Phoenix, Arizona —  Darren Pitts, Brian Gast and Brad Ranly of Velocity Retail Group represented the Landlord, C & H Development Company in 14,412-square-foot lease at Scottsdale Commons shopping center located at the southwest corner of Shea Boulevard and Scottsdale Road. Kitchen United, Inc. will be occupying the vacant space adjacent to BevMo.  The tenant was represented by Todd Folger and Jami Gray from CBRE.

Kitchen United began in 2017 and is a state-of-the-art commercial kitchen facility designed to meet the needs of restaurant operators looking to build off-premise business.  The shared facilities offer kitchen space and infrastructure for restaurants to launch delivery-only concepts, or to even test their brand in new markets without having to invest in their own real estate.  By the end of 2019 the company is expected to open in nine additional markets, with Phoenix among them.

“This is a prime location in central Scottsdale which should provide Kitchen United a great launch into the Phoenix market,” said Brian Gast, Executive Vice President of Velocity Retail. “We were focused on filling the vacancy for our owner with a quality tenant who can bring energy and synergy to the dozens of shop tenants in the center.  Kitchen United will be a great addition,” he added.  More info at:  https://www.kitchenunited.com/

This transaction is one of dozens of big box deals completed by Velocity Retail Group in the past year.  The firm continues to lead the retail market in big box leasing and sales and looks forward to continuing to serve its expanding retailers at the highest level.

Tucson, Arizona – Tucson’s retail big box sector continues to face similar challenges occuring nationally as online shopping changes the game. Big box retailers such as Sears, Kmart, and Toys R’ Us have lost the battle but other on-line only stores are beginning to open brick and mortar stores and businesses are spreading out their efforts to meet consumer demand, according to CBRE Tucson’s Year-End Big Box Report.

“What many believed to be the final nail in the coffin for retail as we know it: online shipping has swayed a new direction with some on-line-only companies are now finding it important to have physical store presence. Online shopping has challenged traditional brick and mortar retailers to become nimble in a playing field where the lines are blurred on where sales are actually made. “Omnichannel” is the new buzz-word allowing consumers to get what they want, when and where they want it: research online and buy in the store, or check it out in the store and buy on-line, buy on-line and return in the store, etc.

Big box vacancy (spaces greater than 10,000-square-feet) saw an increase of a number of spaces vacant year-over-year, with 49 spaces, but the total square footage vacant increased to 1,162,469-square-feet available at the end of 2018, compared to 44 spaces totaling 946,192 square feet at year-end 2017. Tucson closed out 2018 with 14 vacant big boxes of 30,000 square feet or more up from 9 in 2017.

In total, 381,804-square-feet of big box space was leased in 2018, down only slightly from 2017’s 506,570-square-feet of absorbed big box space.

Experiential retail is the new trend with consumers demanding experience over product in their physical retail. “The ‘3-F’s:’ Fitness, Fun, and Food seem to be the here and now categories that are active and absorbing vacant boxes—a national trend happening in Tucson!” Said Nancy McClure, “Fitness users like the new entrant, VASA Fitness, plus expanding existing: Chuze Fitness and Planet Fitness are filling boxes vacated by grocers, merchandisers, and even has spurred ground-up construction on the peripheral of town. Fun & Food is now often combined with eatertainment venues such as the new Galaxy Movie Theatres; the planned indoor trampoline/ entertainment center, Defy Tucson and Round 1; Top Golf; Dave & Busters with others to follow.”

2019 will bring more challenges for retailers such as grocery, drug, and department stores increasing vacancies. The demand for creative retail is stronger than ever in 2019. Property owners will have to stay nimble to adapt to the market.

“Property owners who are adapting to the changes in retailing, with guidance of real estate advisors, are thriving. To do that they are targeting the most active categories and are proactively working to remove, reduce or modify restrictive covenants to allow such uses as entertainment, fitness, and conversion to call centers and other office uses. Most retailers are working to modify their store sizes, and number of stores to adjust to customer demand.”

For full report: Big Box Report Year-End 2018

Colliers International Arizona Assists with Lease, Furnishings and Financial Support

Phoenix, Arizona – Lutheran Social Services of the Southwest (LSSS), a nonprofit mission affiliated with the Evangelical Lutheran Church in America, has consolidated and relocated its headquarters to Airport Office Park at 2502 and 2516 E. University Dr.

The team of Kathy Foster, MCR, Phil Breidenbach, SIOR, Kyle York and Sarah Stecko, CPMC of Colliers International Arizona represented the charitable organization in its real estate search and negotiations.  In addition, the team members obtained donations of furniture for the organization and contributed a portion of their real estate commission back to LSSS to help with development of an unmatched refugee-focused program during the holiday season.

“We cannot say enough good things about our work with Kathy and Phil. Kathy took the time to get to know us and our needs, and she worked tirelessly to find a space that would work. There were many challenges, but Kathy never gave up. She was a true partner; we are very grateful to have been able to work with her,” says Connie Phillips, President and CEO, LSSS.

The nonprofit organization leased 16,338-square-feet of space comprised of five different suites at the property.  The firm will occupy a sizable portion of the 22,688-square-foot project for a term of seven years.

“LSSS was on the cusp of being evicted from its building,” says Foster, senior vice president with Colliers.  “Fortunately, we were able to work with Reliance [Management] to help them find a new home that suits their growing needs and prevent them from becoming homeless.”

Built in 1978, Airport Office Park provides a variety of features that suit the mission, values and culture of LSSS.  It offers an amazing outdoor courtyard component that will be well-used by both employees and clients. Airport Office Park also offers excellent freeway visibility and access to Interstate 10.  The property is just two minutes away from Sky Harbor International Airport.

LSSS provides supportive services to empower individuals in need, including aging and disabled, children and family emergency, and refugee and immigration services.

Airport Office Park is owned by Presson Advisory, LLC.  The landlord was represented in this lease negotiation by Michael Crystal and Emily Currie of NKF in Phoenix.