Middle Market Digest: This Week in Southwest

LOS ANGELES—As sales from the end of quarter one and early quarter two are reported, it is clear that this is another active year in the Southwest market. In Phoenix, there were nearly 15,000 units under construction in the first quarter and another 15,000 units in the pipeline. In Los Angeles and San Diego, activity was also strong with several sales and financing deals completed. 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 multifamily construction pipeline was active in the first quarter of the year. The market currently has 15,102 units under construction and during the first quarter, nearly 1,800 units were completed in a total of 10 properties. In the same time period, an additional 14,834 units in the construction pipeline, a total of 66 properties.

(SOURCE: ABIMULTIFAMILY)

NEW & NOTABLE

LOS ANGELES—AECOM hired Vern Kuehn as executive vice president and general manager of a newly created federal business unit within its Construction Services business group. In this role, Kuehn will be responsible for working with leadership across AECOM to implement a strategy that enhances its integrated delivery offering, focusing on efforts to provide design-build services across federal market sectors, specifically looking at vertical building opportunities. Kuehn brings more than 20 years of construction service experience, most recently leading the federal construction business of Kiewit Corporation in McLean, Va. His experience spans multiple markets, with a track record of creating growth and a comprehensive understanding of the federal government contracting and procurement process.

SAN DIEGO—NAIOP San Diego has awarded approximately $12,000 in annual scholarships to university students Rodel Melaya and Victoria Ortiz from University of California at San Diego, Erik Flores and Chris Nesbitt from University of San Diego and Nick Zalkow and Dominick Chanes from San Diego State University. Melaya and Ortiz each received scholarships awarded to students from UCSD's Urban Studies and Planning program. Flores and Nesbitt received Mickey Carhart Memorial Scholarships, awarded to members enrolled at USD's Burnham Moores Center for Real Estate. Carhart was a leader in San Diego land development and construction and a dedicated member of NAIOP San Diego. NAIOP San Diego student members Zalkow and Chanes received Mike Philbin/Tony Badeaux Memorial Scholarships, awarded exclusively to SDSU Real Estate Society members. Philbin, a commercial real estate broker, and Badeaux, a commercial real estate investor/developer, were prominent members in San Diego's real estate industry and leaders within NAIOP San Diego.

SAN DIEGO—Holliday Fenoglio Fowler has promoted Chris Collins to an associate director in its San Diego office.  Collins will focus on middle market debt and equity placement transactions throughout the western United States. He has been with the firm since 2014 as a senior real estate analyst and has more than five years of experience in commercial real estate finance.  Prior thereto, he was a real estate analyst at La Jolla Capital, a boutique commercial real estate finance firm focused on middle market apartment transactions.  He is a member of NAIOP Developing Leaders and the International Council of Shopping Centers (ICSC).  Mr. Collins graduated with a Bachelor of Science from Colorado State University.

SCOTTSDALE, AZ—Taylor Morrison Home Corporation has names President and CEO Sheryl Palmer as Chairman of the company's Board of Directors, succeeding Timothy R. Eller, who plans to retire from the Board at the conclusion of his current term on May 31, 2017. In addition, current director of five years, Peter Lane, has been appointed as the Board's lead independent director.

DEALTRACKER

LOS ANGELES—An unnamed borrower has secured a $10.6 million CMBS, first mortgage loan for Lemon Grove Plaza, located eight miles east of San Diego in Lemon Grove, CA. Built in 1989, the retail property totals more than 86,700 square feet and is shadow anchored by Albertson's. Randy Martin of KeyBank Real Estate Capital's commercial mortgage group structured the nonrecourse loan with a 10-year term, five-year interest only period and 30-year amortization schedule. The financing was used to facilitate the acquisition of the property.

SCOTTSDALE, AZ—Two separate commercial land transactions totaling 19 acres, have sold for a combined $6.3 million. The properties were located in Scottsdale and one in Glendale. An 11-acre parcel in the D.C. Ranch Corporate Center, 17492 N. 91st St., Scottsdale, sold for $4.4 million to CH Realty VII_WPC, I Phoenix from SWVP DC Ranch LLC, Scottsdale. A 8-acre parcel at the SEC of 107th Ave. & Northern Ave., Glendale was sold for $1.9 million to Swire Pacifi c Holdings, from AZ Investment, LLC, Omaha, NE. This property will be used for an expansion for the Coca Cola bottling plant in the Glendale Airport. Lee & Associates Principals Robert Kling and Dave Johnson negotiated both sides of each deal.

LOS ANGELES—An unnamed buyer has purchased a 131,263 square-foot single-tenant industrial building in Riverside, in a 1031-exchange for approximately $17.85 million. The building traded at a capitalization rate of 4.8%. The property sits on approximately 15 acres with excess land that will enable the new owner to construct an additional 145,000 square-foot building on site or alternatively expand the current building. The property has access to multiple railroad lines that carry over a large percentage of the freight handled by the Ports of Long Beach and Los Angeles. The building is currently 100 percent leased to Boise Cascade Co., a wood product manufacturer and distributer across the United States and Canada. CBRE's Gary Stache, Anthony DeLorenzo, Doug Mack and Erik Wanland represented the seller, The Abbey Company, a privately held real estate investment and management firm. An outside broker represented the buyer.

PHOENIX—An affiliate of Summit Hotel Properties has acquired a 152-guestroom Hyatt Place Phoenix Mesa located in Mesa, Arizona. The Hyatt Place is one of only two purpose-built Hyatt Places in Arizona. Bill Murney, Senior Vice President in HREC Investment Advisors' Phoenix office, exclusively represented Mesa Hotels LLC during the transaction.

SAN DIEGO—The Mission Bay Visitor Information Center in San Diego is slated for renovation by Playground Concepts after sitting empty for seven years. The project is slated break ground later this year and will include a counter-service restaurant with local wine and beer on tap, grab-and-go picnic arrangements, as well as a walk-up coffee and juice bar for early morning joggers and cyclists. Also in the works is a space for private events and bay front weddings, beach and bike rentals, as well as a small retail component and children's play area.

PHOENIX—Cypress Equities has signed a number of new tenants that have recently opened or are slated to join its development known as Lake Pleasant Crossing, a 235,000-square-foot regional power center situated at the intersection of W. Happy Valley Road and N. Lake Pleasant Parkway in Peoria, a major suburb of Phoenix. The new tenants include Village Inn, Pet Club, Happy Campers Pediatric Dentistry, Pure Vanity and Cricket Wireless.

PHOENIX—Perry Investment Trust No.1 has sold Scottsdale Executive Office Center, a 181,238-square-foot Class A office campus located at 15880, 15990 and 16100 North Greenway-Hayden Loop in Scottsdale, to Kramer-Wilson Company for $37.5 million. Barry Gabel and Chris Marchildon with CBRE's Phoenix office represented the seller, Perry Investment Trust No.1, LLC, based in Phoenix, Ariz. The buyer, Kramer-Wilson Company is located in Encino, Calif. This is the third of four office properties that Kramer-Wilson Company has purchased in the greater Phoenix market since last November, totaling nearly a half-million square feet.

SAN CLEMENTE, CA—An unnamed borrower has secured a $16 million loan for a 47,117-square-foot shopping center. The center is anchored by TJ Maxx and nine other tenants. Michael Thorp of PSRS secured the funding on behalf of the borrower through one of the firm's correspondent life companies.

LOS ANGELES—Charter School Capital has bought a multi-tenant office building in the heart of San Bernardino, California for $14.5 million. CBRE's Gary Stache, Anthony DeLorenzo, and Doug Mack and CBRE's local market expert Phil Woodford represented the seller, California Community Collaborative. An outside broker represented the buyer. The property, located at 655 West Second Street, is approximately 86,606 square feet and sits in downtown San Bernardino. The space has large, flexible floor plates enabling tenants to expand and contract freely. Additionally, the property benefits from street frontage and easy access to multiple retail outlets. The building is currently 80% leased to two tenants; Fortune School of Education and the San Bernardino Superior Court.

NEWPORT BEACH, CA—CBRE Capital Markets' Debt and Structured Finance team has arranged loans totaling more than $24.6 million for the acquisitions of three Southern California retail centers in separate transactions. The properties include: Cypress Center in Cypress, Calif., Pacific Plaza in Ontario, and Shops at Topaz in Hesperia, CA. Shaun Moothart of CBRE's Newport Beach, office, Bruce Francis and Dana Summers of CBRE's Phoenix office, Robert Ybarra of CBRE's Las Vegas office and Doug Birrell of CBRE's Salt Lake office, arranged the financings.
BUILDING BLOCKS

ROLLING HILLS ESTATES, CA—The Peninsula Shopping Center has completed an 18-month renovation and welcomed new retailers, including Orchard Supply Hardware (OSH), Petco, Ulta Beauty, The Bar Method, AT&T, Verizon, The Habit Burger Grill and Chipotle. The redevelopment increased the Peninsula Shopping Center's size by 16,579 sq. ft., which included the addition of three new retail/restaurant pads. The changes also featured demolishing the existing pedestrian colonnade and constructing a drive aisle in its place, reconfiguring parking and circulation facilities, creating new junior anchor spaces, improving sidewalks, and installing new soft seating and new monument and way finding signage as well as new landscaping.

LOS ANGELES—As sales from the end of quarter one and early quarter two are reported, it is clear that this is another active year in the Southwest market. In Phoenix, there were nearly 15,000 units under construction in the first quarter and another 15,000 units in the pipeline. In Los Angeles and San Diego, activity was also strong with several sales and financing deals completed. 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 multifamily construction pipeline was active in the first quarter of the year. The market currently has 15,102 units under construction and during the first quarter, nearly 1,800 units were completed in a total of 10 properties. In the same time period, an additional 14,834 units in the construction pipeline, a total of 66 properties.

(SOURCE: ABIMULTIFAMILY)

NEW & NOTABLE

LOS ANGELES—AECOM hired Vern Kuehn as executive vice president and general manager of a newly created federal business unit within its Construction Services business group. In this role, Kuehn will be responsible for working with leadership across AECOM to implement a strategy that enhances its integrated delivery offering, focusing on efforts to provide design-build services across federal market sectors, specifically looking at vertical building opportunities. Kuehn brings more than 20 years of construction service experience, most recently leading the federal construction business of Kiewit Corporation in McLean, Va. His experience spans multiple markets, with a track record of creating growth and a comprehensive understanding of the federal government contracting and procurement process.

SAN DIEGO—NAIOP San Diego has awarded approximately $12,000 in annual scholarships to university students Rodel Melaya and Victoria Ortiz from University of California at San Diego, Erik Flores and Chris Nesbitt from University of San Diego and Nick Zalkow and Dominick Chanes from San Diego State University. Melaya and Ortiz each received scholarships awarded to students from UCSD's Urban Studies and Planning program. Flores and Nesbitt received Mickey Carhart Memorial Scholarships, awarded to members enrolled at USD's Burnham Moores Center for Real Estate. Carhart was a leader in San Diego land development and construction and a dedicated member of NAIOP San Diego. NAIOP San Diego student members Zalkow and Chanes received Mike Philbin/Tony Badeaux Memorial Scholarships, awarded exclusively to SDSU Real Estate Society members. Philbin, a commercial real estate broker, and Badeaux, a commercial real estate investor/developer, were prominent members in San Diego's real estate industry and leaders within NAIOP San Diego.

SAN DIEGO—Holliday Fenoglio Fowler has promoted Chris Collins to an associate director in its San Diego office.  Collins will focus on middle market debt and equity placement transactions throughout the western United States. He has been with the firm since 2014 as a senior real estate analyst and has more than five years of experience in commercial real estate finance.  Prior thereto, he was a real estate analyst at La Jolla Capital, a boutique commercial real estate finance firm focused on middle market apartment transactions.  He is a member of NAIOP Developing Leaders and the International Council of Shopping Centers (ICSC).  Mr. Collins graduated with a Bachelor of Science from Colorado State University.

SCOTTSDALE, AZ— Taylor Morrison Home Corporation has names President and CEO Sheryl Palmer as Chairman of the company's Board of Directors, succeeding Timothy R. Eller , who plans to retire from the Board at the conclusion of his current term on May 31, 2017. In addition, current director of five years, Peter Lane, has been appointed as the Board's lead independent director.

DEALTRACKER

LOS ANGELES—An unnamed borrower has secured a $10.6 million CMBS, first mortgage loan for Lemon Grove Plaza, located eight miles east of San Diego in Lemon Grove, CA. Built in 1989, the retail property totals more than 86,700 square feet and is shadow anchored by Albertson's. Randy Martin of KeyBank Real Estate Capital's commercial mortgage group structured the nonrecourse loan with a 10-year term, five-year interest only period and 30-year amortization schedule. The financing was used to facilitate the acquisition of the property.

SCOTTSDALE, AZ—Two separate commercial land transactions totaling 19 acres, have sold for a combined $6.3 million. The properties were located in Scottsdale and one in Glendale. An 11-acre parcel in the D.C. Ranch Corporate Center, 17492 N. 91st St., Scottsdale, sold for $4.4 million to CH Realty VII_WPC, I Phoenix from SWVP DC Ranch LLC, Scottsdale. A 8-acre parcel at the SEC of 107th Ave. & Northern Ave., Glendale was sold for $1.9 million to Swire Pacifi c Holdings, from AZ Investment, LLC, Omaha, NE. This property will be used for an expansion for the Coca Cola bottling plant in the Glendale Airport. Lee & Associates Principals Robert Kling and Dave Johnson negotiated both sides of each deal.

LOS ANGELES—An unnamed buyer has purchased a 131,263 square-foot single-tenant industrial building in Riverside, in a 1031-exchange for approximately $17.85 million. The building traded at a capitalization rate of 4.8%. The property sits on approximately 15 acres with excess land that will enable the new owner to construct an additional 145,000 square-foot building on site or alternatively expand the current building. The property has access to multiple railroad lines that carry over a large percentage of the freight handled by the Ports of Long Beach and Los Angeles. The building is currently 100 percent leased to Boise Cascade Co., a wood product manufacturer and distributer across the United States and Canada. CBRE's Gary Stache, Anthony DeLorenzo, Doug Mack and Erik Wanland represented the seller, The Abbey Company, a privately held real estate investment and management firm. An outside broker represented the buyer.

PHOENIX—An affiliate of Summit Hotel Properties has acquired a 152-guestroom Hyatt Place Phoenix Mesa located in Mesa, Arizona. The Hyatt Place is one of only two purpose-built Hyatt Places in Arizona. Bill Murney, Senior Vice President in HREC Investment Advisors' Phoenix office, exclusively represented Mesa Hotels LLC during the transaction.

SAN DIEGO—The Mission Bay Visitor Information Center in San Diego is slated for renovation by Playground Concepts after sitting empty for seven years. The project is slated break ground later this year and will include a counter-service restaurant with local wine and beer on tap, grab-and-go picnic arrangements, as well as a walk-up coffee and juice bar for early morning joggers and cyclists. Also in the works is a space for private events and bay front weddings, beach and bike rentals, as well as a small retail component and children's play area.

PHOENIX—Cypress Equities has signed a number of new tenants that have recently opened or are slated to join its development known as Lake Pleasant Crossing, a 235,000-square-foot regional power center situated at the intersection of W. Happy Valley Road and N. Lake Pleasant Parkway in Peoria, a major suburb of Phoenix. The new tenants include Village Inn, Pet Club, Happy Campers Pediatric Dentistry, Pure Vanity and Cricket Wireless.

PHOENIX—Perry Investment Trust No.1 has sold Scottsdale Executive Office Center, a 181,238-square-foot Class A office campus located at 15880, 15990 and 16100 North Greenway-Hayden Loop in Scottsdale, to Kramer-Wilson Company for $37.5 million. Barry Gabel and Chris Marchildon with CBRE's Phoenix office represented the seller, Perry Investment Trust No.1, LLC, based in Phoenix, Ariz. The buyer, Kramer-Wilson Company is located in Encino, Calif. This is the third of four office properties that Kramer-Wilson Company has purchased in the greater Phoenix market since last November, totaling nearly a half-million square feet.

SAN CLEMENTE, CA—An unnamed borrower has secured a $16 million loan for a 47,117-square-foot shopping center. The center is anchored by TJ Maxx and nine other tenants. Michael Thorp of PSRS secured the funding on behalf of the borrower through one of the firm's correspondent life companies.

LOS ANGELES—Charter School Capital has bought a multi-tenant office building in the heart of San Bernardino, California for $14.5 million. CBRE's Gary Stache, Anthony DeLorenzo, and Doug Mack and CBRE's local market expert Phil Woodford represented the seller, California Community Collaborative. An outside broker represented the buyer. The property, located at 655 West Second Street, is approximately 86,606 square feet and sits in downtown San Bernardino. The space has large, flexible floor plates enabling tenants to expand and contract freely. Additionally, the property benefits from street frontage and easy access to multiple retail outlets. The building is currently 80% leased to two tenants; Fortune School of Education and the San Bernardino Superior Court.

NEWPORT BEACH, CA—CBRE Capital Markets' Debt and Structured Finance team has arranged loans totaling more than $24.6 million for the acquisitions of three Southern California retail centers in separate transactions. The properties include: Cypress Center in Cypress, Calif., Pacific Plaza in Ontario, and Shops at Topaz in Hesperia, CA. Shaun Moothart of CBRE's Newport Beach, office, Bruce Francis and Dana Summers of CBRE's Phoenix office, Robert Ybarra of CBRE's Las Vegas office and Doug Birrell of CBRE's Salt Lake office, arranged the financings.
BUILDING BLOCKS

ROLLING HILLS ESTATES, CA—The Peninsula Shopping Center has completed an 18-month renovation and welcomed new retailers, including Orchard Supply Hardware (OSH), Petco, Ulta Beauty, The Bar Method, AT&T, Verizon, The Habit Burger Grill and Chipotle. The redevelopment increased the Peninsula Shopping Center's size by 16,579 sq. ft., which included the addition of three new retail/restaurant pads. The changes also featured demolishing the existing pedestrian colonnade and constructing a drive aisle in its place, reconfiguring parking and circulation facilities, creating new junior anchor spaces, improving sidewalks, and installing new soft seating and new monument and way finding signage as well as new landscaping.