Caliber’s Canyon Village Office-to-Residential Conversion Approved by Phoenix City Council

Article originally posted on HERE on April 22, 2025

In a significant step toward addressing Phoenix’s housing shortage, real estate investment firm Caliber (NASDAQ: CWD) has secured unanimous approval from the Phoenix City Council to convert a distressed office complex into a 376-unit multifamily residential project.

The redevelopment, known as Canyon Village, is located in North Mountain Village, a strategic infill area of North Phoenix expected to benefit from ongoing semiconductor industry growth.

The approval paves the way for Caliber to transform a more than 300,000-square-foot office building—currently underutilized—into much-needed rental housing. The property sits within a federally designated Opportunity Zone, enabling favorable tax treatment for investors and aligning with Caliber’s mission to revitalize distressed assets while promoting economic development.

Chris Loeffler, CEO of Caliber, said, “Nationwide the most frequent topic we hear at real estate conferences is the opportunity presented to investors by distressed commercial real estate (CRE). Reminiscent of our first five years in business, Caliber is seeing opportunities to buy CRE at less than 50% of estimated replacement cost, and, in the case of Canyon Village, approximately 15% of estimated replacement cost. We are pleased that the Phoenix City Council and Mayor Kate Gallego saw the benefits and vision that this project offers and voted unanimously to approve it. This project is a great example of the federal opportunity zone tax program at work, combined with strong partnership at the city and community level, and fueled by private investors in Caliber’s funds.”

Converting Crisis into Opportunity

The Canyon Village project reflects a broader trend in real estate: the adaptive reuse of distressed office space. The national office sector—valued at over $2.4 trillion—continues to suffer from declining valuations, weak post-pandemic tenant demand, and rising financing costs. Caliber aims to seize this moment by acquiring assets at a deep discount; according to the company, the Canyon Village property was purchased at just 15% of its estimated replacement cost.

Housing Demand Meets Strategic Timing

The redevelopment arrives at a crucial time. Phoenix’s rental market is tightening amid a sharp decline in new multifamily construction, which dropped significantly from its 2023 peak due to high interest rates and escalating building costs. In the five-mile radius around Canyon Village, active construction has fallen from nearly 1,900 units in Q4 2023 to just over 450 units in Q2 2025. With less supply coming online, market analysts like CoStar forecast rent growth to rise to 5% annually by late 2027.

Caliber plans to deliver the first apartments in the second half of 2026, positioning the project to benefit from strengthening fundamentals as the market rebounds.

Tied to a Larger Economic Engine

Demand for housing in North Phoenix is expected to surge alongside the expansion of the local semiconductor industry. TSMC (NYSE: TSM), which recently upped its U.S. investment from $65 billion to $165 billion, has completed its second fabrication facility ahead of schedule. The influx of jobs and economic activity tied to this investment is expected to drive continued housing demand—particularly in areas like North Mountain Village.

Financing the Vision

The project’s financial foundation has been laid by Caliber’s tax-advantaged funds. The Caliber Tax-Advantaged Opportunity Zone Fund, LP has invested approximately $6.7 million to date, acting as the lead investor in Canyon FundCo, LLC. An additional $1 million has come from Caliber’s second Opportunity Zone Fund. The company is now raising additional equity for Phase I construction, which is slated to begin in the fourth quarter of 2025, following finalization of construction plans and financing.

Caliber is inviting both institutional and accredited investors to participate, whether or not they are taking advantage of Opportunity Zone tax incentives.