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Phoenix Regional Profile
Multi-Model Access to Key Western Markets From PHX
Union Pacific Rail Accessible and 1-10 Accessible
Did you Know Arizona:
• Ranked #2 For Workforce - CNBC 2014
Reno
• Operating Costs are Approximately 40%
Lower Than California
• Is Home to Powerhouse Firms Like Intel,
GoDaddy and PetSmart
The University of Phoenix sold its three
building campus headquarters to a
United Kingdom real estate investor,
Epic Apollo, LLC in Q1 2015. The sale
was part of a strategy by Apollo to take
advantage of the continued strength
of Phoenix’s real estate market. The
$305 per square foot sale consisted
of 599,700 SF for a whopping $183
million compared to 2011 when it sold
for $283 per square foot providing a
7.6% increase.
Winters Arizona, LLC purchased 31553165 S. Price Rd. in Chandler. Tyson
Breinholt and Shane McCormick of
CPI’s Tempe Office Group represented
the seller, SFGVI Properties LLC, in this
transaction. The ±12,800 SF, Class A
building is part of a ±51,164 SF office
complex located along the Price
Road Corridor. The transaction closed
at a value of $1.86 million in total
consideration.
635 miles
11.00 hours
750 miles
12.00 hours
• Ranked #5 For Fastest Growing Tech
Market - Fortune Magazine
• Has an Unemployment Rate of Just 7.4%
Salt Lake City
Bay Area
Den
Denver
enver
enve
ve
err
920 miles
12.25 hours
Las Vegas
285 miles
5.25 hours
Los Angeles
Long Beach
350 miles
4.75 hours
Colton
Phoenix
Albuquerque
475 miles
6.25 hours
Oklahoma City
Dallas
Tucson
Trucking Times & Distance
Union Pacific Train Routes
Peiterson Keil, LLC purchased the
±20,640 SF retail strip center at
11541 W Bell Road, which was built
in 1981. Eric Jones commented. “My
client, Peiterson Keil, LLC looked at
several markets in the western U.S.,
and views Phoenix as a market with
growth potential. This purchase was
based on the uniqueness of a multitenant automotive center, the price
per square foot, and value add.” The
property at a value of $1.375 million.
Frontgate, part of Cornerstone
Brands, Inc. (CBI) a $3.3 billion
dollar retailer is opening a 32,590
SF location in Scottsdale, AZ. The
first-to-the-market Frontgate Outlet
in the Scottsdale Pavillions mall off
Indian Bend Road and the Loop 101
is slated to open in June of 2015.
It will be one of only four brick and
mortar locations in the United States.
El Paso
FT. Worth 1,120 miles
15.50 hours
440 miles
6.00 hours
San Antonio
Houston
H
1
1,185 miles
17.50 hours
Prologis sold their 486,241 SF industrial
property at 5555 W. Lower Buckeye
Road in Phoenix to Exeter Property
Group. Exeter is an investment
manager with more than 85 million SF
of industrial properties across the U.S
and Europe. Exeter actively invests in
all primary distribution markets and
acquired 5555 W Lower Buckeye
Road for $24.25 million in Q1 2015.
Jeff Hays, Chad Neppl, John G. Soldo,
SIOR and Ryan Steele of CPI’s Tempe
Industrial Team represented Jensen
Precast’s former ±33,000 SF property
with five structures on approximately
10.66 acres. Jeff Hays commented.
“This former concrete precast facility
site has a total of 7 cranes ranging
from 5 tons up to a 30 tons and newly
refurbished office space.” The new
tenant, Modular Power Solutions (MPS)
leased the property for nearly $1 million
in total consideration.
Industrial Market Report
PHOENIX METRO
1ST QTR. 2015

