PHOENIX—The Greater Phoenix industrial real estate market had a strong

fourth quarter in 2017, one of the city's historically best years. Net absorption was the strongest in a decade, absorbing robust construction completions and pushing the vacancy rate to a 10-year low. Net absorption of industrial space topped 2.1 million square feet in the fourth quarter, bringing the 2017 total to approximately 9.2 million square feet. Large tenants drove up absorption during the past year, including Conair with its 800,000-square- foot space and UPS taking occupancy of more than 600,000 square feet in the Northwest Valley. The Southwest Valley posted more than 1 million square feet of net absorption in the last three months of the year. Industrial vacancy declined during each quarter of 2017, ending the year at just eight percent. The vacancy dropped 30 basis points during fourth quarter and is 140 basis points below year- end 2016. This marks the lowest industrial vacancy rate in Phoenix in more than 10 years. The Airport Area saw the most significant decline as the submarket's recently completed spec projects experienced leasing.

(SOURCE: COLLIERS INTERNATIONAL)

PHOENIX—The Phoenix office market has signs of slowing. Last year, the office market had below average leasing activity. Tenants have leased 7.5 million square feet in the last four quarters, well under the long-term average of 10.3 million square feet. At the same time, however, the office availability rate also fell to 17.1%, or 110 basis points from the third quarter to the fourth quarter. The class-A availability rate fell by 60 basis points to 17.5%. Rental rates also continued to climb. Phoenix's overall average asking rent increased by 1.4% to $24.95, and spiked by 9% year-on-year. Class-A asking rent rose by 1.6% to $28.76, and has jumped by 3.6% year-on-year. While lease rates increased, investment sales fell slightly. From November 2016 to November 2017, property sales through November totaled $1.8 billion, nearly even with the $2.0 billion sold through November of 2016.

(SOURCE: Savills Studley)

NEW & NOTABLE

SALT LAKE CITY—NorthMarq Capital has hired Adam Cornelius has joined its Salt Lake City office serving as vice president. In his new role at NorthMarq, Cornelius originate, underwrite and close commercial real estate transactions involving both debt and equity solutions for clients, sourced through the entire capital stack. Cornelius works across all property type for the “life of the loan,” but focuses on multifamily properties with an affordable component.

LOS ANGELES—JLL Capital Markets has hired Toni Steele as an Executive Vice President. Steele comes to JLL from Goldman Sachs, where she spent 22 years within the firm's real estate investment business in both the United States and Europe. As a member of JLL's Southwest Capital Markets team, Steele will focus on acquisitions, dispositions, recaps and financings. Her unique background makes her an additional resource to clients seeking more structured solutions to their investment needs. At Goldman Sachs, Steele served as Vice President, Acquisitions & Asset Management for Southern California where she directed business development, including the firm's first progressive office and life science initiatives. Steele also brings international acumen, previously serving as Goldman Sachs' Country Director in Italy and leading the firm's German nonperforming real estate loan platform. She holds a Bachelor of Arts from Pepperdine University and a Master of Business Administration from International University of Monaco. She also served on the Board of Directors for the Resource Center non-profit organization in Dallas.

CALABASAS, CA—Marcus & Millichap has hired Scott M. Holmes as senior vice president and national director of its retail division, which provides investment, advisory and transaction services for every type of retail real estate. Holmes, an industry veteran with over 25 years' experience in the commercial real estate investment business, will be responsible for directing the firm's retail business strategy nationwide. Marcus & Millichap's retail division is among the leading brokers of single-tenant net lease assets and shopping centers in the industry.

DEALTRACKER

LOS ANGELES—Mesa West Capital has provided a private multifamily investment firm with $125 million in short-term first mortgage debt to finance the West Coast apartment investor's recent acquisition and repositioning of four California multifamily assets. Mesa West's five-year, floating rate financings were secured by properties in the San Francisco Bay Area, Orange and San Diego Counties. They include the 186-unit Atlantic Apartments in Alameda, the 116-unit Mosaic Hayward, the 102-unit Villas at Carlsbad in Carlsbad, and the 116–unit Vista del Rey in Tustin. The properties were acquired over the past six months from three different sellers. The properties all provide workforce housing in infill locations and were in need of more focused management and capital upgrades, according to Mesa West Capital Principal Ronnie Gul, who led the origination team out of the private lender's Los Angeles office.

LOS ANGELES—Kearny Real Estate Company has acquired a 197,370-square-foot office campus in Santa Ana, CA from The Colton Company in a transaction valued at $34.8 million. The newly named Elevate@Harbor includes two mid-rise buildings on eight acres at 3100-3130 Harbor Boulevard in the South Coast Metro West submarket. Built in 1982, the three- and five-story glass curtain wall buildings were built on top of one level of podium construction creating nearly an acre of open space. To capitalize on the building's functional layout, which can accommodate full and partial floor users, Kearny plans on investing approximately $15 million to reposition the office campus, according to Kearny Partner Hoonie Kang. Kearny plans on taking advantage of the unique aspects of the building, which starts with the podium construction. The one-acre outdoor area surrounding the first floor of both buildings will be redesigned to incorporate outdoor areas that provide a mix of work, leisure and active spaces. With the podium elevated off of the street, the shared outdoor area set between the two buildings will create a true campus feel and provide shared indoor/outdoor conference areas, meeting spaces and an upgraded café and dining area.

LOS ANGELES—A 60,478-square-foot multi-tenant office building has traded for $12 million, according to Mark Leonard, a principal of Lee & Associates-LA North/Ventura, who represented the seller along with Lee's Mike Tingus and Grant Fulkerson SIOR. The property, at 2475 Townsgate Rd. in Westlake Village, Calif., is leased to The Walking Company for its corporate headquarters and Yoga Works, among other tenants. The seller was a private investor. The buyer, Abington Emerson Investments, LLC, was represented by Greg Pill of TriNet Investments.

