News
Acquisition and Investment
Nov/24/2004

Crown West in growth mode

Spokane company gobbles up properties in Phoenix, plans new buildings here



By Linn Parish
Spokane Journal of Business



Crown West Realty LLC, the Spokane-based owner of the big Spokane Business & Industrial Park, is on an aggressive building-acquisition spree in Phoenix, having been involved with two recent purchases there worth more than $80 million, including one earlier this month.



Those acquisitions, made through a joint venture, bring to six the number of Phoenix-area properties—together worth more than $160 million—that Crown West has acquired in less than three years. And more activity in Phoenix likely is on the horizon, says Crown West President Richard Rollnick.



Meanwhile, Rollnick says, the company plans next year to build four new buildings, with a combined more than 90,000 square feet of floor space, in its sprawling business and industrial park at 3808 N. Sullivan here.



“We will continue to bring properties on line there,” Rollnick says. “We think the Spokane economic environment has improved markedly.”



Dean Stuart, Crown West’s director of marketing, says design work on the new structures will be completed yet this year. Weather permitting, Crown West will start construction in March and will complete them next July. He says cost estimates aren’t available yet.



In late 2001, when Crown West disclosed plans to build its newest structure, the company said it would cost $3.6 million, or $45 a square foot, to develop that 80,000-square-foot structure. At that rate, the company would spend more than $4 million to develop the four new structures.



Crown West currently is demolishing two older office buildings at the northern end of the park, two blocks east of the complex’s main northern entrance, to make way for construction of three of the planned new structures, each with 20,000 square feet of office and warehouse space.



Many of the buildings that comprise the 67-building, 545-acre industrial park were constructed as part of a U.S. Naval supply depot several decades ago.



The fourth planned new structure will be built along Euclid Avenue, at the south end of the park, Stuart says. That structure will include 33,000 square feet of office and warehouse space and will be located just west of the last structure Crown West built, an 80,000-square-foot building that outdoor electronics-cabinet maker Purcell Systems Inc. plans to move into next February. The new building will be similar in design to the building that Purcell has leased.

In Phoenix

In Phoenix, joint ventures that Crown West manages have bought two properties in the last four months.

Earlier this month, a joint venture between Crown West and St. Paul Properties, of St. Paul, acquired for about $32.5 million the nine-story, 235,000-square-foot Camelback Center, in a Phoenix financial district.

The property currently is only 40 percent occupied, and Crown West plans to make $8 million in upgrades to boost the office building’s appeal and attract more tenants, Rollnick says.

“Camelback Center has underperformed over the last three years due primarily to unfavorable market dynamics and poorly defined leasing strategies by previous ownership,” he says.

Crown West plans to market part of the building as smaller office suites of between 1,500 square feet and 5,000 square feet of office space each on lower floors, and large chunks of space on upper floors.

Current tenants in that building include offices of Principal Financial Group and CNA Insurance, among others.

That transaction follows one that another joint venture between Crown West and St. Paul Properties reported in August. That month, the company bought the Arizona Business Park, in northern Phoenix, for about $52 million. That property includes 10 buildings with a total of 440,000 square feet of floor space, and currently is fully occupied.

The headquarters for Bank One Corp. currently is located there, as are operations for Wells Fargo Bank, the Arizona Conservatory for the Arts and Academics, and a number of other tenants.

Rollnick says Crown West plans to continue buying properties in the Phoenix area as a key part of its growth strategy.

“This is a very dynamic market,” he says. “It has growth in just about every direction. You’ve got a huge labor pool, great infrastructure, and a lot of companies locating (in the Phoenix area).”

Formed in 1996, Crown West has offices in Phoenix and New York City in addition to its headquarters here. The company currently owns and manages about 7.2 million square feet of industrial and business properties along with 600 acres of land.

Of that, about 4.2 million square feet of floor space is in the Spokane Business & Industrial Park.

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Acquisition and Investment
Nov/08/2004

Crown West Realty Acquires Class A Office Building in Prestigious Location

PHOENIX - Crown West Realty has recently completed their second joint-venture acquisition with St. Paul Properties, a wholly-owned subsidiary of St. Paul Travelers. This purchase, Crown West's sixth in the Phoenix area, boosts their total portfolio size to approximately 1.2 million square feet in the Phoenix market.

