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-   -   Phoenix Development News (3) (https://skyscraperpage.com/forum/showthread.php?t=173764)

ASUSunDevil Mar 11, 2024 3:00 PM

Quote:

Originally Posted by gymratmanaz (Post 10161995)
I see the huge blocks south of McDowell and west of 56th ST fenced off with skirting, but I can't tell what is going to be built. Are they tearing down the existing buildings? The skirting almost looks like something involving entertainment.

https://www.axios.com/local/phoenix/...-52nd-mcdowell

Obadno Mar 11, 2024 3:40 PM

Looks like the lot at Cental and Adams (Edith??) HAs some activity, has it broken ground or is it site prepping for construction?

dillsquad Mar 11, 2024 3:47 PM

Quote:

Originally Posted by Obadno (Post 10162099)
Looks like the lot at Cental and Adams (Edith??) HAs some activity, has it broken ground or is it site prepping for construction?

Interesting, does anyone have a mock-up on the Edith? Curious as to how much ground floor retail there is. Need more activation on Central, badly.

gymratmanaz Mar 11, 2024 3:47 PM

The article states - Chicago-based Baker Development Corp. says it hopes data centers, manufacturing, warehouses and distribution-type companies will take up residence. -

The wrapping sure doesn't seem to reflect data centers. I couldn't read it all as I was driving by, but the pictures all seem entertainment and social in nature.

combusean Mar 11, 2024 6:34 PM

The developer exclusively works in industrial per the article, and according to the zoning narrative they don't have a site plan or potential uses, just they are consolidating the site zoning to allow for "data center, manufacturing, warehouse, and distribution-type uses."

https://www.phoenix.gov/pddsite/Docu...0Narrative.pdf

Obadno Mar 12, 2024 4:29 PM

Can somebody post the text: https://www.bizjournals.com/phoenix/...-concerns.html

Also, can somebody int he news industry outlaw the phrase "some experts say" :slob:

I am going to assume the conclusion and say NO we are not at risk of overbuilding, apartments downtown are too expensive for the local market, the decrease in rents due to oversupply is good.

combusean Mar 12, 2024 5:07 PM

Downtown is absolutely overbuilt, for now at least.

And while I'm making calls like that, here are my predictions for the future.

The winners for the next phase are going to be old and cautious investors making plays in established low risk areas like Biltmore or North Scottsdale.

The losers have gambled on extra-risky areas like 12th St/Washington or further north on Central that only were hot because they were adjacent to overheated markets. Most of that area is still probably going to be a dump for the next few years which is really shameful.

muertecaza Mar 12, 2024 6:02 PM

Quote:

Originally Posted by Obadno (Post 10162885)
Can somebody post the text: https://www.bizjournals.com/phoenix/...-concerns.html

Also, can somebody int he news industry outlaw the phrase "some experts say" :slob:

I am going to assume the conclusion and say NO we are not at risk of overbuilding, apartments downtown are too expensive for the local market, the decrease in rents due to oversupply is good.

Here:

Quote:

About 2,400 apartment units are under construction in downtown Phoenix, putting the submarket in danger of being overbuilt.

Developers have been ramping up apartment construction throughout Phoenix for the past several years, which is causing real estate experts such as Peter O'Neil, research director for Northmarq, to expect a peak in new rental construction in 2024.

"As far as the potential for overbuilding is concerned, I think that is a valid concern in downtown, just like it's a legitimate concern in nearly all of the submarkets in the Phoenix area at least in the near term," O'Neil said.

Northmarq is forecasting 20,000 units to come online in 2024 across the region, with downtown Phoenix accounting for about 1,200 units, he said. However, O'Neil is forecasting a sharp decline in multifamily permitting and construction starts in 2024.

"So we'll overbuild in the short term and then demand should catch up with supply in the next few years as we slow the pace of new construction," he said.

