Michael Lieb, president of Michael A. Lieb Ltd. in Phoenix, saysAlliance Residential next month will buy a site at the intersectionof 16th Street and Campbell Avenue. Construction is scheduled tobegin in the fall, with units to be delivered to market in early2010. Although the complex will carry Alliance Residential'sBroadstone brand, the project name's has yet to be determined.

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Lieb negotiated the land deal between Alliance Residential andBroderson Properties LLC of Phoenix. He says the developer has landdeals working for a Downtown site and one in the northern tier."One is in escrow and the other is under negotiation," he says."Both should close by yearend."

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Alliance Residential did not return calls by press time tocomment on the upcoming projects. In all likelihood, the projectswill be going vertical at a time when the multifamily market issoftening in the region.

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Greg Willett, vice president of research and analysis for M/PFYieldStar in Carrollton, TX, says fourth quarter 2007 figuresshowed the Phoenix metro's 279,000 units were 92.5% occupied, with7,644 units under construction. Willett tells GlobeSt.com thatpreliminary numbers for the first quarter aren't showing muchchange.

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"We can point to the overbuilt single-family market and the factthat Phoenix is one of the top five metro markets for ongoingforeclosures," Willett explains. "Because of that, the inventoryfor shadow market product is growing continually. That's a hugeproblem for the area."

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But, Willett says Alliance Residential's strategy of buying landand building on it may not be so far-fetched. For one thing, thesite about to be bought is near the Camelback Corridor, anattractive infill location with few remaining developabletracts.

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"The general perception is that this is still one of thefastest-growing metropolitan markets in the country," Willett says."This will clearly create a lot of demand for multifamily housing.We just won't see that demand for a couple of years." By the timeAlliance Residential delivers its crop of units, he adds, thecompany should see some positive interest from renters.

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