Campus Acquisitions Tops Up $25M Hi-Rise Near Univ. of Arizona

By Camelia Bulea, Associate Editor

The $25 million student housing that Chicago-based Campus Acquisitions is developing near the University of Arizona has recently topped out at 14 stories high. Expected to open in late summer of 2013, the 300,000 square-foot upscale project will include 176 units and house about 550 students.

Dubbed Level, the project represents Phase I of two student housing projects that Campus Acquisitions plans to develop adjacent to the University of Arizona in Tucson. The property will feature 93 parking spaces, and amenities on levels 2, 13, and 14, including a rooftop pool, tanning beds, sauna, steam room, outdoor grilling stations, meditation areas and fitness center with views of Tucson, according to Student Housing Business Magazine.

Units will feature floor-to-ceiling windows, balconies, stainless steel appliances, quartz countertops, hardwood floors, modern furnishings and flat-screen TVs. The exterior of the building will feature brick and modern materials such as metal, glass and aluminum. Phoenix-based Shepley Bulfinch served as the architects of the two student properties, while UEB of Scottsdale is the general contractor for both projects.

The project is only the first phase of a greater redevelopment plan near the UA campus. The second phase includes a 13-story student housing tower at 1031 N. Park Ave. Construction on that phase is planned to start in early 2013 with an opening date settled for the fall of 2014, according to the developer’s website.

Photos courtesy of Campus Acquisitions

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$52M Hospital Project in Green Valley Meets Community Opposition

By Camelia Bulea, Associate Editor

Green Valley’s first emergency room hospital, about 25 miles south of Tucson, could be blocked due to objections from a homeowners association.

In October 2012 news broke that Tucson Medical Center would develop and operate the $52 million hospital and emergency room project with Scottsdale-based McDowell Enterprises. Two months later the project ran into a snag when nearby residents opposed the height and size of the project and feared that the two-story hospital could damage their property values, according to the Arizona Daily Star. A letter from the homeowners association, which represents over 440 homes, said that residents are also worried about round-the-clock traffic and light pollution.

The Green Valley News and Sun nevertheless reports the sale of the 22-acre site closed on Nov. 30 between landowner Fairfield Homes and developer McDowell Enterprises.

The new hospital would serve about 50,000 people who live in Green Valley. These people now have to travel about 30 minutes to an emergency room, noted the Daily Star publication. According to initial plans, the hospital could open in 2014.

Initial plans called for a 100,000 square-foot hospital, but McDowell Enterprises has recently asked the county for a few modifications, including expanding the hospital’s surface to 138,533 square feet and for the potential to expand from 32 beds to 50 beds. Other construction plans include: a rehabilitation center, medical offices, cardiac catheterization lab, four operating rooms, on-site radiological imaging labs, 26 inpatient private rooms, a six-bed intensive-care unit and a helipad.

Photo rendering of the proposed Green Valley Medical Center, courtesy of Swaim Associates LTD

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Aris Integration Picks Tucson for Corporate HQ and Plant

By Camelia Bulea, Associate Editor

Aris Integration has announced its intention to move its corporate headquarters to Tucson.

The Scottsdale-based company plans to build a facility that will manufacture a new type of modular energy-efficient building panel, and hire about 600 people by 2017. Positions at the office will include ones in executive management, sales & marketing, quality control, HR, and manufacturing.

Aris plans to develop five more regional manufacturing sites in the country. Although no other specific location was made public, company officials plan to finalize a deal before the end of December 2012. The Tucson facility should be fully operational by the third quarter of next year, according to the Inside Tucson Business.

Duane Armijo, CEO and founder of Aris, said Tucson was chosen as a location mainly for its pool of skilled construction workers, coordinated public-private support and focus on sustainable technologies, according to the Arizona Daily Star. The company also looked at cities including Albuquerque, Las Vegas and El Paso before deciding upon The Old Pueblo.

