Phoenix Development News (3)

[CrestedSaguaro]

Originally Posted by biggus diggus

I am at the Phoenician today looking down the hill and it looks like they're building a tower crane at roughly Camelback and Goldwater area. Anyone know what that could be for?

My guess would be Envy. At 8 floors, it will need a tower crane and it was at full steam with groundwork when I went by it last week. That would be closer to Drinkwater and Camelback.

Edit: Just drove by. Crane is for Envy.

[Jjs5056]

Originally Posted by PHXFlyer11

Great news! I hope that Barrister doesn't die after the delay. Who owns the rest of the land to the east of Barrister (but before the Sarver owned lot)? I would think that would be next for development.

I want to see the Barrister building itself renovated and converted into residential + retail, but the overall plans for the entire assemblage are actually pretty lame. 150 units between 3 buildings is really weak, especially if this is to turn into the city's most concentrated retail district. New construction along Jefferson and/or Central of 6 stories is pretty... Yes, keeping the scale of the 6-story Barrister building is important, but that could've easily been accomplished by setbacks or change in the facade at 6 stories, etc. Even doubling the new buildings to about 14 stories would've been fine in terms of complementing the Barrister building, while allowing for an appropriate number of residential units for such a location.

The rest of the land has 2 different owners - one owns a small piece along Madison, and the other owns about half of Jefferson + the remaining piece of Madison. Neither owns any other property in Phoenix, and I would have to imagine the City tried to assemble all of that property before issuing the RFP, so I don't know about their future.

I wish the Marriott hotels were being built in place of the Luhrs Garage, that the St. James and Madison Hotels were kept in tact, and that CityScape's Jefferson frontage was similar to its 1st St or Central Ave blocks. I know that's a lot of 'what if' talk, but the Luhrs Building was perfect for retail along the street and loft conversions on the 2nd floor, which would've complemented the proposed ground level retail in the Barrister developments really well; all of which could've connected to the Madison and St. James as a transition into the Warehouse District. And, Jefferson from 1st Ave - 5th Street could've had nearly continuous double-sided retail potential. As it is, I guess we can hope the foot traffic from the Marriott hotels, and the added street life from the Bitter & Twisted patio, will help fill in the Luhrs retail until something is eventually done with Barrister.

[Jjs5056]

Originally Posted by Obadno

There is no new office space downtown... why build new or rehab an old building when class A office space is available along the 101

I'm not sure what you are trying to say. The article's point is that there is Class A space available in downtown's "jewel" properties (CityScape, etc.), which runs contrary to what we have continued to hear which is that it's downtown's lower-tiered spaces ruining its vacancy %. Hearing about these Class A buildings' problems, along with all of the new tenants at buildings like 111 W Monroe and Luhrs makes me think that maybe there is downtown office demand, but that it's coming from companies with a) fewer employees and b) smaller budgets, which makes them better-suited toward these older buildings.

It's no surprise that many of the companies that have leased downtown space have been start-ups, creative agencies, etc. In fact, it fits the overall theme of investment throughout downtown Phoenix - much more money has been poured into adaptive reuse projects and small-scale apartments than large office, hotel, or condo high rises.

I agree with exit2lef that I am typically fine with companies choosing locations along the light rail; major cities have suburbs with healthy economies. But, the lack of any serious economic growth happening downtown while areas on the fringe prosper is worrisome. Midtown and Roosevelt Row have seen a lot of great new projects, but Downtown proper has been pretty quiet, and I have to think the stagnation of job growth has to do something with it. But, when you have a Mayor supporting a Biomedical campus at Mayo when there's one struggling to grow in downtown, what can you expect?

[Jjs5056]

And, FYI, the 420 Roosevelt/Bodega home is slated for demolition as part of the new Alliance apartments. However, Alliance has been actively searching for a home builder willing to move the house and the Roosevelt CDC has been trying to find an interested land-owner, but neither has been successful.

It would be a real shame if the home is demolished when there is a cooperative developer involved, and there are so many parking lots/vacant land in the area. It kind of disgusts me that the City is RFPing 2nd Street into a massive parking lot when the land could have been used for this house and any others that will soon be endangered by the PBC. I'd personally love to see it go into half of the parking lot behind the Roosevelt Community Church and turned into a restaurant + professional development center (with professional clothing consignment shop, classroom/speaker space for lessons on resume building, vocational studies, etc.). With 2nd Street going to crap, 1st Street is the last remaining hope of a decent connection between Hance Park through to ASU.

