| ASU Diablo |
Oct 26, 2023 2:45 PM |
Phoenix midtown tower could transform into 'urban resort oasis'
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Originally Posted by ASU Diablo
(Post 10060482)
I'm not sure if that's totally correct? I reviewed permits and the project # listed for the tower renovation (MF & Hotel) is completely different from the 6-story apartment project being built on the parking lot. This project is called "Modera Midtown at PunchCard".
I may be wrong...
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Looks like I was right after all :cheers:
They are proposing a NEW building directly to the North...but only at 40 feet high! What is that, 4 floors? Also, looks like the proposed apartment building to the East is on hold, bummer.
https://www.bizjournals.com/phoenix/...otel-2023.html
Quote:
The Phoenix Financial Center — a midcentury office tower with distinctive slots resembling vintage computer punch cards — could be taken off the office market permanently.
New York City-based Left Lane Development is planning to acquire and transform the mostly empty building into a boutique hotel with residential and retail uses — while a second structure complete with a rooftop deck and spa is proposed to rise at the site.
The vertically-integrated real estate firm, which specializes in hotel and multifamily development, adaptive reuse and historic activation, also plans to develop a second, smaller structure on the north portion of the property with new amenities. A second building was originally planned at the site, but was never built.
The iconic 18-story structure and its two 9,000-square-foot rotundas in midtown Phoenix have operated as office space since they were developed in the 1960s at the northeast corner of Central Avenue and Osborn Road, just across from the former Park Central mall.
The property, now referred to as the Punchcard Building, is home to a few tenants, including restaurant group Upward Projects and architectural firm Shepley Bulfinch in the rotundas, but the tower has remained mostly vacant since a number of government agencies left the building years ago.
Jon Bloomberg, a partner at Left Lane, said the Punchcard building has shallower floor plates that will be easier to convert to residential and hotel uses.
His team has been working for the past year with the current owners on the next stage for the historic building, a project that will be the company's first in metro Phoenix.
"How often can you find 3 and half acres, a few-hundred-thousand [square] foot, unbelievably beautiful building that needs a new vision? That doesn't exist in many places," he told the Business Journal.
Punchcard Building's next life: Hotel rooms, multifamily units
Left Lane will convert the tower into 192 hotel rooms and 144 multifamily units with event space, retail and restaurants. The second building, once developed, is expected to stand 40 feet tall and compliment the hotel and residential with meeting space and rooftop deck amenities such as a pool and spa.
"The way we like to think about this is as a complex, so this is going to be like an urban resort oasis — that's the feeling we want," Bloomberg said. "We're excited to bring something really cool to the market."
Bloomberg said the second building, although it won't be the same height as the existing tower, will match the design and architecture of the first building. The company wants to deliver the overall project in one phase.
Left Lane is currently working through the pre-application process with the city of Phoenix and is at least a year away from starting material work on the project, Bloomberg said. The timeline and budget are still being determined and finalized.
Left Lane is investing $1.5 billion to acquire, convert or develop projects in the next five years through its GP Fund II. The projects include the Phoenix property as well as others in Savannah, Georgia; Memphis, Tennesse; Pittsburgh and Providence, Rhode Island; according to its website.
Why Punchcard Building owners pivoted from office to hotel
For the past few years, Phoenix-based developer Ironline Partners has worked with the owners of the Punchcard Building, the Geddes family, to refresh the historic property into a modern midcentury concept.
Ironline renovated space such as the 18th floor for potential office tenants with plans to turn the overall site into a mixed-use project. This included updated indoor and outdoor amenities such as a 1-acre park for events and plans for a separate, ground-up apartment complex on the east parking lot.
But they have run into some hurdles.
Mill Creek Residential was under contract to buy the lot east of the Punchcard Building for the multifamily project, but because of the capital market conditions the company has paused on developing the $100 million, 335-unit apartment complex and are no longer acquiring the lot, according to Tim O'Neil, president of Ironline.
"We had a very good experience with them, they completed full entitlements and construction drawings. We are still collaborating and looking for a way for that to be the ideal win-win development project on the east side of the property," he said.
Ironline had also considered building a second structure for a potential hotel on the northern part of the site while continuing to renovate the Punchcard Building for primarily office uses.
But O'Neil said it no longer made economic sense to renovate the office space piece-by-piece and that it would work better to renovate the building all at once.
"The collapse of office, whether it's overstated or not, is certainly a real thing. [It's] exponentially difficult and dangerous for vintage properties because restoring them is so complicated and so expensive," O'Neil said. "Our building, while inefficient because of the cool quirky parts of it — not being geometric — makes it really difficult to restore. It actually presents good bones and infrastructure for hospitality."
After consulting with other experts, they ultimately decided to pivot from developing an office-anchored project to a modern, amenitized hospitality and food and beverage concept for the Punchcard Building.
Punchcard Building sale expected to close in 2024
Through a mutual connection, O'Neil said they met Left Lane Development as they were thinking about other uses for the tower. The two companies are actively collaborating through the planned sale and are in discussions for continuing their involvement after that, O'Neil added. The sale is expected to close in late 2024.
"It seemed like there was a shortage of their version of hospitality in the central corridor despite there being some great operators," O'Neil said. "Something that is this boutique and bespoke."
The project is also ideally located next to a light rail station and the burgeoning Park Central mixed-use development, which is now home to Phoenix's third bioscience corridor.
The transformation of the tower will add to a handful of office conversions in the Valley while also removing approximately 300,000 square feet from the office sector in Phoenix.
Developers have been increasingly looking to reuse struggling buildings across the U.S. by turning them into hotel or residential uses as the office sector continues to feel the impacts from the Covid-19 pandemic.
Although experts don't expect this trend to pick up steam in Phoenix because many Valley office buildings don't meet the criteria for ideal conversions, the Punchcard could be one of the largest and high-profile conversions in the region if completed.
The former Phoenix Financial Center was built by Phoenix real estate developer David H. Murdock and designed by W.A. Sarmiento, an architect famous for his modern bank designs.
The third phase of the project was slated for a sister office tower but this was never built. The lot to the east of the existing buildings was once planned for a shopping center that also never came to fruition.
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