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

exit2lef Feb 20, 2024 10:08 PM

Quote:

Originally Posted by PHX31 (Post 10147809)
PLEASE let Castles n Coasters hold out and stick around until metrocenter is redeveloped. I may not make it if that place closes and gets demolished.

Seems to be doing OK for now.

I would love to see Castles N' Coasters expand. Phoenix is long past the point where it can support a full-fledged amusement park, and it would be great to have one accessible via light rail.

azcats Feb 20, 2024 11:01 PM

Underground City!
 
Quote:

Originally Posted by combusean (Post 10147363)
Was curious what the forum thought about large scale retail coming to downtown with Saiya, Sol Modern (fka Realm), and Central Station pretty much all at the same time.

I haven't seen floorplans for Saiya or Central Station recently but I had the feeling they were all chasing larger contiguous space which I think has been really missing downtown.


I have thought about this for a long time. Montreal has the Underground City. I haven't been there in over twenty years - but, was very impressed with it. Montreal has extremely bitter winters - Phoenix has extremely killer summers. You want downtown Phoenix to become bigtime - have an Underground City like this. You take the elevator from your hotel - straight down - there your are in a train station and Underground City. I understand all the reality of prohibitive expense...logistics...security concerns...the bad element that it would also draw, etc., etc., but, you can dream. Some of the greatest things ever built - when initially proposed, people screamed "NO Way." Well...even if it were to be built - it probably wouldn't happen in our lifetime.

https://www.mtl.org/en/experience/gu...-city-shopping

combusean Feb 21, 2024 5:40 AM

Yeah no, that's not what I was talking about I will 100% pass on that anyways. Caliche makes digging too expensive and pretty much everything that's attempted to keep pedestrians off the sidewalk has failed miserably in Phoenix.

US downtowns with skyways or tunnel systems are getting absolutely creamed in the post-covid department anyways. Nobody wants to run an already tenuous deli or newsstand that's open 7 - 3 when you have half the customers you did four years ago at best.

What I was talking about is whether the large scale retail in these new tower complexes will suceed at knitting together some of the smaller projects and help the overall disjointedness of downtown.

MMDelon Feb 21, 2024 6:12 PM

Quote:

Originally Posted by combusean (Post 10147363)
Was curious what the forum thought about large scale retail coming to downtown with Saiya, Sol Modern (fka Realm), and Central Station pretty much all at the same time.

I haven't seen floorplans for Saiya or Central Station recently but I had the feeling they were all chasing larger contiguous space which I think has been really missing downtown.

Retail is really missing downtown so I am excited about that and I think it will drive people to stay downtown but there needs to be a way to connect all this retail together which I am not sure how that can happen currently. I think certain streets need to be a walkable space. That is the one way I think that can work. I think adding some shaded coverages and shaded spaces will help too.

MiEncanto Feb 21, 2024 6:33 PM

Quote:

Originally Posted by MMDelon (Post 10148547)
Retail is really missing downtown so I am excited about that and I think it will drive people to stay downtown but there needs to be a way to connect all this retail together which I am not sure how that can happen currently. I think certain streets need to be a walkable space. That is the one way I think that can work. I think adding some shaded coverages and shaded spaces will help too.

We've covered this at length in the past but there's widespread agreement that downtown lacks a primary public square and a walk-only (or at least, mostly walk-only) street.

It would also be nice if downtown had an uninterrupted walking path. I know it's a pipe dream, but I think a north south elevated walking path like the High Line connecting downtown to Hance Park, complete with greenery and trees, would be amazing. It would be super cool if it turned through some of the newer projects going up around Roosevelt Row so it wasn't a pure straight line. I see tons of people out walking in the mornings, many with dogs, who could use something like this. It would also be a nice way to connect the different sections of downtown.

CrestedSaguaro Feb 28, 2024 3:19 PM

Another black-eye to the downtown Phoenix office submarket. Freeport-McMoRan looking to potentially leave downtown.

Quote:

By Audrey Jensen and Ron Davis – Phoenix Business Journal
Feb 28, 2024


Freeport-McMoRan Inc. (NYSE: FCX), the second-largest publicly traded company in Arizona, is eyeing an exit from the downtown Phoenix office tower that bears its name.

The international mining giant, which had a net income of $1.8 billion and employed 27,200 people worldwide in 2023, is preparing to sublease its 250,000-square-foot global headquarters office in the 26-story Freeport-McMoRan Center. The company's lease for the top eight stories of the tower doesn't expire until May 2027.

Linda Hayes, Freeport vice president of communications, said in a statement that "based on the success" of a hybrid-working environment, the company has engaged brokerage firm Cresa Global Inc. to assist in subleasing its downtown office space.

