Friday, April 29, 2011
Thursday, April 28, 2011
CoStar Selects Tucson's Top Office Sales for Q1 2011
The following is an account of the Tucson market’s select top five office sale transactions for first quarter 2011.
American Recovery Capital NY recover REIT, Inc. purchased the 125,000-square-foot building at 5411 E Williams Blvd. in Tucson for $32 million, or $256 per square foot. Phillip Skillings of Bourn Advisory Services represented the seller, Bourn Companies LLC. Mark Palmer of The Palmer Team, Inc. represented the buyer.
Nova Financial & Investment Corporation acquired the 10,472-square-foot property at 6893 N Oracle Road in Tucson for $1.75 million, or approximately $167 per square foot. Ken Schlachta and John Yarborough of Romano Real Estate represented the seller, Monte Sherrill. Mark Irvin of Mark Irvin Commercial Real Estate Services LLC represented the buyer.
Jerry Soneblick purchased the 14,784-square-foot building at 1735 E Fort Lowell Road in Tucson for $900,000, or roughly $61 per square foot. Tari Auletta of Grubb & Ellis represented the seller, Shanahan Mechanical & Electrical. Larry Paul of Realty Executives Tucson represented the buyer.
Robert Snyder acquired the 3,681-square-foot property at 4711 E Camp Lowell Drive in Tucson for $830,000, or about $225 per square foot. Jon O’Shea and Rob Fischrup of VAST Commercial Real Estate Solutions LLC represented the sellers, Mark Goldberg & Antonio Esquibel. The buyer did not use a broker for this transaction.
Assurance Home Care, Inc. purchased the 5,107-square-foot building at 2312 N Rosemont Blvd. for $600,000, or approximately $117 per square foot. Thomas Nieman of PICOR Commercial Real Estate Services represented the seller, Del Sol Enterprises. The buyer did not use a broker for this transaction.
Tucson's Select Top Office Leases for Q1 2011
The following is an account of the Tucson market's select top 10 office lease transactions for first quarter 2011.
La Frontera leased the entire 22,090-square-foot building at 4891 E Grant Road in Tucson. Buzz Isaacson and Ike Isaacson of CB Richard Ellis represented the landlord, Commission of Accreditation of Rehabilitation Facilities. Tom Knox of PICOR Commercial Real Estate Services represented the tenant.
Ridgetop Engineering leased 11,743 square feet at 3580 W Ina Road in Tucson. Tari Auletta of Grubb & Ellis represented the tenant. The landlord, Diamond Ventures, handled the negotiations in-house.
Cox Communications leased 6,615 square feet at 1640 E River Road in Tucson. Buzz Isaacson and Ike Isaacson of CB Richard Ellis represented the landlord, IEA LLC. The tenant did not use a broker for this transaction.
ESDI leased 6,500 square feet at 110-150 N Tucson Blvd. in Tucson. Gary Best of KW Commercial represented the tenant and the landlord, Engineering & Research Associates.
Bank of America Home Loans signed a lease renewal for 4,204 square feet at 6875 N Oracle Road in Tucson. Tari Auletta of Grubb & Ellis represented the tenant. John Yarborough of Romano Real Estate represented the landlord, Plaza Campana TIC 1 LLC.
Community Archives leased the entire 4,204-square-foot building at 6861 N Oracle Road in Tucson. John Yarborough and Ken Slachta of Romano Real Estate represented the landlord, Plaza Campana TIC 1 LLC.
SimonMed Imaging, Inc. leased 3,858 square feet at 310 N Wilmot Road in Tucson. Roy Grinnell and Eric Campos of Benchmark Commercial LLC represented the tenant. Laura Abbinate of The Plaza Companies represented the landlord, Healthcare Trust of America, Inc.
Bayada leased 3,734 square feet at 1055 La Canada Drive in Green Valley. Thomas Nieman of PICOR Commercial Real Estate Services represented the landlord, HR Acquisition I Corp. The tenant did not use a broker for this transaction.
The Center for Life Skills Development leased 3,552 square feet at 5700 E Pima St. in Tucson. John Hamner of KW Commercial represented the tenant. Andrew Sternberg and Robert Nolan of Oxford Realty Advisors represented the landlord, Hamilton-East Pima LLC.
Dr. Pimienta leased 3,031 square feet at 2330 N Rosemont Blvd. in Tucson. Thomas Nieman of PICOR Commercial Real Estate Services represented the landlord, Clyde M. Robinson III. The tenant did not use a broker for this transaction.
CoStar Lists Tucson's Select Top Industrial Leases for Q1 2011
The following is an account of the Tucson market's select top 10 industrial lease transactions for first quarter 2011.
Bridgestone Tire signed a three-year lease for 10,800 square feet at 1861 W Grant Road in Tucson. Darrell Deshaw of NAI Horizon represented the tenant. Rob Glaser of PICOR Commercial Real Estate Services represented the landlord, Walker Tucson Property LLC.
