Phoenix Rising from its Own Ashes? Maybe…
- Apr 20, 2011
When talking about exciting new real estate developments, Phoenix doesn’t come to mind. The city is currently undergoing a revision of its general development plan, but that’s the most activity the planning committees are getting at the moment, apart from more mundane rulings regarding brownfields and blight remediation. In the case of the Desert View Village Planning Committee, which covers northern Phoenix, not a single rezoning case has been submitted to discussion during the last 16 months. It’s not for a lack of trying, but the recession has created obvious constraints for potential developers.
Sometimes development proposals are rejected, the most poignant case being the recent refusal that Bechtel met for its project to construct a new AT&T cell tower at a church at 26th Street and Northern Avenue, where the two roads merge into Arizona 51. Interestingly, previous projects such as those for a billboard in the area have met the same unanimous refusal by the planning committtee. The AT&T tower would have been built by Bechtel and leased to the cellphone company.
Meanwhile, some developers are trying to profit from the lackluster market and are making moves for the future. Such is the case with TDF DV Bixby Services L.L.C., the company that has just closed an $8.5 million deal for 51 acres at the southeast corner of Seventh Street and Deer Valley Road. The deal was mediated by Colliers International in Scottsdale and Daum Commercial Real Estate Services in Phoenix. The site will be used for the building of commercial build-to-suits and speculative construction. It’s deals like this that demonstrate the potential of the Phoenix real estate market.
In more lavish real estate news, there are signs of an upturn with the recent demand for luxury apartments. The epicenter is the previously doomed high-rise development in downtown Tempe. West 6th, as it was named after entering new ownership, was converted from high-end condominiums to apartments and the interest in the luxury residences has been surprisingly brisk. The 10 luxury apartments the 22-story building has to offer were snatched up in a mere five hours after Capstone’s leasing agent started accepting applications.
Real estate professionals are crediting this high rate of demand to the six long years of marketing and community awareness generated since the towers started off as the initial Centerpoint Condominiums. Zaremba Group, the new owner, sure knew a good deal when it saw one. Come December, the second tower will be completed, the complex will have 375 available units–and Bob Kammrath of Kammrath and Associates, a real estate research firm, thinks that although the project is attractive, it will experience trouble facing the competition of the available affordable rental homes in the metro area.