Howard S. Wright Accomplishes Major Milestone at WestWorld As 6 Massive Steel Roof Trusses are Erected

  Howard S. Wright, a Balfour Beatty company, successfully installed six, 280-foot steel double roof trusses at the North Hall addition of the Tony Nelsson Equestrian Center expansion project at … CONTINUE READING

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Retail real estate in the digital age: A conversation with Michael Lagazo

If you’re active in the commercial real estate social media sphere, you’ll recognize Michael Lagazo as @Michael_MBA. If you’re not active, take this opportunity to hear insights beyond 140 character tweets from a bright mind in the space, one with depth in the retail and mixed use environments from Southern California throughout the Southwest.

Retail real estate in digital age


Q. With most of the markets shifting to equilibrium after many years of distress, where do you see the opportunities to buy at value and create value?

A. Value is found in quality core real estate with quality income that can outpace inflation with long term performance. Despite lower yields, adhering to core and quality with both assets and location is the traditionally safe play.

Value can be found as well in good secondary assets in locations outside central metro areas. Secondary projects with productive tenants and long leases have delivered higher returns than better quality properties with less durable incomes. In a article, “Class B, C Retail Sees Strong Demand,” Jennifer LeClaire comments that demand is strong from private capital for B and C class retail opportunities as investors seeking yield are responding to improving leasing fundamentals.

Primary lenders I have talked to in the past week mentioned that income-producing projects in nonmonetary default for delinquent taxes, for example, retain value. Tax sales are attractive to potential investors. Urban infill is in demand, as well, and can presently be acquired at value.

Value creation is largely a function of growth, not current yield. Investors should avoid pursuing growth indiscriminately; true value creation comes from growth without a commensurate increase in risk. Merlone Geier Partners, a private REIT I met with last week is developing Delta Shores, a mixed use project in northern California, by incorporating strong retail with other types of real estate – office, multifamily, hotel, and even healthcare.’

Q. What impact has the digital age had on the role of the property and asset manager?

A. Asset and property management are challenged by changing tenant needs. The use of commercial real estate itself has been impacted by e-commerce, alternative work place strategies, virtual meetings/collaboration, and innovations in logistics.

Cloud Computing

Enterprise Mobility


Real-time portfolio visibility and enterprise information flow across diverse geographic locations improving decision making and potentially increases investor visibility.


Mobile engagement empowers people to take the next most likely action in their moments of need.


Increased transparency with informed, ultra-connected clients and tenants using revolving devices interacting with peers as well as your competition.

Improved business agility – efficient deployment, faster execution, greater flexibility and scalability.


System of engagement: Guide an action or a decision. Get a quick status or a quick search.


Higher brand value. Positions group as always addressable.

Elastic – users can access as much as required, on demand.  Improved operational efficiency. Reduced resource costs. Fully managed by the service provider.


Engagement is about treating someone differently because you know something about them. Mobile is an important driver in investor engagement.


Immediacy, simplicity, and context. Proactive service not just self-service.

Cost effective tenant programs and campaigns elevate quality of service and tenant retention.


Moving from a database world to a user experience world. Velocity of change and feedback increasing rapidly. Virtually ubiquitous across all markets and plays a disruptive role.

Gain an intimate understanding of clients’ and tenants’ needs and behaviors.

Q. I’ve recently read about what seems to be a ‘rebound effect’ or backlash against e-commerce, particularly from millennial shoppers. What are you seeing, and how do property owners capitalize?

A. Anecdotally, I am seeing broader adoption of showrooming and increasing e-commerce retail sales growth. The Urban Land Institute (ULI) reports in MediaPost that Millennials (ages 18-35) are crazy about shopping at brick-and-mortar stores valuing the novelty and social experience. ULI found that Millenials get bored easily and crave pedestrian-friendly shopping centers, malls, and venues.

Property owners can draw interest by reinventing centers with new concepts offering extensive omnichannel support and specialty foods. The passing of the Marketplace Fairness Act is anticipated to diminish the price advantage e-commerce holds. Gap and Banana Republic shoppers can now reserve products available in stores online. CEO Glenn Murphy uses online and offline inventory pools “to give customers access to business anywhere they want.”

Local restaurants Urban Plates and Burlap offer open kitchens, farm fresh organic foods, and fresh ideas that have activated a shopping center.

