Phoenix Development News (3) - Page 403

exit2lef · #**8041** Posted **Aug 17, 2015, 3:47 PM**

Quote:

Originally Posted by biggus diggus

It always comes down to CAP rate, so a bunch of old leases at lower rents mean less than a couple new leases at a high rate.

If I have five spaces for rent and I rent four of them at $21/ft then I have positive cash flow, and that's good right? but if I rent three spaces at $26/ft then I can show a prospective buyer that my average rent is $26/ft and I have a few vacancies due to what is generally written off as a normal vacancy rate.

Commercial real estate and residential rental markets are different in that sense (I'm counting apartment buildings as commercial here because they largely only focus on CAP rate as well) because owners will eat vacancy three meals a day in order to maintain a CAP rate which may help them reap bigger rewards in a sale later. In residential, owners are looking for cash flow and the name of the game is to minimize vacancy which sometimes means accepting a lower rent. I'm speaking in generalities, of course.

So in this instance, my speculation would be that Renaissance is ending current leases which do not wish to renew at a higher rate and would like to take (perhaps) higher short-term vacancy rate which hurts the monthly cash flow just for the benefit of a sale.

Thanks. I had to look up CAP rate, but having done that, this explanation makes sense.

ASUSunDevil · #**8042** Posted **Aug 17, 2015, 3:50 PM**

Downtown Phoenix's Growing Residential Boom:

http://www.bizjournals.com/phoenix/news/...nixs-growing-residential-boom-shown.html

PHXFlyer11 · #**8043** Posted **Aug 17, 2015, 4:23 PM**

Quote:

Originally Posted by ASUSunDevil

Downtown Phoenix's Growing Residential Boom:

http://www.bizjournals.com/phoenix/news/...nixs-growing-residential-boom-shown.html

I wish you could zoom in on this thing. I noticed a few interesting things:

Completely missing the development on 3rd and McDowell which is now well under construction
Not sure what the planned project for the dirt lot next to Spaghetti Factory is. I've never seen a proposal for that land.

Pretty cool map though. Wish they provided details on all the proposals.

mhays · #**8044** Posted **Aug 17, 2015, 7:57 PM**

Quote:

Originally Posted by biggus diggus

You don't need to worry about protecting yourself from a reasonable person, it's the nutty people who are a theat.

The bolded sentence above means the author is determining what walking or biking distance is, and formulating an ad which appeals to people in two classes:

1. those who can ride a bike or walk
2. those who can ride a bike or walk, but can do either for limited distance which is perhaps not as much as required to get to the destination listed.

Federal fair housing laws are arcane and a complaint will result in a mandatory investigation which costs a business owner both time and money, even if it does not result in any fine. There have been instances in the past where this type of thing, or even crazier things have happened. The short answer is that you and I don't decide what a "reasonable person" should do. If the marketing people at Edison want to expose themselves to all that liability, that's on them, but professionally speaking I think it is rather nuts to stick your neck out there like that. It may be a "central theme in advertising for thousands" but that doesn't mean you aren't taking a risk by doing it.

If you want to learn more, you should call one of the many real estate attorneys in the Phoenix area (or any other since fair housing laws are the same throughout the country) and ask them to explain the risks you're taking by classifying the ad as such.

It must be a local thing. Federal laws are federal laws (with some wiggle at the district level initially), but thousands of buildings talk about walkability. Maybe it's not a selling point in some cases, but when it is, it's often used heavily.

My first click: Equity Residential on the first line of their listing of buildings in my city. And my first click for Downtown Phoenix does the same.

There might be a gap between the Equity Residential type guys that can handle spurious claims and the little players that don't know enough to worry...midsized firms that worry but can't easily handle claims. But at any size range it's a common advertising theme.

Further, the suburban-type developers would obviously be less interested or less willing to take a risk than the urban locations.

biggus diggus · #**8045** Posted **Aug 17, 2015, 9:01 PM**

I don't think intelligence and mindfulness is a local thing. Just because people advertise something in a way that is common doesn't mean they can't get themselves into trouble over it.

mhays · #**8046** Posted **Aug 17, 2015, 9:38 PM**

One of the defining strengths of a good developer is the ability to juggle dozens of aspects of their projects at once -- finance, entitlements, design process, understanding what potential residents want, construction management, legal risk, marketing, making everyone around them confident (arguably the most important skillset), and so on.

They tend to be pretty good at balancing marketability and risk, which appears to be the issue here. And many are putting a key marketability point over what they consider a small risk.

combusean · #**8047** Posted **Aug 17, 2015, 10:06 PM**

You can sort of zoom in on the bizjournals downtown multifamily map...

https://a248.e.akamai.net/f/1867/1301/3/...g/6723222/phnx-20150814-downtown-mfr.jpg

It's bullshit tho. There's no solid proposals for the 4th Ave and Fillmore lands or the NEC of Central and Fillmore.

biggus diggus · #**8048** Posted **Aug 17, 2015, 11:31 PM**

I'm not sure what is going on at the 4th and McKinley corner but they are definitely still moving lots of dirt over there, just took this photo from the office:

nickw252 · #**8049** Posted **Aug 18, 2015, 2:50 AM**

http://m.bizjournals.com/phoenix/blog/he...s-inc-to-design-400m-banner-patient.html

Quote:

Phoenix-based Banner Health is planning a 16-story patient tower on its flagship campus formerly known as Good Samaritan — making it the tallest hospital in Arizona.

