Phoenix AZ New High-rises One Central Park East and CityScape

Phoenix AZ New High-rises One Central Park East and CityScape

Businesses and real-estate analysts are eagerly awaiting the completion of two high-rise projects in downtown Phoenix that are expected to help ease a chronic office-space shortage in one of the Valley's top business markets.

One of the towers - known as One Central Park East - officially moved beyond the planning phase Wednesday morning during a groundbreaking ceremony attended by top city officials.

The 26-story building is expected to deliver 485,000 square feet of high-end office space by fall 2009. And it is competing with CityScape, a $900 million mixed-use development located a few blocks to the south, for the distinction of being the first major office tower to be added to the downtown skyline in eight years.

CityScape, located on three city blocks between Second Street and First Avenue and Washington and Jefferson streets, held its groundbreaking ceremony last month. Plans call for the CityScape office tower to include 600,000 square feet of Class A office space; its first phase is also slated for completion in fall 2009.

The sudden commercial real-estate development boom is significant considering that the last high-rises built in Phoenix's central business district - Collier Center and Phelps Dodge Tower - were completed in 2001.

"There's a lot of interested in the project at the moment," said Jim Fijan, an executive vice president with the Phoenix office of CB Richard Ellis, which is handling leasing for One Central Park East.

One Central Park East, which will be located at the northeast corner of Central Avenue and Van Buren Street, is estimated to cost $175 million and comes at a time when downtown Phoenix is being plagued by what brokers consider to be unusually low vacancy rates.

The market is so tight, in fact, that some businesses are being forced to seek space elsewhere or pay higher-than-average rents.

Consider: Downtown Phoenix south of McDowell Road saw an office vacancy rate of 6.95 percent in the third quarter, according to commercial brokerage CBRE data. By comparison, the vacancy rate was 11.19 percent in the entire central business district, which includes Midtown, 12.64 percent in the Camelback/Piestewa Peak submarket, and 16.31 percent in north Phoenix.

And while One Central Park East and CityScape pose competition for each other, Fijan said the demand for space downtown is great, and that is only likely to grow as the projects progress.

Meanwhile, Andrew Conlin, a member of the development team behind One Central Park East, said that once finished, the tower should help law firms, accounting businesses and others who want to be downtown achieve their goals.

Conlin, managing partner of Chicago-based developer Mesirow Financial Real Estate Inc., said the One Central Park East's proximity to the future light-rail line would be a draw for firms. Mesirow is partnering with A&L Phoenix Development LLC and the National Electric Benefit Fund to develop the project, which will be located adjacent to Arizona State University's downtown Phoenix campus.

Developers have not announced potential tenants for One Central Park East, but Fijan, the CBRE broker, said his team has talked with financial-services firms who are interested in the future building.
Source: AZ Central

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