AZ Biz Journal – Man behind P.F. Chang’s, Fleming’s bringing latest restaurant concept to Scottsdale

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Former Paradise Valley resident and renowned restaurateur Paul Fleming is bringing his latest concept to Arizona.

The man behind Fleming’s Steakhouse and Valley-based P.F. Chang’s China Bistro will open Paul Martin’s American Grill this spring in Scottsdale. Fleming’s newest concept focuses on natural, sustainable and seasonal food at a moderate price. Paul Martin’s menu features classic American fare such as hamburgers, grilled fish and spinach dip, but made using organic produce and free-range chicken and beef.

The 6,500-square-foot restaurant will employ around 117 when it opens in the next few months at 6186 N. Scottsdale Road, just south of Lincoln Drive.

“Americans claim they want to know where the product’s coming from,” Fleming said. “The product is what drives the concept. It tastes better, it’s better for you.”

Fleming, who now lives in Napa Valley, Calif., became interested in launching a concept focused on natural and sustainable foods after marveling at the intensity of Northern California residents for organic and seasonal foods.

Over the past five years, Fleming and his partners have opened six Paul Martin’s in California. Scottsdale’s restaurant marks the first location outside the Golden State.

Most of the ingredients at the Scottsdale location will be sourced from local farms and vendors in the Phoenix area. Items such as fish and chicken will be brought in from elsewhere.

“We found a way to be able to sell it at an affordable price,” Fleming said. “We buy as much local as we can and we do the right thing and have a seasonal menu.”

AZ Biz Journal – Taylor Morrison plans to top $1 billion in spending on land acquisition, development this year

Shares of Taylor Morrison Home Corp. (NYSE:TMHC) were up 3.6 percent by the end of trading Wednesday following its earnings report released earlier that morning showing a strong finish to 2013.

The Scottsdale-based home builder, which went public in April, saw its fourth-quarter earnings before income taxes climb by nearly one-third to $121.54 million. Its 42 percent plunge in year-end earnings before taxes was mostly attributed to the costs of its initial public offering that raised about $591 million.

Taylor Morrison doled out nearly $1 billion toward land acquisition and development last year, $302 million of which was spent during the fourth quarter. By the end of the year, the home builder had 45,000-plus lots throughout the U.S. and Canada under its control, up from 40,000 or so from a year ago.

“As we look to 2014, we anticipate we will spend over $1 billion in land acquisition and development,” Sheryl Palmer, Taylor Morrison’s president and CEO, said during a conference call with analysts Wednesday.

David Cone, the company’s vice president and chief financial officer, said he anticipates the community count this year “to increase 25 percent to 30 percent and closings to increase by 15 percent to 20 percent.”

Taylor Morrison posted 1,462 home sales in the U.S. during the fourth quarter, up 39 percent year-over-year, at an average price of $430,699. That average price was up 20 percent from a year ago and substantially higher than the industry norm.

For instance, the average new-home sale price in the Valley was $318,119 in November, according to the latest data from Arizona State University. The nationwide average in December was $311,400, according to the U.S. Commerce Department.

AZ Biz Journal – Apartment tower, Whole Foods planned for downtown Tempe in $80-100 million project

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A failed mixed-use project in downtown Tempe that once promised a condominium high-rise and a Whole Foods grocery store is being revived.

Greenwood Village, Colo.-based Alberta Development Partners LLC paid $6.1 million for less than 2 vacant acres at the northwest corner of University Drive and Ash Avenue in a deal that closed this week, according to a statement from CBRE Inc. Brookfield Asset Management was the seller.

The company plans to spend another $80 million to $100 million erecting a mid-rise or high-rise apartment tower there with a ground-level grocery store over the next several years.

Nearly a decade ago, the 1.86-acre parcel was slated for a similar project dubbed Mosaic that called for a high-rise condo tower and ground-level Whole Foods. The developer at the time, KML Development, never got the project off the ground due to the downfall of its lender, the now-defunct Mortgages Ltd.

The announcement of this new project comes at a time when commercial development, especially high-end multifamily, has been exploding in Tempe’s urban core. It would also fill a void for the downtown area’s growing number of residents, who currently do not have a nearby grocery store.

