https://www.bizjournals.com/phoenix/news...enddate=2025-08-14&utm_term=ep4&empos=p4
Astra project's groundbreaking delayed to 2026 due to financing issues
Arizona's tallest tower will be 541-foot residential building in Phoenix
Downtown Phoenix experiencing high apartment vacancy rates amid construction boom
The developer of a $650 million project to build Arizona's tallest tower won't break ground in 2025, after all.
Originally projected to break ground during the second quarter, the project is getting pushed back to potentially break ground in downtown Phoenix by the back half of 2026.
Aspirant Development, developer of the Astra, is still working on finalizing financing, a spokeswoman for the Scottsdale-based developer confirmed to the Business Journal.
The project is expected to be built on 2.18 acres on Second Avenue between Van Buren and Fillmore streets in downtown Phoenix. It is slated to include a 44-floor residential tower that will be 541 feet tall, surpassing the 483-foot former Chase Tower as the largest in Phoenix. An adjacent tower will span 34 floors and rise 424 feet.
With 700 apartment units, the project also will include 185,000 square feet of office space and 14,500 square feet of retail and restaurant space, as well a a 250-room hotel and 1,156 underground parking spaces.
New building would eclipse former Chase Tower
For the first time in Arizona's history, the tallest tower in the state – when it gets built – will be a residential tower and not a commercial space.
"Downtown Phoenix’s tallest tower being a residential building is emblematic of the evolution the area has undergone into a true live/work/play destination," said Connor Devereux, director of market analytics for CoStar Group/Homes.com. "An influx of retail and entertainment options, new luxury rental housing, the extension of light rail, and growing enrollment at downtown universities have made the area popular among young people seeking a dynamic lifestyle."
Anyone who had been to the top of the former Chase Tower on Central Avenue back in the day can tell you how amazing the view is up there, said Peter O'Neil, national director of research for Northmarq.
"I bet this project will offer some amazing views," O'Neil said. "It will be interesting to see how quickly the project leases up and what kind of rents they can command — especially on the units on the higher floors. Will renters pay a premium for some of the best views available in the Valley? Only time will tell."
CoStar is tracking about 2,600 apartment units currently under construction in core downtown Phoenix, with several other proposed that have not yet broken ground. These new units will add to an existing inventory of about 8,000 market-rate, non-student apartment units in core downtown Phoenix, Devereux said.
"The stabilized apartment vacancy rate in downtown is above 10%, compared to 8.5% for the Valley as a whole," Devereux said.
More multifamily developers go vertical in downtown Phoenix
The Astra project seems like it is the next step in recent multifamily development trends that have been taking shape in downtown Phoenix for the past few years, O'Neil said.
Of the 15 high-rise buildings with more than 15 stories in downtown Phoenix, two-thirds of those properties have been delivered during the past five years, he said.
Some of this is because of recent population trends, with more people living in downtown Phoenix, where there's more amenities and higher education creating renter demand for housing, O'Neil said.
"Developers are responding to that demand by bringing new projects online," he added.
Phoenix's downtown core has been one of the primary targets of the multi-decade high wave of new supply that has entered the Valley multifamily market over the past few years, Devereux said.
"More than 4,000 units have delivered in the CBD since the start of 2020, doubling the area’s inventory of market-rate apartment units during that time," he said.
The substantial supply injection, much of which was luxury communities targeting the top of the renter pool, has intensified competition for prospective tenants, he said.
"While downtown has several long-term drivers that are supportive of underlying renter demand, the area is facing a temporary imbalance that has led to declining average asking rents, longer lease-up timelines, and elevated concession usage," Devereux said. "Over the long term, however, the area’s ongoing revitalization should support a recovery in multifamily performance once supply-side pressure abates."
O'Neil said he is seeing more supply growth than new demand downtown.
"Vacancy downtown has generally been about a full percentage point or two — 100 to 200 basis points — higher than the metro Phoenix average during the past few years," O'Neil said. "That's pretty common in areas where there has been a steady stream of new inventory over a period of a few years."
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