PHOENIX—Marcus & Millichap has brokered the sale of Verona Court, a 141-unit apartment community in Phoenix, Arizona. The sales price is $10.2 million. David and Steve Gebing, senior managing director of Marcus & Millichap's Institutional Property Advisors (IPA) division, represented the seller, CalCap Advisors, and procured the buyer, Dalan Management. Developed in 1985 by Fratantoni & Sollami, the property is located at 17646 North Cave Creek Road in Phoenix, approximately three miles southwest of the Desert Ridge Marketplace, one of the premiere shopping, dining and entertainment destinations within Greater Phoenix comprised of more than 1.2 million square feet and home to 110 retailers and restaurants.

IRVINE, CA—ValueRock Realty Partners has acquired two retail properties, acquiring University Village, a 43,858-square-foot grocery-anchored retail center at 1075-1095 Monroe St in Albany, and Sprouts Farmers Market located at 90 SE Bidwell St in Folsom. ValueRock acquired University Village for $19.25 million and the Sprouts in Folsom for $9.25 million. Both properties were acquired from Twin Cities-based national property development firm Oppidan. University Village is anchored by Sprouts Farmers Market, along with Pet Food Express, Starbucks, Banfield Pet Hospital, and The Habit Burger, among others. The property is located at the western gateway to UC Berkeley. An added draw to this property is that all of the tenants are food and service- oriented, making the center highly-resistant to internet competition.

SAN DIEGO—Asana at North Park Apartments in San Diego, California, has traded hands to Real Asymmetry and Constellation Realty Management for $32.3 million. The 132-unit property is located at 3710-3810 Wabash Avenue. JLL's Capital Markets team of Darcy Miramontes and Kip Malo represented the sellers, Alex. Brown Realty Inc., Arc Capital Partners LLC, and New Standard Equities Inc., and JLL's Finance team led by Zane Sweet secured financing for the transaction. Asana at North Park is located in the hip neighborhood of North Park, offering modern apartment living and easy access to the area's incredibly popular dining and social scene. Asana offers residents one- and two-bedroom units that recently underwent an extensive renovation program.

SAN DIEGO—Pathfinder Partners has acquired two Phoenix properties for approximately $32 million, including the Vintage Apartments in Gilbert, acquired for $18.6 million and Avalon Apartments in Northeast Phoenix, purchased for $13.7 million. Vintage is a 107-unit garden-style community located at 1303 West Juniper Avenue, in Gilbert, Arizona, southeast of Downtown Phoenix. The 9.3-acre property includes a resort-style pool and spa, a clubhouse with a theatre, business center playground and billiards room as well as six studios, 21 one-bedroom/one-bathroom, 40 two-bedroom/two-bathroom and 40 three-bedroom/two-bathroom units, averaging 1,150 square feet. Pathfinder plans to rebrand the community, complete comprehensive renovations to all unit interiors and make common area improvements. Avalon is a 117-unit multifamily community located at 3851 N. 28th Street near the 24th and Camelback corridor. Built in 1973, the 3.5-acre community encompasses seven two- and three-story garden-style buildings. Pathfinder plans to enhance the property's appeal with new exterior paint, upgrades to the façade, improvements to the common area gathering spaces and a comprehensive renovation to all unrenovated unit interiors.

VALENCIA, CA—Institutional Property Advisors has sold The Madison at Town Center, a 130-unit luxury multifamily property in Valencia, California. The $45.9 million sales price equates to more than $350,000 per unit. Green, Greg Harris and Joseph Grabiec of IPA represented the seller, an affiliate of Decron Properties, and procured the buyer, Gemdale USA, a subsidiary of Gemdale Corp., one of China's largest and leading real estate developers.

SAN DIEGO—Mike Dobbins, senior vice president of NorthMarq Capital's San Diego office, arranged a $57 million construction loan for Watermark II, a Class-A office building comprising 158,000 sq. ft. located in San Diego, California. The loan was structured with a 5-year term, the first three of which are interest-only followed by a 25-year amortization schedule. NorthMarq arranged the financing through its relationship with a regional bank.

WHITTIER, CA—Oppidan has sold the newly-constructed Friendly Hills Marketplace in Whittier, California, a power center, 100% leased to national and regional credit tenants including Orchard Supply Hardware, HomeGoods, ULTA Beauty, and Skechers. CBRE retail experts Voorhees, Kirk Brummer, James Tyrrell, Megan Wood, Preston Fetrow and Jim Leary represented the seller, Minneapolis-based Oppidan. The buyer, represented by a cooperating broker, was Golden Capital Whittier, LLC, a Vietnamese-based private investor who purchased the property as an addition to its portfolio.

BUILDING BLOCKS

PHOENIX—Developer Mark IV Capital has broken ground on 2625 at Chandler Freeway Crossing, a 153,370-square-foot, Class A office building within the company's 40-acre Chandler Freeway Crossing business park. Located at 2625 W. Geronimo Place, at the southwest corner of Geronimo Place and Ellis Street, the new development totals three stories with 50,790-square-foot floor plates, high 14-foot ceilings and a collaborative roof deck for private tenant use. It also offers a 6.5/1,000 parking ratio and freeway visibility that includes building signage opportunities and a 60-foot tall, freeway-facing monument sign. The 2625 building joins three existing buildings at the park, all fully leased to tenants including General Motors, ASML, Western Digital and VenSure Employer Services. Managing Directors Dave Seeger, Karsten Peterson and Mark Gustin from the Phoenix office of JLL are the exclusive leasing brokers for the business park.