The Deal with Club Pilates Was Completed in a Professional“ Manner

www.REBusinessOnline.com May 2016 • Volume 14, Issue 9

The deal with Club Pilates was completed in a professional“ manner. The tenant’s lease comments and requests were fair, the tenant was very responsive during the negotiations; the business will be another

first class addition to our center. Scott A Tucker ” CSM Vice President to Leasing (Chicago Region) KIMCO

CLUB PILATES CONTACT: RICHARD FEINBERG – Vice President of Real Estate www.clubpilates.com/realestate

CP AD 10.8125X14 COVER.indd 1 4/21/16 4:48 PM www.REBusinessOnline.com May 2016 • Volume 14, Issue 9

THE DISTRICT DETROIT AIMS NET LEASE TO BE GAME CHANGER FOR CITY INVESTMENT Bold mixed-use plan for area around arena fosters neighborhood concept. By Christina Cannon MAINTAINS ummer may be approaching, but workers on the Detroit BRISK PACE SEvents Center are cooling off as 1031 exchange buyers, the practice ice begins to take shape. With work on the roof and training fa- private investors drive cility underway, the new home of the demand, but cap rates NHL’s Red Wings is right on schedule to open for the 2017-2018 season. suggest cycle nears peak. With so much excitement surround- By Joe Gose ing the construction of the arena, it’s unger for yield and persistently easy to lose site of the other compo- low interest rates, the dynam- nents that will make up The District ics that have fueled a robust Detroit. In addition to the 20,000-seat H This building will be situated along Woodward Avenue and is part of The District net lease investment market for retail arena, 50 blocks between downtown Detroit’s Woodward Square neighborhood. The building will hold more than 55,000 properties over the past few years, see ARENA page 28 square feet of retail space and more than 160,000 square feet of office space. remain in place so far in 2016, but emerging signs suggest that prices are nearing their peak as recession wor- ries continue to mount. FOUR RETAIL DEVELOPMENTS Institutional, high-net-worth and foreign investors TO WATCH IN HOOSIER STATE make up a good chunk of net lease Favorable market conditions give developers green light on retail projects. buyers, who are By Christina Cannon plowing money into Family Dollar stores, nown as The Crossroads of What follows is a closer look at four In 2009, Cabela’s pulled the plug Walgreens proper- America, Indiana is home of retail developments coming on line in on a 120,000-square-foot store, and in ties, quick-service the Indy 500 and the stomp- the Hoosier State. From the suburbs 2014 GoodSports Enterprises Global K restaurants, conve- ing ground for the NFL’s Indianapolis of Indianapolis to the northern banks abandoned its plans for a $22 million nience stores and Colts. And increasingly it’s becoming of the Ohio River, these developments sports complex. Ralph Cram similar retail proper- a magnet for a variety of retail devel- aim to be the go-to place for shoppers. The new mammoth retail develop- Envoy Net ties that are geared opment. ment by Gershman Partners will be Lease Partners to provide steady “Strong disposable incomes and Greenwood Town Center located 13 miles southeast of the heart income from stable competitive income tax rates create in suburban Indianapolis of Indianapolis in Greenwood. The long-term tenants. But 1031 exchange a welcome environment for retailers Residents of Greenwood are hop- city is situated in Johnson County, the buyers, who roll the proceeds from a to do business in Indiana,” says Bill ing that the third time is a charm for third fastest-growing county in Indi- property sale into a similar property French, senior managing director with a nearly 100-acre plot of land to the ana. for tax benefits, have increased their Cushman & Wakefield. east of I-65 in suburban Indianapolis. Approximately 250,000 people re- appetite for net lease properties over Add to the mix a low cost of living, Gershman Partners is spearheading a side within a 10-minute drive of the the last six to nine months to become relatively low real estate taxes plus $90 million, 700,000-square-foot shop- city center. some of the most active buyers in the available land, and it’s easy to see ping center and entertainment district Gershman plans to break ground on why retailers are drawn to the state, that will stand on a site where two pre- see NET LEASE page 24 adds French. vious projects failed to come to fruition. see RETAIL page 26

INSIDE THIS ISSUE Developing Universities Requires a Special Skillset page 20

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Accelerating success. PUBLISHERS’ NOTE May 2016 • Volume 14, Issue 9 RETAIL REAL ESTATE STARS IN ALIGNMENT Calling 2016 the year of the consumer, brokerage services giant Cushman & Wakefield in a newly released white FRANCE MEDIA, INC. Heartland Real Estate Business (ISSN paper lays out a compelling case as to 1542-8311) is published monthly by Jerry France...... Chairman & CEO/Publisher why retail real estate stands to greatly France Publications, Inc., d/b/a France Scott France...... President/Co-Publisher benefit in the short run. Media, Inc. Editorial and advertising Michael Jacobs...... Chief Financial Officer The U.S. economy is expected to offices are located at Two Securities Randall Shearin...... SVP, Editorial & Operations add 2.6 million nonfarm payroll jobs Centre, 3500 Piedmont Rd., Suite 415, this year on top of the 5.7 million it EDITORIAL Atlanta, GA 30305. Telephone (404) added in 2014 and 2015. Thanks in 832-8262, facsimile (404) 832-8260. E- Matt Valley...... Editor, Heartland Real Estate Business/ part to faster wage growth, consumer Jerry France Scott France mail: [email protected]. Editorial Director, Real Estate Regionals Periodicals postage paid at Atlanta, spending is projected to accelerate Publisher Co-Publisher Christina Cannon...... Associate Editor this year to its strongest pace in more GA, and additional mailing offices. John Nelson...... Assistant Editor POSTMASTER: Send address changes than a decade after rising 3.1 percent properties and cast a spotlight on the Haisten Willis �� Assistant Editor to: Heartland Real Estate Business, P.O. in 2015. new $627 million arena under con- Julie Hunt...... Graphic Designer Box 47065, Plymouth, MN 55447-0065. Jaime Lackey...... Graphic Designer Low oil prices continue to put mon- struction for the Detroit Red Wings in Heartland Real Estate Business is a Jeff Shaw...... Graphic Designer ey in consumers’ pockets, which leads the Motor City that will feature an ac- registered trademark of France Pub- to faster spending growth. Cushman companying $200 million mixed-use lications, Inc. Subscription rates: USA & Wakefield predicts the average district across 50 blocks. ADVERTISING 1 year $65; 2 years: $112. Single copies price of oil this year will be $41 per Market snapshots in this issue high- Scott France...... Co-Publisher are $10. For subscriber services, includ- barrel, down from $49 in 2015. light office sector trends in metropoli- Matt Nixon...... Media Advisor ing change of address or subscriptions, Barbara Sherer...... Media Advisor What’s more, the U.S. shopping tan Detroit; an apartment develop- please email [email protected] center vacancy rate, which stood at ment boom in downtown Cleveland; INTERFACE CONFERENCE GROUP or call (800) 869-6882. 7.9 percent at the end of the first quar- and HSA Commercial’s retail center, Richard Kelley...... Senior Vice President ©2016 France Publications, Inc. For ter, has either remained steady or de- The Mayfair Collection, on a 69-acre Alicia Lewis...... Conference Coordinator reprints or to photocopy articles, please clined for 16 consecutive quarters. site in the suburban Milwaukee com- Angelina Varagona...... Conference Coordinator contact Barbara Sherer, manager of spe- Our front-page coverage this month munity of Wauwatosa. CIRCULATION AND ADMINISTRATION cial advertising at (630) 553-9037. The opinions and statements made has a decidedly retail and entertain- We hope to see you at the annual Tammy Orr...... Vice President, Circulation Director by authors, contributors and advertis- Teresa Hennington...... Office Manager ment focus. In addition to highlight- ICSC RECon convention scheduled ers to Heartland Real Estate Business are Charlotte Ray...... Circulation Assistant ing four significant retail development to take place May 22-25 in Las Vegas. not necessarily those of the editors and across Indiana, we update our read- Feel free to stop by booth #N1834 and Jackie Newman...... Circulation Assistant John Paul Abraham...... Receptionist publishers. ers on investor appetite for net lease say hello.

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at 440 S. LaSalle St. in Chicago’s financial district. Dallas-based TIER REIT Inc. is reportedly selling the asset for $200 million, according to Crain’s Chicago. Sources say the deal has not closed, however, and CIM Group declined to comment. Built in 1984 and renovated in 2014, the office tower features a 40,000-square-foot amenity floor for tenants, 45,000-square-foot landscaped plaza, café, underground parking, 150-seat conference room, 24-hour staffed security and bay win- dows that offer 180-degree views. The tower also houses the Chicago Stock Exchange, the Arciel bar and lounge, The Everest Room and The Bucking- Addison & Clark, which will be located across from Wrigley Field in Chicago, is slated for completion in 2018. The transit-oriented ham Club and Hotel. apartment building will contain 148 luxury units, 150,000 square feet of retail space and a 405-space parking garage. KINZIE REAL ESTATE GROUP M&R, BUCKSBAUM RETAIL GREENBRIER BREAKS 365-bedroom student housing com- TO BUILD 258-UNIT LUXURY PROPERTIES TO DEVELOP GROUND ON $30 MILLION plex in DeKalb, approximately 70 APARTMENT COMPLEX 148-UNIT LUXURY SENIORS HOUSING COMPLEX miles west of Chicago, for $11.6 mil- ELGIN, ILL. — Kinzie Real Estate APARTMENT BUILDING PROSPECT HEIGHTS, ILL. — Green- lion. Ridgebrook Court Apartments Group will construct a new luxury CHICAGO — A joint venture between brier Senior Living has broken ground is a three-building, 180-unit property rental community in Elgin, approxi- M&R Development and Bucksbaum on Greenbrier of Prospect Heights, a that is located at 832 Ridge Drive, mately 40 miles northwest of Chicago. Retail Properties LLC has acquired 101-unit assisted living and memory 808 Ridge Drive and 835 Edgebrook Watermark at the Grove will be situ- a 2.3-acre site in Chicago’s Lakeview care community in the northwest Drive. The apartments are less than ated on 11 acres and will include 258 neighborhood for the future develop- Chicago suburb of Prospect Heights. a mile from Northern Illinois Univer- units within five three-story build- ment of an apartment building. Ad- Greenbrier, a division of Evergreen sity and 7.5 miles from Kishwaukee ings. Floor plans will include studios, dison & Clark, slated for completion Real Estate Group that specializes in College. The property has undergone one- and two-bedroom units. Ame- in 2018, will contain 148 luxury units the development and management of recent renovations including new nities will feature a clubhouse, event and 150,000 square feet of retail space senior living communities, estimates plumbing, electrical, HVAC, drywall, space, a fitness facility, theater room, across from Wrigley Field. The retail development costs at $30 million. doors, frames, lighting and security outdoor pool, dog park, walking trails component, which will be located Located on five acres, Greenbrier of systems. The complex also features and secure auto and bike parking. In- on the first three floors, will contain Prospect Heights will include a three- updated wood floors, laundry room, terstate Partners LLC is the project a multi-screen theater, health and story, 69-unit assisted living facility, kitchens and bathrooms. A private developer. fitness club and several dining op- as well as a one-story, 32-unit build- developer sold the asset to a private tions. The units will consist of studio, ing for memory care. Chicago-based investor. Eric Bell of Marcus & Mil- CBRE BROKERS SALE one- and two-bedroom apartments. Pathway Senior Living will operate lichap represented the seller in the OF MIXED-USE BUILDING The transit-oriented building will be the community once it’s complete. transaction and procured the buyer. FOR $8.3 MILLION located a block west of the Chicago CHICAGO — CBRE has brokered the Transit Authority’s Red Line and will MARCUS & MILLICHAP CIM AGREES TO PURCHASE sale of a mixed-use building in Chica- also feature a 405-space parking ga- BROKERS SALE OF STUDENT OFFICE TOWER FROM go for $8.3 million. A foreign investor rage. Solomon Cordwell Buenz will HOUSING COMMUNITY TIER REIT FOR $200 MILLION purchased the building, located at 175 design the LEED-certified building, FOR $11.6 MILLION CHICAGO — CIM Group has agreed N. Franklin St., from an undisclosed and Power Construction will serve as DEKALB, ILL. — Marcus & Millichap to acquire Four40, a 39-story, 1 mil- seller. The four-story, 42,552-square- the general contractor. has arranged the sale of a off-campus, lion-square-foot office tower located foot property is 100 percent leased to a mix of office and retail tenants. John Slivka of CBRE represented the own- One Retail Loca(on…Two Opportuni(es! er in the transaction. ü Jewel Osco grocer-‐anchored retail center ü Immediate availability for last 2 end-‐caps (3,900 & 7,000 SF) WESTMOUNT REALTY ü 5 acre build-‐to-‐suit across the street with frontage CAPITAL, PARTNERS GROUP ACQUIRE 19-PROPERTY Distance Popula(on Households (HH) Avg HH Income INDUSTRIAL PORTFOLIO CHICAGO — A joint venture between 1 Mile 5,630 1,939 119,603 Westmount Realty Capital LLC and 3 Mile 43,466 15,854 111,196 Partners Group has acquired an in- 5 Mile 140,960 48,137 109,022 dustrial portfolio in the greater Chi- cago area for an undisclosed amount. Maple View Center 811-957 E. Belvidere Rd 2 end caps available 19,600 Traffic Count The portfolio consists of 19 multi- tenant facilities totaling approximate- 5.15 Acres 120’ Frontage ly 1.5 million square feet. The portfolio is 86 percent occupied. The seller 804 E. Belvidere in the transaction was a large, institu- 19,600 Traffic Count tional owner of industrial real estate. Within the portfolio, 14 properties are located near Chicago’s O’Hare Inter- national Airport. The other five assets are located in Romeoville, Gurnee and Wheeling. Westmount will provide property management services, For addi(onal site and incen(ve informa(on contact: Michael Stewart, Managing Director, Grayslake Business Partnership and Cawley Chicago will provide the (847) 665-‐8444 or [email protected] leasing services. 8 • May 2016 • Heartland Real Estate Business www.REBusinessOnline.com KANSAS & MISSOURI

CAIN BROTHERS ARRANGES ing deck will be added providing over $51.8 MILLION IN BOND 300 additional spaces. Construction FINANCING TO REPOSITION on the hotel is slated for completion SENIORS HOUSING COMPLEX by the summer of 2017. The Drury Inn KANSAS CITY, MO. — Cain Brothers & Suites at Streets of St. Charles will has arranged $51.8 million in bond fi- offer meeting space, an indoor/out- nancing for Kingswood Senior Living door pool, Wi-Fi and hot breakfast. Community, a retirement community The hotel is the latest of several new in Kansas City. The bonds will fund tenants to be announced at Streets of the repositioning of the community, St. Charles including Orangetheory which Life Care Services operates. Fitness, P.F. Chang’s China Bistro, The campus was built in 1982. LCS Firebirds Wood Fired Grill and Noo- Development has formulated a turn- dles & Co., which are all scheduled to Cullinan Properties will deliver this 180-room Drury Inn & Suites at Streets of St. around plan that includes converting open this summer. Charles to the greater St. Louis area by the summer of 2017. the obsolete independent living units to new assisted living and memory care units. Renovations will also be performed throughout the remaining units, common areas and amenities. In addition to the 35-year, non-rated, fixed-rate bonds, Cain Brothers arranged $2 million of mezzanine financing to execute the development.

