commercial real estate 2013 - inside tucson business

Rewind the tape. Play it again, Sam. Déjà vu all over again.

In many ways, the Tucson re-gion’s commercial real estate mar-ket performance in 2012 was akin to 2011. Improvement was slow, sluggish and incremental. Th e eco-nomic recovery was a grind, not fast enough to satisfy anyone.

After four years of doom and gloom, going slow was OK in 2011. Coming off the bottom, the progress made during 2012 was good enough. For 2013, expect more of the same — slow job growth, slow consumer spending, slow in-migration and slow population growth.

Nationally, there is still much

uncertainty regarding the Aff ord-able Health Care Act, business regu-lations, tax rates and the “spending cliff ” called sequestration. As a re-sult, much of the commercial real estate market across the U.S. re-mains frozen in a wait-and-see po-sition until the federal government clarifi es its policies.

Except student housing.In the Tucson region, the multi-

family category was the rock star of 2012, characterized by some as “the darling” of commercial real estate. About 1,000 units were completed in 2012 and another 1,200 are ex-pected this year.

Other than student housing, progress was good enough

BY ROGER YOHEM

SPECIAL REPORTCommercial Real Estate 2012

Multifamily sector: Student housing shinesIndustrial sector: Strong absorption retail sector: Challenging future

Offi ce sector: Frozen market warms up Land sector: Late land surge profi le: CCIM helps get deals done

Continued on Page 3

geo

rge

How

ard

Downtown, a mix of new construction, rehabs and traditional apartment projects are developing. The jewel will be the $33 million Cadence, designed to house some 500 students.

2 - ITB - FEBRUARY 15, 2013

2 FEBRUARY 15, 2013 COMMERCIAL REAL ESTATE InsIdE TUcson BUsInEss

� Wells Fargo is the �� SBA �(a) lender by dollars according to the U.S. Small Business Administration as of September ��, ��.� Based on data from U.S. Small Business Administration, for federal fiscal year ��.All credit decisions subject to approval.� �� Wells Fargo Bank, N.A. All rights reserved. Member FDIC. (��_��)

SBA Lending Getting the right business financing is key in today’s economy. A Wells Fargo SBA loan is a smart choice, because the low down payment and low monthly payments help you maintain capital and cash flow. If you’re looking to purchase real estate for your business, acquire another business, expand to an additional location, or simply buy equipment or inventory, turn to Wells Fargo SBA Lending to help you do it.

You can be confident in our experience as an SBA lender. In ��, we approved over a billion dollars in SBA loans to businesses across America — more than any other bank in SBA lending history.� We’ll use that experience to guide you through the process and make sure you get the financing you need.

Apply for a loan or learn more today. Stop by a Wells Fargo location to talk with a banker, or call �-��-��-�� (Monday – Friday, � a.m. – � p.m. Pacific Time). You can also visit wellsfargo.com/sba.

Proud to be America’s �� SBA lender for the �rd straight year�

ITB - FEBRUARY 15, 2013 - 3

COMMERCIAL REAL ESTATE FEBRUARY 15, 2013 3InsideTucsonBusiness.com

National players such as Campus Acquisitions and Core Campus came to Tucson after sitting off stage for years.

Th e industrial sector also had a solid showing, highlighted by higher occupancy and the sale of several high-profi le buildings. Last year, eight industrial buildings valued at $1 million or more were sold.

Two of the more prominent par-cels were the Pella manufacturing site on the southwest side that had been vacant since 2009 and the American Airlines reservations call center near the Tucson International Airport.

Retail real estate remained in a cycle of “right-sizing,” a phase likely to continue through 2014. New com-petitive pressures from e-commerce, shifting population demographics, and a brutal fi nancial hangover from the Great Recession have the market unsettled.

Th e offi ce category, which is reli-ant on small business growth, stag-nated with few notable gains. More than any other sector, offi ce activ-ity was impacted by a fragile Tucson economy and the ongoing political issues coming from Washington, D.C.

As businesses put off start-up and expansion plans due to the uncer-tainties, others moved to reduce their risks.

National home builders returned

to Southern Arizona last year, cre-ating a “land surge.” Builders now control all the developed lots along Marana’s hot Tangerine Corridor and have begun buying dirt again in Vail on the southeast side.

Residential land sales doubled to $112 million in 2012 from $54 million in 2011. Of the new total, builders grabbed $71 million worth of land.

While interviewing a few dozen real estate brokers, executives and analysts for this report, all made the same point, over and over again: Tuc-son’s economy is slowly getting bet-ter, but ... where are the jobs?

Signifi cant job creation is needed in the private sector. Until that hap-pens, the Tucson region’s economic recovery will continue to lag behind other areas of the U.S.

Contact Roger Yohem at [email protected] or (520) 295-4254.

About the datastatistics cited in this special report were provided by Picor commercial Real Estate services, chapman Lindsey commercial Real Estate services, Tucson Realty & Trust, costar Group, cBRE and Land Advisors organization. Inside Tucson Business soought to verify the accuracy and representation of the information and in cases where data did match exactly, either an average or median number was used to best represent those market conditions.

PROGRESS Continued FRoM Page 1

Essentially, all new construction was build-to-suit, for owner-occupied businesses or by developers who had tenants pre-leased to occupy the space. Although the region has many outdated and functionally obsolete commercial buildings, little spec building is expected in 2013.

Tucson Medical Center’s towering 200,000 square-foot addition, known as The West Pavilion, will open this spring on the hospital’s campus at 5301 E. Grant Road. The expansion is part of an ongoing $109 million construction improvement program at the hospital. Tucson Orthopaedic Institute will occupy the fi rst fl oor. The second and third fl oors will house 24 state-of-the-art operating rooms and the fourth fl oor is for 40 private patient rooms.

otis

Bla

nk

otis

Bla

nk

OVERVIEW



MULTIFAMILY SECTOR

Student housing shines as ‘darling’ of regional market

Roger YohemInside Tucson Business

To loosely borrow a political quip about former President Bill Clinton, Tucson is caught up in a love aff air of torrid “triangula-tion.”

Th e City of Tucson, University of Arizona, and commercial developers have bonded over a red-hot passion for student housing.

“Th at is the number one story in commer-cial real estate: the multi-family sector. We have a signifi cant construction cycle,” said Michael Sandahl, senior vice president spe-cializing in investment sales for CBRE.

Th e rise of student housing near the UA campus and downtown along with tradition-al apartment projects across the region “is long overdue,” added Bob Kaplan, a principal with Picor Commercial Real Estate Services. “We have not had good-quality stock of stu-dent housing near campus. And Tucson is al-ways way behind other cities when it comes to development in general.”

Sandahl and Kaplan identifi ed four key factors driving the multi-housing construc-tion cycle. Two of them are sector-specifi c: most inventory is old and outdated and strong pent-up demand for amenity-heavy product.

“Tucson has an aged apartment inven-tory. Th e construction pipeline has been at a very low number, virtually non-existent for years,” said Sandahl.

About half the region’s 60,000 apartments were built in the mid-1980s. Today, that product is worn, inadequate and undesir-able. Tenants want vibrant living spaces that feature upgraded appliances, upgraded fl oor and window coverings and access to tech-nology.

About 1,000 units were completed in 2012 and another 1,200 are expected this year. Oc-cupancy has hovered at around 90 percent for the past few years.

“Th is new construction is so positive for the community. To attract and keep young-er people here, we need eff ective housing,” Kaplan noted.

Th e third key factor driving multi-housing construction is fi nancial. Low interest rates have made site acquisition, construction and fi nancing costs more aff ordable. Kaplan said the Great Recession changed the economics of development and quite simply, “the num-bers didn’t pencil out until recently.”

Th e fourth factor is local politics. Ulti-mately, that dynamic may turn out to be the most signifi cant element.

‘Up-zoning’ was keyIn February 2012, the Tucson Mayor and

Council approved the Main Gate Overlay District, basically an “up-zoning” of property west of the UA campus to create high-density development along the Sun Link modern street car route. Th e overlay district covers 54 acres surrounding the Main Gate Square de-

Hend

ricks

& P

artn

ers

velopment on University Boulevard. Th e overlay district plan removed the

zone’s 40-foot building height limit and al-lowed for the construction of 16 new build-ings, some up to 14-stories tall.

Th e initiative was a game-changer, sig-naling to the broader banking and invest-ment community that Tucson government was taking action to change its anti-business reputation.

BIZ FACTS

BY THE NUMBERSTucson Multi-housing sales/pricesYear Units Total Sales Avg. Price/unit Avg. Price/SF2012 3,861 $287 million $74,399 $86.452011 3,106 $107 million $34,380 $59.042010 4,357 $148 million $33,858 $52.18

“Mayor (Jonathan) Rothschild pushing through the Main Gate zoning changes was a huge accom-plishment during his fi rst year. It could be his legacy achievement,” said Amber Smith, executive direc-tor of the Metropolitan Pima Alli-ance. “Students must have hous-ing and these projects off er that as opposed to students being lim-ited to living in the nearby historic

neighborhoods.”National companies that specialize in

Class A student housing have for years want-ed to do high-rise projects in Tucson. But with their narrow, precise business models and terms, the dynamics were never quite right so they invested in other cities.

“Th at changed with the up-zoning, the trigger to getting them here,” said Kaplan.

In May 2012, Chicago-based Campus Acquisitions broke ground on a $25 million, 14-story project called Level. Th e tower at 1020 N. Tyndall Ave. will house more than 550 students when it opens in August. Th e second phase is an adjacent 13-story tower called Park Avenue, at 1031 N. Park Ave., for about 580 students that will be ready for the UA’s 2014 fall semester.

Also nearby, Core Campus, also based in Chicago, is planning Th e Hub at Tucson, a 14-story tower at the northwest corner of First Street and Tyndall Avenue that will house 600 students and also plans to open by August 2014.

And south of the campus, at 1000 E. 22nd St. at Park Avenue, Th e Retreat, 183 cottage-style units with a total of 774 beds on 22 acres is gearing up to open this year.

A notable completion near campus in

Through 2014, over 3,000 new apartments for college students are being planned



MULTIFAMILY SECTOR2012 was Th e District on Fifth, 550 N. Fifth Ave., a $67 mil-lion luxury project with 756 beds.

Downtown, a mix of new construction, rehab and ren-ovations, senior, and traditional multi-family projects are developing. Th e most prominent will be Cadence, a $33 million student housing project wedged onto 2.5 acres on downtown’s east edge.

Th e tech-friendly complex is under the direction of developer Jim Campbell of Oasis Tucson in partnership with Capstone Development Partners, Birmingham, Ala. Two six-story buildings are rising across from each other on Toole Avenue; one at Broadway and Toole Avenue ad-jacent to the Rialto Th eatre on East Congress Street and the other, three fl oors added to the top of Centro Garage that was opened in September 2012. Th e entire Cadence project includes commercial retail space as well as hous-ing for about 500 and is due to open by August.

