Ian received his Masters in Real Estate Development (MRED) from Arizona State University in 2008. He holds both a real estate broker’s license as well as contractor’s license with the State of Arizona.

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NAI Horizon Valuation Services Group is one of the oldest and most experienced commercial real estate appraisal and consulting teams in the southwest. Led by Dan Paulus, MAI, the Valuation Services Group provides a broad range of services on a wide range of property types. They are designed around integrated teams and specialty groups using a distinctive approach wherein senior appraisal personnel are involved at all levels of inspection, research, analysis and client communication – a full service, team approach to providing solutions for clients.

Their 83 years combined experience in real estate valuation, management and technical experience with single assets, national portfolios, and complex multi-discipline engagements for corporations, financial institutions, government agencies, legal and accounting firms, developers, investors and public sector agencies has qualified them to work with or manage engagements with other experts in partnership with the client.

Donna is a goal and detailed oriented professional with experience in facilities and property management with emphasis in standardizing reporting procedures.

In addition to traditional property management experience, Donna brings with her a unique perspective having worked in-house property management for a large retailer.

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NAI Horizon and its Property Management team have been providing a comprehensive menu of services to their Arizona clients for more than 20 years. We have earned a reputation for working hard to develop and maintain effective relationships with our clients, tenants, leasing agents and service providers. This focus has enabled us to consistently meet the goals and objective of our clients, efficiently manage each property in our portfolio and achieve tenant retention above the industry norms.

NAI Horizon Property Management Services:
Asset and Property Management, Financial Services and Reporting, Receiverships, Acquisition and Disposition Planning, Leasing / Marketing Programs, Routine Property Inspections, Lease Audits/Administration, Construction Supervision, Repair and Maintenance Programs, Tenant Retention Programs, Emergency Response Services, Space Planning / Move Management

Dave brings a unique blend of determination and creativity in achieving the goals of multifamily clients as evidenced by 20 multifamily transactions over the past 3 years in the Phoenix market. Dave has been involved in the acquisition of over 4,200 units in 18 multifamily communities in the Greater Phoenix area. Dave brings multifamily development, construction, acquisition and disposition experience to our multifamily team.

Dave attended the University of Calgary and Mount Royal University in Canada.

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The NAI Horizon Multifamily Investment Group is a specialized group of professionals whose sole focus and philosophy is to provide investors in multifamily with innovative solutions and personalized services that maximize the potential of each assignment. We are relationship oriented and our repeat clients have come to depend on our unbiased forward thinking recommendations.

NAI Horizon Multifamily Investment Services:
Investment Acquisition, Disposition, Valuation Analysis, Market Research, Property Management, Receivership, Asset Optimization, Capital Markets, Site Selection

Vacancy continued to decline in the retail sector, dropping to 11.0% in the first quarter of 2013, down a full percentage point year over year when the vacancy rate sat at 12% in Q1 of 2012. Retail sales volume also reflected the buzz of increase in the local retail market; Q1 of 2013 totaled an impressive $109 million. This is up considerably from the $67 million posted in Q1 of last year, and is the largest sales volume seen in the first quarter since 2008. Average rental rates, while down slightly this quarter to $14.29, also seem to be leveling out from the rapid declines seen during the recession, which could be part of the overall market correction being felt in the retail market.

Net absorption fell this quarter to 484,073 SF of space absorbed, down significantly from the impressive 2012 year end of over 1.5 million SF. While dips in absorption numbers during the first quarter are common place as the market rebounds from the increase during the holiday season, Q1 of 2012 posted significantly higher SF of space absorbed at 762,725 SF. Leasing activity also lagged during the first quarter of 2013; total deals fell to 437 in contrast to Q1 of 2012 when 607 deals were completed, and square footage leased totaled just over 1.2 million down from almost 2 million in the final quarter of 2012. While leasing has seen a slight lull this quarter, the market seems to be stabilizing overall, steadying the frenzy to new space seen during 2012.