LOVE FUNDING PROVIDES $15.3 MILLION LOAN FOR CHRISTIAN CARE HOME FERGUSON, MO. — Love Funding has closed a $15.3 million loan for the refinancing of Christian Care Home, an assisted living and skilled nursing community in Ferguson. Christian Care Home offers 178 beds in 92 units and is one of only two nursing homes in the area that provides on-site di- alysis services to its residents. Chris- tian Woman’s Benevolent Association owns the facility. Robyn Cunningham and Adrian Hartman of Love Fund- ing secured the financing through HUD. This is the second time in less than three years that Love Funding HEARTLAND AFFILIATES: has refinanced the property’s debt. WHERE ARE YOUR CHICAGO, IL MILWAUKEE, WI Love originally financed the construc- Podolsky|Circle The Dickman Company, Inc./ tion of the facility under HUD’s Sec- CORFAC International CORFAC International REAL ESTATE DECISIONS 847.444.5700 414.271.6100 tion 232 program in June 2009. www.podolsky.com www.dickmanrealestate.com TAKING YOU? CHICAGO, IL MINNEAPOLIS, MN MID-AMERICA ARRANGES ProTen Realty Group/ Gaughan Companies/ CORFAC International CORFAC International $15 MILLION SALE 312.263.5930 651.464.5700 OF FENTON COMMONS www.protenrealty.com www.gaughancompanies.com Chart your course with CORFAC FENTON, ILL. — Mid-America Real CINCINNATI, OH NASHVILLE, TN Henkle Schueler & Associates/ Chas. Hawkins, Co., Inc./ Estate Corp. has arranged the $15 International, a commercial real estate CORFAC International CORFAC International million sale of Fenton Commons, an network managed by independent, like- 513.621.7535 615.256.3189 82,242-square-foot shopping center www.hsabh.com www.chashawkins.com located in the St. Louis suburb of Fen- minded principals and agents worldwide. CLEVELAND, OH PITTSBURGH, PA Weber Wood Medinger/ Weber Wood Medinger/ ton. Best Buy, Old Navy and Barnes CORFAC International CORFAC International 216.464.7100 412.515.1550 & Noble anchor the center, which also www.wwmrealestate.com www.wwmrealestate.com features Chili’s and Bank of America Navigating the commercial property DETROIT, MI ST. LOUIS, MO outparcels. Ben Wineman of Mid- markets as an investor, developer or tenant L. Mason Capitani, Inc./ Sansone Group/ America and Scott Seyfried of Pace CORFAC International CORFAC International seeking office, industrial and retail assets 248.637.9700 314.727.6664 Properties worked on behalf of the www.lmcap.com www.sansonegroup.com has never been easier. Experience the seller, a private St. Louis-based part- KANSAS CITY, MO WINNIPEG, MB nership. GDA Real Estate, represent- Karbank Real Estate Shindico/ client-centric service that local experts Company, LLP/ CORFAC International ed by Greenwood Village, acquired CORFAC International 1 204.474.2000 the property. deliver every day for businesses like 816.221.4488 www.shindico.com www.karbank.com yours. Contact a CORFAC firm in your CULLINAN PROPERTIES MEMPHIS, TN market today. Crump Commercial, LLC/ TO BUILD HOTEL PROPERTY CORFAC International 901.452.4521 AT STREETS OF ST. CHARLES www.crumpcommercial.com ST. CHARLES, MO. — Cullinan Prop- erties will construct a 180-room Drury Inn & Suites hotel, which will be part Locally Owned. www.corfac.com of the Streets of St. Charles, a 27-acre mixed-use community. In addition to Globally Connected. 224.257.4400 the seven-story hotel, a second park- www.REBusinessOnline.com Heartland Real Estate Business • May 2016 • 9 MICHIGAN

KROGER TO INVEST and Josh Miller of Friedman Integrat- $180 MILLION IN MICHIGAN ed Real Estate Solutions represented WITH MARKETPLACE STORES both parties in the transaction. NOVI, MICH. — Novi-based The Kroger Co. of Michigan will invest MID-AMERICA BROKERS $180 million in Michigan’s grocery SALE OF 130,424 SF sector during 2016 by adding three SHOPPING CENTER Kroger Marketplaces and six new fuel CLAWSON, MICH. — Mid-America centers. The grocer will also increase has arranged the sale of Clawson its ClickList online shopping service Center, a 130,424-square-foot grocery- to 22 locations and remodel 11 exist- anchored shopping center located in ing stores. The new stores will be lo- the northern Detroit suburb of Claw- cated at 12 Mile Road and Stephenson son, for an undisclosed price. Tenants Highway in Royal Oak, M-59 and at the center include Aldi, Dollar Tree, Elizabeth Lake Road in White Lake O’Reilly Auto Parts, Rite Aid and Township and at 26 Mile Road and Staples. The shopping center was 80 Van Dyke Avenue in Shelby Town- percent occupied at the time of sale. ship. The Kroger Co. of Michigan in- This 4,971-square-foot Chick-fil-A, which will be located at 5617 W. Saginaw Highway Ben Wineman and Daniel Stern of cludes 129 Kroger stores, 69 fuel cen- in Lansing, will be the third location in the state of Michigan. Mid-America represented the seller, ters and 103 pharmacies. Kimco Realty, in the transaction. Vi- new stores within the next five years. along the banks of Lake Michigan. king Partners was the buyer. COHEN FINANCIAL ARRANGES The first building, to be located at Originally constructed as a hotel in $4.5 MILLION LOAN FOR 5617 W. Saginaw Highway in Lan- 1928, the property was converted to L. MASON CAPITANI APARTMENT COMMUNITY sing, is slated for completion this fall. seniors housing in 1973. NorthPoint NEGOTIATES 140,000 SF YPSILANTI, MICH. — Cohen Finan- The 4,971-square-foot restaurant will Capital Funding is a subsidiary of INDUSTRIAL LEASE cial has arranged a $4.5 million non- feature seating for 132 people with NorthPoint Capital Group, a lender PORT HURON, MICH. — L. Mason recourse refinancing loan for Blue additional patio seating. The building based in Chicago. Capitani CORFAC International has Heron Pointe Apartments. The 64- will also include two drive-thru lanes. arranged a 140,000-square-foot in- unit complex is located at 6244 Trum- The remainder of the stores in the ex- FRIEDMAN NEGOTIATES SALE dustrial lease in Port Huron, approxi- peter Lane in Ypsilanti, approximate- pansion will open at a rate of approxi- OF 34,965 SF RETAIL CENTER mately 60 miles northeast of Detroit. ly 40 miles west of Detroit. The Class mately three to four stores per year, LIVONIA, MICH. — Friedman In- Rex Performance Products, a manu- A property was built in 2014. Cathy and the franchise is considering addi- tegrated Real Estate Solutions has facturer of polyethylene foam, has Bronkema of Cohen Financial secured tional locations in Kalamazoo, metro arranged the sale of a 34,965-square- leased the building at 2100 Dove St. the 25-year, fixed-rate loan with a life Detroit and Grand Rapids. Chick-fil- foot retail center in Livonia, approxi- Jason Capitani and Joe DePonio of insurance company. Unit amenities A currently operates two stores in the mately 20 miles northwest of Detroit, L. Mason Capitani represented both at Blue Heron Pointe Apartments in- state of Michigan, one at Detroit Met- for an undisclosed price. CRE REO parties in the transaction. clude one-car garages, kitchen appli- ropolitan Airport and one on the Oak- LLC - Gearing Capital Partners sold ances, granite countertops, faux wood land University campus in Rochester. L.A. Plaza to Cantor Real Estate In- SANDLER & TRAVIS SIGNS floors and washers and dryers. come and Opportunity Fund II LLC 38,773 SF OFFICE LEASE NORTHPOINT ARRANGES through Auction.com. The single- SOUTHFIELD, MICH. — Sandler & CHICK-FIL-A BREAKS GROUND $7 MILLION LOAN FOR story building is located at 36083- Travis Trade Advisory Services Inc. ON FIRST STORE IN NEW SENIORS HOUSING COMPLEX 36175 Plymouth Road. The shopping has signed a 38,773-square-foot lease MICHIGAN EXPANSION ST. JOSEPH, MICH. — NorthPoint center includes tenants such as Lily at the Galleria Officentre in South- LANSING, MICH. — Chick-fil-A has Capital Funding has arranged the $7 Nails, The Hair Doctor, Cozy Corner field, approximately 17 miles north- broken ground on a freestanding million refinancing of The Whitcomb Café, Quizno’s Subs, The Jewelry Fac- west of Detroit. Sandler & Travis will store in Lansing, kicking off the res- Senior Living Community, a 134-unit tory, KDI and The Bike Tri Shop. The occupy space on the first and fourth taurant chain’s expansion across the community in St. Joseph, located center is 60 percent occupied and is floors of the 350,000-square-foot state. Chick-fil-A will open 15 to 20 in the southwest corner of the state situated on 4.4 acres. Rich Deptula building. The five-story, Class A office building was constructed in 1987. David Friedman and Robert Gagniuk Redi-Dock® Provides Instant of Friedman Integrated Real Estate Solutions represented the ownership Drive-In Access to Your Facility in the transaction. • Modular NAI WISINSKI BROKERS SALE OF OFFICE BUILDING • Minimal site prep KENTWOOD, MICH. — NAI Wisin- • Low maintenance ski of West Michigan has negotiated the sale of a 9,000-square-foot build- • Delivered & set ing in Kentwood, approximately 10 • Easily relocated miles southeast of Grand Rapids, for an undisclosed price. Mattson Fi- • Lengths to 50’ nancial Services LLC purchased the property from Chulam Malin. Matt- • In nite widths son Financial will relocate from its • Heavy duty rating current facility at 1507 Plainfield Ave. in Grand Rapids following the reno- • No future demolition vation of the building. Mattson Finan- • ADA ramps available cial Services specializes in financial planning, investment management and tax planning. Cameron Timmer Call: 800-724-4881 of NAI Wisinski represented Mattson www.ReadingPrecast.com Financial Services. Jason Makowski [email protected] Call for an immediate consultation. and Mary Anne Wisinski of NAI Wis- inski represented the seller. 10 • May 2016 • Heartland Real Estate Business www.REBusinessOnline.com IOWA & NEBRASKA ASSOCIATED BANK PROVIDES HREC INVESTMENT ADVISORS $6.5 MILLION CONSTRUCTION ARRANGES SALE OF HOTEL LOAN FOR VETERANS CLINIC WATERLOO, IOWA — HREC KNOXVILLE, IOWA — Associated Investment Advisors has brokered Bank has provided a $6.5 million con- the sale of a 79-room Holiday Inn struction loan for a Veterans Admin- Express in Waterloo, approximately istration Primary Care Clinic in Iowa. 60 miles northwest of Cedar Rapids, Knoxville VA LLC was the borrower. for an undisclosed price. The hotel, The 16,731-square-foot clinic will be located at 2127 La Porte Road, located at 1607 N. Lincoln St. in Knox- features a business center, fitness ville, approximately 40 miles south- center, complimentary breakfast and east of Des Moines. The build-to-suit indoor pool. The buyer and the seller This 16,731-square-foot Veterans Administration Primary Care Clinic, located in Knox- facility is scheduled for completion by were undisclosed. Ted Anka of HREC ville, Iowa, is slated for completion by the end of this year. the end of the year. Knoxville VA LLC represented the seller. is an affiliate of W.D. Schorsch LLC, which specializes in the development and management of build-to-suit projects for the United States General Services Administration.

