New Residential Tower Adds More than 250 Units to Downtown; Plus 7 More Arizona Deals to Know Article originally posted on Phoenix Business Journal on February 22, 2024 Philadelphia-based Korman Communities and New York-based RXR have unveiled a 17-floor residential tower in downtown Phoenix. Called AVE Phoenix Sky, the 254-unit residential community at 601 N. 3rd Ave. was built by Clayco Construction, with CCBG Architects as architect and Rutledge Haro Design as interior designer. The opening of this new residential community brings the total number of units to 605 within two blocks on FIllmore Street, said Lee Anne Welsh, COO of Korman Communities and president of AVE. “We did that strategically,” she said. AVE Phoenix Terra, a midrise apartment just two blocks away at 555 N. 5th Ave., is 94% occupied, she said. Both communities offer traditional apartments with long-term leases as well as short-term leases in furnished units that can range anywhere from weeks to years, she said. About 25% of the apartments are furnished at the new AVE Phoenix Sky development, she said. Monthly rents start at $1,275 for a studio up to $2,530 for a two-bedroom unit. AVE Phoenix Sky also includes 4,350 square feet of retail space, with 3,770 reserved for a future restaurant and 580 square feet for a studio for local artists. The original developer of AVE Phoenix Sky was Scottsdale-based Empire Group of Cos., which sold the project in December 2021 to Korman Communities/RXR. Andy Smith, Empire Group director of development, confirmed that his company had still been contracted to oversee completion of the project, ever since it hired Clayco to take over as general contractor in August 2023 from Tucson-based BFL Construction Co. Inc. which walked away from the project and is now tied up in ongoing litigation. • One of Phoenix’s largest advertising firms has moved into a new downtown office. On Advertising Inc., which recently celebrated 30 years in business, has relocated into a 14,400-square-foot office in RED Development’s CityScape tower at 1 E Washington St., #300. Tenant improvements at the new office space include a new in-house video production studio. “We absolutely love being in the right place at the right time with RED Development as our partner,” said John Hernandez, co-owner of ON Advertising along with Ron Meritt and Eric Garcia, in a statement. “We are so excited to be in this location. We are extremely close and accessible to restaurants and events in the area, as well as the State Capitol. And, as members of the Greater Phoenix Economic Council, all we have to do is cross the street to get to their offices.” On Advertising now has 26 employees, including a new assistant creative director hired in February. The company is actively looking to hire more account executives. The firm registered more than $18 million in local capitalized billings in 2022, according to the latest Business Journal data. The company in August named Darren Higgs as its new president and general manager. • Washington-based Mindful Therapy Group is making its Arizona debut with an office in Tempe. The 5,026-square-foot space is being built out at 1250 W. Washington St. in suite 215. The plan is to open in May. Plans call for opening additional offices throughout metro Phoenix and Tucson, said Derek Crain, co-founder of Mindful Therapy Group, a collaborative network of licensed, independent mental health clinicians. The Tempe location will include 17 therapy offices, a break room and work room for storage. Later this year, plans call for opening two offices in Colorado, with one in Denver and the other in Fort Collins, as well as an office in Las Vegas. Established in 2011, the company has 11 offices throughout Washington and Oregon, where more than 15,000 clients are served weekly. “Arizona, like many other states, faces a lack of providers and we hope to address this issue while increasing timely access to therapy for more residents,” Crain said. • The Koll Cotton Center recently traded hands for $38 million, with a $20.5 million down payment for the property near Phoenix Sky Harbor International Airport. The property includes seven buildings totaling 228,605 square feet at 4050 E. Cotton Center Blvd., south of Interstate 10 and the airport in a large industrial core. San Mateo, California-based G.W. Williams Co., a real estate investor, acquired the property from TerraCap Management LLC, a commercial real estate investment firm. Kirk Kuller, Will Strong, Michael Matchett, Molly Hunt and Dean Wiley of Cushman & Wakefield’s national industrial advisory group brokered the deal in collaboration with Tracy Cartledge and Robert Buckley of Cushman & Wakefield’s capital markets. TerraCap acquired the Koll Cotton Center in 2021 for nearly $31 million as a value-add opportunity and has since invested in new roofs, improving the exteriors, repositioning vacant suites and more. “G.W. Williams Co. has added a high quality, well-leased industrial asset with a highly desirable and strategic Phoenix location to its investment portfolio,” Hunt said in a statement. At the time of the sale, the property was 98% leased. Kuller said light industrial properties have remained in high demand from small and mid-size tenants because of the flexibility of the buildings to accommodate different industries. “As one of the most robust and strongest performing industrial areas in metro Phoenix, the Sky Harbor submarket is well-known and desired due to its proximity to several key freeways and logistical routes,” Kuller said in a statement. • The Washington, D.C., office of Merchants Capital has secured $175.2 million for the construction of Juniper Square, a senior living community, and 67 Flats, a 384-unit family housing development, in Glendale. Roughly $86 million of that will come from Freddie Mac 4% Low-Income Housing Tax Credit Tax-Exempt Loan Forwards. The project at 6504 N. 67th Ave. also is supported by $89 million in equity bridge loans from Merchants Bank