“It’s an exciting project, that should add life to down-town,” said Sandahl.

“To go downtown, the trigger was light rail. To revital-ize downtown, you have to have people living there and Cadence will do that,” added Kaplan.

Renovations activeTh e rehab-renovate-revitalize triangulation of the ur-

ban core also attracted traditional apartment builders in 2012.

Tucson developer Ross Rulney bought and redevel-oped the entire block of 118 S. Fifth Avenue for about $4 million. It is the site of the historic Julian Drew Building/Lewis Hotel. On the same block, he converted an aged apartment building, Tiburon Apartments, to Th e Flats at Julian Drew and put 53 conventional apartment units into play.

For low-income seniors, a $27 million complex called Th e Sentinel, 795 W. Congress St., was built by Senior Housing Group, based in Chicago, and Evergreen Part-ners, based in Portland, Maine. It is replacement housing for low-income residents of Armory Park Apartments, 211 S. Fifth Ave.

In turn, the 40-year-old Armory Park Apartments were acquired for about $3 million by a partnership of Tucson-based fi rms Peach Properties and Holualoa Arizona. Th ey are spending another $4 million to convert them into 144 modern, market-rate apartments to be called Th e Her-bert.

Based on his other ventures, “we’re also seeing de-mand for product downtown for older, more mature tenants,” said Ron Schwabe, owner of Peach Properties. “We’re going the other direction away from students.”

Although student housing gets the headlines, tradi-tional apartment construction is happening across the region.

Tucson developers Alta Vista Communities, HSL Prop-erties, and MC Companies are all active “and more new product is being planned region wide,” Sandahl added.

While all sectors of commercial real estate improved last year, “the darling of this cycle’s recovery has been multi-housing. People who lost their homes to foreclo-sure moved to rentals. Additionally, the demographic wave of Generation Y or Millennials, generally those born from the late 1970s to early 2000s, continue to support the rental stock. Th e age group has a greater likelihood of renting so they can remain footloose to follow job avail-abilities,” said Asieh Mansour, senior managing director of CBRE Global Research.

“Th e demand has been driven by a change in the way households view multi-housing rentals. Rental housing is no longer viewed as an inferior product,” she said.

Contact reporter Roger Yohem at [email protected] or (520) 295-4254.

ABOVE The $25 million, 14-story Level will house some 550 students.

RIGHT Robert Perez (left) of BSH Construc-tion reviews plans for rehab-bing The Herbert with Ron Schwabe of Peach Properties.

otis

Bla

nk

geo

rge

How

ard



INDUSTRIAL SECTOR

Veiled improvements set stage for stable 2013

By Roger YohemInside Tucson Business

Commercial real estate’s industrial sec-tor data deserves a close look. Critically close, because there are some hidden im-provements to be found deep inside the numbers.

As lease rates dropped slightly in 2012, occupancies ticked up. That’s logical: lower prices attract tenants back into the market. At year-end, the vacancy rate was 11.9 per-cent, down from 12.2 percent at the end of 2011.

What’s a bit unexpected, unless you’re a stat-geek, is the veiled progress in occupan-cy. Last year, some 206,000 square feet was added to the inventory. That brought the sector’s total space to 39.4 million square feet.

Net absorption for 2012 was positive 306,000 square feet. So a critical look at the stats shows that the demand for space was over 500,000 square feet.

“With consolidation largely in the rear view mirror, signs point to a more stable market. With less concern about business survival, tenants are seeking longer-term leases, looking to lock in rates that are at or near the bottom,” said Rob Glaser, a princi-pal and industrial broker with Picor Com-mercial Real Estate Services.

“Absorption was the best since 2007,” he added. The sector’s lease market “is inch-ing toward balance, but we do not predict

equilibrium until vacancy decreases to 8 “percent,” he added.

6 new buildingsSix new buildings were completed in

2012, adding 206,654 square feet to inven-tory, according to CoStar Group. Ameri-can Tire Distributors built the largest new facility at 6720 S. Alvernon Way. The 100,000 square-foot warehouse and distri-bution complex is packed with high-tech lighting, fire and business technologies, and includes 17 loading docks.

ReCommunity Material Recovery, 3780 E. Ajo Way, erected the second-largest building in the region at 59,041 square-feet. The company processes aluminum, steel, glass, newspaper and mixed card-board scrap from the City of Tucson’s resi-dential recycling program.

“Clearly, all of this construction was driven by build-to-suit activity. That is expected to dominate the market again in 2013 due to the limited supply of func-tional space,” said Tim Healy, vice presi-dent at CBRE.

8 large salesDuring 2012, there were eight indus-

trial building sales valued at $1 million or more. In the biggest, at $13.4 million, Chi-cago-based Titanium Real Estate Advisors acquired a 63,800 square-foot complex at 6990 S. Palo Verde Road. The sales price amounted to $209.48 per square foot.

The second largest sale, at $5.25 mil-lion, also was the largest property in size: the 257,600 square-foot building that was the former manufacturing facility for Pella Windows, 6700 S. Pella Drive.

The building had been vacant for more than three years after Pella shut it down in 2008 in response to slow demand for its products.

BH Properties LLC acquired the facility as an investment. The property had been listed at $9.9 million. The $5.25 million purchase price was considered a bargain at $20.38 per square foot.

Although the Pella building sold, it re-mains empty, noted Glaser. But because “activity is percolating,” he believes there is a good chance the site could be leased sometime this year.

The vacant 300,000 square-foot Lisa Frank Building, 6760 Lisa Frank Ave. near Tucson International Airport, also is likely to lease or sell this year.

“Tucson is the only Southwest city with 11 vacant industrial buildings that are 100,000 square feet or larger. That could accommodate a company looking to re-locate immediately and not have to wait for new construction,” said Chuck Blacher, industrial specialist with Tucson Realty & Trust.

“There should be no new speculative building by investors until the inventory is reduced. It’s still a tenant’s market. Those are positives,” he added.

2012 largest transactions Largest building sales$13.4 million at 6990 s. Palo Verde63,800 square-foot building seller: Michael Wattis Inc.Buyer: Titanium Real Estate

$5.25 million at 6700 s. Pella dr.257,600 square-foot building seller: Pella corporationBuyer: BH Properties LLc

$5.1 million at 335 E. Valencia Road85,000 square-foot buildingseller: AMR corporationBuyer: Freeport-McMoRan corp.

$4 million at 2650 E. Elvira Road110,026 square-foot buildingseller: Veeco Instruments Buyer: Zygo corporation

$2 million at 4400 s. santa Rita Ave.38,988 square-foot buildingseller: Multi-Fineline ElectronixBuyer: Involta LLc

Largest lease101,226 square feet at 6950 s. country club By: solon America

Largest new building100,000 square feet at 6720 s. Alvernon Way owner: American Tire distributors

By the numbersIndustrial sector stats

Base space2012: 39.4 million square feet 2011: 39.2 million square feet2010: 39.1 million square feet

Vacancy rate2012: 11.9 %2011: 12.2 %2010: 11.2 %

New construction completed2012: 206,654 square feet2011: 128,659 square feet2010: 55,873 square feet

Net absorption2012: 306,347 square feet 2011: -285,521 square feet2010: 76,327 square feet

Average asking rent 2012: $6.17 per square foot2011: $6.33 per square foot2010: $6.49 per square foot

Flex space average rent 2012: $7.64 per square foot2011: $7.64 per square foot2010: $8.44 per square foot

Warehouse space average rent 2012: $5.78 per square foot2011: $6.00 per square foot2010: $6.00 per square footsource: costar and cBRE

Phot

o co

urte

sy o

f ReC

omm

unity

Mat

eria

l Rec

over

y

ReCommunity Material Recovery completed its massive recycling facility in July.



INDUSTRIAL SECTOROther large sales included Freeport-Mc-

MoRan Copper & Gold acquiring the for-mer American Airlines call center at 3350 E. Valencia Road for $5.1 million a month after the airline shut it down. Also, Zygo Corpora-tion bought the 110,000 square-foot former Veeco Instruments building at 2650 S. Elvira Road for $4 million.

“Th e market for both user and invest-ment sales is improving, aided by very com-petitive interest rates. Th ough values are still quite soft with no real pressure, activity is up, including a fair amount of REO listing and sales,” said Glaser.

Th e Tucson market now has 39.4 mil-lion square feet of industrial space in 2,436 buildings. A large majority of that space is

classifi ed as warehouse: 29.9 million square feet in 1,971 buildings.

Overall, only 103 buildings totaling 4 million square feet are owner-occupied. At year-end, only one industrial building was under construction, a 17,000 square-foot project at 4475 S. Coach Drive for the fed-eral government.

“Sales to owner/users are way up over the past fi ve years. About 85 percent have been to owner/users and just 15 percent to investors,” Blacher noted.

About 85 industrial properties sold last year and current listings off er about 150 buildings for sale at 1,000 square feet or larger. Th at leaves a 20-month supply in the market, said Blacher.

Currently, there is 4.7 million square feet of space for lease. Although that is only a net decrease of 99,700 square feet compared to 2011, the trend is signifi cant.

“Many tenants are seeking long-term leases again, a sign that confi dence in their businesses and the economy is returning,” said Healy. “Th e market gained some mo-mentum in 2012. Th is year, expect over a half-million square feet of positive absorp-tion to drive down vacancy and new con-struction projects to push up rental rates.”

Glaser characterized the new momen-tum as “a lot of little positives.” Th e sector should benefi t from a “new synergy” of low interest rates; fewer distressed properties; improving consumer confi dence; a better

Tucson housing market; growing business activity in Mexico; and “those eight big sales.”

He also noted that the community’s eco-nomic development representatives “have re-engaged” after years of little activity.

“We’ll also benefi t from Phoenix, one of the nation’s three hottest commercial mar-kets last year. As that space dwindles, inves-tors and businesses will expand their search for properties into Tucson,” Glaser said.


In the hotel sub-sector, the high-profi le Aloft Tucson University Hotel, 1900 E. Speedway, will open in mid-2013. The 40-year-old, 95,000 square-foot building is undergoing a complete transformation into an urban, contempo-rary complex. It is being renovated by Scottsdale-based Linthicom Corp. at an undisclosed price.

At year-end, the only notable project under construction was a 15,000 square-foot building in the central industrial sector on south Palo Verde Blvd. north of Interstate 10. The structure is being built for the federal government.

Roge

r Yoh

em p

hoto

s



RETAIL SECTOR

Technology and demographics challenge retail’s future


Retailers have faced operational, eco-nomic and competitive pressures going back to before Rowland Hussey Macy es-tabalished R.H Macy Dry Goods in New York in 1858 or Montgomery Ward & Co. made its first sale in 1872 in Chicago. De-livering goods by stagecoach was a chal-lenge and merchants in distant cities had grown to serve their consumers.

