24,000 sf Restaurant & Retail Component of Mixed-Use Development Breaks Ground

PHOENIX, AZ – WINLEE Development, the real estate development division of locally based investment firm Winfield Lee Investments, commenced construction this week on Chandler Viridian PRIMEGATE at Fashion Square.  PRIMEGATE is the 24,000-square-foot distinctive restaurant and retail component of the 25-acre Chandler Viridian mixed-use project being developed by the consortium of Hines, Alliance Residential, Concord Hospitality and WINLEE.  The project is located at the NWC of the freeway Loops 101 & 202 interchange and prominently at the main entrance to the Fashion Center super regional luxury mall.

In addition to the PRIMEGATE amenities, the integrated multi-use project features an Alliance Residential Broadstone luxury multi-family community that is nearing completion, a 250,000-square-foot six-story Class-A office building by Hines and a Concord Hospitality Cambria Hotel, all interconnected via jogging trails and grand pedestrian promenades.

WINLEE also announced today that Panera Bread is excited to be among the first users locating at PRIMEGATE, with more tenant announcements to follow in the coming weeks.

PRIMEGATE is situated on the hard corner of the Loop 101 Freeway/Price Road and Frye Road at the entry to Chandler Fashion Center and offers direct freeway visibility and access.  It sits at the gateway to Chandler’s highly regarded Price Road employment corridor as well.

“We are excited to be under construction as planned on this distinctive project and to participate in bringing to fruition the larger vision of the mixed-use development.  It didn’t take Panera Bread, a quality operator with sophisticated real estate analysis, very long to realize the unique nature the PRIMEGATE location affords. Panera’s coming on board so quickly underscores the dynamic shift that is occurring as Frye Road supplants Chandler Boulevard as the primary entrance to the mall area for the Southeast Valley.  Frye Road is emerging as the preferred route quite simply because it provides greater ease of access to more amenities from more directions for more people,” said WINLEE’s President, Peter Nelson.

PRIMEGATE is part of the Chandler Fashion Center overlay and is completely encircled by Chandler Fashion Center Mall, Harkins Fashion 20 Theatres, Super Target, Costco, the Chandler Viridian class-A residences, offices & hotel and the Loop 101 & 202 freeways.

LeDonna Spongberg and Traci Russell of CBRE, who are handling the leasing of PRIMEGATE, observed “it isn’t often that one site can boast lifestyle, office, residential, hospitality, entertainment, daily needs, a major power center and super-regional mall users all as anchors.  The confluence of all of these draws, together with freeway exposure and immediate gateway access to Chandler’s highly regarded residential and employment demographic, makes PRIMEGATE one of the truly premier locations in the entire Valley.”

Chandler Viridian PRIMEGATE at Fashion Center is being developed by WINLEE Development (a division of Phoenix-based Winfield Lee Investments, Peter Nelson and Gary Emery, principals) and features approximately 24,000 square feet of specialty restaurant and retail amenities. Construction began recently and will be completed by Q2 2017.  Tenants include Panera Bread with additional announcements coming imminently.

• Contractor: Wespac Construction
• Architect: Reigle & Associates
• Engineer: Larson Engineering
• Leasing: CBRE, LeDonna Spongberg & Traci Russell
• Financing: Alliance Bank, Jonathan Bouvet
• Counsel: Berry Riddell, LLC & Sacks Tierney, P.A.

PHOENIX, AZ – Industry veteran Eric Forshee, has joined NAI Horizon as Director of Business Development.

A resident of Cave Creek, Ariz., Forshee has more than 28 years of commercial real estate experience. He comes to NAI Horizon after nine years at Newmark Grubb Knight Frank (and Grubb & Ellis) as national director of business development for property management. Prior to that he served as director of property management for Trammell Crow Company. His work experience also includes stints at Insignia/ESG, Hallwood Management Company, and Equitec Properties Company.

While at NGKF, Forshee helped bring in more than 80 MSF of new management and leasing assignments nationally.

“I am very excited to have Eric on our team,” said Terry Martin-Denning, CEO of NAI Horizon. “His experience and relationships in the industry are a valuable addition to our platform.”

Forshee earned a Bachelor of Science degree in business management and finance from Brigham Young University in Provo, Utah. He has past involvement with NAIOP, the International Council of Shopping Centers (ICSC), BOMA, and CoreNet Global. He is a USGBC LEED Green Associate (LEED GA), Real Property Administrator (RPA), and served as president of the Kiwanis Club of Phoenix (2006-2007).

Real Estate Daily News Buzz is designed to give news snippets to readers that our (yet to be award winning) editors thought you could use to start your day. They come from various business perspectives, real estate, government, the Fed, local news, and the stock markets to save you time. Here you will find the headlines and what the news buzz of the day will be.

