Phoenix Development News (3)

[Edifice]

Originally Posted by combusean

A spec office project in Midtown is crazy. Spec projects where they don't even know the use rarely get built. That area has high vacancies and there is no demand for office in Central Phoenix.

If an office development won't get leased and its vacancies cause problems for the city, drags down existing rents, is probably just an entitlement grab/landbank, and smells like overbuilding, I'm disinclined to support it.

Planning is called planning for a reason--it's not rubberstamping any crap that comes through. I don't think the project provides a good direction for the city.

It's interesting how my opinion is so offensive.

It's "interesting"? My response may have been influenced by some previous opinions...

[Obadno]

Originally Posted by combusean

A spec office project in Midtown is crazy. Spec projects where they don't even know the use rarely get built. That area has high vacancies and there is no demand for office in Central Phoenix.

If an office development won't get leased and its vacancies cause problems for the city, drags down existing rents, is probably just an entitlement grab/landbank, and smells like overbuilding, I'm disinclined to support it.

Planning is called planning for a reason--it's not rubberstamping any crap that comes through. I don't think the project provides a good direction for the city.

It's interesting how my opinion is so offensive.

I wouldn't say that it has high vacancy its sub 20% and most of what is empty is low quality out dated office space.

population first, office second. Just look at Tempe. Companies are only going to pay the premium to locate in central Phoenix, when Central Phoenix has cahe enough to be worth the extra price per sqft

Now I agree with you that I'm surprised we arent seeing office spec projects downtown where vacancy is lower and the buzz is stronger but Midtown is definitely not some unpopular backwater, within a half a mile of this intersection several hundred apartment units have been and are being built as well as significant office remodels/refurbishments, a new Medical School and Hospital expansion. Not to mention this is a far more reasonable project than the insane Indian School and Central proposal.

I dont think its crazy for a land owner to start thinking about the office demand in the area 3 or 4 years from now.

[TJPHXskyscraperfan]

Piggy backing on Obadno, I live in Midtown and definitely see the remodels of these offices happening and filling up with new companies. Yeah, the Thomas project seems way more realistic than the Indian School Project although I would love to see the Indian School Project happen.

[combusean]

The data I saw was 22% for Q1 2019, perhaps it's dropped.

Those are all excellent points to make. I think I misjudged the size of the floorplates from the site plan, they offer much more contiguous space than a couple towers I investigated.

Central/Thomas has a 2.0/1000 parking ratio. This is far lower than all the other buildings in Midtown. Novus which is appreciably close to the train has 5.26/1000 ratio reflecting the trend of cramming ever more workers into large spaces.

I think it's extremely risky to think that many people aren't driving in.

Maybe they will be lucky in snagging a large company that wants a bunch of space available all at once, but that's a big if with everything else.

[Jjs5056]

Originally Posted by PHXFlyer11

As do I. But they’ve already placed their bet. They need as much foot traffic around Arizona Center as possible, otherwise they risk disaster. I really hope there is some residential that comes along with the Mercado redevelopment as it can only help Arizona Center. They do have more land, so if they can develop the two towers and flip them, maybe they’d also want to then redevelopment the north of the complex and add apartments.

Neither AC or Palmcourt will incorporate retail, so really, what is dependent on built-in foot traffic at AZ Center? The current retail mix is identical to what it was prior to the reno: restaurants and bars. The entire redesign was misleading. They mordernized the facade and cut open a valet entry... so what? They didn't even bother to at least have the retail spaces adjacent to the valet open to the street.

DTPHX has a lot of great stuff happening, but a livable city needs more than bars and restaurants. AZ Center should have been able to satisfy the residential district that has formed along 4th st, as well as the nearby universities. There is more than enough space near the Taylor intersection to have constructed an anchor tenant space for something like H&M, the corner of the AMC or parking lot would have been a great space for a Walgreens or Urban Target, and a few floorplates could have been combined for much-needed retail like a shoe store (ALDO?), home goods (World Market + Harmon combo), and small men/women boutiques. Palmcourt and AC offered an opportunity for anchor tenants- imagine something like a Design Within Reach beneath the apt tower?

That said, relying on ASU - owners of the Mercado - to save the day with proper planning is irrational given their track record. Cronkite is the only building that is truly mixed use. The fact that their flagship property is home to a Midfirst Bank and Market is pathetic.. where is a Barnes and Noble ASU overlooking Civic Space? My preference would be for as many of the PBC lots be sold off as possible to force density and mixed uses on the current lots. But, the Mercado is especially important with its connection to AZ Center and Heritage Square/CC/etc. It's crazy that no residential or retail exists on the campus yet, but that block should absolutely contain housing (student + apartments), medical conference space + hotel, and a new school like a Dental, Vet, etc.

