Arizona Center Development

[ASU Diablo]

I figured this deserved its own thread now that the reno is kicking off AND will include multi-family housing and boutique hotel in the first phase

Link

No details on how many units or height just yet, but according to this brochure that was circulating around last year, hotel appears to be 10+ stories and would be situated on 5th St, just south of the parking garage (Parcel A).

Residential may go on the NWC of 5th and Van Buren and also appears to be 10+ stories (Parcel B). Empty parcels are zoned for up to 450'

https://cassidyturley.onehub.com/d/x6h2/








AC Marriot Hotel Rendering


Palmcourt Tower (residential tower)

[floc34]

This is great, hopefully they will renovate the AMC also.....

[ASU Diablo]

Originally Posted by floc34

This is great, hopefully they will renovate the AMC also.....

From what I remember reading from previous articles, the AMC is not in scope to be renovated OR down-sized. At least in the initial phase. I think 24 screens is too big and would like to see it reduced.

[KEVINphx]

scratch the original response - too quick and missed the article!

[biggus diggus]

Wow, make Arizona Center great again!

The sheer number of things underway right now is astonishing.

[ASU Diablo]

http://azbigmedia.com/azre-magazine/...-make-progress

[exit2lef]

Originally Posted by airomero83

http://azbigmedia.com/azre-magazine/...-make-progress

But still no announcements of new tenants. I'm hoping that's coming soon. Renovated or not, there's a lot of vacant space at the Arizona Center.

[ASU Diablo]

Originally Posted by exit2lef

But still no announcements of new tenants. I'm hoping that's coming soon. Renovated or not, there's a lot of vacant space at the Arizona Center.

Agreed. Tidbits in the article about the hotel/apartments too.

Jaimie Cronemeyer, senior vice president of operations at Parallel Capital Partners, announced during the ceremony for the renovations in March that a boutique hotel and multifamily housing will be added as amenities to the Arizona Center. More details for the newly announced amenities will be released after negotiations are complete.

[ASU Diablo]

Already posted in the Phoenix thread but figured would post here as well.

http://www.bizjournals.com/phoenix/n...-downtown.html

[biggus diggus]

It's possible the author misunderstood what he was told and maybe he should have written "second tallest residential tower in Arizona". 407/31 = 13 feet per floor. Seems abnormal.

edit: looks like air romeo beat me to the punch while I was writing this reply!

[biggus diggus]

So we have a guy who has never designed a (constructed) high rise, a company who has never developed a high rise, an over saturated apartment market, and a location in which a new ownership​ team really needs to draw attention and create excitement.

Yeah, I'll wait here.

And don't a single one of you try to tell me the downtown market isn't over saturated in the upscale segment, rents are dropping and vacancy rates are rising.

[Obadno]

Originally Posted by biggus diggus

And don't a single one of you try to tell me the downtown market isn't over saturated in the upscale segment, rents are dropping and vacancy rates are rising.

The Market isn't oversaturated

[mdpx]

Originally Posted by biggus diggus

So we have a guy who has never designed a (constructed) high rise, a company who has never developed a high rise, an over saturated apartment market, and a location in which a new ownership​ team really needs to draw attention and create excitement.

Yeah, I'll wait here.

And don't a single one of you try to tell me the downtown market isn't over saturated in the upscale segment, rents are dropping and vacancy rates are rising.

You are just incorrect. Here are the facts on Downtown's Top 20 High-value Multifamily properties:

Last quarter overall vacancy: 13.6%
This quarter overall vacancy: 9.8%
Occupancy last quarter: 86.4%
Occupancy this quarter: 90.2%
Concessions are down (good sign). They don't need as many incentives to lease up.

These figures are similar to totall Downtown multifamily regardless of quality. It's across the board.

Biggus-You have been singing the imminent death of multifamily song for sometime and arguing against facts with several on the forum. What repressed anti-apartment pain are you processing, dude? I'm curious. Thanks.

[biggus diggus]

Originally Posted by mdpx

You are just incorrect. Here are the facts on Downtown's Top 20 High-value Multifamily properties:

Last quarter overall vacancy: 13.6%
This quarter overall vacancy: 9.8%
Occupancy last quarter: 86.4%
Occupancy this quarter: 90.2%
Concessions are down (good sign). They don't need as many incentives to lease up.

These figures are similar to totall Downtown multifamily regardless of quality. It's across the board.

Biggus-You have been singing the imminent death of multifamily song for sometime and arguing against facts with several on the forum. What repressed anti-apartment pain are you processing, dude? I'm curious. Thanks.

What you have just stated is absolutely 100% counter to every anecdotal piece of information given to me by people who are in the buildings (either owners or management) every single day, I trust them much more than some stat that may or may not be out dated (depending on what opening date they chose for many of the new units) or even worse could be biased. Maybe these stats were published two weeks before 380 units became available, maybe since they became available things have been harder, there's no way of knowing unless you're actually there. My sources are whining already.

When management tells me "we had to drop the rents again because there's too much competition in the neighborhood" I interpret it to mean there are more units than there are buyers. It's no different than if you were selling a car. Porsche GT cars are produced in numbers of about 1000-2000 per run and there may be 25,000 ready, willing, and able buyers so the prices skyrocket. There's an almost unlimited amount of Chevrolet Malibus out there so anyone can walk onto a lot and make whatever deal they want. A year ago running apartment buildings downtown you were closer to the Porsche end of that spectrum, now they've fallen back to reality with signs pointing toward continuing over-saturation. I doubt downtown will ever be the Chevy Malibu of apartments but I think you must understand the concept of supply and demand.

