NAI Horizon negotiates $7M sale of largest multifamily-zoned private land holding in Central Phoenix to Scottsdale firm

NAI Horizon negotiates $7M sale of largest multifamily-zoned private land holding in Central Phoenix to Scottsdale firm

News & Updates


     PHOENIX, ARIZONA (September 18, 2018) – The $7 million sale of the largest multifamily-zoned land holding in Central Phoenix was negotiated recently by NAI Horizon on behalf of the seller.

The 7.01-acre tract assembly on the east side of N. 12th Street and north of Indian School Road was sold to Scottsdale-based Deco Communities and fetched $22.92 per square foot.

NAI Horizon Vice President Kim Kristoff represented Sidney M. Rosen as trustee on behalf of a lifetime grouping of partners and trust beneficiaries. The combined R-5/R-4 zoning allows up to 311 apartment units based upon the results of a previous site plan submittal.

“Over the past four years, the property has been marketed nationwide and internationally,” Kristoff said. “Most of the national firms resisted the idea of a project on North 12th Street and have paid as much as three times more for their land acquisitions only a few blocks away and had to build structured parking as well.

“They are facing the reality of achieving $2-plus base rents and a variety of related fees (covered parking, storage, utilities, and exercise club) that bring the cost of a one-bedroom unit to more than $1,500 per month. Apartment renters, whether seasoned professionals or entry level students, are seeking the very best rental rates for a well-designed and secure apartment in a given market location. They are willing to forego a variety of service amenities of arguable value if they can save perhaps hundreds of dollars each month and use the savings for other lifestyle choices,” Kristoff said.

The 24-lot assembly began with the first purchase by the partners 40 years ago in 1978. The property has had a typical Central Phoenix history as a collection of garden apartments and also as the home for more than 20 years of Solutions, Inc., an addiction rehab facility.

While the N. 12th Street community has begun to gentrify, it has been the home of law practices, architectural and engineering firms, small associations, insurance brokerages, and numerous other service providers. Retail in the area includes small restaurants, cafes, a coffee shop, sandwich shops, and a variety of local artists.

Considered an area of affordable housing and post-war apartment properties, the street is becoming the new value proposition for the emerging middle market developer and renovation investment opportunities. New nearby apartment projects developed by national firms include the Loft at Campbell and N. 16th Street, the Crescent and Alante at Highland and N. 16th Street, Alta Camelback at N. 7th Street and E. Camelback, Citi stretching between Highland and Camelback, and several others north and south along N. 7th and N. 16th streets.

“Kim Kristoff has absolutely been the best and most professional commercial real estate broker we have worked with in our many years of assemblage and our acquisitions of the 24 contiguous parcels,” Rosen said. “His extremely professional, persistent, in-depth, and sophisticated marketing efforts culminated with this sale to Deco Communities.”

One of the most attractive advantages of this site for Deco Communities is that it doesn’t need to build expensive parking structures. Deco can provide ample parking on grade for up to 311 units, Rosen said.

“This will dramatically lower the overall development cost of the project and allow for more affordable rents, additional landscaping, and easier entry level access for apartment renters,” Kristoff said. “It was not until we tried a pre-app site plan submittal and discovered a provable building volume, on-grade parking count, and site density that were we able to speak with confidence about the real project possibilities.”


by Sep 18, 2018
Phoenix’s Fry’s-anchored Block 23 mixed-use development on menu at AZCREW lunch

Phoenix’s Fry’s-anchored Block 23 mixed-use development on menu at AZCREW lunch

News & Updates

       PHOENIX, ARIZ. (September 10, 2018) – For years Baby Boomers and Millennials bemoaned the fact that Downtown Phoenix didn’t have a major grocery store, a much-sought after amenity that would draw development and residents to the city center.

In April, RED Development broke grown on the Block 23 mixed-used development, which features a Fry’s Food Store, 200,000 SF of office space, 330 apartment units, and additional retail space.

AZCREW, the leading organization for senior-level executive women in the Metro Phoenix real estate field, presents “Block 23: A Mixed-Use Development in Downtown Phoenix,” September 18 at Phoenix Country Club, 2901 N. 7th St., in Phoenix.

