Phoenix | Astra Towers (2 towers) | 541 FT | 44 Floors & 425 FT | 30 Floors

[MMDelon]

Let’s give it some time and see what happens. Central Station was delayed and we thought the project was dead so let’s see what happens with this project. I still have faith in this project. It could also be delayed due to the Super Bowl coming too.

[gymratmanaz]

Come on Santa.....a late gift of good new news on Astra????

[Obadno]

Originally Posted by gymratmanaz

Come on Santa.....a late gift of good new news on Astra????

.... I dont hold much hope

[combusean]

Seriously. Empire is flush with cash after selling the Stewart and that should have been indicative of some progress. The fact of the matter is a large portion of this project is slated for office when there is *zero* demand for that downtown. It's on the down end of a boom to be spending as much as they're spending in a potentially overbuilt market for every bit of product in the development.

My guess is they need more money than they have, and especially after their shoddy construction record with the Stewart investors just aren't willing to risk them as the lead partner on the project. They'll probably sell the project to a better developer who will reprogram it but doesn't care about the 525' height limit.

[IndyAZ]

I wouldn't be so skeptical this project is dead, nearly every project is delayed in this market and 99% of it comes down to the City review times (not just a Phoenix issue).

The City has standard review times they are supposed to hit, i.e. 45 days for first building permit review. However, most projects are landing between 60-90 days now, and second reviews are also way behind. So when developers plan out their design/permit process to create schedules, they aren't accounting for the extra months of review. Couple that with a revolving door of reviewers at the City, the comments sometimes require more coordination.

Those factors create major delays for developers and early projections of a Q4 Groundbreaking can easily slide 3-6 months to Q2 of the following year. Unfortunately it's a product of understaffed Cities along with Massive Workloads due to increased development demand. This is a current problem in almost every municipality right now in the Valley, along with many other Cities across the County in hot markets.

I also think combusean makes a great point, the office component could be an issue, and wouldn't be shocked if they are trying to rework the design to reprogram that portion of the building (but that's just speculation).

[combusean]

I don't believe this thing is held up in city review, it's finished its zoning long ago unless it's coming back and forth in response to "changing market conditions" ... or whatever developerspeak there is for a project that at the end of the day won't pencil out.

I think entire towers have came and finished in the time since this was initially approved.

[IndyAZ]

There original planned groundbreaking was Q4 this year. Zoning was only completed about a year ago, Design Development takes about 3-6 months and another 3-6 months for Construction Document phase. I never anticipated this project starting till late this year due to how big/complicated of a job this is.

Permit delays, plus any redesign that we aren't aware of can completely blow up that schedule. Also, developers aren't going to go as far as they have without preliminary pricing and underwriting to ensure a project pencils out, most kill projects before they even get to PSP. If it's due to inflation of materials (possible), then they could be going through a Value Engineering process and that could hold things up. I wish I knew someone involved in this project to get some intel, but unfortunately I don't with this one.

I was told there is a project that is in a mess because they approached the City about phased occupancy prior to receiving the final building permit. No clue what project it is, but since this one doesn't have a permit, it's a possibility, and that can cause major issues with permits. Whichever project it was, the smart thing to do would have been to pull your permit and revise it after the fact for phased occupancy, that way you could still start construction while the details are sorted out with the City.

[combusean]

That Q4 ground breaking was way beyond the time past its initial approval than is typical for projects that actually get off the ground though.

I'm not sure what the holdup could be with that project you're talking about, phasing (PHAS) permits and core and shell permits are almost the norm for large projects prior to interior buildout permits.

[IndyAZ]

Originally Posted by combusean

I'm not sure what the holdup could be with that project you're talking about, phasing (PHAS) permits and core and shell permits are almost the norm for large projects prior to interior buildout permits.

This isn't the same thing, core/shell permit split from building is very common. Phased occupancy is something we have really only seen hospitals do in this market. Complete the entire structure and exterior improvements, but leaving many interior floors as shell space. It's complicated from a life safety standpoint and construction logistics, because you have to come back and finish the structure while its occupied and you are limited to the building elevators. Could be a solution though if they don't have a hotel operator on board, or if they are short on funding and only want to bring half the units to market initially to save cost and fit within their funding. Not sure if its this building, I just know there is a project currently trying to do this downtown, that's why I mentioned it.

