Owner-Users Building Ahead of Interest Rate Rise
Janet Yellen might be holding off on raising interest rates for now, but it won't be long—and the anticipation of an increase is spurring build-to-suit deals in Phoenix.
LGE Design Build president Dave Sellers tells us that he's seen increased activity in owner-occupied build-to-suits in the Phoenix market over the last 12 months. Low interest rates are a factor, but so is the lack of available quality existing product, he says. It's also important that there are specialists in the market (such as LGE) that can deliver this kind of product in a timely manner, he adds.
Recently LGE completed construction on a 64k SF office and warehouse building in Chandler for Savage Universal, which provides products for the photography industry (including 65% of the world market in photographic background paper). Needing a more efficient space for its HQ, Savage wanted a new building at the gateway of the Chandler Airport Business Park at 2050 S Stearman Dr. The building also includes a small museum, located near the front lobby, that will showcase historic equipment, catalogs, brochures and other company documents dating to the 1930s. |
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Tenants Still Have an Edge (If They Strategize)
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There's more demand for office space in Phoenix now, and large blocks with the right amenities are harder to find, but tenants can still find the space they need. "Markets differ over time in terms of the balance of power between landlords and tenants, but no matter what the dynamics, it's always important for a tenant to negotiate from a position of strength," Savills Studley SVP and Phoenix branch manager Tiffany Winne tells us. Snapped: family members Sophie, George, Madison (dog), Tiffany and Zachary. |
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Crafting the right strategy depends on the situation, Tiffany adds, and it can be more challenging in a rising market, but there's always a way. Recently, Savills Studley expanded into the Phoenix market (its 26th US location), tapping Tiffany to open and lead the new office. Over the course of her career, she's done about 10.8M SF in deals, repping clients in financial services, law, media and technology, health care, not-for-profit and other industries. Tiffany has hired industry vets Ryan Bartos and Matthew Coxhead to work with her. |
PB Bell Buys Apartments for $33M
Scottsdale-based PB Bell Cos acquired the 294-unit The Boulevard apartment complex in north Phoenix for $33.5M. Colorado-based Slavin Residential was the seller, and Legacy Capital arranged a $26.8M loan for PB Bell to facilitate the deal. The buyer plans to invest $2M in upgrades to the complex, which was originally developed in 1994, reports the Phoenix Business Journal. CBRE's Sean Cunningham and Tyler Anderson brokered the deal. [PBJ]
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Investor Bag Health Club, Adjacent Site
Integrated Real Estate Services acquired a 45k LA Fitness and the lease-fee interest in an adjacent 14.5-acre site within Camelback Village Square shopping center in Phoenix. The investor paid $8.4M. The health club is at 710 W Camelback Rd, with the land parcel at Camelback and 7th Avenue. Marcus & Millichap's Jamie Mecress and Mark Ruble repped both the buyer and the seller in the deal, CoStar reports. The seller was Wells Fargo Bank, as trustee. [CoStar] |
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MEB Management Services: Big Fish in the Rental Market
The American Dream of home ownership, while fading, is not yet flatlining, says MEB Management Services SVP Mark Schilling. It may be premature to assume that Millennials are not about buying single-family homes, he says, and a careful eye needs to be kept on the trend's ultimate direction. Mark adds that about 8,000 units are going to be delivered to the Phoenix rental market this year, which will not make a significant negative impact on occupancy rates. Rental rates should climb 2.5% to 4%, depending on asset quality and location. Mark joined the management services firm nine years ago, and has been a partner for two years. MEB started out with 4,000 units and that has since grown to 22,000. For more info on our Bisnow partner, click here.
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