Development in the Southwest markets is still hot. This week, three projects were reported out of the Southwest: Long Beach City College's $25 million renovation to an on-campus entertainment facility; Desert Mountains' development of a luxury housing community in Phoenix; and Decron Properties $10 million renovation of the 440-unit garden apartment community Reserve. But, it wasn't only development and redevelopment projects fueling the industry this week. There were some major trades. Namely, KBS Strategic Opportunity REIT's $147 million acquisition of City Tower in Orange County. The class-A office tower is the third largest building in Orange County, and a significant trophy asset. 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—Phoenix recovered all jobs lost during the Great Recession. Since 2007, the metro has added 100,800 more jobs, an increase of 5.3%. The market placed among the top 10 metros for employment growth in 2017 with 44,400 new jobs. Unemployment dipped to 3.9%, just below the national rate of 4.1%, after reaching a high of 10.4% in 2007. Among the eight employment sectors that recorded job gains last year, leisure and hospitality–which includes accommodation, food services, entertainment and arts jobs–recorded the most significant bump in employment. The sector added 90,000 more jobs than during its pre-recession level, indicating a boost in tourism and increased consumer spending that also benefits retailers. Though the growth in employment during 2017 was widespread, certain sectors have grown faster than others throughout the recovery. Because of this, the Phoenix economy is much different today than it was a decade ago. This shift has led to Phoenix slowly moving away from a dependency on construction, which accounted for 9.2% of jobs in 2007. That sector now accounts for only 5.4% of all jobs, despite healthy growth in 2017. Meanwhile, current office-using employment is 50,000 jobs above its previous pre-recession peak, bolstering office-leasing activity in the region. In 2017, Phoenix was second in the nation for net absorption, totaling 2.8 million square feet.

(SOURCE: CBRE)

NEW & NOTABLE

PHOENIX, AZ—NAI Horizon has hired two new associates, Logan Crum and Dylan Whitwer. Crum joins NAI Horizon's Investment Services Group. Whitwer joins the Office Properties Group. Crum will assist SVPs Lane Neville and Barbara Lloyd with their brokerage activities. This includes client relationship-building, market research, leasing services, presentation preparation, and buyer/seller representation in investment transactions. Whitwer joins Senior Vice President Laurel Lewis as a tenant representative. He will be responsible for assisting in transaction management as well as developing new tenant relationships and providing market intelligence.

PHOENIX, AZ—Industry leader Christine Zeihen, president/commercial mortgage broker at OPM Capital in Phoenix, has been elected to the board of directors of the Arizona Private Lender Association (APLA). APLA serves the needs of Arizona private moneylenders who provide loans secured by real estate with funds from private sources. Its mission is to represent, promote, and foster the business of bringing private capital to Arizona for real estate projects.

DEALTRACKER

LAS VEGAS—Fiesta Plaza, a 200,000-square-foot grocery-anchored retail shopping center in North Las Vegas, has signed a lease with a Ross Dress for Less. Fiesta Plaza is now 80% occupied with three major anchors, according to property owner Agora Realty. Agora Realty acquired Fiesta Plaza in mid-2016 at 55% occupied with no anchors. Since that time, the firm has successfully leased more than 133,000 square feet of space, expanding La Bonita Supermarket as well as adding Conn's HomePlus and Ross Dress for Less. Agora also completed an exterior façade renovation, parking lot renovation and upgraded core utilities to the site, investing $20 million to renovate and reposition the property.

PHOENIX—90 Mountain View Phase II, located at 9999 N. 90th Street in Scottsdale, was purchased by Buchtel Realty Investors from Regent Properties for $30.5 million. Steve Lindley, Bob Buckley, Tracy Cartledge of Cushman & Wakefield Phoenix, along with Andrew Bogardus and Douglas Longyear of Cushman & Wakefield San Francisco, negotiated the transaction on behalf of the seller. Rob Edwards and Tom Ethington, principals at Pinnacle Real Estate Advisors. 90 Mountain View Phase II is a three-story, 92,562-square-foot, single-tenant office building currently 100% occupied by PayPal. The building serves as one of PayPal's four global, mission-critical Network Operations Centers. Developed in 2005, the class-A, institutional-quality property has millions invested in the building for the mission-critical operations center use. PayPal's other three Network Operations Centers are located in Silicon Valley, India and Malaysia.

