The 4th Annual Shark Tank presented by ULI Arizona mirrored some of the trends that we’re seeing in Valley commercial real estate: affordable, ground-up multifamily; converting single-family homes into residential assisted-living; and repurposing and preserving a building that’s been part of the local economy since the 1940s.
A rapt audience of more than 200 was treated to a lively event at the Camelback Inn moderated by Joseph Blackbourn, president and CEO of Everest Holdings. The sharks were Bill Cleverly of INCA Capital, Andrew Cohn of Levine Investments and David Larcher of Vestar.
Those presenting included architects, former Arizona State University students and a commercial real estate influencer. And the projects were:
Peak Care Assisted Living Homes: Presenter Rocky McKay said his team’s goal was taking care of the elderly by providing them with homes that offer the highest quality of life in their later years.
“The mission is to care for our residents as if they are with their own family,” McKay said.
He pointed out that nationally more than 4,000 people turn 85 each day, 1.5 million annually. There are more than 185,000 residents over the age of 75 in Metro Phoenix.
The initial Peak Care project calls for a four-bedroom home of 3,092 square feet. The final home will feature 10 bedrooms, 11 bathrooms and an office at 4,168 square feet. Cost, obviously is a big factor in this project.
The sharks suggested the investment could be converted to a debt instrument. The project was also considered more of a business opportunity as opposed to a real estate transaction.
“An individual investor would want more skin in the game from the owner side,” Larcher said.
9th Street Lofts: Presenter Aaron Call and his colleagues are recent graduates of ASU’s Masters in Real Estate Development program. This project, Call said, “represents responsible infill and adaptive reuse in the historic Garfield District. It is low-cost housing because it utilizes the amenities of Downtown Phoenix.”
The goal is to have affordable housing near downtown that will cater to University of Arizona and ASU students already living and playing downtown.
“They want to walk to the office, the school research lab … we want to create an energy on the ground floor on 9th Street,” Call said.
The project, which is looking for an equity partner, will feature two to three levels of studio apartments and one-bed and two-bed lofts. Total construction cost is estimated at $5 million.
For the most part, the sharks thought it was a good project in a great location. However, the notion of more apartments in Downtown Phoenix “is a little scary.” The project calls for 48 units, which was also a bit of a concern. Overall, the sharks said, the plan was nice.
The GUILD (Phase II): Presenter James Trahan and a team of two other architects were looking for an equity partner for their project at 7th Avenue and Camelback Road. Located in the highly-sought after Melrose District, the project represents a 22,700-square-foot, net-leased mixed-use project located in a period building that dates back to the 1940s. It currently serves as the office of architectural firm 180 Degrees, which owns the building.
The team was looking for an investment of $1 million.
“It will be in an urban, walkable zone,” Trahan said. “It is 400 feet from the light rail, will include three levels with a covered roof, and hopefully house a fab studio, or a new tech and design firm.”
One suggestion the sharks made was raising the money and keeping the building for themselves instead of working on an exit strategy.
Shark Tank is another great example of the information-sharing and best practices ULI is known for, this time adding a twist as compelling “edutainment.”