Real estate development predictions

by Timothy Inklebarger

Featuring the perspective of:

Heath Melton, President, The Howard Hughes Corporation

What are the hottest areas in Phoenix for future master-planned communities? 

Heath Melton: The West Valley is the hottest expansionary area in the Greater Phoenix market and home to Teravalis, our newest community in the Howard Hughes portfolio that is strategically located just west of the White Tank Mountains in the City of Buckeye — one of the fastest-growing cities in the country. Future Interstate 11 will traverse through the western portion of Teravalis and connect Phoenix to Las Vega, and ultimately to the border of Mexico. Buckeye has an estimated current population of 110,000 and is expected to reach over 300,000 residents by 2040.  

What hurdles are the most difficult to overcome in getting a new community developed, and how do you overcome those? 

Melton: Successful communities are those that plan for and invest in smart, sustainable infrastructure and innovative technologies from the very beginning — a commitment which requires substantial capital investment. 

Forming strong partnerships with key stakeholders is key to the success of Teravalis, the City of Buckeye and the greater region. At Howard Hughes, we are a master plan developer who takes a broad and cohesive overview of planning and development — working closely with consulting engineers, environmental experts, local officials, regional agencies and community members to address issues up front and responsibly plan for long-term growth and sustainability.

How are rising interest rates impacting the development of new master planned communities? What impact is it having on the kinds of houses and communities you’re developing? 

Melton: Higher interest rates coupled with unprecedented price appreciation and housing shortages have put pressure on consumers nationwide. As a result of current market conditions, we are seeing some homebuilders lowering their base pricing and offering incentives for homebuyers which may include rate locks, rate buy-downs or money offered toward closing costs.

At The Howard Hughes Corporation, we continue to build to meet the dire need for affordable housing and the demand in our markets, we are committed to providing an exceptional quality of life to all who live, work and play in our communities for generations to come. Teravalis is a pivotal solution to the great need for quality housing and commercial real estate in support of Arizona’s booming economic growth. 

What are developers looking for when developing a master-planned community? 

Melton: Teravalis presented a rare opportunity to add to our core asset of master planned communities with a property that aligns so perfectly with our portfolio of large-scale, mixed-use urban communities and fits the characteristics of HHC’s existing MPCs, including: Prime location with convenient access to regional metropolitan hubs.

If you look at our existing MPCs, you will notice they all reside near large metro areas such as Houston with The Woodlands and Bridgeland, Las Vegas with Summerlin and the Baltimore/D.C. corridor with Downtown Columbia.  

Teravalis is strategically positioned in the pathway of Phoenix’s significant growth in the West Valley. Favorable Business Environment with a thriving job market and ample employment opportunities; strong demographics; robust commercial growth; potential for impactful ESG initiatives; and supportive local government.

How is the shift in the economy affecting your community plans?  

Melton: With a 50-year development plan, we recognize that Teravalis will span many economic cycles. We are continuing our development efforts as planned and will keep our finger on the pulse of the market to ensure we are prepared to meet the housing needs of consumers now and in the future. 

How are you increasing your appeal to buyers and agents? 

Melton: Across the country, The Howard Hughes Corporation is recognized for our expertise in creating walkable mixed-use areas with a cohesive, dynamic blend of office, retail, and entertainment spaces, all thoughtfully integrated into the surrounding natural environment. We curate placemaking experiences that enhance the quality of life for our residents and tenants and offer home choices in close proximity to great commercial offerings — and Teravalis will be no different. 

Initially, Teravalis will focus on residential offerings with unmatched community amenities. As our community continues to mature, we will include retail, offices, health care and employment opportunities, creating new jobs and services and a great quality of life. Our goal at Teravalis is to create one-and-a-half jobs for every home and have just as many commuters coming into the community as we have going out. Teravalis will be an eco-friendly sustainable community, which is fundamental to our DNA at the Howard Hughes Corporation, and we know that matters to buyers and agents now more than ever.  

What are some of your environmental initiatives for your communities? 

Melton: The Howard Hughes Corporation has a legacy of responsible environmental stewardship across the country, as a master plan developer of many diverse environments including the desert. We will work together with community stakeholders including the city of Buckeye, Maricopa County and the state to ensure that our legacy of responsible stewardship and long-term sustainable growth continues. 

Our goal is to be recognized as a regional leader in water conservation strategies and techniques, including use of reclamation, drought tolerant landscape, low flow fixtures and informed design guidelines. We will focus on Leadership in Energy and Environmental Design (LEED) certification from day one, following in the footsteps of our other communities. 

We will identify opportunities for onsite power generation. Prioritizing renewable energy and smart technology is not a matter of checking a box for us. It is a matter of doing what is right. We are connecting the gaps between nature and development by thoughtfully planning homes, amenities, and retail space, while embracing native vegetation and thriving wildlife that celebrates the vastness of the land between our mountains. This is one of the many ways Teravalis will differentiate itself as a community.

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