TUCSON, Arizona — Phoenix investors, The Bynum Family Trust, traded into the purchase of Colonia Verde at 7245 E Tanque Verde Road in the Eastern submarket of Tucson.  The 9,216-square-foot retail center sold fully occupied with five tenants. The property commanded a sale price of $2.925 million ($317 PSF).

Built in 2001, the property offers marquis signage for each tenant as well as tremendous street visibility to the roughly 89,000 vehicles per day on Tanque Verde Road and Sabino Canyon. Three of the five tenant are original tenants, Subway, Super Cuts and The Cellular Connection.

“The property has been fully leased and stabilized since 2013,” John Yarborough with Romano Real Estate says. “Three of the tenants are food related, Ha Long Bay Vietnamese Restaurant, Papa Murphy’s and Subway (58%), with The Cellular Connection (28%) and Supercuts (14%) accounting for the balance of the space.

SUPER CUTS: Founded in 1975, Supercuts has more than 2,600 locations throughout the United States, Canada and the United Kingdom. Supercuts is ranked the number one haircare franchise in the United States and is a subsidiary of Regis Corporation, a Fortune 1000 corporation with 90 years of salon industry experience. Supercuts signs the lease corporately and guarantees store operation for the term of the lease. (www.supercuts.com)

VERIZON: The Cellular Connection  is the largest Verizon premium retailer in the nation with more than 700 locations across 38 states.  The Cellular Connection sells smartphones, tablets, dish and cable service products, and home Internet products. It was founded in 1991 and was formerly known as Moorehead Communications, Inc. and changed its name to The Cellular Connection, LLC in August 2015. The company was founded in 1969 and is based in Carmel, Indiana with stores in Kansas, Oklahoma, Missouri, Texas, Arizona, Nebraska, and Iowa. TCC consistently ranks on Inc.’s 500/5000 list. (www.tccrocks.com)

SUBWAY: Since opening in 1965, Subway has become the world’s largest submarine sandwich chain with more than 44,000 locations around the world including nearly 27,000 outlets in the United States. Corporately signed lease. (www.subway.com)

Papa Murphy’s: Founded in 1981, Papa Murphy’s is the fi fth largest pizza chain in the United States with over 1,500 stores across the country. Although this store is the franchisee’s only location, it consistently ranks in the top 3 in Tucson for sales. (www.papamurphys.com)

Ha Long Bay Vietnamese Restaurant: Ha Long Bay is an authentic Vietnamese restaurant open for lunch and dinner 7 days per week that features tasty Vietnamese cuisine in an unpretentious, comfortable atmosphere. (www.halongbaymenu.com)

John Yarorough and David Carroll with Romano Real Estate Corporation in Tucson represented the seller, FPI, LLC of Tucson (James Fischer III, manager) and Paul Rosado of Paul Rosado Brokerage of Tucson represented the investor.

For more information, Yarborough and Carroll should be reached at 520.577.1000 while Rosado can be contacted at 520.325.7337.

Property was listed on RED Listing Registry on October 13, 2016 and in escrow about 30 days.

To learn more login and see RED Comp #4452.

[mepr-show rules=”58038″]Property closed January 3, 2017. This was the buyer’s upleg in a 1031 exchange. Property was marketed at a 6.42% cap rate and sold at a 7.03% cap rate. Buyers are Gary and Denise Bynum. Property was listed on RED Listing Registry on October 13, 2016 and in escrow about 30 days. Click here for offering memorandum: REListing-170-Listing [/mepr-show]

By: Aaron Mendenhall and Dan Feig, Chapman Lindsey Commercial Real Estate Services

New home sales are up in 2016. Per SAHBA, monthly net sales from their 12 member builders so far in 2016 has each been higher than any month in 2015 with the exception of January’s 173 net sales which was only one sale less than March 2015 and 10 less than April. The 620 single family permits pulled in Q1 2016 was the 2nd highest in a quarter for the past three years. Q2 of 2015 was higher, but only by 2 permits. 2016 is off to a good start here in Tucson. Much of the success is due to a few strong communities, including DR Horton’s Saguaro Bloom, Pulte’s Sierra Morado and the newly opened Center Pointe Vistoso by Maracay. Each of these properties has introduced new lots this past year either as a new community or as a continuation of an existing community.

As has been mentioned in prior articles, existing and available finished lot inventory is extremely limited in Tucson and what remains has challenges relating to location, lot size or price. Builders have been forced to seek out platted or raw land properties to fill their pipelines, which they try to keep full up to at least two years out. When finished lots were more plentiful, a builder could identify, negotiate and purchase a property in 3 to 6 months and they could begin building homes immediately. With platted lots it can take 8 to 12 months after the lots are purchased to develop the lots and begin constructing homes. Most builders will not close prior to final plat, so any property that needs to be rezoned and entitled can add an additional 1 to 2 years onto the timetable.

As the market has continued to improve, certain communities have enjoyed stronger than anticipated sales and communities are building out faster than initially projected. While this is great news for builders, it also presents challenges as their pipelines need to be replenished sooner. Builders need to be constantly on the lookout for new opportunities and have the foresight to think longer term and take some risks based on future needs and inventories.