and $179 million in construction loans from Barclays Capital Inc. As a requirement for receiving low income housing tax credits, the developer Dominium Inc. will restrict all its 221 units at Juniper Square at 60% or less of the area median income through 2053 to maintain affordability for seniors over the age of 55. WD Construction is expected to begin construction Feb. 27 and finish the projects within 24 months. • Zara Nail Bar has opened two new salons in the East Valley, continuing an expansion that is reaching across the Valley. One of the new locations, at 200 W. Combs Road, is in a 2,500-square-foot-space in the Vineyard Town Center, where the grand opening event is set for Feb. 24. The other is at Queen Creek Crossing at Ellsworth and Queen Creek roads, where the grand opening event will be Feb. 25. Zara was represented by CRE8 Advisors in the lease transactions. “The way they built these salons is next level and no expense spared,” said CRE8 Partner Rommie Mojahed. Zara now has 15 locations around the Valley, with the expansions motivated by a mission to make nail care services inclusive and accessible, the company said. • WM of Arizona is about to start work on its new $19 million, 21.2-acre WM Casa Grande Hauling & Transfer Station. The company planned a ceremony to launch construction at 10 a.m. on Feb. 22 at the location at 1310 N. Jefferson Ave. in Casa Grande. The facilities will include a 21,000-square-foot transfer station that is expected to be finished in December 2024 and an 8,000-square-foot hauling facility that is expected to be finished in the first quarter of 2025. When operational, 30 WM employees and a fleet of collection trucks will be based at the site. “WM of Arizona is proud to start construction of our Casa Grande Hauling and Transfer Station at this 21-acre site,” said WM Area Vice President Scott Bradley in a statement. “At WM, we are committed to innovation, sustainability and providing safe and effective waste solutions that enhance the communities we serve. This new facility will support the rapid growth that Casa Grande is experiencing and reinforce WM’s commitment to providing responsible environmental services.” A second phase is envisioned at the site, which will add a compressed natural gas fueling station for WM trucks • A new $17.5 million student activity center has opened at Arizona Western College in Yuma. The two-story, 45,000-square-foot facility, called the Matador Activity Center, will serve more than 11,000 students at the college with a lecture hall, shared common areas, conference rooms, a maker space, an eatery, game areas, a multimedia center, an esports arena and a C-Store. “This building is for the students,” said AWC President Dr. Daniel Corr in a statement. “It was planned and designed with students in mind. We hope it’s a place where they can connect, engage and thrive in their experience at Arizona Western College.” The KAWC radio station and broadcast television studio will operate out of the multimedia center. Additionally, the center has space for administrative offices and a food pantry and clothing program for disadvantaged students. The Matador center was built by McCarthy Building Cos. The design architect was EMC2. The project was funded through board-approved revenue bonds for the college’s capital building efforts.
“We did that strategically,” she said. AVE Phoenix Terra, a midrise apartment just two blocks away at 555 N. 5th Ave., is 94% occupied, she said. Both communities offer traditional apartments with long-term leases as well as short-term leases in furnished units that can range anywhere from weeks to years, she said. About 25% of the apartments are furnished at the new AVE Phoenix Sky development, she said. Monthly rents start at $1,275 for a studio up to $2,530 for a two-bedroom unit. AVE Phoenix Sky also includes 4,350 square feet of retail space, with 3,770 reserved for a future restaurant and 580 square feet for a studio for local artists. The original developer of AVE Phoenix Sky was Scottsdale-based Empire Group of Cos., which sold the project in December 2021 to Korman Communities/RXR. Andy Smith, Empire Group director of development, confirmed that his company had still been contracted to oversee completion of the project, ever since it hired Clayco to take over as general contractor in August 2023 from Tucson-based BFL Construction Co. Inc. which walked away from the project and is now tied up in ongoing litigation. • One of Phoenix’s largest advertising firms has moved into a new downtown office. On Advertising Inc., which recently celebrated 30 years in business, has relocated into a 14,400-square-foot office in RED Development’s CityScape tower at 1 E Washington St., #300. Tenant improvements at the new office space include a new in-house video production studio. “We absolutely love being in the right place at the right time with RED Development as our partner,” said John Hernandez, co-owner of ON Advertising along with Ron Meritt and Eric Garcia, in a statement. “We are so excited to be in this location. We are extremely close and accessible to restaurants and events in the area, as well as the State Capitol. And, as members of the Greater Phoenix Economic Council, all we have to do is cross the street to get to their offices.” On Advertising now has 26 employees, including a new assistant creative director hired in February. The company is actively looking to hire more account executives. The firm registered more than $18 million in local capitalized billings in 2022, according to the latest Business Journal data. The company in August named Darren Higgs as its new president and general manager. • Washington-based Mindful Therapy Group is making its Arizona debut with an office in Tempe. The 5,026-square-foot space is being built out at 1250 W. Washington St. in suite 215. The plan is to open in May. Plans call for opening additional offices throughout metro Phoenix and Tucson, said Derek Crain, co-founder of