The publication added that Aris was looking for a facility of about 300,000 square feet, with high ceilings and office space. The company had reportedly been looking at sites near Tucson International Airport, among others. Building its own plant, which is still an option, would cost upwards of $30 million, Armijo said.

Photo courtesy of PR Newswire

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Freeport-McMoRan Buys and Occupies 85,000SF American Airlines Building

By Camelia Bulea, Associate Editor

Phoenix-based Freeport-McMoRan Copper & Gold, a global mining company, has purchased the American Airlines building in Tucson for $5.2 million.

The 85,000-square-foot call center building, located at 3350 E. Valencia Road, was closed in August and has been vacant ever since, reports the Inside Tucson Business. The new owner intends to leave its current office at 6840 N. Oracle Road, which is currently listed as being available for lease.

Russ Hall and Steve Cohen with Picor Commercial Real Estate Services represented American Airlines in the transaction. The buyer was represented by Los Angeles-based Stewart Niles with Travers Realty, adds the Tucson publication.

Built in 2004, the building sits on 14.5 acres of land northeast of Tucson International Airport. The property was listed at $7.3 million.

Freeport-McMoRan Copper & Gold Inc. is the world’s largest publicly traded copper company. The company operates five mines in Arizona at Safford, Morenci, Bagdad, Sierrita and Miami, according to its website.

A market report regarding the Tucson office market in the third quarter of 2012 illustrates that demand for office space continued to decline as the overall market vacancy rate finished the third quarter at 14.6 percent, up from 14.4 percent in the previous quarter.

Cushman & Wakefield analysts report that three significant distressed buys occurred in the analyzed period in Tucson. The acquisitions include the Corporate Center Brodway and the County’s purchase of 160 N. Stone, with an investor buying Southwest Professional Plaza at auction.

Chart courtesy of Cushman & Wakefield Alliance Research

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CareMore Medical to Open Fourth Medical Facility in Tucson

By Camelia Bulea, Associate Editor

CareMore Medical Enterprises announced plans to open its fourth medical facility in Tucson near the Carondelet Heart & Vascular Institute. The new facility will occupy a vacant retail space at 4881 N. Stone Avenue, a former Cost Plus retail center, according to Inside Tucson Business. The building’s landlord is Brixmor Property Group of New York City.

Cerritos, California-based CareMore Medical, which provides healthcare services to senior patients, operates in Arizona, California, Nevada, New York and Virginia. The company also offers personalized health planning and medical supervision.

The landlord of the 18,229-square-foot facility at Northmall Center was represented by Nancy McClure, first vice president with CBRE, in this transaction. Retail health clinics and urgent care facilities are active in the local market, according to McClure as quoted by the Inside Tucson Business. Additionally, facilities such as the ones CareMore operates in Tucson are welcome in a market affected by the lack of hospital emergency rooms, reports the Tucson publication.

In other news, three large industrial properties are expected to close by the end of this year in Tucson. Currently in escrow, the properties total 365,980 square feet of industrial space. According to Inside Tucson Business, the three properties are:

• A 261,000 square-foot manufacturing/warehouse property at 6700 S. Pella Drive
• An 85,000 square-foot call center at 3350 E. Valencia Road
• A 19,980 square-foot manufacturing building at 6393 S. Campbell Ave.

If all three sales are completed in the last quarter of 2012, the transactions will more than double the industrial space absorbed in the first three quarters of this year. According to a CBRE report, the Tucson market recorded 329,079 square feet of positive absorption year-to-date.

Chart courtesy of CBRE

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Curacao Opens 85K SF Mega Store in Tucson

By Camelia Bulea, Associate Editor

Curacao opened its first mega-store in Tucson. The store is the company’s second in Arizona, and it was originally scheduled to open in 2008.

The main reason for the delay was the economic crisis, said Rick Hutton, president of Curacao. Nonetheless, Hutton admits that Arizona was always on the expansion list, as quoted by the Inside Tucson Business.

The original 2008 plan called for leasing the store, but the company decided earlier this year to buy the property — an 85,000-square-foot store located in Southgate Shopping Center — for $9 million.