Don Provost, founder and principal of Alberta Development, declined to name the grocer, but sources close to the deal who did not want to be named said Whole Foods has signed letter of intent to occupy the space. Whole Foods representatives did not immediately return an email late Wednesday afternoon about the possible store.

Provost also declined to say how large the retail space would be and whether the grocer would occupy the entire space, so it is unclear whether there will be enough space for a full-scale Whole Foods like those sen in Scottsdale and Chandler. A smaller Whole Foods in Tempe is about four miles from the new project.

Phx Biz Journal – OdySea Aquarium planned near Scottsdale on Salt River land

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The group behind the Butterfly Wonderland near Scottsdale plans to break ground this summer on a new large-scale aquarium project that’s being dubbed as “Sea World meets Disneyland.”

Construction on OdySea Aquarium is slated to begin this summer off Loop 101 and Via de Ventura Drive on tribal land next door to the Butterfly Wonderland attraction that opened last year. The 200,000-square-foot aquarium will include 2 million gallons of water for its numerous exhibits and myriad species.

“OdySea Aquarium is a unique kind of attraction that will change how marine life is looked upon by the general public,” said Amram Knishinsky, one of the principal partners on the project.

Guests will be able to travel up and down escalators and elevators surrounded by transparent acrylic tubes and sides, allowing them to view the marine life as they travel through the two-story attraction.

Even the bathroom fixtures such as the counters and sinks and commodes will be built to provide views into the shark tanks, Knishinsky said.

“If you go to the bathroom, you come out and you’ll say to your friend … you gotta go see the bathroom,” he said. “Nobody would have ever thought of something like that. We have an opportunity to deliver that.”

Unlike Sea World, OdySea will not feature mammals, Knishinsky said, but will feature more than 1,000 marine species. Also, the aquarium will have trained penguins perform parades daily in a public square-type setting.

OdySea Aquarium is the third stage of a $175 million project that began with construction of Butterfly Wonderland and continued with OdySea Mirror Maze on the same parcel of land owned by the Salt River Pima-Maricopa Indian Community.

Phx Biz Journal – Demolition underway at Mountain Shadows Resort in Paradise Valley

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Demolition has finally commenced at the Mountain Shadows Resort, a Paradise Valley landmark that was a popular hangout for locals and celebrities before shutting down nearly a decade ago.

The move is the first tangible step toward the long-awaited redevelopment of the property, which until recently has been the center of contentious debate amongst the town, surrounding residents and the property owner.

Now that agreements have been reached and the owner, Irvine, Calif.-based Crown Realty & Development, has paid off its debts following a July 2012 bankruptcy protection filing, the massive overhaul of the property at 56th Street and Lincoln Drive is coming to fruition.

The redevelopment plan calls for a new 150-plus room boutique hotel, redesigned golf course and a 40-home subdivision. It is to be done in phases, but in aggregate will cost as much as $300 million and could take up to four years to complete, said Robert Flaxman, president and CEO of Crown.

Flaxman said Crown will partner with several home builders for the subdivision, but declined to give any names. He also wasn’t ready to disclose who the hotel operator would be, although recent news reports indicate that Scottsdale-based Westroc Hospitality has signed a letter of intent.

Flaxman said the existing 337-room resort, which has been closed since September 2004, needs to be torn down because it doesn’t even come close to meeting today’s building codes. It also bears no real historical or architectural significance, he said.

Additionally, “it was latent with asbestos,” Flaxman said, which is being removed.

The 18-hole golf course, driving range and clubhouse, which comes equipped with a restaurant, fitness center, pro shop and tennis courts, has remained open. Crown had acquired the property for $42 million in 2007 with a $32 million loan from US Bank, records show. The owners’ plans to immediately ramp up revitalization efforts were stalled as the economic downturn hit shortly after the acquisition, court records show. During that limbo period, the Crown Realty affiliates — MTS Land LLC and MTS Golf LLC — defaulted on its loan and filed for bankruptcy.

