CCIM Teaches Risk and ‘Back of Envelope Calculation’ Class at MRED

CCIM members Laurie Weber, Paul Rosado, George Larsen and Jason Wong
Southern Arizona CCIM members: (l to r) Laurie Weber, Paul Rosado, George Larsen and Jason Wong at UA MRED class

How do you educate future real estate investors on the development process of a major retail center? Well, that’s exactly what members of the Southen Arizona CCIM, George Larsen, Laurie Weber and Andy Seleznov with Larsen Baker, Paul Rosado of Paul Rosado, and Jason Wong with Red Point Development did on Wednesday in Dr. Drew Sanderford’s Masters of Real Estate Development (MRED) finance class at the University of Arizona.

The presentation called “The Development Process: Risk and ‘Back of Envelope’ Calculations” was a fascinating case study of the Marana Marketplace, a 165,000-square-foot, retail center at the corner of Thornydale and Orange Grove in Marana. The presenters took their audience through the ‘wack-a-mole’ development process, something they claim all development projects follow to one degree or another: enthusiasm, disillusionment, panic, a search for the guilty, punishment of the innocent and praise and honor for the developers.

The 18 acres of land was purchased for $6 million ($7.65 PSF) back in 2005 before impact fees existed in Pima County. Between 1988-2004 the vacancy rate had dropped to 9.4% and projections were expected to be 7.9% by 2006. In 2005 people had an 8% annual income increase in wages and there were 12,705 home permits pulled for Pima County that year along. Everything was going well for any developer with low vacancies and increasing rents. So what could go wrong with the back of envelop proforma calculations for this project?

Then the recession hit and the business plan couldn’t meet its all its goals, this is when panic strikes and a new appreciation for key business partners is learned, sometimes the hard way.

From a pragmatic view point, “something always goes wrong in development,” Larsen told the students, “and there is always something new to learn.” According to this case study and these experienced developers, here are some of the important take-away lessons to learn: good market timing is more important than good property pricing. A good banker becomes more important than market timing or property pricing, and a good partner is more important than market timing, property pricing or a banker.

Of course the costs of the project exceeded expectations (don’t they always) and the importance of the Internal Rate of Return, or IRR, was taught through this real life, real money, real estate development process.

Many of you reading this now must be wishing they had given this class when you were in school. That’s one of the many benefits the MRED program has, as part of the University of Arizona College of Architecture, Planning & Landscape Architecture.

The Southern Arizona CCIM Chapter brings their irreplaceable real world experience to the classroom.

The CCIM Institute is a national organization for commercial real estate practitioners who wish to elevate their business practices through education and networking. The Institute provides cutting edge education and awards its CCIM designation (Certified Commercial Investment Members) to Realtors who complete the extensive coursework, pass a comprehensive exam and demonstrate that they have qualifying experience in the field.

The Southern Arizona CCIM Chapter has 22 CCIM designees and 112 CCIM candidates and associate members. The Chapter provides networking and mentoring to the Tucson commercial real estate community.

 




CCIM’s Taskforce Initiative Credited for Drastic Metal Theft Decline

Assistant Chief Kathleen Robinson receiving the donation on behalf of the Tucson Police Foundation (L-R: Mayor Jonathan Rothschild, Mona Deane (BOMA), Assistant Chief Robinson, Amber Smith (MPA)
Assistant Chief Kathleen Robinson receiving the donation on behalf of the Tucson Police Foundation (L-R: Mayor Jonathan Rothschild, Mona Deane (BOMA), Assistant Chief Robinson, Amber Smith (MPA)

TUCSON – Metal thefts in Tucson are down from their peak in 2012, thanks to cooperation between law enforcement, businesses and metal recyclers. At the peak, a coalition of business groups, including the Metropolitan Pima Alliance, the Southern Arizona Chapter of CCIM and Building Owners and Managers Association (BOMA) of Greater Tucson, formed the Pima County Metal Theft Task Force to work with the Tucson Police Department (TPD) to combat metal thefts.

Jason Wong, CCIM, with Tucson-based, RedPoint Development initiated the task force and CCIM Southern Arizona Chapter was awarded the Community Engagement Award earlier this year for its efforts.

The Taskforce raised money, launched a public relations campaign and worked with state lawmakers to pass legislation dedicated to deterring metal theft. The business community, residents, local and State governments, local law enforcement and the metal recyclers all worked together to reduce the high frequency of metal theft. Due to these community efforts, reports of metal theft have drastically decreased since 2012.

