The Dealmaker: 2/7/2018

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The Dealmaker is a daily note of the day’s top real estate stories served just in time for lunch. Bon Appetit! Subscribe here to receive the Dealmaker to your inbox



Jim Belfiore tells KTAR News 92.3 FM: Millennials buying homes in Phoenix area on the rise. “[Millennials] will become the most substantial buying group over the next decade,” said Jim Belfiore, founder and president of Belfiore Real Estate Consulting. What’s driving this Valley invasion of millennial buyers? What areas are they flocking to? More from Jim here:

IN-FILLMORE – New high-rise residential tower in Phoenix Downtown Fillmore District. “Aspirant Development [which is also developing the ’apartment tower known as The Stewart’ at Central & McKinley] has purchased 1.2 acres fronting on the north side of Fillmore Street between 2nd Avenue and 3rd Avenue.” Purchase price plus development details, including just how high thisapartment tower will rise. Also, broker Ray Cashen with news on even MORE infill for Fillmore (trying saying that ten times in row really fast!) — in Real Estate Daily News

East Valley’ gets new name — but it’s pretty much the same as old one.“The East Valley Partnership is now calling [it] the ‘PHX East Valley’… The push, they say, will lead to national name recognition and help attract more business to an area.” And it’s ALREADY paying off! as “Mesa is working on a [deal] ‘as we speak’ that would bring a 15-story apartment and hotel… next to Mesa Arts Center..” More on this and other developments, plus further details on EVP’s branding effort (or should the group now be called the “PHX East Valley Partnership”?) — in AZCentral

LMI indicates continued improvement across the country. “According to the NAHB/First American Leading Markets Index (LMI), 277 metropolitan statistical areas, recorded growth in their LMI Score over the fourth quarter of 2017 compared to a year ago. The index uses single-family housing permits, employment, and home prices to measure proximity to a normal economic and housing market.” So how does the LMI shake out for Arizona markets? Find out through mapped-out data at Eye On Housing.

Arizona gets best-ever ranking in national survey of prosperity, but still below average. “Among the good news: Arizona’s unemployment rate is at an 11-year low, the poverty rate has decreased slightly and the HOUSING MARKET IS SOLID, with some of the nation’s lowest rates of foreclosures and delinquent mortgages.” <– Emphasis ours. The report? AZCentral’s. –>

Predictions of a crash in housing prices have not come true. The “scary predictions” started rolling in “last fall”: “Cutting tax benefits for homeowners would inevitably lead to declines of 4 to 10 percent in home prices, and maybe even more for upper-bracket properties in high-tax areas. So how are those dire warnings holding up?” The Washington Post gets the “Bottom line” answer on these failed fall-through-the-floor forecasts, with help from a couple of prominent housing experts.

This is what falling stock prices mean for mortgage lending. “Spoiler alert: Pretty much nothing, unless…”® Senior ‘numbers sleuth’ Joseph Kirchner reveals and explains, in HousingWIre.

Construction job openings fall in December. “[A]ccess to labor remains a top business challenge for builders. However, there was a leveling off for open jobs in construction during 2017, as measured by the [openings] rate.” Eye On Housing.

Builder Insider: How will housing draw in a new wave of talent and leaders? That’s what Builder’s John McManus wants to know, and LP Building Products’ chief executive officer Brad Southern supplies the answer: “By elevating a commodity business to the realm of bold, tech-driven performance and a people-serving culture.” The LP CEO unpacks that, and has more to say, in this Builder“one-on-one.”

Phoenix retail market posts strongest net absorption in a decade. “The fourth quarter of 2017 brought a spike [of more than 1 million sq. ft] in net absorption of retail space… bringing the total for the year to more than 2.8 million… This was the highest level of net absorption posted since 2007, according to the year-end retail report released by Colliers International in Greater Phoenix.” For a market overview of 4Q 2017, a look ahead to 2018, and access to the full Colliers’ report, tap to AZRE.

Skyway Commons Phase I coming to Surprise. “[Cawley Architects, Inc.] working with Silagi Development and LGE Corporation, has created plans for two speculative office and warehouse buildings… fronting Rio Glass Solar Road and Dysart.” AZBEX has details on the Skyway Business Park project, including this bit of ‘Surprising’ background info about the parcels: “Since [1997], there have been preliminary and final plats approved, as well as three separate site plans approved in 2007 alone.”