Meritage was the first and most active builder to take on platted lots since the downturn. They recognized the need of future lots and identified the Tangerine Corridor in the Northwest submarket as the place to invest in. In May 2012 Meritage purchased two platted lot communities in the Tangerine Corridor – Sky Ranch and Tangerine Crossing Phase 3. Later that year they closed Saguaro Forest in Dove Mountain with Silverbell Preserve and Rancho de Plata closing in 2013. Meritage skipped 2014 but purchased 3 platted lot properties in 2015 and one so far in 2016 for a total of 9 properties with 695 platted lots. The three platted lot communities purchased in 2012 are now each built out and the two purchased in 2013 are nearly built out with only 5 remaining lots between them. These initial trailblazing purchases have netted Meritage over 250 sales to date. Their early 2015 purchases will be opening in Q2 2016.

DR Horton, Richmond American and Pulte Homes were ranked #1, #2 and #3 respectively one year ago in the number of finished lots owned. In the past 12 months, DR Horton, Richmond American and Pulte Homes are ranked #1, #3 and #2 respectively in the number of homes sold (per SAHBA reports). This correlation extends to the other builders as well. Of the top six builders in lot holdings a year ago, each ranked the same in number of finished lots owned as the number of homes sold within the past 12 months, with the only exception of Pulte being # 2 in sales and #3 in finished lots, while Richmond American was #3 in sales and #2 in finished lots.

As of the end of Q1 2016, lot ownership rankings have experienced slight changes. DR Horton remains at #1 with 389 finished lots. Maracay jumped to #2 with 267 finished lots with the opening of its Center Pointe at Vistoso communities earlier this year. Richmond American fell to #3 with 264 finished lots and Meritage jumped up one to #4 with 239 lots. Pulte fell to #5 with 170 finished lots and Mattamy Homes entered Tucson opening its Dove Mountain community and is ranked #6 with 124 finished lots. When looking at sales numbers from just 2016, the top three remained the same, but Maracay jumped from #7 to #4, pushing Lennar to #5 in reported net sales.

When comparing current lot inventories to lots currently under construction, the finished lot ownership rankings will change even more by the end of 2016. Meritage will take over the #1 spot with over 650 finished lots as it opens . KB Home could jump to #2 as it completes the four new communities currently under construction. Richmond could fall to #6 and Pulte to #8 in finished lot ownership as each are selling well in their existing communities but only have a small number of lots currently under construction that could finish out this year.

Most builders currently have other properties in escrow that will add additional lots to their pipelines in the future, but it will take time to get them ready to build houses on. Any builder who waits too long to secure new inventory can easily find themselves with a lot shortage in 2017 and 2018 and sales will suffer as a result. If their pipelines become too depleted they may be forced into paying higher prices for the remaining existing traditional inventory or developing new product to fit the non-traditional finished lot inventory.

Future employment opportunities coming to Tucson will impact housing needs. Caterpillar recently selected Tucson for its regional headquarters and will bring 600 high paying jobs to the area over the next five years. The Rosemont Mine project is nearing its final rounds of government permitting, which if approved, could be another major source of employment for the area. The trickle down effect of these and other upcoming employment announcements will create even more demand for housing, which in turn will create additional demand for land and lots by homebuilders. Look for an active land market in upcoming years.

Please contact Chapman Lindsey or Aaron Mendenhall at 520-747-4000 x102 for additional information.

To see the full report click here: Chapman Lindsey Q1 report

SCOTTSDALE, AZ — Taylor Morrison Home Corporation (NYSE: TMHC) and Pulte Homes (NYSE: PHM) have announced a joint venture to acquire approximately 410 acres of land in North Phoenix from the Arizona State Land Department and develop it into a new master plan community. Development of the site is slated to begin in spring 2017 and will feature multiple product offerings from the Taylor Morrison and Pulte brands.

The Taylor Morrison / Pulte joint venture group was the successful bidder for the parcel at the State land auction on March 3 for approximately 1,200 lots on more than 400 acres of land, which sits adjacent to the existing Desert Ridge master plan community in the highly desirable North-Phoenix submarket. Teh property commanded a sale price of $100 million ($243,900 per acre).

“I am very pleased by the outcome of the State land auction,” said Brad Schoenberg, president of the Taylor Morrison Phoenix division. “We have had our eye on this property since 2013, when we first became an applicant for it with the State, and strongly believe – even three years later –  that it holds significant value and potential as part of Taylor Morrison’s portfolio. I look forward to beginning the development process and bringing the Phoenix homebuyer what they want in their most important investment.”

Pulte Arizona division president, Scott Wright, said the company looks forward to partnering with Taylor Morrison on building a quality new community in North Phoenix.

“This is a very sought-after location next to great retail, dining and with easy freeway access to all parts of the Valley,” Wright said. “This is an ideal community setting in a great location, and we are excited about the opportunity to collaborate with Taylor Morrison to develop a beautiful, well-planned new master plan in the Desert Ridge area.”

The collaboration brings together two highly experienced teams that are committed to building a quality master plan with world-class amenities, innovative home designs and vision for excellence.

“Our shared vision is to create a new master planned community that will be a point of pride for the Desert Ridge area, and the future residents who will call it home,” Schoenberg said.