Two affordable housing and one market rate project to start construction in the next 6-8 months.
https://www.bizjournals.com/phoenix/...aFFTK0ZSIn0%3D
Scottsdale-based Defer Gain and Los Angeles-based Pacific Oak Capital Markets Group have formed a joint venture to develop projects using "opportunity zone" funding.
They'll start out building three apartment communities in downtown Phoenix totaling $61 million in development costs, said Mike Lafferty, partner in Defer Gain.
First to be built will be a 140-unit workforce housing project called Imperial Apartments near 20th and Roosevelt streets within the Edison Eastlake Choice Neighborhoods, which has begun a $150 million redevelopment project.
That project will join the addition of 1,100 new city of Phoenix housing units, propelled by a $30 million federal grant recently awarded to the Edison Eastlake neighborhood.
"We're the only private developer within the Choice Neighborhood area," he said. "We'll mobilize in September."
Of the $61 million investment, $15 million will be used to build the Imperial Apartments on a 2.1-acre parcel he bought in June, Lafferty said.
"Workforce housing is the most underserved housing type of all housing types," Lafferty said. "I've developed a lot of projects and am now working on workforce housing in Phoenix, Prescott and Coolidge. It's gonna take over a larger part of my business henceforth."
Too many employees in downtown Phoenix are having a tough time affording apartment rents, he said, pointing to his partner Scott Ton, who employs more than 500 people.
"His employees are living in horrific places and are being taken advantage of by landlords," Lafferty said. "Scott can't send company trucks home to some of these locations. They'll be stolen."
That's why he settled on the area to build workforce housing units — it's a central location near light rail and buses.
"It's very important to have the first one be successful so we can build off of that," Lafferty said. "It's also very important employees are living in a very safe environment."
He also plans 600 workforce housing units totaling $70 million in development costs in Coolidge over the next seven years as Nikola Motor Co. and Lucid Motors Inc. build out their operations.
"We're seeking other sites to just prototype and stamp this out 10 more times," Lafferty said. "The challenge is buying the right land in a booming market. If we have to, we will wait until it slows down a little bit."
In addition to the workforce housing, Lafferty also is building other types of apartment communities, including efficiency housing and market rate properties.
The 241-unit St. Ambrose apartments will be considered efficiency housing, which means they are smaller than a traditional apartment unit but still have full kitchens and full appliances, Lafferty said.
The 84-unit Presidential Apartments will be standard-sized apartments with typical apartment rental rates, he said.
Here's a closer look at the three apartment communities the joint venture has on its plate:
Closer look
The Imperial Apartments
Address: 919 N. 20th St., Phoenix
Units: 140
Development cost: $15M
Rent range: $800-$1,400 per unit
Square foot range: 500-800 per unit
Type of housing: Workforce housing
Groundbreaking: September
St. Ambrose Apartments
Address: 220 N. 12th St., Phoenix
Units: 241
Development cost: $26M
Rent range: $800-$1,400 per unit
Square foot range: 350-600 per unit
Type of housing: Efficiency housing
Groundbreaking: January 2020
Presidential Apartments
Address: 1111 W. Washington St., Phoenix
Units: 84
Development cost: $20M
Rent range: $1,200-$1,950 per unit
Square foot range: 600-1,100 per unit
Type of housing: Market rate
Groundbreaking: December 2019
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