June 14, 2016

Apparently, it’s as true in economy as it is in psychology. The best predictor of future behavior is past behavior. Standing at roughly the mid-point of 2016, it seems that what we’ve gotten so far this year is what the rest of the year will shape up to be. Now, as you might remember from my January column, I was pretty confident that 2016 would be a robust, breakout year for the market, based in large part on the growth that I was seeing in my own precincts.

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June 13, 2016

Retail will remain an extremely popular investment vehicle among the other food groups given more passive ownership structure, low barrier to entry for ownership, intuitive nature, operating expense reimbursement structures, and predictive yields (assuming tenants are properly underwritten). Those thoughts are according to Eli Randel, director of business development at CREXi, who recently chatted with GlobeSt.com about his thoughts on all things retail.

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Sagewood, a Scottsdale senior living community, has completed the expansion of its on-site, Acacia Health Center, according to Sagewood’s Executive Director Stewart Ingram. Doubling in size, the $13.2 million expansion includes another 36,300 square-feet to Acacia Health Center at Sagewood. Sixty beds have been added to the health center including a new 20-bed memory care neighborhood […]

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With a number of metrics pointing to a more sluggish economy (though not necessarily a recession), small wonder that U.S. consumers seem a little nervous about the future, at least according to the latest University of Michigan Consumer Sentiment Index. The overall index was down in June to 94.3, compared with 94.7 in May. The drop was small, but it reflects apprehension about the future—which could restrain consumer spending at retail properties.

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There seems to be a concern over how long the recovery will last. At the present time, some forecasters are suggesting a slowdown or even a recession in 2017. But it is simply too early to tell at the present time. Despite weakness in the employment report earlier in the month, recent data is relatively positive. This is good news. If the slowdown in employment turns out to be an aberration, the likelihood is that the economy will continue to plod along as it has since the recession ended. And, at least at the present time, it appears that if there were a recession, it would be mild.

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Specifically, medical providers in retail spaces represent two compelling forces directing lives in the U.S. right now: Americans are spending more on health care, and want to do so in locations that are as convenient as they are safe. Also, landlords and investors are vigilantly looking for creditworthy tenants who can also consistently draw foot traffic to their properties. Not all medical services are suited to every available retail vacancy. Good partnerships do crop up, however, and it is a formula that both landlords and real estate investors are learning to perfect.

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June 12, 2016

Global real estate investment firm Hines is joining the ranks of major institutional investors seeking to cash in some of their longer-held investments and lock-in returns at today’s high property valuations. The Houston-based developer disclosed it is exploring strategic alternatives for two of its sponsored non-traded REITs: Hines Real Estate Investment Trust and Hines Global […]

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Melissa Trujillo is part of the fastest-growing group of homebuyers in metro Phoenix. a group that is poised to drive the housing market during the next decade. Not the Millennials, though she’s nearly one at age 38. And not the boomerang buyers, though she is one of those. She lost a home during the housing crash and had to wait five years to buy again. But the single mother of three, who bought a $135,000 three-bedroom home in west Phoenix earlier this month, is also Hispanic.

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A new luxury living apartment complex is opening up in Scottsdale in mid-June, a stone’s throw from local hangout spot Hotel Valley Ho. When The Standard opens, it will be the only luxury apartment community that is partnered with a hotel to offer resident perks such as access to the Valley Ho pool, spa and room service, according to the property managers.

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The Phoenix city council has unanimously approved a planned unit development application for 130 acres in and around the iconic Metrocenter Mall development, located on Interstate 17 between Peoria and Dunlap Roads. Of the 130 acres, 83 acres are occupied by Metrocenter Mall, the adjoining Macys and Sears anchor spaces, and the 10-acre land site of a future Walmart Supercenter. The new zoning allows for multiple new uses. It also allows for increased height and density at the infill site, which boasts the highest surrounding residential density in all of the metro Phoenix market.

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The struggles of Gap Inc. may ripple beyond either the retailer’s investors or its landlords. Morningstar Credit Ratings LLC said Thursday it had identified 231 securitized commercial mortgages, with an allocated property balance of $13.89 billion, with exposure to various Gap brands. Of those loans, more than half are backed by collateral where leases with Gap expire in the next two years.

