PHOENIX-By selling a 49% stake in the $65-million Kierland Commons, Woodbine Southwest Corp. and Herberger Family Interests are now free to focus on building out the rest of the 38-acre tract with residential units and undertaking other developments in the Valley.
The new partner, Macerich Co. of Santa Monica, CA, has staked a claim to just the retail and office space. The deal sets up Macerich's local subsidiary, Westcor, to lease and manage the 450,000 sf of specialty retail, entertainment, restaurant and office space and keeps majority control in the hands of Woodbine Southwest, a division of the Dallas-based Woodbine Development Corp., and the Herberger family of Phoenix and Scottsdale. For previous story, click here.
"Macerich's interest is only in the retail and office portion," Tracey Gotsis, SVP with Westcor tells GlobeSt.com. "Woodbine Development will oversee the residential." She says the retail portion is built out while residential development will continue to rise in phases over the next two years.
The majority owners have 120 for-sale residential units on the drawing board. The first phase for the Plaza Lofts was sold out before construction began, according to Woodbine. The 30 units, ranging from 1,100 sf to 2,700 sf, will deliver in the spring.
This summer, Woodbine plans to begin work on the second phase, 55 units ranging from 1,000 sf to 6,000 sf. Delivery is planned by fall 2006.
The sale to Macerich boils down to "where you want to put your expertise," Gotsis says. "Woodbine's expertise is in development and they would rather focus on development than on management and leasing. They want to go out and develop these types of projects."
Kierland Commons, boasting a 99% occupancy, has 70 retailers and restaurants on the roster. Store sales average $550 per sf.
The retail and office components debuted in 2000, with the final round of shop space delivering in December 2004. The development straddles the northeast border of Phoenix and Scottsdale, acting as a focal point for the 730-acre master-planned community of Kierland. Within a seven-mile radius, there are 326,680 residents in 131,142 households with an average annual income of $98,928. The submarket is projected to grow to 373,722 residents by 2008.
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