The 235,000 square foot Class "A" office building was purchased from Artemis Fortis, LLC for just under $32.5 million. Constructed in 2001, Cambelback Center has nine stories of impressive Class "A" office space with four levels of subterranean parking, and is located in the heart of one of Phoenix's most prestigious office and condominium markets at 2355 East Camelback Road. Neighbors include The Biltmore Fashion Park, Camelback Esplanade, the Ritz Carlton, and historical Biltmore Estates. Camelback Center currently has a 40% occupancy rate which includes CNA Insurance, Principal Financial Group, and several other noteworthy tenants. "Crown West plans to add many new amenities including interior and exterior enhancements which will significantly improve its identity as a premiere office location," states Bob Olshan, Vice President of Crown West Realty.

Richard Rollnick, President of Crown West Realty remarks, "We're very fortunate to add such a well-located, high-quality, 24th and Camelback asset to our portfolio. Camelback Center has underperformed over the last three years due primarily to unfavorable market dynamics and poorly defined leasing strategies by previous ownership. Crown West will provide the market with premiere 1,500 to 5,000 square foot turn-key suites, as well as sizeable amounts of contiguous space, up to 60,000 square feet, on upper floors"

Crown West Realty continues to look for investment opportunities in the Phoenix area which according to Bob Olshan is Crown West's ideal market. "The dynamic business environment and diverse real estate opportunities are well-suited to our investment goals. We will continue to aggressively seek additional properties and hope to add four to six properties to our portfolio in 2005."

Crown West Realty, formed in 1996, is a privately-owned real estate investment, development and management firm with executive offices in Phoenix and New York City and administrative headquarters in Spokane, Washington. Crown West owns and manages nearly seven million square feet of leased office and industrial properties along with a significant amount of prime undeveloped industrial land.

Parties interested in leasing information or acquisitions should contact Richard Rollnick or Bob Olshan at (602) 288-3836.

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Leasing and Development
Sep/02/2004

Lloyd Industries moves to industrial park space

Manufacturer of pizza and bakery equipment seeking to consolidate and expand

By Andrea Worley
JOURNAL OF BUSINESS

Lloyd Industries Inc., of Spokane, plans to move its two plants here and consolidate them into one much larger facility at the Spokane Business & Industrial Park.

The pizza and bakery equipment manufacturer will move out of its two facilities at 2825 N. Hogan and 3808 E. Queen, both located on Spokane’s North Side. Together, the two buildings have a total of 18,000 square feet of floor space, while the new facility will have 40,000 square feet of space, says John Crow, company president. Crow expects that the company will make the move in the next couple of weeks.

Besides consolidating the company, the move is being made to allow it to grow and expand, Crow says. He says it’s difficult running two facilities located three miles apart. The business has operated at the Hogan location for five years and at the Queen location for three years.

After the move, Crow hopes the company’s current $3 million in annual revenues will jump 30 percent to 40 percent a year over the next four or five years. The move also will allow the manufacturer to add another production shift. In addition to the current day shift, Crow plans to add a night shift, and add five to 10 employees in all to its staff of 25. The new hires will include a Web designer, machine programmer, production planner, and more machine operators for the night shift.

The company makes baking equipment, including pizza pans, pizza cutters and knives, pans for cheesecakes and desserts, and other baking tools and pizza utensils, for pizza restaurants and commercial bakeries. Among its clients are Pizza Hut, Domino’s, Papa John’s, and large commercial cheesecake manufacturers, Crow says.

“Every Domino’s in the world has some of our stuff,” he says.

Lloyd Industries also makes equipment for the cafes located in Wal-Mart, Sam’s Club, and Costco stores, Crow says, and operates two e-commerce Web sites: www.pizzatools.com and www.bakingtools.com.

Crow says the company sells its products worldwide, including to about 45 of the top 100 pizza franchises, as well as to about 7,000 independent restaurants.

Lloyd Industries, owned by Crow and his son, Rob Crow, was established in 1986 in the San Diego area, and moved to Spokane in 1993.

