Urbane Executive Summary
Powerpoint Intro with video
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Market Analysis
Site plan and Phasing
Mix of Uses: Office, Retail, Residential, and Hotel
Financials
Financial Pro-Forma, excel file - I recommend downloading the entire file, and then viewing it from your desktop for best results.
The Lux Group presents Urbane: a new breed of luxury. Urbane offers style, experience, and energy. The intersection of office, retail, boutique hotel, and residential uses on a 28 acre site moves away from a common contrived feel, and instead moves towards an accessible urban pedestrian experience that builds on the tapestry of product uses and psychographics already present in the area. Urbane offers a special blend of retailers, meeting a demand for high end fashion, highly sought after entertainment and “one-off” restaurant concepts. Urban creates a sense of place, allowing visitors, office workers, hotel guests, and residents to enjoy convenience, quality of life, and luxurious living. Our project, rather than compete with neighboring shopping and office, creates value by offering a more complete experience to a population already attracted to the area for live work and play.
Setting
Located within the one of the most vibrant and dynamic areas of the Valley and the Scottsdale Airpark, is a 28 acre site that is home to the CrackerJax Family Fun Park. This site presents a variety of choices for redevelopment. The area has a several attractive features: a demographic income above $100,000 per year that is expected to reach $150,000 in 2012; the third largest employment corridor in Arizona, expected to be the largest in 2012; and a psychographic profile that epitomizes a very affluent lifestyle. Additionally, the area brings in a large amount of tourism dollars and plays host to many prestigious annual events, such as the FBR Open, the Barrett Jackson Auto Auction and the Arabian Horse Show. With Scottsdale Road on the western boundary of the property and views of the McDowell Mountains to the east, creating a site plan that showcases these valuable characteristics will prove beneficial for the project.
Offering
Bridging high end future developments in the north section of Scottsdale and downtown Scottsdale nightlife on the South end, while presenting national boutique retailers previously not in Arizona, and providing convenience retail for an urban experience, the Lux group has created Urbane. To capitalize on the opportunity presented with a property in such a location, The Lux Group has created a project in Urbane that differentiates from neighboring mixed use centers. Urbane is oriented around a central entertainment core, surrounded by high end hospitality and retail, while supported by office and residential uses at the boundaries. Two pedestrian streets connect from the core out to the corners of Scottsdale road providing pedestrian connections and inviting views into the heart of the project. Between these pedestrian apertures, the Scottsdale Road frontage opens up with a lush landscaped plaza and a grand vehicular entry framed by two modern Class “A” commercial office buildings, restaurants, retail and book ended by two additional Class “A” office buildings. The density will create a site that has a distinct urban feel yet is still has 28% open space brings balance and character to the project. The mix of uses throughout the site will create a sense of arrival amongst the customers, residents, hotel patrons, and office workers that is active at all hours of the day. The following combination of uses makes up the community that is Urbane.
Class A Office-400,000 square feet
The four office buildings are located across the front of the site along Scottsdale Road. These buildings are the bookends that create the gateway into the retail village of Urbane. This presents a number of signage opportunities in structures that are all located along Scottsdale Road, which will increase the exposure of the tenants. The Lux Group has identified a strategic partnership opportunity, which would include leasing the entire 400k sq ft.
The Shops at Urbane-255,000 square feet
The shops at Urbane will be an exciting mix of national boutique brands, known for style and irrational exuberance, outdoor events, a national entertainment brand, and dining experiences, mostly unfounded anywhere in the state. With world class entertainment at the House of Blues; elegant jewelry at Harry Winston, one of kind purchases at Sotheby’s, and restaurants with national stature or “one-off” creations by innovative restaurateurs, The Shops at Urbane will become a destination for people across the Valley and beyond.
Ownership at Urbane-290,000 square feet
The Residences at Urbane will be a collection of condominiums that provide a home for people who love to live where others want to be. Offering the elite amenities through the Mandarin Oriental Hotel, residents will have the opportunity to enjoy spectacular views of the McDowell Mountains or overlook the activity of the retail center at Urbane. These residences will be considered among the finest in modern living in the Valley and are expected to be popular across a wide array of potential buyers.
Mandarin Oriental-450,000-square feet
The Mandarin Oriental Hotel will provide guests and residents with a modern and chic experience that is unparalleled in North Scottsdale. By offering modern and bold architecture along with chic interiors and impeccable service, a roof-top pool and deck tremendous views, the hotel will exceed the expectations of all those who visit there. As a capital formation strategy we plan to sell a four acre hotel pad to the Mandarin Oriental hotel group. We have decided to transfer the inherent risks of hotel development and operation to an experience operator.
Capital Plan
Constraints:
Developing our project is constrained by available capital, underwriting terms, and cost of development. Our phasing plan is thereby structured to optimize synergy, lease-up, and value-add while considering likely future market forces and their constraints. Phase I, South-side office and retail, will be the most costly as it requires a capital outlay of approximately $130 million. The large capital outlay is due in part to complete land development during Phase I. Synergy and momentum drive the need for Phase II, North-side office and retail, to commence vertical construction at Phase I Certificate of Occupancy, compounding capital outlay needs by $80 million. These capital needs are met by utilizing the increased land value realized through the entitlement process. Future phases, III, IV and V are funded by cash re-financing realizing value add and reversion of hotel pad.
Financing Strategies:
Joint Venture with Land Owner – A joint venture with the land owner will allow developer to leverage land in exchange for offering the land owner a preferred return, an equity piece in development project, and a back-end split.
Mezzanine Financing - Utilize mezzanine financing when appropropriate, even considering the higher cost of capital.
Phasing - Consider how timing of phases can contribute to available equity and liquidity. Also maintain flexibility with phasing to avoid a cash crunch.
Capitalization Objectives:
Capitalization objectives are to meet a 17% IRR hurdle rate on initial land value. Financial analysis on reversion opportunities, re-financing, joint ventures, and operational holdings are considered to maximize IRR, while considering investment hold benefits and maintaining product integrity.
Closing
With a location that provides immense opportunity; an effective site design that creates a modern and dynamic space; and a significant financial return to the developers, Urbane will be a project that that succeeds on multiple levels and for all stakeholders involved.
