Scottsdale was flooded with rezoning requests and plans over the past two years to build apartments after a decade with only a few hundred new units added to the city's housing supply. Most of the projects were approved but there has been a lag in development while builders finalize their plans and secure financing.
But signs of dirt turning are out there.
Optima Sonoran Village is under construction southeast of 68th Street and Camelback Road with the first of 210 units in a seven-story building targeted to open as early as May, said David Hovey Jr., an Optima vice president.
Optima, with plans for 781 apartments and condominiums is the first of nearly 20 Scottsdale apartment projects with about 6,900 units in the development pipeline, said Pete TeKampe, Marcus & Millichap vice president of investments.
He and other market watchers say not all the apartments will be developed. But a few projects are starting to turn dirt or will be under way later this year.
Scottsdale's apartment building boom is expected in 2013 with thousands of renters likely to start moving in the following year.
"Developers are definitely going to meet some of the demand," said TeKampe, an apartment analyst. "I don't want to get people spooked, but (the apartments) won't all be added at one time."
Photo: An artist's rendering shows Optima Sonoran Village on Camelback Road.
At least nine projects with 3,600 apartments are teed up and ready to start construction, city planners said.
That includes Gray Development Group's Blue Sky project and Portales Place downtown, the Mark-Taylor apartments and SkySong development on McDowell Road and the Jefferson at One Scottsdale at Loop 101 and Scottsdale Road.
Optima Sonoran Village, meanwhile, is making headway on a project that is a newer version of Optima Camelview Village with its terraced landscaping, north of Scottsdale Fashion Square.
The first phase will include underground parking and a 20,000-square-foot fitness center. Five buildings are planned with the tallest one, 11 stories, on Camelback Road.
Sonoran Village will open a leasing office in January but eventually will sell units as condominiums, Hovey said.
Photo: Construction will start by mid-August on a new, 325-unit apartment complex at SkySong
Blue Sky should be under construction in the first quarter of next year, said Brian Kearney, Gray Development's chief operating officer.
It is a three-building complex northeast of Scottsdale and Camelback roads with 749 apartments, 1,400 underground parking spaces and 69,000 square feet of commercial and retail space.
"The equity partners are preparing to go out to the market for a construction loan," Kearney said. "All approvals have been obtained with the exception of building permits."
Blue Sky will be ready for its first residents about 21 months after construction starts, he added.
Photo: A rendering shows the planned Blue Sky apartment complex that would be near the northeastern corner of Scottsdale and Camelback roads
Dallas-based JLB Partners is close to submitting plans to the city's Development Review Board for its 9.6-acre Portales Place project southwest of Scottsdale and Chaparral roads, said Kevin Ransil, the company's Arizona regional partner.
It will include 300 apartments in buildings as tall as five stories with underground parking and 69 two-story townhouse units with attached garages.
JLB hopes to break ground in early 2013 and move its first residents in a year later, Ransil said.
In the second quarter of 2013, Mark-Taylor Residential Inc. plans to start construction on its 536-unit apartment complex. The project is planned on 25 acres that includes much of the abandoned Los Arcos Crossing shopping center southeast of Miller and McDowell roads.
Mark-Taylor will be submitting its Development Review Board proposal for building elevations and landscaping soon, said Chris Brozina, vice president.
"Our expectation is to move directly from (board approval) to building permits, to construction," he said.
The first phase, including a majority of the apartments, is targeted for completion by April 2015, Brozina said.
Construction already is under way on a 325-unit apartment complex at SkySong, the Arizona State Scottsdale Innovation Center. The first 83 units will be ready for occupancy in fall 2013, with overall completion set for April 2014.
The McDowell Road corridor includes the vacant Los Arcos Crossing shopping center.
Dan Symer, Scottsdale senior planner, said other projects nearly ready to launch include:
The Jefferson at One Scottsdale. TDI Real Estate Holdings LLC of Irving, Texas, plans to build 677 units, with 388 in the first phase.
Alliance Residential Holdings, which is close to pulling construction permits for Broadstone on Lincoln, 264 apartments northwest of Scottsdale Road and Lincoln Drive. Demolition of a medical complex on the site started last month.
The Residences at Zocallo Place, 240-unit complex northwest of Greenway-Hayden Loop and 73rd Street.
Archstone Apartments at DC Ranch, 224 apartments at Pima Road and Legacy Boulevard.
Bauhaus Flats & Studios, a proposed mixed-use complex with 270 apartments and 9,909 square feet of commercial space near Scottsdale and Thomas roads.
After a big rush last year and early this year, the number of new applications for apartment complexes has come to a halt, Symer said.
Apartment rents up
Apartment rents in the first half of 2012 were up 4 percent over last year in south Scottsdale to an average of $770, and up 2.5 percent to $928 in north Scottsdale/Fountain Hills, according to a Marcus & Millichap report.
The apartment vacancy rate was 3.6 percent in south Scottsdale and 4.7 percent in north Scottsdale/Fountain Hills.
The Valley's overall market vacancy rate of 6.4 percent is at its lowest level in six years.
The Valley housing market will add 1,260 apartments this year, increasing the overall supply by 0.5 percent.
Source: Marcus & Millichap.
by Peter Corbett, and Edward Gately - Aug. 28, 2012 The Republic | azcentral.com
6,900 Scottsdale apartments in pipeline
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