Now called Banner — University Medical Center Phoenix, the campus is preparing for a 650,000-square-foot patient tower — though it is not yet approved and funded. The proposed tower would create 312 private rooms in the 16-story tower, eliminating all semi-private rooms.

sky51 · #**8050** Posted **Aug 18, 2015, 4:01 AM**

The new townhouses on 3rd Avenue are essentially completed. They look amazing. I love the big gutters on the back side - very urban and industrial; and the walk up front balconies create such a cool sense of arrival/departure from one's unit into the city.

The cladding on the O'Connor Law Building looks fantastic. It is not totally visible in the second pic, but the cladding on that side is not flush - - it is 3D.

The new UA Cancer Center sparkles in the Arizona sunset:

nickw252 · #**8051** Posted **Aug 18, 2015, 4:22 AM**

Those are great pics. I love the look of the brick townhomes.

Has anything happened with the Union @ Roosevelt? It seems like that project has been stalled forever.

CrestedSaguaro · #**8052** Posted **Aug 18, 2015, 5:01 AM**

Quote:

Originally Posted by nickw252

Those are great pics. I love the look of the brick townhomes.

Has anything happened with the Union @ Roosevelt? It seems like that project has been stalled forever.

Union never really stalled, it just slowed down after getting the hole dug. They are currently working on the underground garage and it is about 50% completed. I suspect Union will get a crane and start going above ground level in about weeks or so.

CrestedSaguaro · #**8053** Posted **Aug 18, 2015, 5:04 AM**

Quote:

Originally Posted by nickw252

http://m.bizjournals.com/phoenix/blog/he...s-inc-to-design-400m-banner-patient.html

Dang! I was just about to.post this. Will be great to see another tower going up...even if it is for patient beds.

CrestedSaguaro · #**8054** Posted **Aug 18, 2015, 5:13 AM**

Quote:

Originally Posted by biggus diggus

I'm not sure what is going on at the 4th and McKinley corner but they are definitely still moving lots of dirt over there, just took this photo from the office:

5 story townhome/condo development. I believe it has not had a final plan approval yet.

I park where that white truck is about 2 or 3 times per week and walk to downtown.

ASU Diablo · #**8055** Posted **Aug 18, 2015, 5:17 AM**

Quote:

Originally Posted by RonnieFoos

5 story townhome/condo development. I believe it has not had a final plan approval yet.

I park where that white truck is about 2 or 3 times per week and walk to downtown.

Yeah I believe that's McKinley Row, other development by MetroWest. Also, the crane will be going up at Union around November

nickw252 · #**8056** Posted **Aug 18, 2015, 5:26 AM**

Quote:

Originally Posted by airomero83

Yeah I believe that's McKinley Row, other development by MetroWest. Also, the crane will be going up at Union around November

With as well as the Metro West infill projects have turned out I'm really looking forward to seeing the Union- a bigger project in a prominent location.

nickw252 · #**8057** Posted **Aug 18, 2015, 5:31 AM**

Quote:

Originally Posted by RonnieFoos

Dang! I was just about to.post this. Will be great to see another tower going up...even if it is for patient beds.

A 16 floor tower will make somewhat of an impact on the skyline. At 16 floors it should be about 200 feet tall. It will be nice for Phoenix's skyline expand to the east a little bit.

PHXFlyer11 · #**8058** Posted **Aug 18, 2015, 4:08 PM**

Quote:

Originally Posted by nickw252

A 16 floor tower will make somewhat of an impact on the skyline. At 16 floors it should be about 200 feet tall. It will be nice for Phoenix's skyline expand to the east a little bit.

So you can add this to Luhr's Marriott, Portland on the Park, UA Building and Central Station. 5 towers to really expand the skyline south, east, and filling the gap between downtown and midtown. Love it.

Obadno · #**8059** Posted **Aug 18, 2015, 5:09 PM**

Quote:

Originally Posted by PHXFlyer11

So you can add this to Luhr's Marriott, Portland on the Park, UA Building and Central Station. 5 towers to really expand the skyline south, east, and filling the gap between downtown and midtown. Love it.

And remember Deco is looking at building "downtown" as well as Roosevelt, Id imagine Roosevelt will be their standard 4-7 stories but I hope they go big with a downtown location. Taller with a smaller footprint near ASU maybe 12-15 stories? envy is 7 and its their biggest yet.

I can dream

ASUSunDevil · #**8060** Posted **Aug 18, 2015, 5:22 PM**

Not sure if this has been posted as it's a bit dated. Pretty comprehensive look at the current Downtown projects:

http://dtphx.org/wp-content/uploads/2015/06/Development-Activity-Report-2Q15-2.pdf