property in 2013 for $40.72million, and made substantial improvements to the property.Upgrades featured a fitness room, an Internet café, and a clubhousewith iPads stations. Interior upgrades included two-tone paint, newcabinetry, granite countertops, energy-saving stainless steelappliance packages, modern light fixtures, vinyl plank flooring,and ceilings fans. The amenities brought the community up to moderndesign.

|

PHOENIX—NorthMarq Capital has provided the $23million refinance loan for Colter Park Apartments, a 120-unitmultifamily property located at 909 West Colter Street Phoenix,Arizona. Luke Donahue, senior vice president/senior director at thefirm, secured the funding on behalf of an unnamed borrower. Thefull term interest-only loan was funded by NorthMarq's Fannie Maeplatform.

|

TEMPE, AZ—Capstone Advisors has acquired DeMuroCorporate Square, a seven-building office and flex industrialproperty in Tempe, Arizona, from University CorporateSquare Associates, for $10.2 million. The investor hasplans to reposition the property to supply 'creative' office andflex–industrial space to today's contemporary firms looking for aunique work location in centrally located Tempe. The 88,837square-foot property is located at 1505-1575 W. University Ave.just a few blocks west of the Arizona State University campus, adynamic hub for entrepreneurship and innovation.

|

LAS VEGAS—Calmwater Capital has originated a$36.7 million loan on behalf of Remington Nevada to refinanceexisting debt and finance remaining construction of the MountainsEdge Marketplace in southwest Las Vegas. Once completed, the101,000-square-foot retail property will be located at the cornerof Blue Diamond Road and South Buffalo Drive, and will be anchoredby Albertsons. The Calmwater-provided credit facility comprises a$16.6 million senior secured term loan and a $20.1 million delayeddraw term loan for future construction costs, tenant improvementsand leasing costs.

|

SAN DIEGO—San Diego's Mission Grove Office Park has traded handsbetween Radius Investments and CharlieJadallah for $10.3 million. The two-building,65,649-square-foot office complex has two multi-tenant officebuildings. Cushman & Wakefield's DerekHulse, Rick Reeder and BradTecca with the firm's San Diego offices represented theseller in the transaction. Nick Totah ofMarcus & Millichap represented thebuyer.
PHOENIX—Las Vistas at Papago Park, a 13-building apartmentcommunity at 1010 N 48th St., has been sold for $13.5 million to anaffiliate of Avenue North. The local buyer has plans to rename theproperty Proximity at Papago Park and update the multifamilydevelopment. Hahn, Trevor Koskovich and Jeff Sherman with ColliersInternational in Greater Phoenix negotiated the sale transaction.WWC XVIII LLLP, an Arizona limited liabilitypartnership sold the property to Avenue North,LLC. The apartment community was constructed in 1982 andcontains 13 buildings on 4.74 acres of land. The development offers200 apartments units totaling 134,000 square feet. Equally splitbetween one and two-bedroom units, the apartments range in sizefrom 620 to 720 square feet. More than 300 parking spaces areavailable at the development, which is located on 48th Streetbetween McDowell Road and Van Buren Avenue. The property was 90%occupied at the time of the sale.