Speakers include Barry Shannahan and Jeff Moloznik of RED Development, which says the Fry’s will be one of the most technologically advanced grocery stores in Arizona. It will feature above- and below-ground parking and marks CityScape’s expansion to Second Street.

AZCREW’s September lunch begins with networking at 11:30 a.m. The program starts at noon. Member registration is $40; non-member pre-registration is $65. Registration closes Thursday. Lunch is included. Register here.


by Sep 10, 2018
Retail real estate veteran Mike Kumelski joins NAI Horizon

Retail real estate veteran Mike Kumelski joins NAI Horizon

News & Updates

     PHOENIX, ARIZONA (September 6, 2018) – NAI Horizon bolstered its retail properties division with the hiring of 22-year industry veteran Mike Kumelski.

Kumelski, who will be a vice president, has specialized in retail leasing, development, tenant representation, and sales. Since the start of his real estate career in 1997, he has completed more than 1,200 transactions, including the development of 2 million square feet of shopping centers.

During his career, Kumelski has worked for private and public brokerage firms and private and public development companies.  At NAI Horizon, he will focus on his representation of regional and national tenants leveraging the NAI platform.  He will also work as the landlord representative on listings for select clients.

“We are excited to add Mike to our NAI retail division,” said Terry Martin-Denning, Principal and CEO of NAI Horizon. “Mike’s work ethic, professionalism, and dedication to provide the best service possible to his clients aligns perfectly with our vision.”

Kumelski has facilitated numerous franchise and corporate roll-out expansions in the Arizona market as well as throughout the U.S. Some of his clients include Thai Express, Mucho Burrito, Domino’s Pizza, Extreme Pita, Ginger Sushi, and CoreLife Eatery.

Kumelski is involved with the International Council of Shopping Centers (ICSC) and has held various leadership roles including Western Regional Chair and advisory board member for ICSC’s Next Generation program.

A native of Milwaukee, Wisconsin, Kumelski was raised in Tempe. He studied at Arizona State University. He has volunteered his time to Special Olympics and Gigi’s Playhouse.

by Sep 06, 2018
Hunter Contracting Co. aces its 28th annual charity golf tournament, raising more than $20,000 for a pair of youth organizations

Hunter Contracting Co. aces its 28th annual charity golf tournament, raising more than $20,000 for a pair of youth organizations

News & Updates


     GILBERT, ARIZONA (Sept. 6, 2018) – For almost 30 years, Hunter Contracting Co. and its business partners have given nearly $600,000 to community organizations through its charity golf tournament.

This year’s 28th annual event to benefit the Boys & Girls Clubs of the East Valley and the Children’s Organ Transplant Association (COTA) raised more than $20,000. The tournament drew 131 golfers to the Arizona Grand Resort.

“Philanthropy comes from the heart. We are honored to support these two incredible organizations,” said Hunter Contracting Co. Chairman of the Board Max Taddei. “The Boys & Girls Clubs make a difference in bringing out a child’s potential and helping them achieve their goals.”

COTA was the choice of his mother, the late Dr. Miriam Taddei, one of the founders of Hunter Contracting Co.

“She looked tirelessly for an organization that effectively helped families with urgent medical needs. She found that in COTA,” Taddei said.

Boys & Girls Clubs of the East Valley has been around since 1963. They provide valuable after-school programs to both girls and boys. More than 35,000 children and teens are served at 11 branches.

COTA was founded in 1986 after a group of volunteers in Indiana helped raise funds to place a child on the liver transplant waiting list. Since then it has helped thousands of children and young adults and has raised more than $100 million for transplant-related expenses. COTA does not charge a transplant family, or patient, for its services.

Ben Sornsin, a “COTA Kid” since 1992, is the son of Thomas Sornsin, who is a former employee of Hunter Contracting Co. When Ben required a life-saving liver transplant, his only chance for survival was an operation at UCLA Medical Center. COTA answered their prayer.

“We were so scared we were going to lose our little boy while at the same time being repeatedly asked how we were going to pay the bill,” Thomas Sornsin said. “We are extremely thankful our family has been part of the COTA family for 26 years.”