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June 10, 2016

When millennials began entering the rental pool en masse, the multifamily industry couldn’t have been happier. After all, the recession—brought on by the single-family mortgage meltdown—had pulled down the for-rent side of the industry as well, and the idea of a burgeoning “renter nation” was more than welcome news. The stars had aligned. After a few years of underbuilding, a voluminous new demographic dramatically emerged from the shadows and formed a line at the door of your friendly local leasing office.

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So far this year, U.S. real estate investment trusts are handily beating the Standard & Poor’s 500 stock index, as income-oriented investors remain drawn to the trusts’ often-juicy yield. Two factors are driving the performance: continued low interest rates and a rebound in the physical real estate market, whether residential or commercial. The MSCI US REIT Index Total Return is up 4.17 percent as of mid-May, versus the S&P 500 year-to-date return of 0.41 percent.

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Park at Deer Valley LLC in Chandler (Nasim Sikder, principal) paid $33 million($75,688 per unit) to acquire a 436-unit apartment complex at 17425 N. 19th Avenue in Phoenix called The Park at Deer Valley. The seller was Synergy 19th Ave (US) LP, a limited partnership formed by investors Myles Bruckal and Steven Bruckal in Phoenix.

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Phoenix is a town built on real estate, and what nearly died during the Great Recession finally is starting to reboot. In all corners of the region, construction on various commercial real estate projects is in full bloom with plenty more in the pipeline. We know it’s often hard for readers to keep track of all that’s happening on that front.

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June 9, 2016

Pending home sales in the US rose for the third consecutive month in April and reached their highest level in over a decade, according to the latest index data to be published.

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Foreclosures low, home building high, prices affordable and buyers are moving to the area. April just might have been the best month for metro Phoenix’s housing market in a decade.

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Metro Phoenix is often considered among the more-affordable places to live in the U.S., but a recent flurry of luxury-apartment construction in Scottsdale bucks that trend, with rent in some cases approaching Manhattan prices.

A studio at one of Scottsdale’s priciest new complexes might cost $1,300 to $1,700 a month, while a two-bedroom apartment can fetch $3,500 to $4,000 — the same price as a modest two- or three-bedroom unit in New York City’s SoHo or Greenwich Village neighborhoods.

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May’s increase in nonresidential building projects suggests further growth in construction activity in 2016 despite first-quarter market volatility. The Dodge Momentum Index rose 2.4 percent in May to 119.4 from its revised April reading of 116.6 (2000 = 100).

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As first reported by GlobeSt.com sister publication, ALM’s ThinkAdvisor.com, this was an 11.6% increase from $1.48 trillion issued in the fourth quarter of 2015 but a 5.4% decline year over year from $1.75 trillion in the first quarter of 2015, according to the report.

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June 8, 2016

The Town of Gilbert Design Review Commission will consider at its June 9 meeting a developer’s request to build a Main Event entertainment complex, like two other Arizona locations previously opened in Tempe in 2013 and in Avondale earlier this year. Developer LeSueur Investments seeks to build the 50KSF facility on 5.9 acres of vacant farmland at the SEC of East Ray Road and Santan Village Parkway just west of the Loop 202 Santan Freeway.

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Central Phoenix’s building boom is spreading north. Developers are planning hundreds of new houses and apartments in the North Mountain and Deer Valley areas, including a 31-acre community full of restaurants and retail. A few projects broke ground in May with more slated for the summer. Stretching from Northern Avenue past Happy Valley Road, the zones are seeing some of the same building trends as the central city, said Alan Stephenson, Phoenix Planning and Development director. Projects are filling in vacant parcels among existing development, or clearing land for new uses.

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Tempe Town Lake’s first hotel will open this week. The AC Hotel Tempe, part of Marriott International, will open on Wednesday, June 10. The European-style hotel will be the first in the western U.S. It will be the eighth in the U.S.

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West Valley residents will soon realize the pleasures of one-stop-healthcare, a new development trend, with Dr. John Simon’s latest project: Westgate Healthcare Campus. The first phase of the 250,000-square-foot, $30 million campus is expected to be finished at the end of the year, with the remainder of the project looking to come online within the next five years. Once finished, the campus seeks to be a one-stop-shop for anyone’s healthcare needs, hoping to provide everything from lab work and routine check-ups, all the way to dental exams. Simon also hopes to add research components to the campus.

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ColRich Multifamily purchased two adjacent Scottsdale apartment complexes yesterday from NorthStar Realty Finance for a total of $67.5 million, or $108,000 per unit. Each sale was funded by an assumption of the seller’s prior loans with US Bank, as well as new notes with Freddie Mac.

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