Q. Despite this, e-commerce is here to stay. Comment on the impact of online shopping on tenant mix in neighborhood shopping centers.

A. Time-starved consumers still value a sense of place and experiential shopping that cannot be matched online. Daily needs merchants with healthy gross sales are reliable majors. Hardware and home improvement merchants offering products that are difficult to distribute online continue to perform well. 

Q. If you were advising an owner of a well-located neighborhood center to position their property for improved success and profitability for their investors and merchants, what would you recommend?

A. Diversify the merchant mix to distribute risk. The format has to be exciting to the shopper by being unique or well merchandised. The unique value proposition of the location has to fit the demographic of the trade area and be more than a distribution channel. The economics of the leases have to be right for both the landlord and the tenant.

Mike, your perspective is keen and forward-thinking. Appreciate your taking the time to share your views with our subscribers.

Barbi Reuter, Principal/Marketing & Operations
Cushman & Wakefield | PICOR 

Michael Lagazo retail real estateMichael Lagazo is a commercial broker in San Diego, CA specializing in designing and implementing creative leasing strategies which optimize the value of the client’s asset as well as executing strategic leasing and investment sale transactions. Prior to this role, Lagazo held a variety of management and leadership positions with Four Seasons, Forest City and Westfield. Lagazo began by managing regional malls ranging from 1.25 to 2 million sf, later overseeing a luxury resort. Lagazo holds an MBA and a dual B.S.



Sources, Class B, C Retail Sees Strong Demand, June 4, 2013

Deloitte, Commercial Real Estate Outlook: Top Ten Issues in 2013

National Real Estate Investor, Retailers Must Deliver on Customer Service and Experience to Compete with Online Merchants, May 31, 2013, Steve Jones

Wall Street Journal, More Consumers Prefer Online Shopping, June 3, 2013

MediaPost, Marketing Daily, Gen Y’s Favorites: JCPenney, Target, Walmart, Kohl’s, Monday, May 20, 2013

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US Retail Sales vs. Industrial Leasing Activity | CushWake Industrial Research

The rise in United States retail sales bodes well for industrial leasing, as the latest “fact of the week” released by Cushman & Wakefield’s research team indicates: 

US Retail Sales vs Industrial Leasing Activity


  • As the above graph shows, there is a strong correlation between U.S. retail sales and U.S. industrial leasing activity. Retail sales continued to rise and totaled $1.3 trillion in the first quarter, an increase of 3.8% over this time last year. Although the economic backdrop continues to slowly improve, consumer confidence remains low. Consumer confidence levels lagged first quarter, dropping 7.0% from this time last year.
  • Contributing to the rise in retail sales, over the last few years, e-commerce grew faster on a year-to-year percent change basis than total economic activity. E-commerce growth for Manufacturers, Retailers, and Selected Service businesses significantly outpaced overall economic activity in their respective sectors.
  • U.S. leasing activity during the first three months of the year for C&W markets measured 93.2 msf. Four major U.S. markets (Greater Los Angeles, CA; Chicago, IL; Inland Empire, CA; and Dallas, TX) reported leasing activity greater than 5.0 msf first quarter. Positive absorption is expected to continue in the coming quarters and the current forecast bodes well for the economic climate.  847-518-3235

* Source – Moody’s Analytics, U.S. Census Bureau, Cushman & Wakefield Research.  Only markets tracked by Cushman & Wakefield offices are included in this analysis. 


Please click here to access the electronic version of this information


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Global Supply Chain Services: How does Tucson fit in?

In the realm of supply chain services, as with any growth-oriented product or service, constant innovation is a critical component to differentiate and create distance from the competition.

Global Supply Chain Services

Global commercial real estate firm Cushman & Wakefield is constantly investing in tools to stay at the forefront of the commercial real estate services arena and availing its brokers of the best resources available to advise an increasingly global client base. Among those innovative and unique services is the Global Supply Chain Services group (GSCS). 

Essentially the GSCS platform was created and exists to help corporations, institutional owners, developers, REIT’S, logistics providers, transportation companies, and other entities attain peak effectiveness by focusing on upstream business issues and related factors, then providing strategic, comprehensive solutions.  From manufacturing and transportation to warehousing and delivery of product to retail and other outlets, Cushman & Wakefield’s GSCS platform exists to help clients improve speed to market, provide cost and risk reduction, and maximize location and labor requirements.  Among those entities that can best benefit from GSCS solutions would be major employers, import/export firms, third party logistics (3PL) firms, and locally the Levin Family, owners and developers of Century Park Research Center and the Port of Tucson. The GSCS platform is unique to Cushman & Wakefield, and C&W ensures that its member brokers are sharply trained and attuned to the vast assets of the C&W network for the benefit of local clients.



