By Rebekah Morris for the Arizona Builder’s Exchange
The 350-acre Papago Park Center enters the final phase of development: The Grand at Papago Park Center has announced Lincoln Property Company (LPC) has been selected to develop the Class A and mixed-use office space. The project is a 60-acre, high-profile, urban mixed-use property on the last developable parcel within the 350-acre Papago Park Center in Phoenix.
This is truly a legacy-type development. The master-developer has owned the parcel on the north side of the Loop 202 for decades, and truly wants this last major parcel to become a crown jewel.
The Grand project will be one of the largest business parks in Arizona. Papago Park Center, Inc., The Grand project’s master developer, selected LPC after an extensive RFP process that included local, regional and national development candidates. Some of the qualities that made Lincoln Property Company the successful developer include: firm and personnel experience, reputation, and the team the development proposal brought together. Team members include HKS Architects and JE Dunn Construction.
At build-out, The Grand will total more than 3.2MSF of mixed-use office, multifamily, hotel, retail and restaurant space, including up to six 10-story, Class A office buildings surrounding a central water feature. Construction on three parking garages will coincide with the buildings’ development.
When combined with Papago Park Center’s existing 3.3MSF of mixed-use projects, there will be more than 6.5MSF of urban development and approximately 20,000 employees and residents.
Not Going Vertical on Spec
Krumwiede indicated that potential tenant interest level in the project is ‘good’, and in general activity in the Southeast Valley is very high. Low vacancy rates along with very little available high-quality space would indicate this could be a viable project to move on quickly. That doesn’t quite seem to be the case; he seemed more inclined to have a portion pre-leased before breaking ground. At present, no tenants have signed letters of intent or pre-lease documents.
With market fundamentals such as high demand and low vacancy, Krumwiede explained why more projects won’t begin without signed tenants (aka speculative development). He explained that without tenants in place, the risk is inordinately higher, which drives much higher equity and capital requirements for the developer to have in place. In many cases, securing major tenants in advance of construction ensures a successful, well-occupied project that will serve the community, investor, and major stakeholders to the highest possible degree.
Infrastructure to Break Ground Soon
The portion of work that will kick off right away is the infrastructure to the development. JE Dunn will break ground on the connecting loop road within the next few weeks, and that could take up to 6-months to complete. The owner, Papago Park Center, Inc. has already taken on the massive task of relocating the canal that will become the central water feature of the park. As part of that process, SRP’s Land Department worked with worked to secure the land rights and process the real estate transaction with the U.S. Bureau of Reclamation to allow the canal to be relocated, which is rare. Before the relocation could be approved, a six-month environmental process that included archeological, hazardous materials and biological surveys was completed.
The final water feature looks to be incredible – while still in early in the design phase, it could easily be the size of a football field, creating a stunning sense of place for the development, and a destination of its own just a hop, skip, and a jump from Tempe Town Lake.
How to Work with Lincoln Property Company
Krumwiede did take the time to explain how to work with them. He explained that much as a developer has to differentiate itself and be the right developer for the right project, the design and construction teams have to do the same. He selects the best fit team for the project, saying who he would use for TI projects is very different from large-scale ground-up developments. He prefers to be a ‘significant’ client of any firm he chooses to do business with. The first step for any firm to approach LPC is to reach out to Construction Manager Doug Klocke.