After witnessing Ward’s mail-order suc-cess, Sears, Roebuck & Co. launched in 1893. James Cash Penney followed suit, opening his namesake store in 1902. Over the next 100-plus years, these and other dry-goods merchants expanded and be-came powerful retailers with thousands of stores across the nation.

Other players, including Target and Wal-Mart gradually entered the field to compete for customers. For decades, busi-ness was good until a new kind of competi-tion made a dramatic impact, e-commerce shifting demographics, and an economic hangover from the Great Recession.

“Retail always has had cycles. Now there’s the technology evolution with the Internet. The recession cycle changed con-

sumer behavior, everyone is very price ori-ented. Getting a deal is in vogue,” said Greg Furrier, a partner in Picor Commercial Real Estate Services.

“People are watching their money. That has spread through the entire economy.”

E-commerce is one of the most dynam-ic changes. The technology is shredding traditional business models by taking away sales from physical “brick-and-mortar” store locations.

Changing demographics are another game-changer. Aging Baby Boomers are saving for retirement and spending less on material items. Essentially, they already own most of what they want.

Generation X, those born from 1965 to about 1980, is a smaller demographic group just now entering their prime earn-ing years. Millenials, those born from about 1980 to 2000, prefer a high-density, urban lifestyle experience.

“Shopping dynamics are changing. I don’t see the expansion of any traditional department stores. The opportunities be-ing taken by the national retailers are to reposition their space in better locations,” said Nancy McClure, first vice president specializing in retail for CBRE.

These younger consumers are likely to

reside and work in urban environments, and shop close-by while continuing their online purchasing.

“That’s why the Benenson redevelop-ment is a statement piece. It is clearly a big space on a permanent corner in a major regional retail hub,” said McClure. “Proj-ects on the periphery will be challenged. Unanchored, mid-block strip centers will continue to see more vacancies than well-anchored prime sites.”

The Benenson Retail Center was devel-oped on the 7.4 acre parcel at the northeast corner of East Broadway and Craycroft Road that had been vacant since late 2008. New York-based Benenson Capital Part-ners has redeveloped the corner, which now includes a Stein Mart that opened in November and will feature the Tucson market’s first Hobby Lobby store, due to open by Easter. The center will have six re-tailers.

8.2% vacancyThe Tucson market now has 51 million

square feet of retail space in 546 centers and 5,311 buildings. By sector, shopping centers have the most space at 22.3 mil-lion square feet, then general retail at 19.9 million square feet. The smallest sector is

Largest Transactions

Largest building saleTucson spectrum, Interstate 19 and Irvington Road$125.4 million ($176.58 per square foot)cap Rate: 6.93%

Largest new building156,000 square feet 1260 E. Tucson Marketplace Blvd. Retailer: Wal-Mart

Largest lease50,000 square feet5545 E. Broadway Retailer: Hobby Lobby

Largest under construction 92,660 square feet2711 s. Houghton RoadRetailer: Wal-Mart completion: April-June 2013

By the numbers

Base space2012: 50.99 million square feet 2011: 50.95 million square feet2010: 50.48 million square feet

Vacancy rate2012: 8.2%2011: 8.4%2010: 8.6%

New construction 2012: 349,887 square feet2011: 477,573 square feet2010: 323,642 square feet

Net absorption2012: 313,801 square feet 2011: 218,961 square feet2010: minus 72,519 square feet

Average asking rent rate 2012: $14.78 per square foot2011: $14.54 per square foot2010: $15.10 per square foot

costar and cBRE data

Continued on Page 10

Six retailers will occupy the completely renovated Benenson Retail Center.

geo

rge

How

ard



#1 in Real estate seRvices WoRldWidewww.cbre.com/tucson 520.323.5100

Buzz isaacson First Vice President Office Specialist

nancy mccluRe First Vice President Retail Specialist

david montijo First Vice President Office Specialist

W. michael sandahl Senior Vice President Investment Specialist

john ash Senior Associate Investment Specialist

CBRE CongRatulatEs its top REal EstatEpRofEssionals on thEiR aChiEvEmEnt.

10 - ITB - FEBRUARY 15, 2013


RETAIL SECTORspecialty centers at 155,400 square feet, ac-cording to CoStar.

Vacancy rates improved slightly, falling to 8.2 percent in 2012, from 8.4 percent in 2011. Likewise, quoted lease rates fi rmed up, rising 24 cents to $14.78 per square foot.

Overall, the retail sector has 4.2 million square feet of empty space.

Last year, 350,000 square feet was added to the region’s inventory. At 156,000 square feet, Wal-Mart completed the largest new building, a new Supercenter at 1260 E. Tuc-son Marketplace Blvd. in Th e Bridges, be-tween Kino Parkway and Park Avenue north of Interstate 10. No other new project was larger than 50,000 square feet.

At year end, about 128,000 square feet of retail was under construction. Th e largest was a 92,600 square-foot Walmart at 2711 S. Houghton Road at the southeast corner of Golf Links Road. In 2013, any new buildings likely will be “for committed users,” Furrier said.

Bourn Advisory Services had the year’s two largest sales. In August, the company sold Tucson Spectrum for $125.4 million to DDR Corp., Beachwood, Ohio. Th e 122-acre complex, west of Interstate 19 at Irvington Road, has more than 1 million square feet of retail space and is one of the largest open-air power centers in the western U.S.

Th e sales price was $176.58 per square foot. Th e sellers were private real estate companies Phoenix-based Barclay Group, which developed the center in two phases in 2001 and 2008, and Creswin Properties Inc., Winnipeg, Manitoba.

In November, Bourn Advisory Services sold Th e Corner at Oracle Wetmore, an 80,059-square foot complex for $29.5 mil-lion. Th e center on the southeast corner of the intersection was acquired by Inland Diversifi ed Real Estate Trust, based in Oak Brook, Ill., for $368.48 per square foot.

Natural cycleTh e region’s retail sector improved in

2012 in most key metrics. And despite news that eight national chains plan to close a to-tal of more than 2,000 stores beginning this year, Tucson brokers were unshaken.

Th e projected closings include locations of Barnes & Noble, Best Buy, GameStop, JC Penney, Kmart/Sears, Offi ce Depot, Offi ce Max and Radio Shack. So far, the retailers haven’t identifi ed any specifi c locations they plan to close.

Such downsizing talk is not new, said Furrier, who characterized the moves as part of retail’s “natural cycle.” Plus, Tucson was never overbuilt like other cities, he adds.

Before the housing crash, retailers ex-panded to the suburbs based on projections of 10,000 more homes there in a few years. Until then, the plan was to break even.

“Th en the faucet shut off . Now it’s fi ve years later in the cycle and their leases are coming up. Th e growth was not there so why stay if you’re not profi table?” Furrier said.

Furrier and McClure expect distressed retailers will “right-size” and maintain a presence in the region. Any large blocks that

are vacated could attract “entertainment” tenants.

“Look for more non-traditional tenants to fi ll space,” said Patrick Darcy, retail spe-cialist with Tucson Realty & Trust.

“I expect a move toward some type of ac-tivity, where people want an experience do-

ing something. Th e attraction is social, like a neighborhood center,” said McClure.

Across the nation for example, malls, bowling alleys and other big boxes have successfully converted abandoned space into “experience venues” such as sky diving, laser tag, wind tunnels, skate parks, rock

climbing and even new car showrooms.“It’s a good, evolving use of space to re-

cycle it into something diff erent,” said Fur-rier.


RETAIL Continued FRoM Page 8

The Corner at Oracle and Wetmore was acquired by Inland Diversifi ed REIT for $29.5 million.

otis

Bla

nk

Wal-Mart continued its aggressive expansion plans and currently has four projects underway, including this one at 2711 S. Houghton Road.

otis

Bla

nk

ITB - FEBRUARY 15, 2013 - 11


REAL ESTATEPOWERHOUSE

3709 N. Campbell Ave., Suite 135, Tucson, AZ 85719P: 520.321.3330 F: 520.321.3331

www.newmarkkf.com

Sandy AlterDirector

Tari Auletta, CCIMDirector

Jesse BlumAssociate

Hannah CarrilloAdministrative Manager

Bob DavisManaging Director

William DivitoManaging Director

Howard Kong, CCIMDirector, Managing Broker

Justin LanneManaging Director

Ron ZimmermanDirector

Scott SoelterAssociate Director

Suzanne StarttProperty Manager

12 - ITB - FEBRUARY 15, 2013


Plaintiff in service awards for their efforts on behalf of the classes.

How to Ask for PAyment To receive payment, merchants must fill out a claim form. If the Court finally approves the settlement, and you do not exclude yourself from the Cash Settlement Class, you will receive a claim form in the mail or by email. Or you may ask for one at: www.PaymentCardSettlement.com, or call: 1-800-625-6440.

otHer Benefits for mercHAnts

Merchants will benefit from changes to certain MasterCard and Visa rules, which will allow merchants to, among other things:

•Charge customers an extra fee if they pay with Visa or MasterCard credit cards,

•Offer discounts to customers who do not pay with Visa or MasterCard credit or debit cards, and

•Form buying groups that meet certain criteria to negotiate with Visa and MasterCard.

Merchants that operate multiple businesses under different trade names or banners will also be able to accept Visa or MasterCard at fewer than all of the merchant’s trade names and banners.

LegAL rigHts And oPtions Merchants who are included in this lawsuit have the legal rights and options explained below. You may:

• Fileaclaimtoaskforpayment.You will receive a claim form in the mail or email or file online at: www.PaymentCardSettlement.com.

• Excludeyourselffrom the Cash Settlement Class (Rule 23(b)(3) Settlement Class). If you exclude yourself, you can sue the Defendants for damages based on alleged conduct occurring on or before November 27, 2012 on your own at your own expense, if you want to. If you exclude yourself, you will not get any money from this settlement. If you are a merchant and wish to exclude yourself, you must make a written request, place it in an envelope, and mail it with

postage prepaid and postmarked no later than May28, 2013 to Class Administrator, Payment Card Interchange Fee Settlement, P.O. Box 2530, Portland, OR 97208-2530. The written request must be signed by a person authorized to do so and provide all of the following information: (1) the words “In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation,” (2) your full name, address, telephone number, and taxpayer identification number, (3) the merchant that wishes to be excluded from the Cash Settlement Class (Rule 23(b)(3) Settlement Class), and what position or authority you have to exclude the merchant, and (4) the business names, brand names, and addresses of any stores or sales locations whose sales the merchant desires to be excluded.Note: You cannot be excluded from theRule Changes Settlement Class (Rule 23(b)(2) Settlement Class).

•Object to the settlement. The deadline to object is: May 28,2013. To learn how to object, see: www.PaymentCardSettlement.com or call 1-800-625-6440. Note: If you exclude yourself from the Cash Settlement Class you cannot object to the terms of that portion of the settlement.

