Howard Hughes Corp., Jerry Colangelo Buy 37,000 Acres in Phoenix for Massive Douglas Ranch Mixed-Use Project
PHOENIX — The Howard Hughes Corp. (NYSE: HHC) and local business magnate Jerry Colangelo are partnering to develop Douglas Ranch, a large-scale, master-planned community in Phoenix. HHC and Colangelo have purchased 37,000 acres for the project in Phoenix’s West Valley region for $600 million.
Upon full buildout, Douglas Ranch will comprise 100,000 homes for 300,000 residents, as well as 55 million square feet of commercial development. The partnership plans to launch residential lot sales at Douglas Ranch in the first half of 2022.
“We are creating a city of the future — leveraging HHC’s development expertise to build a community with limitless potential to spur growth, business expansion, economic opportunity and innovation,” says Colangelo, a longtime Phoenix resident and former owner of the Phoenix Suns NBA franchise.
The land sellers, locally based JDM Partners and Scottsdale-based El Dorado Holdings, will remain as joint venture partners for Douglas Ranch’s first phase, which is a 3,000-acre village called Trillium located in the city of Buckeye. Colangelo is a partner at JDM Partners, along with David Eaton and Mel Shultz. The firm is one of the largest owners of entitled land in Arizona.
HHC and Colangelo are launching Douglas Ranch to tap into the growth potential they see in Phoenix, which has added almost 1 million residents in the last decade and is expected to grow by approximately 100,000 residents annually over the next 10 years, according to HHC. The city’s West Valley district has shown outsized growth in new home construction, capturing 57 percent of all housing demand in metro Phoenix, according to the developers.
HHC is an experienced master-planned community developer, with over 100,000 acres in projects including Summerlin in Las Vegas and The Woodlands near Houston, as well as master-planned communities in Maryland, Hawaii and New York City. The Texas-based developer plans to utilize the “self-funding” model at Douglas Ranch with the help of launching residential lot sales next year.
“We are excited to partner with JDM and El Dorado to launch what will be the leading master-planned community in the Western United States,” says David O’Reilly, CEO of HHC.
HHC and Colangelo say the 37,000-acre site is “shovel-ready” and is located off the future home of Interstate 11, which has received Congressional approval and is projected to create $30 billion to $60 billion of economic impact in the region. I-11 will connect Phoenix, Las Vegas and Southern California, and eventually establish a new trade route between Canada and Mexico by way of Idaho, Arizona and Nevada.
Centerview Partners LLP served as financial advisor to HHC in the land deal.
HHC’s stock price closed on Monday, Oct. 18, at $91.10 per share, up from $61.81 a year ago.
— John Nelson