Why Whole Foods would be a good fit for Tempe high-rise
Last week, I reported that a Denver developer paid $6.1 million for less than 2 acres in the heart of downtown Tempe, where it plans to erect an apartment tower that will include a ground-level grocery store. The estimated development cost is $80 million to $100 million.
Blueprints are similar to a project previously planned for the site at the northwest corner of University Drive and Ash Avenue that was to include a Whole Foods. That project failed after the bankruptcy of its lender, Mortgages Ltd., which now is defunct.
Sources close to the new deal tell me Whole Foods still is in the works via a letter of intent. The developer, Alberta Development Partners LLC, declined to name the grocer, and Whole Foods representatives say there is “nothing on our dockets for now with regard to a Tempe site.”
Local retail expert Jeff Green said a grocery store would be a major bonus for the Mill Avenue area, which does not have one. Whole Foods, he said, is the absolute best pick.
“I actually think that Whole Foods is perfect for that market,” Green said. “You wouldn’t think students would be a big draw for Whole Foods, but they are.”
Students — or, rather, their parents — usually are flush with disposable income, he said. The grocer’s array of prepared meals also appeals to the younger consumer.
The area’s mix of college faculty and thousands of white-collar workers also are plausible Whole Foods shoppers, he said.Don Provost, founding principal of Alberta Development, declined to say how large the retail space would be or whether it would be occupied entirely by a grocer.
Green said Whole Foods initially built stores in the 35,000-square-foot range, but nearly doubled that size in the years leading up to the recession. Recently the grocery chain has been downsizing back to the 35,000-square-foot format in an effort to drive up its sales per square foot. The Tempe site in question could definitely support a store of that smaller size, he said.
Kristena Hansen covers residential and commercial real estate.