Phx Biz Journal – Shea Scottsdale retail center sold to Turf Paradise owner for $44.5 million

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Turf Paradise owner Jerry Simms has forked over $44.5 million for a large Safeway- and CVS-anchored retail center in the heart of Scottsdale, according to a statement today from the Phoenix office of Cassidy Turley.

The Shea Scottsdale retail center is situated at the northeast corner of Shea Boulevard and Scottsdale Road, one of the busiest intersections in the area. The transaction included all freestanding structures, including Wells Fargo and MidFirst Bank branches, Jason’s Deli, Arby’s and McDonald’s, which is located on the same slab that once housed Devil’s Martini.

It was only 5 percent vacant at the time of sale, while similar neighborhood retail centers in Scottsdale posted an average vacancy rate of 12.4 percent during the fourth quarter, according to Cassidy Turley research.

The sale, which closed escrow Wednesday, was the result of an unsolicited offer by Simms, said Michael Hackett, an executive managing director of Cassidy Turley who helped represent the seller.

“He approached us with a 1031 Exchange from the sale of property he had in Beverly Hills,” Hackett told me.

Los Angeles-based Karlin Real Estate, the seller, purchased the property in October 2011 along with the neighboring retail center to the east, dubbed Shea Scottsdale East, which is anchored by the Harkins Shea 14 movie theater and includes Pita Jungle and the infamous Amy’s Baking Co. Karlin paid $50.32 million total for the two properties, which were a combined 277,253 square feet.

Simms actually wanted to buy both retail centers, but the numbers penciled out better to only buy one, at least for now, Hackett said. So Karlin is still the owner of Shea Scottsdale East, which Simms may buy sometime down the road.

Phx Biz Journal – Hannay Realty buys Camelback East Shops for $12.2m

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What: Sale of the Camelback East Shops, a neighborhood shopping center

Where: Southeast corner of 32nd Street and Camelback Road, Phoenix

Size: 25,150 square feet

Price: $12.2 million, or about $500 per square foot

Buyer: Hannay Realty Advisors in Phoenix

Seller: Camelback East Shops Inc. in Phoenix

Deal details: Hannay paid $6.1 million in cash and financed the rest with a loan maturing in 2019, according to public records pulled by Vizzda.

Property details: The shopping center is a staple of Phoenix’s Biltmore area. It was built in 1957, with later additions completed in 1969. It is anchored by Van’s …

AZ Central – Northgate Center sells for $22.825M

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Najafi Companies of Phoenix sold Northgate Corporate Centre at 2625 W. Grandview Road in Phoenix to Griffin Capital Corp. of Los Angeles for $22.825 million. Jim Fijan and Will Mast of CBRE in Phoenix negotiated the sale of this 131,850 square-foot class A office building. Northgate Corporate Centre is 100 percent leased to Houston-based Waste Management Inc., with about 10 years remaining on the current lease. The property sits on 13.37 acres subject to a long-term ground lease with the Arizona State Land Trust, which expires in 2095.

Major deals

REO asset manager John Mitchell of LNR Partners in Miami Beach, Fla., as special servicer, sold Black Canyon Corporate Center at 10835 N. 25th Ave. in Phoenix to Younan Properties Inc. of Woodland Hills, Calif., for $7.14 million. Eric Wichterman, Mike Coover, Jeff Wentworth and Sean Spellman of Cassidy Turley in Phoenix represented both parties in the sale of this 94,203 square-foot office property.

Brookfield Asset Management of Toronto sold Tempe Towne Centre at 20 E. University in Tempe to Tempe Towne Center LLC in Tempe, a holding company owned by YAM Management, for $5.25 million. Barry Gabel and Chris Marchildon of CBRE in Phoenix, in conjunction with CBRE’s National Loan Sale Advisory Group, represented the seller. The buyer of this 21,737 square-foot office property was self-represented.

Horlacher Foundation Inc. of Mesa sold 19.3 acres west of the southwest corner of Greenfield and McDowell roads in Mesa to Blandford Homes through its McDowell Citrus 100 LLC for $3.2 million. Brent Moser, Mike Sutton and Brooks Griffith of Cassidy Turley Arizona’s land group represented both the seller and the buyer, who plans to build high end executive homes on 35,000 square foot lots.

