There are undeniable truths in commercial real estate. For instance — retail follows rooftops. However, when the right variables come together, the presence of retail can create a demand for mixed-use communities.
This is a phenomenon Michelle Schwartz, associate at RSP Architects, has observed in her firm’s recent work.
“Arizona has such a short history when compared with the rest of the United States and as such, we have developed around a more vehicular centralized society,” says Schwartz. “When we look at new communities — and the desire for connection in neighborhoods — creating mixed-use flexibility where residents can truly live-work-play is unique.”
RSP Architects has designed The Row in downtown Chandler, a 60KSF two-story mixed-use development in the city’s newly designated entertainment district. The project’s anchor is Alamo Drafthouse Cinema, an Austin, Texas-based dine-in theater expected to bring 700 people to downtown Chandler four times a day.
“Today’s retail focuses on experience, which is exactly what The Row will bring,” Schwartz says, adding that many restaurateurs’ interest in the area has been piqued by the project.
Another rooftop project that has sought out a vibrant area in which to incubate is Portland on the Park, a 14-story luxury condo development by Habitat Metro and Sunbelt Holdings, designed by DAVIS Architecture. This project, jokes Habitat’s Timothy Sprague, has a three-acre front yard and 32-acre backyard, referring to the Japanese Friendship Garden and Margaret T. Hance Park adjacent to the site.
“The big different between suburban and urban environments is we’re able to do our own placemaking,” says Sunbelt Holdings President and CEO John Graham. “It’s critical to be near meaningful open spaces and more interesting amenities.”
Sunbelt Holdings, largely known for its master planned communities throughout Arizona, is stepping off the golf courses and bringing its suburban sensibility to the urban environment of downtown Phoenix. The company’s 149-unit Portland on the Park is also being constructed near the evolving Roosevelt Arts District. The cultural developments of the parks and Roosevelt Row were “absolutely critical” to the identity of Portland on the Park, Graham says.
He’s been following the development of the area for almost five years, since his eldest son moved into Portland Place. Through his son, Graham says, he watched and learned to understand the dynamics of the area, which has evolved over the course of the project with light rail and the growth of ASU’s downtown campus.
Graham says he’s seeing similar trends in Chandler, Phoenix and Gilbert and he has his eyes on Mesa.
“I think there’s a direct correlation between Marina Heights and Portland on the Park, Tempe Town Lake and Margaret T. Hance Park,” Graham says. The urban energy and urban vibes they share, he says, “is because of ASU students and the really fun, cool gathering places like The Yard.”
The Yard on 7th Street and Camelback Road was the shot in the dark heard around the Valley.
A former motorcycle garage was turned into a multi-tenant restaurant space that shares a patio and yard area. The Fox Restaurant Concepts design has since been emulated in what is Sam Fox’s largest project to date, The Yard at Farmers Arts District.
“When The Yard opened, it opened everyone’ eyes,” says Dave Sellers, president of LGE Design Build.
“The first Yard was very much an exploratory mission to see how successful it’d be,” says Brian Frakes, who worked on the first Yard with WDP Partners, and the second Yard with Common Bond.
“The Tempe one was different because it was west of the rail,” explains Frakes. “It was a dense, urban area. State Farm hasn’t even opened up yet, but there were a lot of good things coming. One-thousand multifamily units around us, and we noticed a strong southeast Valley group at The Yard on 7th. We wanted to capture the southeast Valley (at the new Yard).”
There were a lot of State Farm and multifamily conversations in the planning stages of The Yard in Tempe, says Frakes.
“I think it’s the sum of all the parts that makes these places so dynamic and interesting. I think restaurant and retail is the big driver because employers are looking for that amenity base,” says Frakes.
Sellers announced plans for The Colony, a similar concept nearby the original Yard development. He is also working in downtown Gilbert’s Heritage District on The Marketplace, which houses a Fox concept restaurant, among others, and office space. Since Gilbert doesn’t have the same kind of old buildings as downtown Phoenix, LGE Design Build built Marketplace to look like something that had been there much longer than it had.
“It is risky,” Sellers says. “It’s not your cookie cutter retailer. It’s not a power center where you have a Walmart. It’s not that. You’re developing what the clientele and customer kind of like, hoping the retailers believe in it.”
Retailers acclimate, he adds.
“What’s neat is we have projects that are larger retail, national users trying to fit into a space that isn’t a typical space,” he says. To Graham’s point, Sellers says his company is looking to develop before big projects come through the pipeline.
Rivulon, for example, is a $750M mixed-use business park that broke ground in 2014 on Gilbert Road and the Loop 202 in Gilbert.
Gilbert’s Economic Development Director Dan Henderson sees a symbiotic relationship between developments such as Nationwide Realty Investors’ Rivulon project and the Heritage District.
“Candidly, you need both (types of development),” says Henderson. “You can’t have one without the other. These things work with each other and are in some ways the defining element of opposites attract. People will be attracted to both areas for different reasons.”
He refers to Heritage District as the “living room” of the community and Rivulon as the “family room” of Gilbert.
“What we’ve found in (Nationwide Realty Investors President) Brian Ellis and his team is a partner that is not looking at today, but at 20 years from now,” says Henderson. “It’s a similar partnership in the Heritage District.”
“The $64,000 question is: Is it a blip or shallow market?” Graham asks. “It’s not a blip. It’s a trend. The market is deeper than (people) think it is. A lot of people are thinking there’s a slowdown in master planned communities and that’s what’s driving apartment development, but it’s a modified business and trend that’s going to stay.”