courtesy of MHN online, Amalia Otet, Associate Editor
Greenwood Village, Colo.- based Alberta Development Partners has acquired a 1.9-acre parcel at the northwest corner of University Drive and Ash Avenue in the Mill Avenue District of downtown Tempe, where it plans to develop 187 apartment units and 40,000 square feet of ground-floor retail space.
PCCP L.L.C., a real estate finance and investment management firm provided a $5.7 million senior loan to Alberta to purchase and entitle the development site.
The seller, Brookfield Asset Management of Toronto, was represented by Barry Gabel and Chris Marchildon of CBRE Group Inc.’s Phoenix office, in conjunction with CBRE’s National Loan Sale Advisory Group. Alberta Development Partners negotiated the sale in house.
The property is “one of the single most sought-after vacant land parcels in the Phoenix metropolitan area,” according to Gabel.
With a shortage of grocery retailers in downtown Tempe, Alberta is seeking a grocery tenant to anchor the development. At present, the nearest grocer is a Safeway two miles away.
The community will be within walking distance of the Mill Avenue District and its 75 restaurants, shops and nightlife attractions, and close to the 60,000 students, faculty and staff at the nearby Arizona State University campus.
“Both Alberta and PCCP look forward to further contributing to the vibrant Mill Avenue District and delivering the proposed mixed-use project to the market,” said Philip Russick, principal with PCCP, in a statement. “There is a pent-up demand in the area for the product they are seeking to entitle and we feel this will be an ideal fit for the area.”
Despite an increase in multifamily completions last year, Phoenix’s steady employment growth and robust economy will allow housing supply and demand to remain well aligned. Approximately 4.500 units are projected to come online in 2014, an uptick from the 3.900 units completed last year. According to a forecast by Marcus & Millichap Real Estate Investment Services Inc., vacancy will fall 30 basis points to 6.9 percent this year. In 2013, vacancy dropped 40 basis points.
The Tempe/Arizona State University area remains even tighter, with vacancy declining to the low 4 percent range.
Chart via Marcus & Millichap’s 2014 Annual Report