New Office to Feature a “Hub” and “Huddle Areas”

Phoenix, AZ – Colliers International in Greater Phoenix recently completed an office renovation at the Biltmore Financial Center, creating an inviting open concept that fosters collaboration and creativity, increases efficiency and enables brokers to better serve clients. The renovation was also advanced through a collaboration with landlord ViaWest Group of Phoenix.

Colliers held visioning sessions and conducted internal surveys during a two-year comprehensive workplace strategic review process to determine how its team uses its 19,500-square-foot office space, examining Colliers’ multi-generational workforce with a wide variety of expertise. The strategic review found brokers and employees work best when they:

• Connect through engaging conversations which promote collaboration
• Draw upon energy and expertise from others
• Utilize efficient and cutting-edge technology solutions

The new office features the “hub,” a relaxing environment where brokers can interact and socialize with other Colliers team members around the globe or here at home; a large 26-person conference room with see-through “nano doors” that easily collapse to adjust the size of the room; treadmill desks helping busy professionals stay fit; and “huddle” areas with cushiony seats making it even more comfortable to collaborate. Upgrades to copy room equipment and digitized records and files have also been part of the mix.

“This renovation reflects Colliers culture, which is responsive to the interests and priorities of our brokers, staff and clients, making us all more productive, competitive and happy,” said Bob Mulhern, senior managing director of Colliers International.

“Community and collaboration, pillars of Colliers’ core values, are expressed throughout the new office. From the reception area and conference room to individual workstations, every corner is thoughtfully designed,” said Todd Noel, executive vice president at Colliers International.

“I’m looking forward to being in an open, bright fresh space that will be conducive to great collaboration with my colleagues,” said Mindy Korth, executive vice president at Colliers International.

“We thoughtfully approached our comprehensive work place strategy. The Biltmore Financial Center embraces our culture, brand and supports our diverse and multi-generational talent,” said Kathy Foster, senior vice president at Colliers International.

The renovation coincides and connects with ViaWest Group’s renovation of the Biltmore Financial Center, evolving the property for today’s more collaborative work environments. The Phoenix-based company is creating a 3,500-square-foot tenant lounge, enhancing the café, renovating the gym and updating elements of the lobby space, corridors, bathrooms, and elevator lobbies, among other improvements.

“ViaWest could not be more excited about Colliers moving into its new space,” said Steven Schwarz, founding partner of ViaWest Group. “As one of our largest tenants in the complex, they did an extraordinary job of improving an extremely high-profile 1st floor suite. The energy they bring to the Biltmore Financial Center as one of the premier real estate firms in the country goes hand-in-hand with the purpose of the significant renovations to the complex that we are completing.”

ViaWest recently named Todd Noel, executive vice president; Phil Breidenbach, executive vice president; Kathy Foster, senior vice president; and Ryan Timpani, vice president; as leasing agents for the Biltmore Financial Center.

“ViaWest’s improvements are elevating the Biltmore Financial Center to exceed the needs of today’s tenants and workforce,” Noel said.

SmithGroup JJR of Phoenix served as the architect and Stevens Leinweber of Scottsdale served as the contractor for Colliers’ tenant improvements. Bruce Herr, director of project management at Colliers International, oversaw the renovation.

Despite drop in commodity prices globally, labor shortages in the U.S. are driving up construction costs, according to new CBRE report

Despite the global collapse of commodity prices – including many key inputs to construction – overall construction costs continue to rise nationwide in large part due to labor supply and demand dynamics that first surfaced during the recession and still have yet to resolve, according to a new report from CBRE Group, Inc.

In January 2016, average total construction costs in the U.S. registered a year-over-year increase of 1.8 percent, according to the RSMeans Construction Cost Index (CCI). Since January 2011, the national CCI has increased by an annual average of 2.3 percent, resulting in a cumulative 11.8 percent increase during that period.

“The price of materials is just one driver of overall construction costs. The cost of construction labor tends to be much more variable across geographies and over time, so it typically has a larger impact on overall cost trends,” said Andrea Cross, Americas head of office research, CBRE. “The collapse of the housing market and subsequent recession affected supply-side dynamics for new construction throughout the country, as a substantial number of construction workers left the industry during the downturn and never returned.”

Nationwide, the number of workers employed in construction-related occupations declined by nearly 985,000, or 15.8 percent, between 2005 and 2015, according to the most recent occupational employment statistics survey from the Bureau of Labor Statistics. As a consequence, many markets have faced considerable labor shortages as new construction has picked up during the current economic cycle.

This is especially true in Metropolitan Phoenix, where construction employment fell by more than 52,000 workers or 40.3 percent between 2005 and 2015. Conversely, as development has returned to the Valley, the demand for construction labor has caused the average hourly wage in Phoenix to increase by 31.7 percent over that same time period – second highest among the markets examined in the CBRE report.

“When the number of new construction jobs began to grow without a proportional increase in qualified construction workers, tighter labor markets conditions pushed wages upward,” Ms. Cross added. “The effect was compounded by increased fees from contractors, who charged more not just because they could now afford to be more selective, but also because they were stretched across a larger number of projects and would need to use less-experienced crews for some projects—allocating to those projects more man-hours than would be necessary with the best crews.”

“Metropolitan Phoenix is definitely experiencing a construction labor shortage. Particularly, we are seeing a lack of depth in the labor pool for quality subcontractors in trade areas like millwork and electrical, among other things,” said Susan LaGanke, senior managing director of project management, southwest region and multi-markets. “During the downturn a majority of the skilled workforce migrated to busier markets. That labor pool is still not confident enough in the economy to return to Arizona.”

In addition to rising labor costs, while the U.S. Producer Price, Index (PPI) has showed dramatic price drops for many key construction materials including asphalt, diesel and iron and steel products, the overall price of construction materials has not fallen. The decline in some materials has been offset by increases in other construction products (glass, cement and construction sand, gravel and stone). In addition, local materials prices tend to be sticky – supply-chain issues, contract requirements, project timelines and other factors cause price changes to lag broader trends.

Construction cost increases have outpaced the national average in several major metropolitan areas since January 2011. In the past year, Atlanta and Los Angeles saw particularly steep CCI increases—3.8 percent and 3.5 percent, respectively. For most markets, annual construction cost inflation accelerated in January 2016, following limited growth in 2015.

While total construction costs have registered strong increases during the current economic cycle, appreciation has been significantly slower than in the previous cycle. Between January 2004 and January 2009, the national CCI increased by an average of 6.6 percent per year for a cumulative gain of 37.4 percent—more than three times the cumulative 11.8 percent increase from 2011-2015.

The CBRE report, the first in a multi-part series, can be accessed here.

The following commercial leases were reported to the Real Estate Daily News for the Tucson Lease Report from June 13 thru June 17, 2016.

INDUSTRIAL – 2705 E. MEDINA RD., TUCSON
CAID Industries, Inc. renewed their lease for 13,400-square-feet at 2705 E. Medina Rd., Suites 161 and 171 in Tucson, from 2705 Medina Properties, LLC.  Brandon Rodgers, CCIM, Principal; Stephen D. Cohen and Russell W. Hall, SIOR, GSCS, Industrial Specialists with Cushman & Wakefield | PICOR, represented the landlord.  Rob Glaser, SIOR, CCIM, also with Cushman & Wakefield | PICOR, represented the tenant in this transaction. [mepr-show rules=”58038″]Tenant Phone: 520.294.3126[/mepr-show]

OFFICE – 3501 E. SPEEDWAY BLVD., TUCSON
Tucson Physician Group subleased 13,000-square-feet of office space at 3501 E. Speedway Blvd. The tenant was represented by David Montijo and Damian Wilkinson with CBRE’s Tucson office, and the landlord was represented by Bruce Suppes with CBRE’s Tucson office. [mepr-show rules=”58038″]Asking lease rate: $20.50 SF/YR Full Service[/mepr-show]

