Panelists at the ICSC’s Western Division Conference discussed using private-sector capital and expertise for public-private partnerships (P³s) projects, as an efficient use of resources and a great way to improve tight-budgeted communities (something we know quite a bit about herer in Tucson) and the demise of many big-box and department-store retailers in large enclosed malls not expected to reverse itself any time soon—if ever—said panelists on Friday.

P³ Is Smart in Post-RDA Era By Carrie Rossenfeld as reported in GlobeStreet.com
SAN DIEGO – Many in the development community were apprehensive about the ability to complete development transactions after the dissolution of California’s redevelopment agencies, but governing bodies and private developers have been forming successful partnerships to get deals done, according to speakers.

Public-private partnerships (P³s) are contractual agreements formed between a public agency and a private sector entity that allow for greater private sector participation in the delivery and financing of transportation projects.

Tax-increment financing is one way municipalities can pay for development, but in some cases, particularly in California, this is not possible. “Private/public partnerships create a revenue stream when tax-increment financing is not an option,” said David Wallace, former mayor of Sugar Land, TX, and CEO/co-founder of Wallace Bajjali Development Partners L.P. “We have to create revenue streams to get projects off the ground.

Another method of payment is for the City to donate land to the developer, which can be figured as equity in the project, Canzoneri said. Wallace added that Cities can say to their constituents, “This is what we did to your tax rate because we relied on the private sector, because we used their capital and ingenuity.”

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Decline of Enclosed Mall Is Permanent By Carrie Rossenfeld as reported in GlobeStreet.com
SAN DIEGO-The demise of many big-box and department-store retailers has led to a decline in large enclosed malls that won’t reverse itself any time soon—if ever—said panelists of ICSC’s Western Division Conference on Friday. Speakers opined that the days of the department-store-anchored mall are gone, but there are many emerging retail models to replace them.

One of those trends is outlet centers, which speaker Michael Marino, EVP & division manager for Wells Fargo Bank, says his firm has financed two or three of, even during recent difficult financial times. Another trend is Hispanic grocery-anchored local centers, of which Mark Schurgin, president of the Festival Cos., said his firm is currently developing eight. And speaking of grocery stores, trends in this area abound, from Internet-ordered groceries via Amazon.com, said Terry Evans, VP of the Kroger Co., to retailers like Target adding grocery aisles to their floorplans.

“The Internet use of grocery is one of the biggest trends we’re seeing,” said Evans. “It’s a trend we’re studying and continuing to look at.” The trend is concerning to grocery retailers like Kroger, who don’t want to see their market share eaten up by former non-grocery retailers.

Also growing is the size and number of grocery stores, said Evans. Kroger’s stores are now ranging from 75,000 square feet to 125,000 square feet, and he expects to add 150 to 175 new major projects over the next three years. He also said that consolidation is not over in the grocery business, and we will hear about other deals taking place over the next couple of years.

Still, many other types of retailers are looking at smaller footprints and utilizing the Internet to sell product it can’t fit into smaller bricks-and-mortar shops. Some are using their stores as showrooms, expecting to make the actual sales online.

But even though retail footprints are shrinking, bricks-and-mortar shops will not disappear, said Arturo Sneider, a partner with Primestor Development Inc. “The experiential need of a shopping center is shifting back in a big way—the need to have a place to hang out, to be, to spend time.”

On the development side, construction of schools, drugstores, neighborhood shopping centers and standalone restaurants is increasing, according to Bruce Pomeroy, president of Evergreen. In fact, among the three major drugstore retailers—Walgreens, CVS/pharmacy and Rite-Aid—the competition is strong, and with retailers adding new lines like groceries to their mix, Robert Roscoe, division VP of real estate for Walgreens, said, “We need to change up what we have to offer.”

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PHOENIX – Capital Markets experts in the Phoenix office of Jones Lang LaSalle(JLL) have completed a $22.1 million sale of Broadway Industrial Portfolio, totaling three Class A buildings and 308,038 square feet in Tempe, Ariz. The deal is JLL’s second investment sale in the area this quarter, accentuating the strength and draw of the submarket’s commercial real estate inventory.

Broadway Industrial Portfolio encompasses a 110,000-square-foot building at 1005 W. Alameda Dr; a 96,437-square-foot building at 2910 S. Hardy Drive; and a 101,601-square-foot building at 2925 S. Roosevelt St., all in Tempe. Each building is a Class A, institutional quality asset offering manufacturing, distribution and office space. The properties are also all located directly off of Interstate 10 and fully occupied, with no near-term rollover, to tenants including United Stationers Supply Co., ACI Plastics, Inc., Misty Mate, Inc. and Triumph Group, Inc.

Jones Lang LaSalle Managing Directors Mark Detmer and Bo Mills represented the property seller, San Francisco-based Prologis, Inc. The buyer is DCT Industrial Trust.

