Wednesday, May 30, 2012

Silverleaf developer perseveres after recession of '08

Charlie Leight/The Republic Silverleaf, a north Scottsdale development, is centered on the scenic 18-hole golf course in the McDowell Mountains.

Two coyotes are sunning themselves on the Silverleaf Club golf course on a recent morning as DMB President Charley Freericks looks on from inside the clubhouse.

Breakfast guests are admiring the animals, and Freericks jokes that it is not going to be appetizing if a jackrabbit makes a run for it across the emerald fairway.

As a Valley real-estate veteran of nearly 30 years, Freericks is well aware that only the strong survive in the wild and in development.

DMB Associates Inc., developer of Silverleaf, DC Ranch and One Scottsdale, has emerged from the steepest canyons of the real-estate crater with plenty of vacancies in its office and retail space. But new tenants are moving in, new homes are going up and more than 500 apartments are planned at One Scottsdale and east of the DC Ranch Crossing shopping center.

"The recession slowed things down but a lot of people kept chugging along," he said as he drove through Silverleaf, among the Valley's most exclusive addresses, at the foot of the McDowell Mountains, just east of Pima Road on Thompson Peak Parkway within DC Ranch.

It's not uncommon for valets at the Silverleaf clubhouse to find themselves at the wheel of a Bentley, Rolls-Royce, Porsche 911 or Mercedes SL63 AMG.

Many of DC Ranch's residential neighborhoods southeast of Pima Road and Thompson Peak Parkway were completed by the time the recession hit four years ago.

Meanwhile, DMB's Market Street commercial district has long searched for the right mix of tenants. The economic downturn of 2008 did not help. Restaurants and retailers fled, leaving the strong like Herb Box,Fleming's and Armitage to survive.

At the same time, DMB opened its Canyon Village, with 92,427 square feet of offices and retail space.

The timing was a perfect storm that made it a challenge to fill the space, said Freericks, who was promoted to DMB president in April.

Zog Media is Canyon Village's biggest tenant and DMB is working to bring medical tenants into the complex.

The Sterling Collection Development Group is moving into Canyon Village, said Nathan Day, company president.

Sterling revived a stalled villas project in November east of Canyon Village in Silverleaf. It sold five of its nine villas for an average price of $465 per square foot. The villas start at $1.29 million.

A second phase is planned with one- and two-story options.

Ciao Wine Bar and Bistro is set to open in September at Canyon Village.

DMB also faced stiff headwinds in opening DC Ranch Crossing in late 2008. The Scottsdale-based development company sold the shopping center last June for $16.5 million.

Now Archstone, an apartment developer, plans to build 224 units on 9.2 acres east of the shopping center, which is located at Pima Road and Legacy Boulevard.

Freericks said DMB is marketing a 2.3-acre site south of DC Ranch Crossing for a limited-service hotel.

One Scottsdale, 362 apartments

Another planned apartment project would bring new life to DMB's One Scottsdale project northeast of Scottsdale Road and Loop 101. Henkel North America opened its headquarters there in December 2008 but the remainder of the site has been vacant.

TDI Real Estate Holdings LLC of Irving, Texas, plans to build 362 apartments in its first phase on 10.62 acres south of Thompson Peak Parkway and 74th Street.

The land deal for the project is set to close at the end of June. TDI hopes to have its building permit by then and complete a rental office by the first quarter of 2013, Freericks said.

The 120-acre One Scottsdale includes excavation for a parking garage to support a planned retail development. But lenders pulled back on the project.

Freericks said he regrets that the garage was not finished but it could have been worse if DMB had gone ahead with retail development as the recession hit.

"It reminds me of the Garth Brooks song with the line 'thank god for unanswered prayers,' " he said.

DMB is patiently optimistic about the future of One Scottsdale, Freericks added.

New to Market Street

He also expressed optimism about the changes and new tenants at Market Street. That includes new signage along Pima Road that makes it easier for motorists to find the shopping center, which is tucked amid desert landscaping southeast of Pima and Thompson Peak Parkway.

An Italian restaurant, Mia Francesca, opened in February and Grimaldi's has expanded.

Plus, a former hotel food-and-beverage executive, Paul Keeler, said he plans to open the Market Street Kitchen by mid-August in the space formerly occupied by the Beauregard restaurant and Krispy Kreme doughnut shop.

On the downside, the Heirloom restaurant has closed and Eddie V's restaurant space remains vacant after it moved last year to the Scottsdale Quarter.

"Eddie V's is a big hole in the doughnut," Freericks said.

by Peter Corbett - May. 29, 2012 12:40 PM The Republic |

Silverleaf developer perseveres after recession of '08

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