A select 10% of Cushman & Wakefield industrial brokers carry the GSCS designation, among those Russell W. Hall, SIOR, GSCS, a principal and industrial specialist with Cushman & Wakefield | PICOR’s commercial real estate headquarters in Tucson, Arizona. The GSCS group formally supports our clients’ supply chain activities and allows them to maximize their performance. Brokers attend specialized training sessions to further develop their specialty knowledge base relative to supply chain activities, and hone their skills. The most recent session was held as part of Cushman & Wakefield’s Industrial Forum conference in Las Vegas earlier this month. 

The GSCS platform of brokers are also studying trends very closely.  The reshoring movement represents a growing trend, whereby domestic companies formerly actively manufacturing in Asia and other remote locations see increasing economic benefit to relocate manufacturing activities closer to home.  Nearshoring is a similar concept which again brings manufacturing to such locations as Mexico, whose economic competitiveness with China and other overseas locations continues to grow.  Companies are looking at these factors, and others to help determine how real estate will complement changing trends in the way goods and services will be produced and moved around the world in years to come.  Change is constant, and the GSCS group studies and stays abreast of trends to help our clients best anticipate where opportunity will reside in the future.

For information on supply chain services, please contact Russ Hall by email or at 520.546.2747.


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Reis Q1 2013 Tucson & Phoenix Commercial Real Estate Data Analysis

On May 1, Reis published data and reports for both the month of March and for the first quarter of 2013.* The following is an update on the Tucson office market and the Phoenix office market and trends to watch. 

Commercial real estate Tucson

Asking Rates have Leveled Off in Tucson

Entering into 2013, the Tucson office market is finally seeing some stabilization in terms of asking rent.  After a startling decline for the full-year 2012 of 0.6% and a Q4-12 drop of 0.3%, asking rents have leveled off.  At the end of Q1-13 the mean asking rent of $21. 38 remained unchanged from the end of 2012.  Vacancy, however, continues to be somewhat of a concern for Tucson.  Vacancy, however, continues to be somewhat of a concern for Tucson, increasing 30 bps during the first quarter to 15.8%. With no new construction coming online during the first quarter, Tucson is struggling to absorb existing inventory.  Given that asking rent has remained flat, this uptick in the vacancy rate is responsible for the decrease in gross revenue per square foot by 0.4% from Q4-12 (compared to a 0.8% increase nationwide).

Vacancy Still the Big Story in Phoenix

Tucson Phoenix office vacancy 2013

While Phoenix did not experience the same rate of asking rent growth during the first quarter as was exhibited throughout 2012 (0.7% for the year and 0.4% for Q4 2012), rent growth remained positive during Q1 2013 ending the quarter at $22.40, a growth rate of 0.1%.  Vacancy is still the big story in Phoenix.  With a vacancy rate of 26.0% for Q1 2013, compared to 17.0% nationwide, Phoenix is ranked 79 out of the 82 total metros nationwide covered by Reis.  Total net absorption in Phoenix in Q1 2013 was negative 144,000 square feet, erasing the 122,000 square feet absorbed in Q4 2012. Job growth continues to be key to future vacancy declines in Phoenix. It remains to be seen whether sequestration will hinder the tepid progress that has been made so far in that regard.  

The Road Ahead Shows Improved Rent Growth

Looking ahead, fundamentals will continue to improve in both Tucson and Phoenix.  Asking rent is expected to increase in the two metros by of 0.9% and 1.9%, respectively, in 2013. The recovery effort in both Tucson and Phoenix should, however, lag national rent growth, which is expected to increase 2.5% by the end of this year.

Credit: CRE Data & Video provided by Reis, Inc., photo credit Sirlin/Shutterstock.

Editor’s Note: Market statistics vary from those quoted in C & W | PICOR’s quarterly reports, due to differing data sources and data sets. For details on Reis, Inc.’s survey criteria, please visit the Reis, Inc. FAQ page.

*ReisReports now offers monthly reporting, giving subscribers access to both sets of information.