North Marana growth heats up as the area looks to be a major beneficiary of Tucson’s strong market 

Land deals seem to be non-stop these days in this sub-market of southern Arizona and Real Estate Daily News decided to look deeper into what is driving this. We thought there was no better place to start than the company who has been the “go to” source in this area. Will White and John Carroll of Land Advisors Organization have been involved in a major portion of the activity in north Marana for decades and represent several of the area’s larger projects going forward.  

We recently sat down with White to get his thoughts on all this activity in north Marana and to ask what we can expect going forward. 

Q: Will, the Tucson market has had an amazing ride over the past 18 months. Nowhere is this more true than in north Marana. Can you break down how (and why) this has happened?   

North Marana benefited from a Tucson land market that was short on lot inventory going into 2020 and is extremly short going forward. This area has the most privately held land available that is unconstrained and can be delivered in the Tucson metro area. In addition, the land there is developable and there are entitlements in place and infrastructure at the ready. Difficult to find that right now in other areas of Tucson. As other large projects around the region saw most of their lot inventory purchased in the past 12 months, the homebuilders have turned their sights on this area. Keep in mind also that this area is already home to successful projects like Gladden Farms that will put up the most SFR permits in the market this year. The area was already successful and will look to only get better as we move forward. 

Q: We all have heard how tight the land supply is in Tucson. Is this also the case in Marana? 

The picture is getting clearer on the supply side of things in Tucson. It is historically short on lots and it would take some time to get back to balance. At the current pace, the Tucson metro market needs 19,000-34,000 lots to be built and delivered to builders in the next 5 years. Bottom line, the market is not set up to deliver this many lots in just 5 years. It’s a big challenge. Important to keep in mind that these numbers are based on our historically low permit pace, +/-5,000 permits. Adding pressure is, there is consensus that we have 20% more consumer demand for housing than what can be produced. Due to the land constraints around the region here, we believe the north Marana will begin taking up to 40-50% market share of all of the permits in Tucson metro area. What this means is north Marana needs to be delivering 2,000 lots annually to homebuilders, or10,000 over the next 5 years. The race is on to get these lots produced and they will 100% come at a premium.

Q: How are homebuilders reacting to this dwindling land supply? Are they moving forward or pulling back? 

Homebuilders have done a nice job of securing lots in north Marana to-date. On the land side, we are not currently seeing any pull back in Tucson. Gladden Farms has grown its roster to 6 homebuilders over the past year and has been a “go to” project in Marana. The homebuilders have been selling really well. However, with all of the acquisition activity at Gladden over the past 18 months, new lots are becoming harder to secure. What we are seeing now is a lot of homebuilder strategy revolving around positioning for the future up there. There are 4-5 larger projects in north Marana that will be the main supplier for the homebuilders moving forward. Several builders are working with these owners/developers right now to secure spots in the initial phases of these projects. This becomes important when looking at future pipeline availability in the big projects. As there wont be enough positions to go around in these initial phases, It will definitely be the “haves and have nots” and some builders will be constantly on the search. Definitely better to be proactive than reactive in north Marana.

Q: Tell me what homebuilders find attractive about that submarket 

It’s important to remember that north Marana has been active for decades, but we are definitely seeing it accelerate. What is great about the area is a lot of it is new and it has a great feel to it. The projects are new, the homes are new and the product is getting more innovative, the infrastructure and roads are new, the schools are good, and we will most likely see new employment and commercial services to support all of this residential. The area just looks and feels very good and it has a lot of history to it. Also, the Town of Marana has been very open to work with and, in our experience, has rolled out the red carpet to the area’s homebuilders and developers up there. The process is pretty streamlined in getting things going. Lastly, the homebuilders like to be where they can be successful and north Marana has shown some of the region’s best pricing power and pace. As this continues, they will look for ways to keep building on that success. 

Q: Okay – we get that north Marana is hot. But, in your opinion, are some areas there hotter than others? 

You have two interchange points of access currently into this area, Tangerine Road and Marana Road to the north. The success of Gladden Farms off Tangerine is well documented and now we are seeing projects begin on the eastside of I-10 that will be accessed off of Tangerine. That interchange has been “main and main” for some time. What we definitely have our eyes on next is what is becoming known as the “MRC” or “Marana Road corridor”. This is accessed at Marana Road and I-10 and it is the area that will light up soon with all that is being planned up there in larger master-plan projects, commercial/retail and major infrastructure work, both west and east of I-10. In addition to that, we have seen the homebuilders very active father north up I-10 at Red Rock Village so that gives you and idea of the total spectrum. 

Q: Lastly, look into the Land Advisors’ crystal ball. What does north Marana look like 5 years from now? 

The past 18 months has proven that our crystal ball isn’t as clear as we would like all the time. North Marana has a large amount of land to grow, very good master developers in place, a strong and supportive municipality, proven homebuilding track record, growing employment and commercial uses, and it is on top of its growing infrastructure needs. As we mentioned, in 5 years, we believe this area north of Tangerine will have to accommodate close to 2,000-2500 permits a year. We also think that we will see renewed demand for various commercial and retail services as well as a growing employment base. In 5 years, we think homebuilders in Tucson metro will rely on this area for upwards of half of their pipeline and business. We will see the Tangerine and I-10 area fill out and we will see a large amount focus on the Marana Road corridor (MRC). Demand is far exceeding supply in all areas of Tucson and to get it back in balance will take time. North Marana will be a major player in that solution.

