Phoenix Development News (3)

[haux]

These photos are a couple of days old, but I was able to get the big crane being removed from The Stewart.









Here's the mostly completed building. Without the crane, it looks pretty nice.

[dtnphx]

She's a big gal, that Stewart. Hubba hubba.

[Mr.RE]

Originally Posted by dtnphx

She's a big girl, that Stewart. Hubba hubby.

Now she just needs an extra 40 stories. My kind of woman.

[combusean]

Billion Dollar Betsy is way outside the league of us schmucks.

But didn't we meet all those nice girls on Indian School Park that we all thought was never going to happen?

Maybe we're just too picky.

[ASU Diablo]

Looks like some of the first RO2 retail tenants are being announced.

• French Restaurant/bar in the bungalow next to the Cambria Hotel on 3rd St/Portland
• French Coffee Shop in the Knipe House (part of community garden will remain)

https://www.azcentral.com/story/entertai...restaurants-downtown-phoenix/2539435002/

[Mr.RE]

Originally Posted by ASU Diablo

Looks like some of the first RO2 retail tenants are being announced.

• French Restaurant/bar in the bungalow next to the Cambria Hotel on 3rd St/Portland
• French Coffee Shop in the Knipe House (part of community garden will remain)

https://www.azcentral.com/story/entertai...restaurants-downtown-phoenix/2539435002/

When is the Ro2 development scheduled to be complete? Is there a residential component?

[Obadno]

Im not really sure it almost seems like a master-plan where its kind of open ended and theyll just build as demand ...demands.

[CrestedSaguaro]

Originally Posted by Mr.RE

When is the Ro2 development scheduled to be complete? Is there a residential component?

All I have seen on Ro2 is the development proposal. I didn't know they were considering Cambria as part of Ro2. Outside of Cambria, nothing else on the Ro2 development has started. So this is going into the old house on the lot to the left of Cambria which has been getting rehabbed the last few weeks.

The residential component is a 27 story tower that is very similar to the Creative House design by Davis that is proposed to go on the SW corner of 1st St and Portland. I think it will be a long while before that gets built though if at all IMO.

[fawd]

Is it just me or is 44 Monroe & Cityscape Residences prettier looking buildings?

Could be just me.

[ASUSunDevil]

Originally Posted by fawd

Is it just me or is 44 Monroe & Cityscape Residences prettier looking buildings?

Could be just me.

I think The Stewart has a cool mid-century look, which is rare for a tall building. The ground floor adaptive reuse is pretty special. They didn't skimp and put the pool on the roof. I'm a fan

[DowntownCosmo]

I was reading a Phoenix New Times article back from December of 2017 on the Ro2 project. Not much new information, but one thing I found interesting was on the timeline for the proposal. The article said...

"True North Holdings has to secure its first building permit within 18 months. Once that first permit is issued, the company will have 36 months to complete the project."

That would mean construction on the Ro2 project is set to begin in 5 months. Not sure if it is going to happen, but it is something to keep an eye on.

https://www.phoenixnewtimes.com/arts/phoenix-roosevelt-row-development-ro2-9916229

[CrestedSaguaro]

More good news for Midtown. Randstad will be consolidating all their local offices to Midtown. No word on the number of employees this will be, but Midtown office growth is getting stronger.

PHOENIX, Arizona – Cushman & Wakefield has announced that Atlanta-based Randstad, a global leader in HR services, signed a 10,668-square-foot (sf) lease at 3838 N. Central Avenue in Phoenix.

On behalf of Randstad, the transaction was completed by Curtis Chickerneo and Larry Downey of Cushman & Wakefield’s Phoenix office and Allison Bittel of Cushman & Wakefield’s Atlanta office. John Bonell, Brett Abramson and Chris Latvaaho of Jones Lang LaSalle represented the landlord, San Diego-based Parallel Capital Partners, Inc.

Randstad will be relocating and consolidating its offices into one location at 3838 N. Central Avenue. The company plans to move in this month.

3838 N. Central Avenue is part of City Square, midtown Phoenix’s prominent mixed-use project consisting of three Class A office towers totaling over 724,387 sf. The site provides tenants with a first-class business environment including high speed internet and fiber optics, City Square Sports Club, Hilton Garden Inn, on-site restaurant facilities, on-site childcare facility, barbershop, shoe shine, beauty salon, easy access to major banks, 24-hour guard services, and on-site management and engineering.

“3838 N. Central Avenue provided a great opportunity for Randstad to consolidate a few offices in the Valley to one central location while reducing their overall square footage and leasing costs,” said Chickerneo.

