PHOENIX—The Phoenix industrial market started the year with strong leasing activity, increasing development and steady rental rates. The market had 1.6 million square feet of positive absorption, while new deliveries of over two million square feet caused vacancy to remain at 9.8%. In 2017, demand and rental rates are expected to rise, thanks to the strong economy. The Phoenix unemployment rate sits at 4.5%, only a 10 basis point decrease from the 4.6% recorded this time last year.

Chandler Airport, SC South of Salt River and South Airport have the highest vacancy rate, while West Phoenix, West Phoenix and Central Phoenix had the lowest. There is 4.5 million square feet of industrial space under construction, and new deliveries in 2017 could temporarily ease the tightening market. Asking rental rates for all industrial properties maintained the average price of $0.57 per square foot on a triple-net basis, which represents a 5.6% year-over- year increase in rates. On the retail side, total vacancy decreased by 20 basis points to 8.6%, a result of 803,000 square feet of positive net absorption and close to 1.0 million square feet of leasing activity this quarter. With growing demand the market continues to tighten, and we expect increased competition for space and higher rates to continue in 2017. The Phoenix unemployment rate sits at 4.5%, only a 10 basis point decrease from the 4.6% recorded this time last year. The overall retail vacancy level of 8.6% represents the lowest vacancy rate recorded since the third quarter of 2008.

(SOURCE: KIDDER MATTHEWS)

RIVERSIDE, CA—The Riverside market ended the first quarter of 2017 with a lack of inventory, but continued to post strong activity and gross absorption. Gross absorption for 2016 totaled 19.3 million square feet, continuing on the heels of the great absorption performances in 2015 of 15.3 million square feet and 2014 of 11.4 million square feet. Gross activity in the first quarter was 4.6 million square feet, with investment purchases and lease renewals accounting for 36.6% of the total. Overall gross activity will remain strong, however, there is a lack of inventory as vacancy rates remain low. Absorption is expected to remain strong throughout 2017, although it may not keep up with the pace seen in 2016. First quarter 2017's absorption figures were just over 2.9 million square feet, compared to 5.1 million square feet during the same period last year.

(SOURCE: LEE & ASSOCIATES)

PHOENIX—Asking rents in the Phoenix office market have increased to the highest level in nine years to $24.91 per-square-foot. The average rent is 7.1% lower than the pre-recession high of $26.82, set in Q4 2007. Total vacancy remains relatively unchanged, still less than 20%, and as new construction just slightly outpaces demand with 1.1 million square feet of space delivered in the first quarter. Half of all new space delivered in Q1 2017 was preleased product, primarily at the Marina Heights/State Farm development in downtown Tempe.

(SOURCE: JLL)

DEALTRACKER

SANTA MONICA, CA—DR Investments LLC has acquired Piazza Montana, a 9,799 square foot creative office mixed-use building in Santa Monica for $15.5 million or $1,582 per square foot. The property is located on the corner of Montana and Lincoln at 729 Montana Avenue, and was built in 2001. It features creative office space, ground level retail, and two top floor luxury apartments, and is approximately 7 blocks from the Third Street Promenade. The building was 100% leased at the time of the sale. SVP Ted Zwicker with NAI Capital represented the buyer in the deal.

HOLLYWOOD, CA—6344 Fountain Avenue, a two-story, 29,000-square-foot office and post-production space fully leased to Deluxe Entertainment Services Group, has traded hands for $12.6 million between Ascent Media and an undisclosed buyer. The property is located in the heart of Hollywood's Sunset & Vine Media District, one of the premier office markets in Southern California and home to the world's leading entertainment firms. The two-story building, with two-level subterranean parking garage, was originally constructed in 1988 and has been built out as a post-production facility. Madison Partners' Bob Safai, Matt Case and Brad Schlaak represented the seller in the deal.

SALT LAKE CITY, UT—South Towne Corporate Center, a two-building, Class A office property totaling 262,219 square feet in Sandy, UT, has traded hands. NGKF Capital Markets' President of West Coast Capital Markets Kevin Shannon, Ken White, Rick Stumm and Eli Mills with CBRE represented the seller, a joint venture between Oaktree Capital Management and Hines. The same brokerage team also represented the buyer, a joint venture between EverWest Real Estate Partners and Independencia Asset Management. The property is on 10.74 acres at 150 and 200 West Civic Center Drive, and includes two, six-story buildings. South Towne is 96% leased to a high quality tenant base that includes E*Trade Financial, CoreLogic Solutions, Cadence Design Systems and New York Life Insurance Company.

