Above: Glen91

REAL ESTATE | 8 hours ago | AZRE

The West Valley leads the way in land sales in the Phoenix Metro area. With an ever-growing entertainment district, high-performing schools, private utility companies and an expanding infrastructure, the West Valley is an attractive territory for homebuilders and developers and new developments in the West Valley are being announced on a regular basis.Last week, Bill Lally, shareholder and zoning attorney at Tiffany & Bosco, P.A., and his team helped process five cases to completion for developments in the West Valley, all within 24 hours: two in Glendale on Tuesday evening, two in Maricopa County on Wednesday morning, and one in Phoenix on Wednesday afternoon.

“Our team worked very hard to finish June strong. Some of us were in Glendale until 11:00 PM Tuesday night, and then up for hearings starting bright and early the next morning,” Lally commented. “I am proud of our team for getting some tough cases over the finish line.”

June also brought a flurry of online meetings and hearings throughout the month, and on the whole, the West Valley continued to grab the attention of every facet of the real estate industry, including single family homes, apartments, industrial and retail.

Here’s a closer look at what’s to come:

Cotton Properties

The Glendale City Council approved the rezoning of 161 acres located at Bethany Home and the Loop 303. The case includes 94 acres of industrial, 19.5 acres of flex industrial and 47 acres of commercial uses that may accommodate a Love’s Travel Stop. After many hours of debate, the City Council voted to approve the zoning with additional stipulations. The project will produce a net financial benefit of $2.5 million annually to the city, helping to kick off over 21 million square feet of new employment uses along the Loop 303.

Glen91

The Glendale City Council approved the rezoning of a 15-acre property at the southeast corner of Glendale Avenue and 91st Avenue for a mixed-use development. T&B attorney, Shaine Alleman, worked with the property owner over the past year on the general plan amendment and PAD rezoning applications. The first phase will include an exciting multifamily project called Glen91, which will be a distinctive, high quality, urban residential development. The remaining property is being targeted for a major hotel, office space, and other commercial retail users. This is an exciting addition to the adjacent Westgate area that continues to develop as a major entertainment and activity center for Glendale.

Northern Crossing

Lennar Corp. is paving the way for 279 new entry-level and first-time move up homes generally located at the northeast corner of Northern Avenue and Cotton Lane. Northern Crossing is located in District 4 of unincorporated Maricopa County. Lally worked alongside fellow T&B shareholder Ashley Zimmerman-Marsh to obtain a Comprehensive Plan Amendment and zone change for this property in March 2019, and assisted on the closing pieces to achieve Final Plat approval.

Middle Vista

Lennar also received approval from the Phoenix City Council on a General Plan Amendment and rezoning request for property located in North Phoenix at the I-17 and Dixileta Drive. Lally and Marsh partnered with Lennar to obtain the approvals for these two requests, which will allow Lennar Homes to build a brand new, 228 lot residential subdivision over approximately 70 acres. As part of the rezoning approval, approximately 120 acres of separate hillside land will be donated to the City of Phoenix as a mountain preserve or park. This is a win-win for Lennar and the City of Phoenix with Lennar obtaining entitlements for this exciting new community and the City of Phoenix obtaining additional land as part of the beautiful Sonoran Preserve.

Azure Canyon

Mattamy Homes was approved for Azure Canyon, formerly known as Russell Ranch South, generally located north of Camelback Road between Perryville Road and Citrus Road. Azure Canyon is located in District 4 of unincorporated Maricopa County. Lally helped obtain the Comprehensive Plan Amendment and zone change for this property in February 2015, and Marsh assisted on the closing pieces to achieve the recent Final Plat approval.

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Ever since Host Hotel & Resorts Inc. bought the Phoenician from Starwood Hotels for about $400 million in 2015, the Maryland-based company has been working to redevelop a portion of the 300-acre property to make room for more than 300 new homes.

Host Hotels & Resorts Inc., one of the nation’s largest lodging real estate companies, has sold its first land parcel to a homebuilder as part of a larger plan to develop more than 300 homes on what was part of the golf course at the Phoenician luxury resort at the base of Camelback Mountain in Phoenix.

Walnut, California-based Shea Homes paid $17.5 million for 34 home sites.

Maryland-based Host Hotels has planned this redevelopment since buying the Phoenician in 2015 from Starwood Hotels for $400 million.

Maryland-based Host Hotels eliminated nine holes of the 27-hole golf course to pave the way for more than 300 homes, including single-family residential units like the ones Shea bought, along with condominiums and townhomes,

Ken Peterson, Shea Homes’ vice president of sales and marketing, told the Business Journal that the company will offer seven floorplans for the community with homes ranging from 2,300 to 4,000 square feet and averaging $1.5 million.

Shea Homes also will invest $1.5 million to build amenities, including a clubhouse, fitness center, pool and outdoor fire pit and gathering area.

Some homes will be on the golf course with views of Camelback Mountain, he said.

Peterson said Shea Homes was in escrow on the property for about 10 months. He expects those attracted to the homes will be move-down buyers who want to live in a lock-and-leave gated community that is situated at the doorstep of Scottsdale.

“We’ve been working on this quite some time,” he said. 

A few weeks ago, Shea Homes installed a banner on the property to announce the project.

“Within the last few weeks, over 50 people have responded with a level of interest,” Peterson said. 

The project is similar to the luxury homes at the Ritz Carlton resort community in Paradise Valley, said Jim Daniel, president of RL Brown Housing Report.

Of Shea’s 66 home sites there, about half are sold, Peterson said. Those homes will range from 3,500 to more than 7,000 square feet, with average prices around $2.8 million.