Keli Dobberstein serves as chairperson of the golf committee. Other golf committee members that helped exceed last year’s goal included Jason Robinson, Jackie Johnson, Gary Hornberger, Omar Cifuentes, Lynne Stocker, Amara Reis, S. Loretta Roberts, and Wendy Williams. The 2019 tournament will return to Arizona Grand Resort.


by Sep 06, 2018
Brewers, Mortenson celebrate ‘Topping Out’ ceremony at Phoenix’s Maryvale Baseball Park

Brewers, Mortenson celebrate ‘Topping Out’ ceremony at Phoenix’s Maryvale Baseball Park

News & Updates


        PHOENIX, ARIZONA (August 27, 2018) The Milwaukee Brewers and Mortenson hosted a Topping Out ceremony this morning to commemorate the last beam put in place on the top of Maryvale Baseball Park, the spring training home of the Milwaukee Brewers.

The final beam was signed by representatives of the Brewers, City of Phoenix, Mortenson, and HKS. It was lifted into place on top of what will be the new home clubhouse of the Brewers.

The ceremony recognized the achievement and celebrated a safe project site with zero injuries to date. The practice of a Topping Out ceremony dates back to the ancient Scandinavian religious rite of placing a tree atop a new building to appease the tree-dwelling spirits displaced in construction. Often, the tree is placed with flags and streamers tied to it.

“Today, we mark a significant milestone in the renovation and construction progress at Maryvale Baseball Park,” said Brewers COO Rick Schlesinger. “On behalf of the Brewers, I would like to thank Mortenson, the City of Phoenix, HKS, IFG and everybody else who has thus far helped make this project a success. The progress is visually stunning and we look forward to the next milestone when we cut the ribbon to open this state-of-the-art facility.”

“Mortenson is proud to partner with the Brewers and the City of Phoenix, as well as all HKS and all of our trade partners on this project,” said Ben Goetter, vice president and general manager at Mortenson. “The Topping Out is always a rewarding time to acknowledge all of the hard work, as well as recognize the team’s commitment to safety on the project site. We look forward to seeing this ballpark continue to transform into an experience the entire community will enjoy come next spring.”

Highlights of the project:

>> 424 tons of fabricated steel have been used;

>> 12,793 yards of concrete have been poured;

>> 19,288 man-hours have been worked to date;

>> 652 team members have gone through safety orientation to make this project a success.

In November 2017, the Phoenix City Council voted in favor of a plan to renovate Maryvale Baseball Park, which has served as the spring training home of the Milwaukee Brewers since 1998. The plan keeps the club in Maryvale through at least 2042, the second-longest commitment in the Cactus League.

Construction began in late March and will be substantially completed by the start of the 2019 Cactus League season.

The Brewers are investing more than $60 million in the construction phase of the program, and have assumed operation and maintenance (as well as related costs) of the facility. The City of Phoenix will allocate $2 million each year for the next five years for renovations; the Arizona Sports and Tourism Authority will contribute approximately $5.7 million.

Maryvale Baseball Park opened in 1998. The facility is built on more than 60 acres of land donated by John F. Long Properties and is located off North 51st Avenue and Indian School Road in Phoenix.

Mortenson Vice President and General Manager Ben Goetter addresses the crowd at the Topping Out ceremony at Maryvale Baseball Park.

by Aug 27, 2018
Trio of self-storage deals worth $13.25M highlight recent deals by NAI Horizon

Trio of self-storage deals worth $13.25M highlight recent deals by NAI Horizon

News & Updates

     PHOENIX, ARIZONA (August 22, 2018) – A trio of self-storage deals worth a combined $13.25 million closed by Senior Vice President Denise Nunez highlight recent transactions closed by NAI Horizon professionals.

Sale Transactions:

Denise Nunez negotiated the sale of a 101,891 SF self-storage property in Tucson, AZ, representing the seller, LPG Associates, for $7.15 million.

Denise Nunez negotiated the sale of a 5.03-acre self-storage entitled, permit-ready site, representing the seller, Happy Valley Self Storage Partners, LLC, for $3.2 million.