Over 200,000 SF of space remains under construction this quarter in addition to the 147,751 SF of new space delivered so far this year. The top lease transactions of the quarter included a 26,115 SF lease to Arizona Humane Society at 4240 W Camelback Rd, a 25,740 SF lease to Goodwill at 860 E Warner Rd, and a 25,261 SF lease to Sprouts at 6760 W Deer Valley Rd. The top sales transactions so far this year include a $7.6 million 14,820 SF space in Vistancia Marketplace at 28516 N El Mirage Rd in Peoria, occupied by Walgreens, and the $6 million sale of 1661 S Alma School Rd, a 120,026 SF space currently occupied by Roomstore Furniture.

Overall vacancy fell slightly this quarter to 20.4% from its 20.6% rate at the end of 2012, down substantially from Q1 2012 when the vacancy rate was 22.4%. Class A office vacancy continued to decline to a rate of 20%, a significant decrease year over year; Q1 2012 posted a vacancy rate of 23.8%. Class B spaces are also moving in a positive direction, resulting in a vacancy rate of 21%, down from 21.3% at the end of 2012, and down considerably from Q1 2012 at 22.6%. Class C continues to remain stagnant, with vacancy rates increasing slightly to 17.2% this quarter, up from 17.1% from the end of 2012, and rising from the 16.4% rate seen at the beginning of 2012.

While absorption figures remained positive for the first quarter of 2013, total net absorption is down significantly from the impressive Q4 of 2012. With 195,034 SF of net space absorbed this quarter, 226,281SF consisted of Class B office properties, while Class C properties continued to post negative numbers with -50,777 SF of net absorbed space. This trend remains visible as tenants are taking advantage of the market to leave lower grade properties while rental rates remain low.

Despite positive news in vacancy, leasing activity lagged this quarter with 1.6 million SF leased so far this year, the lowest first quarter seen in 5 years. This number is down since the end of 2012, when over 2 million SF of office space was leased in the final quarter. As new large users begin to take advantage of the currently low rental rates it is anticipated that the next several quarters will see an uptick in activity due to these newly signed long-term leases.

Rental rates fell slightly this quarter after three quarters with relatively no change. Q1 posted an average rental rate of $19.68 PSF, compared to the $20.04 PSF exhibited for most of 2012. Class A space rental rates remained flat at $23.16 PSF, while Class B fell slightly to $18.48 PSF after stabilizing at $18.96 PSF over the last three quarters. Class C space fell to $14.01 PSF after three quarters at $14.52 PSF.

It is anticipated that the progress of 2012 will continue into 2013; with absorption stabilizing and vacancy rates continuing to decline, rental rates should begin to improve as the market shows signs of recovery. While a fully sustained recovery in the office sector is still years away, economic conditions in the Phoenix area are continuing to improve at a faster pace than most metro areas in the US.

With the bottom in the rearview mirror, the Phoenix industrial market is continuing its strong climb back to pre-recession standards. With vacancy continuing to decline, and with construction on the rise, 2013 will elevate the sector towards its previous levels of growth and expansion. Construction employment in Arizona jumped 7.3% in February from a year ago, adding 8,300 new construction jobs statewide, ranking Arizona as the fifth highest in the nation. This activity in the Valley bodes well for the industrial market and aligns with the recovery the industrial sector is experiencing.

Vacancy fell to 11.9% in Q1 of 2013, down from 12.4% at YE 2012, and down remarkably from Q1 of 2012, when the rate sat at 14%. This trend is expected to continue as we see the market adjusting back to previous indices. While we may not see vacancy drop to the historical lows of 2006 for some time, when rates hovered between 7%-8%, the sector is close to resetting the clock to 2007/2008 levels when vacancy rates hovered around 10% before the recession hit the economy hard. Absorption numbers also remain steady; while down over a million SF from Q4 2012, Q1 posted a substantial net positive absorption of 1,564,392 SF. Q1 2013 absorption posted the strongest first quarter seen in 6 years. All five industrial submarkets posted positive absorption numbers with the Northwest Valley and Southeast Valley leading the way with over a million SF combined.