“These buildings are exceptional in that they combine outstanding functionality and full occupancy with a true Class A image in an infill location,” said Detmer. “This includes access—within minutes—to many of the key amenities that a high-end industrial user might need: an extensive freeway network, international airport, deep labor pool and host of retail opportunities.”

In addition, the project is located within the Southeast Valley, an area that over the last decade has remained one of the nation’s fastest growing regions for industrial and technology companies, and according to JLL is well situated for long-term stability.

Jones Lang LaSalle Executive Vice Presidents Pat Harlan and Steve Sayre, and Associate Kyle Westfall, will serve as the exclusive leasing brokers for the property buyer on behalf of DCT Industrial Trust.

This is the second investment sale closed by JLL in the Tempe submarket this quarter. In July, the firm completed a $27.1 million sale of Broadway 101 Office Park, a deal that was driven by high market demand and fundamentals reminiscent of pre-recession transactions.

Jones Lang LaSalle is a leader in the Phoenix commercial real estate market. Employing nearly 400 of the region’s most recognized industry experts, the firm offers office and industrial brokerage, tenant representation, facility and investment management, capital markets and development services. In 2012, the Phoenix team completed 9 million square feet in lease transactions valued at $458 million, directed $63 million in project management and currently leases and/or manages a 19.8 million-square-foot portfolio.

Detmer and Mills as well as the leasing team of Harlan, Sayre and Westfall can be reached at (602) 282 6300.

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PHOENIX, PRNewswire — Cole Real Estate Investments, Inc. (NYSE: COLE), a market-leading net lease REIT, announced on behalf of its private capital management business, Cole Capital™, the acquisition of 12 single-tenant office and industrial properties by Cole Corporate Income Trust, Inc. (CCIT). The combined price of the acquisitions was approximately $386.1 million, and included corporate facilities in North Carolina, Tennessee, Virginia, Texas, New Jersey, Nevada, Arizona, California and Colorado.

CCIT invests primarily in strategic single-tenant, income-producing, necessity corporate properties leased to creditworthy tenants under long-term net leases. Cole Corporate Income Advisors, LLC, a subsidiary of Cole Real Estate Investments, Inc., serves as external advisor to CCIT.

“The diversified industries, geographic locations, remaining lease terms and strategic importance of the properties for the tenants made these solid acquisition targets,” said Thomas W. Roberts, executive vice president and head of real estate investments at Cole Real Estate Investments, Inc. “We continue to identify opportunities that meet our stringent acquisitions criteria and satisfy our rigorous underwriting processes, while building a high-quality portfolio of net-leased office and industrial assets for CCIT.”

AMAZON.COM DISTRIBUTION CENTERS – Nashville and Richmond MSAs
CCIT acquired two Amazon.com (A&P ‘AA-‘) distribution warehouses totaling more than 2 million combined square feet in Murfreesboro, TN, and Chester, VA. The build-to-suit properties serve as regional distribution centers for the world’s largest online retailer.

AT&T SERVICES FACILITY – Dallas-Ft. Worth MSA
CCIT acquired a 199,248-square-foot, three-story office property located in Plano, TX. The property serves as an “AT&T Foundry” innovation center, an R&D facility where AT&T (parent company S&P ‘A-‘) and its partners collaborate on creating new technology.

BJ’S WHOLESALE CLUB WAREHOUSE/DISTRIBUTION CENTER – Philadelphia MSA
CCIT acquired a 633,836-square-foot warehouse facility in Burlington, NJ, via a sale-leaseback transaction. The facility serves as the regional distribution center for BJ’s retail stores in the Mid-Atlantic region. This facility is one of only three distribution centers operated by BJ’s.

DUKE UNIVERSITY HEALTH SYSTEM – Durham-Chapel Hill MSA
CCIT acquired a 126,225-square-foot, three-story office building leased to Duke PRMO, LLC, part of the Duke University Health System network. The facility provides administrative and training support to the health system.

TREX WAREHOUSE – Reno MSA
CCIT acquired a 337,500-square-foot industrial warehouse leased to the Trex Company in Fernley, NV. The property serves as a raw materials warehouse for Trex, the world’s largest manufacturer of wood-alternative decking and railing products.

Six-facility Portfolio – Phoenix, San Jose and Denver MSAs
CCIT acquired an 833,079-square-foot, six-facility portfolio that includes three properties in the Phoenix, AZ MSA: a DeVry University educational facility, a CVS Caremark back office/call center and C.R. Bard’s customer service, conference and showroom facility; two properties in San Jose, CA: Acxiom’s West Coast headquarters and Bestronics’ corporate headquarters and manufacturing facility; and one facility in Denver, CO: Boise Paper Holdings’ paper corrugation plant servicing the West.