Behind Arizona’s Biggest Master-Planned Project

When population growth and job gain meet housing shortage, a new master-planned community seems like an ideal solution. And greater Phoenix could be the perfect place to develop such a project. According to recent data from the U.S. Census Bureau, Phoenix is not only the nation’s reigning champion of industrial development, but also the fastest-growing city in the U.S. from 2010 to 2020. Within the same time period, Phoenix’s Buckeye suburb grew faster than any other city with a population of more than 50,000.

Enter The Howard Hughes Corp., which has set out to develop its largest MPC yet in Buckeye: The 37,000-acre Douglas Ranch. HHC recently acquired the fully entitled, shovel-ready enclave from JDM Partners and El Dorado Holdings, in a deal valued at approximately $600 million. Projected to be developed across 40 or 50 years, Douglas Ranch will feature 100,000 homes and 55 million square feet of commercial space at full build-out, which will make it Arizona’s largest MPC.

Heath Melton, the recently appointed president of HHC’s Phoenix region, talked to Commercial Property Executive about the future master-planned community that will house more than 300,000 residents and about how Douglas Ranch fits into the firm’s established goals for its MPC platform.

After successfully leading the residential planning and development of The Woodlands, Bridgeland and The Woodlands Hills, now you have returned home to lead the development of Douglas Ranch. What’s the vision behind the project? How much will it reshape the Buckeye area?

Melton: Our vision for Douglas Ranch is to create our country’s next great master-planned community—what is in essence a vibrant new city in Phoenix’s West Valley. We envision Douglas Ranch both as a vibrant residential community offering an exceptional quality of life as well as a thriving business destination—a place where there are as many jobs as rooftops and an ultimate regional hub where employees will commute into the area to take advantage of the job opportunities that come with a burgeoning master-planned community.

Another key aspect of our vision for Douglas Ranch is a commitment to the preservation of the natural environment. Sustainability is always at the forefront of our master planning efforts, as we focus on how technology that can best be integrated into the emerging stages of development to enhance the overall success of a community and provide for the flexibility that will allow for future innovations.

An expert, thoughtful planning process will enhance not only the city of Buckeye, but the entire Phoenix region and the state of Arizona—and when Interstate 11 becomes a reality, the entire Western United States. In addition to being strategically positioned in the direct pathway of Phoenix’s growth with direct access to Interstate 10 through the Sun Valley Parkway, Douglas Ranch is bifurcated by the future home of I-11, which 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.

You mentioned in a prepared statement that Douglas Ranch will be “an industry leader in technology, innovation and sustainability.” What does that entail? What elements will make this project stand out?

Melton: The master-planned communities in The Howard Hughes Corp.’s portfolio are built on the visions of James Rouse and George Mitchell who were at the forefront of creating viable, self-sustaining cities. We are committed to carrying on that legacy.

We will establish Douglas Ranch as a LEED-certified resilient community, aligned with the United Nations’ sustainable development goals. We will embrace any technology that’s available to us that will help us support a more sustainable environment and preserve as much of the national resources as we can—implementing mindful resource conservation measures such as water reclamation, smart irrigation, and usage of renewable power generation. We will also utilize innovative technology for smart homes and amenities such as EV-charging infrastructure and enhanced mobility systems.

We anticipate implementing here many of the same sustainable elements that we have executed in our Texas community of Bridgeland, that has been celebrated for its integration of local ecology and its low-impact, sustainable design. We will also bring the successful best practices and processes from our Summerlin community in Las Vegas, which is located in a desert-landscape environment similar to Douglas Ranch. Summerlin was Nevada’s first community to put into effect WaterSmart conservation guidelines and was one of the Las Vegas valley’s earliest adopters of desert landscaping. Today, Summerlin goes beyond the restrictions for new construction, utilizing low-water-use/drought-tolerant landscaping that saves millions of gallons of water each year.

In what ways will Douglas Ranch resemble your other large-scale MPCs?

Melton: Douglas Ranch shares many of the key the characteristics of our other communities and is a perfect complement to our national portfolio of MPCs. Our communities are characterized as each being authentic to their natural landscapes, providing sought-after amenities within a walkable urban core set amidst expansive open space to allow for an active outdoor lifestyle.

Similar to the locations of our other communities, Phoenix is a business-friendly environment with a thriving job market, strong demographics and ample employment opportunities. Its prime location offers convenient access to nearby regional metropolitan hubs and opportunities for robust commercial growth. In addition, and critical to our mission as a developer, Douglas Ranch offers the potential for impactful ESG initiatives.

Another shared characteristic among our master-planned communities is the increasing number of Millennial homebuyers. Millennials are the most populous age group and the largest segment of the homebuying population—as well as the largest segment of new residents at our communities throughout Texas and Las Vegas. The Millennial generation is transforming the real estate world, and long-term demand is there for developers who can meet their needs and deliver the homes, the communities, and the quality lifestyle that Millennials want.

HHC did its own Foundational Research about what Millennials are looking for—surveying roughly 1,500 millennials in April 2021. Millennials do not want to give up all of the great amenities in a walkable urban environment that they are used to enjoying in dense cities‚ but they want all of these amenities integrated into beautiful natural setting—one that is safe and with good schools, opportunities for career success and an active outdoor lifestyle.

What can you tell us about the office component of the property? How large will it be and what type of tenants are you targeting for that space?

Melton: As we draw more and more residents into a community and build out the number of homesites to meet market demand, this in turn sparks accelerated demand for commercial development. The plan for the full build-out of Douglas Ranch comprises 55 million square feet of commercial development, which will include everything from office to retail and hospitality.

The fact that Douglas Ranch is fully entitled and “shovel-ready” provides the unique opportunity for us to deliver commercial development much more rapidly than is typical with such large-scale development—and to deliver new product types given the outsized demand in the region.

Phoenix is the nation’s absolute champion when it comes to planned and under construction industrial developments. Please tell us a few details about Douglas Ranch’s industrial component.

Melton: With its location in Phoenix’s West Valley, Douglas Ranch is approximately five hours to the coast—which is going to make the community especially attractive for business and industrial tenants as they look to make the community their home.

Integrated transportation will strategically position Douglas Ranch in the pathway of Phoenix’s significant growth in the West Valley and contribute to industrial growth. Direct, easy access to I-10 through the Sun Valley Parkway and direct alignment with the future home of I-11 positions Douglas Ranch as an ideal hub for further industrial development.

Are you preparing any kind of incentives to lure in an anchor tenant?

Melton: Today’s leading companies and target anchor tenants are looking to attract and retain top employees by locating their businesses in a community in which people want to live—where they can find both personal and career success. The best incentive we can offer is the exceptional quality of life that our master-planned communities are known to offer across the country, plus the assurance that we are building in the infrastructure and flexibility to accommodate future technological growth and innovations in sustainability—elements that will allow businesses to thrive for decades to come.

Douglas Ranch is HHC’s first MPC in Arizona. Are you eyeing other development opportunities within the state?

Melton: We always have our eye out for new opportunities—whether they exist within Arizona, or beyond. Douglas Ranch is a rare find—the first new community outside of our core portfolio that fits our discerning criteria. If there are other development opportunities that match our criteria for what makes an exceptional live/work/play/discover community, we would certainly be willing to entertain them and pursue the opportunity.