Brad Gorman, co-managing member with Pier 202 LLC and chairman, president and CEO with Irvine, CA-headquartered Laguna Pacific Properties, says the first phase will consist of a 230,000-sf office building, 90,000 sf of retail, 150 condominium units and possibly a 285-room hotel. The initial phase has a mid-2009 completion date.
"Right now, we're set for a minimum of three phases, with the build-out probably over a seven-year period," Gorman tells GlobeSt.com. He adds that construction for the remaining phases will be determined by market demand. Future phases will include 230,000 sf of office space and 1,330 additional condominiums.
Pier 202 LLC acquired the acreage along McClintock Drive, Rio Salado and Rural Road from the city about a year ago. Gorman says his company has been working hand-in-glove with the city to determine an appropriate development plan and to get the entitlement process fast-tracked. "I can't say enough about the City of Tempe staff, city council and mayor," he adds. "They've been wonderful throughout this process."
Scott Baumgarten, senior associate for Phoenix-based Grubb & Ellis/BRE Commercial LLC, says the office space will be spec. And, he and Grubb & Ellis senior vice president Don Arones would like to see larger tenants taking down significant portions of the first phase.
"The strength of the market is really showing itself with the large number of big users," Baumgarten says, adding users for 2,000 sf to 10,000 sf also are being contacted. The lease rate tentatively is set at $34 per sf to $36 per sf, gross, with negotiable tenant-improvement allowances. Retail quoted rates have not been determined nor have price points for the condominiums.
On the hospitality side, nothing has been decided although Gorman says the development is attracting a lot of attention from national and international hotel chains. "We're negotiating with several companies right now," he adds.
Working with Gorman on the development are Pier 202 LLC co-managing member Michael Barker in the Los Angeles office of Barker Pacific Group and Mike Guterman with El Segundo, CA-based Highland Realty Capital Inc. The master architect is Ernie Vasquez with McLarand Vasquez Emsiek & Partners of Irvine, CA, and the landscape architect is David Berkson with SWA Group's Sausalito, CA office. The hotel architect is William Reed with Wimberly Allison Tong & Goo's Newport Beach, CA office. Pacific Coast Capital Partners LLC is providing financing.
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