Sunday, October 9, 2011

Rush is on to build 3,500 apartments in Scottsdale

Alliance Residential Co. wants to build 264 apartments and retail at the northwestern corner of Scottsdale Road and Lincoln Drive.

The mixed-use project would replace vacant, two-story office buildings on 7.5 acres in Scottsdale. The property borders a planned Ritz-Carlton resort in Paradise Valley.

Phoenix-based Alliance submitted its development plans for the property last week. No date has been set for a Scottsdale Planning Commission hearing on rezoning the site from a commercial-office category to a planned unit development.

Alliance's gated apartment complex would feature units ranging from 630 to 1,100 square feet. The apartment buildings would be three stories high along Lincoln Drive and four stories to the north.

Parking would be in an underground garage with elevator access to the apartments. The one-story retail shops would be built in a second phase.

Alliance officials did not return calls seeking comment on their development plans.

In the pipeline

The proposal is the latest in a rush of apartment projects in Scottsdale. Close to 3,500 apartments are in the works across the city.

That includes more than 1,000 that have already been approved downtown and at SkySong, the Arizona State University Innovation Center. Plus, there are a few hundred more in the pipeline nearby at the Los Arcos Crossing redevelopment site.

Another 1,565 apartment units have been proposed in three separate projects within the Scottsdale Airpark - the former Barcelona nightclub site, the Crackerjax property and the former car dealership next to Costco.

The Scottsdale Planning Commission unanimously recommended approval off all three of those projects Sept. 21.

Lenders hold key

Apparently, developers are betting that everyone wants to live in apartments. But are lenders willing to make the same bet?

No one has a shovel in the ground yet.

Not all these apartments will be built in the current development cycle, but the first few projects seemingly will have the best chance to succeed.

Developers are counting on attracting renters who lost homes or who are spooked about buying in the current housing market.

The risk is that too many apartments will get built over the next few years and an oversupply would hurt rental prices.

Scottsdale is still digging out from an oversupply of new condominiums and apartments converted to condos.

Six years ago, condo conversions were the rage before the pendulum swung back the other way. Several complexes halted the condo conversions and went back to renting apartments.

Now we've seen new-build condos converted to apartments in downtown Scottsdale.

Ten Wine Lofts, 7126 E. Osborn Road, is one of those condo-to-apartment conversions.

Two-bedroom apartments there start at $2,200 for 1,481 square foot up to $2,600 for 1,881 square feet.

Those prices are higher and the apartments are larger than the units that have been proposed.

Estimated starting prices for rent at some of the proposed apartment complexes have been closer to $800 to $950 for one-bedroom units.

by Peter Corbett The Arizona Republic Oct. 7, 2011 02:28 AM

Rush is on to build 3,500 apartments in Scottsdale

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