PHEONIX—The Shops at Sossaman in Mesa, Arizona has traded hands between 7641 E. Guadalupe, LLC and AEI Sossaman. CBRE's Phoenix Steve Julius and Jesse Goldsmith represented the seller. Originally constructed in 2002, the center features approximately 34,294 square feet of leasable retail space. The property contains a mix of food and service tenants with nearby national retailers including CVS and AutoZone. Located near ASU's Polytechnic campus at Phoenix-Mesa Gateway Airport, the property is near the Loop 202 and U.S. 60 freeways as well as several master-planned residential communities.

LOS ANGELES—An unnamed borrower has secured $50 million in construction financing for the development of Timbers Kiawah – Ocean Club & Residences, a private oceanfront residence club on Kiawah Island in South Carolina. HFF secured the funds on behalf of borrower to secure the financing from Mosaic Real Estate Credit. Timbers Kiawah – Ocean Club & Residences, due for completion in summer 2018, will consist of a total of 21 fractional-ownership residences across three residential buildings, each with six ocean residences on the first three levels and an expansive fourth-floor ocean penthouse.

RIALTO, CA—Colliers International and Lee & Associates have tapped to exclusively market for lease the recently completed I-210 Logistics Center II in Rialto, Calif., a 758,940-square- foot Class A cross-dock warehousing and distribution facility recently acquired by a Brookfield-sponsored real estate fund. Located at 1686 W. Baseline Road in the Inland Empire, the bog box building is one of the fund's marquee logistics properties. Colliers Executive Vice President Mark Zorn and Michael Chavez of Lee & Associates, will be responsible for leasing the facility. Along with some 6,594 square feet of office space designed for administrative purposes, the free-standing, cross- dock facility is located on more 35 acres and features 36-foot minimum clearances, 103 dock-high loading doors, 4 grade-level loading doors, parking for 237 semi-truck trailers, secured concrete truck courts measuring from 185-224 feet, and 240 automobile parking spaces (expandable to 422 spaces) for employees and visitors.

LOS ANGELES—Barak Investors Group and MIP Investment have acquired a class A-office building located at 3330 Cahuenga Blvd. in “the high 30s.” NGKF's Kevin Shannon represented the seller on this transaction. Barak Investors Group & MIP Investment arranged the acquisition of this transaction to the investors Cahuenga Investment and Cahuenga Equity. The property is a 5-story Class A steel-frame office building, containing 103,154 square feet of rentable area, located in the prestigious Universal City market. It is 92% leased to an excellent tenant roster that includes Extreme Reach, Inc., Panasonic, EPSCineworks, and Abominable Pictures. 3330 Cahuenga caters to the market's deep media, entertainment, and tech tenant base found immediately in Universal City and the adjacent Burbank and Hollywood markets.

NEWPORT BEACH, CA—Bixby Land Company has sold the former Kawasaki USA headquarters in Irvine, Calif. to Karma Automotive, LLC for $56.25 million. Karma, an American car company that manufactures luxury hybrid plug-in vehicles, had previously leased the 262,463-square-foot facility in August 2016. Bixby initially acquired the project, located at 9950 Jeronimo Road, with plans for a major repositioning into a dynamic workplace that would appeal to larger companies. Gregg Haly and Jeff Carr of CBRE represented Bixby in the transaction, while Karma Automotive was represented by Kevin Leonard of Heathwest Realty. Karma is underway with its own designs for the new headquarters location, including a Branded Experience Center for its new Revero luxury sedan and ample employee amenities inspired by Bixby's initial designs and in high demand by today's workforce.

LAS VEGAS—MG Properties Group has acquired Sedona at Lone Mountain and Prelude at the Park Apartments in Las Vegas, Nevada. The two separate acquisitions total 641 units and approximately $68 million. Sedona at Lone Mountain Apartments was built in 1999 and consists of 321 units in North Las Vegas. The property was purchased for $34.7 million and required the assumption of existing Freddie Mac loans. Executive managing directors Doug Schuster and Curt Allsop, director Vittal Ram and associate Angela Bates of ARA, A Newmark Company, represented the seller. Prelude at the Park Apartments was built in 1997 and consists of 320 units in desirable Henderson, NV. MGPG plans an extensive renovation of common areas and unit interiors. Brian Eisendrath and Cameron Chalfant of CBRE secured a $21.97 million Fannie Mae loan for the purchase. The property was purchased for $33,500,000. SVP Tom Naseef and VP Garry Cuff of Colliers International represented the seller.