McKinley Row
Site plan review is scheduled for 808 N 4th Avenue - MetroWest's McKinley Row. If anyone goes, I'd love to know what's being proposed. I hope it's not just a replica of their 3rd Ave project; I'd like to see live/work units included.

McKinley RFP
Lastly, the RFP for the vacant land between 2nd and 3rd Avenues along McKinley was issued. Kind of an awkward assemblage - I can't imagine a parking garage being configured within that space to support any decent-sized residential project? Plus, it kind of sucks that they are all but forcing the existing alley to be abandoned for any viable project. Anyway, something like Mill Ave/5th Street (old Terralever building) would be interesting there, with maybe 1 floor office + 3 floors residential over the ground level retail instead. I'd like to see some commercial space oriented toward McKinley and have it become a small-scale 'main street' for the west side of downtown.

[azsunsurfer]

Originally Posted by Jjs5056

And, FYI, the 420 Roosevelt/Bodega home is slated for demolition as part of the new Alliance apartments. However, Alliance has been actively searching for a home builder willing to move the house and the Roosevelt CDC has been trying to find an interested land-owner, but neither has been successful.

It would be a real shame if the home is demolished when there is a cooperative developer involved, and there are so many parking lots/vacant land in the area. It kind of disgusts me that the City is RFPing 2nd Street into a massive parking lot when the land could have been used for this house and any others that will soon be endangered by the PBC. I'd personally love to see it go into half of the parking lot behind the Roosevelt Community Church and turned into a restaurant + professional development center (with professional clothing consignment shop, classroom/speaker space for lessons on resume building, vocational studies, etc.). With 2nd Street going to crap, 1st Street is the last remaining hope of a decent connection between Hance Park through to ASU.

McKinley Row
Site plan review is scheduled for 808 N 4th Avenue - MetroWest's McKinley Row. If anyone goes, I'd love to know what's being proposed. I hope it's not just a replica of their 3rd Ave project; I'd like to see live/work units included.

McKinley RFP
Lastly, the RFP for the vacant land between 2nd and 3rd Avenues along McKinley was issued. Kind of an awkward assemblage - I can't imagine a parking garage being configured within that space to support any decent-sized residential project? Plus, it kind of sucks that they are all but forcing the existing alley to be abandoned for any viable project. Anyway, something like Mill Ave/5th Street (old Terralever building) would be interesting there, with maybe 1 floor office + 3 floors residential over the ground level retail instead. I'd like to see some commercial space oriented toward McKinley and have it become a small-scale 'main street' for the west side of downtown.

Not to mention...just driving by the construction site of Alta Filmore you can't help but notice that that development will definately create a fortress like effect from anyone even noticing that site further east from 7th Ave.

[dtnphx]

Originally Posted by Jjs5056

I'm not sure what you are trying to say. The article's point is that there is Class A space available in downtown's "jewel" properties (CityScape, etc.), which runs contrary to what we have continued to hear which is that it's downtown's lower-tiered spaces ruining its vacancy %. Hearing about these Class A buildings' problems, along with all of the new tenants at buildings like 111 W Monroe and Luhrs makes me think that maybe there is downtown office demand, but that it's coming from companies with a) fewer employees and b) smaller budgets, which makes them better-suited toward these older buildings.

It's no surprise that many of the companies that have leased downtown space have been start-ups, creative agencies, etc. In fact, it fits the overall theme of investment throughout downtown Phoenix - much more money has been poured into adaptive reuse projects and small-scale apartments than large office, hotel, or condo high rises.

I agree with exit2lef that I am typically fine with companies choosing locations along the light rail; major cities have suburbs with healthy economies. But, the lack of any serious economic growth happening downtown while areas on the fringe prosper is worrisome. Midtown and Roosevelt Row have seen a lot of great new projects, but Downtown proper has been pretty quiet, and I have to think the stagnation of job growth has to do something with it. But, when you have a Mayor supporting a Biomedical campus at Mayo when there's one struggling to grow in downtown, what can you expect?

