A consortium of private real estate firms are working together to develop the initial phase of CityNorth, a 144-acre, mixed-use project in Phoenix, Arizona.
New York-based private real estate firm Related Companies has teamed up with McLean, Virginia-based private equity real estate firm JER Partners and property developer Thomas J. Klutznick Company on the project. Last month, the investor group announced it has raised $379 million (€280 million) for the first phase of the project, which is known as the High Street district and encompasses 24 acres.
“It's a great piece of land in one of the fastest growing cities in the country,” said Adam Meister, a senior vice president with Related Urban, adding that the location, off Highway 101, provides good access to the site and is close to much of the growth in the Phoenix area.
The investor consortium has secured $290 million in financing from construction lender Capmark Finance and a $50 million mezzanine loan from Centerline Capital Group. The investors supplied the remaining $39 million in equity.
The project will be part of the Desert Ridge, a planned community in the northeast part of the city, which is being developed by Klutznick. Ground has already been broken for the High Street component, which is slated to be completed by autumn 2008. It will feature 293,000 square feet of retail space, 306,000 square feet of offices and 409,000 square feet of luxury condominiums and townhouses.
Related has developed a number of high-profile urban projects, including the Time Warner Center in Manhattan and Copley Place in Boston. This project would be somewhat similar to the $600 million, 72-acre CityPlace project that the firm built in West Palm Beach, Florida, Meister said.
“We've been investing in mixed-use projects in cities through the country, some of which aren't as vertical or dense as the Time Warner Center,” he said, adding that they all share similarities in how the projects must integrate a number of different uses.
According to a statement released by the group, the High Street project will “be in the mode of classic streetscapes such as Newbury Street in Boston and Oak Street in Chicago.”
The next phase of the development will have 2.5 million square feet of space on 45 acres and is set to open in late 2009. It will sport four department stores, including a Nordstrom, and an additional 200,000 square feet of retail space. Additional phases will include more office and residential space, as well as a five-star hotel and health spa.