Denise Nunez negotiated the sale of a 4.8-acre self-storage entitled, permit-ready site, representing the seller, Waddell & Litchfield Self Storage Partners, LLC, for $2.9 million.

Laurel Lewis negotiated the sale of a 3,775 SF office property, representing the buyer, NRC, LLC, for $540,000. The property is located at 1608 W. Earll Dr., Phoenix, AZ. Mike Coover with Cushman & Wakefield represented the seller, 1608 E. Earll Building, LLC.

Tom Bean, CCIM, and Rick Foss negotiated the sale of an industrial property, representing the seller, Erin M. Glenn, PR for Estate of Robert William McIntire, for $410,000. The property is located at 918 E. Broadway Rd., Phoenix, AZ. Jack Cardinal with Cooper Cardinal & Company represented the buyer, David Michael Sweetman Family Trust

Barbara Lloyd, Lane Neville and Logan Crum negotiated the sale of an office property, representing the seller, Lexbrooke Properties, LLC, for $387,000. The property is located at 7420 E. Pinnacle Peak Rd., Building D, Scottsdale, AZ.

Matt Harper and Michael Gaida negotiated the sale of a 2,500 SF retail property, representing the seller, Fineline Properties, LLC, for $355,000. The property is located at 13331 W. Indian School Rd., Litchfield Park, AZ. Johnnie & Tarja Panfill with West USA Realty represented the buyer, CWS AZ, LLC.

Lease Transactions:

Barbara Lloyd, Lane Neville and Logan Crum represented the tenant, Legacy Air HVAC, LLC, in a 92-month office lease for 11,405 SF at 645 E. Missouri Ave., Phoenix, AZ. Mike Strittmatter with CBRE represented the landlord, ICIC Commercial Investments 3, LLC.

Tyler Smith, Troy Giammarco and Joe Pequeno represented the landlord, Bay Pacific Phoenix Corporate Center, LLC, in a 65-month lease for 19,436 SF at 10010 N. 25th Ave., Phoenix, AZ. Garius Green with Keyser Company represented the tenant, Veyo, LLC.

Isy Sonabend represented the tenant, FinishMaster, in an 88-month industrial lease for 12,712 SF at 318 S. Dobson Rd., Mesa AZ. Mike Parker with CBRE represented the landlord, PRA/LB, LLC.

Chris Gerow, Shelby Tworek, Gabe Ortega and Patrick Anthon represented the landlord, The Market at Estrella Falls, LLC, in a 120-month retail lease for 1,871 SF at 1981 N. Pebble Creek Parkway, Goodyear, AZ.

Tyler Smith represented the tenant, Magnus Title Agency, LLC, in a 60-month office lease for 2,644 SF at 17015 N. Scottsdale Rd., Scottsdale, AZ.

Matt Harper represented both the landlord, 43rd Avenue, LLC, and the tenant, Family Care Connections, LLC, in a 63-month retail lease for 4,889 SF at 9250 N. 43rd Ave., Glendale, AZ.

Laurel Lewis and Tom Bean, CCIM, represented the landlord, Top of the Tram, LLC, in a 36-month office lease for 3,446 SF at 2165 W. Pecos Rd., Chandler, AZ.

Sharon Reeves represented the landlord, Jula International, LLC, in a 63-month retail lease for 1,664 SF at 10626 N. Scottsdale Rd., Scottsdale, AZ. Josh Stewart with Strategic Retail Group represented the tenant, Scottsdale D&D, LLC.

Sharon Reeves represented the landlord, First & Pierce, LLC, in a 60-month retail lease for 1,227 SF at 7119 E. Sahuaro, Scottsdale, AZ.

Matt Harper represented the landlord, MAZ Northern Plaza, LLC, in a 25-month retail lease for 1,000 SF at 5008 W. Northern Ave., Glendale, AZ.

Ed Toschik represented the tenant, LK Institute, in a 36-month office lease for 1,428 SF at 2525 W. Carefree Highway, Building 1A, Phoenix, AZ. Bob Deininger with Commercial Properties Inc. represented the landlord, Sonoran Property, LLC.