INVESTORS REAL ESTATE TRUST SELLS NEBRASKA ORTHOPAEDIC HOSPITAL FOR $24.3 MILLION OMAHA — Investors Real Estate Trust has sold the Nebraska Ortho- paedic Hospital in Omaha for $24.3 million to the in-place tenant. The 61,758-square-foot facility is located at 2808 S. 143rd Plaza. The hospital provides services such as physical thera- py, diagnostic imaging, surgery, rheu- matology and has an infusion clinic. Investors Real Estate Trust primarily invests in income-producing medical office and apartment properties located in the upper Midwest.

DOUGHERTY FUNDING CLOSES $11.7 MILLION LOAN FOR 248-UNIT AFFORDABLE HOUSING PROPERTY IOWA CITY, IOWA — Dougherty Funding has closed an $11.7 million acquisition loan for a 248-unit af- A PLACE FOR BRANDS WHO LIVE THEIR VALUES. fordable apartment property in Iowa City. A majority of the units at Iowa 400,000 SQ. FT. OF RETAIL • 150,000 SQ. FT. OF CLASS A OFFICE SPACE City Pheasant Ridge Apartments were 145 ROOM BOUTIQUE HOTEL • 90 LOFT STYLE APARTMENTS • 300 NEW RESIDENCES covered under a project-based Section 8 Housing Assistance Payment Con- The world of retail has changed. It is not enough to just have great products and an exciting tract. The property, built in 1971, re- experience. Today, great brands must demonstrate that they share the values of their customers cently underwent $700,000 worth of and so must we. That is why we are building Pinecrest, a 21st century mixed-use destination improvements such as new furnaces, designed as a place where brands and their customers get to share and live their values. roofing, kitchen cabinets, countertops and appliances. Iowa City Leased Cleveland’s newest mixed-use lifestyle district located in Orange Village, Ohio. Housing Associates II LLLP was the borrower. Dougherty served as the lead lender and servicer for the loan. FAIRMOUNT PROPERTIES | HEATHER KOVELLO | [email protected] | 216.514.8700 EXT. 117

CARETRUST REIT ACQUIRES SKILLED NURSING FACILITY FOR $5 MILLION CEDAR FALLS, IOWA — CareTrust REIT Inc. has acquired Cedar Falls Health Care Center, an 82-bed skilled nursing facility in Cedar Falls, for $5 million. CareTrust will lease the community to a subsidiary of Trillium Healthcare Group LLC on a triple-net basis. Initial annual rental revenue to CareTrust is approximately $483,000, and the master lease carries a remain- Please visit us in Las Vegas, North Hall Booth N2062 ing term of 14.5 years with two five- www.fairmountproperties.com year renewal options and CPI-based rent escalators. www.REBusinessOnline.com Heartland Real Estate Business • May 2016 • 11 INDIANA & OHIO

BEDROCK REAL ESTATE tallest building in Indianapolis and mixed-use development. Raymond BROOKDALE COMPLETES ACQUIRES THE AVENUE houses tenants such as BMO Harris Management Co. is the developer $11 MILLION EXPANSION OF SHOPS AT TOWER CITY Bank, the U.S. Department of Defense, and operator of the 130-room hotel. SENIORS HOUSING COMPLEX CENTER FOR $56.5 MILLION General Electric and law firms Rubin Amenities at the hotel include a fit- INDIANAPOLIS — Brookdale Senior CLEVELAND — Bedrock Real Estate & Levin and Quarles & Brady. Avison ness center, indoor pool, on-site park- Living has completed a three-story Services has acquired The Avenue Young represented the seller. ing, local restaurant dinner delivery building on the campus of Robin Run Shops at Tower City Center, a three- and a full-service business center. The Village, a continuing care retirement story, 366,000-square-foot retail center AC HOTEL CINCINNATI OPENS property also features AC-branded community in Indianapolis. The $11 located in downtown Cleveland, from AT LIBERTY CENTER amenities such as a kitchen, lounge, million project is part of a capital in- Forest City Realty Trust Inc. The sale CINCINNATI — The AC Hotel Cin- store, library and meeting space. The vestment and community manage- price was $56.5 million. The property cinnati by Marriott has opened at Lib- 64-acre Liberty Center includes over ment joint venture between Brookdale opened in 1990 after Forest City con- erty Center, a 1.2 million-square-foot 800,000 square feet of retail and enter- and Health Care Properties (HCP). verted the historic Cleveland Union tainment space, 75,000 square feet of The new building’s top floor offers Terminal into the shopping mall. The office space and 240 luxury apartment 25 memory care apartments. The first center is currently comprised of more units. The shopping district opened and second floors offer 43 assisted liv- than 100 retailers and restaurants as last October. ing apartments and amenities. With well as an 11-screen movie theater. completion of the project, Robin Run The Avenue Shops are connected to COLUMBUS PACIFIC, Village can now accommodate ap- the Ritz-Carlton Hotel, Skylight Office HOMESTEAD U DEVELOP proximately 700 residents on its 86- Tower and Terminal Tower, and via STUDENT HOUSING FACILITY acre campus. indoor walkways to Quicken Loans ATHENS, OHIO — Construction Arena and JACK Cleveland Casino. is currently underway on River CBRE ARRANGES SALE OF Bedrock Real Estate Services is the Gate, a 232-bed student housing THE PARK AT EAGLE CREEK real estate arm of Quicken Loans Inc. property near the Ohio University INDIANAPOLIS — CBRE has founder and chairman Dan Gilbert. campus in Athens, located in the arranged the sale of The Park at southeastern part of the state. The Eagle Creek, a 240-unit apartment HEARN, CROSSHARBOR complex, developed by Columbus community on the west side of CAPITAL PARTNERS ACQUIRE Pacific Properties and Homestead Indianapolis. CBRE acted on behalf BMO PLAZA FOR $40 MILLION U, will offer fully furnished two-, of Meridian Realty Investments, the INDIANAPOLIS — HEARN and three- and four-bedroom apartments. asset manager for the property’s CrossHarbor Capital Partners have Community amenities include a ownership group. Block Funds and purchased the BMO Plaza in down- resident life center featuring a bistro Block Multifamily Group purchased town Indianapolis for $40 million. with gourmet coffee and a cyber the property for an undisclosed True North Management Group sold The BMO Plaza in downtown Indianapolis lounge, a resort-style pool, private price. The Park at Eagle Creek was 91 the 440,000-square-foot, 28-story of- is a 440,000-square-foot, 28-story office study rooms, a 24-hour fitness center, percent occupied at the time of sale. fice building. Located at 135 N. Penn- building. gaming room and an underground Units at the property have an average sylvania St., BMO Plaza is the sixth parking garage. size of 973 square feet. MINNESOTA & WISCONSIN PHYSICIANS REALTY TRUST ported it was $60.5 million. Hub Mil- TO ACQUIRE MEDICAL OFFICE waukee River Center Properties sold ASSETS FOR $724.9 MILLION the 28-story building to Milwaukee MILWAUKEE — Milwaukee-based Center Management, an affiliate of Physicians Realty Trust, a healthcare Associated. Reinhart Boerner Van REIT, has executed a series of pur- Deuren represented Associated Bank chase and sales agreements and a let- in the transaction. Associated will ter of intent, to acquire 52 medical of- occupy between one-fourth and one- fice facilities from the Catholic Health third of the building when the lease Initiatives (CHI) for $724.9 million. on its current regional office expires The CHI portfolio is 94 percent leased in 2022. The Class A property was and contains 3.1 million square feet of This 214,533-square-foot distribution warehouse will feature 32-foot clear heights, 28 built in 1988 and is 426 feet tall, with space across 10 states. The portfolio truck dock positions, four drive-in doors, 52 trailer stalls and 91 car parking spaces. a total size of 373,000 square feet. It purchase price includes $32.9 million was 81.7 percent leased at the time of future capital improvements, most drive-in doors, 52 trailer stalls and 91 2010. The properties include Avalon of sale. Milwaukee Center is attached of which will be completed in the next car parking spaces. The Class A build- Cove, Cascade Shores, Crystal Bay to a 220-room InterContinental hotel, five years. The acquisitions are subject ing will be located at 901 Northview and French Creek. With the addition Milwaukee Rep Theaters and Pabst to closing conditions, which include Road. Partners in Design Inc. is the of these townhomes, Investors Real Theater. Amenities include three din- the Vatican’s approval to purchase 35 architect for the project, and Pinnacle Estate Trust now owns 1,773 units ing options and a fitness studio. facilities. Catholic Health Initiatives, Engineering Group is providing civil within the Rochester market. Inves- the fifth largest non-profit health sys- engineering services. HSA Commer- tors Real Estate Trust is a publicly HOME2 SUITES OPENS NEW tem in the United States, owns over cial is the building developer, and JLL traded REIT that invests in income- 110-ROOM PROPERTY 103 hospitals. will market the building for lease. producing properties located primar- MILWAUKEE — Home2 Suites by ily in the upper Midwest. CBRE rep- Hilton has opened a new 110-room PREMIER DESIGN + BUILD INVESTORS REIT ACQUIRES resented the seller, Bouquet Cos. hotel in Milwaukee. Raymond Man- TO CONSTRUCT 214,533 SF TOWNHOME PORTFOLIO agement Co. will own and manage SPECULATIVE WAREHOUSE FOR $72.5 MILLION ASSOCIATED BANK the hotel, which will feature fully WAUKESHA, WIS. — PREMIER ROCHESTER, MINN. — Investors PURCHASES MILWAUKEE equipped kitchens, Internet access, a Design + Build LLC will construct Real Estate Trust has acquired a CENTER FOR $60.5 MILLION combined laundry and fitness area, a 214,533-square-foot distribution 393-unit luxury townhome portfolio MILWAUKEE — Associated Bank complimentary breakfast, indoor pool warehouse in Waukesha, approxi- in Rochester for $72.5 million. The has purchased the Milwaukee Cen- and outdoor grill area. The hotel, lo- mately 20 miles west of Milwaukee. rental portfolio is comprised of four ter office building at 111 E. Kilbourn cated at 5880 S. Howell Ave., also pro- The speculative facility, situated on multifamily communities that con- Ave. in downtown Milwaukee. The vides a 24-hour shuttle to and from 11.8 acres, will feature 32-foot clear sist of two- and three-bedroom units purchase price was not disclosed, the General Mitchell International heights, 28 truck dock positions, four that were built between 1990 and but the Milwaukee Business Journal re- Airport, which is one mile away. 12 • May 2016 • Heartland Real Estate Business www.REBusinessOnline.com drive IT’S WHAT SEPARATES US FROM THE PACK

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Developments to watch Cleveland. Similar to most new down- This is much lower than the 2 percent Alec Pacella Construction is currently underway town planned developments, construc- to 3 percent of the population that cur- CCIM, Managing Partner, on nearly 1,000 units that will come on tion is expected to begin by late sum- rently live in comparable Midwestern Senior Vice President, line over the next 12 months. An addi- mer, working around the Republican downtowns, such as Milwaukee or In- NAI Daus tional 2,300 units are slated for delivery National Convention. The original dianapolis. during 2017 and 2018. plans for the 3 million-square-foot de- Three noteworthy projects account velopment included 1,200 residential New demographic target for a significant portion of the units units with a rooftop bar, deck and pool, A second trend is a strategic shift by slated for delivery over the next few along with 100,000 square feet of retail developers in who they are targeting It’s no longer a secret. Residential years: space, green space and a covered park- as renters. Early units were often built housing is one of the biggest stories • The 925 Building is a $280 million ing garage. Phase I, scheduled to come to target Millennials and Baby Boom- to hit Cleveland’s central business renovation of the former Huntington on line by mid-2017, will boast 352 units ers, and for good reason. Downtown district in over a quarter century. The Building. Built in 1924, the 21-story and 22,000 square feet of retail. Cleveland has seen a 77 percent in- only thing more impressive than the tower located on Euclid Avenue was • And nuCLEus is another $400 mil- crease in the former and a 97 percent long list of residential projects that once home to Huntington National lion new development that will include increase in the latter over 15 years. have been completed over the last five Bank. When completed, the project un- 500 housing units, 250,000 square feet But as the market has matured, years is an even longer list of residen- dertaken by Hudson Holdings of Flor- of office space and 150,000 square feet developers are anticipating the next tial projects that are either planned or ida will include 673 apartments, along of retail space. Cleveland-based de- phase to be characterized by the under construction. with 279 hotel rooms, 150,000 square veloper Stark Enterprises, along with growth in households with young Despite this prolonged surge in ac- feet of office space and 43,000 square J-Dek Investments, acquired the three- children. As a result, the unit com- tivity, several questions remain, with feet of retail space. acre site in late 2014. position will be tilted toward larger most centered around the viability According to The Plain Dealer, Cleve- Cleveland-based Benesch, a law two- and three-bedroom configura- and sustainability of this sector. But land’s daily newspaper, the build- firm, will serve as the lead tenant to tions and away from efficiency and before we take a look forward, let’s ing contains 1.3 million square feet help anchor the proposed 54-story, one-bedroom designs. first take a look back. of “near-empty offices over an ornate mixed-use tower. Unlike the other ma- Equally important is the emergence Downtown Cleveland has added bank lobby and hushed retail arcades.” jor projects, a portion of the housing of new amenities aimed at families, approximately 1,700 new rental units The property was awarded $25 million units at nuCLEus are expected to be such as providing areas to exercise over the past five years, with the total in state tax credits last December, and for-sale units. Construction is expected pets, designing large gathering/family residential rental inventory standing construction is scheduled to begin by to begin late this year. room areas and offering various stor- at nearly 5,900 units. the end of the second quarter. While some may be skeptical that age options. Last year alone saw 573 new units • Weston Citymark is a $400 million Cleveland’s downtown market can ab- come on line as the direct result of development that will be built in four sorb all of this pending supply, some Schools act as catalyst converting nearly 500,000 square feet phases by the Asher Family. The six- experts think otherwise. They are quick A third trend is an upswing in ac- of former commercial and office space acre site is located just west of Public to point out that the downtown area tivity among educational institutions to residential. Square, a four-block central plaza that currently houses less than 1 percent of within the downtown area. Campus But despite this additional inven- is considered the center of downtown the total population in the metro area. International School was founded tory, the occupancy rate has increased in 2010 as a partnership between the nearly 2 percent over the last five Cleveland Metropolitan School Dis- years, ending 2015 at 97.5 percent. trict and Cleveland State University. It is currently housed on the campus Population surge in CBD of Cleveland State and accommodates The downtown area contains ap- over 500 students in grades K-7. proximately 14,000 residents, a 79 However, construction is under- percent increase since 2000, accord- way at the Cleveland State University ing to a newly released report from campus on a $24.2 million project that the Downtown Cleveland Alliance. will include a new 92,000-square-foot The average rent per month for a one- school that can house nearly 750 stu- bedroom apartment has increased dents. It is expected to be ready for the nearly 30 percent since 2011. 2017-2018 school year. Peering a little deeper into this re- Another recent development is the port, a few demographic trends stand MC2 STEM High School. Instead of out. The fastest growing group by age having a permanent location, it ro- is 5- to 9-year-olds. The population of tates students through various loca- that group has soared by nearly 200 tions around the city throughout their percent over the last five years. The high school years. second fastest growing group is chil- Ninth-grade students meet and dren under 5 years of age. More spe- take classes at the Great Lakes Science cifically, the population of that group Center, 10th grade students meet at grew by nearly 100 percent during the GE Lighting’s corporate headquarters same period. located just east of downtown and Households with incomes between 11th- and 12th-grade students take $150,000 and $200,000 grew by over courses at Cleveland State University. 300 percent during the last five years, The school’s enrollment is over 400 while those with incomes in excess of students. $200,000 increased by 182 percent. Cleveland’s downtown residential A few clear trends are emerging market will never have the depth and as a result of these market nuances. breadth of Chicago or Boston. But The most obvious one is that there with the recent addition of retail, ser- is a large pipeline of projects either vice and educational components to planned or already under construc- Hudson Holdings is transforming the former Huntington Building in Cleveland to The the core downtown, it’s clear that the tion to help meet the continued rent- 925 Building, which will convert the historic office property into a mixed-use asset downtown housing market is moving er demand. that includes 673 apartments. (Photo by Alec Pacella) toward a sustainable trend. 14 • May 2016 • Heartland Real Estate Business www.REBusinessOnline.com REGISTER TODAY LIMITED SEATING!

