Commercial Real Estate Weekly 5.2.18

The Annual Real Estate Magazine magazine, sent out in the April 27 Business Record and available now, contains stories on five segments of the real estate market, trends to watch in 2018 and beyond, market facts, featured property listings, and the top commercial deals of the past year.

To prepare the content, the Business Record hosted five video roundtables, each featuring experts from different segments of real estate and development in Greater Des Moines: office, retail, industrial, residential and land.

Senior Staff Writer Kent Darr then wrote summaries of each discussion and put together Q&A-style stories for the new magazine.

In addition to having received the print version on April 27, all Business Record members have online access to the full magazine and the full videos from all five roundtables.

If you are not a member and are interested in purchasing a copy, please contact our circulation team at circulation@bpcdm.com or call (515) 288-3336. For immediate online access, sign up to become a Business Record Insider today.

To learn more about the magazine, go to www.businessrecord.com/AREM.

Free preview: Retail roundtable

While the full magazine is only available to Business Record members, we wanted to share with all our readers our roundtable discussion on the retail market. Our panel of experts consisted of Tim Leach, Downtown Community Alliance, Greater Des Moines Partnership; Tyler Dingel, senior vice president, CBRE|Hubbell Commercial; Jake Christensen, president, Christensen Development; and Christopher Stafford, senior vice president, Cushman & Wakefield Iowa Commercial Advisors. Among other things, we learned how retail is making its way to the "corporate side" of the Des Moines River; how the East Village is changing; the effect of e-commerce on the industry; and how the real key to retail is making it an experience.
Read the full story

Creating a neighborhood at former Maytag campus
By Kent Darr | Senior Staff Writer

Just a couple of blocks from Newton’s historic downtown stands a neighborhood in waiting in the form of the former Maytag corporate campus.

Maytag has been out of the picture in Newton for a little more than a decade, but pieces of its past — washing machines, a test kitchen, a large conference table fashioned from Iowa walnut still in place in an abandoned boardroom — remain.

The corporate campus, hulking office and manufacturing buildings, and two eye-appealing brick buildings sitting side by side where the company had its origins make up the neighborhood.

Des Moines Area Community College acquired the campus in 2016. The property was a gift from Reza Kargarzadeh, a Grinnell businessman, who picked up the property after it lost its corporate occupants, first Maytag, then Iowa Telecom.

At one time, the campus hosted 2,000 Maytag employees, not to mention dedicated sales people who learned how the company’s range of household appliances functioned and then learned to pitch them in a training room more reminiscent of a local theater, complete with a stage and projection room.

These days, DMACC is relying on Keller Williams Commercial to market the property and relying in no little part on Kim Didier, the college’s executive director of business resources, to provide the context and suggest future uses for the campus.

Didier is a premier tour guide. She is a former Newton city administrator who later worked as director of training and director of call centers for Maytag. She can point out a corridor that served as an escape route when a former CEO didn’t want to meet visitors. She can suggest uses — event catering, a brew pub, maybe a restaurant — for the first two structures erected on the campus. And she can envision the future.

DMACC is encouraging a mixed-use community made up of market-rate housing, retail shops, and a cluster of businesses connected by a courtyard that can be used for neighborhood and citywide events.

The campus offers the full package.

Retail spaces are available in chunks of 500 to 15,000 square feet; office spaces from 500 to 350,000 square feet; and flex space from 500 up to 54,000 square feet. There are rooms with a view to the city and others with a view to the past, all timbered beams and scrubbed brick.

Brad Long, commercial team leader for KW Commercial, said DMACC is flexible on gross leases and willing to work out tenant improvement budgets for the "right" users. Gross rents for a year are advertised at $7 to $10 per square foot.

"If it meets our strategic objectives for what we want for this campus, we are open to all kinds of conversations," Didier said.

Housing developers have shown interest in converting some of the large spaces to apartments. In addition, "several deals are in the works" for potential commercial tenants, said Carrie Williams, associate director at KW Commercial.

The hope is that some of the commercial tenants will provide internships and other educational opportunities for DMACC students.

Development of the campus, which is being marketed as Legacy Plaza, would be another step forward in Newton’s recovery from the collapse of Maytag.

When the company shuttered operations in the second quarter of 2007, 1,750 jobs were lost. By 2009, the city’s unemployment rate was 9.9 percent, said Frank Liebl, executive director of the Newton Development Corp.

Since those days, 12 new companies have come to town and 2,000 jobs have been created. The unemployment rate is hovering around 3 percent.

Last year the city platted more building lots than in the previous 12 years combined, and 10 builders are at work on spec homes, some that have sold before they were completed.

BY KENT DARR: Business Record photographer Duane Tinkey’s cover photo for this year’s Annual Real Estate Magazine has some history behind it, and why not, given that it is a view of the entrance to the Bridge District, a mixture of apartments and for-sale townhomes developed by Hubbell Realty Co., a firm that traces its roots in real estate to 1856.

We here at the Business Record like the view, sweeping to the skyline from the steel frame of a 1920s Boone County bridge. Just a few years ago, the view wasn’t quite so dramatic. Hubbell bought the roughly 16 acres that make up the Bridge District from Principal Financial Group, which owned buildings that housed warehouses and small business.

The Bridge District is on the east bank of the Des Moines River, almost at the foot of the Iowa Women of Achievement Bridge on the Principal Riverwalk. Hubbell wanted a special piece of artwork to adorn a park at the entrance to the Bridge District, and landscape architect and urban designer Dennis Reynolds found it in the form of a pony truss bridge that was going to be torn down in northeast Boone County.

The bridge was removed and reassembled in the Bridge District. Business Record columnist Dave Elbert interviewed Reynolds about the project.

"Reynolds’ idea was to create that unique piece of art, which he calls ‘Bridges,’ from a much older bridge and to tweak its design to create a contrast to the Riverwalk’s ultra-modern Women of Achievement Bridge. The perfect foil, he decided, would be an early 20th-century Iowa pony truss bridge. Pony truss bridges are small structures without cross bracing on the top that were used throughout rural Iowa in the early 1900s to help bring farm produce to market. Together with the high-tech, high-arched bridge, the old bridge will help span the history of the Des Moines River as a centerpiece of the city for more than 150 years."

THE INSIDER NOTEBOOK
Development tips from a lawbreaker

BY PERRY BEEMAN: A whole bunch of organizations got together with the Des Moines Area Metropolitan Planning Organization to bring lawbreaking, big-thinking, cancer-surviving Jason Roberts to the atrium of the Historical Building for a noon presentation recently. He’s a funny, thoughtful guy whose Better Block Foundation started on a bit of a whim and now is international, with operations from Tehran, Iran, to Melbourne, Australia. Read more

MORE NOTEBOOK ITEMS: Read more Insider bits and bites of the finer side of Iowa business online.

LOCAL NEWS

ICREA meeting will focus on Des Moines airport
Kevin Foley, executive director of the Des Moines International Airport, will give an update on recent operational changes and future development of the airport terminal and airfield when the Iowa Commercial Real Estate Association meets at 7:15 a.m. Thursday at Des Moines Golf and Country Club. The meeting is open to anyone with an interest in commercial real estate. The fee is $10 with reservations or $15 at the door. The meeting features networking opportunities and a hot buffet breakfast. Register here or contact Sue Clark at 222-3191, ext. 201, or seclark@ccim.net.

Add your vision for the Des Moines Market District
The city of Des Moines wants the public to participate in a redevelopment study for the Market District of the East Village. The study and subsequent master plan will mix residential, commercial, retail and civic land uses, while emphasizing improved mobility for pedestrians, bikes and vehicles, including a focus on sustainable development practices, according to a release. A "public vision workshop" is scheduled for 5:30 p.m. May 8 at the Richard A. Clark Municipal Services Building, 1551 E. Martin Luther King Jr. Parkway. More information is at marketdistrictdsm.com.

Kruse earns CCIM designation
Harrison Kruse of CBRE|Hubbell Commercial has earned the Certified Commercial Investment Member (CCIM) designation by the CCIM Institute, one of the leading commercial real estate associations in the world. The CCIM designation is awarded to commercial real estate professionals upon successful completion of a graduate-level education curriculum centered around investment and market analysis as well as the compilation of a portfolio of qualifying industry experience. Kruse’s portfolio includes leasing activities in all asset categories, and he has proved to be proficient in net leased investment sales, completing over $14 million in sales volume throughout the Midwest, according to a release.

Kaduce earns SIOR designation
Adam Kaduce, vice president of R&R Real Estate Advisors, has qualified for the SIOR designation from the Society of Industrial and Office Realtors. "The requirements for attaining a designation are rigorous," Mark Rupprecht, president of R&R Realty Group, said in a release. "It tells clients, ‘you are working with the best of the best.’ " Kaduce completed commercial brokerage coursework during his candidacy for SIOR Office Designation and has successfully leased in all areas of the company’s 6.9 million-square-foot portfolio. Kaduce was recently recognized by the Real Estate Forum’s Fifty under Forty and was R&R’s 2017 top producer for office space in 2017, according to a release.

People’s Choice winners
The American Institute of Architects Iowa Chapter tallied 125,000 votes in its third People’s Choice Award competition among projects designed by Iowa architects. Finishing first, second and third were the Southeastern Community College Health Professions Center by DLR Group, Prairie Ridge Integrated Behavioral Healthcare by Accord Architecture, and the Storm Lake High School addition and renovation by DLR Group. Twenty-eight projects were submitted for consideration, including many schools and public buildings. Voter participation was high. Last year the competition collected 41,000 votes. The winning projects can be found on IowaArchitecture.org.

