{"id":1004268596,"date":"2018-10-01T04:38:36","date_gmt":"2018-10-01T12:38:36","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004268596"},"modified":"2022-12-08T11:55:17","modified_gmt":"2022-12-08T19:55:17","slug":"george-smith-partners-assembles-106m-for-spec-project-in-phoenix","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/george-smith-partners-assembles-106m-for-spec-project-in-phoenix\/","title":{"rendered":"George Smith Partners Assembles $106M for Spec Project in Phoenix"},"content":{"rendered":"

By Scott Baltic, Contributing Editor <\/em><\/p>\n

\"The<\/a>

The Watermark Tempe<\/p><\/div>\n

George Smith Partners has completed $105.5 million in financing for the $150 million initial phase of The Watermark Tempe, a master-planned, mixed-use development on Tempe Town Lake in metro Phoenix.<\/p>\n

Fenix Development Inc. of Los Angeles is undertaking the project, which is located at 430 N. Scottsdale Road in Tempe, Ariz. Plans call for for a 250,000-square-foot, 15-story Class A office tower, on-site retail, a sky lobby and sky gardens, a rooftop balcony, high-efficiency chilled-water HVAC, high-speed traction elevators, a fitness center and spin cycle studio, a bar\/lounge, a game room and a conference center, all on 1,250 linear feet of Tempe Town Lake frontage.<\/p>\n

This phase of The Watermark Tempe will also include 44,000 square feet of lifestyle retail, with individual spaces potentially ranging from 22,657 to 1,436 square feet.<\/p>\n

Scott Meredith, senior vice president with George Smith Partners, arranged $25 million in mezzanine construction financing and worked with Fenix in negotiating an $80.5 million senior loan.<\/p>\n

Creative financials, the good kind<\/h2>\n

The challenge in funding this high-end, mixed-use project in Tempe, Meredith said in a prepared statement, \u201cwas in navigating the perceived historical volatility of the Tempe and Phoenix office markets<\/em>.\u201d<\/p>\n

\"The<\/a>

The Watermark Tempe<\/p><\/div>\n

Tempe currently boasts an average office vacancy under 5 percent and reportedly was recently recognized as the nation\u2019s number-one market for office absorption and rising rent rates, according to CBRE\u2019s annual Tech-30 report. The market is home to the new regional headquarters of State Farm, along with major companies such as ADP, Uber, ZipRecruiter, Amazon, eBay and Microsoft.<\/p>\n

Despite this, much of the capital markets and many potential investors were unwilling to take on the risk of a spec development in a non-primary market, according to Meredith.<\/p>\n

\u201cFenix already had a senior loan in the works, however the lender required a high preleasing threshold prior to funding<\/em>,\u201d Meredith explained. \u201cThis limitation had proven insurmountable, as the local leasing market would not commit to signing new leases without a confirmed delivery date<\/em>.\u201d<\/p>\n

George Smith Partners identified a solution that was ultimately agreed on by the senior lender, involving an alternative structure with no preleasing requirement. In addition, the GSP team was able to secure $25 million in mezzanine construction financing to fill the remainder of the capital stack.<\/p>\n

The master-planned community will include Aura Watermark, featuring 360 luxury apartments with amenities such as a 4,000-square-foot glass-walled fitness center overlooking the lake, an aquatic activities center, two resort-style pools and an outdoor movie theater. This part of the project is under construction, Meredith told Commercial Property Executive<\/em>.<\/p>\n

The Watermark Tempe site also features a for-sale, 1.67-acre hotel pad that\u2019s fully entitled for up to 251 keys.<\/p>\n

Earlier this year, GSP secured funding for two hotel projects: $45 million in bridge refinancing<\/a> for the San Francisco Proper Hotel and $32 million in development financing<\/a> for the IHG Hotel Indigo in Coachella, Calif.<\/p>\n

Phoenix as a tech market<\/h2>\n

In CBRE\u2019s latest Scoring Tech Talent Report, Phoenix moved up two spots to #15. The report ranks 50 U.S. and Canadian markets according to their ability to attract and grow tech talent.<\/p>\n

Phoenix, according to CBRE, has a tech talent labor pool of 83,930, or 4 percent of its total employment, versus the national average of 3.5 percent. <\/p>\n

\u201cArizona\u2019s university system \u2026 is producing more tech degree graduates than there are tech jobs available in the market. Expanding tech companies in Metro Phoenix are capitalizing on this surplus of talent and able to fill positions more easily than other tech hubs<\/em>,\u201d Kevin Calihan, executive vice president with CBRE Phoenix, commented on the report.<\/p>\n

Images courtesy of George Smith Partners<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The 250,000-square-foot Class A office tower, along with 44,000 square feet of lifestyle retail, is part of The Watermark Tempe, a mixed-use project that Fenix Development is undertaking in Tempe, Ariz. <\/p>\n","protected":false},"author":882,"featured_media":1004268608,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21782,21808,21825,21752,21742,21747,1601,15],"tags":[32789,33306],"class_list":["post-1004268596","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-development","category-featured","category-finance","category-mixed-use","category-latest","category-office","category-phoenix","category-west","tag-cbre","tag-george-smith-partners"],"acf":[],"yoast_head":"\nGeorge Smith Partners Assembles $106M for Spec Project in Phoenix - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/george-smith-partners-assembles-106m-for-spec-project-in-phoenix\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"George Smith Partners Assembles $106M for Spec Project in Phoenix\" \/>\n<meta property=\"og:description\" content=\"The 250,000-square-foot Class A office tower, along with 44,000 square feet of lifestyle retail, is part of The Watermark Tempe, a mixed-use project that Fenix Development is undertaking in Tempe, Ariz.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/george-smith-partners-assembles-106m-for-spec-project-in-phoenix\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2018-10-01T12:38:36+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-08T19:55:17+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2018\/10\/The-Watermark-Tempe.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"620\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Scott Baltic\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/george-smith-partners-assembles-106m-for-spec-project-in-phoenix\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/george-smith-partners-assembles-106m-for-spec-project-in-phoenix\/\",\"name\":\"George Smith Partners Assembles $106M for Spec Project in Phoenix - 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