MJA Investments of Lincoln, Neb., sold two office buildings of Redrock Business Center at 17100 E. Shea Blvd. in Scottsdale to A2Z Properties of Scottsdale for $1.925 million. Erick Wichterman and Mike Coover of Cassidy Turley negotiated the sale of this 21,190 square-foot property, representing both the buyer and the seller.

AZ Central – Commerical real estate set to heat up in Phoenix area

Metro Phoenix’s commercial-real-estate market, once battered like the region’s housing sector during the crash, is on the rebound and rapidly gaining popularity with big investors again.

In the latest “Emerging Trends in Real Estate” report, considered one of the real-estate industry’s most influential surveys, Phoenix moved up eight spots from last year, to rank No. 25, in a list of the best places in the U.S. for investors to put their money.

The Valley’s employment and population growth, as well as a relatively low cost of doing business, helped the area improve its position with small and large investment funds.

Phoenix’s population is projected to grow 2.6 percent in 2014, according to the report’s publishers, PwC and the Urban Land Institute.

That figure is higher than local estimates.

The report also predicts the number of the coveted millennial-generation residents, ages 20 to 34, in the region will increase by 11 percent over the next five years.

The report projects the number of jobs in the region will increase by 2.4 percent in 2014, another figure slightly higher than local economists forecast. The Emerging Trend forecast also predicts that employers needing office space will account for the biggest growth in jobs.

“Survey respondents feel that the investment outlook (for metro Phoenix) will be better in 2014,” said the report, which was released in November. “The outlook for development and homebuilding really boosted Phoenix’s overall rank.”

The majority of the 1,000 investors polled saw Phoenix’s office market as a sector to buy in during the next year because of the projected increase in jobs.

“We’ve seen several major employers bring their operations to the Valley or expand existing operations,” said Craig Henig, senior director of CBRE Phoenix. “We’re back on the map as an attractive place for major companies. Apple, in particular, was a big win. Now that they’re invested in the Valley, we’re going to see suppliers for the tech giant migrating here, too.”

In November, Apple Inc. created its first a significant Arizona presence.

A company that will make high-tech glass for Apple products announced it planned to employ about 700 people at former First Solar Inc. factory in east Mesa. At the time, Apple announced it was buying the building for the supplier, GT Advanced Technologies Inc.

Here is a quick new year’s forecast for commercial properties:

Office: More buildings on way

Metro Phoenix’s office vacancy rate has dropped to about 22 percent, based on research reports from metro Phoenix brokerages. The vacancy rate soared above 27 percent in 2009.

Some office areas in the Valley are faring better.

Downtown Phoenix has drawn several new tenants during the past few years, as well as more restaurants and other amenities. The overall office vacancy rate downtown has dropped to 15 percent, according commercial-real-estate firm Cushman & Wakefield.

Rents for office space are climbing as a result.

“We are forecasting office-rent increases in 2014 of between 2 and 4 percent, with more robust growth in 2015,” said Bob Mulhern, managing director of real-estate brokerage Colliers International in Phoenix.

CBRE is predicting demand will entice developers to build new office space. About 700,000 square feet of office space is under construction now, and development of additional buildings is expected to start this year.

Recently, international investor Lowe Enterprises, with J.P. Morgan Asset Management, bought a Phoenix office building just north of Paradise Valley and a central Scottsdale building with a total of 327,263 square feet of space for $51 million.

“We like the strength of the Phoenix office market, with occupancy rates on the rise and unemployment rates falling,” Rick Newman, CEO of Lowe Enterprises, said in a news release. “These buildings offer the opportunity to acquire well-located, well-maintained properties in markets that will continue to benefit from improving economic conditions.”

He said Lowe is looking to invest more in metro Phoenix’s real-estate market.

Jim Fijan of CBRE, who negotiated the deal for the seller, Newport Beach-based CJK Investments, said the sale exemplifies the strong demand from institutional investors for office properties in the Valley.

One of the biggest deals in 2013 was the $600 million Marina Heights development in downtown Tempe. It will be anchored by an office building for insurer State Farm, which is expected to become a job hub that will draw hundreds of workers.

