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Friday, June 23, 2017

Building Fuels Real Estate Improvements

As people continue searching for hints of an economic recovery, attention on the real estate market has been growing greater by the day.

 

Several reports show Phoenix-area housing on the rise, as well as increased activity in the commercial sector. Naturally, this trend carries over to the South Mountain area, where one local developer says movement is due, in part, to residential builders again buying land.

 

“When they start the build-outs, you’ll see the improved lots go first,” said Michael Moreines, owner of Sierra Sun Properties. “These are the lots where the developers just stopped – the infrastructure is in and the pads are ready to go.”

 

This residential building should then trigger more movement in the commercial market, which – particularly in Laveen – remains slow.

 

“Everybody is getting ready, Moreines stressed. “We’re kind of on the precipice of things starting to change.”

 

At Moreines’ Estrella Mountain Village development, the LA Fitness-anchored retail center on the southwest corner of 51st Avenue and Baseline Road, build-out is set to begin on a Fry’s Fuel Center behind Walgreens. Tenants for two other pads on the corner are close to being finalized, as well.

 

Throughout the South Mountain area, previously vacant commercial spaces have started filling in. Examples include Baseline Crossings at 27th Avenue and Baseline Road, as well as on the southeast corner of 24th Street and Baseline Road, where several food franchises were added.

 

Just northwest of Laveen, industrial activity is what’s creating momentum. According to Moreines, the demand in warehouse space is the result of increased taxes in California, which is causing more companies to relocate operations to the Phoenix area.

 

Michael Martinez, CCIM, a Laveen resident and associate broker at RE/MAX Excalibur, has also noticed the industrial push – even inside the South Mountain area. In fact, during the last 12 months, of the 98 transactions involving industrial, multi-family, retail and office property in the 85040, 85041, 85042 and 85339 zip codes, his records show 44 were industrial.

 

“That (industrial) seems to be a lot of the market down here,” he added.

 

The multi-family market is also showing life. Martinez believes this progress is likely due to the many people who lost homes during the last several years.

 

Furthermore, since single-family housing stabilized, more traditional properties are on the market (as opposed to short sales and foreclosures). As a result, Martinez said residential values jumped about 25 percent over the last year and that figure continues rising – although the pace is slowing.

 

“We’ll continue to see appreciation in that market – maybe 5 percent or 7 percent for residential sales this year,” he added.

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