The Pima County Metal Theft Taskforce was recognized at a press conference this week by City of Tucson Mayor Jonathan Rothschild and the Tucson Police Department for its efforts to decrease metal theft and raise funds for the Tucson Police Foundation. The Taskforce donated $6,000 to the Tucson Police Foundation for the purchase of additional surveillance equipment to be used for the continuing efforts to fight this billion dollar crime.

“The city was experiencing metal theft at unprecedented levels,” said Tucson Mayor Jonathan Rothschild. “Due to the business community coming together with our police department, we are now below levels we were at in 2010.” Three years ago, as copper prices soared and the recession lingered, Tucsonans reported a property loss of $2.9 million, a substantial increase over the 2010 property loss of $652,000. Last year, the property loss from metal thefts was $310,000.

To learn more about the Pima County Metal Task Force visit https://mpaaz.org/advocacy/metal-theft-task-force

 




TUCSON LEASE REPORT April 14 – 18, 2014

Tucson Lease Report
Tucson Lease Report

The following Tucson leases were reported to the Real Estate Daily News for the week April 14- 18, 2014.

MANUFACTURING – 3781 N. HIGHWAY DR., TUCSON
QRP, Inc. leased 15,000-square-feet at 3781 N. Highway Dr. in Tucson from Daveck Properties, LLC. Ron Zimmerman, Commercial Specialist, with Cushman & Wakefield | PICOR represented the landlord. Paul Hooker, Industrial Specialist with Cushman & Wakefield | PICOR represented the tenant in this transaction.[mepr-show rules=”58038″]Tenant Phone: 520-790-3533 [/mepr-show]

OFFICE – 6296 E. GRANT RD., TUCSON
Edmund Optics has leased a 6,171-square-foot space at Wilmot Professional Plaza, located on Wilmot Rd, just south of Grant Rd. The Premises will be used as an office for research and development. They are scheduled to open for business July 2014. Andy Seleznov, CCIM, Director of Leasing at Larsen Baker represented the landlord and Peter Douglas of Cushman & Wakfield | Picor represented the tenant. [mepr-show rules=”58038″] Tenanat Phone: 520-514-2572 [/mepr-show]

OFFICE – 201 N. BONITA AVE., TUCSON
KB Home Tucson has leased 4,683-square-feet of office space at Rio Nuevo Professional Plaza located at 201 N. Bonita Ave. in Tucson. The tenant was represented by Rob Waller with CBRE’s Los Angeles office and Jeff Casper with CBRE’s Tucson office. The landlord, RNPP LLC, was represented by David Montijo also with CBRE’s Tucson office. [mepr-show rules=”58038″] $21.00 SQ FT/YR full service; Tenant Phone: 520-622-2919 [/mepr-show]

RETAIL – 1011 N. TYNDALL AVE, TUCSON
Debbie Heslop, CCIM, of Volk Company represented Core Campus Tucson I LLC in its lease of 3,000-square-feet in The Hub at Tucson to Zi Quan Lu, who plans to open Sushi Station 1 in the space. The Hub at Tucson is a 592-bed high rise student housing community currently under construction near the U of A campus at 1011 North Tyndall Avenue. The project will feature 7,000 square feet of ground level retail space. Jason Wong of Crestline Properties represented the tenant.

MEDICAL – 6565 E. CARONDELET DRIVE, TUCSON
Sonora Quest Laboratories, LLC renewed their lease for 2,847-square-feet at 6565 E. Carondelet Drive in Tucson from Tucson II MOB Owner, LLC. Tom Knox, SIOR, and Rick Kleiner, MBA Principals and Office Specialists with Cushman & Wakefield | PICOR, represented both parties in this transaction. [mepr-show rules=”58038″] $21 – 22.00 SQ FT/ YR full service; Tenant Phone: 520-751-0904[/mepr-show]

OFFICE – 12470 RANCHO VISTOSO, TUCSON
Agnico Eagle USA Limited of Toronto, Ontario, Canada, a leading international gold producer, with mines and exploration properties in Canada, Finland, Mexico and the United States has leased 2,595-square-feet of office space at 12470. Rancho Vistoso in Tucson. CBRE’s Jeff Casper and David Montijo represented the landlord, OV Office. The tenant was represented by Esther Empens of Tierra Antiqua Realty in Tucson.

