Employment announcements ruled this week, with several companies announcing promotions and new hires. Savills Studley promoted several professionals to the role of vice chairman in its Downtown and West Los Angeles offices, and Westcore Properties hired Robert Sistek as chief operating officer. Deal activity remained strong, and is expected to continue to be strong through the end of the year, making up for the slow start to the year. Phoenix multifamily transactions continued to be robust, along with major acquisitions in Los Angeles and San Diego. Somewhat surprisingly, new reports have pegged the Inland Empire as the leading multifamily market in terms of occupancy in Southern California, and with limited construction, vacancy rates are expected to stay low in the market. Read on for more information about these deals and the trends, announcements and deals that you may have missed in Southern California, Utah, Arizona and Nevada.

BY THE NUMBERS

INLAND EMPIRE, CA—The Inland Empire now has the lowest apartment vacancy rate in Southern California. Job creation in the Inland Empire will remain strong despite a tightening labor market. Riverside and San Bernardino County employers are slated to create nearly 30,000 positions as the unemployment rate edges down toward 5%. Gains in retail, government and education-related positions bode well for apartment owners as workers in these sectors historically rent. Yet, continued income growth is making homeownership more realistic for some house- holds, namely in San Bernardino County where the median home price hovers around $270,000 per unit. While a recent increase in metro home sales should be noted, this trend's impact on multifamily vacancy will most likely be limited as pent-up household formations should backfill any recently vacated apartments. The construction pipeline will fuel the tight vacancy rate. Market-rate completions will be sparse this year with projects only coming online in Riverside, Rialto and Temecula. While an increase in conventional deliveries will occur in 2018, more than 1,000 rentals will be spread between three projects in Ontario/Chino, including the 400-unit Paseos at Ontario I. The lack of new conventional apartments throughout the metro should allow demand to rebound following a shortened span of rising vacancy.

(SOURCE: MARCUS & MILLICHAP)

NEW & NOTABLE
SCOTTSDALE, AZ—Sigma Contracting announced it has hired Business Development Specialist Catherine Frendahl. Frendahl will be responsible for creating business opportunities and securing new business. Frendahl joins Sigma Contracting after spending the past two years at Kinney Construction Services. Frendahl possesses more than 25 years of experience in sales and business development. She has also performed business development duties for a commercial solar company.

LOS ANGELES—Kennedy Wilson has been hired to lease the retail spaces at The Culver Steps, a transformative mixed-use development adjacent to The Culver Studios and Culver Hotel in Downtown Culver City. The four-story development will offer 40,000 square feet of vibrant retail space, 75,000 square feet of creative office space and a 35,000-square-foot public plaza. Destined to become the new gathering place in the heart of Screenland, The Culver Steps will create an open, pedestrian-friendly urban hub with shopping and dining for the area's working population and residential community, as well as an outdoor venue for movies, concerts and special events.
LOS ANGELES—Savills Studley has promoted Bill Bauman, Mike Catalano, David Gordon and Mark Sullivan to Vice Chairman in the Downtown and West Los Angeles offices. Bauman joined Savills Studley in February 2009 and serves as Co-Head of the firm's Global Retail Services practice. Catalano has been representing tenants throughout the United States for more than 29 years and runs Savills Studley's West Los Angeles office. Gordon has been with the firm since 1994, and is the founder of Savills Studley's Corporate Services Group.

ORANGE COUNTY, CA—Savills Studley has promoted Kelly Givens in the Orange County office to Vice Chairman. Active in the real estate and development industry since 1980, Givens' primary responsibility is to create transactional strategies centered on workplace and facility requirements (occupier space demands) and to uncover, explore and analyze the costs, timing and feasibility of all potential, existing and to-be-built occupancy solutions. His experience in workplace design and construction procurement strategies yields substantial value to clients throughout the scope of an assignment. Givens has experience as transactional manager, project architect, construction manager, asset manager, contractor and developer.