|

NEWPORT BEACH, CA—HFF has closed the $42million sale Gateway Marketplace, a 127,861-square-foot shoppingcenter anchored by both Smart & Final and Aldi in the San Diegocounty community of Chula Vista, California. HFF marketed theproperty on behalf of the seller, a partnership between BrixtonCapital and ALTO Real Estate Funds. An affiliate of AmericanAssets Trust, Inc. purchased the asset free and clear of existingdebt. Gateway Marketplace was completed in 1997 and redeveloped in2016. In addition to the dual grocery anchors, the98.7-percent-leased center is also home to Party City, Hobby Lobby,Mattress Firm, Little Caesars and AT&T. GatewayMarketplace is situated on 9.95 acres at 40 North 4th Avenue inChula Vista, which is approximately seven miles from downtown SanDiego and Tijuana. The center is located at the northwestcorner of North 4th Avenue and C Street, which have combinedtraffic counts of 43,400 vehicles per day. Additionally, thecenter has direct east and westbound access to the South BayFreeway, which is trafficked by approximately 146,500 vehicles perday.
LOS ANGELES—Rexford Industrial Realty has acquiredthree industrial properties in three separate transactions for atotal of approximately $71.5 million. Additionally, the companyannounced the disposition of an industrial property forapproximately $18.7 million. Proceeds from the dispositionwere reinvested into a new acquisition, with the balance of thepurchases funded utilizing cash on hand and the company's line ofcredit. The Company acquired 14820-30 Carmenita Road and 13555Excelsior Drive located in Norwalk within the Los Angeles – MidCounties submarket for $30.7 million, or approximately $155 persquare foot. The property consists of one two-tenant industrialbuilding and two single-tenant industrial buildings containing atotal of 198,062 square feet on 12.01 acres. The buildingsare 100% leased to four tenants at rents that are approximately 17%below market. The two-tenant building features 30-footclear-height, high-image frontage and a favorable ratio ofdock-high loading. The two single-tenant buildings provide excessland for outside storage that is coveted by tenants in the market.The property is located on a major thoroughfare with immediateSanta Ana (5) freeway access. According to CBRE, the vacancy ratein the 109 million square foot Los Angeles, Mid Counties submarketwas 0.9% at the end of the first quarter 2017.

|

PHOENIX—The I-10 Distribution Portfolio in Phoenix has tradedhands between DCT Industrial and ColonyNorthstar for $39 million. JLL managing directors Bo Millsand Mark Detmer and Vice president Ryan Sitov led the JLL team onthe sale. The assets are located at 101 North 103rd Ave. and 101North 104th Ave., and are 279,186 square feet and 279,279 squarefeet respectively. Both buildings offer flexible space withcross-dock capabilities and the ability to accommodate eithersingle or multi-tenant layouts.

|

SAN DIEGO—Cushman & Wakefield announcedtoday that Elisabeth Awes Separate Property Trustand the Williams Family Trust have come to termson a long-term ground lease with developer 4th & J for aprominent 30,056 square-foot parcel at 372 4th Ave. in San Diego'sMarina District. As the new lessee, 4th & J,LLC plans to redevelop the parcel into a $60 millionsix-story, 168-unit multifamily project. The highly visibleproperty situated at the corner of 4th Ave. and J St. currentlyconsists of a 20,000 freestanding retail building formerly occupiedby Cost Plus World Market that will be razed to make way for thenew housing structure.

|

BUILDING BLOCKS

|

PHOENIX—Cawley Architects of Phoenix recentlycompleted a 9,130-square-foot surgery center for SpectraEye Institute at the newly redeveloped 36,959-square-footheadquarters of Retinal Consultants of Arizona along I-17. CawleyArchitects collaborated with G2 Capital of Scottsdale and GCON ofPhoenix on redeveloping the original building, located at 15401 N.29th Avenue in the Arizona Business Park in Phoenix. The buildingwas first constructed as a large fitness center. Upon being vacatedby the original owner, the two-story concrete building fell intodisrepair and

|

OCEANSIDE—Shopoff Realty Investments has sold4.8 acres of land it previously entitled for the ground-updevelopment of 70 townhomes and 3,000 square feet ofneighborhood-style retail space. The townhomes will range from1,708 square feet to 2,215 square feet, and will feature roof-toppatios. The site is ideally situated within the El Corazonmaster-planned community in Oceanside, California, just a few milesfrom the Pacific Ocean. The community will feature a vast array ofparks, tournament sports fields, hiking trails, commercial, retailand housing.

|

SAN DIEGO—Badiee Development has commencedconstruction on the Escondido Victory Industrial Park, Escondido'sfirst, new industrial development in more than a decade. Thissignificant milestone was celebrated today with a groundbreakingceremony hosted with City of Escondido Mayor Sam Abed and dozens ofother distinguished community and business leaders. The91,000-square foot Escondido Victory Industrial Park is located at2005 Harmony Grove Road, Escondido, CA (92029) and will becompleted in the spring of 2018. The project is comprised of twomodern industrial buildings, which are suited for one to twosubstantially sized companies. The project will featurecontemporary building design including outdoor areas that open tothe Escondido Creek, high clear height ceilings and mezzanine spaceamong other features.

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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