Construction and deliveries have continued to ramp up over the past two years. 2013 began with over 5 million SF under construction in 15 projects. Just two years ago, Q1 2011 showed only 450,000 SF under construction and has been steadily increasing since then. Deliveries have also been on the rise for the past two years, showing signs of increased confidence. While down from the impressive YE 2012 of over 2 million SF delivered, Q1 2013 started off strong with 447,792 SF of new construction. The largest project this year comprising a majority of the total delivered SF is 2 S Price Road, a 350,000 SF class B industrial telecom hotel/data hosting building situated in the Price Road corridor of the Southeast submarket.

Rental rates continue to remain flat, increasing only slightly this quarter to $0.51 per SF monthly. As 2013 begins to take shape and the industrial sector moves forward in its recovery, it is anticipated that there will be a corresponding increase in rental rates.

The top sale transactions for this year include 3200 W Germann Rd., Chandler, a 125,000 SF Class B Manufacturing Building that sold for an allocated $13,072,447, and 1830-1850 N 95th Ave., Phoenix, a multi-property sale of three flex buildings with a total RBA of 118,853 SF for $12.7 million. The top lease transactions for the quarter included 6725 W Allison Rd., Chandler, a 105,000 SF lease to Sound Packaging, and 5120 W Buckeye Rd., Phoenix, a 80,587 SF lease to Amcor Packaging.

Despite Phoenix’s bumpy housing market history, the Metro Area continues to grow at remarkable rates. Based on updated population change percentages from 2000 through 2012, Metropolitan Phoenix ranked 7th in the US, beating Houston, San Antonio and Dallas Fort Worth as Texas has become direct competition as the other hot spot for businesses fleeing the west coast. Phoenix Metro population increased 32% from 2000-2012, and increased 2.3% from mid-2011 to mid-2012, roughly twice the national average. With that, interest has been coming back to Arizona from companies who may have skipped over the Phoenix Metro Area during the peak in our market in 2003 and 2004. With the wealth of possibilities in our market now, it is a prime alternative to the west coast.

The unemployment rate in Greater Phoenix as of February is 6.7%, down from 7.2% in January of this year and 7.7% in February 2012, according to the Department of Administration. For comparison, Arizona added 22,900 jobs in February of this year; from 2004 through 2007, the state added between 31,000 and 44,000 jobs in the months of February, before the recession hit. Nationally, the unemployment rate fell slightly to 7.6% as of March, but only due to the 496,000 people who left the labor force. March posted the lowest job count in nine months, at only 88,000 jobs created. While these figures may be partly due to a wintery March and the increased taxes that began in 2013, the disappointing numbers could start to set the tone for the new American workforce. Only 63% of American adults are now working or looking for work, the lowest percentage since 1979. Economic factors affecting businesses continue to shift the make-up of our work force, redefining part time and full time employment mixes and changing the way the average American earns a living and spends those earnings.

Nationally, a mild housing rebound and steady employment gains continue to support moderate economic growth. In the commercial real estate sector, US properties showed a 24% increase in sales volume over last year, and rent growth in the office, industrial, multifamily and retail sectors is projected to continue through 2014. The nation seems to be settling into a “new normal” with slight but steady improvements. Secondary markets such as Seattle, Austin, Baltimore and Phoenix cited significant year over year investment gains illustrating the regrowth of areas hit hard by the recession. George Ratiu, Manager of Quantitative and Commercial Research for the National Association of REALTORS®, who hosted the CCIM Institute’s Feb. 27 webinar, “The 2013 Economy and Its Effect on Commercial Real Estate”, shared that his projections included a continuing momentum for the economic recovery; “I feel more optimistic about the economy’s direction than I did even just a few months ago.” Such optimism gives hope that we are leaving recovery mode and getting back to a new kind of business as usual.

Great to see our own Terry Martin-Denning representing “Women in Power” – Profiles on 12 of the Valley’s most prominent women in commercial real estate – in this month’s edition of Commercial Executive Magazine. See below to read the issue: