Max Friedman is as bullish as ever on metro Phoenix.
The partner of Los Angeles- based Banyan Residential has $650 million in multifamily and mixed-use construction projects underway in metro Phoenix, with another $100 million project in the pipeline.
“We love Phoenix,” Friedman said. “We are under contract for one big site in the market. That would be another $100 million project.”
While he said it’s too soon to disclose that location, he said all of Banyan Residential projects are within an Opportunity Zone.
“We’ve got some others in the hopper as well,” he said.
The company just broke ground last Thursday on the first phase of a 651-unit apartment community being built on what formerly was a county island and recently annexed into the city of Tempe.
That $175 million apartment community at 1245 E. Curry Road in Tempe is being built in partnership with Indianapolis-based Milhaus, which is making its Valley debut and has plans to build or acquire 2,000 units here within the next five years.
Banyan also is in the midst of a mixed-use project at 64th Street and McDowell Road in Scottsdale called Scottsdale Entrada.
That $300 million project includes 736 apartment units, 250,000 square feet of office space and 8,000 square feet of retail space, Friedman said.
Another project under development is called Banyan Washington, which will include 223 units at 5321 E. Washington St. in Phoenix. That $60 million project and Scottsdale Entrada are expected to have the first apartment units ready by the end of the year.
“We are constantly looking for new sites in Phoenix,” Friedman said. “We love Phoenix. It’s where the bulk of our business is located, really. It’s the market where we’re most familiar with. A lot of our institutional equity partners want more of Phoenix. We’re very bullish.”
While Banyan has Opportunity Zone projects in other markets, Friedman said metro Phoenix has the best runway for these type of projects.
“Other markets typically have only so many good Opportunity Zone locations,” Friedman said. “A lot of those have been picked off. There’s a lot of well-located sites in Phoenix that are certainly easier to finesse.”
Founded in 2019, Banyan manages a development pipeline exceeding $750 million in value in the Valley, Houston, Dallas and Denver.
Out-of-state developers and investors are keen on metro Phoenix, which has approximately 17,000 apartment units under construction, according to a new report by CoStar Group.
Once those units are delivered, the overall apartment unit stock will grow by 5%, Jessica Morin, director of market analytics for CoStar, said in her State of the Market Report via Zoom on April 16.
“That’s a pretty healthy amount compared to the historical average,” she said.
Downtown Phoenix has the most units under construction, followed by Gilbert.