As usual, you have most of your facts wrong to support your negative take on EVERYTHING. Though downtown vacancy Class A rates are about 17% now and 20% overall, there are only three contiguous spaces in all of downtown larger than 50,000 SF. Of those three, two are getting close to finalizing, so that leaves one. So, Class A office space downtown is extremely tight for large users. If a large corporate entity wants to build something, they will be hard pressed to get the land assemblage together downtown and then need to make the project pencil out. Most likely, they chose a suburban/campus model such as State Farm did.

Rarely are office towers built (in many second tier cities like Phoenix) with more than one and, at the most, two during any up cycle. Cityscape was the last one Downtown, but certainly another few proposals will come in the next year or so. Its more likely you'll see a hotel, condo or apartment tower before you'll see an office tower. Also, not sure of the downtown you speak of, but it has been anything but quiet with at least a dozen new projects underway.

[gymratmanaz]

THANKS dntnphx!!!!

[ASUSunDevil]

Originally Posted by dtnphx

As usual, you have most of your facts wrong to support your negative take on EVERYTHING. Though downtown vacancy Class A rates are about 17% now and 20% overall, there are only three contiguous spaces in all of downtown larger than 50,000 SF. Of those three, two are getting close to finalizing, so that leaves one. So, Class A office space downtown is extremely tight for large users. If a large corporate entity wants to build something, they will be hard pressed to get the land assemblage together downtown and then need to make the project pencil out. Most likely, they chose a suburban/campus model such as State Farm did.

Rarely are office towers built (in many second tier cities like Phoenix) with more than one and, at the most, two during any up cycle. Cityscape was the last one Downtown, but certainly another few proposals will come in the next year or so. Its more likely you'll see a hotel, condo or apartment tower before you'll see an office tower. Also, not sure of the downtown you speak of, but it has been anything but quiet with at least a dozen new projects underway.

To cater to your signature, it would be nice if Colliers put those tax breaks to use and built something comparable to this adjacent to CityScape:

http://www.designbuild-network.com/news/...0-storey-skyscraper-in-denver-us-4599339

This is a much more attractive option than turning U.S. Airways Center into a cheesy mall, and it could provide large amounts of office square footage on the top floors. If someone had the balls to build something with architectural significance, companies would eat up the office space.

[Obadno]

Originally Posted by ASUSunDevil

To cater to your signature, it would be nice if Colliers would put those tax breaks to use and build something comparable to this on the site adjacent to CityScape:

http://www.designbuild-network.com/news/...0-storey-skyscraper-in-denver-us-4599339

This is a much more attractive option that turning U.S. Airways Center into a cheesy mall, and it could provide large amounts of office square footage on the top floors. If someone had the balls to build something with architectural significance, companies would eat up the office space.

I think its just a matter confidence. Most companies aren't going to spend extra unknown millions to build a tower or two when they could build a campus for much less. Most companies could care less about urban form especially when its bad for business.

As for real-estate developers, why risk with quirky downtown when you can go for the Airpark, Tempe or the price corridor which are practically guaranteed tenants.

[azsunsurfer]

Originally Posted by dtnphx

As usual, you have most of your facts wrong to support your negative take on EVERYTHING. Though downtown vacancy Class A rates are about 17% now and 20% overall, there are only three contiguous spaces in all of downtown larger than 50,000 SF. Of those three, two are getting close to finalizing, so that leaves one. So, Class A office space downtown is extremely tight for large users. If a large corporate entity wants to build something, they will be hard pressed to get the land assemblage together downtown and then need to make the project pencil out. Most likely, they chose a suburban/campus model such as State Farm did.

Rarely are office towers built (in many second tier cities like Phoenix) with more than one and, at the most, two during any up cycle. Cityscape was the last one Downtown, but certainly another few proposals will come in the next year or so. Its more likely you'll see a hotel, condo or apartment tower before you'll see an office tower. Also, not sure of the downtown you speak of, but it has been anything but quiet with at least a dozen new projects underway.

Well said. Facts vs. emotions.

[biggus diggus]

Originally Posted by ASUSunDevil

To cater to your signature, it would be nice if Colliers would put those tax breaks to use and build something comparable to this on the site adjacent to CityScape:

http://www.designbuild-network.com/news/...0-storey-skyscraper-in-denver-us-4599339

This is a much more attractive option that turning U.S. Airways Center into a cheesy mall, and it could provide large amounts of office square footage on the top floors. If someone had the balls to build something with architectural significance, companies would eat up the office space.