Tyler Smith represented the landlord, Arrowhead 79th, LLC, in a 63-month lease for 864 SF at 18001 N. 79th Ave., Glendale, AZ. Adrienne Bryant with Bryant Commercial Real Estate represented the tenant, Parma River, LLC.

Tyler Smith represented both the landlord, Arrowhead 79th, LLC, and the tenant, Tina M. Waggoner, LLC, in a 38-month office lease for 1,276 SF at 18001 N. 79th Ave., Glendale, AZ.

Matt Harper represented the landlord, M&N Realty, LLC, in a 39-month retail lease for 1,908 SF at 12020 S. Warner Elliot Loop, Phoenix, AZ.





by Aug 22, 2018
Cawley Architects adds flair to Deer Valley industrial park with innovative design concept

Cawley Architects adds flair to Deer Valley industrial park with innovative design concept

News & Updates

   PHOENIX, ARIZ.  (August 22, 2018) – Cawley Architects is the design firm behind an innovative concept that is being employed at a North Phoenix business park for the first time in the Valley.

TTR Industrial Park is being designed with all metal buildings that have an emphasis on contemporary architectural design. The design vocabulary focuses on the clean and crisp architectural surface and qualities of metal buildings which maintain their allegiance to several benefits over other construction methods, namely clear span construction without interior column posts and being fully insulated.

The 12-acre site is located east of Phoenix Deer Valley Airport at 16th Street and Deer Valley Road at 1650 E. Donald Dr.

When completed, the park will feature 14 free-standing industrial buildings and condo units that feature large and secure private yards. Completion dates are late 2018 and early 2019. The site is zoned A-1 industrial. The light industrial office/warehouse buildings will range from 7,500 SF to 15,000 SF.

TTR Industrial Park

It is the first project for owner Morton Development LLC, the newest venture of Mike Morton, founder and CEO of several commercial construction businesses. For the past 32 years, his companies have been active in commercial real estate development throughout Arizona, California, New Mexico, and Texas.

“Having foreseen the need of small businesses for quality A-1 industrial space in the Deer Valley submarket, Mike turned his wealth of experience in construction and commercial land acquisition to Morton Development’s inaugural project, TTR Industrial Park,” said Cawley Architects President Sherman Cawley.

Morton is continually seeking new and innovative materials and methods to introduce into the commercial construction industry. He and Cawley have employed this approach at TTR Industrial Park. Morton’s past honors include Technical Innovator of the Year by Arizona Corporate Excellence and earning the Governor’s Award for Energy Efficiency.

“We wanted a concept for an industrial park that reaches out to a niche market, users of about 10,000 square feet are our sweet spot,” Morton said. “We wanted a stand-alone facility and not the tract home industrial look predominantly available in the Deer Valley submarket. It was evident to me that the submarket was absent of an industrial park that offered a unique, affordable, and feature-packed ownership experience.

“By using pre-engineering metal construction, we were able to provide our clients with a fresh and modern industrial look, clear-span construction (no posts), and fully insulated warehouse,” Morton said.

Morton outlined other benefits as well. They include no common walls as each project is free standing on its own lot. Each lot features large, outside secure asphalt storage areas with concrete masonry unit (CMU) walls and steel gates, evaporative warehouse cooling systems, and skylights. Morton also incorporated a common area retention into the park so that each lot is able to maximize and utilize every square foot of its land area.

TTR Business Park LLC is the general contractor; Luke Land Realty has the marketing assignment.

“We have had a strong presence in the Deer Valley submarket for more than 30 years. We sold the property to Morton’s construction company over 20 years ago,” said Mark Lewis, Principal, Luke Land Realty & Investments. “So you can imagine how excited we are to be a part of this development project. The amount of interest and support from the brokerage community and business owners has been overwhelming.

“Cawley Architects gave it a fresh, modern look. The buildings really pop when you drive into the park. They are not going to be cookie cutter. Prospective buyers have multiple design and color options to choose from.” Lewis said.