ORANGE, CA—KBS Strategic Opportunity REIT has acquired City Tower, a 21-story, class-A office building totaling 435,000 square feet in Orange, California, for $147 million. City Tower is accessible by three major freeways and situated in a prime location within its submarket. In addition to being the tallest office building in the area, onsite amenities include a six-level parking structure, café and Zagster bike service. Additionally, City Tower is within walking distance of The Outlets of Orange, which offer tenants a variety of retail, dining and entertainment options. Angel Stadium, Honda Center, the Grove of Anaheim as well as Disneyland Resort and Theme Park are all in close proximity to the property, providing tenants great access to a dynamic 'live, work, play' experience.

MIDVALE, UT—The Shops at Ft. Union, a 688,549-square-foot shopping center on approximately 59.27 acres at 1072 E Fort Union Boulevard in Midvale, has traded hands for $142 million between Blackstone-ShopCore and CCA Acquisition Company, LLC, affiliate of Kornwasser Shopping Center Properties. Mountain West's Ben Brown represented the seller and the buyer and Pete Bethea, the executive Managing director of NKF Capital Markets represented the seller.

PHOENIX—Kidder Mathews brokers, Mike Ciosek, Eric Bell and Dylan Scott, has negotiated the purchase of a 50,000 square-foot manufacturing facility located at 3831 South Bullard Avenue in Goodyear, Arizona, on behalf of IAC Industries. IAC is a manufacturing company that specializes in specialty workstations, benches, lab stations, and shelving units. The 50,000 square-foot building sits on five acres and will be fully renovated to provide a state of the art manufacturing facility for its new Arizona, and relocating California workforce. IAC will have over 50 employees, many of whom will be hired locally.

PHOENIX—The Living Spaces Showroom and Distribution Center in Phoenix has traded hands. JLL represented Living Spaces, which sold the 437,234-square-foot, class-A industrial asset to Cohen Asset Management. Managing directors Mark Detmer and Bo Mills, and VP Ryan Sitov led the JLL Capital Markets team on the sale, along with JLL retail experts EVP Scott Kaplan and SVP Erik Westedt. The Living Spaces Distribution Center and Showroom is an institutional, distribution facility with 122,850 square feet of showroom. The property is located adjacent to Interstate 10 and provides immediate access to Phoenix's transportation infrastructure and growing population of over 4.5 million people.

LOS ANGELES—A 100% leased, multi-tenant 347,119-square-foot R&D/industrial building in the master-planned Conejo Spectrum Business Park in Thousand Oaks, CA, has traded hands for $41.05 million. NKF Capital Markets co-head of US Capital Markets Kevin Shannon, executive managing director Bret Hardy, managing director Brad Burton and associate Guillermo Boisson represented the seller, Majestic Asset Management. The buyer, Penwood Real Estate Investment Management, was self-represented. Originally built in 1962, the asset was renovated in 2000 and is located at 1461 to 1475 Lawrence Drive. The facility is situated on a 17.9-acre site and is fully occupied by four tenants including Sensata Technologies, LAC Group, Kanner Corporation and MB2 Raceway. The asset also offers easy access to the 101 and 118 freeways as well as the greater San Fernando Valley.

LOS ANGELES, CA—The Landing Tahoe Resort & Spa, a 77-room lakefront resort and spa in South Lake Tahoe, California, has traded hands. HFF marketed the property on behalf of the seller, an affiliate of Kairos Ventures. DiamondRock Hospitality Company purchased the hotel free and clear of existing debt and unencumbered of a management contract. The luxury hotel underwent a multi-million-dollar redevelopment and rebranding by the seller and reopened as The Landing Resort & Spa in December 2013. The hotel features 10,300 square feet of indoor and outdoor function space; the award-winning Jimmy's Restaurant, which serves contemporary Greek and California cuisine; a wine cellar and lounge; state-of-the-art, full-service spa; heated outdoor pool and hot tub; lakeview patio with fire pits; rooftop deck with fireplace; and fitness center with sauna. The hotel is located at 4101 Lakeshore Boulevard steps from Lake Tahoe and proximate to Heavenly Mountain Resort that provides access to more than 4,800 acres of world-class skiing and snowboarding. Close to the heart of downtown South Lake Tahoe, The Landing Resort & Spa is within walking distance to popular restaurants, bars and casinos. The HFF investment advisory team representing the seller consisted of managing directors Scott Hall and Tony Malk, senior managing director Paul Brindley and analyst Aaron Lapping.

PHOENIX—Paradise Marketplace, a Smith's anchored shopping center located on the northeast corner of Flamingo Road and Sandhill Road in Las Vegas, has traded hands for $15.75 million. Investment Concepts Inc. of Orange, CA purchased the property from Houston-based Weingarten Realty. Cushman & Wakefield executive managing directors Michael Hackett and Ryan Schubert represented the seller. Al Twainy of Colliers International represented the buyer. Anchored by Smith's Food & Drug (NAP), Paradise Marketplace is a 77,997-square-foot neighborhood shopping center spanning 6.49 acres. Currently 91.5% leased to an internet-resistant tenant roster of national, regional and local retailers, the shopping center offers groceries, a fuel station, fitness, discount retail, gaming, cleaners, dental and hair and nail salons.

IRVINE, CA—Corporate Pointe, 160,499-square-foot multi-building office campus in Irvine, CA, has traded hands for $41.7 million. NKF Capital Markets co-head of US capital markets Kevin Shannon, senior managing directors Paul Jones and Brunson Howard, executive managing director Ken White, managing director Rick Stumm and director Blake Bokosky represented the seller, an undisclosed REIT. The buyer, Kelemen Caamano Investments, was self-represented. Built in 1986, Corporate Pointe's five, two-story buildings are situated on just under 10 acres and are located at 1, 3, 5, 7 and 9 Corporate Park off Jamboree Road. The property is within the highly sought after Irvine Business Complex and is walking distance to The District Tustin Legacy, a regional shopping center. It is also near the 5, 55, and 405 freeways and 3.5 miles from John Wayne Airport. Corporate Pointe is 97.6 percent occupied by approximately 35 local and regional tenants.

BUILDING BLOCKS

CHINO HILLS, CA—Decron Properties Corp. has opened Reserve, a 440-unit garden-style apartment community in Chino Hills following a $10 million renovation. Decron acquired the property, then known as Village Crossing in August 2014 for $82.25 million and immediately began one of the most ambitious renovation plans in the firm's history. Reserve at Chino Hills is an example of Decron's investment strategy to acquire older, well-located value add multifamily assets in suburban areas with strong school districts, and following renovation still keep rents in line for the neighborhood. After an investment of $21,000 per unit, rents for the studio, one- and two-bedroom units at Reserve at Chino Hills will range between $1,495 and $2,000 a month, which conforms with the three times rent/income multiple, for young families with an annual household income between $60,000 and $75,000. This compares favorably to the majority of renters in the region who spend at least half their income on rent, making Los Angeles one of the most expensive rental markets in the United States.

SCOTTSDALE—Seven, a luxury home community, has broken ground in north Scottsdale's most exclusive residential golf club, Desert Mountain. The 90-acre addition, developed by Desert Mountain members, is just west of the existing main gate on Cave Creek Road and will feature up to 190 homes designed around a par 54, 18-hole short-game golf course and new clubhouse. Seven broke ground in December and is the second community developed by the partnership of the Van Tuyl Companies and Phoenix-based M3 Companies. The community's name was chosen to represent Desert Mountain's seventh private golf course and clubhouse.

SANTA ANA, CA—SVA Architects, Long Beach City College and Novus Construction has broken ground on a $25 million renovation and addition to Auditorium J at Long Beach City College. The renovations to Auditorium J, which is dedicated to performing arts activities, are being funded by voter-approved Measures E and LB. Long Beach City College joins SVA's ever-expanding portfolio of improved educational settings featuring state-of-the-art technology and efficient design. SVA's Long Beach City College project includes both new construction and modernization for an existing performing arts auditorium originally built in 1956. The 37,878-square-foot renovation includes a complete redesign of the entry, lobby, and restrooms, as well as substantial work within the auditorium including rehab of all seating and the addition of accessible control areas. All backstage and support areas are being completely modernized. The project also includes constructing a new, 14,449-square-foot, two-story addition designed to blend with the existing structure and the surrounding campus. The addition includes a costume shop, paint room, offices and new classrooms for theater production and dance. Construction is anticipated to be complete in fall 2019. The project was designed by SVA Architects, and is being built by Novus Construction.

Instant Insights /

Middle Market Digest: This Week in Southwest

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