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Leasing and Development
Aug/19/2004

New specialized lumber maker to start up here

Company expects to begin operation in October, ramp up quickly to 35 employees

By Linn Parish
JOURNAL OF BUSINESS

A Seattle contractor plans to start a specialized lumber-making company in Spokane this fall that he projects will employ 35 people here by early next year.

The contractor, Spokane native David Thompson, has leased 40,000 square feet of warehouse space in the Spokane Business & Industrial Park, at 3808 N. Sullivan, for the operation and expects that the company, Timberlake Forest Products Inc., will begin production this October.

Thompson, who is president and part-owner of Timberlake, says the company has four employees who currently are setting up the plant. He expects to have 20 employees upon starting production and 35 workers within three months of operation.

The company has invested about $800,000 in machinery for the plant thus far, he says.

Timberlake Forest Products will make what’s known as finger-jointed framing lumber. To produce it, the company will buy scrap lumber from Northwest lumber mills and run the boards through a finger-jointing machine, which will put sets of grooves at each end of the boards so that they can be fit together snugly. The interlocking boards then will be glued together to make 8-foot-long to 12-foot-long lumber.

“We’re kind of a green company, because we’re putting scrap to good use,” Thompson says.

Timberlake plans to sell its products to wholesale lumber companies throughout the western U.S., with specific emphasis on the Southwest, Thompson says. He contends finger-jointed lumber is especially popular in Arizona and neighboring states, because it doesn’t twist and bow in extreme heat as conventional lumber can.

Thompson has worked in Seattle as a residential contractor for 13 years, building mainly single-family homes and townhouses.

He plans to stop working as a contractor soon and to move back to Spokane to oversee Timberlake.

He owns Timberlake with a silent partner who lives in the Seattle area.

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Acquisition and Investment
Aug/19/2004

Venture buys park in Arizona

Crown West, partner buy Phoenix office complex in $52 million transaction

By Linn Parish
JOURNAL OF BUSINESS

A joint venture involving Crown West Realty LLC, the Spokane-based real estate company that owns the large Spokane Business & Industrial Park, has bought for just under $52 million the Arizona Business Park, in Phoenix.

Located in northern Phoenix, the property includes 10 buildings with a total of 440,000 square feet of floor space. The acquisition is the largest that Crown West has been involved in to date, the company says.

The complex currently is fully occupied.

It’s home to the 106,000-square-foot corporate headquarters of Bank One Corp. and also accommodates operations for Wells Fargo Bank, the Arizona Conservatory for the Arts and Academics, and a number of other tenants, Crown West says.

The joint venture, called CWSP LLC, is owned by Crown West and St. Paul Properties, a wholly-owned subsidiary of St. Paul Travelers. Crown West is the joint venture’s managing partner.

The acquisition is Crown West’s fifth purchase in the Phoenix market in less than three years and brings the value of the company’s portfolio there to more than $130 million.

Crown West President Richard Rollnick says the business expansion and population increases in the Phoenix area make the Arizona city a desirable location for Crown West to buy more properties.

“It is our intent to acquire several more quality projects yet this year,” he says.

Formed in 1996, Crown West has offices in Phoenix and New York City in addition to its headquarters here. The company currently owns and manages nearly 7 million square feet of industrial and business properties along with 600 acres of industrial and commercial land.

The Spokane Business & Industrial Park, at 3808 N. Sullivan, includes 67 buildings on 545 acres of land with a total of 4.2 million square feet of floor space.

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Acquisition and Investment
Aug/04/2004

Crown West Realty Announces $52 Million Acquisition; Nearing 1 Million Square Feet in the Phoenix Market

PHOENIX - Announcing today its purchase of the Arizona Business Park, Crown West Realty's commercial holdings now near one million square feet in the greater Phoenix area. This purchase, Crown West's largest to date, is their fifth Phoenix-area acquisition in less than three years and brings the value of their Phoenix portfolio to over $130 million. In addition, this transaction marks Crown West's first acquisition with institutional joint-venture partner St. Paul Properties, a wholly-owned subsidiary of St. Paul Travelers.

