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.