|George Smith Parters (GSP) has arranged $105.5 mil in financing for a portion of The Watermark Tempe, a master-planned, mixed-use ground-up development situated on Tempe Town Lake in Tempe, AZ. The property, located at 430 North Scottsdale Rd, is being developed by Fenix Development Inc.
The financing consists of $25 mil in mezzanine construction money and an $80.5 mil senior loan, all of which will fund the speculative development of a 250k sf, 15-story Class A high rise office building and 44k sf of lifestyle retail space. It was arranged by GSP’s Scott Meredith.
The 250k sf office tower is planned to feature on-site retail, as well as a sky lobby and sky gardens, a roof-top balcony, 1,250 linear feet of Tempe Town Lake frontage, high efficiency chilled water HVAC, high-speed traction elevators, a fitness center and spin cycle studio, as well as a bar/lounge, game room, and conference center, among other amenities.
The 44k sf of retail space will be contiguous to 22.7k sf or divisible to 1.4k sf, with dramatic ceiling heights, lakeside restaurant space, a rooftop terrace, ample 5:1,000 parking, and oversized sidewalks providing immediate access to Tempe Town Lake and Papago Park.
The master-planned community will include 360 luxury apartments, Aura Watermark, offering unique amenities such as a 4k sf glass walled fitness center overlooking the lake, an aquatic activities center, two resort-style pools, and an outdoor movie theater, among others.
The Watermark Tempe development site also features a for-sale, 1.67-acre premium hotel pad that is fully entitled for up to 251 keys and up to 278 feet in height.
“This is a landmark project for Tempe,” says Meredith. “As the very first high-end, truly mixed-use project in this city, there is tremendous potential to leverage Tempe’s high-tech employment, rapidly growing population, and affluent local community. The challenge, however, was in navigating the perceived historical volatility of the Tempe and Phoenix office markets.”
Tempe currently boasts sub-five-percent office vacancy and was recently recognized as the number one market in the nation for office absorption and rising rent rates, according to CBRE’s annual Tech-30 report. The market is home to the new regional headquarters of State Farm, along with other major companies including ADP, Uber, ZipRecruiter, Amazon, eBay, Microsoft, and others.
“The Watermark Tempe is what the future of Premium Class A development in the Phoenix metro looks like,” says Mike Loretz, Project Manager at Fenix Development. Watermark is planned to be a walkable environment that blends seamlessly with the lake and its boardwalk, according to Loretz. It will feature Class A office buildings, great restaurants, unique shops, luxurious multi-family units and a future hotel.