For more information about these rights and options, visit: www.PaymentCardSettlement.com.

if tHe court APProves tHe finAL settLement

Members of the Rule Changes Settlement Class are bound by the terms of this settlement. Members of the Cash Settlement Class, who do not exclude themselves by the deadline, are bound by the terms of this settlement whether or not they file a claim for payment. Members of both classes release all claims against all released parties listed in the Settlement Agreement. The settlement will resolve and release any claims by merchants against Visa, MasterCard or other defendants that were or could have been alleged in the lawsuit, including any claims based on interchange or other fees, no-surcharge rules, no-discounting rules, honor-all-cards rules and other rules. The settlement will also resolve any merchant claims based upon the future effect of any Visa or MasterCard rules, as of November 27, 2012 and not to be modified pursuant to the

settlement, the modified rules provided for in the settlement, or any other rules substantially similar to any such rules. The releases will not bar claims involving certain specified standard commercial disputes arising in the ordinary course of business.

For more information on the release, see the settlement agreement at: www.PaymentCardSettlement.com.

tHe court HeAring ABout tHis settLement

On September 12, 2013, there will be a Court hearing to decide whether to approve the proposed settlement, class counsels’ requests for attorneys’ fees and expenses, and awards for the class representatives. The hearing will take place at:

United States District Court for the Eastern District of New York225 Cadman PlazaBrooklyn, NY 11201

You do not have to go to the court hearing or hire an attorney. But you can if you want to, at your own cost. The Court has appointed the law firms of Robins, Kaplan, Miller & Ciresi LLP, Berger & Montague, PC, and Robbins Geller Rudman & Dowd LLP to represent the Class (“Class Counsel”).

Questions?For more information about this case (In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, MDL 1720), you may:

Call toll-free: 1-800-625-6440Visit: www.PaymentCardSettlement.com Write to the Class Administrator:

Payment Card Interchange Fee SettlementP.O. Box 2530Portland, OR 97208-2530

Email: [email protected]

Please check www.PaymentCardSettlement.com for any updates relating to the settlement or the settlement approval process.

LegaL Notice

To merchants who have accepted Visa and MasterCard at any time since January 1, 2004:

Notice of a 6+ billion dollar class action settlement.

Notice of a class action settlement authorized by the U.S. District Court, Eastern District of New York.

This notice is authorized by the Court to inform you about an agreement to settle a class action lawsuit that may affect you. The lawsuit claims that Visa and MasterCard, separately, and together with banks, violated antitrust laws and caused merchants to pay excessive fees for accepting Visa and MasterCard credit and debit cards, including by:

•Agreeing to set, apply, and enforce rules about merchant fees (called default interchange fees);

•Limiting what merchants could do to encourage their customers to use other forms of payment through, for example, charging customers an extra fee or offering discounts; and

•Continuing that conduct after Visa and MasterCard changed their corporate structures.

The defendants say they have done nothing wrong. They say that their business practices are legal and the result of competition, and have benefitted merchants and consumers. The Court has not decided who is right because the parties agreed to a settlement. On November 27, 2012, the Court gave preliminary approval to this settlement.

tHe settLement Under the settlement, Visa, MasterCard, and the bank defendants have agreed to make payments to two settlement funds:

• Thefirstisa“CashFund”–a$6.05billionfund that will pay valid claims of merchants that accepted Visa or MasterCard credit or debit cards at any time between January 1, 2004 and November 28, 2012.

• The second is an “Interchange Fund” –estimated to be approximately $1.2 billion

– that will be based on a portion of theinterchange fees attributable to certain merchants that accept Visa or MasterCard credit cards for an eight-month “Interchange Period.”

Additionally, the settlement changes some of the Visa and MasterCard rules applicable to merchants who accept their cards.

This settlement creates two classes:

•A Cash Settlement Class (Rule 23(b)(3) Settlement Class), which includes all persons, businesses, and other entities that accepted any Visa or MasterCard cards in the U.S. at any time from January 1, 2004 to November 28, 2012, and

•A Rule Changes Settlement Class (Rule 23(b)(2) Settlement Class), which includes all persons, businesses, and entities that as of November 28, 2012 or in the future accept any Visa or MasterCard cards in the U.S.

wHAt mercHAnts wiLL get from tHe settLement

Every merchant in the Cash Settlement Class that files a valid claim will get money from the $6.05 billion Cash Fund, subject to adeduction (not to exceed 25% of the fund) to account for merchants who exclude themselves from the Cash Settlement Class. The value of each claim, where possible, will be based on the actual or estimated interchange fees attributable to the merchant’s MasterCard and Visa payment card transactions from January 1, 2004 to November 28, 2012. Payments to merchants who file valid claims for a portion of the Cash Fund will be based on:

•The money available to pay all claims,

•The total dollar value of all valid claims filed,

•The deduction described above not to exceed 25% of the Cash Settlement Fund, and

•The cost of settlement administration

and notice, money awarded to the class representatives, and attorneys’ fees and expenses all as approved by the Court.

In addition, merchants in the Cash Settlement Class that accept Visa and MasterCard during the eight-month Interchange Period and file a valid claim will get money from the separate Interchange Fund, estimated to be approximately$1.2billion.Thevalueofeachclaim, where possible, will be based on an estimate of one-tenth of 1% of the merchant’s Visa and MasterCard credit card dollar sales volume during that period. Payments to merchants who file valid claims for a portion of the Interchange Fund will be based on:


•The total dollar value of all valid claims filed, and

•The cost of settlement administration and notice, and any attorneys’ fees and expenses that may be approved by the Court.

Attorneys’ fees and expenses and money awarded to the class representatives: For work done through final approval of the settlement by the district court, Class Counsel will ask the Court for attorneys’ fees in an amount that is a reasonable proportion of the Cash Settlement Fund, not to exceed 11.5% of theCashSettlementFundof$6.05billionand11.5% of the Interchange Fund estimated to be $1.2billion tocompensateallof the lawyersand their law firms that have worked on the class case. For additional work to administer the settlement, distribute both funds, and through any appeals, Class Counsel may seek reimbursement at their normal hourly rates, not to exceed an additional 1% of the Cash Settlement Fund of $6.05 billion andan additional 1% of the Interchange Fund estimated to be $1.2 billion. Class Counselwill also request reimbursement of their expenses (not including the administrative costs of settlement or notice), not to exceed $40 million and up to $200,000 per Class

www.PaymentCardSett lement.com 1-800-625-6440 • info@PaymentCardSett lement.com

Si desea leer este aviso en español, llámenos o visite nuestro sitio web.

ITB - FEBRUARY 15, 2013 - 13


Plaintiff in service awards for their efforts on behalf of the classes.

How to Ask for PAyment To receive payment, merchants must fill out a claim form. If the Court finally approves the settlement, and you do not exclude yourself from the Cash Settlement Class, you will receive a claim form in the mail or by email. Or you may ask for one at: www.PaymentCardSettlement.com, or call: 1-800-625-6440.

otHer Benefits for mercHAnts

Merchants will benefit from changes to certain MasterCard and Visa rules, which will allow merchants to, among other things:

•Charge customers an extra fee if they pay with Visa or MasterCard credit cards,

•Offer discounts to customers who do not pay with Visa or MasterCard credit or debit cards, and

•Form buying groups that meet certain criteria to negotiate with Visa and MasterCard.

Merchants that operate multiple businesses under different trade names or banners will also be able to accept Visa or MasterCard at fewer than all of the merchant’s trade names and banners.

LegAL rigHts And oPtions Merchants who are included in this lawsuit have the legal rights and options explained below. You may:

• Fileaclaimtoaskforpayment.You will receive a claim form in the mail or email or file online at: www.PaymentCardSettlement.com.

• Excludeyourselffrom the Cash Settlement Class (Rule 23(b)(3) Settlement Class). If you exclude yourself, you can sue the Defendants for damages based on alleged conduct occurring on or before November 27, 2012 on your own at your own expense, if you want to. If you exclude yourself, you will not get any money from this settlement. If you are a merchant and wish to exclude yourself, you must make a written request, place it in an envelope, and mail it with

postage prepaid and postmarked no later than May28, 2013 to Class Administrator, Payment Card Interchange Fee Settlement, P.O. Box 2530, Portland, OR 97208-2530. The written request must be signed by a person authorized to do so and provide all of the following information: (1) the words “In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation,” (2) your full name, address, telephone number, and taxpayer identification number, (3) the merchant that wishes to be excluded from the Cash Settlement Class (Rule 23(b)(3) Settlement Class), and what position or authority you have to exclude the merchant, and (4) the business names, brand names, and addresses of any stores or sales locations whose sales the merchant desires to be excluded.Note: You cannot be excluded from theRule Changes Settlement Class (Rule 23(b)(2) Settlement Class).

•Object to the settlement. The deadline to object is: May 28,2013. To learn how to object, see: www.PaymentCardSettlement.com or call 1-800-625-6440. Note: If you exclude yourself from the Cash Settlement Class you cannot object to the terms of that portion of the settlement.

For more information about these rights and options, visit: www.PaymentCardSettlement.com.

if tHe court APProves tHe finAL settLement

Members of the Rule Changes Settlement Class are bound by the terms of this settlement. Members of the Cash Settlement Class, who do not exclude themselves by the deadline, are bound by the terms of this settlement whether or not they file a claim for payment. Members of both classes release all claims against all released parties listed in the Settlement Agreement. The settlement will resolve and release any claims by merchants against Visa, MasterCard or other defendants that were or could have been alleged in the lawsuit, including any claims based on interchange or other fees, no-surcharge rules, no-discounting rules, honor-all-cards rules and other rules. The settlement will also resolve any merchant claims based upon the future effect of any Visa or MasterCard rules, as of November 27, 2012 and not to be modified pursuant to the

settlement, the modified rules provided for in the settlement, or any other rules substantially similar to any such rules. The releases will not bar claims involving certain specified standard commercial disputes arising in the ordinary course of business.

For more information on the release, see the settlement agreement at: www.PaymentCardSettlement.com.

tHe court HeAring ABout tHis settLement

On September 12, 2013, there will be a Court hearing to decide whether to approve the proposed settlement, class counsels’ requests for attorneys’ fees and expenses, and awards for the class representatives. The hearing will take place at:

United States District Court for the Eastern District of New York225 Cadman PlazaBrooklyn, NY 11201

You do not have to go to the court hearing or hire an attorney. But you can if you want to, at your own cost. The Court has appointed the law firms of Robins, Kaplan, Miller & Ciresi LLP, Berger & Montague, PC, and Robbins Geller Rudman & Dowd LLP to represent the Class (“Class Counsel”).

Questions?For more information about this case (In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, MDL 1720), you may:

Call toll-free: 1-800-625-6440Visit: www.PaymentCardSettlement.com Write to the Class Administrator:

Payment Card Interchange Fee SettlementP.O. Box 2530Portland, OR 97208-2530

Email: [email protected]

Please check www.PaymentCardSettlement.com for any updates relating to the settlement or the settlement approval process.

LegaL Notice

To merchants who have accepted Visa and MasterCard at any time since January 1, 2004:

Notice of a 6+ billion dollar class action settlement.

