Survivor Arizona: Out of the Downturn, Into the Future

By Peter Madrid
Cushman & Wakefield of Arizona, Inc.
Reshape. Revitalize. Enhance.
Coming out of the Great Recession, Arizona’s commercial real estate industry dug down, pulled itself back up and survived. That message was clear – and well delivered – at Valley Partnership’s March breakfast.
With Molly Ryan-Carson of the Ryan Companies moderating, the panel consisted of three individuals who witnessed their companies emerge from the downturn: Michael A. Pollack, President and Founder, Pollack Investments; Keith Earnest, Executive Vice President, Development, RED Development; and Rick Hearn, V.P., Leasing, Vestar.
The discussion started with each panelist recalling when they realized the industry was headed for trouble.
>> Hearn said the tipping point for him was 2007. With 2 million square feet of product under construction, his message asked and answered the question: “Was the bus the right size?”
>> Pollack said his concerns were raised in 2005. “We were overbuilding and no one was taking their foot off the throttle.” It didn’t help that some of his larger office tenants were filing for bankruptcy.
>> RED Development, Earnest said, was “getting deals done” and building this mixed-use project in Downtown Phoenix called CityScape. Still, there were uneasy moments.
Fast forward to 2014. According to Ryan-Carson, by taking risks – backed by hard work and people willing to stay during the hard times – Arizona’s commercial real estate industry has survived.
“We expanded our footprint through our acquisition component,” Hearn said.
“We adapted,” Earnest said. “Town & Country was a perfect example. We added to a component already there. ‘A shave and a haircut,’ we called it.”
“We diversified, and redeveloped,” Pollack said. “We took what was there and rebuilt.”
All three also talked about the importance of community, and working with industry groups such as Valley Partnership.
“Get involved,” Hearn said. “Give back where people live, work and play,” Earnest added.
Their advice:
>> “Be humble,” Earnest said.
>> “Embrace diversity,” Pollack said.

>> “Leave it better than you found it,” Hearn said.

Oh Canada: Commercial Development & Financing By Canadian Investors

By Peter Madrid
Cushman & Wakefield of Arizona, Inc.
While Arizona and the U.S. conduct billions of dollars worth of business with our neighbors to the south, the same amount – or maybe even more – of attention should be given to our Canadian neighbors.   

Throughout the Valley, Canadian investors are bringing dollars and jobs to the commercial real estate industry. February’s breakfast featured Canadian experts who shared the success of their international ventures.

With Karrin Taylor moderating, the panel consisted of Robert Leinbach, President, Walton Development and Management, N.A.; Glenn Williamson, Nest Ventures, a private equity and investment firm; and Chris Camacho, Executive Vice President with GPEC.
Kicking off the monthly event was Mesa Mayor and gubernatorial candidate Scott Smith. Mesa is undergoing a development boom, and as Mayor Scott said, “Two things that mayors enjoy are ground breakings and ribbon cuttings.”
Mayor Smith also keyed on two phrases important to his East Valley community: “Building a better Mesa,” and “Facilitate, don’t regulate.”
Williamson, whom the Phoenix Business Journal dubbed “Mr. Canada” in its latest issue, said that one Phoenix Sky Harbor is one of the “driving forces” to conducting business with Canada. The number of non-stop flights to Canada continues to increase, he said. He also mentioned that foreign direct investment (FDI) between Canada and the Valley is increasing as well.
Williamson pointed out several positive trends including:
>> Canadians ages 30 to 40 are coming to the Valley. The U.S. recession was a huge opportunity and many Canadians benefitted from coming here and buying property.
>> The Valley is challenging destinations such as Texas and Nevada for regional offices and headquarters for Canadian-based firms.
>> Proximity to Mexico from both the Canadian buyer and seller standpoints are key.
With Calgary, Alberta, located geographically above Arizona, many opportunities exist to do business, Leinbach said. Edmonton-based engineering consulting firm Stantec, for instance, has a huge presence in the Valley.
“Arizona is ideal for corporate headquarters,” Leinbach said.
Camacho closed by stressing the importance of FDI between the Valley and Canada and added, “The catalyst (of the Valley and Canada working together) is for better jobs.”

The only thing missing from the sold-out breakfast: Canadian bacon.