PHOENIX-In a double win for the 5.5-million-sf CityNorth, $379 million of construction financing has cleared all hurdles for the development partnership. In addition, Chicago-based Thomas J. Klutznick Co. and Related Cos. of New York City have agreed to joint venture on the 24-acre first phase.
The McLean, VA-headquartered JER Partners is the equity backer for the mixed-use development that’s under construction in the northeast Valley’s 5,700-acre Desert Ridge, which Klutznick has been developing since the 1980s. The first phase is the one-million-sf High Street district.
The partnership trio has secured more than $290 million from Capmark Finance Inc. and $50 million in mezzanine financing from Centerline Capital Group. A spokeswoman for Related tells GlobeSt.com that the remaining equity came from private sources.
Construction on High Street district began in late 2006. The 293,000-sf retail component is 70% preleased, with the opening not due until fall 2008. The initial phase also contains 306,000 sf of office space and 409,000 sf of condos and townhouses.
Plans for CityNorth’s 2.5-million-sf second phase are underway. It’s been ticketed for a November 2009 delivery. Nordstrom will be one of the anchors for the 45-acre second phase, marking its first store in the Phoenix metro. The second phase will have three anchors and 200,000 sf of retail and restaurant space.
CityNorth is mapped for a third phase with a five-star hotel, upscale spa and health club and more office and residential space. Bordered by the Pima Freeway, State Highway 52 and Deer Valley Drive, CityNorth is being built on 144 acres.
by Amy Wolff Sorter