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In real estate, where some see an eyesore, others can sometimes find opportunity. Such was the case with The Mayfair Collection, a new regional shopping center in Wauwatosa, Wis., located approximately 10 miles west of downtown Milwaukee. Just a few years ago, the 69-acre site was filled with old, obsolete industrial buildings that were mostly unoccupied, but the City of Wauwatosa and our firm, Chicago- based HSA Commercial, shared the vision of transforming the vacant in- Phase I of The Mayfair Collection opened to the public in the spring of 2014 and featured retailers such as Nordstrom Rack, Saks dustrial park into a vibrant mixed-use Fifth Avenue OFF 5TH, DSW and Ulta Beauty. The developer's vision is for the center to be part of a vibrant mixed-use community. community. The project initially involved adap- of promotional fashion shops that an additional 110,000 square feet of base to the growing mixed-use de- tively repurposing 1 million square would attract affluent customers from retail, a 140-room Hilton Homewood velopment. The units will be the first feet of warehouse space into a con- a broad trade area. Suites hotel and a mix of upscale bars of more than 1,000 residences slated temporary retail destination that The strategy paid off. Nordstrom and restaurants designed to enhance for construction at The District over has brought national retailers like Rack was soon joined by Saks Fifth the experiential nature of the center. the next five years, pending market Nordstrom Rack and Saks Fifth Av- Avenue OFF 5TH, DSW Shoe Ware- Among the offerings are four newly demand, via a joint venture between enue OFF 5TH to Wisconsin. The de- house, Ulta Beauty and more. That created concepts from Milwaukee- HSA Commercial and Fiduciary Real velopment also has helped launch lineup of best-in-class fashion brands, based Bartolotta Restaurants, includ- Estate Development. new national brands such as J. Crew in turn, helped secure leases from oth- ing a diner, a gastropub, a French bis- As the first residential buildings be- Mercantile and Off/Aisle by Kohl’s. er national retailers, many of which tro and a taqueria. gin to rise, we are already looking to The once-empty industrial structures did not previously have a presence in Rather than isolating the restau- develop additional sites throughout are now completely transformed into the Milwaukee area. rants in a sea of asphalt, we clustered The District that can cater to the needs lively shops and restaurants that are Some retailers even saw The May- them together in “Restaurant Row,” of the area’s shoppers, residents, din- drawing customers from all over fair Collection as the ideal place to a strategy that encourages visitors to ers and businesses. In January 2015, a southeast Wisconsin. debut a new store concept. Last fall, extend their stay at The Mayfair Col- separate venture between HSA Com- the newly launched J. Crew Mercan- lection by providing them with a va- mercial and Chicago-based Innova- Phase I: Find the right mix tile opened its second U.S. location at riety of dining experiences, including tive Capital Advisors acquired the for- What historically made the site The Mayfair Collection. numerous different culinary offerings mer Schwaab Stamp Factory, a light attractive for industrial use — its In January of this year, it was an- from Milwaukee’s most popular local industrial building across the street highly accessible location, at the in- nounced that Kohl’s had selected the restaurateurs, in a lively, downtown- from The Mayfair Collection. terchange with U.S. Highway 45 and center for one of the first Off/Aisle by like environment. Like the warehouses that comprised Burleigh Street, less than five miles Kohl’s locations in the country, fill- Phase II’s anchor, a 47,563-square- Phase I of the Mayfair, the Schwaab north of Interstate 94 — also made ing the last available anchor space in foot Whole Foods Market, opened in property will be converted into a it ideal for retail, with direct visibil- Phase I. February 2016. The chain’s expansion 32,000-square-foot multi-tenant retail ity to the 141,000 vehicles that pass Shoppers who had grown accus- in Wauwatosa — only its third loca- center, with completion scheduled for by the property each day. But it was tomed to driving more than 90 miles tion in Wisconsin — helped establish late summer 2016. In recent months, the proximity to Mayfair Mall, the to Chicago could now access their fa- the area around The District as one of we’ve acquired two additional sites region’s dominant shopping center, vorite stores in a single location much the region’s thriving commercial and near The District — a 114,000-square- that drew retailers to the infill proj- closer to home, with most of the Mil- residential corridors. It also added a foot warehouse and 45,321-square- ect, part of a larger mixed-used de- waukee metro area no more than a “daily needs” tenant to The Mayfair foot office building, both of which velopment called The District. five- or 10-minute drive away. For the Collection’s growing roster of busi- are partially leased — that may also The Mayfair Collection’s first phase retailers, it was an opportunity to en- nesses, giving shoppers who might be converted to retail or mixed-use opened to the public in spring 2014. ter a new, less saturated retail market otherwise visit the center on a month- buildings. Designed to complement the full-price where they could locate next to other ly or weekly basis a reason to go there Where others once saw an eyesore, offerings at Mayfair Mall, less than a category leaders and serve the entire more frequently. opportunities continue to abound as mile southeast of the property, Phase region with one store. The District grows and attracts new I targeted off-price concepts like Nor- Phase III: Build a community retailers, restaurants and residents. dstrom Rack that became even more Phase II: Create experiences The addition of Whole Foods and Now that Nordstrom opened its first popular with cost-conscious shoppers With shoppers now driving from an eclectic mix of local restaurants, full-line department store in Wiscon- during the recession. all over southeast Wisconsin to enjoy combined with the walkability of The sin at nearby Mayfair Mall, customer Project goals also included the cre- the shops at The Mayfair Collection, District, laid the groundwork for the shopping patterns are evolving as the ation of cross-shopping opportunities it was time to begin the second phase, development’s third phase slated to gravitational pull to Mayfair and The within the center itself, passing up of- which sought to increase the frequen- break ground this summer. District becomes stronger. And the fers from service-oriented businesses cy and length of visits among the cen- Along with another 50,000 square vision for the future of this project in favor of apparel, footwear, cosmet- ter’s growing customer base. feet of full-price fashion retail, Phase as a vibrant, mixed-use community ics and accessories retailers that saw In late 2014, HSA Commercial broke III will include 250 luxury residen- is well on its way to becoming fully value in being part of a critical mass ground on Phase II, which includes tial units, adding a built-in customer realized.

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CP 10.8125X14 full pg ad.indd 1 4/21/16 2:20 PM OFFICE SNAPSHOT: DETROIT DETROIT’S DOWNTOWN REVIVAL, LED BY DAN GILBERT, GAINS MOMENTUM Southfield into downtown last year for $76,900 to $126,000, or 64.5 percent, Mason L. about 50,000 square feet at One Wood- according to data compiled by Real- Capitani ward Avenue, another property owned comp for the Federal Reserve Bank of by Gilbert’s Bedrock. Chicago. Principal, Executive Vice Gilbert has indicated that he is not As a result, new luxury develop- President, L. Mason done buying and stated he is poised to ments are being built from the ground Capitani/CORFAC start building speculative office space. up for first time in decades. Residents International In light of the data, one can under- can dock their boats in reserved slips stand Gilbert’s temptation to build. at Water’s Edge, an upscale apartment The overall vacancy rate in Detroit’s community on the Detroit River with Detroit has become a five-sport CBD has plummeted from 24 percent a private marina and two private lakes town: The Pistons, Red Wings, Lions at the beginning of 2011 to under 15 that opened in January. Rental pric- and Tigers have been joined by Dan percent by the end of 2015, according es for its 134 apartments range from Gilbert’s Bedrock Real Estate Services to CoStar Group. $1,285 to $2,324 a month. Triton Invest- LLC, the entity that has made a sport First-quarter leasing activity indi- ment Co. is the developer of Water’s out of assembling a downtown Detroit cates that vacancy could fall another Edge. portfolio of commercial buildings. In point when the final numbers are tal- The Scott at Brush Park, a $64.5 the process, Gilbert is becoming the lied. Normally, speculative develop- million development with 199 apart- city’s biggest advocate. ment is uncommon with vacancy hov- ments, will be completed in Decem- Talking about Detroit’s office market ering around 15 percent. However, a ber. For $949 to $2,844 a month, rent- The PNC Center, a Class A office building without including Gilbert’s latest in- closer examination of the data helps ers will have access to a rooftop pool, in Troy, Mich., is currently 84 percent vestment is akin to discussing Detroit’s explain why Gilbert or someone else outdoor kitchen and spa, as well as a occupied. economy and excluding the automo- may pull the trigger on a new office pet-grooming station and on-site bike tive industry. high-rise sooner than some might ex- repair. Woodward and Erskine LLC, way. For example, a new light rail The Quicken Loans founder and pect. a real estate venture of Broder and system, partially funded by Gilbert, principal shareholder of the Cleveland The total inventory in the CBD is Sachse Real Estate Services, is the de- is coming on line soon. Named the Cavaliers put himself on the region’s slightly more than 26 million square veloper and owner of The Scott project. QLINE (pronounced Q-Line) after one real estate game board when the re- feet. But Class A space had a vacancy This year, Gilbert’s Bedrock com- of its main benefactors, the light rail cession ended and he started buying rate of only 10.6 percent at the end pany will break ground on a new $70 system will connect downtown with up properties. To date, Gilbert and his of 2015 compared with 11.8 percent million, 8.4-acre development in the Midtown, where Wayne State Univer- team have amassed a portfolio of more for Class B space and 30.5 percent for historic Brush Park district with re- sity is located. than 85 properties in and around the Class C space. stored Victorian-era mansions, pedes- downtown comprised of more than 13 In most cities, a vacancy rate near 10 trian greenways, shops and 400 new Rising tide lifts all boats million square feet and valued in ex- percent is considered a balanced mar- residences. More historic conversions For all the publicity downtown cess of $2.2 billion. ket and is often the inflection point that are on the way, with downtown’s ap- Detroit has garnered in recent years, The March 2015 acquisition of the spurs new construction. Developers peal for high-end residences strongest the vast majority of the region’s office 43-story One Detroit Center at 500 tend to focus on the vital signs of Class among young professionals and empty space is solidly in the suburbs, with Woodward Ave. — which has since A and B space rather than the overall nesters moving there for an urban life- approximately 170 million square feet been renamed Ally Detroit Center — market when considering moving for- style. of space. Much of that inventory is oc- and attached 2,070-space parking deck ward with new projects. Gilbert isn’t the only force behind cupied by the region’s 315,000 compa- for well over $100 million was his big- Detroit’s downtown revival. Mike Il- nies, including 14 in the Fortune 500 gest deal during the acquisition spree. Luxury living is catalyst itch, the founder and owner of the (ninth most in the U.S.). Additionally, Ally Financial is completing its re- The city of Detroit’s median home international fast food franchise Little Detroit is one of the biggest U.S. trad- location to the building this spring sale price in January 2008 was $75,500 Caesars Pizza and owner of both the ing partners with Canada. from the nearby Renaissance Center, and has fallen to about $34,000 cur- Detroit Red Wings and Detroit Tigers, Thanks to a resurgent automotive in- as well as bringing employees from rently, according to Zillow, yet de- is the man behind the downtown de- dustry in recent years, a record 18 mil- various buildings in Southeast Michi- mand for riverfront homes and velopment and construction of the lion cars, SUVs and light trucks sold gan into its new downtown headquar- condos in the downtown around Detroit Events Center, where the city’s in 2015 with a similar sales volume ters. When complete, Ally Financial Woodward Avenue has increased iconic hockey team is set to begin play expected for 2016 and 2017, according will employ some 1,300 workers on 13 steadily since 2006. Woodward area in the fall of 2017. to forecasters from the University of floors and occupy 321,000 square feet homes were selling for an average Ilitch’s group, along with other pri- Michigan Research Seminar in Quanti- of the 43-story, 1 million-square-foot price of $137,300 through September vate developers, has ambitious plans tative Economics. skyscraper. last year, up 95 percent from $70,400 to build a downtown district adjacent In addition to the automotive indus- In addition to Ally Financial, Fifth in 2006. The east riverfront area’s sale to the new Red Wings arena. Planned try, continued growth in healthcare, Third Bank was lured from suburban prices on average have increased from in phases and partly funded by tax defense/aerospace, information tech- breaks and related public monies, the nology and international logistics has 50-block district known as The District boosted Michigan’s economy in recent Detroit calls for mixed-use facilities, re- years. tail, restaurants, multifamily and other The state has just completed its sixth commercial structures (see related story year of economic recovery, averaging on front cover). 74,200 (net) new jobs a year. Since the It will also include a $40 million low point in the recession, the sum- Wayne State University business mer of 2009, Michigan companies have school named after Mike Ilitch. The added 445,000 workers to their respec- Mike Ilitch School of Business will be tive payrolls. The U-M forecast calls for built at the southwest corner of Wood- the growth to extend at least through ward Avenue and Temple Street, with 2017 with 61,100 jobs forecast in 2016 the land donated by the Ilitch family and 64,800 the following year. plus a $35 million pledge to build the Michigan’s seasonally adjusted state school, and a $5 million endowment unemployment rate in February stood for added goodwill. at 4.8 percent, down one-tenth of a per- The Detroit Events center, an arena currently under construction downtown, will be The downtown landscape has centage point from the prior month, the new home of the Detroit Red Wings starting in fall 2017. District Detroit will be a changed substantially in recent years, according to the U.S. Bureau of Labor 50-block, mixed-use area surrounding the arena that will include new office space. and more positive changes are on the Statistics. 18 • May 2016 • Heartland Real Estate Business www.REBusinessOnline.com OFFICE SNAPSHOT: DETROIT