[Jjs5056]

The Battery Apartments are 50/50 for me. Are they no longer building on the lot to the south? If not, it'd be great to see those structures rehabbed. Anyway, the total exclusion of retail in the WD is bizarre and unfortunate, so hearing that the two historic structures will now be retail vs. amenity space is fantastic. Unfortunately, there is nothing nearby to help them succeed, which is why I wish they had added retail or live/work units along the edge to connect to the Summit area.

Residents are a great addition and could mitigate the total takeover by small tech firms with their need to services and retail. It would be great to see the rest of Summit leased out, the parking lot potentially built on, and rehab projects trickle westward. The Job Corps has a massive presence- imagine if they redeveloped their properties to become more integrated? And if the Sporting House became a brewery again? And, at least portions of Jackson 1st st - Central with small retail/bars?

[azsunsurfer]

lol right??? Barnes and Noble is on the verge of financial insolvency but let's open more stores with no proper demographics in the trade area to support it! I wish he was on the board of a major retailer, he would do wonders.

[Obadno]

Weren't we just having this discussion? How do we get on this forecasting/Consulting game because it seems like these guys just read our forum and then go present it to hapless businessmen

Economists: Phoenix more prepared to weather economic slowdown than a decade ago

If there is an impending recession, it’s likely to be short and shallow, economists studying the Arizona and U.S. economy said Thursday, forecasting that any upcoming market correction would be nothing like the market experienced during 2007 and 2008.

At the Economic Outlook 2020 event on Oct. 10 hosted by the Greater Phoenix Chamber of Commerce, Elliott Pollack, CEO of Elliott D. Pollack & Co., said while it is “very late in the game” of the economic recovery since the last recession, he did not foresee another recession being triggered based on current economic factors.

Pollack said employment growth likely will slow as the U.S. gets closer to full employment and population growth continues to be slow, but neither appears to be enough to trigger a recession.

As for Phoenix, most of the population growth has come from people moving to the city from other areas. So far this year, Phoenix has ranked third in employment growth out of 36 metros studied, ranking behind only Orlando, Florida, and Dallas, Pollack said.

https://www.bizjournals.com/phoenix/...o-weather.html

[CrestedSaguaro]

Originally Posted by Jjs5056

Neither AC or Palmcourt will incorporate retail, so really, what is dependent on built-in foot traffic at AZ Center? The current retail mix is identical to what it was prior to the reno: restaurants and bars. The entire redesign was misleading. They mordernized the facade and cut open a valet entry... so what? They didn't even bother to at least have the retail spaces adjacent to the valet open to the street.

DTPHX has a lot of great stuff happening, but a livable city needs more than bars and restaurants. AZ Center should have been able to satisfy the residential district that has formed along 4th st, as well as the nearby universities. There is more than enough space near the Taylor intersection to have constructed an anchor tenant space for something like H&M, the corner of the AMC or parking lot would have been a great space for a Walgreens or Urban Target, and a few floorplates could have been combined for much-needed retail like a shoe store (ALDO?), home goods (World Market + Harmon combo), and small men/women boutiques. Palmcourt and AC offered an opportunity for anchor tenants- imagine something like a Design Within Reach beneath the apt tower?

That said, relying on ASU - owners of the Mercado - to save the day with proper planning is irrational given their track record. Cronkite is the only building that is truly mixed use. The fact that their flagship property is home to a Midfirst Bank and Market is pathetic.. where is a Barnes and Noble ASU overlooking Civic Space? My preference would be for as many of the PBC lots be sold off as possible to force density and mixed uses on the current lots. But, the Mercado is especially important with its connection to AZ Center and Heritage Square/CC/etc. It's crazy that no residential or retail exists on the campus yet, but that block should absolutely contain housing (student + apartments), medical conference space + hotel, and a new school like a Dental, Vet, etc.

Not sure if you missed it or do not remember it mentioned, but there are plans to demo nearly half the AMC with further plans to expand with more retail and possible student housing in the future. The North lot is also slated to be developed. The remodel could have been better, but it's far better than what it was originally. Does this make AZ Center perfect? No, of course not. But it IS getting better and unless another buyer comes along and wants to spend 100+ million on demo'ing and rebuilding an entirely new retail center, this is about as good as it's going to get for now.

I'm not sure why retail wasn't planned for Palmcourt Tower. Maybe the developers figured, why add retail when it's already in the mall? Also, Palmcourt has not released any "final" designs, so maybe this will change? If not, I'm not going to think twice about it when it's still bringing 500'something residents to the block. There are many inward facing malls across the country that do just fine. SLC has two centers that do fantastic. The key is to have retail that people want to come to (i.e. H&M as you suggested), building adjacent residential and getting some office tenants where workers will want to frequent restaurants and bars during lunch and after work. Aside from bars, restaurants and shops, not sure what else to add? Isn't that pretty much life?