Those also are targeted to the move-down buyer, he said.

“Shea has a current $2.74 million closing average at the Ritz and has pulled 30 permits,” Daniel said. “These projects solidify them in offering an ultra luxury product.”

‘Moving to Phoenix like crazy’

Nate Nathan, founder of Nathan & Associates Inc. and land broker on the Shea Homes deal at the Phoenician, said he expects these home sites and others across the Valley to attract people from other areas of the country, including Detroit, Chicago, New York, San Francisco, Seattle and Los Angeles.

“These people are going to be moving to Phoenix like crazy,” he said. 

Also part of the land brokerage deal are Nathan’s team: Dave Mullard, Ryan Duncan and Casey Christensen.

After 40 years of operating the state’s oldest and largest land brokerage firm, Nathan said he’s not worried about Phoenix’s recovery from the Covid-19 pandemic and associated shutdown.

“I’ve lived through five downturns,” he said. “This was not a downturn. This was a tragic speed bump. But we will recover and we will be one of the strongest — if not the strongest — and fastest growing states in the nation.”

Angela Gonzales

Senior Reporter 

Phoenix Business Journal

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What consumers spend to buy everyday items has risen 2 percent in just the past year. With incomes not keeping pace, Americans need to be more careful than ever choosing where they live. 

TheSeniorList.org today released a study on the Most and Least Affordable States using the latest data from the Bureau of Economic Analysis and the Bureau of Labor Statistics on income and expenses like housing, utilities, groceries, healthcare, clothing, gas and more.

Here are key findings in Arizona:

• No. 1 lowest financial services & insurance costs, which is $2,049.

• No. 3 lowest healthcare costs at $5,681.

Here are key national findings: 

• 10 most affordable states are: D.C., Arizona, Georgia, North Carolina, Alabama, Washington, New Mexico, Oklahoma, Texas and Mississippi.

• The least affordable state is South Dakota, where the average resident spends more per year than they take in, a ratio of 100.9 percent.

• The South is the most affordable region, with an average of 77.2 percent of income eaten by expenses, while the Northeast is the most expensive with 85.1 percent.

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Rating agency Moody’s Investors Service said it expects Arizona’s economy “will continue to perform positively and that the state will maintain ample reserves” in boosting Arizona’s rating to the second highest notch.

Moody’s rates states on a 21-grade scale, from C at the low end to Aaa at the top. Arizona now has the second highest rating, at Aa1, up from Aa2 previously. The increase means the state could benefit from slightly lower interest rates when selling bonds or issuing other debt. Arizona has about $1.5 billion in state-issued bonds and similar instruments that have been evaluated by Moody’s.

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A recent American Enterprise Institute (AEI) comparison ranked Arizona the number one inbound state in the nation. The inbound-outbound ranking is determined by the percentage of people moving to the state versus those leaving in 2018 based on Census Bureau data. The comparison also reviewed indicators related to tax and regulatory friendliness, business climate, affordability and job opportunities and found inbound states like Arizona generally vast outperforming their peers.

“With hundreds of new residents and businesses moving to Arizona every day, one thing is clear — smart policy matters,” said Governor Ducey. “With more people and a booming economy, Arizona has been able to invest in the things that matter—like K-12 education, public safety and child safety—while preparing for our future. This is a winning recipe, and Arizona will continue to prioritize growing jobs, expanding opportunity and keeping Arizona the most welcoming state in the nation.

According to AEI, 60.4 percent of the moves in Arizona were inbound and 39.6 percent were outbound, resulting in a +23.2 percent net inflow. Arizona experienced a 3.4 percent employment growth between October 2017 and October 2018, tied for highest of inbound states. Additionally, Arizona’s 2018 Real GDP growth rate reached 4 percent — the second highest among AEI’s inbound states.

With a growing economy, hundreds of new residents everyday and a fiscally conservative budget, Arizona went from a $1 billion deficit four years ago to a $1 billion surplus today and a record-breaking $1.014 billion in the Rainy Day Fund.

View the AEI ranking HERE.

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This tenant demand was illustrated by a spike in net absorption. Tenants moved into a net of more than 1.9 million square feet during the fourth quarter, bringing the total for all of 2015 to more than 3.5 million square feet—the strongest single year of net absorption since 2006.

Developers are responding to the heightened tenant activity by moving new projects through the development pipeline.

This tenant demand was illustrated by a spike in net absorption. Tenants moved into a net of more than 1.9 million square feet during the fourth quarter, bringing the total to more than 3.5 million square feet—the strongest single year of net absorption.

Developers are responding to the heightened tenant activity by moving new projects through the development pipeline.

The most prominent of these new developments is the 2.1-million-square-foot Marina Heights Project in Tempe. The first of five buildings that State Farm will occupy came online during the fourth quarter, with additional phases set to deliver in 2016 and 2017.

CONTINUING TO BUILD

Developers are responding to the heightened tenant activity by moving new projects through the development pipeline.

The most prominent of these new developments is the 2.1-million-square-foot Marina Heights project in Tempe. The first of five buildings that State Farm will occupy came online during the fourth quarter, with additional phases set to deliver in 2016 and 2017.

With 2015 in the rearview mirror, the focus is about to shift to our goals and aspirations of 2016.
The early indications call for continued strengthening in the local office market.

Employment growth will be the primary demand driver, and employers are expected to accelerate the pace of payroll expansion in 2016. This will fuel net absorption of more than 3.5 million square feet, driving further vacancy declines and additional rent increases.

It is these underlying market fundamentals that has put Phoenix back on the map for developers and is creating an attractive investment landscape. Phoenix is a growth market, and the office market finds itself in the middle of a growth cycle.

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