It’s no surprise that Covid changed the economic dynamics of our world in a lasting way. E-commerce went from a dominant economic factor to THE dominant economic factor, millions of square feet of office space have been rendered null and void due to work-from-home and hybrid work policies, and delivery services became ascendent.
One of the bigger questions vexing much of the real estate world: what should we do with the excess space? Should old buildings be sold at a significant loss? Or what about completely rethinking the space as it is and creating something new within it?
Enter the old Paradise Valley Mall; a victim of numerous circumstances. The expanded adoption of Amazon’s cost and convenience hurt shopping malls around the country, and like many others covid policies dealt a death blow. It was razed in 2021 but is now entering its next phase: a mixed-use housing development.
Granted, I think it would be the dream of nearly anyone of a certain age (think young Gen Xers and elder millennials) to have a mall directly repurposed as a residential complex. After all, what would you pay to be able to live in your favorite mall’s Hot Topic? Alas, redeveloping from commercial space to residential is not just a nightmare from a development perspective (your Hot Topic probably didn’t have any faucets, let alone the water hookups for showers after all) but from a rezoning perspective as well.
Korman Communities is instead starting from scratch with AVE Paradise Valley, a 400-unit luxury living space paired with “immediate access to an on-site Whole Foods plus tons of dynamic shopping, dining and entertainment options”, along with a fantastic location where PV, Phoenix and Scottsdale meet.
Prices are not for the faint of heart, and it would not be shocking if they are deemed a bit rich when the time to lease comes; studio apartments approach $1,700 per month, and three-bedroom units start at an eye-popping $5,300. Considering that that’s going to be far above a mortgage payment for a three-bedroom house nearly anywhere in the Valley, that feels like a stretch. But by all indications, the complex will have significant trappings of convenience and luxury, so perhaps there is adequate demand to buoy those prices.
So while it’s good to see an old landmark get a new life, we’re still waiting for the opportunity to be able to bunk in the old Spencer’s Gifts and walk over to the old JC Penney’s to have a drink and watch some games.