BUILDING BLOCKS

VACAVILLE, CA—Community Development Partners has broken ground on Rocky Hill Veterans Housing. Located at 582 Rocky Hill Rd in Vacaville, CA, the property is only new affordable developments targeting veterans in Solano County. The $21-million project will provide much-needed housing for chronically homeless veterans, and low-income veterans and families. Rocky Hill will have 39 new, high-quality permanent rental homes for people earning 15% to 60% of the Area Median Income. Twenty-nine units will be reserved for veterans, with the remainder having a veteran preference. Services include case management, substance abuse counseling, and assistance with locating community services. The innovative project's structural system is comprised of modified steel shipping containers, which is stronger than typical wood framing. The project is designed to achieve LEED Gold certification, and is scheduled for completion in December 2017.

PERRIS, CA—Rockefeller Group has acquired 68 acres of industrial land in Perris with plans to build two premier distribution centers totaling 1.45 million square feet and located approximately 70 miles east of the Ports of Long Beach/Los Angeles. The site is also strategically located within eight hours of customers in Nevada, Utah, Arizona, and New Mexico. The logistics center will offer two buildings, one of approximately 1 million square feet, which will be one of the largest distribution buildings along the corridor, and a second building, which will be approximately 400,000 square feet. Both buildings will be state-of-the-art, Class A distribution centers with 232 total truck bays, 449 trailer-parking stalls and 36-and 32-foot clear heights, which allow for more cubic storage.

LOS ANGELES—Markets throughout the Southwest region reported strong activity in the first quarter of 2017. In Phoenix, industrial and office rents continued to rise with demand keeping pace with construction. In Riverside, the extreme lack of supply didn't hamper absorption rates and pushed rental rates to new heights. In Los Angeles, employment growth was strong, with education and healthcare continuing to be a leader in jobs. Here's a look at this week's trends, announcements and deals that you may have missed in Southern California, Utah, Arizona and Nevada.

BY THE NUMBERS

LOS ANGELES—Nonfarm payrolls in Los Angeles County grew by 1.9%, adding a total of over 84,500 new jobs last year. This steady increase puts Los Angeles employment growth at 2%, on par with the state, but slightly behind other economic powerhouses in California, like San Francisco, which saw 2.6% employment growth, and the Inland Empire, which saw 3.2% growth in the same period. The unemployment rate in Los Angeles County dropped by about 1%, going from 5.8% to 4.9%, as nearly 44,000 more people entered the labor force. Education/Health industry, which expanded by 4.7% or about 35,400 new jobs, drove much of the job growth. The bulk of these jobs came from health care providers.

(SOURCE: BEACON ECONOMICS)

PHOENIX—The Phoenix industrial market started the year with strong leasing activity, increasing development and steady rental rates. The market had 1.6 million square feet of positive absorption, while new deliveries of over two million square feet caused vacancy to remain at 9.8%. In 2017, demand and rental rates are expected to rise, thanks to the strong economy. The Phoenix unemployment rate sits at 4.5%, only a 10 basis point decrease from the 4.6% recorded this time last year.

Chandler Airport, SC South of Salt River and South Airport have the highest vacancy rate, while West Phoenix, West Phoenix and Central Phoenix had the lowest. There is 4.5 million square feet of industrial space under construction, and new deliveries in 2017 could temporarily ease the tightening market. Asking rental rates for all industrial properties maintained the average price of $0.57 per square foot on a triple-net basis, which represents a 5.6% year-over- year increase in rates. On the retail side, total vacancy decreased by 20 basis points to 8.6%, a result of 803,000 square feet of positive net absorption and close to 1.0 million square feet of leasing activity this quarter. With growing demand the market continues to tighten, and we expect increased competition for space and higher rates to continue in 2017. The Phoenix unemployment rate sits at 4.5%, only a 10 basis point decrease from the 4.6% recorded this time last year. The overall retail vacancy level of 8.6% represents the lowest vacancy rate recorded since the third quarter of 2008.