OFFICE – 5151 E. BROADWAY BLVD., TUCSON
Goldblatt Systems, LLC.recently leased 8,191-square-feet in 5151 E. Broadway, Tucson. The location of the property is at the Northeast corner of Broadway and Rosemont in Tucson.  The owner of the property is Tucson 5151 Investments, LLC. Sandy Alter of Rein & Grossoehme Commercial Real Estate represented the landlord. [mepr-show rules=”58038″]Asking lease rate: $18.00 – $21.00 SF/YR Full Service; Tenant Phone: 520.382.5999[/mepr-show]

OFFICE – 2 E. CONGRESS ST., TUCSON
The Planning Center leased 5,990-square-feet at 2 E. Congress. Buzz Isaacson, with CBRE, handled the transaction.[mepr-show rules=”58038″] Asking lease rate: $21.50 SF/YR Full Service; Tenant Phone: 520.623.6146[/mepr-show]

OFFICE – 100 N. STONE AVE., TUCSON
Kaneen Advertising and Public Relations, Inc. leased 4,395-square-feet of office space at 100 N. Stone Ave., Suite 450 in Tucson from Holualoa Pioneer, LLC.  Tom Nieman, Office Specialist with Cushman & Wakefield | PICOR, represented the tenant and Bruce Suppes and David Volk with CBRE, Inc., represented the landlord in this transaction.[mepr-show rules=”58038″] Asking lease rate: $17.00 SF/YR Full Service; Tenant Phone: 520.885.9009[/mepr-show]

OFFICE – 1 W. WETMORE, TUCSON
Intrepid USA Healthcare Services leased 3,000-square-feet at 1 W. Wetmore Rd., Suite 203 in Tucson from Issa and Henrietta Hallaq. Tom Nieman, Office Specialist with Cushman & Wakefield | PICOR, represented the landlord and Dean Cotlow with Cotlow Company, represented the tenant in this transaction. [mepr-show rules=”58038″]Asking lease rate: $15.00 SF/YR Modified Gross; Tenant Phone: 520.722.0555[/mepr-show]

RETAIL – 4951 E. GRANT RD., TUCSON
Jenny Craig renewed 2,730-square-feet of retail space at 4951 E. Grant Road, located within the Crossroads East Shopping Center. The transaction was handled by Nancy McClure with CBRE’s Tucson office. [mepr-show rules=”58038″]Asking lease rate: $15.00 – $19.00 SF/YR NNN; Tenant Phone: 520.325.2601[/mepr-show]

OFFICE – 1773 W. ST. MARY’S RD., TUCSON
Sonora Quest Laboratories, LLC renewed their lease for a 1,705-square-foot medical office at 1773 W. St. Mary’s Rd., Suite 101 in Tucson, from Richard A. Silver Irrevocable Life Insurance Trust.  Rick Kleiner, MBA, Office Specialist with Cushman & Wakefield | PICOR, represented the tenant in this transaction.

OFFICE – 1151 W. LA CANADA DR., TUCSON
Sonora Quest Laboratories, LLC renewed their lease for a 1,679-square-foot medical office at 1151 W. La Canada Dr., Suite 206 in Green Valley, from Continental Professional Plaza, LLC.  Rick Kleiner, MBA, Office Specialist with Cushman & Wakefield | PICOR, represented the tenant in this transaction.