Christine Mackay, economic development director for the city of Phoenix, counts nine cranes outside her office window in downtown Phoenix. That's a far cry from the 20 cranes she saw in November 2020 during the height of the global pandemic, which was up from 14 cranes in January 2020.

Answers on X Phoenix's stalled downtown project

The Phoenix area has one of the most aggressive new construction pipelines in 10 to 15 years, said Bruce Hanley, vice president of Commercial Properties Inc. in Tempe.

Within a three-mile radius of the 85004 ZIP Code in downtown Phoenix, Hanley counts 32 properties either under construction or proposed.

"Everybody now wants to get in on the action in downtown and around Phoenix," he said. "But you also have some construction projects that are faltering, that they've ceased construction on."

One apartment project that spans an entire city block downtown came to a screeching halt last fall, causing a flurry of mechanics liens against the project.

The second phase of X Phoenix, a 29-story luxury residential tower with 592 beds at Third Avenue and Van Buren Street, has racked up nearly $50 million in mechanics liens since October 2023, including $35 million from general contractor Clayco Inc.

Chicago-based X Cos. secured a Government Property Lease Excise Tax, or GPLET, through the city of Phoenix, to abate property taxes while the project is under construction. That means the city currently owns both phases of X Phoenix, Mackay said.

"They're working diligently right now on some new funding," she said. "I believe it will be back under construction by summer. The market got a little goofy on financing, and this is a project that got caught up in financing. It will be back by summer."

X Cos. could not immediately be reached for comment on this story.

Mackay said she doesn't expect to see 20 cranes in the air again within the next few years.

"That's what the market is supposed to do," she said. "Pause, take a breath, let's catch up. Sometimes, when we force the market is when we start to have problems."

'Weird market': Rent growth is now flat, and transactions are down
While year-over-year rent growth between 2020 and 2022 was 20%, rent growth is now flat, Hanley said. Plus, multifamily sales/transaction volume was down 72% from 2022 to 2023.

"This is a weird market right now," Hanley said. "Are we overbuilt right now? Probably. It's called absorption, where demand keeps up with supply. Right now that's kind of off."

These changes to the multifamily market come at a time when the state's second largest publicly traded company plans to vacate eight stories of its downtown Phoenix tower. Freeport-McMoRan Inc. (NYSE: FCX) is preparing to sublease its 250,000-square-foot global headquarters office in the 26-story Freeport-McMoRan Center at 333 N. Central Ave. in downtown Phoenix.

Mackay said she's glad the company will still have offices at the Cotton Center in Phoenix.

"But that's eight floors of new and modern office space, which is easier to bring tenants," she said, adding that she's also seeing activity and interest in the former Chase tower across the street.

Freeport McMoRan accounts for a small percentage of the overall workforce in downtown Phoenix, somewhere between 1% and 2%, O'Neil said.

"Typically, I don't think one move in particular is going to result in a significant impact on submarket vacancy or performance, especially in a dense area like downtown Phoenix," O'Neil said. "Not all of the people who work in Freeport's office rent. And even if they do rent, it doesn't mean they rent in downtown Phoenix. I imagine the company employs a mix of homeowners and renters, and that the employees are located in downtown and the Phoenix suburbs."

phxjack Mar 12, 2024 6:08 PM

Quote:

Originally Posted by muertecaza (Post 10162974)
Here:

Good news to hear X Phase 2 will restart construction by Summer

MMDelon Mar 12, 2024 7:18 PM

I did not know we were over building downtown. That concerns me that other projects will be pushed back or not happen at all.

ASU Diablo Mar 12, 2024 8:43 PM

I guess we wait and see what happens with Astra...

dillsquad Mar 12, 2024 9:07 PM

Quote:

Originally Posted by ASU Diablo (Post 10163097)
I guess we wait and see what happens with Astra...

What’s the latest on this ? this project has been talked about for years….

CrestedSaguaro Mar 12, 2024 9:35 PM

Quote:

Originally Posted by dillsquad (Post 10163126)
What’s the latest on this ? this project has been talked about for years….

