Tag Archives: retail space

downtown phoenix housing

Multi-Family: Downtown Phoenix Housing Project

Downtown Phoenix Housing Project

Developer: Concord Eastridge
General Contractor: hardison/downey
Architect: Ayers Saint Gross
Location: Roosevelt St. to the north; McKinley St. to the south; Fourth St. to the east; Third St. to the west
Size: 2.9-acre site comprising 2 parcels
The $52M, 2-building, mixed-use project is the first private investing supporting Downtown Phoenix student housing. Plans call for 325 apartment units and 5,000 SF of retail space. Subcontractors include Spectrum Engineers, Dibble Engineering, PK Associates and SmithGroupJJR (landscape architect). Expected completion is 3Q 2013.

AZRE Magazine May/June 2012

gateway airport

Phoenix Mesa-Gateway Airport plans $1.4 Billion Expansion

Phoenix Mesa-Gateway Airport has big plans to cater to more travelers.

The Airport Authority’s Board of Directors announced Monday the airport will undergo a $1.4 billion expansion.

Officials say the project is set to be completed in four phases. The plan includes the construction of 60 airplane gates and 21,000 parking spaces.

They predict the airport will be able to accommodate 20 million passengers annually.

Nearly 957,000 passengers went through Mesa-Gateway last year, making it one of the fastest growing airports nationwide.

The Arizona Department of Transportation and the Federal Aviation Administration are also funding the project.

There is also an effort to privately raise $385 million to build two hotels and office and retail space.

For more information about Phoenix Mesa-Gateway Airport, visit Phoenix Mesa-Gateway Airport’s website at phxmesagateway.org

3rd Quarter Figures Upbeat for Retail and Market Sector

3Q Figures Upbeat For Office, Industrial & Retail Market Sectors

The Arizona economy has marked some improvement and is much better than the public perceives, according to the Third Quarter 2010 Economic Outlook released by the Forecasting Project at the University of Arizona.

However, the report also states that will it will take some time for many Arizonans to recognize the improvement in the state’s economy and to repair the damage done by the recession. Estimates are that it will be 2013 or early 2014 before all the damage that occurred during the recession is repaired. The long-term forecast is for nation-leading growth to return to Arizona.

There was also some positive news in the CB Richard Ellis Third Quarter 2010 Analysis of Metro Phoenix Office, Industrial and Retail Markets. Highlights included:

Office: After 12 consecutive quarterly increases, the office market vacancy rate remained unchanged from the second quarter, at 25.9 percent. While the full service average asking lease rate for office space has leveled off in 2010, it has fallen 12.5 percent in the past two years, from $25.44 per square foot in third quarter 2008 to $22.25 per square foot today.

Absorption for the year is 147,610 square feet, with gross activity of 4.3 million square feet. This compares with negative absorption of 897,916 square feet and gross activity of 2.9 million square feet at the same time last year. An increasing supply of office sublease space continues to impact the absorption of direct space. There was 2.2 million square feet of available sublease space at the end of the third quarter compared to 2 million square feet one year ago.

Industrial: Through the first three quarters of 2010, the Metro Phoenix industrial market had positive absorption of 2.6 million square feet. Leading the way was the Southwest submarket, with more than 3.4 million square feet of positive absorption year-to-date. The industrial market vacancy rate decreased for the second consecutive quarter, dropping from 16.4 percent at the end of the first quarter to 15.3 percent today. One year ago the vacancy rate was 15.8 percent.

The net direct average asking lease rate for existing industrial product remained relatively unchanged during the past three months, ending the third quarter at $0.54 per square foot. However, in the last year the rate has dropped 5.3 percent. While there is 619,800 square feet of industrial product under construction, it consists entirely of build-to-suit projects. No speculative developments broke ground in the third quarter. This trend is expected to continue due to the challenging financial market and the glut of space.

Retail: The retail market experienced positive absorption in the third quarter, posting 83,491 square feet. This was the first time in seven consecutive quarters that the metro area reported more retail space was gained than lost. Vacancy increased slightly in the third quarter, from 12.2 percent to 12.3 percent. In comparison, the retail vacancy rate one year ago was 10.9 percent.