Wednesday, the Dow Jones industrial average rose 30.06 points, or 0.2 per cent, to 18,199.33. The Standard & Poor’s 500 index lost 3.73 points, or 0.2 per cent, to 2,139.43. The Nasdaq composite fell 33.13 points, or 0.6 per cent, to 5,250.27.

Brent crude, the international standard, lost 81 cents, to 1.6 per cent, to $49.98 a barrel in London. In other energy trading, wholesale gasoline slid 2 cents to $1.48 a gallon. Heating oil lost 1 cent to $1.55 a gallon. Natural gas fell 4 cents to $2.73 per 1,000 cubic feet.

Southwest 3Q profit falls 34 per cent on higher costs — Southwest Airlines Co. says third-quarter profit fell 34 per cent on falling fares and higher costs, and the company gave a weak revenue forecast for the rest of the year. The shares slid Wednesday, leading other airline stocks lower too. Southwest said that overall pricing remains “soft,” and it forecast that a key measure of revenue per mile will fall by between 4 per cent and 5 per cent in the fourth quarter — more sharply than it fell in the third quarter. DALLAS (AP)

Sales of new homes rose 3.1 per cent in September — More Americans bought new homes in September, a sign that demand remains solid despite a shortage of properties on the market. New-home sales advanced 3.1 per cent last month to a seasonally adjusted annual rate of 593,000, the Commerce Department said Wednesday. The gains were concentrated in the Northeast, Midwest and South, as sales tumbled last month in the West. So far this year, sales have increased 13 per cent compared to the same period in 2015. WASHINGTON (AP)

Simon Property raises outlook on improved rents “Simon Property Group Inc. said Wednesday that occupancy and rent rates improved during the latest quarter, leading the retail real estate operator to boost its annual earnings forecast. For the year, Simon Property expects earnings on a per-share basis between $6.25 and $6.27, up from a previous range of $6.04 to $6.12. The company also expects funds from operations, a key profitability measure for real-estate investment trusts, will be between $10.85 a share and $10.87 a share, up from $10.77 to $10.85. Analysts surveyed by Thomson Reuters expect $10.86. The Indianapolis-based firm has benefited recently from high occupancy rates as it has shifted its focus on bigger malls and outlets. Funds from operations for the latest quarter were $976 million, or $2.70 a share, compared with $918.7 million, or $2.54 a share, a year ago.” (MarketWatch)

Why Austin supplanted D-FW to become the ULI’s top real estate spot in the U.S. “Austin has edged out Dallas in the competition for the top U.S. real estate market. Both Texas cities headed the list of the best places to invest in property and develop in 2017, according to the annual Emerging Trends in Real Estate report by the Urban Land Institute and PricewaterhouseCoopers. The yearly study surveys real estate execs across the country for their predictions about the U.S. property market and economy. Last year, the closely watched report ranked Dallas-Fort Worth first and Austin a close second. ‘This year Dallas flip flopped with Austin,’ said Andrew Warren, PwC’s director of research. ‘Austin has been steadily climbing in the last 10 years.’” (The Dallas Morning News)

A Project Mends a Gash in the Street Grid of Washington “The depressed highway is a road from nowhere, the remnant of an Interstate once planned to cut through residential neighborhoods. Activists blocked the larger plan for the freeway in the 1960s, so this small segment close to the Capitol is left to feed traffic from city streets to other freeways, leading south over the Potomac to Virginia and east across the Anacostia River. The scuttled plan left an open gash — a six-lane trench — that divided Capitol Hill from downtown Washington’s East End. Now, a large air rights project is underway to cover the trench with five buildings, bringing with them 2.2 million square feet of offices, apartments, public spaces, shops and restaurants. Covering three square blocks, it will bridge a divide in the city and restore Pierre L’Enfant’s original street plan for the nation’s capital. The seven-acre project, called Capitol Crossing, also entails moving an 1876 synagogue, Washington’s oldest and more recently a museum of local Jewish history.” (The New York Times)

Moody’s: Slow supply chains are department stores’ Achilles heel “Relatively slow supply chains are hindering department stores’ ability to compete effectively in today’s retail market. That’s according to a new report by Moody’s Investor Service, which finds department stores fighting to stay relevant in a world in which consumers have rapidly prioritized value and convenience as pricing becomes more transparent, and in which consumers are shifting to off-price retailers and online shopping. Aggregate operating income of department stores is expected to decline approximately 11% this year. ‘Consumers today have access to a broad array of goods at the most competitive prices, which has spurred retailers across the industry to accelerate their efforts to compete more effectively,’ said Moody’s VP Christina Boni. ‘Department stores have been the hardest hit, with relatively slow supply chains their biggest Achilles’ heel.’ Department stores suffer inventory backlogs when consumer demand suddenly shifts, according to the “Department Stores Battle to Stay Relevant” report. Big markdowns to clear merchandise at such major players as Macy’s and Nordstrom have dampened consumers’ willingness to pay full price for goods. The markdowns also underscore department stores’ supply chain challenge.” (Chain Store Age)