Freeport employs 1,000 in the Phoenix area, according to Hayes. This includes workers that support its global headquarters operations in finance, human resources, information technology and planning, according to its website.

The company said employees have been working out of "redesigned and expanded" offices at the Cotton Center, a large business park in Phoenix near 40th Street and Interstate 10, since the outset of the Covid-19 pandemic.

"These facilities offer flexible work and meeting spaces designed to be collaborative, efficient and more conducive to a hybrid working model," Hayes said in a statement. "Freeport's commitment to Phoenix remains strong. We look forward to our continued role as a meaningful contributor to the city while supporting a work environment that best meets the needs of our employees."

The global mining company has leased its space at the Freeport-McMoRan Center at 333 N. Central Ave. for about 15 years. It shares the building with the Westin Phoenix Downtown hotel, which has occupied the lower nine floors below Freeport's space since the building was developed in 2009. Freeport has two five-year renewal options once its lease expires in 2027, according to data from CoStar Group Inc., but it's unclear whether the company will exercise those options.

Downtown Phoenix in transition
Downtown Phoenix has been in a transition phase for several years with the exit of longtime downtown tower tenants including Wells Fargo, JPMorgan Chase and US Bank, while other commercial development including multifamily and education uses have significantly grown downtown.

The downtown office submarket had a vacancy rate of more than 21% in the fourth quarter of 2023, which is higher than the metro's overall 16% vacancy rate and third among the Valley's office submarkets, according to data from CoStar. For comparison, downtown had a 11.5% vacancy rate in Q4 2019. Over those four years, downtown saw a cumulative negative absorption of about 1 million square feet, CoStar found.

A recent University of Toronto study found that activity in downtown Phoenix had recovered 72% from the Covid-19 pandemic by the spring of 2023. Phoenix ranked No. 21 out of 63 downtowns measured based on cellphone activity data.

The Freeport building is owned by El Segundo, California-based REIT Peakstone Realty Trust (NYSE: PKST), which acquired the asset through its acquisition of Cole Office & Industrial in 2021. Freeport's downtown Phoenix lease makes it one of Peakstone's five largest tenants, which altogether account for a quarter of its revenue, according to its most recent annual filing in February. Freeport makes up approximately 4% of Peakstone's revenue with an annualized base rent of $7.8 million, the filing said.

In total, the company owns seven properties in Arizona, which made up about 12% of its overall annualized base rent in 2023, the highest rent amount of any state in which it holds assets.

If Freeport chooses not to renew its lease in three years, Peakstone will be faced with the challenge of backfilling a large office footprint — and making up millions of dollars in annual rent payments.

Peakstone did not respond to requests for comment about its plans for the Freeport-McMoRan Center.

Challenges remain to fill Freeport space
Should Freeport's space hit the sublease market, it will join other major corporations across the Valley looking to restructure or walk away from their large office footprints amid challenging market conditions.

Tempe-based Carvana Co., after putting nearly 300,000 square feet of its Marina Heights office on the sublease market, will not take occupancy of a new office campus in Tempe that was originally going to house its headquarters. Coworking giant WeWork Inc. plans to vacate nearly 100,000 square feet of space across two properties in downtown Phoenix while working through a Chapter 11 bankruptcy.

Despite ranking toward the top of the Valley's office submarkets for vacant space, there are fewer sublease opportunities downtown compared to the rest of the Valley. Roughly 150,000 square feet of downtown's total inventory of 11.5 million rentable square feet — just over 1% — is currently on the sublease market, according to CoStar data. That compares to 7.8 million of rentable square feet available metro-wide.

The Freeport sublease would effectively more than double available sublease space in the downtown submarket.

"An additional vacancy of this size to a submarket that was already seeing vacancy increase pretty steadily over the past four years just adds further pressure to fundamentals of the downtown office market," said Connor Devereux, CoStar's director of market analytics.

John Bonnell, a managing director for Stream Realty Partners in Phoenix, said perception will play a role in how vacated space will impact downtown Phoenix, which he said is currently in a growth period with more residents and students. While seven construction cranes were visible in downtown Phoenix during the most recent crane count, they are dedicated to residential and mixed-use projects rather than new office space.

Companies looking for office space are targeting footprints ranging from 25,000 square feet to 100,000 square feet that have up-to-date amenities and design. Large employers, specifically, look to be near labor pools and near the freeways, Bonnell said.

In the next five years, downtown Phoenix is expected to see a 10.6% increase in employment, adding about 6,700 workers to the area as a result of education, technology and biosciences growth, which could increase demand for commercial space, according to an economic report of downtown in 2023.

