Demand for retail spaces in Greater Phoenix remains high, thanks in part to the region’s consistently growing population. According to Avison Young’s Second Quarter 2024 Retail Market Report, “Phoenix’s retail vacancy rates are remarkably low, both historically and on a national scale. In Q1, direct vacancy hit a record low of 4.9%. While the second quarter saw a slight increase to 5.3% due to 1.4 million square feet of new deliveries, this uptick underscores the competitiveness of the retail market and the pressing need for more space to meet the high demand.”
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Seeing an opportunity to meet this demand for more space, Okland Capital and San Tan Development Group have broken ground on phase one of Northside at SanTan Village — a 20-acre mixed-use development that brings high-end retail, restaurants and a 134-key hotel to Gilbert. Half of the land is being reserved for future uses as Okland finishes planning the balance of the site.
“The Northside project brings an attractive, refined and much-desired amenity into Gilbert’s SanTan Village corridor,” says Gilbert Office of Economic Development Director Dan Henderson. “We continue to see increased demand for hospitality product in Gilbert and we anticipate that the addition of Northside’s restaurant, retail and lifestyle components will blend seamlessly into the fabric of Gilbert’s upscale offerings.”
Blake Bunker, managing partner at Okland Capital, explains that the company is always looking to create experiences that leave a lasting impression on the communities in which they build.
“Northside is a perfect example of that, taking 20-acres in Gilbert and planning a number of uses we wanted to coexist and live together,” he says.
The mix of restaurants and retail in the first phase, Bunker continues, is intended to mingle well together with plenty of outdoor shared spaces.
“We wanted the project to turn inwards towards those experiences rather than towards parking or something else,” he says.
“We’re providing a significant amount of common area space in between buildings for families and friends to connect, hang out and play. There will be a ton of open space, common area seating and pedestrian oriented walkways through the project connecting all the different uses together.”
Part of the mixed-use nature of the development includes a SpringHill Suites by Mariott hotel, which fits nicely into the Northside, especially since the average age of the nearby hotel stock is more than 10 years old.
“Hotels, like other asset classes, want to be in good mixed-use environments where guests can some spend some time being entertained and have access to really good food, beverage and shopping. That’s where people want to spend their time when they’re travelling, whether it’s for business or pleasure,” Bunker says. “We’re very bullish about putting hotels in mixed-use environments, specifically where guests can walk out of the lobby and access places such as Top Golf, Main Event, a movie theater or half a dozen places to eat. That’s exactly what Northside is.”
Phase one
The first phase of Northside at SanTan Village brings 37,245 square feet of retail space to the market. Bryan Babits, vice president at Western Retail Advisors, notes that restaurants are a key focus of this first phase, with several users lined up to sign leases.
“Given how much thought that Okland has put into the design and finishes of the product, we’re seeking a higher end tenant and clientele,” Babits says.
The broader SanTan Village area is one of the premier retail and entertainment destinations in the region, which is why Okland sees Northside akin to an infill project.
“SanTan Village has already gone through the maturation process and has an existing foundation of national retailers that was built over the last 30 years,” Bunker explains. “That’s why we’re positioning Northside with an emphasis on more boutique concepts. We’ve specifically looking for tenant types that aren’t already in the area so we can provide a different offering than what exists there today.”
Having this vision in mind means saying no to groups that don’t match Okland’s criteria for Northside.
“We’re looking for a specific type of tenant,” Bunker continues. “A bank or a drive-thru could be very economically successful at Northside, but those uses don’t fit what we’re trying to create. That means we’ve had to turn away a lot of qualified parties and have had to be more patient with leasing.”
The Town of Gilbert has experienced significant growth in recent years, with multiple high-profile projects coming to market, driving demand for developments such as Northside.
“Gilbert has access to the Loop 202 and the broader freeway system that helps with access. That alone expands the trade area in a region that has been rapidly growing over the last several years,” Babits concludes. “When you can live, work and eat a nice meal all in the same place, that’s when a place becomes more urbanized versus rural.”