SAN DIEGO—Robert Sistek has joined Westcore Properties as chief operating officer. Sistek will work with Chairman Marc Brutten and President and CEO Don Ankeny to oversee acquisitions, leasing, portfolio management, capital allocation and investment strategy. Most recently, Sistek served as chief financial officer and executive vice president, investments for Innovative Industrial Properties (NYSE: IIPR), where he led the closing of $45 million of acquisitions and related leases, as well as the accounting, finance, treasury and investor relations functions, including the successful execution of the company's IPO and listing on the New York Stock Exchange. Before Innovative Industrial Properties, Sistek served as senior vice president, investments for Biomed Realty Trust, which was acquired in an $8 billion transaction by The Blackstone Group in 2016. While at BioMed Realty, he led the financing, underwriting and execution associated with acquisitions, development, structured finance and disposition opportunities totaling over $3 billion across more than 30 separate transactions.

PHOENIX—Cushman & Wakefield has hired Jerry Roberts as Executive Managing Director and Pat Boyle as Senior Associate to its Phoenix office. Roberts and Boyle bring a combined 30+ years of commercial real estate and market experience to Cushman & Wakefield. The team specializes in leasing new developments and existing premier class-A office buildings in Metro Phoenix with a few notable projects including CityScape, The Grand at Pagago Park, Collier Center and currently under construction Camelback Collective, Chandler Viridian and Block 23 at CityScape. Joining Roberts and Boyle are Marketing Coordinators Kaleigh Boyle and Erin Roberts, who previously worked with the team at CBRE since 2015.

DEALTRACKER

PHOENIX—A Los Angeles-based investor has purchased the Desert Wind

apartment community In West Phoenix for $13.4 million. The property, located at 4140-4141 W. McDowell Rd., has been partially modernized and provides opportunity for further updating. Pro Residential Services, Inc., a private equity company based in Los Angeles purchased the community from WWC XVII, LLP, an Arizona limited liability partnership formed by a private investor from North Vancouver, British Columbia. Trevor Koskovich, Bill Hahn, Jeff Sherman and Jesse Hudson of Colliers International negotiated the transaction. Built in 1987, Desert Wind features 18 buildings with 216 units that total 138,192 square feet. Situated on 5.25 acres, the community features a swimming pool, BBQ area and on-site laundry facilities. Tenants benefit from an abundance of covered parking spaces.

SAN DIEGO, CA—Two multi-story, mixed-use properties in the high-end coastal market of La Jolla, California have sold for $9.2 million. The transaction consisted of two buildings at 6902 and 6980 La Jolla Blvd. totaling a combined 25,088 square feet on 0.66 acres. The assets, which both feature office suites over ground floor retail, are located adjacent to each other but are situated on separate parcels. Hillcrest Veritas L.P. acquired the pair of buildings from LSREF4 Dual, LLC. Derek Hulse of Cushman & Wakefield and Victor Krebs of Colliers International represented the seller.

PHOENIX—Allante Properties has acquired Apex off 7th Street for $8.7 million. The apartment community is located at 948 E. Devonshire Ave. Allante Properties, LLC of Denver purchased the property from Villa Mirada Estates, LLC of Los Angeles. Hahn, Trevor Koskovich, Jeff Sherman and Jesse Hudson of Colliers International negotiated the transaction.

SHAFTER, CA—Wonderful Real Estate has signed a build-to-suit lease with Essendant Co. for a 405,299-square-foot industrial building at Wonderful Industrial Park (WIP) in Shafter, California. Essendant will use this facility for local and regional fulfilment, e-commerce and distribution with move in scheduled for the second quarter of 2018. Mac JLL's Mike McCrary, Peter McWilliams and Hewett are leading the leasing efforts at Wonderful Industrial Park, a 1,625-acre rail served master planned entitled industrial development able to accommodate requirements ranging from 100,000 square feet to 2 million square feet.