City awarded $50K in legal fees defending Stuart TPC Scottsdale allegations, suit. “Maricopa County Superior Court has awarded the city of Scottsdale $49,845.30 in legal fees stemming from its defense of a lawsuit filed by two local residents challenging construction costs for improvements made to TPC Scottsdale.” Scottsdale Independent has the full backstory  on the case, including this: “Mr. Stuart made what have now been found to be false claims Scottsdale was in violation of Article 9, Section 7 of the Arizona Constitution and Article I, Section 3 of the Scottsdale City Charter. The Maricopa County Superior Court disagreed.”

Casa Grande buys land near rodeo grounds for $1.8M with no plans for property. “The council voted to approve the purchase of 144 acres of vacant desert land adjacent to Ed Hooper Rodeo Park.” Casa Grande Dispatch reports that with “about 10 percent of the Special Revenue Fund” taking a hit for the land buy, the purchase has left some scratching their heads.

Corporation Commission prevents takeover of Arizona Water Co. “Utility regulators on Tuesday approved a deal that allows Arizona Water Co. to keep a lucrative portion of its service territory in Pinal County… The commissioners had considered granting the [disputed] territory to a competitor owned by Ed Robson, a developer and political donor to one of the commissioners. But an administrative-lawjudge and commission staff had warned that would be unconstitutional, and the settlement avoided such a transfer of territory.” AZCentral. 

[COLUMN] Wolf’s Den: Takeover of federal lands by state seems a nonstarter. The Arizona Legislature… is once again attempting to take over all federal lands [sic] in the state not needed for specific government purposes… Is this effort a colossal waste of time and state resources?” Columnist David Wolf seems to think so, in Arizona Daily Sun.

Dealmaker BONUS: Jeff Sessions’ latest moves should be a wake-up call for the cannabis industry. “The rescinding of the Cole memo does not suggest the sky is about to fall for the U.S. cannabis industry, but it should be a wake-up call for those who have been playing fast and loose with their business operations.” One of several key takeaways: “Unless you want orange to be your new black, you can’t afford to be sloppy with your business structure and financial records.” By Laura Bianchi, Rose Law Group partner and director of Medical Cannabis Department, in Rose Law Group Reporter.

Cameron’s $5M + deals of the day – 

As a supplement to the Dealmaker, we thought you might enjoy these articles!


Embryos in divorce dispute at center of Senate bill; ‘far reaching implications,’ says Rose Law Group partner and director of Family Law, Kaine Fisher. “Contracts currently determine what happens when genetic parents disagree over what to do with their frozen embryos.” Arizona Capitol Timesreports that a “bill sponsored by Sen. Nancy Barto, R-Phoenix, would supersede those agreements…” Kaine Fisher: “SB 1393, if passed, would seemingly have far reaching implications that would impact other controversial issues centered around the basic idea of when life begins, such as abortion. I’m sure the debate about this issue will be ferocious.”

Should anti-harassment policy be a rule or law? “House Speaker J.D. Mesnard, R-Chandler, said he pulled a clause concerning a formal anti-harassment policy from the amended rules because there are questions about what part of the rulebook the harassment policy best fits in.” Arizona Capitol Times. (RELATED, from Roll Call: “House adopts rules to curb sexual harassment” — “Members are now forbidden to have sexual relationships with their aides.”)

How much is the opioid crisis costing governments? “[M]ost opioid-related costs on things like health care, social services and criminal justice spending are harder to measure. That hasn’t stopped some groups from trying. If governments can get a more complete picture of how much they’re really spending on the epidemic, it could help them argue for more funding.” Governing.

World View balloon blast did $200,000 in damage to Pima County-owned building. “An investigation into a December balloon explosion at the World View Enterprises launch pad near the Tucson airport is underway… Supervisor Ally Miller, who has been a critic of the county’s deal with World View… was hoping to get information on the extent of the damage…” Arizona Daily Star reports that the “facility’s insurer has cut a check for $200,000 in repairs…” (RELATED: “Goldwater Institute case: Lawsuit over Pima County’s space balloon deal moves ahead,” in Rose Law Group Reporter.)

A crazy idea for funding local news: Charge people for it. “[It’s] a new way of thinking about local news, and a novel business model for funding it, one that doesn’t depend on the beneficence of Facebook or Google…” Anticipating responses from skeptics, such as, “Wait, Sherlock, your big idea is to create a really good product and charge people money for it? Haven’t people tried this before?” New York Times tech columnist Farhad Manjoo answers back with: “Less than you might think” — along with an explanation how this “crazy idea” would work.

Trophy High Rise in Phoenix’s Central Corridor Sells for $80.7 Million Read more

William Ryan Homes opens sixth neighborhood In Goodyear’s Estrella By Newland Communities Read more

Greater Phoenix industrial vacancy drops to lowest level in 10 years Read more

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February 2018