T & S Transport signed a one-year deal for 8,400 square feet at 3579 E Golf Links Road in Tucson. Paul Siskind of Long Realty Company represented the landlord in-house. The tenant represented itself.
Huddleston Trucking signed a one-year lease for 6,134 square feet at 2800 E Airport Drive in Tucson. Ronald Zimmerman of Grubb & Ellis represented the tenant and the landlord, City of Tucson.
Battery Systems leased 5,787 square feet at 2801 N Flowing Wells Road in Tucson. George Hayduke of Westar Mortgage & Realty Corporation represented the tenant. Gary Emerson of GRE Partners LLC represented the landlord, Keenan Investment Co.
ISS Janitorial leased 5,400 square feet at 3860 S Palo Verde Road in Tucson. Paul Hooker and Rob Glaser of PICOR Commercial Real Estate Services represented the landlord, Presson Corporation. The tenant represented itself.
Master Auto Parts signed a five-year deal for 5,000 square feet at 1671 S Research Loop in Tucson. Ronald Zimmerman of Grubb & Ellis represented the landlord, Jeffco Plaza LLC. The tenant represented itself.
Optical Support, Inc. signed a three-year lease for 5,000 square feet at 1671 S Research Loop in Tucson. Ronald Zimmerman of Grubb & Ellis represented the tenant and the landlord, Jeffco Plaza LLC.
Chopstix Asian Dinner leased 4,500 square feet at 3820 S Palo Verde Road in Tucson. Rob Glaser and Paul Hooker of PICOR Commercial Real Estate Services represented the landlord, Presson Corporation. The tenant represented itself.
Mastek-Innerstep, Inc. leased 4,410 square feet at 3280 E Hemisphere Loop in Tucson. Pat Welchert of PICOR Commercial Estate Services represented the landlord, Tucson Property Investors. The tenant represented itself.
Interior Logics leased 4,246 square feet at 3845 N Business Center Drive in Tucson. Paul Hooker and Rob Glaser of PICOR Commercial Real Estate Services represented the landlord, Presson Corporation. The tenant represented itself.
First Quarter 2011 National Logistics Market Does Not Disappoint
April 27, 2011
Nationwide, nearly 18 million square feet of logistics space was absorbed in the first quarter. Although the logistics market did not see the same acceleration of demand we reported for the overall industrial sector, the logistics segment consistently outperformed the other property types throughout the downturn and recovery. New completions totaled 3 million square feet for the fifth consecutive quarter, and just 23 projects totaling 10 million square feet remained under construction across the country. Most of the projects currently under construction are build-to-suit projects, with preleasing averaging 89 percent. Construction on the largest speculative building started during the first quarter, a 616,000-square-foot distribution warehouse located in the fast-rebounding Inland Empire market. This market has seen its supply of available, large blocks of space go from 17 to seven over the course of one year. At least two more buildings will break ground in the Inland Empire market this year. Measured by net absorption, Inland Empire was the best performing market during the first quarter, with approximately 25 percent of total demand occurring in the market.
Other large logistics markets also performed well, with 88 percent of total demand occurring in the nation's top six logistics markets: Southern California, Atlanta, Chicago, Central Pennsylvania, Dallas and Northern New Jersey. Strong demand and minimal new deliveries continue to drive vacancy downward. During the quarter, vacancy dropped 40 basis points to 12.2 percent, while availability declined 50 basis points to 15.9 percent. Asking net rents grew 3.2 percent on an annualized basis. The first quarter Grubb & Ellis Industrial Broker Market Sentiment survey identified third-party logistics providers as the most active industry across the nation. This market-level intelligence coupled with economic indicators paint a continuously brighter picture for the national logistics market. Source: Grubb & Ellis
Wednesday, April 27, 2011
Tech Firms Leading the Commercial Real Estate Recovery
By Robert Bach, Senior Vice President, Chief Economist and
Dick Scott, Managing Director, San Jose, Leader, Technology Practice Group
Technology stocks have posted impressive gains in recent periods. According to Morningstar Inc., these stocks witnessed an average gain of 20.75 percent over the past year, an average gain of 12.39 percent annually over the past three years (leading all other sectors), and an average 10.09 percent gain annually over the past five years (trailing only basic materials). But has a strong stock market performance translated into demand for commercial real estate? In the following report, Grubb & Ellis examines five office markets with strong technology components to answer this question: Silicon Valley, San Francisco, Boston, New York City and Austin, Texas.
In the Silicon Valley and San Francisco, tech firms are leading the commercial real estate recovery, while in New York City, Boston and Austin, Texas, they are instrumental to the market’s rise in activity. In the Bay Area and New York City, Google, Facebook and LinkedIn are among the most active firms, while in Austin, SunPower Corp., Samsung and Apple Inc. have been prominent. Microsoft, IBM and Oracle have been significant market participants in Boston as well. These firms are largely focused on clustering their offices near each other, as well as tapping into a higher concentration of technology-skilled employees, a number of highly ranked universities and the metropolitan vibe these cities give that is current and hip.