ONTARIO, CA—Western States Technologies Inc. has executed a 10-year lease valued at $6 million with Landec Corp. at 1975 E. Locust St. in Ontario, California. Landec will lease 54,000 square feet at the 92,000-square-foot industrial building located in the Vineyard Airport Center near Ontario International Airport. Headquartered in Santa Clara, California, Landec provides diversified health and wellness solutions within the packaged food and biomaterial markets. The industrial warehouse site at Locust Street will be used for processing, warehousing and distribution of food and food-related products. Featuring 24,000 square feet of temperature-controlled freezer/refrigeration, 30-foot clear height, 13 dock-high loading doors and T8 high energy efficiency warehouse lighting, the location also offers 7,100 square feet of two-story, high image office space. The other tenant in the building is National Flooring Products. Milo Lipson and Ryan Velasquez with Cushman & Wakefield's Ontario office represented Western States in the transaction with Landec representing itself.

PHOENIX—Alta Fillmore Apartments in Downtown Phoenix has traded hands for $59 million. Developed by Wood Partners, Alta Fillmore is a five story, midrise-style apartment community located in Downtown Phoenix and rests on approximately 4.01 acres. The property was built in 2016 of frame construction with flat roofs and individually metered for electricity. The property boasts an attractive unit mix of 141 – 1 bedroom, 84 – 2 bedroom and 5 – 3 bedroom unit types with a weighted average size of 934 square feet.

LOS ANGELES, CA—730 South Serrano, a 34-unit apartment property located in Los Angeles, CA, has traded hands for $9.9 million. Enrique Wong, regional manager of Marcus & Millichaps' Los Angeles office, along with Bryan M. Schellinger, Vice President, and Ronald Z. Harris, Executive Managing Director, had the exclusive listing to market the property on behalf of the seller, Ness Holdings. The property was co-listed with Rich Johns and Adam Zunder, both Senior Investment Advisors with KW Commercial in Studio City. The co-listing team also procured the buyer, a local investment firm. 730 South Serrano is located at in the heart of Koreatown, two blocks east of Western Avenue, and one block south of Wilshire Blvd. The property was built in 1961 and upon renovation, will offer a dynamic unit mix of studio, 1-bedroom, 2-bedroom and 3-bedroom apartment homes. The property was delivered to the buyer with 32 vacancies.

BUILDING BLOCKS

SAN DIEGO, CA—WNC has completed construction of Eastgate Apartments, a 42-unit affordable housing community designed for veterans and families with household incomes between 50 percent and 60 percent of the area's median household income level, is complete. WNC provided approximately $6.6 million in low-income housing tax credit equity to help fund construction of the apartment complex in San Marcos, California, which is part of a mixed-use project that also includes 7,000 square feet of commercial space. The mixed-use multifamily development is located at the intersection of Grand Avenue and Creekside Drive. Eastgate's 42 units consist of six studio apartments, five one-bedroom units, seventeen two-bedroom units, 13 three-bedroom units and a two-bedroom manager's unit.

SAN DIEGO—Affirmed Housing has broken ground on Zephyr, an affordable housing project for veterans. The adaptive reuse project, located at 4370 Alvarado Canyon Road in the Grantville community of San Diego, will transform an existing Motel 6 into a modern and rejuvenated apartment community for 84 extremely low income and homeless veterans. The rehabilitation of the existing motel will include reconfiguring room layouts to create 84 studio apartments for veterans earning 30–40 percent of the Area Median Income (AMI). Unit interiors will include all new flooring and wall surfaces, updated bathrooms redesigned for accessibility and water efficiency, and newly added kitchenettes. Zephyr is funded by the Veterans Housing and Homelessness Prevention Program (VHHP) from the California Department of Housing and Community Development (HCD) for $6.4 million, and SDHC for $3 million and 84 project-based vouchers. The remainder of the project funding will come from federal Low-Income Housing Tax Credits.

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Middle Market Digest: This Week in Southwest

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