After five consecutive years of nega- In many cases, rents are about the at 7.8 percent at the end of 2015, ac- while in Pittsburgh, first-year yields tive net office absorption from 2006 to same as when I got my broker's license cording to CoStar. Quoted rental rates on office properties have averaged 7-9 2010, net absorption of Detroit’s overall in the 1990s. Indeed, 10 years ago quot- for Class A office space in Auburn Hills percent recently. And Cleveland’s of- office space has been positive for five ed rental rates for the overall Detroit of- averaged $22.02 per square foot at the fice cap rates edged up in 2015 to 8.87 consecutive years, beginning in 2011. fice market averaged $20.28 per square close of 2015 compared with $18.33 per percent on average, compared with an The overall office rate in metro foot (at the close of 2006). Asking rents square foot in Dearborn, reports Co- average of 8.34 percent in 2014. That Detroit has declined from slightly dipped as low as $17.57 per square foot Star. said, I have clients in areas of the coun- more than 19 percent at the beginning by 2013 and have since climbed back to Capitalization rates have ranged be- try such as California who view De- of 2011 to nearly 14 percent by late $18.60 per square foot at the end of the tween 8 and 10 percent and are likely troit as an excellent investment given March 2016. fourth quarter last year. to stay in the same vicinity for the bal- the cap rates and the upside potential Net absorption in the suburban De- Auburn Hills, where Fiat Chrysler is ance of this year. Detroit’s cap rates on most deals. troit office market totaled 1.9 million headquartered, has the lowest vacancy have been comparable to other Mid- Even with pockets of high office square feet in 2015, with all four quar- rate for Class A space among the major western cities. CORFAC affiliates told vacancy in suburban Detroit, there is ters in positive territory, according to submarkets, at 4.1 percent. The Class me that cap rates are about the same room for rental growth and good op- CoStar Group. A vacancy rate in Dearborn, the head- in Minneapolis and St. Louis for non- portunities for investors to make mon- While a drop of more than five per- quarters city for Ford Motor Co., stood institutional grade office properties, ey — if they are selective and patient. centage points in the suburban office vacancy rate is reason to cheer, particularly for office property owners, the vacancy rate remains stubbornly high. That’s due in large part to some of our bigger submarkets. For example, Troy and Southfield have vacancy rates of 24 percent and 21.5 percent, respectively. It is my opinion that the historically high vacancy rate in Southfield and Troy is due to a few main factors. First, these submarkets have historically been occupied by engineering, sales and service companies that in some respect have ties to the auto industry. Bankruptcies and restructurings by many businesses have led to more being done with less space. Most of these businesses are wary of falling into the same trap of taking on too much overhead as the market im- proves. This coupled with the overall changes in the way space is utilized (technology allowing for hoteling, sat- ellite office or working from the field) has also led to utilization of less space. This all has had an impact that has resulted in an improving market but not necessarily at the rate that we would normally be accustomed to coming out of recession several years ago. Troy’s gross rents are $18.64 per square foot and near the five-year average of $18.34 per square foot. Bright spots in the suburbs One exception in Troy is the landmark PNC Center. The building’s occupancy rate of 84 percent is considered very good for a Class A suburban office center that is one of the largest office projects in all of the suburbs with over 500,000 square feet. The asking rates at PNC Center are at or near the top of the market at $19.50 to $22.50 per square foot. These are gross rents typically on a modified basis with the tenant paying for electricity and a pass-through of increases in operating expenses and real estate taxes over a base year. In Southfield, which is a more service-oriented market that also has an older stock of Class B and C product, the asking rent average is $18.10 per square foot, a slight improvement from the five-year average of $17.31 per square foot. www.REBusinessOnline.com Heartland Real Estate Business • May 2016 • 19 SCHOOL DEVELOPMENT NEEDS SPECIAL SKILLSET Higher education construction driven by changing technology, complexity and safety. By Jenn Abbott and Barry Sutherland he learning clude group study rooms, technology landscape is driven laboratories, informal work- Tevolving at spaces and cafes — all with a wide a rapid pace. The array of technology needs. lingering effects of To avoid campus sprawl, more uni- the global reces- versities are opting to renovate exist- sion have resulted ing spaces in lieu of building new. In in major curriculum the 1960s, there was a major academic changes that require building boom. Those buildings des- flexible, customiz- Jenn perately need to be updated to meet able academic facili- Abbott today’s technology needs and learn- ties. Overall trends McCarthy Building ing trends, so renovation is becoming in higher educa- Cos. Inc. a primary focus for campus facilities. tion are centered on Student housing is a trend we are undergraduate re- still seeing in higher education. Mc- search, evidence- Carthy is completing an eight-story, based learning, col- suite-style residence hall for Saint laboration and the Louis University (SLU) and an apart- flipped classroom ment-style residence hall at Missouri (where the typical University of Science and Technology lecture and home- (MS&T). work elements of a While each project is different, they McCarthy is serving as the construction manager on this $38 million, 153,426-square- course are reversed. both encompass the trends in student foot, eight-story residence hall for first- and second-year students at St. Louis Short video lec- housing like incorporating collabora- Barry University. The project will be completed in time for the 2016-2017 academic year. tures are viewed by Sutherland tive space. Scheduled to be complete students at home McCarthy Building in July, in time for the 2016–2017 before the class ses- Cos. Inc. academic year, these projects also Each requires a different degree of con- working on a college campus. Will the sion, while in-class demonstrate the importance of strict struction expertise. This was evident in building occupants be exposed or po- time is devoted to exercises, projects scheduling in higher education and the laboratory renovation projects Mc- tentially exposed to any hazards (dust or discussions). the proper planning required to en- Carthy completed for Saint Louis Uni- and debris, asbestos, chemicals, die- This all requires enhanced tech- sure spaces are open for the academic versity and Washington University. sel exhaust, carbon monoxide, falling nology and unconventional learning year. McCarthy will also upgrade a complex equipment and materials, etc.) How spaces. Because the student popula- science building at the University of will these risks be mitigated? Will life tion is constantly changing, so are the Campus complexities Missouri – Kansas City. safety systems be altered (fire suppres- demands on the spaces they inhabit. The various types of buildings One of the most critical aspects sion, lighting, alarms, ingress, egress, Students and faculty want the latest found on higher education campuses of constructing laboratory/science etc.) How will this be communicated? and greatest in their spaces, so build- can present construction challenges. buildings is the requirements for the Will noise impact the operations of the ings have to be easily adaptable. Academic buildings all have unique mechanical, electrical and plumbing university? How will the construction space and technology requirements, (MEP) systems. Since various gas- traffic and deliveries impact the cam- Technology changing trends so selecting a designer and builder es and liquids need to be delivered pus? Do alternate routes need to be One area of college campuses with knowledge of the type of space throughout the facility, it can be diffi- determined? Do flaggers need to be where technological change is most being constructed is paramount. cult to install the necessary piping and designated? Do background checks visibly driving fundamental trans- Very different from student housing, electrical conduit. This is especially and badging systems need to be im- formations is libraries. Because the science buildings have varying levels true if there is limited space dedicated plemented? How will construction ar- use of library space for shelving with of complexity, ranging from under- to these systems. Another unique fea- eas be secured from the public? stacks of books is no longer neces- graduate labs and classroom spaces ture is the size of the laboratory equip- Before any project begins we de- sary, libraries are expanding to in- to highly specialized research spaces. ment, which has structural and acces- velop a project/campus-specific safety sibility implications. How to get the plan, which is agreed upon and com- equipment into the building and en- municated to all university stakehold- suring it is set in the right place must ers, to address all of these safety con- be considered. cerns and more. Safety and security Influencing factors Safety is the most important thing One issue specifically affecting a contractor can focus on when con- higher education is state funding. structing higher education buildings. State budgets are in flux across the The curiosity of young minds has to Midwest, and public universities are be taken into account when planning continually vying for what little fund- and executing construction on a cam- ing is released. Enrollment is down, pus. Campuses have a dense popula- and there are fewer Millennials than tion of students, faculty and visitors, previous generations, so both public particularly during the academic year. and private universities are dealing Keeping this population safe and en- with less income from tuition and suring they are fully aware of the im- room and board. All of this affects pact construction has on their daily the ability for universities to fund life, including building and pedes- construction projects to keep up with The $150 million East Campus Development project will greatly expand the scope of trian walkway closures, is extremely learning trends. Washington University in St. Louis. It consists of a four-year program to redevelop the important. campus through landscaping, a below-grade parking facility with approximately 790 As builders, we ask ourselves a lot Jenn Abbott and Barry Sutherland are both spaces, as well as renovations, expansions and new construction. of questions related to safety when directors for McCarthy Building Cos. Inc.

