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Arizona Developer May Have a Model for Building Apartments Regular People Can Afford

By July 21, 2023No Comments

By Corina Vanek | Arizona Republic

A Tucson-based development firm is creating what could turn into a model for housing in desirable, expensive neighborhoods that average people in metro Phoenix can afford.

Holualoa Cos., a developer with high-profile projects throughout the Valley, has a new project in the Camelback corridor to to redevelop a portion of an office complex at 21st Street and Highland Avenue.

The developer bought the 13-acre site, which includes two office buildings, a 2-acre lake, a parking garage and a restaurant in late 2021 for $50 million, according to real estate database Vizzda. The company now plans to redevelop the northwestern of the portion of the site, which will include razing the restaurant, the Half Moon Sports Grill, to build 144 apartment units. They submitted plans to Phoenix in late June to begin the zoning process.

“Costs are much higher for urban, infill locations,” Steve Betts, managing director of development for Holualoa said, “How can we deliver attainable workforce housing in a more expensive, urban setting?”

That answer, Betts thinks, could be not starting from scratch.

Land, parking and infrastructure add to costs

Betts listed land prices, infrastructure costs like water and sewer lines, and parking as some of the top contributors to higher pricing for construction, which can translate to high rents.

By buying a site that already is earning money through office rents and sharing parking lots and infrastructure with the existing buildings, a developer can build an apartment complex more cheaply. The apartments themselves offer pared-down amenities, with a focus on coworking spaces, meeting rooms, bicycle closets and other amenities that cost less to build and less to maintain.

According to Holualoa documents, rents at the Dwell projects will start around $1,400. New developments in downtown Tempe vary greatly in price, but some recently proposed luxury apartments in the area range in rent from $1,500 to $3,500 depending on unit size.

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