Madison Realty Capital Originates $585M Loan for $2B Paradise Valley Project
The mixed-use, ultra-luxury development could redefine Arizona’s wealthiest ZIP code
By Brian Pascus May 12, 2023 12:04 pm
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Five Star Development has secured a $585 million construction loan from Madison Realty Capital to complete what’s known as The Ritz-Carlton Paradise Valley, The Palmeraie, a $2 billion mixed-use, ultra-luxury retail, residential, hotel and dining development in Paradise Valley, Ariz.
Bryan Clark, managing director of JLL (JLL) Capital Markets, brokered the financing. Madison Realty Capital’s $585 million origination is anticipated to finish construction of the project, which is 80 percent completed and is expected to open this year.
“Madison Realty Capital’s significant experience with branded hotel residences and deep understanding of the hospitality market sets their team apart,” Clark said in a statement. “We were pleased to work with them to deliver tailored financing for a hospitality and luxury retail project that will set a new standard in Paradise Valley.”
The Ritz-Carlton Paradise Valley, The Palmeraie is one of the most ambitious mixed-use undertakings initiated in the Paradise Valley region, which sits just outside Phoenix and Scottsdale. Covering more than 122 acres of land and incorporating more than 160,000 square feet of high-end, mixed-use space, the development is expected to redefine both the living and shopping experiences in the state’s wealthiest ZIP code.
The Palmeraie dining and shopping center is expected to incorporate more than 60 luxury boutiques into its 22 acres of retail and restaurant space, while the 215-room Ritz-Carlton Resort and Hotel will be supplemented by 80 single-level Ritz-Carlton residential villas and 32 single-family estate homes, which will be branded and serviced by Ritz-Carlton staff.
The residential Villas include private balconies, terraces with outdoor fireplaces, and floor-to-ceiling glass windows. The estate homes are adjacent to the Ritz-Carlton Hotel and Residences and within the property grounds, and span four different design styles, ranging from 8,468 square feet to 12,323 square feet.
Josh Zegen, managing principal and co-founder of Madison Realty Capital, described the project as “one of the most impressive undertakings of a luxury master-planned community on the West Coast,” and said that Five Star Development has pre-sold all 80 single-level residential Villas and nearly half of the 32 single-family estate homes.
“The Ritz-Carlton is one of the world’s most iconic luxury brands, and this development is catered for the affluent and desirable Scottsdale market, which is consistently ranked as one of the best places to live in the U.S,” Zegen said in a statement.
Five Star Development is a Scottsdale-based developer with projects across all CRE asset classes. Since its founding in 1978, the firm has developed more than 20 million square feet at a value of $1.2 billion, mainly across the Southwest and at the El Paso/Ciudad Juarez border region.
This is the second deal in the last week that Madison Realty Capital has announced together with Ritz-Carlton. The New York-based firm announced May 3 the origination of a $340 million construction loan for The Ritz-Carlton Residences, Palm Beach Gardens, a three-building residential project in Palm Beach Gardens, Fla., that includes 106 private residences and a private marina with 29 boat slips.
Brian Pascus can be reached at bpascus@commercialobserver.com