HELD at 11.6%
NET ABSORPTION
POSITIVE 1,644,484 SF
-
VACANCY
RENTAL RATES
UP - Averaging $6.57

CAP RATES
DOWN - Averaging 7.57%
To view our available properties,
please visit our Property Search
page online:
www.cpiaz.com/PropertySearch
TRANSACTIONS
Commercial Properties Incorporated (CPI) completed 242 Industrial transactions for a total of
1,116,144 square feet in first quarter 2015. The top Commercial Properties Incorporated Industrial
transactions for the quarter were, a 40,349 square foot sale of 254 W Broadway Rd, for $1.38 million
in Mesa, AZ, and a 12,942 square foot sale of 4055 S Sarival, for $1.6 million in Goodyear, AZ.
VACANCY RATE & ABSORPTION
The Phoenix Industrial market ended first quarter 2015 with a vacancy rate of 11.6%. This is
unchanged from the 11.6% reported in fourth quarter 2014. Net absorption ended up at a
positive 1,644,484 square feet at the end of first quarter 2015. First quarter 2015 absorption was
up compared to fourth quarter 2014’s net absorption previously reported as 619,372 square
feet. The vacant sublease space in the Phoenix market ended the first quarter 2015 at 1,512,551
square feet. This is a decrease from fourth quarter 2014 which was previously reported at
1,752,913 square feet of vacant sublease space. The figures above include buildings that are
owner occupied as well, which affects the actual vacancy numbers. Check with your CPI broker
for an accurate representation of the vacancy rates in the submarket around your properties.
RENTAL RATES
The Industrial rental rates for first quarter 2015 averaged out at $6.57, which is a slight increase
from the $6.56 average previously quoted for fourth quarter 2014. The Flex rental rate average
was $11.92 with the average Warehouse rental rate at $5.63 for the end of first quarter 2015.
CONSTRUCTION
2,760,100 square feet were reported as still being under construction at the end of first quarter
2015 in the Industrial Sector compared to 3,986,684 square feet under construction in fourth
quarter 2014. Some of the biggest projects still under construction were 10 W Logistics Center
- Bldg. A, a 659,618 square foot facility which is 0% pre-leased, and 260 E Queen Creek Rd.,
a 316,034 square foot facility which is 100% pre-leased.
INVENTORY
At the end of first quarter 2015, there was a total of 308,918,480 square feet of industrial
inventory for Phoenix. This square footage is broken out into 9,956 buildings that make up
the sector. This is an increase from the 307,235,915 square feet of total Industrial inventory
compared to fourth quarter 2014.
Office Mar ket R eport

PHOENIX METRO
1ST QTR. 2015
VACANCY

UP SLIGHTLY to 17.2%
NET ABSORPTION
+ 163,755 SF
RENTAL RATES

UP - Averaging $21.30
CAP RATES
UP - Averaging 7.58%
Compared to 7.15% in 2014
To view our available properties,
please visit our Property Search
page online:
www.cpiaz.com/PropertySearch
TRANSACTIONS
Commercial Properties Incorporated completed 80 office transactions for a total of 237,627
square feet in first quarter 2015. The top Commercial Properties Incorporated Office transactions for
first quarter were, a 12,800 SF sale of 3155-3165 S Price Road, for $1.86 million in Chandler, AZ, and a
16,333 SF sale of 1234 S Power Road, for $1.19 million in Mesa, AZ.
VACANCY RATE & ABSORPTION
The Phoenix Office market ended first quarter 2015 with a vacancy rate of 17.2%. This is a
slight increase from the 17.1% vacancy rate reported in fourth quarter 2014. The first quarter
2015 net absorption came in at a positive 163,755 square feet. This is down compared to
fourth quarter 2014 when the net absorption was 1,199,018 square feet. The vacant sublease
space in the Phoenix market ended first quarter 2014 at 757,392 square feet. Sublease space
is up compared to fourth quarter 2014 which was previously reported at 664,578 square feet
of vacant sublease space. The figures above include buildings that are owner occupied as
well, which affects the actual vacancy numbers. Check with your CPI broker for an accurate
representation the vacancy rates in the submarket around your properties.
RENTAL RATES
The average Office rental rates ended first quarter 2015 at $21.30, which is an increase
of 0.614% from the $21.17 per square foot average rental rates quoted back in fourth
quarter 2014. Class-A average rental rates for first quarter 2015 were $25.36 , while the
Class-B average rates were $20.30. Class-C average rates were reported to be at $15.12.
CONSTRUCTION
4,250,762 square feet were reported as still under construction at the end of first quarter 2015
in the Office Sector. This is up from fourth quarter’s 2,898,337 square feet under construction
figures. The biggest projects still under construction at the end of first quarter 2015 were the
600,000 square foot building at 300 E Rio Salado Pkwy, Bldg B., which is 100% pre-leased, and
the 480,000 SF building at 300 E Rio Salado Pkwy, Bldg E., that is also 100% pre-leased.
INVENTORY
At the end of first quarter 2015, there was a total of 162,574,945 square feet of Office inventory
for Phoenix. This square footage is broken out into the 8,134 buildings that make up the sector.
There are approximately 895 owner-occupied properties that make up 16,169,714 square feet of
the total 162,574,945 square feet in the Phoenix office market.
R etail
e ta i l Mar
Ma r ket
ke t R eport
e p o rt
PHOENIX METRO
1ST QTR. 2015

