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
PHEONIX—In 2017, the Phoenix industrial market achieved its largest annual net absorption gain in market history, reaching 9.8 million square feet by year end and marking the fourth consecutive year of annual net absorption totaling 6.0 million square feet or more – a feat not reached since 2004 – 2007 – according to the Q4 2017 JLL Phoenix Industrial Market Insight report. These benchmarks were accompanied by other highly positive market factors including annual rent growth of 4.2 percent and a drop to 7.6 percent in overall vacancy, the lowest in 10 years. And the industrial market shows no sign of slowing. Unlike previous cycles, which relied heavily on the homebuilding industry, the JLL report notes that demand and risk in the current Phoenix industrial market is now spread across a diverse range of growing sectors. Some of the most active of these are e-commerce, food and beverage, logistics services and manufacturing, with growth being generated among companies with footprints already in Phoenix and from new users entering the market. According to JLL, 2018 could exceed 10.0 million square feet of net absorption along with an increase in speculative development to meet unprecedented demand.
(SOURCE: JLL)
LOS ANGELES—The e-commerce-fueled surge in development of warehouses and distribution centers has generated double-digit, year-over-year percentage increases in prices for industrial land in major markets, led by California's Inland Empire, according to a new report from CBRE. CBRE found that the average price for large industrial parcels of 50 to 100 acres, usually earmarked for construction of large, regional warehouses – increased to more than $100,000 per acre from roughly $50,000 a year ago. In California's Inland Empire prices per acre soared a record 35 percent to $980,000 per acre. Similarly, industrial plots of five to 10 acres, often suited for construction of smaller, infill distribution centers in urban or suburban settings – increased to more than $250,000 per acre this year from roughly $200,000 a year ago.
(SOURCE: CBRE)
NEW & NOTABLE
LOS ANGELES—Savills Studley has hired Maurice Nieman to its Capital Markets group as Executive Managing Director. He, along with Carlos Diaz Managing Director, and Alexis Abad, Client Services Coordinator, comes to the company from CBRE. Based in Savills Studley's Los Angeles office, Nieman and his team specialize in the sale, purchase and recapitalization of single and multi-tenanted retail, office and industrial properties throughout the United States. Nieman has more than 30 years of real estate experience in business development, deal origination and property management. Since 2007, he has participated in the sale of hundreds of properties nationwide including net leased retail, industrial medical and office assets totaling more than $1 billion.
NEWPORT BEACH—KBS Realty Advisors has promoted Hiep Diep to Senior Vice President of Financing. Hiep has a long tenure at KBS, first joining in 2013 as an assistant vice president. Prior to joining the firm, he held several senior level positions, including director for Irvine Company and associate director for HFF, as well as a transaction analyst for Birtcher Anderson Realty. Over the past year, Hiep played a vital role in closing 30 financing transactions totaling $3.25 billion. Among these transactions, Hiep was involved in the $1.01 billion REIT III Facility transaction, which was the single largest financing in KBS history.
DEALTRACKER
SAN DIEGO, CA—HFF has closed the partial interest forward sale and arranged the full capital stack of joint venture equity and financing for the construction of the ground up development of Mission Viejo Medical Center, a fully-approved, 104,500-square-foot, Class A medical office building situated on the southeast parking field of the Shops at Mission Viejo, a Simon-owned super regional mall, and just steps from the main entrance of Providence St. Joseph's 523-bed Mission Hospital in Mission Viejo, California. The HFF team served as an advisor to the seller, NCA Real Estate, a Newport Beach, California-based developer, in order to explore strategic options including construction financing, joint venture equity partnerships and a forward sale. Ultimately, Welltower, Inc. agreed to purchase the developer's interest and also provide equity and debt capital to the new partnership.
LOS ANGELES, CA—A132,873-square-foot Class A office building located 30700 Russell Ranch Road in Westlake Village, CA, has traded hands. NKF Capital Markets President, West Coast Kevin Shannon, Executive Managing Director Sean Fulp and Managing Director Brad Burton represented the undisclosed seller. The buyer, TH Real Estate was self-represented.
LAS VEGAS—Brett Hood, senior vice president and Jeff Frankel, senior vice president/senior director of NorthMarq Capital's Chicago regional office, arranged acquisition financing of $24.4 million for The Avenue Apartments, a 252-unit multifamily property located at 4800 East Tropicana Avenue in Las Vegas, Nevada. Completed in 1996, this 34-builidng property is situated on +/-12.58 acres. The property comprises a mix of one and two bedroom units, with an average unit size of 983 square feet. The buyer has plans for upgrades to the common area as well as the unit interiors. The transaction was structured with a 7-year term with 3-years of interest only followed by a 30-year amortization schedule. NorthMarq arranged financing for the borrower through its seller/servicer relationship with Freddie Mac.