Aerial image of TTR Industrial Park in the Deer Valley submarket.


by Aug 22, 2018
Sigma Contracting completes final phase of $1.66M community Fountains in the Green

Sigma Contracting completes final phase of $1.66M community Fountains in the Green

News & Updates

      SCOTTSDALE, ARIZONA (August 20, 2018) – Sigma Contracting, Inc. completed the last two infill buildings for multifamily project Fountains in the Green, which was 100 percent occupied upon delivery.

In addition to completing this project, Sigma is currently working on two new multifamily projects with a local developer.

The final phase of Fountains in the Green, 3019 N. 14th St., in Phoenix, comprises nine units, and totals 5,355 SF over two buildings. Construction cost of the ground-up project was $1.66 million.

Amenities include private patios and balconies and assigned covered parking. It is within close proximity to Metro light rail and easy access to banking, hospitals, retail, and shopping. It is located less than two miles from SR 51.

“We were honored to help the owner fulfill the last piece of his lifetime vision,” said Sigma President Dan Hinkson. “It is a beautiful oasis that feels secluded from the city around it.”

The property is owned by Fountains in the Green, LLC of Phoenix.

Fountains in the Green offers a unique and tranquil residential setting in the heart of Phoenix. The gated community sits on 20 acres of lush green land.

Fountains in the Green, 3019 N. 14th St., in Phoenix.



by Aug 20, 2018
Business Real Estate Weekly names industry veteran Ilana Lowery as Executive Editor

Business Real Estate Weekly names industry veteran Ilana Lowery as Executive Editor

News & Updates

Scottsdale, AZ (August 16, 2018) Business Real Estate Weekly of Arizona, publisher of BREW, a trade publication that covers business and real estate activity in Arizona, announced and welcomed Ilana Lowery as Executive Editor in charge of all digital and print content for the 24-year-old industry tip sheet.

A 30-year media veteran, Lowery was the former editor-in-chief at the Phoenix Business Journal, where she served in that position for 15 years. Prior to her role as chief editor, the Chicago native also served as managing editor of the paper for five years. She started there in 1995 as a reporter and projects editor for a total of 23 years at the publication.

As a reporter, she covered banking and finance, real estate, economic development, aviation, tourism and sports business. Prior to the Business Journal, she was an editor for Independent Newspapers Inc., a community newspaper chain based in Scottsdale.

Lowery also is an adjunct professor at Arizona State University’s Walter Cronkite School of Journalism and Mass Communications where she teaches business reporting.

Before moving to the Valley in 1989, Lowery served as a reporter and editor for Pulitzer Newspapers in Chicago. An award-winning journalist, she also worked for the NBC-TV affiliate in Chicago.

A 1986 graduate of the University of Illinois, Lowery earned BA degrees in Mass Communications and English.

Business Real Estate Weekly of Arizona Publisher Terry McDonnell expressed great confidence in Lowery.

“We are elated to have one of the Valley’s most veteran and respected journalists join our team at Business Real Estate Weekly. With BREW approaching our 25th year anniversary and readying for the launch of new products to celebrate this milestone next year, the timing is ideal for Ilana to be joining the BREW crew as editor. Her addition is a game changer and puts an exclamation point on our promise to provide readers with accurate, timely and independently researched real estate news,” McDonnell said.

Lowery will be responsible for growth in all areas of business and will lead BREW’s product strategy and vision across all platforms, as well as growth of the publication’s audience. Lowery will help develop new features and content. In addition, she will be instrumental in increasing the company’s online visibility and making news stories visible and accessible by BREW’s main target audiences, including the general public and real estate industry leaders.

“This is an amazing opportunity to reinvigorate BREW and help take the publication to a new level, both digitally and in print,” Lowery said. “It is the perfect position for me and gives me the chance to use all of my skills — both on the editorial and the business side of the shop to foster significant growth in all areas. I am thrilled to be working with Terry on this venture.”

Currently, Lowery serves on the executive board of Gabriel’s Angels and is a member of the prestigious women’s
professional associations Charter 100 and Central Phoenix Women. She is co-chair of this year’s Arizona Science

Center’s Galaxy Gala and honorary chair of Debbie Gaby Charities Cat Walk.

