2. The Great Recession was about as bad as anyone who is currently in business can remember.
Because of that, even when we have been in full recovery for a couple of years, it hasn’t felt that way for many people.
We may go back into another recession before the investor community has bought into the fact the Great Recession is over.
*Important* To add sub-bullets, use the Increase/Decrease List Level buttons to increase the indent and add the correct bullet graphic.
Slide numbers can be manually deleted. Select the slide number box and click delete. But…
Best practice for removing the slide number at lower right is:
Go to the Insert tab
In the Text section, click the Slide Number button. The Header/Footer dialog will open.
In the Slide tab, uncheck the Slide Number box and click Apply.
To turn the slide number back on, follow the steps above, and at Step 3 make sure there is a check mark in the Slide Number box and click Apply. This works even if you have manually deleted the slide number box.

3. On the Bright Side Home Values are up – inventory is at normal levels
Job Numbers in Arizona are fully recovered
Companies are moving into and expanding in Arizona
Population in Arizona is growing
Construction is active in all commercial property types
Rental rates are growing and absorption is good
Land prices are back up to previous levels

4. Reality Is Always Lurking
Buyers are still looking for “deals” most of the time
Look behind many of the “trophy” sales – were they trophy or value-add?
Cap rates have remained constant for 18 months
Retailers are filing for bankruptcy – Amazon is delivering using driverless cars
Offices are requiring an increasing number of parking spaces
New construction costs keep going up
ISIS, Presidential debates, Fires in Canada, El Nino –
there is plenty of uncertainty

5. Sales Recap

6. Top Two Sales – Highest Price and $PSF
OFFICE
Top Two Sales – Highest Price and $PSF
December 22, 2015
March 11, 2015
E Camelback Rd
Phoenix, AZ
Size/Occ.: 978,495 SF / 60%
CAP Rate: 3.80%
Sales Price: $279M; $285 PSF
2415 E Camelback Rd
Phoenix, AZ
Size/Occ.: 218,266 SF / 92%
CAP Rate: 7.10%
Sales Price: $74.3M; $340 PSF

7. OFFICE
All of the Year’s Market Makers

8. OFFICE Other Key Trends
Sales increased by 75% – ending the year at $3B, the second highest year, after the $3.2B posted in 2007
Prices PSF ended the year at $173, a 25% jump over levels, but still 12% below 2007
15 sales exceeded $50M, representing one-half of the total sales volume at an average of $225 PSF
The Camelback Corridor posted the largest volume of sales, with $622M invested averaging $260 PSF in nine transactions

9. OFFICE

10. Top Two Sales – Highest Price and $PSF
RETAIL
Top Two Sales – Highest Price and $PSF
June 30, 2015
March 31, 2015
N Scottsdale Rd
Scottsdale, AZ Size/Occ.: 185,065 SF / 97%
CAP Rate: 5.50%
Sales Price: $54.1M; $292 PSF
6560 N Scottsdale Rd
Scottsdale, AZ
Size/Occ.: 22,081 SF / 100%
CAP Rate: 5.50%
Sales Price: $14.0M; $634 PSF

11. RETAIL
All of the Year’s Market Makers

12. RETAIL Other Key Trends
Two private capital investors each purchased three properties for a combined total of $123M
Institutional buyers secured 10 grocery-anchored and large single-tenant deals totaling 22% of all sales volume, averaging $178 PSF
Institutional sellers selectively groomed their portfolio, recycling $144 M from nine properties
Scottsdale was the most active submarket accounting for 29% of total sales volume in 16 deals averaging $212 PSF

13. RETAIL

14. Top Two Sales – Highest Price and $PSF
INDUSTRIAL
Top Two Sales – Highest Price and $PSF
February 27, 2015
December 30, 2015
Metro Phoenix, AZ Size/Occ.: 2,609,671 SF /
91% (portfolio)
CAP Rate: 6.00% (portfolio)
Sales Price: $229.67M; $88 PSF
7195 S Shutterfly Dr
Tempe, AZ
Size/Occ.: 237,000 SF / 100%
CAP Rate: 6.60%
Sales Price: $43.1M; $182 PSF

15. INDUSTRIAL
All of the Year’s Market Makers

16. INDUSTRIAL Other Key Trends
Sales increased 12% above prior year sales and were more than double the volume of 2011
Institutional buyers continued to dominate acquisitions of the highest quality properties, capturing 43% of the sales in 2015
Portfolio sales represented 37% of 2015 sales, totaling $468M
Average user/buyer PSF prices have grown by 48% since 2011
After posting 27 in 2011, 26 in 2012, 11 in 2013 and 7 in 2014, there were only four industrial sales from REO Sellers in 2015 averaging only $53 PSF

17. INDUSTRIAL

18. Trends Across all Types of Real Estate
Sustainability in Building Systems
High speed internet, lower energy consumption, more parking, fewer walls more open space
The Internet of Things (IoT)
All equipment is being designed to connect to the internet - not just the computer

19. Trends Across all Types of Real Estate
Space Utilization
Different than 10 years ago, and it will be vastly different 10 years from now
No exceptions
Autonomous: Replacing Humans for Automation
It is not just about driverless cars – jobs are shifting around
Entrepreneurialism is growing, and looks different
Rent your home; rent your car – with the help from a nerd-based company to provide the technology to connect to the customer

20. How is this Impacting Commercial Real Estate?
Converting empty, obsolete buildings – 26 empty office and retail buildings sold in 2015 – 1.9 million SF – 150+ acres
Datacenters
Every 14 months the demand doubles
Fastest growing sector of commercial real estate
Phoenix is a Tier 1 market due to disaster-free, reliable power grid, reasonably inexpensive power, easy to get to

21. How is this Impacting Commercial Real Estate?
New construction incorporates all of the newest, most current trends 
Smart buildings, parking, energy efficient, floorplates
Connectivity
Village cores, CBD, convenience, freeways, bus lines, light rail, airport, ASU, live, work, play locations

22. Contact Information:
Mindy Korth Colliers International Executive Vice President Investment Properties D: M: E: