Phoenix Activity Report

Down But Not Out, Work Endures in Valley of the Sun

While the economic slowdown has taken its toll onconstruction in the Phoenix area, areas such as theCamelback Corridor, North Phoenix and parts of downtown are still buzzing with activity.

The Phoenix construction market is a spotty landscape.

On the same city block you can find a retail/mixed-use project that is stalled halfway built, while on the next corner is another mixed-use project that is just breaking ground. The key difference is stable financing.

Estrella Medical Plaza in Phoenix was developed by The Plaza Cos., the subject of this year’s Phoenix Developer Spotlight. (Photo courtesy Plaza Cos).

The state budget deficit, now escalating upwards of $4 billion, has led to many project delays. Fortunately, the federal stimulus act has helped bring some new money to the construction pot, especially in transportation and environmental work.

According to McGraw-Hill Construction, May construction starts in the Phoenix metro area (excluding residential) totaled $149.6 million, down 62% over last year and a drop of 49% year to date.

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Diversification is one strategy for getting through the tough times ahead. One such developer embodying diversity is the focus of this year’s Phoenix Developer Spotlight, The Plaza Cos. The firm has so far weathered the rough economic seas by concentrating on long-term values such as teamwork and integrity.

Several office and mixed-use projects succeed by bringing added value to prospective tenants. CityScape surrounds tenants with urban appeal. Two office buildings in the Biltmore area, 24th at Camelback II and 3900 Camelback Center, are gearing their appeal to tenants by going for LEED silver or better.

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