The Los Angeles-based retailer sells electronics, furniture, toys, housewares and other items and it is often referred to as the “Latino Best Buy”, as it targets mainly the Hispanic market, according to AZCentral. Tucson comes as a natural progression for the company, given the fact that 35 percent of Pima County population are of a Hispanic origin. The retailer also operates nine stores in California.

The publication adds that the Curacao mega-store will eventually hire 200 employees, out of which 100 people were already hired before the grand opening, which took place on Sept. 28. Additionally, Tucson News Now reports that during holidays, the number of the people working in the store will reach almost 300 workers.

According to a Curacao news release, the mega-store will offer some of the hottest names and brands: Apple, Samsung, LG, Sony, Panasonic, and Sharp, as well as Beats by Dr. Dre and Skullcandy.

Photo courtesy of Business Wire

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Carondelet Invests $17M to Relocate Heart Institute to St. Mary’s Hospital

By Camelia Bulea, Associate Editor

Carondelet Health Network plans to relocate its Heart & Vascular Institute to the Carondelet St. Mary’s Hospital campus. In a statement, the company said the first phase of the relocation will be complete by early November.

The new location provides many advantages for patients and their families including easier access to the Institute from I-10 and I-19, helicopter access for emergent cases, new technologies and the capability to expand and grow the Ministry’s cardiothoracic surgery program. Patients will continue to be cared for at Carondelet Heart & Vascular Institute’s River and Stone facility until early November, according to Tucson News Now. The first open heart surgery at St. Mary’s will be set for Nov. 7, 2012.

Carondelet will invest about $17 million in the construction of the new facility, which is expected to completed by May 2013. The new building will contain:

• a dedicated Cardiovascular Intensive Care Unit
• a specially appointed hospital wing with all-private rooms for the care and recovery
• a hybrid OR, which will allow surgeons and cardiologists to perform the most modern, minimally invasive cardiovascular procedures

St. Mary’s Hospital has been ranked among the top 5 percent of hospitals nationwide for clinical excellence by HealthGrades two years in a row. Carondelet Heart & Vascular Institute is a previous Thomson Reuters Top 100 Hospital for Cardiovascular Care.

In other news, the Tucson Airport Authority has approved a $68.3 million budget for 2013, representing a 57 percent increase over the current year’s budget of $43.5 million, according to Inside Tucson Business. Most of the new budget will serve capital improvement projects, which will largely be funded through grants.

Photo rendering of former Carondelet Heart & Vascular Institute, courtesy of MOHR Health

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Ohio Investor Acquires Broadway Plaza for $12.7 Million

By Camelia Bulea, Associate Editor

The 83,612-square-foot Broadway Plaza retail complex in Tucson was sold to shopping center REIT Philips Edison-Arc for $12.7 million, according to Marcus & Millichap. The real estate investment services firm represented the Ohio-based buyer in this deal.

The seller, Larsen & Baker, acquired the Plaza in 1997. Fifteen years later the company chose to sell the property as it intends to buy distressed properties and turn them around, thus creating long term value for the company, said Andy Seleznov, director of leasing for Larsen Baker, in an interview with Inside Tucson Business.

Developed in 1982, Broadway Plaza Shopping Center is shadow-anchored by Home Depot and Kohl’s, as reported by Marcus & Millichap. Among its major tenants are names like Sprouts Grocery (dba Sunflower), PetSmart, Western Dental of Arizona Inc., Table Talk, Sunwest Federal Credit Union, 4 Branches Community, UPS Store and Premier Hearing. At the time of the sale the retail property was 94 percent leased.

The plaza’s four buildings were constructed between 1980 and 1982. Its largest building is about 57,000 square-feet and the smallest is 6,200 square-feet. The two mid-sized buildings are about 10,000 square-feet each.

“Demand for well-located shopping centers continues to be strong, while cap rates continue to reflect the compressed interest rates,” said Sanford Burstyn, an investment specialist in Marcus & Millichap’s Phoenix office.

