Big Deals

Changing the landscape

$40 million West Valley land deal shifts focus from residential to industrial potential

By KYLE BACKER

The Valley’s leading female-owned land consulting firm, Arizona Land Consulting, closed on a 2,000-acre property near the Buckeye Municipal Airport for $40 million on Feb. 7. A master-planned housing development first proposed in 2008 called Cipriani was originally planned for the site.

“In the past, everyone looked at these 2,000 acres as a residential community and that’s what all the plans have been geared toward,” says Anita Verma-Lallian, founder and CEO of Arizona Land Consulting. “But my group saw that the property is right off the I-10, close to the Buckeye Municipal Airport and thought it made sense to look at the site from an industrial perspective.”

The West Valley has seen rapid growth in the industrial sector over the past few years, with its proximity to the Port of Long Beach being a major driver of activity. Verma-Lallian notes that changing market demands led Arizona Land Consulting to pursue a change from the current residential zoning to industrial.

“We had several meetings with the City of Buckeye about it, and they were excited about that use as well, based on the demand they’re seeing for industrial and also from an infrastructure standpoint,” she continues. “Residential developments need certificates of assured water supply, which are getting more challenging to obtain.”

Verma-Lallian hopes that the process to reclassify the parcel to industrial use will be complete in four to six months. She adds that her company isn’t looking for a “full-blown rezone” but rather an amendment to the existing community master plan (CMP), which, according to the City of Buckeye’s website, is, “an alternative to conventional development for land located within any general zoning district or combination of districts,” and for projects with a minimum of 640 acres.

“It’s a great site,” Verma-Lallian notes. “Right now, finding even 100 acres of contiguous land is getting very challenging. We took the opportunity to purchase one large tract of land for a multitude of different users. And with the way the market is growing, State Route 85 is becoming the next Loop 303, which doesn’t have much land left at this point.”

A NEW USE

While Arizona Land Consulting is forging ahead with retooling the zoning to accommodate industrial uses, VermaLallian says that a full site plan has yet to be completed. The initial thought, however, is for the property — which is in an opportunity zone and a foreign trade zone — to house a business park.

“In the preliminary discussions we’ve had, we’re going to have a commercial retail component on some of the corners. There’s a small piece of land right off the I-10 that will remain commercial, and there’s a southern piece that we may develop a multifamily option on part of,” she explains. “The middle portion is definitely going to be industrial. We’re open to splitting it up or selling the whole thing.”

So far, the company has received two unsolicited offers at significantly higher prices than the land was purchased for. Verma-Lallian says she wasn’t expecting solicitations so quickly but highlights the prime location of the land as a driver of interest.

“The City of Buckeye will be investing a good amount of money in the Buckeye Municipal Airport,” she says. “Being right next to the airport made the site very attractive. And the city has done a great job embracing new development, which also contributed to our decision to buy the land.”

Two plans for the Buckeye Municipal Airport are underway, according to Annie DeChance, communications manager for City of Buckeye. She notes that everything is in the early stages, but an airport master plan is in the works that will focus on improvements that can be made — something DeChance describes as, “an extensive process.” An area specific plan is also underway that covers all the surrounding land to make sure the type of businesses and uses are going to be compatible with an airport.

“If people want to weigh in on what’s going on, now is the time. They can connect with the economic development department,” DeChance says. “Once we start looking for public input, that’s when we’re going to need to hear from the community on what’s going to work out there both for the master plan and the area specific plan.”

Just north of the 2,000 acres, another important development was announced on Oct. 19, 2021: Douglas

Anita Verma-Lallian

Buckeye Municipal Airport

Ranch, a master-planned community that is expected to be home to upwards of 300,000 residents and contain 55 million square feet of commercial development upon full buildout.

DeChance notes that as developments around the airport build out, Douglas Ranch would be a logical place for workers to live. “It will have different levels of housing available, so it’s a great addition to the city’s portfolio of master-plan communities integrated with our workforce.”

Adds Verma-Lallian, “To be honest, I put this piece of land in escrow very soon after the Douglas Ranch announcement happened, because I think it’s showing what’s coming. I’ve been buying land in Buckeye for the last three years and looking at what available land exists that has infrastructure to stay ahead of that growth.”

LIMITED SPACE

One of the most attractive elements of Greater Phoenix from an economic development perspective is the availability of land. DeChance points out that the City of Buckeye’s borders include 642 square miles, 10% of which is build out. “One of the things that makes Buckeye unique is that we do have the land, we just don’t have all the infrastructure in place yet,” she says.

Verma-Lallian notes that it could take up to 10 years for much of that land to get the required infrastructure built out. “You need developers with the capital and foresight, but there is some inherent risk when you come in and put in all that infrastructure. I do think as Phoenix grows you are going to see those risks being taken — Douglas Ranch is a good example.”

In the meantime, however, the forces of supply and demand will come to bear. “Development costs are rising,” VermaLallian concludes. “Land values are going up and will continue to go up because the supply of available land is going down. That means home prices in the Phoenix market won’t go back to where they were unless you see the supply chain issues resolved and building costs come back down to what they used to be. Values will stay high for some time until those things work themselves out.”

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DEALMAKER: Andy Abraham, Burch & Cracchiolo’s president, is certified as a Real Estate Specialist by the Arizona Board of Legal Specialization.

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