Notice of a class action settlement authorized by the U.S. District Court, Eastern District of New York.

This notice is authorized by the Court to inform you about an agreement to settle a class action lawsuit that may affect you. The lawsuit claims that Visa and MasterCard, separately, and together with banks, violated antitrust laws and caused merchants to pay excessive fees for accepting Visa and MasterCard credit and debit cards, including by:

•Agreeing to set, apply, and enforce rules about merchant fees (called default interchange fees);

•Limiting what merchants could do to encourage their customers to use other forms of payment through, for example, charging customers an extra fee or offering discounts; and

•Continuing that conduct after Visa and MasterCard changed their corporate structures.

The defendants say they have done nothing wrong. They say that their business practices are legal and the result of competition, and have benefitted merchants and consumers. The Court has not decided who is right because the parties agreed to a settlement. On November 27, 2012, the Court gave preliminary approval to this settlement.

tHe settLement Under the settlement, Visa, MasterCard, and the bank defendants have agreed to make payments to two settlement funds:

• Thefirstisa“CashFund”–a$6.05billionfund that will pay valid claims of merchants that accepted Visa or MasterCard credit or debit cards at any time between January 1, 2004 and November 28, 2012.

• The second is an “Interchange Fund” –estimated to be approximately $1.2 billion

– that will be based on a portion of theinterchange fees attributable to certain merchants that accept Visa or MasterCard credit cards for an eight-month “Interchange Period.”

Additionally, the settlement changes some of the Visa and MasterCard rules applicable to merchants who accept their cards.

This settlement creates two classes:

•A Cash Settlement Class (Rule 23(b)(3) Settlement Class), which includes all persons, businesses, and other entities that accepted any Visa or MasterCard cards in the U.S. at any time from January 1, 2004 to November 28, 2012, and

•A Rule Changes Settlement Class (Rule 23(b)(2) Settlement Class), which includes all persons, businesses, and entities that as of November 28, 2012 or in the future accept any Visa or MasterCard cards in the U.S.

wHAt mercHAnts wiLL get from tHe settLement

Every merchant in the Cash Settlement Class that files a valid claim will get money from the $6.05 billion Cash Fund, subject to adeduction (not to exceed 25% of the fund) to account for merchants who exclude themselves from the Cash Settlement Class. The value of each claim, where possible, will be based on the actual or estimated interchange fees attributable to the merchant’s MasterCard and Visa payment card transactions from January 1, 2004 to November 28, 2012. Payments to merchants who file valid claims for a portion of the Cash Fund will be based on:


•The total dollar value of all valid claims filed,

•The deduction described above not to exceed 25% of the Cash Settlement Fund, and

•The cost of settlement administration

and notice, money awarded to the class representatives, and attorneys’ fees and expenses all as approved by the Court.

In addition, merchants in the Cash Settlement Class that accept Visa and MasterCard during the eight-month Interchange Period and file a valid claim will get money from the separate Interchange Fund, estimated to be approximately$1.2billion.Thevalueofeachclaim, where possible, will be based on an estimate of one-tenth of 1% of the merchant’s Visa and MasterCard credit card dollar sales volume during that period. Payments to merchants who file valid claims for a portion of the Interchange Fund will be based on:


•The total dollar value of all valid claims filed, and

•The cost of settlement administration and notice, and any attorneys’ fees and expenses that may be approved by the Court.

Attorneys’ fees and expenses and money awarded to the class representatives: For work done through final approval of the settlement by the district court, Class Counsel will ask the Court for attorneys’ fees in an amount that is a reasonable proportion of the Cash Settlement Fund, not to exceed 11.5% of theCashSettlementFundof$6.05billionand11.5% of the Interchange Fund estimated to be $1.2billion tocompensateallof the lawyersand their law firms that have worked on the class case. For additional work to administer the settlement, distribute both funds, and through any appeals, Class Counsel may seek reimbursement at their normal hourly rates, not to exceed an additional 1% of the Cash Settlement Fund of $6.05 billion andan additional 1% of the Interchange Fund estimated to be $1.2 billion. Class Counselwill also request reimbursement of their expenses (not including the administrative costs of settlement or notice), not to exceed $40 million and up to $200,000 per Class

www.PaymentCardSett lement.com 1-800-625-6440 • info@PaymentCardSett lement.com

Si desea leer este aviso en español, llámenos o visite nuestro sitio web.

14 - ITB - FEBRUARY 15, 2013


OFFICE SECTOR

Frozen market warms up to health care interests


Throughout 2012, the office sector of commercial real estate likely was impacted the most by the ongoing political discourse in Washington, D.C., and a fragile economy locally.

Historically, small businesses have been the largest job creators, both nationally and locally. During 2012, however, most start-up and expansion plans were frozen by uncer-tainty about future federal regulations and taxes.

The crushing lack of confidence caused small business owners to shun risk-taking.

“As Congress continues to defer deci-sions on spending cuts, uncertainty contin-ues among investors and consumers,” said David Montijo, first vice president and of-fice specialist at CBRE.

Southern Arizona’s office sector “seemed to be in a quandary, waiting for the elec-

tions. Once the elections were over, there was a rash of head-scratching asking is it going to improve or get worse?” added Mi-chael Gross, office specialist with Tucson Realty & Trust Co.

Those national political, economic, tax and regulatory issues “and a lack of local market drivers supported a wait and see at-titude,” said Rick Kleiner, a principal with Picor Commercial Real Estate Services.

Other than eight million-dollar property sales, movement in the sector was narrow. Occupancy rates, for example, have idled for three years. At the end of 2010, the sector had 87.7 percent occupancy. It nudged up to 87.9 percent in 2011 and slipped to 87.8 percent last year.

There is 23.9 million square feet of office space in the region, according to CoStar. The most is in 1,216 Class B buildings at 16.5 million square feet. Class C space has 5 mil-lion square feet in 1,172 buildings.

Class A office space has only 18 proper-

ties totaling 2.4 million square feet. Region-wide, only 84 offices over 10,000 square feet are owner-occupied, accounting for 1.8 mil-lion square feet of space.

“Class A office will be next sector to shore up fundamentals, continuing to attract ten-ants seeking to upgrade their space,” said Asieh Mansour, senior managing director of CBRE Global Research. “Central business districts continue to outperform the sub-urbs as tenants increasingly prefer to locate in urban centers closer to a younger work-force, mass transit and cultural amenities.”

Changing economics also are luring back companies that traditionally located in a suburban campus setting.

In general, cities that appeal to the high-tech and energy sectors will see strong ab-sorption. Another major tenant pool will be health care, “which is being driven by the needs of the aging baby boomer genera-tion,” added Mansour.

For prospective tenants, Class A space

is about $20 to $25 per square foot for first-year, effective full-service, according to Gross.

“Negotiating is still the key. This market is a two-way street. The landlord can only survive if the tenant survives, and vice ver-sa,” Gross said.

Health care boostThe Affordable Care Act will have “wide-

spread implications” on the market, em-phasized Mansour. Typical demand-drivers of jobs, consumer spending and real estate will be replaced by health care demand-drivers “due to emerging, new alternative models of delivering medical care.”

Specifically, abundant vacancies in Class B retail centers and suburban office “make them prime candidates to meet the im-mediate demand for space,” Mansour said. “Suburban offices near hospitals are a con-version opportunity that will allow doctors

By the numbers Office Sector stats Base space2012: 23.9 million square feet 2011: 23.8 million square feet2010: 23.6 million square feet

Vacancy rate2012: 12.2 %2011: 12.1 %2010: 12.3%

New construction2012: 113,072 square feet2011: 235,950 square feet 2010: 132,428 square feet

Net absorption2012: 80,800 square feet2011: 248,304 square feet 2010: -175,861 square feet

Avg. asking rent2012: $18.57/square foot2011: $18.98/square foot 2010: $19.47/square foot

Class A average ask rent2012: $22.69/square foot 2011: $22.97/square foot 2010: $23.06/square foot

Class B average asking rent2012: $18.52/square foot2011: $19.10/square foot 2010: $19.76/square foot

source: cBRE and costar

Continued on Page 16

Pima County’s new justice court complex is progressing as scheduled on a 4.3-acre downtown site at 300 N. Stone Ave. Sundt Construction holds a $48 million contract to build out the seven-story tower’s core and shell.

otis

Bla

nk

ITB - FEBRUARY 15, 2013 - 15


V

REAL ESTATE SOLUTIONS

ATTENTION to the CLIENT. FOCUS on the GOAL. FIND the SOLUTION.

Commercial Property - Investment Property - Commercial leasing Asset Management - Property Management - Land and Development

Jon O’Shea - Director of Sales and LeasingRob Fischrup - Asset ManagerThrac Paulette - Land and Development

5102 E Pima StreetTucson, AZ 85712

[email protected]

www.vasttucson.com

16 - ITB - FEBRUARY 15, 2013


OFFICE SECTORand patients to move seamlessly between the two environments.”

“Now that the state is expanding its role with the Aff ordable Care Act, medical would be a most interesting niche to focus on this year. Th ere could be some real activity for large blocks of former retail buildings to be converted to medical offi ces,” said Picor’s Kleiner.

For two consecutive years, the offi ce sector has had positive absorption: 80,800 square feet in 2012 and 248,300 square feet in 2011, according to CoStar. Th at off set a net loss of 176,000 square feet in 2010, pri-marily due to large tenants that moved out of the UniSource Tower downtown.

Th e downtown district is still struggling to recover and “continues to have its chal-lenges,” said Montijo. Major move-outs and limited demand increased the vacancy rate by 310 basis points over the past 12 months, ending 2012 at 31.7 percent, the highest va-cancy rate of all zones, according to CBRE.

Last year, an additional 30,000 square feet was vacated there.

“Business disruption from construction of the streetcar also has driven potential tenants to other areas. Will they come back once the streetcar is complete? Only time will tell,” Montijo said.

At 1 E. Broadway, Caylor Construction is building a mixed-use, six-story offi ce build-ing with street-level retail and two fl oors of apartments. Th e $16 million building’s main tenants will be Pima Association of Governments and Regional Transportation Authority.

Although there is a lot of excitement downtown from an entertainment and life-style perspective, the long-term impact on the offi ce market is unknown. Space is read-ily available elsewhere at competitive pric-es, easier access and more parking.

“Whether all the downtown activity leads to small and mid-sized companies renting offi ce space there is a question in my mind.

You’d have to want an offi ce downtown, have a specifi c reason to be down there,” said Kleiner.

By size, the largest new offi ce was 84,353 square feet at 275 N. Commerce Park Loop. Th e three-story complex houses a new FBI regional offi ce. Overall leasing activity was very narrow with only two deals over 20,000 square feet.

Investor salesSales transactions were the only metric

to excel last year. Eight buildings sold for $1 million or more, representing $44 million worth of property.

