Hines is pivoting on its plans for an office tower in Tempe.
The Houston-based developer is abandoning its plans for an office highrise near Tempe Beach Park and instead looking to build a 110-unit condominium, the Phoenix Business Journal reported.
The project is set to rise on a 1.8-acre empty lot at Rio Salado Parkway and Ash Avenue. Hines requested to increase the building’s height from 14 to 16 stories and modify the development type from office to residential. The city’s Development Review Commission is expected to vote on the request Tuesday.
Hines purchased the parcel from American Airlines for $5 million in 2021. The firm pivoted from its office plans last year after reevaluating the market and finding that office subleasing was weak.
The project site is a block away from the part of the Salt River known as Tempe Town Lake. It is near the Cousins Properties-owned Hayden Ferry Lakeside III office building, at 40 East Rio Salado Parkway, where software firm Cognite recently moved into 30,000 square feet, after moving its global headquarters from Oslo, Noroway.
Of the 110 proposed condo units, 75 will be two-bedroom floor plans, 23 will be three-bedrooms and 12 will be four-bedrooms. Residents would have access to 226 parking spaces and 113 bicycle spots. The building would span 457,000 square feet.
A timeline for construction and costs haven’t been disclosed.
Hines also developed the 100 Mill office building two blocks to the east with Cousins Properties a few years ago. That 18-story building houses offices for companies like Amazon, Deloitte, IBM and Imagine Learning.
The Tempe Townlake office submarket is the strongest in the city, the outlet previously reported. It commanded the highest average leasing rate, at $39.58, a year ago.
Tempe’s condo market is relatively affordable compared to the greater Phoenix market. Condos on the market in the Tempe Townlake neighborhood include a one bedroom, one bathroom unit asking $400,000 and a two-bedroom, two-bathroom unit at 140 Rio Salado asking over $1 million.