Nada :tumbleweed:

Sepstein Mar 13, 2024 4:37 AM

Astra
 
Astra always felt like a pipe dream!

combusean Mar 13, 2024 5:00 AM

New tallests are often signs of irrational exhuberism. SF built theres and is absolutely creamed right now.

phxjack Mar 13, 2024 3:10 PM

Quote:

Originally Posted by MMDelon (Post 10163029)
I did not know we were over building downtown. That concerns me that other projects will be pushed back or not happen at all.

One thing that has not been talked about enough is how we still have not hit critical mass of density in downtown to justify more urban shopping. The more people that move downtown the more businesses will follow. There's still a high percentage of downtown students that leave for summers. Until we have enough year round residents to support downtown shops - we will have to wait.

Other cities have downtown targets, whole foods, aldis, and upscale boutiques. We have not hit this tier yet but hopeful the next round of apartments will level supply and demand and encourage more residents to live downtown.

MMDelon Mar 13, 2024 5:35 PM

I’m hopeful that Astra will still happen but if we are over building and waiting for demand to catch up then I don’t see the demand for a project like Astra at the moment.

MMDelon Mar 13, 2024 6:25 PM

It just sounds like things are evening out at the moment. Instead of seeing 3 to 4 projects going up like we have been seeing, we may see one or two so that demand catches up. We have Central Station (two towers), Sol Modern, X Roosevelt, Saiya, Vela, and X Phoenix Phase 2 when it starts back up under construction. This doesn’t include AVE Phoenix and Skye, and Palm Tower that are finishing up. I am still optimistic about Astra but no way it breaks ground the second quarter of 2024 as planned.

ASU Diablo Mar 15, 2024 9:45 PM

Phoenix wants to hire national consulting firm to work on DT entertainment district
 
https://www.bizjournals.com/phoenix/...-advisors.html

Quote:

The city of Phoenix wants to hire a national consulting firm to help establish a new entertainment district in its downtown.

Phoenix City Council will consider a one-year contract worth $529,000 with HR&A Advisors Inc. for a proposed district at its March 20 meeting.

HR&A has offices in several major markets such as New York and Los Angeles and has worked on entertainment districts in Cincinnati, Detroit, Philadelphia and Toronto, Canada.

It focuses on real estate, economic development and public infrastructure projects and has worked with universities, private owners and investors, hospitals and government.

In the Valley, HR&A has worked on major projects including the design concept for Mesa City Center and the master plan for Margaret T. Hance Park in Phoenix.

The scope of the city of Phoenix agreement, which has two one-year renewal options, includes project management, studies, public participation, feasibility reports, growth analysis, boundary maps and recommendations.

HR&A will be partnering on the project with architecture firm Multistudio, which has a Phoenix office and has worked on a number of projects in the Valley such as Central Station.

Phoenix has been looking for ways to bolster its downtown area and compete with other major markets with more hotels and the establishment of an entertainment district around the Phoenix Convention Center. This would create an area for visitors and residents to walk in a vibrant and safe pedestrian area with amenities such as restaurants, bars, attractions, street performers, art, lighting and transportation options, according to the city.

In September, the city of Phoenix posted a request for proposals for consulting services and subsequently received five proposals, one of which was from HR&A Advisors. A panel evaluated the proposals and selected the winning bidder in December.

The city's economic development and housing subcommittee recommended approval for the contract at its Feb. 14. meeting.

Following a City Council vote, the project will begin in the spring with community outreach and analysis scheduled for the summer. The city expects a draft plan to be delivered by the fall and for the final plan to be completed near the end of 2024.

Phoenix is also in the process of a major expansion of its central business district boundaries in the downtown area, which could help create more development opportunities in the area. City Council is expected to vote on the central business district boundary at its April 17 meeting.

combusean Mar 15, 2024 11:03 PM

Waste of money. Get the convention center activated and redeveloped with a well capitalized and willing partner like Hines and stop f'n around with pointless studies.


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