I can't read that article because the way they spelled story bothers me.

[combusean]

Originally Posted by dtnphx

As usual, you have most of your facts wrong to support your negative take on EVERYTHING. Though downtown vacancy Class A rates are about 17% now and 20% overall, there are only three contiguous spaces in all of downtown larger than 50,000 SF. Of those three, two are getting close to finalizing, so that leaves one. So, Class A office space downtown is extremely tight for large users. If a large corporate entity wants to build something, they will be hard pressed to get the land assemblage together downtown and then need to make the project pencil out. Most likely, they chose a suburban/campus model such as State Farm did.

Rarely are office towers built (in many second tier cities like Phoenix) with more than one and, at the most, two during any up cycle. Cityscape was the last one Downtown, but certainly another few proposals will come in the next year or so. Its more likely you'll see a hotel, condo or apartment tower before you'll see an office tower. Also, not sure of the downtown you speak of, but it has been anything but quiet with at least a dozen new projects underway.

Leases aren't happening frequently for 50,000 square feet or more. There were two in Q3 2014 in the entire valley, one of which was for a resign:

http://www.costar.com/News/Article/Marke...x-Office-Leases-Signed-in-Q4-2014/169538

93% of 2014's office leasing is happening in the East Valley.

http://www.bizjournals.com/phoenix/news/...-of-phoenix-region-s-office-leasing.html

Phoenix has a huge problem on its hands. Saying downtown is fine because it only has so much contiguous space avoids the problem. The companies that Arizona tends to attract aren't going to put customer service centers in expensive downtown towers--they're going to put them in cheap places on the periphery. Uber is an anomaly, but they're headquartered in a bad area of San Francisco and signed a lease in a Class B building downtown Phoenix.

And 20% vacancy downtown is well over a million square feet. That's a *lot* of space.

[Jjs5056]

Originally Posted by dtnphx

As usual, you have most of your facts wrong to support your negative take on EVERYTHING. Though downtown vacancy Class A rates are about 17% now and 20% overall, there are only three contiguous spaces in all of downtown larger than 50,000 SF. Of those three, two are getting close to finalizing, so that leaves one. So, Class A office space downtown is extremely tight for large users. If a large corporate entity wants to build something, they will be hard pressed to get the land assemblage together downtown and then need to make the project pencil out. Most likely, they chose a suburban/campus model such as State Farm did.

Rarely are office towers built (in many second tier cities like Phoenix) with more than one and, at the most, two during any up cycle. Cityscape was the last one Downtown, but certainly another few proposals will come in the next year or so. Its more likely you'll see a hotel, condo or apartment tower before you'll see an office tower. Also, not sure of the downtown you speak of, but it has been anything but quiet with at least a dozen new projects underway.

WTF are you talking about? exit2lef posted a link to a story on the FACT that downtown Phoenix is not attracting employers downtown. It states "Businesses have been fleeing the suburbs, choosing to relocate their offices in downtown, urban areas – except in Phoenix." Another similar story said the same thing, and noted that the high vacancy rates of Class A buildings. I didn't make any facts up - I was summarizing an article that was posted.

And, as usual, you're assuming that my post had a negative connotation, when there wasn't. Articles were posted that businesses aren't choosing downtown, and I indicated that while that may be true of larger businesses and HQ's, buildings like Luhrs and 111 W Monroe are at least attracting a ton of smaller, startup/tech firms. How is pointing out the stronger points of downtown's economy a bad thing?

The only 'negative' I pointed out was the lack of big projects happening inside of downtown, compared to the small-scale developments that are happening throughout Central Phoenix. I was just saying that it seems as though development is mirroring the office market - small, adaptive reuse projects and such are occurring more frequently than new towers. That's neither positive nor negative.

The only development projects that are currently active downtown are:
1. Luhrs Marriott (19 stories)
2. Monroe HGI
3. Alta Fillmore

And the publicly-funded (which I'll admit I hadn't thought of before):
1. ASU Law
2. PBC Biosciences (10 stories)

So, two projects 10+ stories. Downtown isn't attracting private investment into large-scale development projects right now; I don't see how that can be argued? And, its inability to attract high-quality, high-paying jobs is going to stunt its growth. But, as I stated hundreds of time, it is attracting adaptive reuse and infill projects in surrounding neighborhoods... to me, that's pointing out the positive momentum that is occurring, not the negative, but of course, you know better than I what my intentions are.

