By Sammy Williams for AZBEX
The latest in the BEX Leading Market Series found attendees gathered at SkySong in Scottsdale on Thursday, April 4th to discuss the ever-changing world of mixed-use development.
BEX President Rebekah Morris kicked off the breakfast with an overview of the mixed-use sector, which comprises $7B in total construction costs around Arizona. Using information collected from the BEX Database, Morris described 105 projects $150M+ with 85 different owners/developers, 65 different design firms and 43 unique general contractors.
“Forty one percent of these projects do not yet have a general contractor selected,” said Morris, one of many statistics that magnified the mixed-use construction opportunities for attendees and their companies.
After outlining the market, Morris went on to introduce the moderator, Kevin Burnett, CFO of Sundt. Burnett then welcomed the panelists: Kelly Copeland, COO, Grande Vita; John DiVall, Senior VP of Real Estate Development, Ryan Companies; Aric Bopp, Deputy Director for Strategic Initiatives, City of Mesa; and Larry Pobuda, Executive VP, OPUS Group.
Copeland gave attendees an inside look at Grande Vita, a “biocity” campus in Mesa on Crismon Road and US 60. The mixed-use development incudes: a 12-story assisted living community, six-story medical office building and an urgent care located just across from Mountain Vista Hospital. A Residence Inn hotel will open in May, with 10 restaurants and a luxury condo tower planned.
“Our future plans for Grande Vita include a skilled nursing facility with an adjoining campus for nursing students,” Copeland said.
Bopp gave the city’s perspective on the Grande Vita project and discussed the future of mixed-use developments in Mesa. In addition to bringing Arizona State University to Downtown Mesa, Bopp highlighted the upcoming Vivo and Gallery Park developments.
“Mesa is extending light rail through the heart of downtown with a focus on energizing the area, and a lot of that is mixed-use development,” Bopp said.
DiVall described a yet-unnamed mixed-use development near the Scottsdale Airpark, which will include office space, industrial buildings and hangars with runway access.
“We’re also working on Tucson Gateway, on the NWC of Speedway Boulevard and Campbell Avenue next to Banner University Medical Center Tucson,” said DiVall, describing a mixed-use, 20-story development including a hotel, apartments, offices and retail.
Pobuda introduced the $250M mixed-use project, Union Tempe, which opened in July near Arizona State University. The 3.22-acre project extends a full city block and is a mix of 407 apartments, retail, public and residential parking. Union Tempe will soon include a 198-room Canopy by Hilton hotel, the state’s first.
“Our 31KSF of retail is almost fully committed and houses the largest Starbucks in the state of Arizona,” said Pobuda.
Notably, Arizona Real Estate and Development (RED) awarded Union Tempe as the Best Mixed-Use Project of 2019.
Growth and Funding
After highlighting their upcoming projects, the panelists discussed the opportunities for mixed-use growth in the East and West Valleys, North Scottsdale, Tucson, and remote areas like Tuba City.
In regard to location, DiVall said, “things are becoming more dense with a trend toward infill projects, so you have to be more flexible in where you are locating the multi-use developments.”
Finding capital to fund either horizontal (uses placed next to each other) or vertical (uses inhabiting the same building and sit atop one another) mixed-use projects was another topic of interest.
Pobuda stated, “Phoenix has been considered a secondary or tertiary market to attract capital.”
However, that may be changing. Copeland highlighted the senior market being open to a lot of opportunity in capital, while DiVall stated that mixed-use projects are attracting both national and international capital.
Getting Projects Off the Ground
Finally, the panelists were asked to share their keys to success in getting multi-use projects built. The resounding theme was communication, with all agreeing that authentic, honest communication among all parties is crucial.
“Limit the decision makers, appoint one point person to communicate with the city,” advised Copeland.
Bopp agreed. “Communicate early and often and identify an ambassador or champion for your project in the community.”
The next Leading Market Series topic will be on Office & Industrial on June 6th. To check out dates and topics or to register for the next event, visit: http://bex-events.com/lms/.