Madison will lead business development for Primus office in Greater Des Moines
Veteran Greater Des Moines construction executive Shane Madison will spearhead business development efforts for Cedar Rapids-based Primus Cos., which recently opened a Greater Des Moines office at 6165 N.W. 86th St. in Johnston. Mark Severino will continue to lead field supervision efforts in Central Iowa. Primus is a design/build firm with two licensed architects, an interior designer and five other professionals on its design staff. The 46-year-old firm built over 500 dental offices across a nine-state region with a presence in Cedar Rapids, Minneapolis, Omaha, the Kansas City area, Nashville and Des Moines. It focuses on multiple markets including medical, warehouse, manufacturing and general commercial.

Hotel Grinnell owner recognized by rural development group
Angela Harrington received Iowa Rural Development Council's Impact on Place honor for her work developing Hotel Grinnell, a converted 97-year-old junior high school in the city, according to a release. The school's former classrooms now feature upscale hotel rooms with soaring windows, vaulted ceilings and hardwood floors. The locker room houses the bar and outdoor patio. The old school gym and historic theater are wedding, conference/meeting and entertainment venues.

Partnership ranks among nation’s top development organizations, magazine says
The Greater Des Moines Partnership ranks among the top 15 local and regional development groups in the country, according to Site Selection magazine. The Partnership was among the development groups that received the publication’s Mac Conway Award for Excellence in Economic Development, an award that is named after Site Selection’s founder, H. McKinley "Mac" Conway. "Those appearing on these rankings have demonstrated with actual project numbers and other measures that they have the location attributes most in demand by capital investors," Site Selection Editor in Chief Mark Arend said in a release. Iowa dropped to ninth place from eighth in the magazine’s Prosperity Cup rankings, which are based on the "most competitive state-level economic development groups."

For the first time, a Ryan will not lead Ryan Cos.
Pat Ryan, grandson of the founder of 80-year-old Ryan Cos. US Inc., will step down June 1 as president and CEO of the Minneapolis-based developer, following a succession plan that includes the promotion of Iowa State University graduate and company co-owner Jeff Smith to president, according to a release. Ryan Cos. is a major player in development projects in Greater Des Moines and across Iowa. Pat Ryan will be chairman of the company’s board of directors. Bryan Murray has been named CEO. Along with Smith and another owner, Mike McElroy, he has helped lead the company’s day-to-day operations for the last five years, according to the release. McElroy will be the company’s chief investment officer. Tim Gray, who currently chairs the company’s board of directors, will assume the title of chairman emeritus. Murray joined the company in 2009, and is currently the chief operating officer and chief financial officer leading Ryan’s construction operations and shared services functions. Smith has been with the company for nearly 32 years and is currently the national president, overseeing 15 regional offices and leading client development efforts. McElroy is currently president of real estate investments, leading real estate management and capital markets groups and has been with the company nearly 20 years. Smith is a Bettendorf native who graduated from Iowa State in 1983 with a degree in construction engineering.

NOTABLE TRANSACTIONS

Ryan Cos. US Inc. paid $2.9 million on April 9 to First Assembly of God Church for 34 acres at 9301 Northpark Drive in Urbandale, where it will build a new $32.6 million technology center for Deere & Co.’s Intelligent Solution Group. Ryan also has a right of first refusal on other property First Assembly of God Church owns in the Northpark Business Centre.

Ram Lodging LLC paid $2.9 million on April 18 to PIDI Investments LLC for the Econo Lodge hotel at 4743 Merle Hay Road, Des Moines.

Veridian Credit Union paid $1.4 million on April 27 to Alices LC for 1.7 acres at 655 E. Hickman Road, Waukee. Alices LC is made up of Farm Bureau Life Insurance Co., William C. Knapp LC and JSC Properties Inc.

NATIONAL/REGIONAL NEWS

May the experience be with you
Developers should think beyond brick-and-mortar and aesthetics of the property to reach their audience, investors or guests at an experiential level, National Real Estate Investor reported. Up until now, branding considerations in property design have taken a backseat in terms of developers’ top priorities, but they will become increasingly important as the experience economy continues to mature.

Green building certifications rising in international property markets
According to the inaugural International Green Building Adoption Index -- a study by CBRE and Maastricht University in the Netherlands -- major metropolitan office markets across the globe are seeing a significant increase in the adoption of "green" building certification programs, World Property Journal reported. The study reports that 18.6 percent of space in 10 markets across Australia, Canada and Europe is now certified "green," versus just 6.4 percent in 2007. Canadian cities set the pace, with 51.6 percent of the space in Vancouver and 51.0 percent in Toronto holding "green" certifications.

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