Impact on Speculative Construction
The activity by tech firms has created momentum and a spike in the absorption level of large blocks of space in some areas. The majority of technology companies require more than 100,000 square feet of space for their corporate headquarters and other company consolidations. As depicted in the following graph, there are few large blocks of Class A office space sized 100,000 square feet and above available for rent in each metropolitan area. This has led to the question of whether the markets will see an increase in speculative construction in these tech-heavy markets.
Grubb & Ellis does not expect the recent positive absorption levels for large blocks of space to turn into an increase in major speculative construction in the Bay Area immediately. What the company does expect to see in the Silicon Valley, however, is additional company consolidations, which have been occurring more frequently, large redevelopments and the acquisition of strategically located buildings and land parcels.In Austin, two noteworthy projects recently broke ground in the Southeast region, including Data Foundry’s 250,000-square-foot data center and CyrusOne’s 72,000-square-foot data center. Beyond these projects, extensive development of new office and flex space is believed to be unlikely in the near-term. New York City is similar, in that with the completion of construction for 11 Times Square, no new significant office construction is expected to be finished for at least two years.
Boston tells a more unique story, with the Cambridge market being the hot spot for technology companies.
Due to the city’s high barriers to entry and the lack of large blocks of space that come on to the market, Cambridge will likely see construction sooner. Alexandria Real Estate Equities is planning a $1 billion, 1.5-million-square-foot office/laboratory complex in East Cambridge. Additionally, the master-planned Cambridge Discovery Park is currently being marketed with permits in place allowing for the development of more than 800,000 square feet of space. Beyond Cambridge, Grubb & Ellis expects additional construction to take the form of a build-to-suit.
Time to Invest
Technology corporations flush with cash are showing signs that it’s time to invest in Silicon Valley’s commercial real estate market. Microsoft, Dell, Qualcomm and Google are making large leasing commitments in the Silicon Valley. Brocade, Yahoo, Apple, Google and Facebook are just a few of the firms that are in the process or have purchased land near a building or project they plan to lease or redevelop. In San Francisco, Salesforce.com recently purchased 14 acres of land to potentially build a 2-million-square-foot campus and Zynga leased 270,000 square feet of space. By acquiring land, companies have the option to expand right next to their headquarters location when the time is right, eliminating the need for a corporate relocation. With the banking of this land, however, developers can’t compete with the users, creating a barrier to construction in the Silicon Valley. Additionally, the current income from leasing space does not outweigh the cost to build it, making the only construction to take place mostly build-to-suit projects.
In New York City, Google recently purchased 111 Eighth Ave. for $1.8 billion, ensuring their future growth in the market. The company currently occupies more than 500,000 square feet of the 2.9-million-square-foot building.
Austin has more than 90,000 professionals employed by technology firms. Intel Corp. invested $39.8 million into the market by acquiring a 388,000-square-foot office building located at 1300 S. Mopac Expressway. SunPower Corp. is currently searching for space in the market and is expected to bring 450 jobs; the company has invested $10 million in capital into Austin’s economy through the expenses of opening a new operation. Cirrus Logic Inc. announced a $30 million headquarters building to be built in downtown Austin that will house more than 550 employees and is expected to be completed in summer 2012.
Aces and Spaces
To borrow a term used in the game of Bridge, several technology-rich markets are seeing “aces and spaces,” where companies are moving into large, Class A buildings in prominent locations (the aces), while leaving spaces behind in the buildings they previously occupied (the spaces). In the Silicon Valley, there are a number of Class A office lease transactions closing in and around the larger existing projects in the market. Since these transactions often are a consolidation of operations and/or a flight to quality, they leave behind a number of smaller, typically older spaces, which generally take longer to be absorbed. Large firms such as IBM, Microsoft, Texas Instruments, Symantec and Oracle continue to acquire smaller companies in the area, often consolidating these new groups into their existing Silicon Valley campus locations or moving them to more visible, strategic locations.
Surrounding Boston, Acme Packet recently consolidated three offices into one location in Bedford, with additional expansion plans expected to occur within a few years. IBM and Oracle have also been active in acquiring companies, like Netezza Corporation and Art Technology Group, and moving them near their existing locations in Littleton and Burlington.
In the Long Run
The U.S. continues to lead the global technology industry from both an innovation and market share perspective. It’s important to note that although Grubb & Ellis does not expect speculative construction to return to the Bay Area and Austin immediately, construction should return within the next few years, and new buildings will get a lot of attention then.
Tuesday, April 26, 2011
2010 CoStar Power Brokers: And the winners are...
The market was tough. The economy was hard. And our top dealmakers, well, they stood tall, brave and faced the market like true power brokers. They put in long hours, sacrificed weekends and the results are proof of their incredible dedication and talent.
Grubb & Ellis/Tucson has been recognized by CoStar in the 2010 Power Broker Awards as one of the Top Leasing and Top Sales Firm in the Tucson market.
Bob Davis, Bill DiVito, Howard Kong and Ron Zimmerman of Grubb & Ellis/Tucson were also listed as recipients of the Top Industrial Leasing Brokers award in Tucson.
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