OFFICE – 6367 E. TANQUE VERDE RD., TUCSON
Inphonite, LLC leased 1,606-square-feet of office space in Tri-Pointe Plaza, 6367 E. Tanque Verde Rd., Suite 204 in Tucson from CSFB 2005-C3 Tanque Verde, LLC.  Rick Kleiner, MBA, and Isaac Figueroa, Office Specialists with Cushman & Wakefield | PICOR, handled this transaction. [mepr-show rules=”58038″]Asking lease rate: $17.50 SF/YR Full Service; Tenant Phone: 800.350.7693[/mepr-show]

RETAIL – 5975 W. WESTERN WAY CIRCLE, TUCSON
Julie & Javier Cooper, dba J.J. Cooper’s Diner, leased approximately 1,560-square-feet of retail space located at 5975 W. Western Way Circle, Tucson, Arizona, from Trinum Properties, LLC.  Frank Arrotta of Tucson Realty & Trust Co. represented both the Landlord and the Tenant in the transaction. [mepr-show rules=”58038″]Asking lease rate: $14.00 SF/YR Modified Gross; Tenant Phone: 520.240.7344[/mepr-show]

RETAIL – 5228 E. GRANT RD., TUCSON
Kai Huang a Foot Reflexology Business, has leased 1,320-square-feet at 5228  E. Grant Road, from Maqsood & Sabina Enterprises, LLC.  Robert Nolan of Oxford Realty Advisors handled the transaction.

RETAIL – 5975 W. WESTERN WAY CIRCLE, TUCSON
Sar Oum, dba Queen Donut, leased approximately 1,200-square-feet of retail space located at 5975 W. Western Way Circle, Tucson, Arizona, from Trinum Properties, LLC.  Frank Arrotta of Tucson Realty & Trust Co. represented both the Landlord and the Tenant in the transaction. [mepr-show rules=”58038″]Asking lease rate: $14.00 SF/YR Modified Gross; Tenant Phone: 520.884.1123[/mepr-show]

RETAIL – 3305 N. SWAN RD., TUCSON
Wolffmeister LLC dba Glockmeister leased 1,200-square-feet at 3305 North Swan Road, Suite B-105, within the Shops at Camp Lowell at the northwest corner of Swan and Camp Lowell. The tenant sells firearms and related accessories. The Landlord, Camp Lowell I, LLC, was represented by David Dutson of NAI Horizon.  David Hammack of Volk Company Commercial Real Estate represented Wolffmeister LLC.

OFFICE – 1055 N. LA CANADA DR., TUCSON
Desert Podiatric Medical Specialists, PC leased 962-square-feet of office space at 1055 N. La Canada Dr., Suite 101 in Green Valley, from Healthcare Realty Services, Inc. Tom Nieman, Office Specialist with Cushman & Wakefield | PICOR, represented the landlord and John Buette with Buette Derousse Commercial Real Estate Properties, represented the tenant in this transaction.  [mepr-show rules=”58038″]Asking lease rate: $22.00 SF/YR Full Service; Tenant Phone: 520.757.0800[/mepr-show]

RETAIL – 621 N. GRANT RD., NOGALES
Veterans Arms, LLC leased 500-square-feet of retail space at 621 N. Grand Avenue, Suite C in Nogales, Arizona, from Angel T. Mendoza.  Denisse Angulo-Badilla, Commercial Specialist with Cushman & Wakefield | PICOR, represented the landlord in this transaction.

OFFICE – 6430 – 6450 SWAN RD., TUCSON
3dbiosurfaces Technologies, LLC, an international bio-tech startup company, has leased office space at Top of Swan Professional Offices, located at the northeast corner of Swan Rd and Skyline Drive in the Catalina Foothills area of Tucson.  Bob Davis, associate broker and partner of Tango Commercial Real Estate represented the tenant in the transaction.  3dbiosurfaces Technologies, LLC is developing a patented, low-cost diagnostic tool, one that will enable improved genetic testing for the healthcare industry.  Davis said, “3dbiosurfaces Technologies, LLC joins the growing bio-tech industry in Southern Arizona, adding to the diagnostics related enterprises establishing a presence in the area due in part to the available talent, support resources and lifestyle opportunities of our region.” [mepr-show rules=”58038″]Tenant Phone: 520.529.3788[/mepr-show]