[Jjs5056]

Was surprised to hear that the EnHance Park condos on 2nd St/Moreland really are set to break ground next month. This is the kind of project that was sorely missing from the proposals of the last boom - condos will start around $150,000.

http://www.bizjournals.com/phoenix/news/...oper-building-condo-lofts-live-work.html

Between this and The Oscar on 2nd St/Portland, it will be nice to see residential being built so close to the park and with the Firehouse RFP, the live/work units in each will also help create an active border along its edge which is missing right now.

These projects make the City's parking lot RFP for 2nd Street even more frustrating.

[exit2lef]

Noticed on my way to work this morning: Bike lanes are finally being added to Roosevelt. Preliminary markings are in place pending a full restriping in the days to come.

[dtnphx]

Originally Posted by combusean

Leases aren't happening frequently for 50,000 square feet or more. There were two in Q3 2014 in the entire valley, one of which was for a resign:

http://www.costar.com/News/Article/Marke...x-Office-Leases-Signed-in-Q4-2014/169538

93% of 2014's office leasing is happening in the East Valley.

http://www.bizjournals.com/phoenix/news/...-of-phoenix-region-s-office-leasing.html

Phoenix has a huge problem on its hands. Saying downtown is fine because it only has so much contiguous space avoids the problem. The companies that Arizona tends to attract aren't going to put customer service centers in expensive downtown towers--they're going to put them in cheap places on the periphery. Uber is an anomaly, but they're headquartered in a bad area of San Francisco and signed a lease in a Class B building downtown Phoenix.

And 20% vacancy downtown is well over a million square feet. That's a *lot* of space.

I never said downtown was fine. As I posted there is still unacceptable levels of vacancy. For company to commit to going downtown for Class A space, there is nearly nothing left over 50,000K SF. That's a positive to some because that's when projects to alleviate that gap in the market are proposed. Proposed to occupancy of course is 2-4 years. Yes, downtown is hurting because there's not enough high quality, contiguous space for companies to relocate to. That all happened in the past few years when many migrated downtown from Midtown. Its called Flight to Quality. As rents were suppressed from the recession, you could get better digs for the same or less than your last Class B lease. Just last month, Banner took 140K and 121K (those are HUGE leases) in two buildings in Midtown. Why? Because they need to be in Phoenix and that's where the big space is. Also, Uber signed for nearly 42,000 SF in a Class A (Colliers Center I), so not sure where you've been getting your information. Not trying to be a dick, but I do this for a living.

[combusean]

^ Uber also did sign for 111 W Monroe, forgot about the Colliers Center lease.

http://www.bizjournals.com/phoenix/news/...-uber-leases-downtown-phoenix-space.html

In other news, Vanishing Phoenix has posted a preliminary site plan and details about what's to become of 3rd - 5th St and Roosevelt:

5 stories, 316 apartments, ground floor commercial and retail on Roosevelt St. Curb cuts on 5th and Portland Streets.

https://www.facebook.com/permalink.php?story_fbid=887660521289361&id=102070406515047

[biggus diggus]

Originally Posted by exit2lef

Noticed on my way to work this morning: Bike lanes are finally being added to Roosevelt. Preliminary markings are in place pending a full restriping in the days to come.

Here's what bugs the hell out of me, heading westbound it always opened up to two lanes approaching Central, and then remained two lanes until just after first and sure enough people would always pull some dangerous move trying to pass in that right lane and things would go awry. Well, they sort of fixed it and sort of made it worse. Now, at Central the right lane is a turn lane, but in between Central and First the second lane still exists, so now the "I HAVE TO SLAM ON THE GAS AND PASS THESE PEOPLE" moment will come with much more urgency. They really need to delete that right lane altogether.

[exit2lef]

Originally Posted by biggus diggus

They really need to delete that right lane altogether.

Agree with you on that. In fact, I think the westbound bike lane will stop at First Street so that traffic engineers can fit the dedicated right turn lane on the block between First St. & Central.

[biggus diggus]

Originally Posted by exit2lef

Agree with you on that. In fact, I think the westbound bike lane will stop at First Street so that traffic engineers can fit the dedicated right turn lane on the block between First St. & Central.

I should clarify that the right lane has been turned into a turn lane prior to central, but I'm referring to after central, so between central and first avenue.