[MiEncanto]

Originally Posted by gymratmanaz

Come on Santa.....a late gift of good new news on Astra????

Astra was always a long shot.

And now the largest tower in Phx sits empty largely because the largest private employers are either downsizing (every law firm) or have already left (Wells Fargo, Chase, US bank).

The vacancy rate for Class A in downtown appears to be growing.

[Obadno]

Originally Posted by MiEncanto

Astra was always a long shot.

And now the largest tower in Phx sits empty largely because the largest private employers are either downsizing (every law firm) or have already left (Wells Fargo, Chase, US bank).

The vacancy rate for Class A in downtown appears to be growing.

It seems that way but from what I've read downtown has been able to counter those departures with smaller firms, as the downsizing has been very slow over a few years.

Chase is remodeling so Im not to concerned with it being empty for now, and Astras tall tower was apartments and there is no lack of demand for apartments.

[PHX-DUDE-MAN]

I think Astra will still get built but just be delayed and the developers might only build phase 1 and wait a 5 years before phase 2. The developer might definitely scale back office space but just repurpose it for residential or hotel space. It does seem like they are stalling to feel out the market and with all the negative news on a looming recession and a post covid economy I think they want to feel out the market for a bit longer. I don't think it is dead though.

[MiEncanto]

Originally Posted by Obadno

It seems that way but from what I've read downtown has been able to counter those departures with smaller firms, as the downsizing has been very slow over a few years.

Chase is remodeling so Im not to concerned with it being empty for now, and Astras tall tower was apartments and there is no lack of demand for apartments.

The Chase remodel is going to be brutal from what I hear. Local developers all took a pass on the sale because the remediation alone is going to be crazy expensive. From what I heard, no one was surprised it sold to an out of state guy who was in a rush to close on a 1031 exchange and didn't have as much time for homework. I REALLY hope the redevelopment is completed and we get some quality tenants downtown so I hope my cynicism isn't perceived as hoping for anything.

Also another obvious point re: Astra is the cost of debt. If they were financing 70% of it, the cost of debt right now is astronomically higher than 2 years ago. On top of that, investors are going to be even more judicious now that commercial markets are cooling.

[somethingfast]

Originally Posted by MiEncanto

Also another obvious point re: Astra is the cost of debt. If they were financing 70% of it, the cost of debt right now is astronomically higher than 2 years ago. On top of that, investors are going to be even more judicious now that commercial markets are cooling.

Bingo. That's the issue for all current and future development - the much greater cost of money/financing. The last decade was a distortion of artificially-low cost of financing - that day is over (for now). Projects that have true fundamentals will proceed, those that are just money dumps will not.

[MMDelon]

I still believe in Astra. Hopefully, we find out in the next couple of months what’s going on. Isn’t Astra already paid for with the sale of The Stewart? A project that big may be delayed for other reasons like the Super Bowl and the other two projects close by in X Roosevelt and Saiya. But idk lol Development projects seem to take time in Downtown Phoenix for some reason. I’m still shocked Austin is building that 1000’ skyscraper. I for sure thought 1000’ towers were a thing of the past in the US. And we can’t seem to get a 500’ tower off the ground lol Sorry to bring that up but I was shocked.

[MMDelon]

Besides New York and maybe San Fran I didn’t expect to see another a super tall tower 1000’ plus.

[azliam]

I do not know whether or not this is true, but this article dated from 11/1 stated that "the project is on hold pending a zoning hearing."

https://www.phoenixmag.com/2022/11/0...in-the-future/

[BA744PHX]

Originally Posted by azliam

I do not know whether or not this is true, but this article dated from 11/1 stated that "the project is on hold pending a zoning hearing."

https://www.phoenixmag.com/2022/11/0...in-the-future/

Does anyone know what the zoning hearing is about and when it is?

[CrestedSaguaro]

Originally Posted by BA744PHX

Does anyone know what the zoning hearing is about and when it is?

I am not sure of what zoning hearing the article is referencing. There have been no zoning signs posted onsite (a requirement) since the zoning hearing for a height increase 2 or so years ago and I have not seen anything on the city council agenda since then.

[Obadno]

That article ehhh I wouldn't expect accuracy that could have been a zoning hearing from over a year ago.