Howard Hughes Corp., Jerry Colangelo Plan Massive Masterplan Build in Phoenix
The 37,000-acre community will feature 100,000 homes housing 300,000 residents and 55 million square feet of commercial development.
Howard Hughes Corp. and Jerry Colangelo are planning to deliver a massive new masterplan community in Phoenix. The duo have unveiled plans for Douglas Ranch, a 37,000-acre community with 100,000 homes housing 300,000 residents and 55 million square feet of commercial development in the West Valley.
The developers are planning to create a leading sustainable and technology-forward development. Howard Hughes Corp. purchased the shovel-ready site from JDM Partners for $600 million, and the project will add new asset classes, including single-family rentals and industrial, to the company’s portfolio.
Howard Hughes Corp. has the largest portfolio of large-scale masterplanned communities in the country. It is known for employing a self-funding business model. With the exception of 1,000 for-sale home lots, the same strategy is at work at Douglas Ranch.
The property is well positioned to both benefit from and help drive economic growth in the Phoenix area. Phoenix has been a top city in the country for net migration for the last three years, gaining more than 1 million residents in the last decade, and—thanks in part to the pandemic—the market is headed for a period of long-term growth.
Single-family rentals are a particular favorite for investors in Phoenix. According to CoreLogic Single-Family Rent Index, single-family rent growth was largest in Phoenix with an increase of 12.2%, driving both new investment and development in the rapidly growing housing niche.
But, traditional multifamily investors are also seeing opportunity. Los Angeles-based Decron Properties entered the market earlier this year, and it has already purchased three apartment buildings, spending more than $250 million on the combined 772 units.
The activity is putting upward pressure on land prices. Earlier this year, Arizona Land Consulting brokered the acquisition of a 36-acre parcel of land in a Buckeye opportunity zone for $7.1 million on behalf of a 1031 exchange buyer. Within 24-hours, the buyer received multiple offers from multifamily developers to buy the back portion of the site above the buyer’s purchase price.
Douglas Ranch will break ground in the first half of 2022 with the construction of Trillium, a 3,000-acre village within the complex.