I've been in the industry my whole (long) life buying, selling, and running apartments. I know a lot of people who do the same thing, I'm not singing some death song for the hell of it, there's starting to be stiff competition for tenants around Central Phoenix.

[Obadno]

Originally Posted by biggus diggus

What you have just stated is absolutely 100% counter to every anecdotal piece of information given to me by people who are in the buildings (either owners or management) every single day, I trust them much more than some stat that may or may not be out dated (depending on what opening date they chose for many of the new units) or even worse could be biased. Maybe these stats were published two weeks before 380 units became available, maybe since they became available things have been harder, there's no way of knowing unless you're actually there. My sources are whining already.

When management tells me "we had to drop the rents again because there's too much competition in the neighborhood" I interpret it to mean there are more units than there are buyers. It's no different than if you were selling a car. Porsche GT cars are produced in numbers of about 1000-2000 per run and there may be 25,000 ready, willing, and able buyers so the prices skyrocket. There's an almost unlimited amount of Chevrolet Malibus out there so anyone can walk onto a lot and make whatever deal they want. A year ago running apartment buildings downtown you were closer to the Porsche end of that spectrum, now they've fallen back to reality with signs pointing toward continuing over-saturation. I doubt downtown will ever be the Chevy Malibu of apartments but I think you must understand the concept of supply and demand.

I've been in the industry my whole (long) life buying, selling, and running apartments. I know a lot of people who do the same thing, I'm not singing some death song for the hell of it, there's starting to be stiff competition for tenants around Central Phoenix.

You seem to know what you are a talking about most of the time, and I have no idea where Mdpx got the stats.

But If the stats he provided are accurate arguing that your anecdotal discussions outweigh the actual numbers is not a good place to stand on.

[biggus diggus]

Originally Posted by Obadno

But If the stats he provided are accurate arguing that your anecdotal discussions outweigh the actual numbers is not a good place to stand on.

I understand your position and I appreciate it because I would likely take the same stance if I were you. Let me just offer this scenario, though:

There are 3,000 units under construction and then 500 of them become available. There's excitement in the air and they lease to 90% right away. Now there are 2,500 under construction and people are chomping at the bit for the next few to open, when 500 more open they lease to near capacity almost instantly at asking price. At this point some stats are published indicating the downtown luxury apartment market is the healthiest thing there is. Now, 1,000 more units open up and half of them lease right away and the other 500 are sitting around, prices come down a bit and activity picks back up but the lease rates are now a little lower and vacancies are a little longer. At this point 1,000 more open up and that last batch of 500 is still having trouble. Uh oh, now there's 1,500 on the market, time to lower prices to beat out our neighbors. This is how over-saturation begins. The market will continue to correct itself, right now it's slowing down.

Any stats published in the middle of that cycle would not reflect the down-turn in the market. Further, we don't know who published those stats, is it someone with a horse in the race?

Anyway, I'm not trying to take everyone here to negative town, I'm just realistic with my expectations. I've been doing this in very high volume for a very long time and I've seen these cycles before. If everyone I know is telling me they're having more trouble now than they were a few months ago and attributing it to increased competition, I have to take them for their word. I have had some units sitting around in the Biltmore area and have had to practically give them away recently, which is pretty abnormal for the past 2-3 years. My downtown residents aren't moving out because I'm still charging them the rents that were appropriate 12-18 months ago and if they moved out of my place they would have to pay 15% more for anything else. Captive audience.

[fawd]

Originally Posted by biggus diggus

When management tells me "we had to drop the rents again because there's too much competition in the neighborhood"

Which apartments are dropping rents??? I'd actually like to know, I must be living in the wrong place.

I have two apartments in two different developments downtown... Both buildings have been increasing rates EVERY year (including this year) since we got them in 2013 and 2014 respectively

[biggus diggus]

Baron and proxy are both renting for less now vs. when they first opened.

I'm not talking about year to year rents, it's too early to forecast that since these places have only been open for months. 11/12 Capital Place have dropped by 10% since opening.

It's common, though, to raise rent at each renewal for existing tenants. They may be raising existing tenant's rents thinking "they wont move" while they are simultaneously having to drop rates to fill new vacancies.

[PHXFlyer11]

Originally Posted by biggus diggus

Baron and proxy are both renting for less now vs. when they first opened.

I'm not talking about year to year rents, it's too early to forecast that since these places have only been open for months. 11/12 Capital Place have dropped by 10% since opening.

It's common, though, to raise rent at each renewal for existing tenants. They may be raising existing tenant's rents thinking "they wont move" while they are simultaneously having to drop rates to fill new vacancies.

Give it a rest. Yes, eventually you will be right. Will it be a year or 5 years from now? Even a broken clock is right twice a day.

[fawd]

Originally Posted by biggus diggus

Baron and proxy are both renting for less now vs. when they first opened.

Gotcha. I could have told you that before they opened - they were over priced out of the gate.


Didnt I say a month ago to expect more 'big' residental developments in downtown Phoenix after the whole 'they cut the appartments out of Block23' non-sense?

We've got more room to grow still