The Phoenix market is continuing to grow with increasing investor interest. This week, the Phoenix market saw trades in all asset class and significant office lease expansions. While housing is the most active, the market is still struggling in other asset classes. Industrial and retail were flat or slowed in the third quarter, but office absorption was strong and is up for the year. Still, Southern California continues to lead the Southwest market in terms of activity, with office market activity dominating this week. Anaheim and San Diego had a major office campus trade and Los Angeles closed a major lease deal in Downtown Los Angeles. Here's a look at this week's trends, announcements and deals that you may have missed in Southern California, Utah, Arizona and Nevada.

BY THE NUMBERS

PHOENIX—The Phoenix office market reached 184,040 square feet of net absorption in the third quarter, a significant increase over last year. The activity pushed the vacancy rate down 190 basis points to 14.3%. There is no new office product in the pipeline, however, there are several repositioning projects, including , the 200,000 sq. ft. La Placita Village in downtown Tucson will be converted to mixed-use residential in the first half of 2018. In retail, the market had more than 50,000 square feet of negative net absorption as a result of major move outs in the Southwest and Central regions of the market. Vacancy increased only slightly to 7.2% and lease rates increased to $15.90 per foot. The industrial market also saw a rough quarter, with the vacancy rate up 40 basis points to 8.2%. Lease rates increase 6% to $0.50 per foot.

(SOURCE: CBRE)

NEW & NOTABLE
IRVINE, CA—The Southern California office of Duke Realty Corporation has hired Collin Phillips as VP of Leasing. In his position, Collin will be responsible leasing the firm's 8.7 million-square-foot Southern California industrial portfolio leased, as well as source new business and development opportunities for the company. Phillips comes to Duke Realty has experience in leasing, development and acquisitions in several western states. He has a Bachelor of Business Administration in Finance and Real Estate from the University of San Diego. His professional affiliations include memberships in ULI and NAIOP, where he recently graduated from its Southern California Young Professionals Group.

SAN DIEGO— Harland Property Management has hired Al Pesiri as senior property manager. Pesiri will be performing and supervising management operations for rental properties of all types including single-family homes, commercial properties and apartment communities.

LOS ANGELES—American Realty Advisors has hired Doug Vikser as Senior Director of Capital Markets. Vikser will be focused on originating structured debt and preferred equity investments on a nationwide basis and help continue ARA's expansion into the structured finance market. He brings to ARA over 30 years' experience in the structured finance arena. His experience includes originating and structuring senior loans, mezzanine loans, and preferred equity investments on transitional “value add” properties, ground up construction, and other types of non-stabilized opportunities. Most recently, he was a Managing Director at Hunt Mortgage Group. Prior to joining Hunt, Doug established a debt platform at MSD Capital, served as Managing Director of a debt fund for Prudential Mortgage Capital, and was a member of the distressed debt team at Lone Star Fund.

LOS ANGELES—Jeffer Mangels Butler & Mitchell LLP has hired Seena Max Samimi as an Associate in the Government, Land Use, Environmental and Energy practice. He will be based in the Los Angeles office. Previously of Best Best & Krieger LLP and Latham & Watkins LLP, Seena has spent several years representing a wide range of public entities such as cities, counties, water agencies, and transportation districts throughout California in litigation disputes, as well as in an advisory capacity. He also has substantial experience in the private sector, having represented major companies in litigating significant real estate, land use, contract, fraud, antitrust, and loan/financing disputes.

DEALTRACKER

SCOTTSDALE, AZ—Indeed, Inc. has signed a seven-year lease for 53,000 square feet at Scottsdale Galleria, doubling its footprint in the recently renovated 540,579 square foot Class A creative office building. Indeed entered the Scottsdale's Downtown Entertainment District earlier this year by subleasing a little over 20,000 square feet at the Galleria and hiring more than 50 employees to fill sales and client service positions.

LOS ANGELES—Rising Realty Partners has signed The Jerde Partnership, an architecture and urban planning studio, to a full-floor lease at The CalEdison DTLA, a historic Art Deco office building in Downtown Los Angeles. The office will serve as the new global headquarters for JERDE, which has been in Venice Beach for nearly 30 years. The new headquarters is anticipated to open in first quarter 2018. Carle Pierose and Rob Erickson of Industry Partners represented the landlord and Jennifer Frisk and David Kluth of Newmark Knight Frank represented JERDE.
LAKE FOREST, CA—Drawbridge Realty has acquired Pacific Vista Campus in South Orange County for $76.2 million from an affiliate of Barings. The Class-A five building corporate office campus totals 322,262 square feet and is 100% occupied on a triple-net basis by seven tenants. Toshiba America Business Solutions and Loan Depot occupy single buildings and the remaining three buildings are occupied by two tenants each: Home Point Financial & US Real Estate Services, Interval Leisure Group & Loan Depot and the City of Lake Forest & Multiplan Services Corporation. The LEED Silver and Energy Star campus is a preferred destination for corporate users, in proximity to numerous amenities including Irvine Spectrum and the Great Park of Orange County, as well as convenient access to the Santa Ana (I-5) Freeway, San Diego (I-405) Freeway and the Foothill (SR-241) transportation corridor. Constructed in 2000, the project provides mountain and canyon views, and onsite amenities including outdoor lounge areas and a fitness center with showers.
PHOENIX—Deer Valley Plaza, an 87,811-square-foot, two-building shopping center located at 1838 and 1818 W. Bell Road in Phoenix, has traded hands. GM 19 Bell, LLC, a group formed by local developer Jeff Geyser, purchased the center from Deer Valley Associates, LLC for $6.2 million, or $70.60 per square foot. The property was 47 percent occupied with 13 tenants at the time of sale. Geyser has owned, developed and redeveloped over 70 properties throughout the Western U.S., primarily in Arizona. Steve Julius and Jesse Goldsmith with CBRE's Phoenix office represented both the buyer and the seller in the transaction.

