PHOENIX—Judi Butterworth, senior vice president of Velocity Retail Group will be moderating this year's RealShare Phoenix Metro panel: Investing in the Phoenix Metro. Joining her on the panel are Chris Anderson, managing director at Hines; Bill Honsaker, regional director of JLL; Nick Miner, vice president of ORION Investment Real Estate; and Steven Schwarz, managing director of ViaWest Properties.
The Phoenix Metro is a prime location for many reasons, making it an increasingly hot spot for investment. How have corporate relocations to the Phoenix Metro impacted the investment community? What are some of the most notable transactions of late? What are the success stories of the biggest dealmakers?
Butterworth breaks retails down into the “haves” and the “have nots.”
“You have your well-located, anchored, full centers with tenants waiting in the wings,” Butterworth tells GlobeSt.com. “And then you have your good centers that may have a Safeway as an anchor, but it's not at a good intersection and it has some vacancies. Then there are those centers that may not be viable at all. We have definitely overbuilt. In the Valley, 154,000 square feet of retail will not be used as retail again. And if you think of how new Phoenix is as a city, we didn't have really, really old centers until 20 years ago. We have to think that we will never see another residential growth cycle like we have experienced in the past and that made an impact. We may have five new grocery anchor centers in the next three years. We used to have 18 a year. What do you do when you don't have 65,000 new homes being built? What do you do with some of these centers?”
It's questions like these Butterworth will tackle in her panel.
Butterworth says there is a huge appetite for credit tenants: “Investors just want to clip coupons.”
She also references what she calls “the good, the bad and the ugly.”
“The ugly centers with promise, the value-add, have all been purchased—they are bought out. What is left is just “the ugly.” Will they become churches? Charter schools? Or will they be blown out? In some of these retail centers we are seeing a lot more service tenants like restaurants, vets, kids' dentists, massage therapists.”
As far as investment goes, Butterworth says Arizona carries a lot of positives. “We are in competition with other states for dollars,” she says. “Good buyers understand you can't just waltz in. It requires boots on the ground. Someone really needs knowledge of the whole metro area before buying a center.”
RealShare Metro Phoenix and RealShare Healthcare Real Estate will be held December 15-16 at the Phoenician in Scottsdale. Registration for RealShare Metro Phoenix and RealShare Healthcare is available via these links.
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