News Ticker

Commercial Real Estate News 1-7-13

Trends

CRE 11.  Office vacancies are still pretty high in Phoenix, even though the trend is improving. Phoenix Business Journal real estate reporter Kristen Hansen reports in premium content that the rate is still knocking on the 23 percent mark. In her article “Office Vacancies Falling but Still High,” she reports that Phoenix rates #1 of the top 12 markets in office vacancies.

Sales Transactions

2.  Lowe Enterprises, Los Angeles, and J.P. Morgan Chase Asset Management, New York City, picked up a pair of office buildings for a total $51M; one in Phoenix, the other in Scottsdale. The seller of both buildings was CJK Investments, Newport Beach, Calif. The Phoenix project is a 175KSF office building, 5090 N. 40th St., which was worth $26.4M ($150/SF). The Scottsdale Financial Center III, 7272 E. Indian School Rd., was $24.7M ($103/SF) for the 150KSF building. CBRE handled the transactions for both sides.

3.  Lili Rubin Investment Properties sold its second apartment of the last 12 months. This one, Pine Ridge, 2627 N. 45th Ave., Phoenix, was sold for $7M ($23K/unit) to Community Enhancement Group, Denver, Colo. The buyer plans to renovate the 301-unit complex. Newmark Grubb Knight Frank represented the seller.

4.  In a double-deal, Gladstone Land Corporation acquired 1.8K acres near Willcox and signed a 10 year lease with a grain-growing tenant. Gladstone paid $6.7M ($3.8K/acre) for the irrigated farmland, and then inked the pact with Premier Grain Farms. The seller was not disclosed.

5.  The bitter temperatures up north are sending cold, hard cash down south. A group of Canadian investors, Talia Jevan Properties, Inc., paid $5.2M ($235/SF) for a 22KSF corporate office complex, 6970 E. Chauncey Ln., Scottsdale. The firm has invested $40M into Valley real estate in the past year. Cashen Realty Advisors was the broker in the deal for both sides. Alliance Real Estate Holdings LLC was the seller.

6.  In a reversal of the usual story, the conservation non-profit sold the land intended for preservation to a mining company. The Reid Park Zoological Society sold 765 acres donated to the zoo in 2010 for conservation purposes. For $3M, the organization sold the property to Freeport McMoRan Copper and Gold for $4K/acre. The land was donated by Gilbert Aguirre, a southern Arizona native, to “give something back to the community” after he made “a lot of money” selling a nearby 5K acres to a developer. Aguirre told Arizona Daily Star that he was disheartened to learn of the sale.

CRE 27.  Another Tutor Time site has been sold (AZBEX, Sept. 25). This one, 1652 E. Elliot Rd., Gilbert, sold for $2.5M ($238/SF) to a family trust. Lee & Associates represented the buyer in the deal; Encore Realty represented the undisclosed seller.

8.  NAI Horizon closed a number of deals during December:

  • In Payson, Fieldbrook Payson Partners LLC sold 26.8 acres of undeveloped residential land to an undisclosed buyer. The Rumsey Ridge Development sold for $2.1M ($80K/acre). NAI represented the seller in the deal.
  • NAI represented the buyer, the Church of Jesus Christ of Latter Day Saints, in its purchase of 5.3 acres for $1.5M ($280K/acre). The future stake center, Crismon and Baseline roads, Mesa, was tendered by an undisclosed buyer.
  • Seller Iota Thirty Six LLC used NAI in the sale of 103 acres of land, Kleck and Hacienda roads, Casa Grande, for $1.4M ($13K/acre). The buyer was not disclosed.

9.  The National Park Service purchased the McCauley Ranch, using funds provided The Conservation Fund and the National Parks Conservation Association. The 4.3K acre acquisition brings into Petrified Forest National Park the lands of a private ranch within the park’s boundaries. The ranch, located east of the Puerco Pueblo, results in protection of the park viewshed and an improved visitor experience.

10.  Banner Health has agreed to acquire Casa Grande Regional Medical Center for an undisclosed sum. With the opening of a new clinic in Maricopa, this acquisition provides the “hub” for the hospital’s Pinal County growing hub and spoke medical services system. The deal is subject to regulatory approval that will run the closing into spring 2014.

11.  De Rito Partners real estate arm acquired the Macayo’s Plaza, Bell and Reems roads, Surprise, for an undisclosed price. The real estate investment arm has been increasing its acquisitions over the past 12 months. De Rito Partners brokerage represented both sides in the deal.

Closures

12.  The Valley restaurant market is ablaze with new local eateries. This has hit some of the venerable chains hard. With real neighborhood eateries owned by real neighborhood owners, Applebee’s Neighborhood Grill & Bar is one of those chains being hit. A sale of a group of the franchises resulted in 78 closing nationally, including a fifth of those in the Phoenix metro inventory. Five Applebee’s have shut down in the Valley: 1245 W. Chandler Blvd. and 2805 S. Alma School Rd., Chandler; 830 W. Warner Rd. and 3843 S. Gilbert Rd., Gilbert; and 10460 N. 90th St., Scottsdale. 19 units remain open at this time.

13.  At the end of this month, Kitchen Collection in the Tanger Outlet Center will close after serving customers for 22 years. The influx of outlet centers into urban markets has impacted the aging destination outlet malls. Simon Properties opened the Phoenix Premium Outlets south of Chandler on Gila River Indian Community lands, is planning a new outlet mall north of Tucson in Marana, and has pumped renovation dollars into Tempe’s Arizona Mills. Tanger opened a major outlet center in Glendale’s Westgate complex. Only six major name retail outlets remain at the Casa Grande/Eloy outlet center.

14.  Home fashion retailer Z Gallerie has closed its only Tucson location in the Park Place mall. The store opened in 2000, and was one of four in Arizona. There are two locations in Scottsdale and one in Mesa that remain open.