VACANCY
DOWN SLIGHTLY to 9.7%
NET ABSORPTION
+545,110 SF

RENTAL RATES
DOWN - Averaging $13.85

CAP RATES
DOWN - Averaging 7.95%
To view our available properties,
please visit our Property Search
page online:
www.cpiaz.com/PropertySearch.asp
TRANSACTIONS
Commercial Properties Incorporated completed 32 Retail transactions for a total of 107,244
square feet in first quarter 2015. The top Commercial Properties Incorporated Retail transactions
for the first quarter were a 20,640 square foot sale at 11541 W Bell Road, for $1.375 million in
Surprise, AZ, and a 12,613 square foot sale at 4522-4530 N 7th St., for $1.35 million in Phoenix, AZ.
VACANCY RATE
The Phoenix Retail market ended first quarter 2015 vacancy rate decreased slightly to 9.7%
compared to fourth quarter’s previously reported rate 9.8%. The first quarter 2015 net absorption
was positive 545,110 square feet. Absorption is down compared to the fourth quarter’s 2014
net absorption which was previously a positive 745,818 square feet. The General Retail sector,
which is categorized as freestanding retail that is not in a center, had a vacancy rate of 5.9%
at the end of first quarter 2014.
The total sublease space for first quarter 2015 has decreased in Phoenix as shown by the
657,229 square feet currently available, in comparison to the 739,658 square feet of vacant
sublease space previously reported for fourth quarter 2014. The figures above include buildings
that are owner occupied as well, which affects the actual vacancy numbers. Check with your
CPI broker for an accurate representation of the vacancy rates in the submarket around your
properties.
RENTAL RATES
Average Retail rental rates ended the first quarter 2015 down slightly to $13.85 per square foot,
from the $13.87 per square foot previously quoted for fourth quarter 2014. This represents a
0.144% decrease in the average Retail rental rates.
CONSTRUCTION
548,729 square feet were reported as still being under construction at the end of first quarter
2015 in the Retail sector up from the 427,089 square feet previously reported as under
construction in fourth quarter 2014.
INVENTORY
The Phoenix Retail inventory currently consists of 13,373 buildings, and 1,951 centers that
make up the 217,289,781 square feet of total Retail inventory in Phoenix at the end of first
quarter 2015.
PHOENIX MARKET - TOP SALES PER SECTOR
Q1 2015 SELECT TRANSACTIONS
INDUSTRIAL PROPERTIES
Roosevelt Center
ProLogis Park Riverside - Bldg 2
Mack Arrowhead Industrial Park
TEMPE
Price: $26,449,349
Price/SF: $74.43
Cap Rate: N/A
RBA: 355,371
Date: 10/15/2014
Year Built: 1982
Buyer: DTC Industrial Trust
Seller: Deutsche Asset & Wealth Management
PHOENIX
Price: $24,250,000
Price/SF: $49.87
Cap Rate: N/A
RBA: 486,241
Date: 12/31/2014
Year Built: 2013
Buyer: Exeter Property Group
Seller: ProLogis
PEORIA
Price: $18,275,000
Price/SF: $82.95
Cap Rate: N/A
RBA: 220,324
Date: 11/14/2014
Year Built: 2008
Buyer: First Industrial Realty Trust, Inc.
Seller: The Mack Company
University of Phoenix HQ
Freeport-McMoRan Tower
Camelback Esplanade III
PHOENIX
Price: $183,000,000
Price/SF: $305.17
Cap Rate: 7.1%
RBA: 599,664
Date: 2/24/2015
Year Built: 2008
Buyer: EPIC, LLC
Seller: American Realty Capital Properties, Inc.
PHOENIX
Price: $110,000,000
Price/SF: $441.75
Cap Rate: 6.8%
RBA: 249,012
Date: 11/6/2014
Year Built: 2010
Buyer: American Realty Capital Properties, Inc.
Seller: National Real Estate Advisors
PHOENIX
Price: $74,300,000
Price/SF: $340.41
Cap Rate: N/A
RBA: 218,266
Date: 3/11/2015
Year Built: 1997
Buyer: Crow Holdings Capital Partners, LLC
Seller: AEW Captal Management
Promenade & Fulton Ranch Ctr.
The Cornerstone
Kyrene Village
CHANDLER
Price: $47,850,000
Price/SF: $225.52
Cap Rate: 7.5%
RBA: 212,173
Date: 11/5/2014
Year Built: 2008
Buyer: Whitestone REIT
Seller: RED Development
TEMPE
Price: $28,556,152
Price/SF: $243.78
Cap Rate: 6%
RBA: 117,140
Date: 12/2/2014
Year Built: N/A
Buyer: YAM Properties
Seller: ACF Property Management, Inc.
CHANDLER
Price: $18,550,000
Price/SF: $115.09
Cap Rate: 6.32%
RBA: 161,174
Date: 11/26/2014
Year Built: 1987
Buyer: Kyrene Shopping Center LLC
Seller: Arizona Partners Retail Investment Group LLC
OFFICE PROPERTIES
RETAIL PROPERTIES
Data provided by Costar.com