Several multifamily projects in the pipeline around the Valley’s urban core.
The last time the developer bought land downtown 20 years ago, he was ahead of his time. Now, he told the Business Journal, the timing is right for his multifamily project — that includes some opportunity zone funding.
San Francisco-based JMA Ventures LLC is on track to break ground next week for a $75 million apartment community in the warehouse district in downtown Phoenix.
The last time the developer bought land in downtown Phoenix — about four blocks away from its current location at Fourth and Buchanan streets — it was 20 years ago.
“We were thinking downtown was going to go through a growth spurt that it’s going through right now,” said Todd Chapman, president and CEO of JMA Ventures. “We were just a little bit early.”
He remembers the late ’90s during the tech explosion when old warehouse buildings in San Francisco began attracting a community of engineers, software programmers and architects. He figured downtown Phoenix was ripe for a similar explosion.
“Long term, we were right — it’s happening now,” he said. “We were a little bit early.”
Scrapping plans to build office space, Chapman ended up selling the land several years ago.
Now that there’s more development in downtown Phoenix — with Cityscape, Block 23 and Arizona State University — the reurbanization has lured him back to downtown Phoenix.
“It used to be people wanted to go to Camelback or Scottsdale, and now people want a more urban experience that downtown has to offer,” Chapman said.
He plans to build a 5-story apartment community within the warehouse district of downtown Phoenix.
“There’s a great vibrant community in this warehouse district,” he said.
Newmark Knight Frank (Nasdaq: NMRK) arranged $51.9 million in construction financing for the 278-unit apartment community, with the rest coming from JMA Ventures and “opportunity zone” funding.
Called the Battery, the project sits on 3 acres near Chase Field and Talking Stick Resort Arena and is expected to be completed by the second quarter of 2021.
Chapman said it’s a bit too early to disclose rental rates for the apartment community, but said he wants to keep the prices affordable.
“Our units are priced to be more for first-time renters in the Phoenix market,” he said. ‘They are a little bit more affordable than the other stuff you’ll see. We’re targeting renters in that innovation district — people in tech, digital arts or media.”
Even though he wants to keep prices down, he said the project will feature luxury amenities, including floor-to-ceiling glass windows, polished concrete floors and smart home technology packages. It also will feature rooftop amenities deck that will include pool, spa, barbeque areas and fitness center.
Daniel Gauthier, an attorney focusing on opportunity zones with Rose Law Group PLC, said he’s glad to see more of those projects starting to come to fruition.
“It does seem we’re seeing this blast of about a dozen projects in the area that are popping up,” he said. “It’s exciting.”
Investors are still cautious when it comes to investing in these opportunity zone projects, he said.
“Generally, people are still cautious,” he said. “Cautious but optimistic is the way I would phrase it.”
On Aug. 6, Caliber-The Wealth Development Co. paid $12 million for a 96-bed senior living facility near 13th Street and McDowell Road in Phoenix, according to Vizzda LLC real estate database.
Plans call for investing $9.5 million in opportunity zone funds to renovate that 62,596-square-foot facility built in 1982 to develop a health clinic for South Bend, Indiana-based NeuroPsychiatric Hospitals, said Chris Loeffler, CEO and co-founder of Caliber.
“Caliber is one of the bigger names here,” Gauthier said. “They were out and running earlier in the game. They were definitely one of the early movers.”