Crown West purchased a 10-building portfolio totaling 440,000 square feet within the Arizona Business Park from Estes-Samuelson, LLC, for just under $52 Million. Arizona Business Park is located between Bell and Greenway Roads west of Interstate 17 in the Black Canyon / Deer Valley submarket. Construction on this Class A office and flex-office business park originally began in 1986 with the remainder of the buildings added periodically through 1999. The latest addition was the Class A, 106,000 square foot corporateheadquarter building currently leased by Bank One, which is, perhaps, the most prominent building in its submarket. Other tenants in the fully-leased Arizona Business Park portfolio include Wells Fargo, TriWest Healthcare, Hypercom Corporation, NCS Pearson and Arizona Conservatory for the Arts and Academics.

"Arizona Business Park is ideal for our portfolio; it's centrally located and has strong, highprofile tenants. The property's proximity to both I-17 and the Loop 101, as well as its access to the area's abundant amenities, housing and diverse labor pool, creates an appeal unlike that of business parks in other Phoenix submarkets. In addition to the satisfaction that comes with acquiring a portfolio of this quality, we've realized an opportunity to enter into a relationship with St. Paul Properties, an organization that has tremendous integrity and real estate investment sophistication," states Bob Olshan, Vice President of Crown West Realty.

Crown West began its buying spree in the Phoenix area in December of 2001 with the purchase of the Elliot Corporate Center. Other acquisitions over the past two and a half years include the Southbank Business Park, Lakeview Business Center, Broadway Court, and now, the Arizona Business Park. Richard Rollnick, President of Crown West explains, "The overall strength and diversity of the Phoenix market, fueled by business expansion and population increases, make Phoenix one of our prime markets for continued portfolio growth. It is our intent to acquire several more quality projects yet this year."

While Crown West has shown a knack for taking underperforming properties, implementing remedial strategies and dramatically improving value, the firm also pursues stabilized properties and is active in build-to-suit and speculative industrial and office projects.

Crown West Realty, formed in 1996, is a privately-owned real estate investment, development and management firm with administrative headquarters in Spokane, Wash., and executive offices in Phoenix and New York City. Crown West owns and manages nearly seven million square feet of leased industrial and business properties along with 600 acres of zoned industrial and commercial land.

Parties interested in leasing information or acquisitions should contact Richard Rollnick or Bob Olshan at (602) 288-3836.

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Leasing and Development
Jul/31/2004

Purcell to move to industrial park

More manufacturing space needed; doubled sales three straight years

Associated Press
July 31, 2004

Purcell Systems Inc. of Liberty Lake will move its offices and manufacturing group to a new building at the Spokane Industrial Park, the company announced this week.

The move is prompted by the company's rapid growth in selling its line of customized backup power cabinets, used primarily by wireless data and voice carriers, such as Verizon or T-Mobile. The privately held company has doubled its revenue the past three years, company officials have said.

Crown West Realty L.L.C., which operates the industrial park, signed a 10-year lease for an 81,300-square-foot building for Purcell Systems.

The need for more manufacturing space was the key driver behind the move, said company spokesman Jason Higginson.

The new building is currently an empty shell. About $1 million will be invested to renovate and upgrade the building before the move, expected in October.

Earlier this year, Purcell Systems CEO Pete Chase announced the company received $16.6 million in venture-capital funding, primarily to expand sales. That amount is the second-largest VC investment this year in Washington state. That investment came from Weston Presidio, based in San Francisco.

"We are currently experiencing three straight years of doubling our sales," said Higginson. "We're under pressure to make some adjustments to how we operate our manufacturing operation," he said.

The company has about 70 area workers and has about 70 temporary employees.

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Leasing and Development
Jul/28/2004

Valley industrial park to add two tenants

Timberlake Forests Products, Book and Game Co. commit

Alison Boggs
Staff writer, Spokesman Review
July 28, 2004

Two new tenants will move into the Spokane Business and Industrial Park in Spokane Valley this fall, occupying a total of 50,000 square feet and creating about 40 new jobs.

Timberlake Forest Products will move into 40,000 square feet in October, hiring about 36 people, said company owner David Thompson. And the Book and Game Co., which operates Uncle's games shops, will lease space for its warehouse and on-line operations in September, moving from the basement of the Liberty Building in downtown Spokane. Company President Hans Isaacson said the expansion likely will result in five new hires.