New luxury rentals have dog parks and lounges — and they’re nowhere near South Beach “
A fireside lounge and coffee bar, inviting cabanas by the pool, a media room with a wall of big screens, a terrace featuring an outdoor pool table, a fitness center with on-demand spin and yoga classes and life-size virtual trainers — welcome to the ‘burbs, baby. If this sounds like a resort, that’s completely by design. New amenity-rich rental communities complete with conference rooms and business centers are popping up well beyond the gleaming towers of downtown Miami or Fort Lauderdale. A sampling: In West Kendall, Richman Signature Properties last month opened the luxury rental development Azura; it is set to open Portico in Sunrise this fall. In Miramar, FCI Residential recently has begun leasing Atlantico, on the heels of opening Toscana at Margate. In West Miami, the The Estate Companies developed the Soleste Club Prado and Soleste West Gables, and has several more projects set for the neighborhood.” (Miami Herald)

New CoStar Data Reveal a Vast National Inventory of Naturally Occurring Affordable Housing—and an Untapped Opportunity “At least 5.5 million units of naturally occurring affordable rental housing exist in cities across the United States, according to newly released data from CoStar, a leading provider of data and analytics for the commercial real estate industry. Naturally occurring affordable housing (NOAH) is housing that is affordable without being supported by public subsidies such as low-income housing tax credits. NOAH’s market-rate affordability derives mainly from its age—most units were built 40 to 50 years ago—and lack of amenities: it is no-frills, functional housing that is nonetheless safe, secure, and inhabitable.” (Urban Land Magazine)

Canadian retailer to enter U.S. with ‘disruptive’ concept “Spence Diamonds is dropping anchor in the United States with an innovative store concept and unique product offering. The diamond retailer will open a store in Austin, Texas, on Nov. 7, followed by a location in San Jose, Calif., on Nov. 10. A store in Scottsdale, Arizona is planned for first quarter 2017, with additional markets to be announced soon. The Spence concept is unique in that it features “artisan created diamonds,” which are identical to mined diamonds in every way, but created in a plasma chamber instead of being dug out of the ground. These diamonds are physically, optically, and chemically identical to the finest diamonds mined from the earth, but they are substantially larger than mined diamonds at any given price point, according to the company. (Spence stores carry both the artisan diamonds and traditional mined diamonds.) At Spence, customers can watch as diamonds are created right in front of their eyes. Jewelry is displayed in open cases and customers are free to take items out of the case for try on. JGA, Southfield, Mich., is serving as design firm for the company’s Austin store.” (Chain Store Age)

Keeping your enemies close: Vornado mulls selling DC spinoff to rival “Vornado Realty Trust is mulling selling a spinoff of its Washington, D.C., business to rival JBG Companies in a deal that could be worth up to $6 billion. The Washington portfolio consists of more than 16 million square feet of office space, which would be spun off into its own company and then acquired by JBG, Bloomberg reported. The deal — if it goes through — could be worth $4 billion to $6 billion. No final decisions have yet been made. Vornado, led by Steven Roth, has rallied of late to consolidate its assets and focus its energies on its core market, New York City. The REIT sold its last Los Angeles property — a 43,000-square-foot Class A office property — earlier this month. Vornado has been considering selling its Washington office since at least early last year. In an April investor letter,  Roth wrote that the REIT has considered “options with respect to our Washington business, such as inviting in a new investor(s) or even separating the business in a spin or in a spin-merge.” (The Real Deal)

Boston Agency Greenlights $75M Worth of Development “Development is set to continue at a strong pace in Boston, with the Boston Planning & Development Agency’s (BPDA) board recently signing off on seven residential and mixed-use projects. The projects will total $75 million in investment and generate more than 150 construction jobs. To help streamline development in the city, the board also approved a plan to present the South Boston Rezoning Initiative to the Zoning Commission. The initiative began in 2014 at the request of Mayor Martin Walsh and city council members, with the goal of creating zoning that provides “predictable, appropriate development without the constant need for zoning variances,” according to the BPDA, a city agency formerly known as the Boston Redevelopment Authority. The initiative’s proposed zoning includes regulations concerning use, height, density and parking ratios.” (MultiHousing News)

Gwinnett County permits world’s tallest skyscraper… theoretically “Gwinnett County, long a bastion of sprawling suburbia, is now paving the way for the world’s tallest building. At least, in theory. The AJC reports that the Gwinnett County Board of Commissioners abolished height restrictions for development around Gwinnett Place Mall. An old rule limited buildings in the area to 25 stories, but in the interest of spurring investment, the limit was removed. Theoretically, the move opens the door to soaring high-rise towers akin to the Burj Khalifa — currently the world’s tallest building.” (Atlanta Curbed)