PHOTO: Will White, runs the Tucson office of Land Advisors Organization (LAO) and represents the vast majority of Tucson’s larger master planned communities and residential projects.

Oro Valley, Arizona — Land Advisors Organization (LAO) Closed on $7.721 million in residential land deals in northwest Tucson since the start of 2019.

Pulte Home Company plans to plat for development 45 acres of land in Oro Valley at Rancho Vistoso. The land drew a sale price of $4.9 million ($108,888 per acre) in this all cash transaction. The Seller was a group of private investors doing business as VPII Loan, LLC and ML Manager, LLC of Phoenix.

Pulte plans to plat the parcels for a mixture of production lot sizes.

Will White and John Carroll with Land Advisors Organization (LAO) handled the transaction.

This is the same seller who sold 190 acres in October to a New York-based land investment REIT, JEN Arizona 32, LLC and affiliate TerraWest Communities (Mike Jesberger), Blocks 5H and 5I at Rancho Vistoso Neighborhood 5 in Oro Valley sold for $6.3 million. The transaction was also negotiated by LAO.

“This is a great location in the project. The homebuilder opportunities in Rancho Vistoso have become extremely limited and the production has been extremely strong,” said White. “We don’t expect future lot opportunities to be available for long up there and most are sold before we actually get out to market with them. Vistoso has extremely strong pricing power and demand and that really has been the driver.”

In a separate transaction, Mattamy Homes purchased 26 finished lots from Pusch Ridge Christian Academy, beneficiary of Cottonwood Properties (David Mehl, manager) at Blue Agave II in Dove Mountain. The lots are 70X130 and sold for $108,500 per lot, or $2.821 million.

The lots are contiguous to Mattamy’s current Blue Agave I subdivision with 192 lots purchased in 2016 when finished lot prices were $74,479 per lot.

Will White and John Carroll with Land Advisors Organization (LAO) also handled this transaction

“Dove Mountain continues to offer a great lot delivery program for the master-plan’s builders, allowing them to have a steady stream of lots on time,” White stated.  “The project currently is home to several homebuilders and is experiencing strong activity as we head into 2019. The northwest portion of the community has some of the best golf/desert frontage parcels in the northwest area of Tucson and the amazing views that come with them. We are expecting the coming year to be extremely active in Dove Mountain.”

For more information White and Carroll should be reached at 520.514.7454.

To learn more, see RED Comp #6475 and #6479.

RED ROCK, ARIZONA — Sunbelt Holdings, a privately-held Scottsdale developer involved in some of metro Phoenix and Tucson’s largest master-planned communities, purchased the remaining balance of the 1,000-acre Red Rock Village community, located north of Marana along Interstate 10 at the Red Rock interchange.

When fully developed, Red Rock Village will consist of 3,500 homes and supporting commercial uses. The community currently has all major infrastructure in place, along with various existing community amenities, and is home to Red Rock Elementary School, a K-8 school that opened in 2009.

The acquisition of Red Rock Village represents the fourth major investment by Sunbelt Holdings in the Tucson metro area. Sunbelt is currently active in Tucson with its 565-acre La Estancia community. La Estancia is one of Tucson’s most successful master-planned communities, home to three of Tucson’s largest homebuilders – Meritage Homes, Richmond American Homes and Lennar Homes. In addition, Sunbelt is preparing entitlements for the sale and construction of lots within its’ 200-acre Sycamore Canyon and 525-acre Sendero Pass communities.

The transaction was handled by Will White and John Carroll of Land Advisors Organization in Tucson.

“In a market where affordability and land supply are under substantial pressure, Sunbelt Holdings continues to be proactive in sourcing and executing the best opportunities to deliver affordability with current lifestyle concepts to the region’s homebuilders” said White.

“With this acquisition, Sunbelt Holdings has emerged as one of the top master-planned community developers in the Tucson area and with its current land inventory, looks to be a goto source for the area’s homebuilders for many, many years. They have spent several years studying Tucson and have been very selective on acquiring projects that will fill specific needs of this unique market.”

Sunbelt has initiated the design of additional lots within Red Rock Village and plans to have them available to market in mid-2019.

Sean Walters COO, and Bob Bambauer, Senior Vice President are the contacts for the Tucson projects. White and Carroll of Land Advisors Organization can be contacted about available lot inventory in the various communities.

Sunbelt Holdings has been a recognized leader in real estate development, management and investment throughout the Southwest since 1979. Over the years, the firm has gained an understanding of the area’s unique characteristics that only time and experience can teach. Sunbelt entered the local market 38 years ago with a strong presence in commercial development and asset management. Early projects like the Phoenix Gateway Center remain successful icons. Recent acquisitions of turn-around assets have provided unique opportunities to add value in the Class A office market with the Marina Heights and Hayden Ferry Lakeside projects in Tempe, and the PV|303 industrial project in the West Valley. Sunbelt has also developed some of the Valley’s most beloved residential communities including McDowell Mountain Ranch in Scottsdale, Power Ranch in the East Valley, Vistancia in the Northwest Valley, and most recently La Estancia, Sycamore Canyon and Red Rock Village in the Tucson market. In all, Sunbelt has developed more than 50,000 acres of land. For more information, visit sunbeltholdings.com.

To learn more contact White and Carroll with Land Advisors Organization at 520.514.7454.