Th e largest sale was $17.8 million for a 129,000 square-foot building at 950 N. Fi-nance Center Drive. It was acquired by the H.N. & Frances C. Berger Foundation as an investment and is leased by Gieco In-surance. Th e price was $137.86 per square foot.

Th e second-largest acquisition was $10

million for the 42,000 square-foot Universi-ty of Phoenix South Campus Building, 300 S. Craycroft Road. It was acquired by the Para-mount Group for $237.90 per square foot.

Other notable buys were $3.7 million by the Arizona Institute of Urology for 5668 N. Professional Park Drive; $3.4 million by Source Two Investments 1161 N. El Dorado Place; $3.35 million by Fenton Investments for Oracle Offi ce Plaza at 7491 N. Oracle Road; and $2.8 million by the Easter Seals Blake Foundation for the Corporate Center on Broadway at 7750 E. Broadway.

“We saw a frenzy of buying at the end of the year in anticipation of tax changes. I suspect there could be even larger invest-ment sales this year. As larger markets over-heat, investors will look at smaller markets like ours,” said Kleiner.


OFFICE Continued FRoM Page 14

Caylor Construction’s six-story, mixed-use tower is rising from a vacant lot downtown at 1 E. Broadway. The $16 million development will feature offi ce, retail and apartments.

geo

rge

How

ard

ITB - FEBRUARY 15, 2013 - 17


LAND SECTOR

Late land surge strong, but not quite a land rushBy Roger YohemInside Tucson Business

Th ey’re baaaack. Pounding away, helping to build up the economy again.

Large, national home building companies that pulled back or pulled out of Southern Ari-zona following the housing collapse in 2007 came back into market last year looking for “dirt.”

Driven by improving economics, builders spent $71 million to acquire land — the key as-set in their business plans.

Although pent-up demand for dirt was far from a land rush, it was “defi nitely a land surge,” said Will White, Tucson manager for Land Advi-

sors Organization.“Builders purchased about four times the

amount of lots in 2012 than in 2011, a positive sign for the market. For the fi rst time in seven years, national homebuilders are building their own lots again. Late in the year was incredible activity,” said White.

“Th e big story of the year and continuing into this year is the booming northwest. Th e land market in that district is very warm right now. Builders are looking at not only fully im-proved and platted lots but fi nally looking at va-cant land they want to title,” said Jim Marian, a founding member of Chapman Lindsey Com-mercial Real Estate Services.

“We even have a builder looking at a deal

that would require a rezoning. I can’t remember when last we had that conversation,” he added.

Marana’s Tangerine Corridor has had a strong three-year run and most of the remain-ing fi nished lots were bought in 2012.

White said the Dove Mountain and Rancho Vistoso master-planned communities will pro-vide the next round of entitled land, at a sub-stantial premium due to low supply, rising new home prices and strong consumer demand in the area.

Th e largest builder transaction in 2012 was D.R. Horton Homes’ $14.3 million acquisition (see table) of 265 fi nished lots on 68 acres at Saguaro Bloom on West Twin Peaks Road near Rattlesnake Pass at the north end of the Tucson

Mountains in Marana. Formerly known as Sa-guaro Springs, Horton’s purchase price works out to $53,656 per lot.

Th ere were two large acquisitions in Oro Valley’s Rancho Vistoso, including the regions second largest land purchase, 128 fi nished lots on 50 acres bought by Meritage Homes for $7.2 million.

Investors also were active, led by a $10 mil-lion acquisition by True Life Communities for 96 acres known as “Th e Donut Hole” at Rancho Vistoso Golf Course.

Total residential land sales doubled to $112 million in 2012 from $54 million in 2011, Marian said.

Continued on neXt Page

LARGEST LAND DEALS Homebuilder transactions

Sales price Buyer Location Acres/Lots Price per lot

$14.3 million DR Horton Homes Saguaro Bloom, Marana 68/265 fi nished $53,656

$7.2 million Meritage Homes Vistoso Town Center, Oro Valley 50/128 fi nished $56,250

$4.38 million DR Horton Homes Rancho Sahuarita 37/83 fi nished $52,843

$4.2 million Maracay Homes Tangerine/La Cholla, Oro Valley 53/68 platted $61,867

$3.5 million Richmond American Tangerine/R. Vistoso, Oro Valley 9/68 fi nished $50,544

Investor transactions$10 million True Life Communities Rancho Vistoso, Oro Valley 96 acres

$2.8 million SBH Sendero LLP Sendero Pass, SW Pima County 515 acres

$2 million Southwest DVI Property Stone Canyon, Oro Valley 146 acres

Source: Land Advisors Organization

The Donut Hole, 96 acres of prime developable land in and around the Rancho Vistoso Golf Course, was acquired by True Life Communities for $10 million last year. It was the region’s largest sale to investors.

geo

rge

How

ard

18 - ITB - FEBRUARY 15, 2013


LAND Continued FRoM Page 17

Looking back, 2011 “is clearly our rock bottom year for residential sales. But still, we are ebbing and fl owing along the bottom, no-where near where the market was in healthy years.”

Of the $112 million, builders spent about $71 million to buy land. Investors spent $22.5 million on land last year and apartment de-velopers spent $18 million.

Permits upAn increase in building permits is driving

land sales and builders’ business decisions to re-enter the market. Single-family permits rose from to 2,040 in 2012 from 1,438 in 2011, according to Ginger Kneup, owner of Bright Future Real Estate Research.

Th e two-year total for multi-family is 2,638 units and preliminary estimates show another 2,000 units being planned but not yet permit-ted for this year.

Th e jurisdiction that issued the most per-mits last year for single-family homes was

Pima County, at 572, followed by Marana at 526 permits.

Marian quipped that Oro Valley experi-enced “statistical euphoria” because its per-mit count soared 400 percent to 167 permits last year from 43 in 2011.

At year-end, there were 69 active single-family communities in the Tucson region. Based on sales trends, 30 of those develop-ments could sell out by December 2013, ac-cording to Dan Feig, a partner at Chapman Lindsey, and his associate, Aaron Menden-hall.

Based on 99 active communities in 2010, there were just 10.7 new home starts on av-erage per community for the year. In 2011 based on 86 active communities, the average fell to just 6.0 starts per community.

Last year, in only 69 communities, the pace jumped to 20.6 starts.

“Th ese starts per community average will remain high in 2013. Th e new home market has been gaining momentum, but the bottle-

neck of lot supply and limited communities will prevent the market from recognizing its full potential,” said Feig.

Market shareTh e top fi ve public homebuilders now

command about 75 percent of the region’s market share, noted White. Th e intense com-petition for market share and access to private equity and Wall Street funding has knocked most small, private companies out of the game.

“With builders, it’s about who controls the land,” he said.

Th e recession and housing collapse in 2007 changed the market’s dynamics so much that White believes “the 30-year history of specu-lative land development around here is over.”

Debt is dead as a fi nancing tool. Cash buys “have made the market healthier,” Marian added.

“Builders will have to be aggressive to achieve their goals over the next three years.

Larger transactions and eye-opening deals can be expected. Th e market will become very competitive for well-positioned lots and land deals,” White said. “Th is should be a monster year.”

Hmmm… Bob Solfi sburg, land specialist with Tuc-

son Realty & Trust, was a lone voice of cau-tion, tempering the enthusiastic optimism just a bit.

Although he agrees the dirt deals will be strong this year, he was the only land broker to mention that a dark cloud still hangs over the market.

It’s that proverbial skeleton in the closet.Following the market collapse, “a record

number of homeowners have battled nega-tive equity,” Solfi sburg said. “Keep in mind, all those residential loans underwater brings about the argument of shadow inventory.”


LAND SECTOR

WalMart continued its aggressive land acquisition program in 2012 and currently has at least four new projects planned throughout the region. In October, the company opened its newest Super Center in the market at 1260 E. Tucson Marketplace Blvd. near Kino Parkway and 36th Street, known as The Bridges.

aeira

l pho

to c

ourte

sy o

f Wal

Mar

t

ITB - FEBRUARY 15, 2013 - 19


Commercial Real Estate BrokersRank20132012

BusinessAddress

PhoneCompany EmailWebsite

No. of F-T LicensedCommercial RealEstate Agents

No. of F-TSupport Staff

No. Offices:LocalNational

Specialties Top Local Executives YearEstabl.Locally

11

CBRE3719 N. Campbell Ave.Tucson, AZ 85719

(520) 323-5100N/Acbre.com/tucson

36 10 1188

Industrial, retail, office, multi-family, land, hospitality, finance, valuation Don AheeIke Isaacson

1963

23

PICOR Commercial Real Estate Services1100 N. Wilmot Rd., Ste. 200Tucson, AZ 85712

(520) [email protected]

18 7 11

Sales and leasing of commercial property and property management Michael S. HammondEileen M. Lewis

1985

37

Tucson Realty & Trust Co.333 N. Wilmot Rd., Ste 340Tucson, AZ 85711


11 1 22

Sales and leasing of office, industrial and retail. Investments, land, farmand ranch and corporate services.

George H. Amos III 1907

45

Oxford Realty Advisor, Inc.6340 N. Campbell Ave., Ste. 200Tucson, AZ 85718


10 2 11

Office, medical, retail, industrial and investments Douglas E. Marsh 2000

42

Tierra Antigua Realty1650 E. River Rd., Ste. 202Tucson, AZ 85718


10 20 44

Residential and commercial resale Kimberly CliftonMatthew Clifton

2001

64

Long Realty Commercial Real Estate Services900 E. River Rd.Tucson, AZ 85718


8 5 921

All commercial real estate Don Booth 1926

711

Larsen Baker, LLC6298 E. Grant Rd., Ste. 100Tucson, AZ 85712


7 25 11

Brokerage, management and development of real estate in southernArizona

Donald BakerGeorge C. LarsenAndy Seleznov

1993

79

Volk Company2730 E. Broadway, Ste. 200Tucson, AZ 85716


7 2 11

Shopping centers, restaurants, investments Rick Volk 1987

98

Venture West Real Estate Services, LLC6007 E. Grant Rd.Tucson, AZ 85712


6 6 11

Development, construction, brokerage, leasing, property and assetmanagement

Neil R. SimonJordan S. Simon

1981

1013

Burris, Hennessy & Co.1802 W. Grant Rd., Ste. 110Tucson, AZ 85704


5 1 11

Commercial, industrial, residential W. Tim BurrisMichael Hennessy

1989

1013

Chapman Lindsey Commercial Real Estate Svcs., LLC7411 E. Tanque Verde Rd.Tucson, AZ 85715


5 0 11

Commercial and large residential land sales, brokerage, and leasingconsultation

Alan G. MooreJames B. MarianDaniel Feig

1990

1011

Key Group, Ltd.7459 E. BroadwayTucson, AZ 85710


5 3 11

Property tax appeals, commercial properties, land Alain G. HartmannTimothy M. AbramsKathryn Wiseman

1989

1313

Terramar Properties Inc.2200 E. River Rd., Ste. 105Tucson, AZ 85718

(520) [email protected]/A

4 1 11

Development, investment and asset management Terry L. KlippBob Morken Sr.

