By Suzanne Heyn
Proximate to the 1,500-acre Reach 11 recreational area, sat an enticing property owned by the Arizona State Land Department — 29 acres at the southwest corner of Princess Drive and Scottsdale Road. With one segment zoned multifamily and another with an auto overlay, the land required specific uses and needed a special buyer.
“We had been interested in this location for quite some time,” says Chris Brozina, Vice President of Development for Mark-Taylor, Inc. in Scottsdale.
The macro location, combined with greenbelt amenities offered by the adjacent recreational area, shaped what Brozina saw could be an exceptional development. To build it up, Brozina connected with Jack Rasor of WDP Partners and George Brochick, Executive Vice President of Strategic Development with Penske Automotive Group. The opportunity to own the property fee simple motivated the companies to purchase.
“I don’t know that you’ll see fee simple in the area for awhile,” says Brochick.
Brochick started his career in the car business at a Jim Click dealership in Tucson. In the 1980s, he was working in the mining and construction equipment industry when Click offered him a job. Years later, Penske bought out Sun Automotive Group, where Brochick worked, and he has worked for Penske ever since. Brozina started his real estate career in 2006 as a broker for CB Richard Ellis. He worked with Tyler Anderson and Sean Cunningham in the multifamily investment group. In 2010, Brozina joined Mark-Taylor.
When Mark-Taylor’s newest community debuts on this 29-acre parcel, it will represent the company’s 28-year design evolution dubbed the “next generation of Mark-Taylor” apartment communities.
When the Arizona State Land Department issued notice that the property would go up for auction, the two companies sprang into action. They formed a corporation for the sole purpose of purchasing the property and developed covenants to ensure the companies would be good neighbors in the coming years.
When they got to the auction, nobody else was there to bid, despite plenty of advertising by ASLD.
“The mixture of zoning designations may have posed an obstacle for some buyers,” says Brozina “Nonetheless, I would have thought such a location would make up for some of those risks and would have generated other bidders.”
Penske, in tune to the competition it would face from other car dealerships, felt the location offered potential for its adjacent and expanding operations.
On Jan. 29, the two companies paid $16 million cash for the property. The two companies are currently working with the City of Phoenix for preliminary site plan approval. Shortly thereafter, they will split the parcels, paving the way for each to take ownership of its portion.
Since Mark-Taylor has immediate plans to build, Brozina anticipates development flowing “seamlessly” forward. Penske will work with the city on final plans later, after it finalizes the site’s use. Mark-Taylor plans to build a 388-unit apartment community on 19 acres with extensive amenities.
This community will include those Santa Barbara-esque architectural features along with the large lagoon style pool, resort grounds and guard-housed porte-cochere entryway that are Mark-Taylor signatures.
During the recession, while very little building was occurring, the company was working with its own subsidiary architectural firm to evolve its designs further and expand its units to an average size of nearly 1,100 livable square feet – the largest in the market today. This Phoenix property will be among the first to display the next generation of Mark-Taylor.
Apartment options include one, two and three bedroom homes with rents anticipated to range from $950 to $1,900. Brozina anticipates construction will start around the turn of the year, with the first units available for lease around October 2014.
Penske has not yet revealed what it will build on the remaining 11 acres. Brochick says many of the company’s dealerships have outgrown their existing infrastructure, but the land’s ultimate use remains undecided.
Although he didn’t mention specifics, Brochick says the company’s Audi dealership has outgrown its existing location. Its Ferrari and Maserati dealership recently relocated to the area, and Penske renovated its Jaguar and Land Rover facility.
“We’ll use it, no question in my mind about that,” says Brochick. “If you come back here 24 months from now, I don’t think you’ll see vacant property.”