A CBRE report shows that absorption within Tucson’s shopping centers at the end of the second quarter of 2012 was positive, thus marking the fifth straight quarter of positive absorption. In the first half of this year the local retail market recorded a total absorption of 392,088 square feet, resulting in a 2 percent reduction in vacancy over the last six months.

Photo courtesy of Phillips Edison & Company

Chart courtesy of CBRE

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Walmart Hits Tucson Retail Market with Five New Mega Projects

By Camelia Bulea, Associate Editor

Walmart has launched three supercenters and two neighborhood stores in Tucson. The retail properties are in various stages of development.

The discount retailer has identified Tucson as an area that is underserved when it comes to affordable shopping options, according to Walmart officials quoted in the Arizona Daily Star.

The five new Walmart projects are:

• The Bridges, Kino Parkway and 36th StreetIts. Walmart’s largest retail store in Tucson is a 156,000 square-foot supercenter due to open later this year. It will hire about 250 people.
• A smaller Walmart supercenter, in the 90,000 to 100,000 square-foot range, in El Con Mall, near East Broadway and North Alvernon Way. The construction of the project will begin this fall, with a grand opening projected for late 2013. The project was delayed by stiff opposition from a Neighborhood Association, which had sought to invalidate a 2000 development agreement between the City of Tucson and the mall’s owners.
• Another supercenter on the vacant land at 2711 S. Houghton Road. Walmart bought the site for $3.3 million. Currently being built, the supercenter should open in the first quarter of 2013.
• Rolling Hills Shopping Center, 2554, 2560 and 2570 S. Kolb Road. Arizona Daily Star reports that Walmart purchased this center for about $2.9 million. The retailer plans to redevelop the property into a Walmart Neighborhood Market, which is planned to open next year.
• Walmart Neighborhood Market, on the southwest corner of East Broadway and Camino Seco. The existing structure, Berkshire Village Plaza, will be demolished and replaced by a new 40,000 square-foot Walmart store, which should open early next year.

Analysts are still skeptical about Tucson’s retail real estate recovery. They believe it to be held back by slow local job growth, shaky consumer confidence, credit rating downgrades and the Euro debt crisis. Nevertheless, the second quarter saw an uptick in activity among small tenant and local merchants, which had been missing in recent periods,” said Nancy McClure, first vice president at CBRE specializing in retail properties.

Photo credits: Flickr user Ron Dauphin

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Northwest Medical Center Embraces $50M Expansion of Surgical Space

By Camelia Bulea, Associate Editor

Northwest Medical Center (NMC) announced that it plans to invest almost $50 million in a new surgical wing, which will accommodate a growing demand for surgical services. The expansion is set to break ground this winter, and hospital officials expect that the project will take up to 20 months to complete.

According to Arizona Daily Star, the hospital currently has 12 operating rooms, to which the project will add four more rooms. All of the new rooms will be equipped to do minimally invasive procedures and they will be bigger than existing operating rooms by an average of 150 square feet. Along with OR expansion, NMC will renovate one of its Cardiac Catheterization (Cath) Labs.

The new surgical wing will extend from the current building to the existing surgery parking area. The expansion will also allow for future vertical growth of the hospital as the need arises.

In other news, Phoenix-based Linthicum Corp. is currently renovating a Four Points by Sheraton in Tucson, which will be converted into an Aloft-brand hotel, according to the Phoenix Business Journal. Renovation work is expected to take up to nine months, as the new Aloft Tucson University is set to open on Feb. 1, 2013.

Renovation plans call for an exterior facelift of new glass and stucco and then an overhaul of the inside with urban contemporary designs, a new restaurant and lounge, second-level pool and an underground parking garage. The existing conference center on the south side of the property will be demolished, and the renovated hotel will have first-floor meeting rooms in its place, according to Linthicum representatives as quoted in the Phoenix Business Journal. The new hotel will have about 95,000 square feet of space and 154 rooms.

Photo rendering of the new Aloft Tucson University, courtesy of www.starwoodhotels.com