Talk about economies of scale.
The Howard Hughes Corporation announced Tuesday that it has bought the massive, master planned community that Jerry Colangelo has been plotting for nearly 37,000 acres in Phoenix.
The acquisition of the Douglas Ranch project, in the city’s West Valley neighborhood, adds to Howard Hughes’ roster of master planned communities. This one is projected to have 100,000 homes, 300,000 residents and 55 million square feet of commercial space.
Howard Hughes acquired the “shovel-ready” land from Colangelo’s JDM Partners and Mike Ingram’s El Dorado Holdings for $600 million. Both developers will stay on with Howard Hughes as joint venture partners on the first village of the community, Trillium, which will encompass 3,000 acres.
An SEC filing shows JDM and El Dorado have the option to reacquire 50 percent of the master community ― outside of Trillium ― for $271 million, so long as they do so in the next six months.
“We are creating a city of the future—leveraging the Howard Hughes Corporation’s development expertise to build a community with limitless potential to spur growth, business expansion, economic opportunity and innovation,” Colangelo, a former Phoenix Suns executive and member of basketball’s Hall of Fame, said in a press release.
Phoenix has been one of the nation’s hottest housing markets, and sales of Douglas Ranch’s residential lots are expected to begin during the first half of 2022. The developer expects to sell at least 1,000 lots in the first year.
Howard Hughes is the largest operator of master planned communities in the United States. The portfolio includes properties in Las Vegas and Houston.
Phoenix is burgeoning, leading the country’s major metropolitan areas in net migration over the past three years.
The median home price in Phoenix hit $399,900 in June, a 31.1 percent jump from a year earlier. The city also ranks as one of the best in the country in terms of risk-adjusted return on home investments.
Howard Hughes is doing a much smaller, but significant project in Lower Manhattan, on a longtime parking lot at 250 Water Street. The firm’s proposal for a 25-story tower with 270 units, 190 of them market-rate, is expected to be approved Wednesday by the City Planning Commission.