LAS VEGAS—Dornin Investment Group has acquired 129,000 square feet of grey-shell office buildings at Town Square located at Las Vegas Blvd. South and Sunset Road in the Town Square mixed-use shopping, dining, entertainment, and Class A office development in Las Vegas, NV. The property sits at a highly visible and identifiable regional location and provides tenants a central location between affluent Summerlin and Green Valley areas while providing I-215 Beltway access and proximity to I-15, McCarran International Airport and the Las Vegas Strip. The property includes existing finished elevators, lobbies,
and restrooms, and offers a range of unique features including large floor plates, a fully constructed attached parking garage with covered parking, balconies, and patios.
LOS ANGELES—Thorofare Capital has originated nine loans totaling $87.4 million encompassing a mix of short- and medium-term capital, secured by a variety of property types located throughout the U.S. The financings, which closed over the past six weeks, demonstrated the strength of the mortgage firm's multi-strategy platform in an increasingly competitive bridge and transitional debt market. The loans were financed through Thorofare's family of funds and separate accounts including the Thorofare Asset Based Lending Fund IV, L.P., which is now fully invested and closed to new investors. Thorofare funded 45 loans across 18 states totaling $378.5 million out of Fund IV, exceeding its initial targeted equity deployment of $300 million. Management successfully reinvested capital from loan payoffs that occurred during the Fund's reinvestment period to exceed its target. Since its founding in 2010, Thorofare has originated more than $1.3 billion. Thorofare's recent success in winning deals evidences the continued strong demand for transitional commercial real estate debt and the need for non-bank lenders. Although real estate fundamentals remain strong, many commercial banks have cut back on lending and/or are focusing more on stable assets due to the increased post-financial crisis regulatory burdens and higher capital charges for construction and redevelopment loans.
IRVINE, CA—Faris Lee Investments has completed the $15 million sale of CVS Beach Garfield Center, a 31,140-square-foot neighborhood retail property anchored by CVS/pharmacy on Beach Blvd. in Huntington Beach, Calif. The sale was an off-market transaction. Senior Managing Director Shaun Riley of Faris Lee Investments represented the buyer, 209 N Brand Blvd. LP from Beverly Hills. The seller, Palos Verdes-based Sampont Properties, LLC, was represented by Triwell Properties.
BUILDING BLOCKS
SCOTTSDALE, AZ— Caliber Hospitality has announced plans to build a new 125-room hotel anchored at the Tucson Convention Center. Slated to break ground in late 2018, the hotel development project supports the City of Tucson's downtown re-visioning plan and need for increased hotel accommodations near the convention center. Caliber Development will serve as development manager and design/builder for the estimated $20 Million project. The currently unbranded hotel, which will be located in what is now the east-side parking lot, is an asset owned by the Caliber Diversified Opportunity Fund II, LP. Built in 1971, the Tucson Convention Center boasts 205,000 square feet of meeting and event space along with an 8,962-seat arena. It has three performance facilities appropriate for sporting events, ice shows, theatrical performances and concerts. Notably, the convention center hosts the annual Tucson Gem, Mineral & Fossil Show that draws worldwide visitors. The arena is also home to the professional hockey team, the Tucson Roadrunners, affiliated with the National Hockey League's Arizona Coyotes.
SAN DIEGO—The Glen at Scripps Ranch has broken ground. The new Glen at Scripps Ranch community is located at 10718 Pomerado Rd. near Interstate 15 providing convenient access to all the best of San Diego, including the airport, beaches and harbor, and major shopping, recreation and cultural centers. The groundbreaking featured a patriotic theme in honor of the numerous future residents who served in the Armed Forces. Turning the first shovels of dirt were Allen and Lee Rachel, the first to reserve homes at The Glen.
ORANGE COUNTY, CA—BLT Enterprises has sold a 41,519 square-foot medical R&D/office asset in Aliso Viejo, California for $13.7 million. The building is fully-leased to Ambry Genetics, a leading provider of clinical diagnostics testing services for genetic diseases. BLT implemented renovations to the building's roof and parking lot in order to increase the value and appeal of the property. Ambry Genetics was acquired for $1 billion in October 2017 by Konica Minolta, a publicly-traded Japanese technology company with offices in more than 49 countries. Konica Minolta plans to maintain Ambry Genetics' current name and headquarters at the property.
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