One year ago, Christian Faith Fellowship church sold its property at 5601 E. Broadway to local developer Broadway Festival, LLC.

Bill Viner and Steve Shenitzer head Broadway Festival. The development team had the site rezoned to redevelop it as a retail project. Now, almost exactly 12 months later, the site is fully leased, having secured three national tenants, and construction is underway.

“We are very excited about bringing this project to fruition so quickly,” said Shenitzer. “In just over a year from acquisition, the site boasts a superb tenant mix of El Pollo Loco, Blaze Fast Fire’d Pizza & Krispy Kreme Donuts, creating a premium array of delectables. It was a concerted effort from our team of leasing, legal, architect, engineer, contactor & lender professionals that made this a reality.”

The redevelopment of the former church is a boon to the community, as the new use brings the site onto the City’s tax rolls, will add jobs to the base, and puts a fresh-face on Broadway Boulevard.

Continued Shenitzer, “We are very pleased to be bringing these businesses for the area to enjoy, while at the same time substantially increasing the tax base & employment for all of Tucson to benefit from.”

According to Nancy McClure, a retail specialist with CBRE who partnered with John Ash on the marketing and leasing of the project, the highly anticipated redevelopment is consistent with overall retail trends in the Southern Arizona market.

“Redevelopment is a major driver for the Tucson retail market right now,” said McClure. “This is a prime location with proximity to the Park Place Mall – a hub where a lot of retailers and restaurants want to be. This is now one of several successful redevelopment projects down the Broadway corridor.”

5601 E. Broadway sits on approximately two acres on the north side of Broadway just east of Craycroft Road, and will soon be home to El Pollo Loco, Krispy Kreme and Blaze Fast Fire’d Pizza. The multi-tenant project is adjacent to the eastern boundary of 5555 Broadway, a successful retail redevelopment project that is home to Hobby Lobby, Stein Mart, Vitamin Shoppe, Mattress Firm, among others.

Adaptive reuse of sites, particularly those with excellent infill locations, is a trend that is expected to continue. McClure says the current lack of quality, available product means savvy developers with an eye for redevelopment opportunities are well positioned to attract top tenants.

“The high demand for core locations has already spurred redevelopment of existing properties with antiquated layouts and floor plates—barriers to entry will always make these prime locations the target of developers who understand how to buy and reposition these sites for today’s retailer rent parameters.”

For more information, McClure should be contacted at 520. 323.5117 or Ash can be reached at 520.323.5177.

To learn more about the sale of this property, see RED Comp #2624.

Phoenix, AZ – Brian Smuckler and Jeff Seaman of CBRE’s Multifamily Investment Group have completed the sale of The Carolina, an 18-unit boutique apartment community in Central Phoenix. The property commanded a sale price of $1.65 million, or $91,667 per unit/$157 PSF, which was 100 percent of the listed price.

The Carolina is located at 512-524 East Mariposa Street in Central Phoenix. The buyer was KWA Properties Arizona 2, LLC of Seal Beach, California. The seller, Clear Sky Capital II LLC of Phoenix, Arizona, acquired the property fourteen months ago and extensively renovated and rebranded the community while increasing the rents by 100 percent.

Ideally located on a cul-de-sac just south of Camelback Road and east of Central Avenue, the property has excellent proximity to the light rail and nearby entertainment, all while maintaining a neighborhood feel. Interior features include faux wood tile flooring, new kitchen cabinetry, stainless steel appliances, granite countertops, and porcelain tile shower surrounds.

“Rents in Central Phoenix have increased nearly 7.7 percent as vacancy decreased 7.3 percent in 2015. This is in spite of the 563 new units delivered to the submarket last year,” said CBRE’s Smuckler. “New multifamily development is indicative of this submarket’s success. In fact, an additional 318 units are currently under construction with another 701 units planned. The sale of The Carolina proves that as new construction continues to be absorbed, it sets new standards in achievable rental rates for renovated B and C class assets.”

For more information, Smuckler and Seamann can be reached in the CBRE Phoenix office at 602.735.5555.

Colliers International Releases 4Q 2015 Tucson Metro Area Multifamily Market Report

Colliers International in Greater Phoenix released Tucson Metro Area Multifamily Market Report for fourth quarter 2015. Report highlights are outlined below. For more details, refer to the attached report or click here to view online.

The Tucson multifamily market strengthened to close 2015, due in large part to a local labor market that gained momentum in the second half of the year. Until the third quarter, local employers had been slow to expand payrolls, even as the national economy gained momentum. That pattern changed course beginning in the third quarter and employment growth accelerated in the final three months of the year.

The Tucson multifamily investment market is gaining momentum as property performance improves. Sales velocity increased in four of the past five years, and the number of properties that traded in 2015 reached an eight-year high.

One trend that began to take shape in late-2015 that highlights the growing strength of the local market was the sale of new, high-quality assets to institutional and out-of-state investors. Transaction velocity will likely accelerate as the Tucson multifamily market attracts a deeper and more diverse buyer pool.

Employment growth in Tucson closed 2015 on an upswing, as 5,600 jobs were created during the fourth quarter. For the year, 8,900 jobs were added, more than doubling the pace of growth recorded in 2014.

Vacancy ended 2015 at 7.8 percent, 110 basis points lower than one year ago. Vacancy has been declining at a fairly steady pace even as new multifamily units have come online.

As the vacancy rate has tightened, rents have trended higher. In 2015, average asking rents rose 3 percent to $657 per month. Additional rent increases are expected in 2016.

Sales of multifamily buildings slowed in the fourth quarter; but even after accounting for the slight dip in the final three months of the year, the total number of transactions in 2015 surged 43 percent from 2014 levels. The median price was approximately $33,100 per unit in 2015, with cap rates averaging 6.7 percent.

Outlook:

The Tucson multifamily market will benefit from both the supply side and the demand side in 2016. Following three straight years of deliveries of more than 1,000 units per year from 2012-2014, additions to inventory slowed to a more manageable level in 2015, and a similar level of new construction is forecast for 2016.

Renter demand for apartments should strengthen as employers expand payrolls at a more rapid pace than in recent years. These conditions should lead to additional declines in vacancy and an uptick in rents.

With property income revenues on the rise and forecasts calling for additional gains in 2016, investors will likely continue to target multifamily assets that can be acquired at lower price points than in surrounding markets and offer competitive cap rates.

The rise in development over the past few years will likely continue to support investment activity. Approximately one-third of the projects delivered since 2010 have changed hands through 2015, and new projects should continue to attract investor attention as they lease up.