RETAIL – 1551 ST. MARY’S RD., TUCSON
Jerry Bob’s restaurant has leased 2,450-square-feet of retail space at St. Mary’s Plaza at the southeast corner of St Mary’s and Silverbell. The tenant was represented by Peter Villaescusa and Jesse Peron with CBRE’s Tucson office. The landlord, Tucson St. Mary’s Plaza LLC, was represented by Dave Hammack with the Volk Company. Jerry Bob’s is expected to open at this location this summer. [mepr-show rules=”58038″] Tenant Phone: 520-807-5717[/mepr-show]

OFFICE – 4501 SUNRISE DR., TUCSON
Fairway Independent Mortgage Corp. has leased 2,433-square-feet of office space at La Paloma Office Center located at 4501 Sunrise Dr. in Tucson. David Montijo with CBRE’s Tucson office represented the mortgage lender in the transaction. Montijo, along with Bruce Suppes, also of CBRE, represented the landlord, Sunrise Holdings LLC, as well. [mepr-show rules=”58038″] $19.50 SQ FT / YR NNN; Tenant Phone: 520-760-7335 [/mepr-show]

OFFICE – 3561 E. SUNRISE DR., TUCSON
Imus Wilkinson Investment Management has leased 2,253-square-feet of office space at La Paloma Corporate Center located at 3561 E. Sunrise Dr. in Tucson. CBRE’s Jeff Casper and David Montijo represented the landlord, La Paloma Corporate Center LLC, in the transaction. The tenant was represented by Tony Reed and Tim Harris with Long Realty. [mepr-show rules=”58038″] $19.50 SQ FT/YR NNN; Tenant Phone: 520-777-1911 [/mepr-show]

OFFICE – 6261 N. LA CHOLLA BLVD., TUCSON
Ideal Rehabilitation LLC has leased 2,092-square-feet of medical office space at La Cholla Medical Center located at 6261 N. La Cholla Blvd. in Tucson. CBRE’s David Montijo and Jeff Casper represented the landlord, HTA-Tucson Medical Office LLC, while the tenant was represented by Justin Horowitz of Sperry Van Ness. [mepr-show rules=”58038″] Tenant Phone: 520-398-6670 [/mepr-show]

WAREHOUSE – 305 S. EUCLID, TUCSON
Moog Inc., Space and Defense Group, a worldwide designer, manufacturer, and integrator of precision motion control products and systems leased 1,875-square-feet at 305 S. Euclid, Suite 105 in Tucson from Pascoe Investment-Arizona, LLC. Stephen D. Cohen and Russell W. Hall, SIOR, GSCS, Principals and Industrial Specialists with Cushman & Wakefield | PICOR, represented the landlord in this transaction. [mepr-show rules=”58038″] $0.75 SQ. FT/MO modified gross [/mepr-show]

WAREHOUSE – 1870 W. PRINCE RD, TUCSON
SD Media leased 1,440-square-feet at 1870 W. Prince, Suite 8 in Tucson from Presson Corporation. Rob Glaser, SIOR, CCIM, and Paul Hooker, Industrial Specialists with Cushman & Wakefield | PICOR handled this transaction. [mepr-show rules=”58038″] Asking rents: $0.50 – $0.68 SQ FT /MO gross; Tenant Phone: 520-203-8425 [/mepr-show]

RETAIL – 345 E. CONGRESS, TUCSON
Planet Smoothie leased 1,000-square-feet at 345 E. Congress in Tucson from Tucson Properties 1, LLC. Aaron LaPrise, Retail Specialists with Cushman & Wakefield | PICOR, represented the tenant in this transaction.
[mepr-show rules=”58038″] $25.00 SF / YR NNN [/mepr-show]

OFFICE – 5823 N. ORACLE RD., TUCSON
Arizona Auto Savings, new car purchasing and leasing, leased 990-square-feet in Placita del Norte at 5823 N. Oracle in Tucson from CAS Real Property, LP. Greg Furrier, Principal and Retail Specialist with Cushman & Wakefield | PICOR, represented the landlord in this transaction. [mepr-show rules=”58038″]  Tenant Phone: 520-888-8877 [/mepr-show]

RETAIL – 5618 E. BROADWAY BLVD., TUCSON
Bert Layne Jewelers leased space at 5618 E. Broadway in Tucson from Broadway-Craycroft, LLC. Greg Furrier, Principal and Retail Specialist with Cushman & Wakefield | PICOR, represented the landlord.
[mepr-show rules=”58038″]  Phone: 520-747-9947 [/mepr-show]

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