Mindful Therapy Group, a collaborative network of licensed, independent mental health clinicians. The Tempe location will include 17 therapy offices, a break room and work room for storage. Later this year, plans call for opening two offices in Colorado, with one in Denver and the other in Fort Collins, as well as an office in Las Vegas. Established in 2011, the company has 11 offices throughout Washington and Oregon, where more than 15,000 clients are served weekly. “Arizona, like many other states, faces a lack of providers and we hope to address this issue while increasing timely access to therapy for more residents,” Crain said. • The Koll Cotton Center recently traded hands for $38 million, with a $20.5 million down payment for the property near Phoenix Sky Harbor International Airport. The property includes seven buildings totaling 228,605 square feet at 4050 E. Cotton Center Blvd., south of Interstate 10 and the airport in a large industrial core. San Mateo, California-based G.W. Williams Co., a real estate investor, acquired the property from TerraCap Management LLC, a commercial real estate investment firm. Kirk Kuller, Will Strong, Michael Matchett, Molly Hunt and Dean Wiley of Cushman & Wakefield’s national industrial advisory group brokered the deal in collaboration with Tracy Cartledge and Robert Buckley of Cushman & Wakefield’s capital markets. TerraCap acquired the Koll Cotton Center in 2021 for nearly $31 million as a value-add opportunity and has since invested in new roofs, improving the exteriors, repositioning vacant suites and more. “G.W. Williams Co. has added a high quality, well-leased industrial asset with a highly desirable and strategic Phoenix location to its investment portfolio,” Hunt said in a statement. At the time of the sale, the property was 98% leased. Kuller said light industrial properties have remained in high demand from small and mid-size tenants because of the flexibility of the buildings to accommodate different industries. “As one of the most robust and strongest performing industrial areas in metro Phoenix, the Sky Harbor submarket is well-known and desired due to its proximity to several key freeways and logistical routes,” Kuller said in a statement. • The Washington, D.C., office of Merchants Capital has secured $175.2 million for the construction of Juniper Square, a senior living community, and 67 Flats, a 384-unit family housing development, in Glendale. Roughly $86 million of that will come from Freddie Mac 4% Low-Income Housing Tax Credit Tax-Exempt Loan Forwards. The project at 6504 N. 67th Ave. also is supported by $89 million in equity bridge loans from Merchants Bank and $179 million in construction loans from Barclays Capital Inc. As a requirement for receiving low income housing tax credits, the developer Dominium Inc. will restrict all its 221 units at Juniper Square at 60% or less of the area median income through 2053 to maintain affordability for seniors over the age of 55. WD Construction is expected to begin construction Feb. 27 and finish the projects within 24 months. • Zara Nail Bar has opened two new salons in the East Valley, continuing an expansion that is reaching across the Valley. One of the new locations, at 200 W. Combs Road, is in a 2,500-square-foot-space in the Vineyard Town Center, where the grand opening event is set for Feb. 24. The other is at Queen Creek Crossing at Ellsworth and Queen Creek roads, where the grand opening event will be Feb. 25. Zara was represented by CRE8 Advisors in the lease transactions. “The way they built these salons is next level and no expense spared,” said CRE8 Partner Rommie Mojahed. Zara now has 15 locations around the Valley, with the expansions motivated by a mission to make nail care services inclusive and accessible, the company said. • WM of Arizona is about to start work on its new $19 million, 21.2-acre WM Casa Grande Hauling & Transfer Station. The company planned a ceremony to launch construction at 10 a.m. on Feb. 22 at the location at 1310 N. Jefferson Ave. in Casa Grande. The facilities will include a 21,000-square-foot transfer station that is expected to be finished in December 2024 and an 8,000-square-foot hauling facility that is expected to be finished in the first quarter of 2025. When operational, 30 WM employees and a fleet of collection trucks will be based at the site. “WM of Arizona is proud to start construction of our Casa Grande Hauling and Transfer Station at this 21-acre site,” said WM Area Vice President Scott Bradley in a statement. “At WM, we are committed to innovation, sustainability and providing safe and effective waste solutions that enhance the communities we serve. This new facility will support the rapid growth that Casa Grande is experiencing and reinforce WM’s commitment to providing responsible environmental services.” A second phase is envisioned at the site, which will add a compressed natural gas fueling station for WM trucks • A new $17.5 million student activity center has opened at Arizona Western College in Yuma. The two-story, 45,000-square-foot facility, called the Matador Activity Center, will serve more than 11,000 students at the college with a lecture hall, shared common areas, conference rooms, a maker space, an eatery, game areas, a multimedia center, an esports arena and a C-Store. “This building is for the students,” said AWC President Dr. Daniel Corr in a statement. “It was planned and designed with students in mind. We hope it’s a place where they can connect, engage and thrive in their experience at Arizona Western College.” The KAWC radio station and broadcast television studio will operate out of the multimedia center. Additionally, the center has space for administrative offices and a food pantry and clothing program for disadvantaged students. The Matador center was built by McCarthy Building Cos. The design architect was EMC2. The project was funded through board-approved revenue bonds for the college’s capital building efforts.