20 • May 2016 • Heartland Real Estate Business www.REBusinessOnline.com

WICHITA’S REAL ESTATE MARKET IS FLYING HIGH The ‘Air Capital of the World’ soars on strong fundamentals, continued innovation, new business. By Brian A. Lee t only takes a visit to the new $200 with its several large acreage sites. million Eisenhower National Air- Industrial demand is strong and Iport in Wichita to realize you’re availability limited not in old Kansas anymore. Things for product ranging are looking up across the “Air Capital from 5,000 square of the World,” from the state-of-the- feet to more than art airport to the ongoing $54 million 75,000 square feet. Union Station renovation and the “The supply of more than 200,000-square-foot first mid-sized, high- phase of Wichita State University’s ceiling buildings soon-to-be Innovation Campus. Kan- with larger storage sas’ biggest city is generating big real yards and efficient Tom estate headlines. dock configurations Home to Bombardier Learjet, Tex- is limited and the Johnson tron Aviation, and Koch Industries, Home to State Farm Insurance, Wells Fargo, Regus and three restaurants, Union Sta- need for additional NAI Martens a global company with over 100,000 tion is located in downtown Wichita. Occidental Management’s $54 million renovation inventory continues employees, Wichita boasts quite a of the building will provide 110,100 square feet of additional office space. to grow,” says Johnson. “In response, strong manufacturing history and an construction activity is increasing and active market. more is on the drawing board. How- The Brookings Institute ranked produce strong activity from its di- Nothing but results ever, the relationship between con- Wichita No. 1 nationally in manufac- verse and deep industrial base of large More than 50 percent of the coun- struction costs and rents has limited turing jobs as a percentage of total and small companies, its well-known try’s general aviation aircraft are pro- new development.” employment, at 17.7 percent, last year. entrepreneurial spirit supported by duced in Kansas. Located less than six More industrial supply is needed, The city also earned a No. 3 ranking world-class education and job train- miles from Wichita’s central business especially in the smaller range from by Brookings for percentage of manu- ing programs, and from a 10-county district, the new 3,300-acre Eisenhow- 2,000 to 50,000 square feet, according facturing jobs classified as “very high- public/private effort across all in- er National Airport campus accommo- to Branson. “Due to the lack of prod- tech.” dustry sectors to market the area’s dates more than 70 businesses, includ- uct, it is a build-to-suit market until “The outlook for Wichita is very strengths to the nation and overseas.” ing air cargo, aircraft manufacturing, more warehouses are built specula- good,” says Ted Branson, director of He describes both the city’s industrial and aircraft service and repairs. tively,” says the Landmark director. Landmark Commercial Real Estate’s investment sales and leasing sectors Textron Aviation operates large Johnson adds, “The market is seeing industrial division. “It continues to as robust. manufacturing plants for both Beech- some owner-occupied construction craft and Cessna in Wichita. This but new speculative fall, Airbus is expected to unveil a projects are limited. new 90,000-square-foot engineering As an incentive for center at Wichita State’s Innovation developers, prop- Campus. erty tax abatements “New manufacturing and distribu- have been made tion technology continues to reduce available result- PLANO the square footage requirements in ing in a couple of select industries,” says Tom Johnson, new projects. While president of NAI Martens in Wichita. these are positive “The market will accept higher-priced signs, rental rates Ted Branson Landmark product as the availability of existing remain below those Commercial space is absorbed. Users will gradu- required to support Real Estate ally expand to new facilities as the non-subsidized de- inventory of lower-priced alternatives velopment.” diminishes. As the market tightens, NAI Martens notes the following some owners who have held rents ar- highlights from the city’s industrial tificially low will capitalize on increas- sector: ing demand.” • the $9.9 million sale of the new Overall vacancy for the Wichita 182,000-square-foot FedEx facility in industrial sector is 11 percent, and Park City; asking rental rates average $4.25 per • the $5.7 million sale of the square foot, according to NAI Mar- 57,000-square-foot K42 & West Busi- tens. The most active Wichita industri- ness Park to a local investor; al submarkets are the West Street cor- • the recent lease commitment by ridor to the southwest; in Comotara Emerald Aerospace for 200,000 square Discover Plano, Illinois and along Kansas Highway 96 to the feet at the 1.9 million-square-foot for- Business Opportunities in a Business Friendly Community northeast; and the new development mer Boeing property on the south side occurring along Interstate 135 from of Wichita; Choice Retail Site Available 29th Street north to Park City, Kan. • the soon-to-be completed Route 34 High Traffic Retail Corridor The 30-acre Southfork industrial de- 293,000-square-foot speculative ware- Annual Retail Sales: $200,000,000+ velopment boasts a prime location at house, located at 77th St. N and I-135 Business Park Opportunities the confluence of interstates 135 and in the north metro area, by developer Easy access to 3 major Interstate highways 235 and the Kansas Turnpike (I-35) on and Air Capitol Delivery & Ware- Within 55 miles of the Chicago market the south side of Wichita. To the north, house CEO Lou Robelli; Major Manufacturers • Community Attractions the Park City area offers greater avail- • and Great Plains Ventures’ $1.3 Population 11,000 • Median Household Income $65K plus ability of industrial revenue bonds million refurbishment of a 1930s vin- Contact Mayor Robert Hausler: • 630.552.8275 and an aggressive, business-friendly tage warehouse on East 37th Street. or Rich Healy • P EDC • 630.552.9119 www.cityofplanoil.com city hall while the northeast suburb “The industrial market remains of Bel Aire is attracting major interest steady as quality properties are quick- 22 • May 2016 • Heartland Real Estate Business www.REBusinessOnline.com ly absorbed,” says Johnson. “2016 DOWNTOWN TOPEKA SEES PROMISING OFFICE ACTIVITY should be a solid year.” In the stable economic environ- one-third of which is “Topeka remains a stable market Retail remains vibrant ment of this capital city in Kansas, located downtown. with minimal speculative [office and downtown Topeka is experiencing According to Moses, retail] projects,” says Ken Schmanke, With consumer confidence growing, unique office leasing and develop- Class A office asking president and CEO of K1 Realty LLC. retail development in Wichita contin- ment activity. leasing rates range “Quality product is in very short sup- ues to accelerate for a wide variety of “In my opinion, we’re seeing some from $14 to $15.50 ply. However, the demand for this properties, reports NAI Martens. of the lowest vacancy rates in Topeka per square foot, and quality is not sufficient enough to “There have been a lot of value- in the last 15 years,” says NAI Mar- Class B space goes justify speculative development. The added retail and office properties that tens’ Tom Moses. for $12 to $13 per redevelopment efforts of downtown experienced developers have taken The biggest impact on Topeka’s of- square foot. Topeka are nearing completion and on,” says Bradley Saville, president Tom Moses fice market in the last 18 months was In the third quar- will provide a boost to both retail and of Landmark Commercial Real Es- NAI Martens the decision by the State of Kansas to ter of 2015, Federal office activity in the downtown sec- tate. “The use of CID (community im- move several large agencies out of Home Loan Bank tor.” provement districts) and STAR (Sales state-owned buildings into 170,000 announced the de- During the past five years, the capi- Tax Revenue) Bonds have certainly square feet across three privately velopment of a new $26 million, tal city of Kansas has experienced allowed developers to be more com- owned downtown locations, says 80,000-square-foot office to be con- employment growth of 1.8 percent in petitive and also find ways to pay for Moses, an office broker for more than structed downtown on the northeast the finance and insurance sector com- needed infrastructure.” 30 years. corner of SW 6th Avenue and Wana- pared with 0.8 percent nationally, ac- Occidental Management’s $54 mil- The Department for Children and maker Road. The bank plans to move cording to the Kansas Department of lion renovation of Wichita’s Union Families moved to 80,000 square feet its 220-plus employees to the new Labor. Station will offer consumers and in the former Athene Building at 6th facility in 2018. “We have had tremendous growth companies a vibrant sense of place and Kansas avenues in 2015. Later this Sunflower Foundation, a leader in in the financial services industry in while connecting Old Town, Intrust year, the Kansas Department of Rev- Kansas’ health philanthropy com- Topeka,” says Scott Smathers, vice Bank Arena and other key parts of enue will occupy 50,000 square feet in munity, is also boosting the health president of economic development the downtown. The approximately the Scott Building at 10th Street and of Topeka’s office market with a $10 for GO Topeka, who singled out 9.4-acre campus, which consists of Quincy, and the Department of Social million renovation of two buildings Federal Home Loan Bank, Security 110,100 square feet across four build- and Rehabilitation Services will relo- on the former Menninger campus. Benefit and Advisors Excel as prime ings, is already home to State Farm In- cate to 40,000 square feet at the Mills The Menninger Clinic, one of the examples of expanding companies surance, Wells Fargo, Regus and three Building at 9th and Kansas. The agen- first group psychiatry practices in the in the sector. “The proximity to high- restaurants. cies are vacating the Docking Build- country, moved to Houston in 2003. quality education and the low cost of “Union Station’s prominent loca- ing, which is slated for demolition. Sunflower will move its headquarters doing business make it easy for com- tion along Douglas Avenue, our post- Topeka’s Class A and B office mar- to the repositioned real estate in 2017 panies to prosper here.” card street, makes it a key destination ket totals 6 million square feet of non- and lease out the remaining 22,000 for the public and also a critical con- government space, approximately square feet to other non-profits. — Brian A. Lee nector between districts,” says Jeff Fluhr, president of achieving rents in excess of $35 per the Wichita Down- square foot.” town Development Quality retail investment properties Corp. “The invest- in Wichita are difficult to find, espe- ment in this iconic, cially ones with long-term, high-credit landmark property leases, according to Saville. has been catalytic Retail cap rates range from 8.75 to for nearby develop- 9.25 percent and “there are quite a few ment projects, and 1031 exchange transactions also con- the activation of tributing to the market demand for the plaza in front of Chad yield,” adds Stafford. the main terminal Stafford The new northeast Wichita retail building will bring Occidental submarket is anchored by the 106-acre tremendous energy Management Greenwich Place, which includes Bed to the corridor.” Bath & Beyond, Buy Buy Baby and Chad Stafford, Occidental Manage- Cost Plus World Market. The devel- ment’s president, says, “The retail opment will soon welcome DSW, Ulta sector has had a strong trend… with Beauty, Mardel, Home Goods, Caven- a revitalized downtown core retail der’s and Ross Dress for Less, as well ramp-up driven by new apartment as a Hotel La Quinta Del Sol. growth and renovated product enter- To the south, Derby has emerged as ing the market at sites like Union Sta- a strong suburban submarket given its tion, which opened its first phase with housing growth and increasing trade 98 percent occupancy.” area. Hobby Lobby, Aldi, T.J. Maxx Wichita’s overall retail vacancy rate and many other retailers have opened hovers around 15 percent, according there in the last year. to NAI Martens, and the average ask- “Wichita is a stable market in that it ing rental rate ranges from $10 to $15 never gets too frothy at the highs or per square foot. Stafford expects a sta- too low in downturns,” says Stafford. ble retail sector with solid rent growth The head of Occidental Management in the 2 to 3 percent range. maintains that with a lower cost of liv- “Development and leasing activity ing — 10.3 percent below the national among power and lifestyle centers is urban area average — and unemploy- the strongest it has been in years,” says ment near 5 percent, the market’s re- Troy Farha, a commercial advisor with tail sector has been resilient during the NAI Martens. “Class A rental rates in past six years. The influx of new spe- the low to mid-$20 per-square-foot cialty grocers to the market includes range on a triple-net basis have held Whole Foods Market, Green Acres, their own for well-located properties. Fresh Market and Sprouts Farmers A few ‘main and main’ properties are Market. n www.REBusinessOnline.com Heartland Real Estate Business • May 2016 • 23 NET LEASE INVESTMENT MAINTAINS BRISK PACE NET LEASE from page 1 retail real estate market. “The market is red hot; there’s a tremendous amount of money want- ing to get into net lease real estate,” says Ralph Cram, president of North- brook, Ill.-based Envoy Net Lease Partners, a private lender focused on ground lease, construction and bridge loans for net lease properties. “Inves- tors want stable cash flows and non- volatile assets.” David Sobelman, an executive vice president and managing partner with Herndon, Va.-based net lease brokerage Calkain Cos., says that his firm has generally served two categories of buyers over the last several months: In early 2016, the Boulder Group arranged the sale of this Walgreens in suburban Kansas City, Mo., for $6 million. 1031 exchange buyers and institutional investors “starved for a passive, In some cases, however, sellers are going to correct, and nobody wants to sector, he predicts, demand for net stable and above-market” yield for the pricing net lease retail assets too ag- be the guy that paid too high a price lease assets will stay strong. long term as an alternative to bonds. gressively and have begun to encoun- just before the correction.” Similarly, retirees are also seeking In turn, feisty demand is maintaining ter resistance, especially for properties net lease properties, whether they low capitalization rates, states Sobel- in less-than-premier locations, with Exchange trade frenzy are 1031 exchange investors getting man, who operates out of Calkain’s lease terms of fewer than 15 years, Boulder Group research indicates out of “hands-on” properties or more Tampa, Fla., office. or that lack reasonable rent bumps, that cap rates for net lease properties conventional investors frightened Well-located properties housing observers acknowledge. By way of continue to compress, but more stub- by stock market volatility and low- credit tenants like Walgreens and example, a Walgreens landlord may bornly than in previous quarters. Me- yielding bonds, says Parker Carroll, a McDonald’s in major markets with hear that a Walgreens property in the dian asking retail net lease cap rates managing director in the net lease in- longer lease terms are commanding area traded for a cap rate of around 5 dropped 25 basis points to 6.25 per- vestment group with Coldwell Banker typical cap rates from 4.5 percent to 5 percent, and so he decides to test the cent in the first half of 2015 and then Commercial in Austin, Texas. percent, he says. For waters and seek the remained at that lev- “Right now we’re example, in Janu- same cap rate, re- el in the second half seeing a big trend ary, Calkain brokers ports Joey Odom, a of the year. In the of people preparing oversaw the sale of director with Stan first quarter of 2016, for retirement, and a newly constructed Johnson Co. in At- asking cap rates they’re using net Taco Bell with a 20- lanta. ticked down seven lease properties to re- year lease in Pom- “But those proper- basis points to 6.18 place bonds in their pano Beach, Fla., at a ties they’re trying to percent, reports the portfolios,” explains cap rate of 4 percent. sell may have only brokerage firm. Carroll. “We’re see- Meanwhile, assets David five years left on Joey Odom The slight drop in Ian ing that on a big- Parker with more risk — the lease, and not cap rates in the first ger scale than we’ve Stan Johnson Co. those leased by non- Sobelman 20 years like the one quarter occurred Schroeder probably ever seen Carroll credit tenants, those Calkain Cos. that sold at the five despite the Federal CBRE before.” Coldwell Banker that have shorter cap,” says Odom, Reserve Board’s de- Carroll’s team be- Commercial lease terms or those in secondary and whose team recently handled the sale cision in December to raise the target gan marketing seven renovated Dairy tertiary locations — are generally of 25 Dollar General stores in the Mid- range for the federal funds interest Queen restaurants operated by a ma- trading some 100 to 250 basis points west at a cap rate of less than 7 per- rate to 0.5 percent from 0.25 percent, jor franchisee in small Texas markets higher, says Sobelman. cent. “People are bringing properties and net lease professionals expect in February, and three were sold or “Until there is an investment, real to the market with unrealistic pricing, 1031 exchange activity in particular to under contract to separate investors estate or otherwise, that offers the sta- and I don’t think they’re trading.” keep cap rates in their current neigh- within roughly a month. The buyers bility, growth, passivity and/or yield Some investors worried about a pos- borhood. The 1031 exchange program accepted cap rates of around 6 per- that today’s net lease properties pro- sible recession and tightening credit allows sellers of a property to defer cent for the properties, which feature vide, then cap rates will stay in the have become more cautious in general, paying capital gains taxes if they fun- 19 years left on the leases and annual lower ranges,” says Sobelman. adds Ian Schroeder, a senior vice presi- nel proceeds into a similar or “like- rent increases of 1.5 percent. Each of Higher cap rates typically found in dent specializing in net lease proper- kind” asset. But to qualify, the ex- the seven properties listed for around the heartland have also stimulated the ties with CBRE in Newport Beach, changer must complete the purchase $1 million, and the remaining proper- appetite of buyers, says Randy Blank- Calif. Last year it was common to put of the new property 180 days after the ties were generating high interest, he stein, president of net lease broker- assets up for sale at prices higher than initial sale. says. age Boulder Group. In early 2016, the market to take advantage of demand. “If a 1031 buyer really likes a deal, “We believe that’s a pretty aggres- Northbrook, Ill.-based firm arranged Early this year the philosophy shifted they don’t care so much about the cap sive cap rate for those markets,” says the sales of a Walgreens in suburban to asking for a price closer to market to rate on the last trade (of a similar prop- Carroll. “But I think the assets served Kansas City, Mo., for $6 million and create a bidding war, ideally between erty), they just care about fulfilling as a price point where a lot of buyers an LA Fitness in Chicago for $9.5 mil- five to six parties, he says. their trade,” says Odom. “So they’re could go in and buy for cash.” lion. The deals featured cap rates of “I believe right now we’re in the willing to pay a little higher price.” Demand for net lease retail prop- 5.86 percent and 5.63 percent, re- middle of an adjustment on aggres- Schroeder adds that many 1031 ex- erties continues to outstrip available spectively. Both sales were to 1031 sive capitalization rates. I’m getting change buyers are second- or third- product, which should also keep exchange buyers. a lot of email blasts about price re- generation owners of apartments downward pressure on cap rates. “Investor demand in the Midwest ductions that we just haven’t seen in rotating out of the management- The supply of net lease retail assets is strong, as it has historically been a the last four years,” explains Schro- intensive properties and into more for sale plunged 12.5 percent in the market with higher cap rates than that eder, whose team closed 65 transac- “hands-free” net lease real estate. As fourth quarter of 2015 from the third of the coasts for similar assets,” says tions valued at $200 million in 2015. long as investment interest keeps cap quarter, according to Boulder Group. Blankstein. “There’s a feeling that the market is rates compressed in the multifamily It dropped an additional 1 percent in

