Major Biltmore Office Redevelopment Proposed

Credit: City of Phoenix

By Roland Murphy for Arizona Builder’s Exchange

JDM and Best Western, Inc. have submitted a joint proposal to the City of Phoenix to redevelop their properties at the NEC of 24th Street and Arizona Biltmore Circle into a modern mixed-use development in keeping with the area’s ongoing resurgence.

The location is slightly more than one mile from 24th Street and Camelback Road, which was one of Urban Land Institute’s “10 Hottest Intersections in Phoenix” last year. (AZBEX, Sept. 15, 2017)

JDM will redevelop its property with a roughly 215KSF office development that includes a retail component, a hotel or an approximately 320-unit multifamily development to replace the existing office property, which it calls “tired and dated”.

BWI will create a flagship Best Western Premier-branded hotel that includes offices for BWI employees, dining and recreational space and other hotel amenities next to its existing offices.

“The new hotel will act as a showpiece for potential investors and independent hoteliers, demonstrating the exacting standards that BWI expects to be maintained by featuring innovative rooms and function spaces, and upscale designs,” the submittal states.

Together the companies hope to create a “live/work/play” environment in keeping with other development trends in the overall area.

According to the submittal, “The goal of the Project is to revitalize the Property, enhance BWI’s corporate headquarters in the City of Phoenix, while fulfilling JDM’s and BWI’s mission to create residential and business communities with sustainable quality and value, and enhancing a live, work, play lifestyle.”

The maximum proposed building heights for the overall project will be 60 feet, and an associated parking structure will also be included.

Laying out their arguments for the renovations, the submitters note the dramatic changes in style and expectations in the modern era versus when the master plan for the area was adopted in the 1970s, particularly where Class A office and upscale multifamily properties are concerned.

“Low ceilings and separate office casitas are no longer desired and inconsistent with current market demands,” they say. “Today’s commercial and residential tenants expect and demand high ceilings, and cohesive unified amenities. As a result, the two-story limitation placed on the Property in 1974 is prohibiting necessary updates and redevelopment. The Property cannot be redeveloped to meet current market conditions and demands without higher ceilings, and cannot achieve higher ceilings without an increase in the height limitation to 60 feet.”

They also note over time the property has become an infill site restricted by roads, residential and commercial development.

The Properties

JDM’s property is a nearly 6.3-acre commercial office complex on the NEC of the intersection. The BWI property is 5.3 acres housing a commercial office building immediately to the northeast. The offices serve the international corporate office headquarters for Best Western Hotels & Resorts.

BWI’s new office and hotel development is intended to serve as a model site for independent hotel operators so they can see firsthand the company’s expected standards and where they can receive training and support for their operations.

JDM’s current offices were built in the 1980s, and the company claims they no longer fit with the area due to their low ceilings and casita-style design. The company claims a vacancy rate of nearly 50 percent for the site. Various reports for Q1 2018 list the average rate for the submarket at around 18 percent. JDM also notes tenants are leaving its property to relocate in more modern Class A space in other locations. “For a property in this critical location, such circumstances and vacancy rates are not acceptable,” they say.

JDM is considering three options for the redevelopment – an office building with a retail component, a hotel or a luxury multifamily facility. If the office plan is chosen, JDM will keep its corporate headquarters on the site.

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