Source: https://realestatedaily-news.com/randstad-signs-10k-sf-lease-at-3838-n-central-avenue/

[azsunsurfer]

So I noticed there is a listing for a proposed office building at 34 E Jackson right across from Talking Stick Arena. There is an older building on the site. They are looking at 120,000 sqft which seems sizable. Does anyone have anymore info?

[azsunsurfer]

Has the Knipe House renderings been posted yet? I am looking at them now, pretty cool! If I can figure out how to post the PDF later I will!

[CrestedSaguaro]

Originally Posted by azsunsurfer

So I noticed there is a listing for a proposed office building at 34 E Jackson right across from Talking Stick Arena. There is an older building on the site. They are looking at 120,000 sqft which seems sizable. Does anyone have anymore info?

There was a discussion on it a while back. There was an FAA obstruction evaluation submitted for a building with a height of 270' (they actually submitted 4), but I think it would exceed the height limit for that spot by about 15' or so...give or take. Have not heard anything else on it.

Here's the link for the FAA evaluation: https://oeaaa.faa.gov/oeaaa/external/searchAction.jsp?action=displayOECase&oeCaseID=388724503&row=2

[ASU Diablo]

Originally Posted by azsunsurfer

Has the Knipe House renderings been posted yet? I am looking at them now, pretty cool! If I can figure out how to post the PDF later I will!

Not yet but dry Dropbox! I wanna see...

[Obadno]

Office Vacancy Down, Rents Up

https://www.bizjournals.com/phoenix/news...e-vacancy-rate-continues-to-drop-as.html

As metro Phoenix’s employment rate continued to grow in 2018, office vacancies in the Valley dropped to their lowest level since 2007.

The Phoenix area ended the year with a 15.6 percent vacancy rate, its lowest point since the rate reached 14.3 percent in 2007 just prior to the Great Recession, according to Cushman & Wakefield research. The firm anticipates that the vacancy rate will continue to drop in 2019, as employment continues to grow in the Valley, fueled by organic growth and expansions, as well as corporate relocations.

In 2018, the office market had more than double the absorption than in 2017, with 2.8 million square feet of absorption for the year, including 640,000 square feet in the fourth quarter alone.

Just under 1.3 million square feet of new office construction was delivered in 2018, and 2.7 million square feet remain under construction, according to Cushman & Wakefield research. Of the 17 projects under construction, 13 are speculative, totaling 2.2 million square feet. The Tempe North submarket had the largest share of space under construction, with 1.2 million square feet, followed by the Price Corridor in Chandler.

At the end of 2018, office inventory across the entire region reached 102.92 million square feet, the report said.

Asking rents increased slightly in the fourth quarter, with a year-over-year increase of 2.8 percent, to $25.83 per square foot for a full-service lease.

Aetna’s lease of 160,910 square feet in the Workspace Cotton Center in southeast Phoenix was the biggest lease transaction of the fourth quarter. The sale of the Chase Tower downtown was the biggest sale of the quarter and for all of 2018.

Phoenix and Tucson both make massive gains on index of best performing (economically) Cities

https://www.bizjournals.com/phoenix/news...huge-jump-in-annual-best-performing.html

The Phoenix region saw a big jump in the latest 'Best Performing Cities' rankings from the Milken Institute.

The Valley climbed 20 spots to land at No. 20 on the prestigious annual list, which measures the economic vitality of the 200 largest metro areas in the U.S. as well as 201 small cities. The rankings are based on several key metrics, including growth in jobs, wages and salaries, as well as technology output.

Milken Institute officials said its rankings help policymakers, investors and companies understand where local economies are thriving — and in the case of some markets, where they are not.

The Valley's showing — the metro region in the report is defined as Phoenix-Mesa-Scottsdale — was bolstered by strong job growth both recently and in the five-year period from 2012-2017, said Minoli Ratnatunga, director of regional economics research at Milken and a co-author of the study.

"We were particularly impressed with the short-term job growth," she said. The Valley ranked No. 14 for short-term job growth, which measured growth between August 2017 and August 2018. In that time, the Valley landed thousands of jobs including a planned 1,000 from Bank of the West and an announcement of 500 jobs from tech services provider Cognizant.

"That bodes well for the coming year’s index, as we're seeing the beginnings of very strong growth," Ratnatunga said.

Still, despite the region's growth in the tech sector, it still lags behind other tech hubs, she said.