(SOURCE: KIDDER MATTHEWS)

RIVERSIDE, CA—The Riverside market ended the first quarter of 2017 with a lack of inventory, but continued to post strong activity and gross absorption. Gross absorption for 2016 totaled 19.3 million square feet, continuing on the heels of the great absorption performances in 2015 of 15.3 million square feet and 2014 of 11.4 million square feet. Gross activity in the first quarter was 4.6 million square feet, with investment purchases and lease renewals accounting for 36.6% of the total. Overall gross activity will remain strong, however, there is a lack of inventory as vacancy rates remain low. Absorption is expected to remain strong throughout 2017, although it may not keep up with the pace seen in 2016. First quarter 2017's absorption figures were just over 2.9 million square feet, compared to 5.1 million square feet during the same period last year.

(SOURCE: LEE & ASSOCIATES)

PHOENIX—Asking rents in the Phoenix office market have increased to the highest level in nine years to $24.91 per-square-foot. The average rent is 7.1% lower than the pre-recession high of $26.82, set in Q4 2007. Total vacancy remains relatively unchanged, still less than 20%, and as new construction just slightly outpaces demand with 1.1 million square feet of space delivered in the first quarter. Half of all new space delivered in Q1 2017 was preleased product, primarily at the Marina Heights/State Farm development in downtown Tempe.

(SOURCE: JLL)

DEALTRACKER

SANTA MONICA, CA—DR Investments LLC has acquired Piazza Montana, a 9,799 square foot creative office mixed-use building in Santa Monica for $15.5 million or $1,582 per square foot. The property is located on the corner of Montana and Lincoln at 729 Montana Avenue, and was built in 2001. It features creative office space, ground level retail, and two top floor luxury apartments, and is approximately 7 blocks from the Third Street Promenade. The building was 100% leased at the time of the sale. SVP Ted Zwicker with NAI Capital represented the buyer in the deal.

HOLLYWOOD, CA—6344 Fountain Avenue, a two-story, 29,000-square-foot office and post-production space fully leased to Deluxe Entertainment Services Group, has traded hands for $12.6 million between Ascent Media and an undisclosed buyer. The property is located in the heart of Hollywood's Sunset & Vine Media District, one of the premier office markets in Southern California and home to the world's leading entertainment firms. The two-story building, with two-level subterranean parking garage, was originally constructed in 1988 and has been built out as a post-production facility. Madison Partners' Bob Safai, Matt Case and Brad Schlaak represented the seller in the deal.

SALT LAKE CITY, UT—South Towne Corporate Center, a two-building, Class A office property totaling 262,219 square feet in Sandy, UT, has traded hands. NGKF Capital Markets' President of West Coast Capital Markets Kevin Shannon, Ken White, Rick Stumm and Eli Mills with CBRE represented the seller, a joint venture between Oaktree Capital Management and Hines. The same brokerage team also represented the buyer, a joint venture between EverWest Real Estate Partners and Independencia Asset Management. The property is on 10.74 acres at 150 and 200 West Civic Center Drive, and includes two, six-story buildings. South Towne is 96% leased to a high quality tenant base that includes E*Trade Financial, CoreLogic Solutions, Cadence Design Systems and New York Life Insurance Company.

PHEONIX—The Shops at Sossaman in Mesa, Arizona has traded hands between 7641 E. Guadalupe, LLC and AEI Sossaman. CBRE's Phoenix Steve Julius and Jesse Goldsmith represented the seller. Originally constructed in 2002, the center features approximately 34,294 square feet of leasable retail space. The property contains a mix of food and service tenants with nearby national retailers including CVS and AutoZone. Located near ASU's Polytechnic campus at Phoenix-Mesa Gateway Airport, the property is near the Loop 202 and U.S. 60 freeways as well as several master-planned residential communities.

LOS ANGELES—An unnamed borrower has secured $50 million in construction financing for the development of Timbers Kiawah – Ocean Club & Residences, a private oceanfront residence club on Kiawah Island in South Carolina. HFF secured the funds on behalf of borrower to secure the financing from Mosaic Real Estate Credit. Timbers Kiawah – Ocean Club & Residences, due for completion in summer 2018, will consist of a total of 21 fractional-ownership residences across three residential buildings, each with six ocean residences on the first three levels and an expansive fourth-floor ocean penthouse.