Timberlake hopes to be fully operational by October, making finger-jointed studs for the residential housing market, said Thompson, who graduated from Ferris High School and Washington State University, then moved to Seattle to work in general contracting.

"I was born and raised in Spokane and I'm tired of Seattle," said Thompson, who is moving back after 14 years to start the new business.

Finger-jointed studs are made by purchasing the shorter pieces of wood discarded by lumber mills and gluing them together to make standard-length 2-by-4s or 2-by-6s. Thompson said the process is a way of conserving wood that's extremely popular in other parts of the country, including Seattle. When the resulting studs are pressure-tested, Thompson said, the wood breaks before the joints do.

"It's much stronger than the actual wood itself," said Thompson, who anticipates hiring 36 or 37 people in the $8-$16 per hour range. He said he'll be looking for industrial and manufacturing positions, plant workers and trained machinists and electricians.

Book and Game Co. has owned the Uncle's game shops since 1999 and has outgrown its current warehouse and on-line facilities, Isaacson said. The company will move from 5,000 square feet in the basement of the Liberty Building downtown into 10,000 square feet at the park. The move will not affect the company's three Uncle's shops, in Auntie's Bookstore downtown, at the Spokane Valley Mall, and in Redmond, Wash., Isaacson said.

The company is trying to make the move by Sept. 1 and anticipates hiring three people for the on-line operation and two people for the warehouse, Isaacson said.

Book and Game also is planning to change its name to Uncle's Inc. in the near future and hopes to open additional game stores in the Seattle area, Isaacson said.

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Acquisition and Investment
Jul/19/2004

JV's $52M Scores Office Portfolio Win

By Lee Simmons
GlobeSt.com

PHOENIX-Crown West Realty LLC and St. Paul Properties have purchased 11 buildings in the Arizona Business Park for $52 million. The deal adds 440,000 sf of fully occupied office and flex-office space to the new joint venture's portfolio.

"The opportunity in this deal was the ability to buy the buildings at their current rents and know that we're going to end up with good leasing opportunities in two of the nicest buildings in this area in a short period of time," Richard Rollnick, president of the Spokane, WA-based Crown West Realty, tells GlobeSt.com.

The 50-50 joint venture acquired the buildings from Estes Samuelson LLC of Phoenix, which developed them between 1987 and 2000. Compass Bank of Birmingham, AL, provided $17 million in acquisition funds at a Libor-based rate and the balance funded through both partners' equity contributions, according to Rollnick. In addition, two loan assumptions were required before the deal could close--expanding escrow to 11 months.

"You had multiple loans with different lenders. There were some prepayment considerations and then you had a couple of tenants that were in process," says Chris Toci, a director at Cushman & Wakefield of Arizona Inc.'s Phoenix office. A 45-day marketing period generated 17 offers on the 11-building portfolio. There were five finalists on the short list. Toci says Crown West's market credibility and joint equity with St. Paul Properties of St. Paul helped the partners rise to the top.

The 38-acre acquisition, with a central address of 15810 N. 28th Ave., encompasses about half of the Arizona Business Park. The portfolio consists of a 49,920-sf structure occupied by NCS Pearson Inc.; a 24,985-sf building leased to Wells Fargo; a 23,772-sf building held by Hypercom Corp.; a 106,397-sf building filled by Bank One; a 66,693-sf building rented to Triwest Healthcare; and a 46,817-sf building holding Choice Education, a charter school. A separate four-building complex has Triwest Healthcare in two buildings with 43,868 sf and Wells Fargo in the other two, which total 75,263 sf.

Rollnick says rents average $1 per sf, but he predicts the rate will rise as tenants' leases expire in the next few years. The leases in place have expirations from 2006 through 2014. He confides Bank One intends to terminate its lease in 2007 and Triwest Healthcare plans to vacate its buildings for Wells Fargo's in 2006 when the bank moves to Deer Valley.