1973

149

Romano Real Estate Corp.3900 E. Via PalomitaTucson, AZ 85718


3 6 11

Retail shopping centers, office buildings, industrial Bruce A. RomanoDiane Cain

1986

14NL

Shenkarow Realty Advisors7059 N. Oracle Rd.Tucson, AZ 85704


3 2 11

Retail, office, development, investment Richard Shenkarow 1999

1416

The Harpel Company6057 E. Grant Rd.Tucson, AZ 85712


3 2 11

Retail brokerage Brian K. Harpel 2000

1417

Vast Commercial Real Estate Solutions, LLC5102 E. Pima St.Tucson, AZ 85712


3 4 11

Commercial leasing, sales, property management, residential sales,development consulting

Robert FischrupJon O'Shea

2008

1817

A.W. Marrs, Inc.3573 E. Sunrise Dr., Ste. 233Tucson, AZ 85718


2 1 11

Land sales, development Tony MarrsKit Marrs

1983

18NL

Arizona Acquisition Strategies9601 E. Catalina Hwy.Tucson, AZ 85749


2 1 11

Industrial property and business brokerage Timothy J. Bathen 2008

18NL

Camwest Group Inc.1743 W. Prince Rd., Ste. 101Tucson, AZ 85705


2 3 11

Development, property management and brokerage Edward J. Kocis Jr. 1991

1817

Commercial Real Estate Group Tucson4525 E. Skyline, Ste. 113Tucson, AZ 85718


2 0 135

Tenant and user representation Michael CoretzTim DeNiro

2008

1817

DESCO Southwest1795 E. Skyline Dr., Ste. 193Tucson, AZ 85718


2 1 13

Ownership of major commercial properties, real estate development andbrokerage services

Michael Sarabia 2001

1817

Marcus & Millichap Real Estate Investment Services4031 E. Sunrise Dr., Ste. 151Tucson, AZ 85718


2 1 172

Multi-family, office, retail, self-storage and manufactured housingcommunities

Steven Chaben 1995

1817

Mark Irvin Commercial Real Estate Services, LLC3777 E. Broadway, Ste. 210Tucson, AZ 85716


2 N/A 11

Office and medical, office leasing and sales Mark C. IrvinJanine C. Irvin

1995

1817

Tierra Antigua Realty - Downtown216 E. CongressTucson, AZ 85701

(520) [email protected]/commercial

2 0 44

Retail, development, multi-family Marylou Thompson 2010

2626

Art Kelley, CCIM1955 W. Grant Rd.Tucson, AZ 85745


1 0 11

Land, investment property, exchanges, retail Art Kelley 1996

2626

Commercial Retail Advisors, LLC5420 E. Broadway, Ste. 200Tucson, AZ 85711


1 1 11

Retail R. Craig Finfrock 2001

2626

Land Advisors Organization3561 E. Sunrise Dr., Ste. 207Tucson, AZ 85718

(520) 514-7454N/Alandadvisors.com

1 1 121

Land brokerage William C. White IIIGregory J. Vogel

2001

2617

Marquez Peterson Group LLC5874 E. Calle del CiervoTucson, AZ 85750


1 0 11

Business brokering, commercial real estate Lea Marquez Peterson 2005

2626

Trident Commercial Real Estate Company2730 E. Broadway Blvd., Ste. 135Tucson, AZ 85716


1 0 11

Commercial property brokerage and consulting Michael L. Ebert 2004

2626

Tucson Industrial Realty, LLC6061 E. Grant Rd., Ste. 119Tucson, AZ 85712

(520) 294-1610dave@tucsonindustrialrealty.comtucsonindustrialrealty.com

1 3 11

Industrial real estate sales and leasing, tenant and owner representation Dave GallaherSusan Gallaher

1984

Ranked by the number of full-time licensed commercial real estate agents (2 P-T = 1 F-T)Ranked information is provided by business representatives at no charge and is ranked alphabetically in case of ties. Other businesses were contacted but either declined or did not respond by deadline. There is no charge to be included in Inside Tucson Business listings.N/A=not provided WND=would not disclose NL=not listed last year NR=listed last year but ranking criteria not provided

20 - ITB - FEBRUARY 15, 2013


Commercial Real Estate ManagementRank20132012

BusinessAddress


Total Sq FtManaged

RetailOfficeIndustrial

Specialties Top Local Executives YearEstabl.Locally

11

PICOR Commercial Real Estate Services1100 N. Wilmot Rd., Ste. 200Tucson, AZ 85712


4,496,805 617,6692,138,1381,740,998

Sales and leasing of commercial property and property management Michael S. HammondEileen M. Lewis

1985

24

Venture West6007 E. Grant Rd.Tucson, AZ 85712


2,750,000 1,900,000850,000

0

Developing owner-occupied medical and office buildings, tenant improvements Neil R. SimonFred D. SteinigerJordan S. Simon

1981

35

Larsen Baker, LLC6298 E. Grant Rd., Ste. 100Tucson, AZ 85712


2,500,000 2,480,00020,000

0

Brokerage, management and development of real estate in southern Arizona Donald BakerGeorge C. LarsenAndy Seleznov

1993

46

Romano Real Estate Corp.3900 E. Via PalomitaTucson, AZ 85718


2,200,000 1,373,000741,00086,000

Retail shopping centers, office buildings, industrial Bruce A. RomanoDiane Cain

1986

53

Partners Management & Consultants, Inc.5055 E. Broadway, Ste. B100Tucson, AZ 85711


2,047,743 1,207,459721,506118,778

All commercial real estate Steven SchuylerValerie Schuyler

1987

67

Chapman Management Group33 W. Congress St., Ste. 205Tucson, AZ 85701


1,927,400 361,000959,400607,000

Office, retail, industrial Swain R. Chapman 1990

710

Paul Ash Management Co. LLC3499 N. Campbell Ave., Ste. 907Tucson, AZ 85719


1,745,316 1,054,767659,74530,804

Apartment communities, commercial properties Bruce AshPaul AshBarry Edberg

1970

88

Southwest Commercial Management, LLC2900 E. Broadway, Ste. 116Tucson, AZ 85716


1,202,100 855,695346,405

0

Retail, government, medical, high-rise office Lynn Kastella 1989

911

Tucson Realty & Trust Co. Management Services, LLC2525 E. Broadway, Ste. 111Tucson, AZ 85716


750,000 205,000350,000195,000

Full-service management, single family, multi-family, commercial, HOA and trustee/receivershipservices

George H. Amos IIIMarcy Kline

1911

1014

DESCO Southwest1795 E. Skyline Dr., Ste. 193Tucson, AZ 85718


350,000 0100

0

Ownership of major commercial properties, real estate development and brokerage services Michael Sarabia 2001

1113

Holladay Properties6130 N. La Cholla, Ste. 230Tucson, AZ 85741


321,816 0321,816

0

Medical office buildings Susan FrizzellElizabeth "Betsy" Johnson

2010

1215

Tucson Industrial Realty, LLC6061 E. Grant Rd., Ste. 119Tucson, AZ 85712

(520) 294-1610dave@tucsonindustrialrealty.comtucsonindustrialrealty.com

298,000 00

298,000

Industrial real estate sales and leasing, tenant and owner representation Dave GallaherSusan Gallaher

1984

1312

Anthem Equity Group, Inc.1600 N. Kolb Rd., Ste. 118Tucson, AZ 85715


180,000 068,000

112,000

Property management, investments, development Rodger FordDavid MackstallerDiana Dessy

1991

1417

Hazen Enterprises3320 N. Country Club Rd.Tucson, AZ 85716


165,000 0165,000

0

Townhomes, commercial office space Brandt Hazen 1980

1518

Peach Properties Inc.44 E. Broadway, Ste. 300Tucson, AZ 85701


143,138 123,90219,236

0

Small communities Ron SchwabeJeanne Tolin

1982

1619

Oxford Realty Advisors, Inc.6340 N. Campbell Ave., Ste. 200Tucson, AZ 85718


110,000 0110,000

0

Office, medical, retail, industrial and investments Douglas E. Marsh 2000

Ranked by the total square footage managedRanked information is provided by business representatives at no charge and is ranked alphabetically in case of ties. Other businesses were contacted but either declined or did not respond by deadline. There is no charge to be included in Inside Tucson Business listings.N/A=not provided WND=would not disclose NL=not listed last year NR=listed last year but ranking criteria not provided

NEWS TO YOU! Business news delivered to you from inside tucson Business. go to http://bit.ly/37uSS7 to sign up. Best part — It’s Free!

ITB - FEBRUARY 15, 2013 - 21


Services Offered:• Acquisition Loans• Refinance Loans• Bridge Loans

• Construction Loans• Equity Placement• Property Tax Appeal

$1.8 Billion Funded

Contact Ryan Johnson

Call Ryan: 520.305.3222Email Ryan: [email protected]

Office: 2601 N. Campbell Ave,Suite 201-7Tucson, AZ 85719

Newmark Realty Capital, Inc. is proud to announce that it closed over $1.8 Billion

in commercial and multi‐family real estate loans in 2012 representing over 200 transactions with

more than 60 different lenders.

Ryan JohnsonVice President

PROFILE

CCIM designation helps get deals doneBy Christy KruegerInside Tucson Business

Only a few dozen commercial real estate professionals in Tucson have earned the privi-lege to add the letters CCIM after their name. And those who have feel it’s an important cre-dential that can help open doors and boost their careers.

A Certifi ed Commercial Investment Mem-ber (CCIM) designation represents a grueling educational program and a high level of real-world industry experience.

“It’s a group who have taken four, one-week-long courses and submitted a resume of transactions and taken an exam to qualify,” ex-plained J. Terry Lavery, CCIM, associate broker with Tucson Realty and Trust Co. and a CCIM board member.

Advantages of such membership, Lavery added, include access to cutting-edge technol-ogy and pooled resources, as well as opportuni-ties to network with others in the industry who feel an obligation to support one another.

CCIM Southern Arizona chapter has about 150 members, 48 of which are designees.

Th is year’s president, David Blanchette, CCIM, of CBRE, said the organization has mem-bers from all types of services related to com-mercial real estate, such as brokers, lenders, title company representatives and appraisers.

Blanchette agrees that the networking as-pects of CCIM membership can be a signifi cant help in their business.

“Any member has a lot of resources at hand. I refer to these people for information to make deals happen or make decisions for clients re-garding business opportunities. It’s a close-knit group of people who want the networking sup-port of other members,” Blanchette said.

Lavery pointed to the group’s strength when it comes to lobbying local governments.

“We work as a unit, especially meeting with county and city offi cials, when trying to get po-litical clout,” he said.

Th e CCIM chapter holds lunch meetings the second Tuesday of each month. Attendees

are given a chance to network before the guest speaker presents a topic.

