Archives For August 2013

The development firm that owns and operates Fountain Hills Plaza might provide insight to the town in aggressively recruiting retailers to the community.

In the last four years since The Pederson Group invested $23 million in renovating the center, a handful of national retailers have moved into Fountain Hills Plaza, according to Jim Pederson, president.

Rebounding economy attracts retailers

General Nutrition Center, Verizon Wireless, Little Caesar’s Pizza and H&R
Block, Inc., all nationally recognized businesses, opened stores in the shopping center at the corner of Palisades Boulevard and La Montana Drive. Bank of America also built an ATM location.

The challenging retail environment forced Fountain Hills Plaza to re-invent itself, said Pederson.

The Pederson Group, owners and developers of the center, recognized that the center had to adapt to meet community shopping needs.

“Over the years, the trade area has certainly undergone a transformation because of its growth, and we have carefully taken into consideration what our tenants and retailers have expressed to create a high-quality shopping experience,” said Pederson.

When shopping centers in older parts of a community become antiquated and deteriorate, the entire trade area is impacted, explained Pederson.

“In the case of Fountain Hills Plaza, we recognized the fact that creating a ‘new Bashas’ shopping experience, combined with the expansion of the center’s Paul’s ACE Hardware and the attraction of some well-known national tenants, would help revitalize the center and contribute to the community’s economic vitality,” said Pederson.

After completing the renovation project in the summer of 2009, the developer embarked on an aggressive campaign to attract national tenants that would complement the center’s tenant mix and provide “new reason to frequent the center,” said Pederson.

A temporary setback happened when the nation’s economy softened and “our efforts to attract national retailers at the center were slowed quite a bit,” said Pederson.

The center is now 92 percent leased.

“What once was a center comprised of primarily locally-owned businesses is now a center that incorporates a blend of highly successful local merchants and some of the country’s most recognizable brands,” said Pederson.

Originally constructed in 1986, the 124,500 square-foot center also is home to locally-owned businesses with national presence, such as Paul’s ACE Hardware, Great Clips and Radio Shack.

“We take great pride in what we have achieved at Fountain Hills Plaza,” commented Pederson.

The Fountain Hills Times / August 7, 2013

DOWNTURN TO UPTURN

August 6, 2013 — Leave a comment

Jim Pederson, August, 2013

The longest economic expansion in modern Arizona history occurred from the early 1990’s until 2007. Great fortunes were made in the real estate profession; however, as with most economic expansions, many participants in our industry became careless. Whether it was loan underwriting or compromising on the product that we delivered to the public, the end result of this carelessness produced a sudden slamming of the door that resulted in the essential shutdown of our industry. This resulted in business failures and many abandoning real estate and even Arizona to make a living in another pursuit.

ECONOMY


To construct a business plan for the next several years we can take lessons from the recent downturn, as well as the recession that was experienced in the late 80’s and
early 90’s. At that time, our economists were predicting that recovery was years away and writing business plans should involve a very conservative approach. Contrary to these predictions, Arizona’s economy rebounded quickly and outpaced the rate of growth in almost all states including California. The Resolution Trust Corporation was pushing non-producing product out into the market which quickly cleaned the slate by ratcheting down values to reflect market.

The real estate professionals who were assertive during the start of the early 90’s recovery were the ones that profited most from the turnaround. Those individuals spent their time during the slow times to hone their skills and increase their knowledge of the trade area in which they worked. They were positioned well to take advantage of the upturn and quickly distanced themselves from the competition. If we look at any economic cycle it
compares to a bell curve; the most profitable undertakings occur during the first 25% of that curve. Once at the top, everyone jumps back in and the inevitable downturn
in the curve occurs.

The common thread of success, no matter what stage of the cycle, is serving the needs of our ultimate client. Our company develops shopping centers. Therefore, our ultimate client is the retail tenant. The needs of our retailing clients change quickly and our responsibility is to provide the product and complete knowledge of our trade area to serve that client well.

There will be many opportunities presented during the next two to three years in the greater Phoenix area. Those of us prepared with the right skills and the right attitude
will emerge the winners when we arrive at the top of the cycle. Join me and several other experts on August 23rd at the Arizona School of Real Estate & Business from 9:00 am – 1:00 pm discussing trends, possibilities and opportunities in commercial real estate.