"We are what you would call opportunistic value-added investors," Rollnick says. "We see an opportunity to have a class A building at a good value and be able within the next three years to find a new tenant for the building and lease it. We will do that for the Triwest building as well. This is a little bit like a maze. We're moving a whole bunch of buildings around."

The latest deal brings Crown West Realty's Phoenix office portfolio to about one million sf, making it one of the metro's largest office players since came to town 2.5 years ago. The investor's total three-state portfolio tallies some 7.5 million sf, including industrial and office properties in Phoenix, Washington state and North Carolina.

The C&W team of Toci, Brian Ackerman, Mike Beall, Tim Whitermore and Bob Lundstedt (now with Colliers International's Phoenix office) negotiated for the seller. Crown West and St. Paul Properties were self represented in the deal.

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Leasing and Development
Apr/08/2004

U.S. Customs inspects first import container here

Spokane Valley company's year-old container freight station gets first shipment

By Marc Stewart
JOURNAL OF BUSINESS

U.S. Customs and Border Protection officers recently performed the first-ever routine inspection of an international cargo container in the Spokane area.

The hour-long inspection took place at the Spokane Valley facility of Inland Empire Distribution Systems Inc.

About a year ago, U.S. Customs approved Inland Empire Distribution as its first "container freight station" here, but the company didn't attract any cargo containers until last week.

Such stations are authorized to hold freight containers—the big metal boxes that come off ships and are transferred to trucks or rail cars—until they can be inspected by customs officers.

"I sent out 75 notices to brokers that we had this," says Matthew Ewers, the Spokane Valley company's director of marketing and sales. "Why they didn't utilize it (until now), I don't know. I think the economy had something to do with it. I think now we've broken through, more companies will utilize it."

The first company to do so was Susanna International LLC, a Post Falls-based specialty apparel business that had a cargo container shipped here from Pakistan. U.S. Customs and Border Protection officers carefully searched the container. Normally, the officers are looking for drugs, weapons of mass destruction, and illegal aliens. They didn't find anything, or anyone hiding behind boxes of clothing.

After passing the inspection, the cargo was trucked to Susanna International, which sells motorcycle apparel to Spokane area retailers.

"It saves me money and it saves me time," says Shakeel Butt, that company's coowner. "I expect to have 15 containers shipped from Pakistan the rest of year. I was dealing with Seattle. Then a customs officer mentioned to me that you can have the containers shipped here. Of course I was interested."

Traditionally, international cargo destined for Eastern Washington, North Idaho, and Western Montana is inspected in Seattle or another port city on the West Coast.

"I think it's a great plus for the region to be able to clear freight here, instead of waiting in line at Seattle or San Francisco," says Mike Marshall, port director of the customs office here. "It's a great deal for Inland Empire Distribution Systems."

Currently, it can take up to four days for the containers to be inspected once they're taken off ships, due to congestion at the port, says Marshall. Inland Empire Distribution says once a container arrives here, it will take less than two days to inspect it.

"The advantage is that it adds to the asset base of Spokane," says Ewers. "It's another service Spokane offers to new businesses. It's a catalyst to attracting new business."

To qualify as a container freight station, companies must comply with a list of requirements, such as having alarm and fire-protection systems, providing a secure area to hold the containers, and passing criminal background checks on both the company and its employees, Marshall says.

"It took about six months to get federal approval," says Ewers. "We also had to increase security in the container freight station" located in a warehouse it operates in the Spokane Business & Industrial Park, at 3808 N. Sullivan.

When a container arrives at the company, U.S. Customs officers are summoned from the agency's offices here to conduct the inspection.

Under its agreement with U.S. Customs, the Spokane Valley company will fully or partially unload cargo containers to be inspected. The service is charged to the freight company or importer that's shipping the container, Ewers says.

Ewers says the average cost to inspect each container will range from $100 to about $600.

"It's up to U.S. Customs," Ewers says. "We don't know if they're going to take everything off the entire container or not."

Inland Empire Distribution provides warehousing, freight management, and transportation services. The company occupies about 500,000 square feet of floor space spread among nine buildings in the industrial park. It also has a 240,000-square foot operation in Pasco, Wash.

"The container freight station fits with our business," says Ewers. "It's not a money maker. It's just another service we offer."

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