Elevation Chandler's developer, Jeff Cline of Chandler, filed a Chapter 11 bankruptcy last April. Elevation Chandler, positioned on 10.5 acres at loops 101 and 202, broke ground in late 2005, with work grinding to a halt in April 2006 when he ran out of money. Later that year, Cline obtained a short-term bridge loan, but still struggled to pay project vendors. In late 2007, he put the project on the market in hopes of finding a buyer.

Ric Holway, senior vice president with Marcus & Millichap Real Estate Investment Services' Phoenix office, is leading the disposition team as well as distribution of due diligence materials. He says his team is collecting names of interested investors and buyers for an auction, with the pending date subject to court approval.

"We're marketing this to developers. It makes sense to target developers involved with hospitality and office," Holway tells GlobeSt.com. He says the deal also carries a cooperative brokerage fee. "We're not keeping this just as an in-house listing," he adds.

Marcus & Millichap classifies the asset as a mixed-use hospitality and office development adjacent to the 2.5-million sf Chandler Fashion Center. The hospitality component can hold 243 to 330 rooms, fitness club and up to 27 condominium units. The site can also be reconfigured to add 600,000 sf of class A office space. In its marketing package, Marcus & Millichap points out that work on the 10-story building could be completed within 15 months.

"The general consensus in the community is that improvements will need to be scraped entirely," says Brent Moser, senior vice president of Phoenix-based Grubb & Ellis/BRE Commercial LLC. Although he's not involved with the deal, Moser says it will be difficult for a new developer to step in and take over a project that has been stalled for so long. "Most developers and builders want their own projects, something they've started from the beginning," he points out.

Moser says Elevation Chandler is an odd project. It's not often that a developer starts something and then simply stops 30% into construction. He says such work stoppages can happen in horizontal construction, but those are easier to rectify.

"We all believed in this location," Moser stresses. "It's a great location, with good access to infrastructure and very good employment. Unfortunately, for Mr. Cline, he began this at the wrong time. He missed the cycle by about six to eight months."