While some office towers in downtown Phoenix have invested millions in upgrades to attract new tenants, other towers, such as the former Chase building, could be converted into a mix of uses including multifamily, hospitality and retail.

Devereux said CoStar is currently tracking three downtown Phoenix buildings that have more than 200,000 square feet of available space.

Most office tenants in the Phoenix area are also mostly service headquarters for companies based in other markets, Bonnell noted.

"That's going to be the challenge for that much space in downtown, for one tenant," Bonnell said. "We just don't have a lot of those corporate users in the market looking for their corporate headquarters here."
Source: Phoenix Business Journal https://www.bizjournals.com/phoenix/...02-28&empos=p1

MiEncanto Feb 28, 2024 4:08 PM

About the only thing left is their name on the building so I am told.

Sad. The corporate vacuum in downtown continues. It's surprising, given downtowns momentum. CoP really needs to buckle down and figure out how to change it.

exit2lef Feb 28, 2024 4:48 PM

I wonder how popular work-from-home arrangements for corporate staff are among the employees who actually work in the mines.

Obadno Feb 28, 2024 5:19 PM

Quote:

Originally Posted by MiEncanto (Post 10153894)
About the only thing left is their name on the building so I am told.

Sad. The corporate vacuum in downtown continues. It's surprising, given downtowns momentum. CoP really needs to buckle down and figure out how to change it.

It should work out eventually. As I have said before and especially with smaller needs post covid companies need to have a REASON to pay a premium to locate downtown.

As downtown fills with people and entertainment it becomes a desirable place to pay extra for an office. I have always thought the city has done a poor job trying to prioritize its downtown, but its fair considering how massive the city is with multiple nodes to focus on.

It's not like before where you locate your office centrally and people move in nearby. You locate where people want to be now otherwise it's a waste of money. See Tempe, see Old Town, see Kierland etc.

Itll work out, but I think the city should do everythign they can including incentives to keep Freeport downtown.

PHX-DUDE-MAN Feb 28, 2024 7:41 PM

Do any of you anons work downtown? Or do you work remote from home or in the suburbs?

Nobody wants to work in a corporate high rise building anymore and I don't blame them.


Quote:

Originally Posted by MiEncanto (Post 10153894)
About the only thing left is their name on the building so I am told.

Sad. The corporate vacuum in downtown continues. It's surprising, given downtowns momentum. CoP really needs to buckle down and figure out how to change it.


exit2lef Feb 28, 2024 7:58 PM

Quote:

Originally Posted by PHX-DUDE-MAN (Post 10154132)
Do any of you anons work downtown? Or do you work remote from home or in the suburbs?

Nobody wants to work in a corporate high rise building anymore and I don't blame them.

Yes, I work downtown. I stayed home only when it was mandated during spring 2020 and came back as soon as I could that summer, well before before most of my coworkers. I like a downtown urban environment and the focus of being in an office away from my house. I found working from home simultaneously boring and distracting.

MiEncanto Feb 28, 2024 8:51 PM

Yes I work downtown, full time. It's definitely different now. Many of the government, business, legal, and accounting jobs are either gone or part-time since they can wfh.

I don't understand why we can't land a corporate HQ who wants to be in an up and coming downtown. I understand why the banks didn't want to have its folks driving an hour downtown to do a job they could do in Deer Valley just as easily. But for corp HQ and for tech companies, being downtown has real advantages.

Obadno Feb 28, 2024 9:51 PM

Quote:

Originally Posted by PHX-DUDE-MAN (Post 10154132)
Do any of you anons work downtown? Or do you work remote from home or in the suburbs?

Nobody wants to work in a corporate high rise building anymore and I don't blame them.

I used to work and live in midtown.

Now I still live in Midtown but work in North Scottsdale/Kierland. Unfortunately that's where insurance in Phoenix Metro is located.

Many decades ago all of the financial services fled downtown for the Camelback Corridor and North Scottsdale and there is about a 0% chance they will ever go downtown.

Obadno Feb 29, 2024 4:28 PM

RFP's

The one we care about is Columbus and Central.

What's interesting is RFP's for single family home lots up in Sunnyslope rather than just auctioning it off

Quote:

The City of Phoenix is seeking developers to build new residential and commercial projects under two different requests.

The City wants to sell three properties featuring 11 residential/multifamily lots and one commercial lot in its West Sunnyslope and Village Center areas. The properties are located at:

1121 W. Ironwood Drive, 8825 N. 1st St., 8817 N. 2nd St. and 8844 N. 2nd Way;
415-501 E. Puget Ave., and
8930 N. 3rd St.
The combined 12 lots have been appraised at $1.45M. Phoenix wants an area-compatible development for each property that will deliver single- and multifamily housing units. A minimum of 50% of the residences should be targeted to households earning 80% or less of the Area Median Income.

