US-based property investor and developer Caliber has gained approval from the Phoenix City Council for the redevelopment of its Canyon Village project, after meeting the necessary planning permissions and rezoning requirements.
The project will see the retrofitting of a distressed 300,000ft² office building into a 376-unit rental multifamily residential building.
Caliber noted that the project is located within a designated opportunity zone, offering tax advantages.
Demand for new housing in North Mountain Village in Phoenix is expected to increase sharply. This is partly due to the nearby expansion of semiconductor operations by TSMC. The redevelopment project aims to meet some of this anticipated residential shortfall.
TSMC recently revealed a $100bn increase to its initial $65bn investment pledge in the US, alongside the early completion of its Fab 2 facility in Phoenix.
Caliber projects that the initial batch of flats will be ready by mid-to-late 2026. This timing coincides with forecasted population growth in the region.
The project has received $6.7m from the Caliber Tax-Advantaged Opportunity Zone Fund. The fund has acted as the principal backer of Canyon FundCo, which is a Caliber-sponsored single-asset syndication, particularly intended to enable direct investment into the Canyon Village project.
The company completed the acquisition of the property in September 2024. The developer is now working to secure the next equity round to start construction. Phase I is expected to be funded through additional investor participation.
The Tax-Advantaged Opportunity Zone Fund II has so far contributed $1m. Work will begin when a construction loan is arranged and all plans are finalised. The first phase of building activity is targeted for the final quarter of 2025.
Caliber CEO Chris Loeffler said: “Nationwide, the most frequent topic we hear at real estate conferences is the opportunity presented to investors by distressed commercial real estate (CRE).
“Reminiscent of our first five years in business, Caliber is seeing opportunities to buy CRE at less than 50% of estimated replacement cost, and, in the case of Canyon Village, approximately 15% of estimated replacement cost.
“We are pleased that the Phoenix City Council and Mayor Kate Gallego saw the benefits and vision that this project offers and voted unanimously to approve it. This project is a great example of the federal opportunity zone tax programme at work, combined with strong partnership at the city and community level, and fuelled by private investors in Caliber’s funds.”