Ground was broken on the 2 million-square-foot, 20-acre mixed-use project in August.

Industrial: Strong demand

The Valley’s industrial market had seen new development and drawn several big tenants, including online retail giant Amazon.com, over the past few years.

The majority of investors polled by the Emerging Trends survey said 2014 would be a good year to hold onto industrial properties in the Valley because prices could increase.

Currently, there are prospective tenants looking for more than 7 million square feet of industrial space in metro Phoenix, according to Jones Lang LaSalle.

During the third quarter, LaSalle reports Marathon Equipment signed a lease for more than 220,000 square feet of warehouse space in the southwest Valley, and several companies, including Hensley and Sears, inked deals for more than 70,000 square feet of industrial space.

The vacancy rate for warehouse space across metro Phoenix is currently 12.9 percent, according to brokerage Cassidy Turley. That’s up slightly from 12.5 percent at the end of July.

In the last week in December, trucking company Inland Kenworth paid $5 million for 17 acres in Tolleson, where it plans a facility with as much as 100,000 square feet, said Steve Mardian of Cassidy Turley.

A third-quarter report from Phoenix-based brokerage Lee & Associates showed more than 1.5 million square feet of industrial space was built in 2013, with another 5 million square feet under construction across the Valley.

Retail: Big boxes being filled

The many big boxes that were emptied by retailers during the recession are slowly filling up.

Metro Phoenix is leading the nation in demand for more retail space.

A new study by national real-estate group CoStar shows demand for new retail space in the region climbed 2 percent in the past year.

Investors are mixed on their feeling about the region’s retail outlook, according to the Emerging Trends survey. About half say its a good year to sell Valley shopping centers, and the other half believe it’s a good time to hold onto them.

Phoenix-based developer Vestar’s Canyon Trails Towne Center in Goodyear sold for $23.5 million during the last week of December, according to Cassidy Turley.

Retail expert Judi Butterworth with Velocity Retail said the lease and sale of big boxes in the region has been “robust” in the past several months, with traditional and non-traditional users moving into vacant space.

Large national retailers including Burlington Coat Factoryand Ross are filling big spots again.

The vacancy rate for metro Phoenix retail space is about 10 percent, according to Cushman. That’s down from nearly 15 percent in 2010.

AZ Central – Third effort to develop former Rawhide land in Scottsdale

A third effort to develop a portion of the old Rawhide property in Scottsdale is in the works.

A proposal submitted to the city shows plans for a 218-townhome community called Via Bello at Silverstone. Silverstone is the name given by the developer to the entire 160-acre site formerly occupied by Rawhide.

Via Bello would take up almost 17 acres in the southwestern quadrant of the property, surrounding the Scottsdale Appaloosa Library.

According to documents accompanying the proposal, D.R. Horton, a homebuilder, owns the property. The previous owner, Villa Volterra Investments, defaulted on a loan and lost the property.

Larry Gabriele, a developer who put together Villa Volterra, tried with two separate projects to get something going on the site. He purchased the property in 2006 for $22.3 million. It was sold in a trustee’s sale last year.

If approved, the new project would be the fourth element approved on the site. Already open are the library and Vi at Silverstone, a senior living complex.

Rawhide closed in late 2005 and relocated to the Gila River Indian Community in 2006 after 35 years in Scottsdale.

The entire site, which companies associated with car-dealer magnate Larry Van Tuyl purchased in 2005 for $46 million, was rezoned after Rawhide moved out, but development has been slow. Part of the problem is the widening of Scottsdale Road near Pinnacle Peak Road, including a new bridge over Rawhide Wash. Construction continues on the road project, with new lanes being added on the east side.

Neighbors won promises that development would await completion of the road projects in order to accommodate any new traffic that might be generated. Originally scheduled to be complete by 2010, the Scottsdale Road widening was delayed as a result of the recession.

Silverstone developers already have finished work on widening Pinnacle Peak and Miller roads and Williams and Silverstone drives, as well as a new bridge over Rawhide Wash along Pinnacle Peak Road.