PMG Seals $102M Financing for Phoenix Multifamily Project
An East Coast development firm has secured a $102 million loan to fund an innovative multifamily building in Downtown Phoenix, Commercial Observer can exclusively report.
The loan, from Los Angeles’ CIM Group, will fund the project by the developer, PMG, to build a 253-unit residential tower at 200 West Monroe Street in the Arizona capital, within the three-block-by-10-block area that comprises the city’s most densely developed section. The project will be the second in a planned series of a new PMG developments aimed at demand for upscale but affordable apartments.
The branding will be aimed at setting the building apart from a previous line of PMG projects, known as X, which Ryan Shear, a PMG managing partner, said had grown to be too much associated with younger renters.
“X is a phenomenal brand, but it got a little bit pigeonholed as targeting millennials,” Shear said. The Phoenix project is part of “a brand that’s a little more inclusive, and we’re really excited about it,” he added.
The project will include a mix of studios and one- and two-bedroom units in addition to co-living options for residents to rent just one bedroom in a shared apartment. Apartments will be smaller than the competition — a one-bedroom might be 550 square feet, instead of the Phoenix market’s more typical 700, Shear said — but PMG plans to make up the difference with an extensive package of amenities.
The building’s lobby will be open to the public as a come-all hangout, with a vibe like the entrance to a trendy hotel, Shear said. There will also be a food hall, a large pool deck, a co-working space, fitness amenities and bike storage.
“A big part of it is that we sell this concept [that] you don’t need another gym or pool membership. You don’t need a coworking membership. This is about market-rate affordability,” Shear said. “Going to your amenity space downstairs, there will be no comparison.”
James Millon, Tom Traynor, Mark Finan and Rocco Mandala, a team of debt brokers at CBRE Capital Markets, found the CIM financing for the builder.
PMG, which has offices in New York City and Miami, started building a similar project in Fort Lauderdale, Fla. two years ago, and found it difficult at first to bring a lender onboard with the developer’s unorthodox vision.
“Honestly, when we broke ground in Fort Lauderdale, financing was hard,” Shear recalled, noting that lenders weren’t so familiar with co-living concepts at the time. “It was a big building, and was there weren’t a ton of people lining up.”
But broader acceptance of the model made finding debt for the Phoenix project more of a cinch, he added.
“The world got more familiar with it,” Shear said in response to a question about whether obtaining a loan was challenging. “Today, no, but as short as 2 years ago it was a major hurdle,”
The building is scheduled for a 2021 opening. A representative for CIM did not respond to an inquiry.