Developer Moves Forward with Valley Hotels, Spec Office

Article originally posted on Phoenix Business Journal on June 25, 2020

Now that the 238-room, 8-story Hyatt Place hotel is under construction in downtown Phoenix, the developer hopes by the time it is ready for visitors in September 2021, travel will have resumed to normal after the coronavirus pandemic.

“We closed on the land and moved financially forward in mid-March, at the time the bottom was falling out of the hospitality market,” George Foristall, director of real estate development for Mortenson, the co-developer of the project, said.

Because Arizona and the Phoenix market remain better positioned for recovery from the Covid-19 pandemic than it was from the Great Recession, Foristall said the company felt confident moving forward with the project.

“We have the tower crane up right now and everything is on track,” he said.

The project, on Second Avenue and Adams Street, will also have street-level retail and restaurant space, which will help with the city of Phoenix’s goal to add activity to Adams Street, he said.

Mortenson also developed the nearby Hampton Inn downtown, and said the firm was bullish on downtown Phoenix and saw continued demand for hotel rooms in the area.

“The construction of the Hyatt Place hotel across the street from Phoenix City Hall is a testament to confidence in the resiliency of the Phoenix economy,” Christine Mackay, economic development director for the city of Phoenix said in a statement. “This exciting development is needed to add rooms to the city’s hospitality inventory, and it’s a statement that Phoenix is a strong market.”

The designer of the downtown hotel is Allen+Philp Partners. Pacific Hospitality Group will own and manage the hotel.

Another hotel on way in Tempe

Mortenson is also developing a dual-branded Hyatt House and Hyatt Place hotel in the Novus corridor at Arizona State University, which is expected to be finished by mid-August, Foristall said.

Despite the ongoing pandemic, Foristall said he expects long-term success from that hotel.

“We are looking at this on the long-term range,” he said. “For hotels we typically plan for some ramp-up period. We are really excited about this location and the amenities that will be offered there.”

The firm is also planning to break ground later this year on a five-story, 182,000-square-foot office building in Tempe on Farmer Avenue north of Fifth Street in Tempe.

Despite the pandemic and many companies changing their offices to remote work, Foristall said Tempe, which was the Valley’s tightest office market before the pandemic, remains well-positioned to come out strong.

“We have quite a few proposals out in the market,” Foristall said of potential tenants in the spec building.

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