[Obadno]

Originally Posted by RonnieFoos

Not sure if you missed it or do not remember it mentioned, but there are plans to demo nearly half the AMC with further plans to expand with more retail and possible student housing in the future. The North lot is also slated to be developed. The remodel could have been better, but it's far better than what it was originally. Does this make AZ Center perfect? No, of course not. But it IS getting better and unless another buyer comes along and wants to spend 100+ million on demo'ing and rebuilding an entirely new retail center, this is about as good as it's going to get for now.

I'm not sure why retail wasn't planned for Palmcourt Tower. Maybe the developers figured, why add retail when it's already in the mall? Also, Palmcourt has not released any "final" designs, so maybe this will change? If not, I'm not going to think twice about it when it's still bringing 500'something residents to the block. There are many inward facing malls across the country that do just fine. SLC has two centers that do fantastic. The key is to have retail that people want to come to (i.e. H&M as you suggested), building adjacent residential and getting some office tenants where workers will want to frequent restaurants and bars during lunch and after work. Aside from bars, restaurants and shops, not sure what else to add? Isn't that pretty much life?

The plans for the north end are extremely loose but as Time goes on that corner at Filmore and 5th/4th is totally underutilized and will just become more so.

I think that would be a great place for a large office building in the future. As for student housing there was some sort of rough massing plan years ago That I think would involve tearing down and rebuilding the Theater in a way that would allow space built above in a tower or two but I would guess thats a very long way off if ever.

Lastly the AC hotel and PalmCroft dont need retail they are in a complex with mostly empty retail

[PHXFlyer11]

Originally Posted by Obadno

Lastly the AC hotel and PalmCroft dont need retail they are in a complex with mostly empty retail

Do the AC's have a mini restaurant/coffee element? I've never stayed in one. It could be mini retail.

I did with they could activate the corner with a restaurant one the ground floor of PalmCroft, but agree that it ain't gonna happen!

Would be kind of neat to have done the first floor as a sort of tunnel as a warm access point into Arizona Center.

[exit2lef]

Originally Posted by PHXFlyer11

Do the AC's have a mini restaurant/coffee element? I've never stayed in one. It could be mini retail.

I did with they could activate the corner with a restaurant one the ground floor of PalmCroft, but agree that it ain't gonna happen!

Would be kind of neat to have done the first floor as a sort of tunnel as a warm access point into Arizona Center.

I've stayed at the AC in downtown Tucson. There's a small shop for basic needs like shave cream or potato chips. There's also an area that serves breakfast in the morning and functions as a bar at night. That's the extent of it. There's is no full-service restaurant serving lunch and dinner. More generally, the Arizona Center still has too much vacant retail space, even after the recent renovations, to warrant adding more.

[CrestedSaguaro]

BTW. The tower crane is going up for X Phoenix today...AND a 2nd tower crane base has been installed. X will have 2 cranes

[combusean]

I thought ACs did tapas to reflect the founder's Spanish heritage.

[exit2lef]

Originally Posted by combusean

I thought ACs did tapas to reflect the founder's Spanish heritage.

At some locations, yes. I don’t recall any in Tucson, though. The continental breakfast did have a Mediterranean feel.

[Phxguy]

https://www.abc15.com/entertainment/...nCKpn6f2fDx5SQ

Ah yes, the wait for the corner which used to House Tom’s Tavern is over!

[combusean]

^ Holy cow. That is a *huge* restaurant. Biggus also gets another < $10 option.

But tbqh, it looks loud and uncomfortable. Few soft surfaces, lots of all-metal chairs.

[ASU Diablo]

Let's see what developers propose...

https://solicitations.phoenix.gov/So...achmentId=3303

[xymox]

Originally Posted by ASU Diablo

Let's see what developers propose...

https://solicitations.phoenix.gov/So...achmentId=3303

We'll get a bunch of amazing proposals which will never be built.

Have any of the city RFPs actually been built yet? Central Station doesn't seem to have a lot going on despite choosing a winning proposal for a second time.

[CrestedSaguaro]

Originally Posted by xymox

We'll get a bunch of amazing proposals which will never be built.

Have any of the city RFPs actually been built yet? Central Station doesn't seem to have a lot going on despite choosing a winning proposal for a second time.

The Knipe House restoration and the Fillmore were both RFP's and are have been moving for over a month now. Central Station is not slated to begin until mid next year, so there's not going to be much action on it except permitting and backend stuff until then.