PHOENIX—Western Wealth Capital has sold Oakridge Apartments, a 282-unit apartment complex in Phoenix, for $24 million. The property features an attractive mix of 30 -Studio, 172 – 1 bedroom and 80 – 2 bedroom units with a weighted average size of 688 SF. Each unit is individually metered for electricity and has individual HVACs. Alon Shnitzer, Senior Managing Partner at ABI, was the lead broker for the buyer in the deal.

LOS ANGELES—The Knox, a two-building, 108,368-square-foot office park in Torrance, CA, has traded hands for $21.6 million between the Ruth Group and Wilshire Capital Investments. NKF's Capital Markets President of the West Coast Kevin Shannon, Executive Managing Director Ken White and Managing Director Michael Moore represented the seller. Located at 680 and 690 Knox Street, The Knox is situated on 4.9 acres and is 98% occupied by a tenant mix that includes Midmark, City of Los Angeles, CH Robinson and Allied Digital. The property was originally built in 1984 and underwent a major renovation to transform into creative office space in 2016.

SOUTHERN CALIFORNIA—Capital One has provided a $43.5 million Fannie Mae fixed-rate loan to refinance Amberway Apartments, a 272-unit, garden-style community in Anaheim, California. Kristen Croxton and Greg Reed, Senior Vice Presidents in Capital One Multifamily Finance's office in Newport Beach, California, originated the transaction. The borrower is a longstanding real estate investor. The property will continue to be managed by Greenwood & McKenzie, based in Orange County. Croxton and Reed adopted a number of strategies to succeed. They determined at application that the property offered sufficient opportunities for both water and energy savings, qualifying it for a lower rate and higher loan proceeds under Fannie Mae's Green Rewards program. In addition, they took advantage of Fannie Mae's Streamlined Early Rate Lock program to ensure rates would not rise during final underwriting. Finally, Capital One was able to increase the loan amount prior to closing by citing improving net operating income.

SAN DIEGO—A fully occupied two-story, 68,489-square-foot creative office building located in San Diego's Rancho Bernardo submarket has traded hands for $21.5 million. Avison Young Principal Alan Pekarcik and Senior Associate Chris Smith, based in the company's Orange County office, along with Martin Cohan of Marcus & Millichap, represented the buyer, a private investor. The seller, 15255 Innovation Drive LLC, was represented by Colliers International. Built in 1986 as a corporate office facility and fully reimagined in 2015 as creative office space through an extensive renovation, the multi-tenant class A property is situated on nearly four acres of land at 15255 Innovation Drive near the Camino Del Norte exit off Interstate 15. The property features collaborative designs throughout, including large and efficient floorplates, expansive views with floor-to-ceiling glass lines, outdoor employee lounge with fire pit, drought-tolerant landscape with landmark wood trellis accent and a modern-design main lobby. The property also includes 262 parking stalls and is within walking distance to Carmel Mountain Plaza, a nearly 1 million-square-foot open-air retail center.

PHOENIX—Dunlap Falls apartments, located at 3333 W. Dunlap Ave. have traded hands for $22.6 million between two private investors. The community was purchased by two California-based partnerships as their first acquisition in the Arizona market. Bill Hahn, executive vice president of Colliers International in Greater Phoenix and Trevor Koskovich, executive vice president of Colliers International in Greater Phoenix office brokered the deal.

ANAHEIM, CA—Palm Apartments, a multifamily property in Anaheim, CA, has sold to a local investor for approximately $7.6 million. CBRE's Senior Vice President, Dan Blackwell, represented the seller, Ball Anaheim Apartments LLC. The buyer, Great Chi Investments, was represented by Grady Liu with Macroreal Investment Group. The property, located at 1724-1736 W. Ball Road, features 40 one-bedroom units. Built in 1959, this fully gated community features two courtyards, a swimming pool, laundry facilities, and ample assigned parking. The complex is in proximity to Disneyland, the Anaheim Convention Center, and the I-5 and 91 freeways. It is also in walking distance to several schools.

BUILDING BLOCKS

SANTA MONICA—KFA and Century West Partners has completed Next on Sixth, a new, 398-unit development. In response to increased market demand, KFA has expanded its team by more than 80% during the past 3 years, adding select creative talent that has paved the way for the company to successfully accomplish projects of this magnitude. Located at 600 S. Virgil Avenue in Los Angeles, at the corner of Virgil and Sixth Street, Next on Sixth is Century West Partners' second major development in Koreatown, joining the nearby K2LA complex.

SAN DIEGO—Ware Malcomb has completed a new restaurant, bar and lounge area of the Kimpton Hotel Palomar located at 1047 5th Avenue in the heart of downtown San Diego. Ware Malcomb was the Architect of Record for the project, in addition to providing brand-enhancing graphics for the interior and exterior design. The project involved the two-story renovation of the restaurant and bar on the first floor of the Hotel Palomar, as well as an open space designed for a combination of private dining, a game room, and a lounge area on the second floor mezzanine level. The Hotel Palomar's new restaurant concept, named Curadero, serves Mexican street food in a relaxed, fun atmosphere. The second floor Arriba Room is an exciting space to hang out featuring a late-night taco window, vintage arcade games, foosball, shuffleboard, and other activities. Mexican-themed artwork and design are woven throughout the space.

BY THE NUMBERS

(SOURCE: CBRE)

DEALTRACKER

BUILDING BLOCKS

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