Real Estate

Arizona’s most iconic developer, DMB, is moving out of the suburbs

(Source: AZCentral): Catherine Reagor –  Metro Phoenix’s growth has been defined and refined over the past 20 years by the big planned developments DC Ranch in Scottsdale, Verrado in Buckeye and Eastmark in Mesa.

The projects, on the edges of the Valley when they started, have grown into popular communities where schools, shops, and jobs arrived before many of the early residents.Big chunks of land in the developments have been preserved for open space, meaning fewer home sales but more parks and trails for residents.

Real estate analysts credit the developments for upping the quality of Arizona’s growth.

DC Ranch draws buyers and golfers from around the world and many of Arizona’s priciest mansions sit in its Silverleaf neighborhood. Verrado brought a new feel to West Valley housing with its historic-looking homes. And Eastmark is one of the top selling communities in the U.S., drawing many families to the Valley’s eastern edge.

Scottsdale-based DMB Associates, the iconic developer of those large communities, is now shifting gears. It is creating a new company to focus on infill projects in the Valley and California, including its first apartment complex on a prime piece of land along light rail in Tempe.

DMB will continue steering the growth of its existing communities. But its founders Drew Brown, Mark Sklar and Bennett Dorrance are handing over some of that management, and have funded the new company for future projects.

“DC Ranch, our first large-scale master-planned community, is basically done,” said Brown, who is in his 70s like his partners. “Not saying we are done, but we are older and built a business based on large developments that take 20 years to complete.

“None of us are prepared to double-down on another 20-year project, but we will still be involved,” he said.

Dorrance called the change a “transition without ignoring the old projects that made DMB.”

Sklar said he and his long-time friends are ready to take a more “stewardship role than daily management.”

New growth

The new firm, DMB Development, will still carry the initials of the influential founders –  and will be led by DMB Associates president Brent Herrington.

“We have spent a few years talking about DMB 2.0 as Drew, Mark and Bennett power down a bit and focus on other things,” Herrington said. “The growth platform for DMB Development will be to start looking back over our shoulders at opportunities for people trying to live and work closer to their jobs and all the fun stuff they like to do.”

Metro Phoenix’s growth is shifting. Homebuyers are less interested in the “drive until you qualify” mentality, and less willing to take on longer commutes in exchange for larger homes and more suburban amenities.

After the housing crash, buyers and renters began to move closer in. Builders followed with smaller, single-family developments, condominium projects and lots of apartments in central Phoenix, Scottsdale and Tempe.

Going up instead of out

DMB Development is planning a new type of infill project with high-end apartments that draw long-term renters.

Plans for its first apartment project — Eastline Village on Apache Boulevard about midway between the downtowns of Tempe and Mesa — will be finalized soon.

“It will be thoughtfully designed apartments with innovative offices and co-work space and some really cool retail,” Herrington said. “We have a huge opportunity to redevelop and recolonize areas closer in.”

Arizona real estate analyst Mark Stapp, director of the Master of Real Estate Development program at Arizona State University, said DMB did a lot to improve the character of metro Phoenix’s growth in communities farther out and predicts they will now do that for infill.

“Infill is hard to do, but DMB is very smart about development and sets very high standards that other developers must compete against,” he said.

DMB Development is working on other central Valley projects but isn’t ready to talk about them yet.

In California, the new DMB company is working on an infill project in Sacramento that could involve boat slips, as well as other dense and centrally-located developments in Irvine and Napa.

“We (DMB founders) have substantially capitalized the new company to grow,” Brown said. “It will move forward with the DMB brand with new transactions, some similar to what we have done before and others very different.”