"The overall concentration of the high-tech industry in the metro is lower than in some of its competitor West Coast hubs," Ratnatunga said, noting the Valley ranks No. 54 for high-tech GDP concentration, which is a measure of how important the tech sector is to the local economy. The metro also ranked 102nd for high-tech GDP growth from 2012 to 2017.

Ratnatunga said that sub-100 ranking is reflective of the much stronger tech growth in markets such as Seattle, Austin and San Jose.

Phoenix's tech sector is growing "at a relatively slower rate" than the tech sector in other markets, she said.

[CrestedSaguaro]

Now just waiting to see what the heck the plan is for Chase Tower...

[Obadno]

This is centrally located enough:

VA outpatient facility being built behind Celebrity Theater.

http://azbex.com/275ksf-va-outpatient-facility-planned-for-phx/

An application for Planning Hearing Officer Action for a new Veterans Administration Medical Clinic has been submitted to the City of Phoenix Planning and Zoning Department.

The applicant, US Federal Properties Co., LLC, has requested modifications to previously approved zoning stipulations in order to develop a 5-story, 275KSF VA outpatient treatment facility at the northwest corner of 32nd St and Van Buren St.

The 16.19-acre project site is mostly vacant with the exception of an office and retail building at the northeast corner. Along with the facility, the project will also include surface parking and a level of structured parking at the northeast corner of the site. Open public parking will also be included along Van Buren St.

“In order to proceed with this development, a modification to the previously approved zoning stipulations related to the prior site plan is required to accommodate the proposed medical clinic and the required design standards of the Veterans Administration,” states the application.

The modifications will allow the development to be consistent with the standards of the Walkable Urban Code zoning of the site and will also account for the security concerns related to development as a federal Veterans medical clinic. According to the application, “this property will be fully secured after hours and monitored on a 24-hour basis by security staff and therefore providing cross block access to the general public through a fully secured facility is not possible.”

Background

Back in May 2017, The Department of Veterans Affairs and representative, Savills-Studley, issued a Request for Proposals for a firm to develop the property at 32nd St and Van Buren, and then lease the space back to the VA.

“The Department of Veterans Affairs is soliciting up to a 20-year lease for 203K Net Usable Square Feet of space for use by VA…” the solicitation states. “Space shall be located in a quality new building, constructed of sound and substantial construction…”.

The solicitation due date was September 2017 and a lease award was issued in September 2018 with US Federal Properties Co., LLC as the awardee in the amount of approximately $32.1M.

The application will be heard at the city’s Planning Hearing meeting on February 20th.

Along with the county medical center remodel/expansion this will be some nice money/activity being injected into a very blighted neighborhood.

[Obadno]

More News on increased rent and tight Vacancy, this bodes well for all of the proposed apartments still waiting to begin downtown.

https://azbigmedia.com/report-phoenix-topped-apartment-rent-growth-in-2018/

After a big bump late in the year, Phoenix joined Las Vegas as the nation’s leader for apartment rent growth in 2018, according to RealPage, Inc. In the last 12 months, apartment rents have climbed 7.4% in Phoenix, matching the increase in Las Vegas.

By comparison, apartment rents rose an average of 3.3% across the nation in 2018.

Despite the fast-rising rents, Phoenix renters are still filling up apartments at healthy rates. Occupancy across the market is 95.4%. Even considering the high growth rate, Phoenix rents are still affordable at an average of $1,075 compared to the national rate of $1,353.

Phoenix had trailed Las Vegas for rent growth throughout most of 2018. But the 1.3% bump in Phoenix rents during the last three months of the year was enough to close the gap. It also ranked as the nation’s largest rent increase during the fourth quarter, a seasonally slow period for housing markets. Nationally, apartment rents fell 0.6% in the fourth quarter, on average.

“Phoenix’s strong fourth quarter is impressive, given that so many new apartments have come to market in recent months,” RealPage chief economist Greg Willet said. “But job production has ramped up at the same time, providing fuel to the market. And so all that new supply moving through initial leasing hasn’t seemed to dampen performance stats at all.”

Just over 8,000 units came online in Phoenix in 2018, making it the ninth-highest market in the nation for new units. Inventory in Phoenix is set to grow an additional 2.6% in 2019 as just more than 9,000 units are scheduled to be completed. Another 2,000 units are under construction and set to complete construction in more than 12 months.

“The appetite to begin construction has once again returned to the Valley of the Sun in 2018 though and will continue through 2019,” Willett said. “The 9,000 units completing in 2019 will mark the largest inventory number dating back to 2001. There is an expectation for performance to cool somewhat in 2019. But based on its current strength, even a considerable cool down will keep Phoenix among the nation’s best-performing markets in 2019.”