RIALTO, CA—Colliers International and Lee & Associates have tapped to exclusively market for lease the recently completed I-210 Logistics Center II in Rialto, Calif., a 758,940-square- foot Class A cross-dock warehousing and distribution facility recently acquired by a Brookfield-sponsored real estate fund. Located at 1686 W. Baseline Road in the Inland Empire, the bog box building is one of the fund's marquee logistics properties. Colliers Executive Vice President Mark Zorn and Michael Chavez of Lee & Associates, will be responsible for leasing the facility. Along with some 6,594 square feet of office space designed for administrative purposes, the free-standing, cross- dock facility is located on more 35 acres and features 36-foot minimum clearances, 103 dock-high loading doors, 4 grade-level loading doors, parking for 237 semi-truck trailers, secured concrete truck courts measuring from 185-224 feet, and 240 automobile parking spaces (expandable to 422 spaces) for employees and visitors.

LOS ANGELES—Barak Investors Group and MIP Investment have acquired a class A-office building located at 3330 Cahuenga Blvd. in “the high 30s.” NGKF's Kevin Shannon represented the seller on this transaction. Barak Investors Group & MIP Investment arranged the acquisition of this transaction to the investors Cahuenga Investment and Cahuenga Equity. The property is a 5-story Class A steel-frame office building, containing 103,154 square feet of rentable area, located in the prestigious Universal City market. It is 92% leased to an excellent tenant roster that includes Extreme Reach, Inc., Panasonic, EPSCineworks, and Abominable Pictures. 3330 Cahuenga caters to the market's deep media, entertainment, and tech tenant base found immediately in Universal City and the adjacent Burbank and Hollywood markets.

NEWPORT BEACH, CA—Bixby Land Company has sold the former Kawasaki USA headquarters in Irvine, Calif. to Karma Automotive, LLC for $56.25 million. Karma, an American car company that manufactures luxury hybrid plug-in vehicles, had previously leased the 262,463-square-foot facility in August 2016. Bixby initially acquired the project, located at 9950 Jeronimo Road, with plans for a major repositioning into a dynamic workplace that would appeal to larger companies. Gregg Haly and Jeff Carr of CBRE represented Bixby in the transaction, while Karma Automotive was represented by Kevin Leonard of Heathwest Realty. Karma is underway with its own designs for the new headquarters location, including a Branded Experience Center for its new Revero luxury sedan and ample employee amenities inspired by Bixby's initial designs and in high demand by today's workforce.

LAS VEGAS—MG Properties Group has acquired Sedona at Lone Mountain and Prelude at the Park Apartments in Las Vegas, Nevada. The two separate acquisitions total 641 units and approximately $68 million. Sedona at Lone Mountain Apartments was built in 1999 and consists of 321 units in North Las Vegas. The property was purchased for $34.7 million and required the assumption of existing Freddie Mac loans. Executive managing directors Doug Schuster and Curt Allsop, director Vittal Ram and associate Angela Bates of ARA, A Newmark Company, represented the seller. Prelude at the Park Apartments was built in 1997 and consists of 320 units in desirable Henderson, NV. MGPG plans an extensive renovation of common areas and unit interiors. Brian Eisendrath and Cameron Chalfant of CBRE secured a $21.97 million Fannie Mae loan for the purchase. The property was purchased for $33,500,000. SVP Tom Naseef and VP Garry Cuff of Colliers International represented the seller.

BUILDING BLOCKS

VACAVILLE, CA—Community Development Partners has broken ground on Rocky Hill Veterans Housing. Located at 582 Rocky Hill Rd in Vacaville, CA, the property is only new affordable developments targeting veterans in Solano County. The $21-million project will provide much-needed housing for chronically homeless veterans, and low-income veterans and families. Rocky Hill will have 39 new, high-quality permanent rental homes for people earning 15% to 60% of the Area Median Income. Twenty-nine units will be reserved for veterans, with the remainder having a veteran preference. Services include case management, substance abuse counseling, and assistance with locating community services. The innovative project's structural system is comprised of modified steel shipping containers, which is stronger than typical wood framing. The project is designed to achieve LEED Gold certification, and is scheduled for completion in December 2017.

PERRIS, CA—Rockefeller Group has acquired 68 acres of industrial land in Perris with plans to build two premier distribution centers totaling 1.45 million square feet and located approximately 70 miles east of the Ports of Long Beach/Los Angeles. The site is also strategically located within eight hours of customers in Nevada, Utah, Arizona, and New Mexico. The logistics center will offer two buildings, one of approximately 1 million square feet, which will be one of the largest distribution buildings along the corridor, and a second building, which will be approximately 400,000 square feet. Both buildings will be state-of-the-art, Class A distribution centers with 232 total truck bays, 449 trailer-parking stalls and 36-and 32-foot clear heights, which allow for more cubic storage.