The average net asking lease rate for existing retail centers has declined 9.4 percent since the end of 2009, dropping from $17.33 per square foot to $15.71 per square foot at the end of the third quarter. The large supply of available big box space continues to weigh heavily on the Phoenix area retail market. Currently there are 303 spaces greater than 10,000 square feet, totaling 8.2 million square feet. The majority, 34 percent, can be found in the Mesa/Chandler/Gilbert submarket, with 2.8 million square feet of space.

Measuring CityScape’s Impact On Downtown Phoenix

CityScape, a $900 million multi-use project nearing first-phase completion in the heart of Downtown Phoenix, will finally fill the so-called “hole in the doughnut.” Located on a 3-block tract centered at the zero-zero intersection of Central Avenue and Washington Street, CityScape is seen as the catalyst for long-overdue development in the city’s core. Key players in this project, the biggest private-sector undertaking ever in Downtown Phoenix, use such phrases to describe its impact as:

“It’s going to put the heart back into Downtown Phoenix.”
“It’s going to redefine Downtown, giving the area a critical mass of retail and amenities.”
“It’s really going to help change the face of Downtown Phoenix.”

Dave Kreitor, deputy city manager for the City of Phoenix, has helped guide the Downtown area through an unprecedented period of growth, but there was always a hitch. “When I was economic development director 15 years ago, we talked about those blocks being the hole in the doughnut,” he explains. “We would never be truly effective with our Downtown redevelopment activities until that area was developed.”

Spanning Washington Street to Jefferson Street, and Second Street to First Avenue, CityScape is a 1.8 MSF project featuring a 27-story tower that will be home to myriad retail outlets, prestigious law firms and other businesses. The development’s first office tenants are expected to move in by March, with retailers showing up in April. The bulk of the tenants should be up and running by July.

Kreitor expects CityScape to create a center of activity that will relate well to nearby US Airways Center, Chase Field, the Phoenix Convention Center, Arizona State University’s Downtown campus and the core office market.

Leasing Up
As of late November 2009, leasing activity was on target. Jeff Moloznik, development manager for RED Development, says nearly 75% of the 575,000 SF of office space, and 75% of the 180,000 SF of retail space, were leased. Rates PSF were being negotiated with retailers individually, depending on the tenant, Moloznik says.

Office
Jerry Roberts, leasing broker of CB Richard Ellis, says CityScape office space is going for low-to-mid $30 PSF, depending on the length of the lease. “The pre-leasing went better than almost any building I’ve ever been involved with.”

The pace of leasing CityScape office space would be considered very successful in any real estate market, let alone the market of the last two years, Roberts adds.

One of the tenants, Squire Sanders and Dempsey, a law firm with about 110 employees, is moving across the street from the Renaissance II Building. Robert Matia, a partner at Squire Sanders, says the floor layout at CityScape is ideal for the reduced amount of space needed for secretaries.

“Lawyers coming out of law schools have spent so much time on the computer that they prefer to type their own first draft on many documents,” Matia says. The law firm will occupy 72,000 SF on 3.5 floors, with room to expand.

Represented by CB Richard Ellis, the brokerage process for Squire Sanders went smoothly. “We knew RED Development was a great group to work with,” Matia says. “They were anxious to have us there and were accommodating to our needs.”

Retail
Don Keuth, president of Phoenix Community Alliance, says CityScape creates synergy for the area. “It sends a tremendous statement about Downtown Phoenix, that it is a vital place where investments can be successful.”

He applauds RED Development, which is also the brokerage firm for the retail portion of CityScape, for making the project a reality.

Among the challenges was providing enough easy-access parking, especially for retail customers. “We accomplished this by creating an open and inviting below-grade parking environment that allows visitors to intuitively find their way from their below-grade parking stall to their retail destination,” Moloznik says.

Retailers include CVS Pharmacy, Urban Outfitters, Lucky Strike upscale bowling, Sam Fox Restaurants, Designer District, The Breakfast Club and Gold’s Gym.

The key to maintaining and enhancing a successful Downtown, Keuth says, is to get more people to live in the immediate area. “We need to create a reasonably affordable housing option so young professionals can live here and enjoy the area,” he explains.


Arizona Business Magazine

January 2010