24 • May 2016 • Heartland Real Estate Business www.REBusinessOnline.com the first quarter of this year. behind the $26 billion that closed in to meet the debt requirements in the which could bleed into the mortgage “Limited construction is the main the same period in 2015. It also all but commercial real estate market, includ- market and increase loan costs for net driver of the decline in supply,” states dashed hopes that CMBS issuance in ing net lease buyers, even if the CMBS lease borrowers. Blankstein. 2016 would approach or build on last market rebounds. “We’re in a market where execution year’s total of $95 billion. On top of Late last year, the Fed and other reg- risk is higher than it has been in sev- Seller’s market that, Trepp’s estimate that some $205 ulators warned banks that they would eral years because the financial play- Foreign investors that prefer a tepid billion in CMBS loans will need to be more closely watch commercial real ers — especially the CMBS players — economy in the U.S. to the lack of any refinanced through the end of 2017 estate lending in 2016, which has don’t know where they are (in terms growth in other countries continue emphasizes the need for a functioning made banks more cautious, he says, of pricing loans) with all the market to buy net lease assets, especially in securitization market. and life insurance companies allocate volatility,” says Cram. “The whole is- major markets on the coasts, say ob- Cram, president of private lender only a certain amount of capital to- sue on the debt side is that we have servers. Institutional net lease inves- Envoy Net Lease Partners, wonders ward real estate. Plus, Cram suggests some rollover happening, never mind tors remain buyers, too, but some are whether lenders like banks and life that anticipated bankruptcies and de- any new projects that need financing. ratcheting up dispositions to take ad- insurance companies will have the faults in the energy industry could So where is that capital going to come vantage of strong demand. capacity — and tolerance for risk — amplify a growing aversion to risk, from if CMBS isn’t there?” n Four of the largest publicly traded net lease REITs that predominantly invest in retail properties — National Retail Properties, Store Capital, Realty Income and Spirit Realty — have indicated that they’ll pare back acquisitions and sell more assets this year CELEBRATING 45 YEARS than in 2015, according to statements and financial disclosures made by the companies. Looking at their combined trans- OF PRECAST PROGRESS. action activity, National Retail, Store Capital and Realty Income acquired nearly $4.1 billion and sold $47.4 mil- Precast concrete isn’t what it used to be…It’s much better. We’ve been making precast wall lion net lease properties in 2015. But panels for 45 years. It’s no coincidence that we’ve spent exactly 45 years trying to figure together those three REITs predict that they’ll spend $2 billion on acquisi- out how to make it lighter, stronger, better insulated, more sustainable and better looking. tions and sell upwards of $250 million It’s been a good run…but we’re just getting started. in 2016, according to their guidance. While Spirit Realty doesn’t provide Goya Foods Headquarters guidance, executives during the com- Jersey City, New Jersey pany’s fourth-quarter earnings call in February projected that the REIT would be a net seller of assets in the first quarter this year after disposing of $547 million and acquiring $889 million of properties in 2015. Tom Nolan, chairman and CEO of Spirit Realty, told investors that the REIT would seek to take advantage of a 1031 exchange market that was “on fire” to pare off some of its non-core properties. To illustrate the point, he revealed that the company had just completed the sale of a Taco Bell/KFC at a 5.7 percent cap rate. “We’re at an interesting time where the market is a little volatile, so we’re being very cautious in terms of the acquisitions we’re looking at,” he said. “Yet at the other end of the spectrum, we’ve got a very robust acquisition market for the type of assets we own.” Debt riddle The ability of 1031 exchange buyers and other investors to complete net lease deals without debt — or with leverage amounting to only around 60 percent of the transaction — could give them an advantage over buyers that need more financing as a handful of forces cloud lending markets. Stock and bond market volatility early in the year prompted investors in commercial mortgage-backed se- PRECAST WALL SYSTEMS - ENGINEERING - MANUFACTURING - INSTALLATION curities (CMBS) to demand higher re- FABCONPRECAST.COM turns, for example, which effectively shut down CMBS deals. CMBS issuers ©2016 Fabcon Precast sold only $9.5 billion in the first quarter this year, a paltry figure that’s far www.REBusinessOnline.com Heartland Real Estate Business • May 2016 • 25

Title: Fabcon Anniversary Publication: REB Heartland Insertion: March 2016 Color: 4 color Client: Fabcon Date: 3/24/2016 Size: 7.25”x10”

434 Second Street | Excelsior | Minnesota 55391 p/ 952.926.3001 www.ostromcreative.com FOUR RETAIL DEVELOPMENTS TO WATCH IN HOOSIER STATE RETAIL from page 1 its development in spring 2017, and stores are scheduled to open in the spring of 2018. “Greenwood Town Center repre- sents an opportunity to bring some- thing unique to the market,” says Ryan Gershman, principal at Gersh- man Partners. “With prime highway visibility and access to I-65 and a super-regional appeal, Greenwood Greenwood Town Center is a $90 million, 700,000-square-foot shopping center in Greenwood, 13 miles southeast of Indianapolis. Town Center will bring more of a full- Stores at Greenwood Town Center are scheduled to start opening in the spring of 2018. The project is being built on a 100-acre site service shopping, dining and enter- to the east of I-65. The property sits on a site where two previous developments failed to come to fruition. tainment venue.” The developer hasn’t yet disclosed the names of any retailers for the am- future,” says Gershman. Recession, but this summer will wel- of infrastructure in place,” says Ryan bitious project. come the groundbreaking of a new Pennington, principal and CEO with Consumers visiting the new Green- Jeffersonville Town Center 240,000-square-foot power center 7D Commercial Real Estate. The com- wood Town Center once it opens will in Southern Indiana with accompanying outparcels. pany has provided brokerage and also be able to shop at the recently de- Located just across the Ohio River The Koetter Group, a locally based leasing services for the project since veloped Kroger Marketplace, Walmart from Louisville, Ky. is Jeffersonville, real estate development and construc- its onset. Supercenter and Costco located on Ind., a small city with a big vision to tion firm, is developing Phase II of the “It is largely by choice that there is the west side of the I-65/County Line transform the area into the next re- mixed-use Jeffersonville Town Cen- limited development on the south side Road interchange. gional shopping destination. ter on about 25 acres. The architect is because we realize that the infrastruc- “The growth in Greenwood is mov- Jeffersonville Town Center is a 153- MJM Architects of Nashville. ture is there, and it is very valuable. ing east, and the Greenwood Town acre project that took off in 2005, but Bisected by Veterans Parkway, Jef- Instead of grabbing the first deals we Center is very well positioned to cap- then ran into headwinds. The de- fersonville Town Center is segment- can find, we’re trying to find the best ture the shift today and well into the velopment stalled during the Great ed into a north and south side. The cohesive uses.” north side has seen considerable de- Currently located on the south side velopment in the last six years with of Veterans Parkway is a 24,000-square- the completion of a Tire Discounters, foot, multi-tenant building that boasts Marathon gas station, Culvers, Krispy retailers such as Sherwin Williams, Kreme, Popeyes Louisiana Kitchen German American bank, AT&T and and Menards. In addition, Mike’s Car Heine Brothers’ Coffee. Wash purchased a plot of land in April “We feel like Jeffersonville Town to open its 18th location on the north Center will be as strong of a mix as side. you can find anywhere in the Lou- New development on the south side isville metro area, and the project of Jeffersonville Town Center has been size at 153 acres is really bigger than slower coming, but several stores are anything else you’re going to find,” in the works that will level the playing says Pennington. “It will have small- field with its counterpart to the north. er, more quaint pieces of it that will Grandview, which is being developed by Great Lakes Capital, is a 50-acre project that “One thing that is extremely have some really nice restaurants,” he will boast 180,000 square feet of upscale retail space as well as residential, office unique, especially for a project that adds. and hospitality components once the project is finished in 2020. went through the recession, is that The presence of these boutique res- this project has a significant amount taurants is already starting to take shape with the delivery of Wild Eggs, The Comfy Cow and Boombozz Pizza & Taphouse. “We have some huge restaurant volumes that exist in the market, and every time we open a new restaurant it turns out to be one of the top per- formers in the entire chain,” says Pen- CREATING nington. “We usually get bypassed for St. REAL VALUE Matthews in Louisville, which is considered the retail bull’s-eye for the market, but when you look at stores IN PROPERTY. and restaurants that have multiple locations including southern Indiana, southern Indiana is either number one or number two in terms of store volume.” COMMERCIAL • BROKERAGE • MANAGEMENT The main focus, however, is on the • MULTI-FAMILY • TAX CONSULTING 240,000-square-foot power center that is scheduled to start construction in REAL ESTATE SERVICES • MAINTENANCE • CAPITAL MARKETS the coming months and be delivered by the spring of 2017. While specific retailers aren’t yet being named, Pen- Elkhart, IN Indianapolis, IN Merrillville, IN South Bend, IN bradleyco.com nington says he wants to continue Fort Wayne, IN Warsaw, IN Grand Rapids, MI Kalamazoo, MI to bring new retailers to the market, though he is expecting some reloca-