Members also are involved in community service activities, Blanchette noted.

“We assist the U.S. Postal Service in collecting food for the Food Bank. We helped with lunch and dinner at the Ronald McDonald House last year. We also have diff erent fundraising events as they develop,” he said. “We raised money to send troops in Afghanistan gift boxes and care packages.”

Th e group’s largest event of the year is the Pima County Commercial Real Estate Market Forecast Competition. It was started in the 1990s by James Marian, CCIM, of Chapman Lindsey Commercial Real Estate Services. Th e friendly contest features top professionals in their specialties predicting market data for the upcoming year.

Metrics such as vacancy rates and cost per square foot are used in the industrial, offi ce, re-tail and multi-family categories. In the land seg-ment, contestants forecast the number of build-ing permits that will be issued in Pima County.

“At the end of the year, we’ll go through data and determine who has the closest prediction in each category,” said Blanchette. Winners are determined by comparing forecasts to year-end numbers available from CoStar and other real estate reports.

During the Forecast Competition, the win-ner from each category gives a presentation and then joins the other two top fi nalists from his specialty area for a panel discussion, answering questions from the audience. Blanchette said it’s always open to non-members and is a good place to receive information on market condi-tions and opportunities.

Th is year’s event was Feb. 12 at the Marriott University Park, 880 E. Second Street. Th e key-note speaker was Fletcher McCusker, chairman of Rio Nuevo Board, who will give an update on downtown Tucson development.

In addition, Louise Marshall (posthumous-ly), who established he Marshall Foundation; and builder/developer Peter Herder were hon-ored with a Legends Award for their pioneer-

ing contributions to the local commercial real estate industry.

Blanchette predicts a continuation of the past year’s upward trend.

“Vacancy rates have come down in the last year and there’s been a tremendous amount of investment by public and private organizations in Tucson, so the community is more robust,” he said. “I have a positive view of commercial real estate in Southern Arizona.”

Local chapter offi cers, from left, are: vice president James Robertson; treasurer Brandon Rod-gers; secretary Gary Andros; and president David Blanchette.

otis

Bla

nk

BIZ FACTS

CCIM Southern Arizona ChapterPresident: david Blanchette, senior associate, industrial properties, CBRe Vice President: James Robertson, senior commercial associate broker, Realty executives tucson elite Treasurer: Brandon Rodgers, industrial specialist, Cushman & Wakefi eld/Picor Commercial Real estate Services Secretary: gary andros, managing member, andros Com-mercial Properties Designation promotion: J. terry Lavery, commercial broker, tucson Realty & trust Scholarship and candidates: Melissa Lal, leasing agent, Larsen Baker Community service: Lori Schroeder, vice president and escrow admin-istrator, Catalina title agency Immediate past president: Howard Kong, director and managing broker, newmark grubb Knight Frank Chapter Administrator: aaron Reid chapters.ccim.com/southernarizona

22 - ITB - FEBRUARY 15, 2013


Commercial Building ContractorsRank20132012

BusinessAddress


Total ContractsCompleted LastYear $

% of WorkSubcontracted

No. of F-TLocalEmployees

Specialties Top LocalExecutives

YearEstabl.Locally

12

Sundt Construction, Inc.2015 W. River Rd., Ste. 101Tucson, AZ 85704


123.8M 70% 202 Education, laboratory, office, public safety, justice, medical, industrial David CrawfordKurt WadlingtonMarty Hedlund

1929

25

Lloyd Construction Co., Inc.2180 N. Wilmot Rd.Tucson, AZ 85712


56.7M 85% 40 K-12 and higher education, public works, health care William E. LloydBryan J. LloydBradley J. Lloyd

1969

36

Barker Morrissey Contracting, Inc.3619 E. Speedway, Ste. 101Tucson, AZ 85716

(520) 323-3831N/Abarkermorrissey.com

42.0M 90% 40 General contracting, design/build, solar fields, medical facilities, historic restoration Kevin MorrisseyBrian Barker

2004

44

Concord General Contracting, Inc.1636 N. Swan Rd., Ste. 103Tucson, AZ 85713


40.0M 85% 40 Design/build, construction manager at risk, historic renovation, commercial,religious, education and health care

John R. NymanDale MarrEric Peterson

1992

53

W.E. O'Neil Construction710 S. Campbell Ave.Tucson, AZ 85719


34.6M 85% 21 Design/build, construction manager at risk, healthcare, multi-family, senior living,hospitality, education, retail, office, high tech

John HobbsTommy RoofDick Schmidt

1982

610

BFL Construction Co., Inc.700 E. Broadway, Ste. 200Tucson, AZ 85719


20.5M 85% 31 Health care, bio medical, construction manager at risk Garry BravBill VandenBerg

1973

77

Chestnut Construction Corp.2127 E. Speedway, Ste. 101Tucson, AZ 85719

(520) 733-3300tchestnut@chestnutconstruction.comchestnutconstruction.com

20.0M 85% 22 General commercial contractor, design/build, construction manager at risk Thomas E. ChestnutPatrick S. Johnson

1990

88

Division II ConstructionP.O. Box 85250Tucson, AZ 85754


18.4M 75% 30 Retail, medical, educational, religious - new construction and tenant improvements Lynn James CatalfamoDennis ColeRobert Kline

1982

99

Lang Wyatt Construction2127 E. 14th St.Tucson, AZ 85719


18.0M 98% 15 Commercial construction Janice L. Wyatt 1984

1011

Epstein Construction LLC990 E. 17th St., Ste. 106Tucson, AZ 85719

(520) 806-4000mepstein@epsteinconstructionaz.comepsteinconstructionaz.com

11.0M N/A 11 Design/build, medical, health care, dental, office, retail, new construction Michael B. Epstein 2008

1112

Rio West Development & Construction, Inc.2440 S. 34th Pl.Tucson, AZ 85713


10.2M 80% 9 General contracting, tenant improvements, solar/renewable energy Walter E. HogeBrad K. Hoge

1994

1217

Caylor Construction Co.6422 E. Speedway, Ste. 130Tucson, AZ 85715


8.5M 85% 16 Construction and development Rob Caylor 1961

1316

Desert Mountain Construction911 W. Grant Rd.Tucson, AZ 85705


8.0M 50% 25 Custom home building, residential remodel, commercial construction and remodel Thomas RaeDouglas Gratzer

1997

1313

Eastern Style Builders Inc., dba ESB Modular Mfg.11280 W. Adonis Rd.Marana, AZ 85658


8.0M 0% 30 Modular building manufacturing, commercial general contractor Lois MoreyPatricia SeePaul See

1984

15NL

Camwest Group Inc.1743 W. Prince Rd., Ste. 101Tucson, AZ 85705


7.0M 85% 5 Development, property management and brokerage Edward J. Kocis Jr. 1991

1619

Kittle Design and Construction, LLC2539 N. Balboa Ave.Tucson, AZ 85705


5.8M 75% 10 Commercial remodels and new construction, design/build Tom Kittle 2001

1714

Venture West6007 E. Grant Rd.Tucson, AZ 85712


5.2M 100% 18 Developing owner-occupied medical and office buildings, tenant improvements Neil R. SimonFred D. SteinigerJordan S. Simon

1981

18NL

United Builders, LLC3366 N. Dodge Blvd.Tucson, AZ 85716


5.0M 80% 5 Government, medical, design/build, office Andrew Karic 2008

1918

Ventura Pacific Development10371 N. Oracle Rd., Ste. 104Oro Valley, AZ 85737

(520) 327-6400doug@venturapacificdevelopment.comventurapacificdevelopment.com

3.5M 95% N/A Health care and hospitality Douglas Peery 2009

2020

Cutshaw Construction, Inc.3900 E. Timrod St., Ste. 1Tucson, AZ 85711


2.0M 90% 5 Custom, boutique David Cutshaw 1991

2122

The J.R. Tuttle Co.2713 W. Violet Ave.Tucson, AZ 85705


1.8M 60% 4 Steel fabricators and erectors Mark BrownellPatricia Brownell

1985

22NL

Baird Builders, Inc.1600 N. Tucson Blvd., Ste. 200Tucson, AZ 85716


1.6M 90% 6 All commercial real estate, custom homes Michael S. BairdSean Baird

1987

2320

Maly & Associates and Maly Construction4729 E. Sunrise Dr., Ste. 312Tucson, AZ 85718


1.5M 20% 44 Remodels, room additions, tenant improvements Marigale Maly 1982

2424

Presidio Construction Company739 E. Ninth St.Tucson, AZ 85719


1.2M 60% 5 Commercial, restaurants, tenant improvements, remodeling, new construction Richard A. Kepner 1977

2524

American Play Systems, LLC5128 N. Casa Grande Hwy.Tucson, AZ 85743


1.0M N/A 6 Playground equipment, shade structures, park equipment, ramadas, groundsurfacing, park and site furnishings

Debbie A. MooreCraig H. Moore

1997

2626

Turnkey Corporation3260 S. Chrysler Ave.Tucson, AZ 85713


750,000 N/A 9 Work stations, cabinets, reception desks, information booths, nurses stations,laboratory casework, as well as custom millings for contractors

John Henderson 1972

2727

IronHawk Elevator LLC1830 E. Broadway, #124-148Tucson, AZ 85719


550,000 0% 4 Elevator service, maintenance, upgrade/modernize, repair, refurbish, troubleshoot,construct

Laura J.F. MullenWilliam I. Mullen

2010

Ranked by the total value of contracts completed last year in millions of dollarsRanked information is provided by business representatives at no charge and is ranked alphabetically in case of ties. Other businesses were contacted but either declined or did not respond by deadline. There is no charge to be included in Inside Tucson Business listings.N/A=not provided WND=would not disclose NL=not listed last year NR=listed last year but ranking criteria not provided

ITB - FEBRUARY 15, 2013 - 23


LEADERSHIP MATTERS

Hats off to our 2012 Division Leaders

www.PICOR.com • 520.748.7100

Of� ce Rick KleinerRetail Rob Tomlinson

Industrial Rob GlaserMultifamily Bob Kaplan

CONGRATULATIONS 2012 AWARD RECIPIENTS

Barb

i Reu

ter,

RPA

PRE

SIDE

NT’

S AW

ARD

FOR

EXCE

LLEN

CERo

b G

lase

r, C

CIM

, SIO

R

#1

PROD

UCER

Rick

Kle

iner

, MBA

#2

PROD

UCER

Russ

Hal

l,SI

OR,

GSC

S

#3

PROD

UCER

Mon

a D

eane

PRO

PERT

Y M

ANAG

ER O

F TH

E YEA

R

Lind

a M

onte

s-C

ota

TEN

ANT

RELA

TION

S AW

ARD

24 - ITB - FEBRUARY 15, 2013


commercial real estate 2013 - inside tucson business

Documents

commercial real estate

tucson business wells

land sector

sba loans

small business administration

americas sba lender

multifamily sector

right business financing