Responses are due March 22.

Phoenix also wants a developer for a 3.2-acre site in Midtown at 32 E. Columbus Ave. to build a mixed-use multifamily project targeted to mixed-income residents. The City will provide a ground lease to the successful applicant.

The Central and Columbus site is next to an existing apartment community and is zoned under the Walkable Urban Code and Transit Midtown Character area. Heights of up to 100 feet are allowed under the zoning. To be eligible, submitting firms must have completed a minimum of two vertical mixed-use projects of four stories or more in the last five years.

The development proposal will have to include at least 250 multifamily units, at least 50% of which must be targeted to households at 80% of the AMI. Ground-floor commercial or other community/neighborhood-accessible components are also required.

Applicants must state their intent by April 12, and final applications are due April 19
https://azbex.com/local-news/phoenix...ll-developers/

Obadno Feb 29, 2024 4:32 PM

Also to Follow on to the story about Freeport Shopping for an HQ

How about somebody from he city get in touch with AXON whose having its own HQ troubles with Scottsdale and incentivize them downtown?

I understand that they are kind of a weapons manufacturer but its non-lethal stuff so that should assuage some of the screeching

MiEncanto Feb 29, 2024 10:37 PM

Quote:

Originally Posted by Obadno (Post 10154822)
Also to Follow on to the story about Freeport Shopping for an HQ

How about somebody from he city get in touch with AXON whose having its own HQ troubles with Scottsdale and incentivize them downtown?

I understand that they are kind of a weapons manufacturer but its non-lethal stuff so that should assuage some of the screeching

lol of all the companies in AZ, Axon might be the last to move downtown.

MiEncanto Feb 29, 2024 10:42 PM

Quote:

Originally Posted by Obadno (Post 10154818)
RFP's

The one we care about is Columbus and Central.

What's interesting is RFP's for single family home lots up in Sunnyslope rather than just auctioning it off



https://azbex.com/local-news/phoenix...ll-developers/

That is truly bizarre. I looked up several of these lots and they are tiny dirt lots in residential neighborhoods in Sunnyslope. Imagine being a neighbor and you find out the city won't just sell this property so someone can build a home, but no a developer must respond to an RFP and meet some specific criteria.

I'm guessing they are trying to avoid investors doing sober living homes or retirement/assisted living situations. Because no one is going to seriously over build the neighborhood here... that would not work out well.

best case scenario is a small builder wants to build duplex or tri plexes on them and sell them off at affordable prices.

azsunsurfer Mar 1, 2024 3:52 PM

Quote:

Originally Posted by MiEncanto (Post 10155182)
That is truly bizarre. I looked up several of these lots and they are tiny dirt lots in residential neighborhoods in Sunnyslope. Imagine being a neighbor and you find out the city won't just sell this property so someone can build a home, but no a developer must respond to an RFP and meet some specific criteria.

I'm guessing they are trying to avoid investors doing sober living homes or retirement/assisted living situations. Because no one is going to seriously over build the neighborhood here... that would not work out well.

best case scenario is a small builder wants to build duplex or tri plexes on them and sell them off at affordable prices.

I've seen them do this in South Phoenix. They've had builders build new homes on small lots in some crummy neighborhoods. I believe there was a stipulation that the homes were sold below market to first time home buyers.

combusean Mar 1, 2024 5:59 PM

Yeah, the city wants to maintain affordability there and get something built.

I'm also glad they're pushing density on the Columbus lot too, but I think having an affordable project be that dense will be tough to pencil out.

As for Freeport ... there's not much the city can do when every other city in the US is faced with this problem. Downtown hasn't been an office hotspot for a very long time and the companies that want to headquarter in the region aren't likely to pick downtown anyways. In any event, the newer, more high profile buildings downtown should slowly fill up over time as people right-size/upgrade spaces.

Obadno Mar 1, 2024 7:25 PM

Quote:

Originally Posted by combusean (Post 10155770)
Yeah, the city wants to maintain affordability there and get something built.

I'm also glad they're pushing density on the Columbus lot too, but I think having an affordable project be that dense will be tough to pencil out.

As for Freeport ... there's not much the city can do when every other city in the US is faced with this problem. Downtown hasn't been an office hotspot for a very long time and the companies that want to headquarter in the region aren't likely to pick downtown anyways. In any event, the newer, more high profile buildings downtown should slowly fill up over time as people right-size/upgrade spaces.

Yeah I think its something like 20-30% less space is needed across the board. It will take years for that to slowly fill up again with smaller suites and many tenants


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