Lowery recently served on the advisory board for the Greater Phoenix Jewish News and is affiliated with the
Society of Professional Journalists, the Arizona Press Club and the Arizona Newspaper Association, which in
2015 presented her with the Order of the Silver Key, an honor for journalists who have been in the profession
for 25 years or more, contributed to the journalism profession both locally and nationally, and have inspired
fellow journalists.

In addition, Lowery is a long-time supporter of the Ryan’s House, the YWCA and the Southwest Autism
Research & Resource Center. In 2014, she was a Greater Phoenix Chamber of Commerce Athena Award finalist.

She also was honored as a Woman of Distinction by the Girl Scouts Arizona Cactus-Pine Council.

Lowery’s new position is effective Aug. 16, and she can be reached at

by Aug 16, 2018
Revitalizing Arizona communities one opportunity zone investment at a time

Revitalizing Arizona communities one opportunity zone investment at a time

News & Updates

Caliber – The Wealth Development Co. gives U.S. Rep. Martha McSally         a first-hand look at how opportunity zones can be transformative 

    SCOTTSDALE, Ariz. (August 16, 2018) – With $5 trillion of investable capital sitting on the sideline and not being put into projects across the U.S., opportunity zones – created by the Tax Cuts and Jobs Act – are a way to take advantage of a tax reduction and invest in local communities.

Caliber – The Wealth Development Co., on Wednesday hosted a tour of the GC Square Apartments, 3535 W. Camelback Rd., an example of a project that can be developed in an opportunity zone.  The Scottsdale-based firm showcased GC Square as U.S. Rep. Martha McSally-Ariz., who is running for the U.S. Senate, was joined by Caliber President and COO/Co-Founder Jennifer Schrader.

GC Square is a completely renovated, off-campus apartment community designed for students near Grand Canyon University in Phoenix.

“This is exactly the type of property we would transform,” Schrader said. “When opportunity zones were first announced, we saw it as a great way to invest. The old way, we were limited to the 1031 (Exchange) or in many cases business owners were not ready to sell because the tax consequences were too high. Now with Caliber’s Opportunity Zone Fund, it will provide us with another avenue to invest directly in the communities where it’s most needed.”

Arizona had 168 opportunity zones approved at the federal level, the most allowed by the law. Notable areas that were designated include much of downtown Phoenix, areas around Sky Harbor International Airport, Mesa, and Old Town Scottsdale. According to the law creating the opportunity zones, if investors keep their money in the fund for at least 10 years, there are no taxes on what was earned from the investment, only on the original capital gain used to invest in the fund.

“The last time the tax code was updated was 30 years ago; it’s not really been keeping up to what’s happening,” McSally said. “Now, there is really a change of the culture in Washington, D.C. With the Tax Cuts and Jobs Act, we wanted to unlock businesses like this. It now provides the opportunity to take resources and invest in the community. When it doesn’t make sense to sell, this is exactly what we intended it to do – unleash projects like this all over our state and all over our country.”

The opportunity zone program is awaiting final rules from the IRS. In Arizona, McSally said, all 15 counties will benefit from this new investment tool.

“This is really a big idea,” McSally said. “It will really help lower income communities, rural communities, and the reservations. There can be growth, and provide the opportunity for people to work safely, live safely, and go to school safely. This type of investment will attract new residents to move into a community. It will also help create jobs.”

The money must be invested within 180 days for it to be eligible. Investors can re-invest capital gains realized from a sale of property, stock or business to defer paying taxes. With a new fund to attract investors, Caliber will continue investing in the community with additional developments.

“There are two other complexes in this area, similar in size to this one, that are being renovated,” Schrader said. “Given the timing, one will be an opportunity zone property.”

In February, Caliber and project partner Habitat Metro purchased eight buildings on Main Street in downtown Mesa for $7.5 million. Plans call for investment and redevelopment for nearly 100,000 square feet of historic urban buildings that are important project components to the economic strengthening and transformation of downtown Mesa.

GC Square Apartments is not associated with GCU and is a separate entity.

by Aug 16, 2018