LOS ANGELES—Although construction financing has tightened, new starts seem to be stronger than ever. This week, we saw several new multifamily construction starts in the Southwestern region. The developments have residential and mixed-use with retail and commercial components, maintaining the trend that we have seen. 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 Greater Phoenix medical office market started out the year slow with negative net absorption of nearly 50,000 square feet in the first three months. Fundamentals in the market remain strong, and the negative net absorption experienced in the first three months of 2017 drove the vacancy rate up to 16% from 15.7% at year-end 2016. The bulk of the increase was recorded in the Arrowhead/Surprise submarket. Vacancy has been declining over the past several years and currently is 10 basis points lower than one year ago. Vacancy in on-campus buildings remained steady at 17.9 percent. The bulk of market inventory is found in off-campus medical properties and that vacancy rose for the first time in nearly two years. Rents dropped slightly in the start of 2017, but gains have been registered over the past 12 months. Medical office rents have been slow to gain traction in this recovery, unlike traditional office properties.
(SOURCE: COLLIERS INTERNATIONAL)
NEW & NOTABLE
LOS ANGELES—Eric Hasserjian has joined CBRE as the office practice leader within the firm’s asset services line of business for the Americas. In this role, he will drive CBRE’s office property management business in an integrated way by tapping into the company’s market-leading scale and resources, including Asset View, a proprietary tool for centralizing key performance indicators and operational information into a cloud-based dashboard that facilitates strategic decision-making; Premier Properties, a specialized, elite property management services for the world’s most iconic buildings; and CBRE Real Estate Accounting Services, a dedicated team of professionals who create customized accounting and financial reporting solutions. Hasserjian joined CBRE in 2014 as the managing director of asset services for the Los Angeles region where he has successfully overseen more than 135 professionals and 31 million square feet of assets under management.
LOS ANGELES— Allen Matkins, a California-based full service real estate and business law firm, announced today that litigation attorney Nancy S. Fong and real estate attorneys Richard J. Miltimore and Keith J. Pollock have been elected to the firm partnership. Nancy and Keith practice out of the firm’s Los Angeles office and Rick resides in its San Diego office.
LOS ANGELES—Doyle Properties has acquired an industrial property in Anaheim for $19.81 million in a 1031-exchange. The property will be occupied by the Econolite Group, Inc., a pioneer in dynamic intelligent transportation systems and transportation management. CBRE’s Carol Trapani, Ben Seybold and Sean Ward represented the buyer and Colliers’ Clyde Stauff represented the seller, Blackstone Group. The site, located at 1250 N. Tustin Avenue, is a +/-84,928 square foot free-standing corporate headquarters office/flex property with major street frontage, which will serve as Econolite’s new high-image facility.
LOS ANGELES—A multi-tenant industrial building, located on Weld Boulevard in El Cajon has secured $11 million in financing. PSRS’ Daniel J. Phelan financed the building thru one of their correspondent life insurance companies. The lender provided a term of 10 on a 25-year amortization at a rate of 4.32% interest rate.
IRVINE, CA— Liberty Glass Fabricators has acquired a newly constructed 71,054-square-foot class-A industrial facility in Corona (Riverside County) Calif. for $9.95 million from the partnership of Acacia Real Estate Group and Adler Realty Investments, the original owner/developer of the project. Cushman & Wakefield’s Brett Lockwood based in Irvine represented the buyer in the acquisition. Liberty Glass Fabricators was previously occupying a 29,000 square foot facility in Corona. Located at 220 Benjamin Ct. in the southern Inland Empire area, the building is situated on 3.68 acres and features a two-story 5,749-square-foot office, ESFR sprinklers, heavy power, 30-foot clear height, dock and grade loading, and fenced yard. The property also provides convenient access to State Route 91 and Interstate 15.
CHINO, CA—Trumark Communities has acquired an 823 lot master-planned community in Chino, California through a public foreclosure auction. Trumark Communities’ opening credit bid of $2.1 million was unchallenged by any qualified bidders at the auction and represented only a portion of the $10.4 million in defaulted notes owned by the company on the property. Concurrent with the acquisition of this 270-acre property, Trumark negotiated a two-year extension on an additional $19 million loan that was also in default on the property.
EL SEGUNDO, CA—Paragon Commercial Group LLC and Canyon Partners Real Estate LLC has closed on the acquisition of Northridge Plaza Shopping Center, a 240,000 square-foot neighborhood shopping center in Northridge, California. The off-market acquisition of Northridge Plaza comes on the heels of Paragon’s five retail acquisitions in 2016 and continues Paragon’s steady pace of acquiring urban infill retail centers in its programmatic joint venture with the Canyon Catalyst Fund, the CalPERS real estate emerging manager program managed by Canyon Partners Real Estate. Northridge Plaza was previously owned by the family of the original developer and this sale marks the first time the center has traded since it was constructed in 1980. Anchored by Target and Kohls, Northridge Plaza includes 6 buildings situated on 16.85 acres of land on the corner of Corbin Avenue and Nordoff Way in one of the strongest retail submarkets in Los Angeles. Northridge Plaza is currently 100% leased and enjoys a lengthy history of being one of the dominant centers in the San Fernando Valley.
GLENDALE, CA—CBRE Capital Markets’ Debt & Structured Finance team has secured financing for Glendale Plaza, a 547,300-square-foot Class A office tower located at 655 North Central Avenue in Glendale, California. Brad Zampa, Mike Walker, Megan Woodring, Taylor Shepard and Jesse Zarouk of CBRE’s San Francisco and Los Angeles offices arranged the financing on behalf of the borrower, DivcoWest. CBRE’s Sean Sullivan, Todd Tydlaska and Mike Longo recently represented the seller, Prudential. Glendale Plaza is one of the most prominent buildings in the market, attracting the highest caliber of tenancy and currently more than 75% leased to investment grade tenants. Constructed in 1999, the property offers efficient floor plates that have remain in high demand as it has maintained an average occupancy of 93% since completion, exceeding the class-A submarket average.
PHOENIX—Construction is complete at 7120 OptimaKierland, signaling the culmination of this phase of construction and the beginning of a new era of luxury, high-rise condominium living in North Scottsdale. Optima Kierland’s structure is now complete with more than 60 percent of the homes in the first condominium tower now sold. Move-ins for the first residents are scheduled for early 2018; completion of all residences is set for August 2018. The 12-story tower includes 220 residences ranging from 720 to 4,550 square feet and offers 20 unique floor plans for customizable one- to five-bedroom and penthouse condominiums. The homes are priced from the low $300,000s. A stunning combination of geometric shapes, expanses of glass, open floor plans and quality building materials—all hallmarks of Optima properties—create innovative, state-of-the-art living spaces.
PHOENIX—Fenix Development has broken ground on Phase I of The Watermark | Tempe at the north bank of Tempe Town Lake in Tempe, Arizona. Phase I, of the 1.9 million-square-foot mixed-use development, will include 250,000 square feet of premium Class A office space, 44,000 square feet of high-end restaurant and boutique retail service space, and 360 luxury apartments. Future phases include a second 360,000 square foot office tower, an additional 20,000 square feet of restaurant and retail space, and a 170-room business-class hotel. Fenix Development is scheduled to deliver Phase I in the fall of 2018. At build-out, Phase I will include two buildings. The first building, a 15-story building with premium Class A office space, starts on the eighth floor and extends to the penthouse on the 15th floor. The office space will sit on top of the seven floor parking structure and features full height floor-to-ceiling glass around the entire building. The street level will feature 18,250 square feet of high-end restaurant and retail space that overlooks the Watermark plaza and splash pad water feature—the center and focal point of the property. The second building includes an additional seven level parking structure with an additional 25,565 square feet of high-end restaurant and retail space with street level frontage along Watermark’s main driveway facing Scottsdale Road.
SALT LAKE CITY— SALT Development has completed development of the first two phases at 4th West Apartments, Downtown Salt Lake City’s newest ultra-luxury multifamily community encompassing 493 units. Phase one and Phase two , consisting of 373 units, common areas and most amenities is available for immediate occupancy. Phase three consisting of 120 units and amenities will be completed in the third quarter of 2017. Cost of development is estimated at $100 million. Ideally located adjacent to two light rail systems and one block from the Vivant NBA Arena, the multifamily community will provide real resort living to residents of Salt Lake City. Comprised of five pods, the five-story brick structure is situated at 255 North 400 West. All units feature 1G, NEST controls, gas ranges, up-graded stainless appliances, washers and dryers, built in closets, large decks and Anderson Windows. 4th West Apartments will feature 73 studio units, 256 one bedroom/one bathroom units and 164 two bedroom/two bathroom units with rents starting at $1,374.