26 • May 2016 • Heartland Real Estate Business www.REBusinessOnline.com tions and second store units at the power center. Tire Discounters, which opened in 2010, and Menards, which opened last fall, are both new-to-market retailers. “In terms of the Louisville market and southern Indiana, never in my ca- reer have I been a part of a community that has as many economic drivers going for it right now as southern Indi- ana does,” says Pennington. Pennington cites the new 6,000-acre River Ridge Commerce Center as a major driver for growth. The industrial park is currently 10 percent developed and is expected to nearly double Jeffersonville’s population by the time it’s fully developed. In addition, two new bridges and a highway extension and interchange will enhance connectivity to the Lou- isville metro area. Gershman Partners is spearheading this 250,000-square-foot retail development on the north side of Indianapolis. The Bridges is situated on 65 acres and has already seen the delivery of a CVS, Jimmy John’s, Coalition Pizza, Morellis Cleaners, McDonald’s and GrandView near South Bend Market District. The development will also bring first-time tenants to the area, such as Convivio, Los Arroyos and Posh Nails. Located immediately to the east of South Bend is Mishawaka and the 46- to live, work and play on the west side variety of ethnic cuisines. Arroyos, Posh Nails and Shred415. acre site of Great Lakes Capital’s $100 of Carmel.” The Bridges has landed nine new The Los Arroyos and Shred415 stores million GrandView development. Approved by the city in 2011, the tenants that are scheduled to open are the retailers’ first locations in In- “The new Grandview project will project has already seen the delivery of shop this summer. National chains diana. add additional strength to the Uni- a CVS, Jimmy John’s, Coalition Pizza, coming to the center include Star- “The location was really a no- versity Park mall trade area, which is Morellis Cleaners and McDonald’s. bucks, Potbelly Sandwich Shop, Great brainer in terms of the quality of the already a prolific trade area capturing Last October the project welcomed Clips, Regions Bank and Pet Valu. real estate,” says Gershman. “The approximately 650,000 consumers in its anchor tenant, Market District, a Tenants new to the area include lowest side of Carmel was underserved northern Indiana and southwestern 120,000-square-foot fresh format gro- cally owned Italian restaurant Con- and the new U.S. 31 is also broadening Michigan,” says French of Cushman cery store by Giant Eagle offering a vivio, Calif.-based Mexican eatery Los the trade area.” n & Wakefield. “Grandview is targeting upscale retailers looking to take advantage of the tremendous demo- graphics and strong reputation of the trade area.” The 50-acre project will boast 180,000 square feet of upscale retail TRUST. space as well as residential, office and hospitality components once the project is finished in 2020. Phase I of GrandView, expected to It takes years to build, seconds to break and forever to repair. be complete by the end of 2017, will include GrandView Flats & Town- At Bellwether Enterprise, our moral compass is guided by honesty homes, a 200-unit apartment com- and integrity. We stand by our words and deliver on our promises, munity. The first residencies will be which may explain why our customers and lenders have remained available by the end of this spring. The GrandView project is being com- loyal throughout the decades. pleted in four phases. Retailers are not yet being named, We live and work by a code of ethics that embodies but the proposed tenant mix will con- truth and honor, as individuals and as a company. tain retailers specializing in women’s clothing and accessories, home décor Truthfulness is our pledge and our promise. and furnishings, designer shoes and quality outdoor gear and clothing. A coffee shop, gourmet market and restaurants specializing in Italian, Mexi- can and Chinese cuisines are also being targeted. The Bridges in Carmel Ryan Gershman likes to refer to The Bridges as “the classic infill develop- Bellwether Enterprise Real Estate Capital, LLC is a national, full-service commercial and multifamily ment.” The 250,000-square-foot retail mortgage banking company providing the most flexible market rate and affordable financing solutions center is located on 65 acres in Carmel, in the industry. As part of the Enterprise family, we support its mission of creating and advocating for a fast-growing suburban edge city on affordable housing in thriving communities. the north side of Indianapolis. “The Bridges is a highly walkable multi-use development with additional phases including multifamily 866.420.2966 | www.BellwetherEnterprise.com and office yet to come,” says Gersh- man. “It’s quickly becoming the place www.REBusinessOnline.com Heartland Real Estate Business • May 2016 • 27 THE DISTRICT DETROIT AIMS TO BE GAME CHANGER FOR CITY ARENA from page 1 and midtown will be transformed into five bustling neighborhoods containing a mix of office, residential and retail space. While the $200 million-plus price tag for the mixed-use component pales in comparison to the $627 million arena, pulling off development of the surrounding area won’t be any easier. “This is one of the biggest projects to be announced in Detroit in decades,” says consultant Jeff Green, owner of Jeff Green Partners. “It’s huge. Not only is it huge from a development dollars standpoint, it’s huge from a geographic standpoint.” At left, the bowl of the Detroit Events Center, the new home of the Red Wings hockey team next season, will be cloaked in a skin Green says that the biggest chal- that features video and audio capabilities. At right, The Via is a 60,000-square-foot concourse that has been pulled away from the lenge facing the district is getting na- arena to feature a deconstructed design. The Via also features an LED-lit glass roof to blend natural and man-made elements. tional retailers to drop preconceived notions and commit to Detroit. Green tential.” scape and hardscape. This is all in an “Due to the entertainment-driven does believe that once the project Sports and entertainment architect effort to create a top-notch sports and nature of the Detroit Events Center, a gains momentum, which he antici- and design firm ROSSETTI suggests entertainment district and drive eco- lot of this area will be food and bev- pates will take about five years, it will that there are several common fea- nomic growth in the heart of Detroit. erage, with specialty retail making up be key to revitalizing the downtown tures that every successful sports dis- The District is a vision to the future of the balance,” says Mike Atwell, vice area and will stop pushing residents, trict going forward will include. the city’s inner neighborhoods. president of retail for Olympia De- students and visitors to the suburbs Using The District Detroit as an ex- velopment of Michigan, the develop- for their shopping needs. ample, we take a look at how the proj- Pieces must stand on own ment arm of Ilitch Holdings Inc. that “Detroit is like a big old ship that ect is building components that stand The office, retail and residential is responsible for delivering the entire you just have to get moving, but once on their own and creating an iconic components of The District Detroit district. it moves it will pick up pace,” says and flexible facility that promotes pe- will be segmented into five separate The second neighborhood, Colum- Green. “There is a lot of untapped po- destrian activity and integrates land- neighborhoods, each with its own bia Street, will provide laid-back en- personality and purpose. In order to tertainment by offering more relaxing create a vibrant district, the area must and intimate shops and restaurants. Stop by and visit us at ICSC be active around the clock and not just Home to the iconic Fox Theatre and on event days. entertainment venue The Fillmore in Las Vegas, May 23-25, 2016 Woodward Square is the first neigh- Detroit, the European-style Columbia borhood that will come on line and Street neighborhood will be saturated will contain the arena. As the heart with jazz clubs, wine bars and speak- of The District Detroit, Woodward easies lined by cobblestone streets. Square will be centered around the Wildcat Corner will present another Red Wings and cater to sports fans watering hole for sports enthusiasts. through a variety of high-energy res- As home to Comerica Park and Ford taurants and shops. The neighbor- Field, this neighborhood will be all hood will provide approximately sports and events all the time. Adams 100,000 square feet of retail space, in- Street will be party central and reflect cluding a fan store where fans can add Detroit’s industrial roots. Wildcat to their Red Wings collection. Corner is designed to be a one-stop

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28 • May 2016 • Heartland Real Estate Business www.REBusinessOnline.com neighborhood for cheering on the De- Cup winning team, which was also happening on the ice. in a range of 1,200-square-foot to troit Tigers and Lions. one of the original six teams in the “We have incredible interest and 10,000-square-foot stores. “With any major city, neighbor- NHL. we’re going to select retailers that hoods have their own identity,” says Immediately outside the arena will share our desire to create a destina- Promote strolling, watching Green. “The retail and restaurants be a public plaza with a massive video tion where people can come out and While the goal is for the entire dis- should match that identity. It’s al- wall. Highlights and promotions will be amazed,” added Atwell. trict to be one fluid, walkable area, the most as if the neighborhood should be be displayed on the screen, as well The District Detroit will not only pedestrian friendly efforts can really branded in a residential and commer- as in the Via, a large concourse sur- deliver the wow factor through its be seen in the Via. The 60,000-square- cial sense.” rounding the arena. The bowl will be design, but will also offer an array foot concourse is pulled away from Cass Park Village will build off cloaked in a skin with video and audio of options, according to Atwell. Re- the bowl to allow for a more open feel the creative energy of nearby Wayne capabilities so that patrons outside of tail stores will contain a mix of lo- and to bring traditional outdoor ex- State University, Cass Technical High the arena can get a glimpse of what is cal, regional and national concepts periences inside. From the concourse, School and Detroit’s Masonic Temple to create a haven for artists and entrepreneurs. Flooded with markets and galleries, this neighborhood will aim to provide a tight-knit community within the confines of an urban city. Columbia Park will boast laid-back office, retail and residential spaces. With tree-shaded walkways and green lawns, this neighborhood will be for relaxing and refreshing. Gardens and dog runs will encourage visitors and residents alike to get active or simply sit back and people watch. “As the District Detroit takes shape, an eclectic mix of fun and unique restaurants and shops will define the character of each of the five different neighborhoods,” says Atwell. “We aim to bring the hottest restaurant and retail concepts to all of the neighborhoods with The District Detroit.” By deconstructing The District De- troit into separate neighborhoods that operate independently but still flow together, the area will become an economic driver for Detroit year round. “It’s got to have a local flavor, not only to brand the neighborhood but also to bring people from a greater distance,” adds Green. Make the facility iconic The District Detroit has a bold vision to provide one of the most so- The Shoppes at Prairie Crossing are now in development, and Iowa is answering phisticated fan experiences in the the call. A 10-minute drive from Des Moines, it’s a place to live & grow, to shop A NEW STAR IS RISING. United States. & play, to enjoy all life has to offer—right outside your door. For families, The 785,000-square-foot arena will business owners and developers, this is the dawn of Iowa’s Rising Star. It’s happening right now in the City of Altoona. #altoonanow sit 40 feet into the ground and offer 52 corporate suites and 22 mini suites. Gondola seating options, which will suspend spectators over the event lev- ALTOONANOW.ORG el, will also be available. While considerable attention has been paid to creating an impressive experience inside the arena, The Dis- trict Detroit will also wow fans who never step foot inside of the Red Wings’ stomping ground. “We have made it a priority to in- tegrate the rich history of the Detroit Red Wings into the fabric of the events center,” says Atwell. “Fans of the Red Wings will be struck by the care that is being given to this heritage through experiential displays highlighting the moments, players and people that have made the Red Wings such a sto- ried franchise.” The Detroit Events Center will build off the energy of the 11-time Stanley www.REBusinessOnline.com Heartland Real Estate Business • May 2016 • 29 want to live and work,” says Atwell. more space. Detroit’s light rail project will also “We’re creating an experience for add to the walkable nature of The everyone that is unique to the char- District Detroit. Car rides can be trad- acter of Detroit and our region,” he ed in for a streetcar fare, which will emphasizes. connect the Central Business District, Midtown, New Center and North Build flexible civic spaces End. The 3.3-mile Qline project is ex- The District Detroit will become a pected to be complete by the end of hotbed of activity with the options it the year. can provide for events. The arena and “The rail will be quite helpful its underground practice rink will be in bridging the gap,” says Green. used to host amateur hockey, NCAA “That’s one of the things that I am basketball games, concerts and more. most excited about. You have to think According to ROSSETTI, large city about what it is going to take to keep arenas stage up to 200 event days over Wayne State University graduates in the course of the year. Football sta- Detroit.” diums, such as Detroit’s Ford Field, The amenities that The District De- boast roughly 15 event days per year, troit will offer — retail, dining and en- and baseball parks like Comerica Park tertainment — will provide students host an average of 90 event days. with a place where they want to live, Those involved in the creation of notes Green. That’s helpful for the fu- The District Detroit hope that the The District Detroit will be a 50-block mixed-use development that will connect down- ture of Detroit. sports venues, coupled with the Fox town Detroit to Midtown. The project is being anchored by the new 20,000-seat Red Theatre and The Fillmore Detroit, will Wings hockey arena, which will be situated within the Woodward Square neighborhood. Use landscape, hardscape consistently attract large numbers of ROSSETTI notes that any success- spectators to the area and that each patrons will be able to enter shops, and stone. Landscaping and lighting ful sports-anchored development will acts as an economic driver for the city. watch videos on the skin of the bowl will also be tailored to promote stroll- be one that has integrated indoor and The plaza and video wall being con- and enter the arena at street level. ing and leisurely activities. outdoor concepts exceptionally well. structed outside of the arena will also Atwell notes that major efforts to “We’re creating livable neighbor- The seamless flow of landscape serve as a gathering space and will be make the district walkable include hoods throughout The District De- and hardscape will be found through regularly programmed with music creating a street-level scale through- troit, so it will be a venue that will ac- The District Detroit with the utiliza- and other entertainment events. Cre- out the development and using natu- commodate our guests during events tion of natural building materials. In ating these dynamic, multi-use facili- ral building materials such as brick and also be a place many people will addition, green spaces will be found ties will help the district prosper year throughout the various neighbor- round. hoods that will provide shoppers, “The District Detroit’s retail mix residents and spectators with a place will appeal to people of all ages and to take a break. provide an array of high-energy res- The Via offers yet another example taurants for pre- and post-event activ- Illinois of how The District Detroit will blend ities, relaxing and intimate dining ex- its surroundings together. The con- periences, and a collection of unique Economic Development course will sport a glass, LED-lit roof retail stores that will appeal to shop- that will provide shelter in conjunc- pers on event days and on any day,” tion with sky views. says Atwell. This deconstructed design of the “Detroit has become a hotbed of cre- events center is a truly unique feature, ative entrepreneurs of all kinds, and says Atwell, referring to how the Via this development will be part of that is pulled away from the arena to add innovation.” n

e Regional Destination for Retailers!

$ The trade area’s total estimated retail leakage is $596 million dollars! The Trade Area Retail Leakage Net of Malls (millions) Oswego Advantage! Motor Vehicle & Parts Dealers $212.4 High Growth Community Food & Beverage Stores $125.6 4.2% increase in population 2010-2014) Too Many Shoppers, Not Enough Stores Gasoline Stations $88.7 Over one-Half billion dollars/year in unmet demand The Regional Destination for Retail Food & Drink Services $66.1 2.8 million square feet of retail Health & Personal Care Stores $59.0 The Regional Destination for Business 3 First Class Business Parks Sporting Goods, Hobby, $11.5 Book & music Stores Exceptional Quality of Life 2011 Best Places to live Home Furnishing Stores $11.4 Columbia Street, home to the Fox Theatre and Fillmore, is one of five neighborhoods CNNMoney.com Source: 2015 Oswego Market Analysis, SB Friedman that will be featured in The District Detroit. Columbia Street will provide more relaxing To learn moreTo learnabout Oswego’s more about retail opportunities: Oswego’s www.oswegoil.org/ED retail opportunities: or call 630-551-2334 and intimate entertainment options with the presence of wine bars, jazz clubs and www.oswegoil.org/ED or call 630-551-2330 speakeasies along cobblestone streets.

30 • May 2016 • Heartland Real Estate Business www.REBusinessOnline.com Inland Real Estate Corporation is now IRC Retail Centers

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