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SPECIAL REPORT 2016

THE REGION’S BUSINESS MAGAZINE

ENCANTADA AT TUCSON NATIONAL Resort-Style Apartments by HSL Properties


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PHOTOS: COURTESY HSL PROPERTIES

Encantada Tucson

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National

A More Residential Design By Jay Gonzales at HSL went “back to the drawing board” to reconfigure the development and evolve from its three predecessors – Riverside Crossing, Dove Mountain and Steam Pump. “We constantly challenge ourselves to better serve our customer base,” said Christopher Evans, executive VP for HSL Asset Management. “We look continued on page 126 >>>

PHOTO: BRENT G. MATHIS

Sitting on three years of success since the launch of their Encantada brand luxury apartment developments, HSL Properties did not see it as a time to coast on a wave of popularity. Encantada at Tucson National, the fourth in the brand, opened in December with a new look and state-of-the-art technology throughout the development. That’s after the planners

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continued from page 125 at a project and we can always give you 10 things we need to improve.” HSL began by selecting a new architect for the project, Evan Eglin from the local firm of Eglin+Breslin Architects, and went to work. “When you get a fresh set of eyes, it uncovers things you didn’t even know were working and things that you didn’t know were problems,” said Mike Censky, executive VP of HSL Construction Services. As the design phase began, there was an appreciation that the project was going to be moving into an area that had a rich history and a brand name of its own that commanded a certain level of respect. Tucson National has its highly visible history with professional golf, and at the same time, it carries a level of prestige with million-dollar homes and prominent residents. “We had to change the look to drop this product into a residential neighborhood on the front doorstep of Tucson National,” Censky said. “We reached out to Tucson National and we reached out to the nearby homeowners’ associations and neighborhoods.” The neighbors primarily asked for a more “residential look,” Censky said, which means buildings designed to look less like apartments and more like townhomes from certain views. None of the four sides of each of the buildings will look alike. It is a departure from the “multi-family buildings and big, garden-style projects” that characterized the other Encantada developments, Censky said. HSL took the additional step of designing the project with no building more than two stories high. “We could have gone to three stories at Tucson National, but when you step back and look at the context of the area, it just wasn’t appropriate,” Censky said. “We could have fit well over 500 apartment homes in there (instead of the planned 368), but this was good for us too. It helps us be good neighbors.” When new residents start to move in continued on page 128 >>> 126 BizTucson

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We knew there were high expectations for that neighborhood so we knew we had to deliver a quality product. We also knew the Encantada brand was a perfect fit that would show an appreciation for the legacy of Tucson National. –

Omar Mireles, HSL President

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to their apartments, Evans said, they’re going to sense they’re in an Encantada brand project, but there will be distinct differences, some visible and some “behind the walls.” The design put a significant emphasis on energy efficiency with the complex set to become one of only a handful of multifamily projects in Arizona that will operate with 100 percent LED lighting. Solar panels will power all of the common areas which consist of the recreation areas, the office and all the exterior building lighting. The air conditioning/heating units are split units that will reduce noise by 40 percent. “Architecturally it looks very different,” Evans said. “When residents walk inside, they will see some similar quality elements. You can tell it’s the next generation of the same brand.” In keeping with the trademark “resort-style” feel, the apartments will have technology similar to what is found in hotels – only better. “It was clear we needed to be at the cutting edge of technology,” Evans said. Fiber optics were installed to give residents the fastest speed and the most bandwidth in their internet options. A partnership with CenturyLink led to modems being installed which

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allow residents to get hooked up as soon as they power up their computers and mobile devices. “There were only two apartment communities nationwide that were part of this pilot program,” Evans said. “They didn’t even have a name for the product yet. We wound up calling it Direct Connect. “We already have modems set up in every apartment. The day you move in and you turn on your computer, you can immediately set up the programming and services of your choice, and you’re on instantly. You don’t have to wait for a technician to come out next week with a four-hour window. These are lifestyle elements that are commonplace today and they were areas where we knew we had to meet and exceed expectations.” HSL President Omar Mireles said that with the prominence of the surrounding neighborhood, there was no holding back on the quality of the development that Encantada at Tucson National needed to be. “We knew there were high expectations for that neighborhood so we knew we had to deliver a quality product,” Mireles said. “We also knew the Encantada brand was a perfect fit that would show an appreciation for the legacy of Tucson National.”

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BizLIVING Encantada at Tucson National 8323 N. Shannon Road Encantada at Tucson National sits in a location that is convenient for everyday needs like quality schools, shopping, dining and entertainment. It’s also minutes from some of Tucson’s unique lifestyle features: hiking, golf and beautiful Pusch Ridge. It’s a short drive to the bustling activity of a revitalized downtown, the University of Arizona, and an abundance of community activity. Encantada’s neighbor to the east is the historic Omni Tucson National Resort. Some of the all-time great PGA golfers have teed it up in

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the Tucson stop on the PGA Tour and now the Champions Tour in the Tucson Conquistadores Classic in March. The Omni Tucson National Resort is an artful blend of natural beauty and recreation. Recent enhancements include new guest rooms featuring golf course and mountain views. An array of entertainment venues includes outdoor dining terraces and a cabana bar, coupled with Tucson’s only 4-star Forbes-rated spa, tennis courts, 36 holes of golf, Sweetwater Terrace, an infinity edge pool, private function space and outdoor gardens.

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Creating a Lifestyle 132 BizTucson

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From left: Christopher Evans – Executive VP Suzanne Lavergne – CFO Glenn Toyoshima – Senior VP PHOTO: BRENT G. MATHIS

Lisa Rosenfeld – VP, Operations Humberto S. Lopez – Chairman Mike Censky – EVP, Construction Lorri Peterson – Director, HR Omar Mireles – President

HSL Properties was founded in 1975 by Humberto S. Lopez and Glenn Toyoshima. During the last 40 years, the company has invested in and developed properties throughout the southeastern and southwestern United States. HSL Properties currently owns and operates 38 apartment communities and five hotel properties in Arizona, including four newly developed Encantada Apartment properties and the Hilton El Conquistador Resort located in the Tucson metro area.

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Building Encantada Brand of the

Evolution in Technology, Amenities By Jay Gonzales

The apprehension that came with introducing a new brand of apartment living into the Tucson market was palpable, but not unexpected, as HSL Properties prepared to launch its first Encantada brand development nearly five years ago. “We’re always nervous in anything new that we do,” said HSL President Omar Mireles, who was the HSL’s executive VP under Humberto S. Lopez , cofounder and president, at the time they developed the Encantada brand and its first project, Riverside Crossing. “It’s a healthy apprehension that we go into every project with,” Mireles said. “We have to make sure we get it right. We have to identify the market and ultimately we have to deliver the right product and the right quality.” The research and the numbers added up for the company to do exactly what it envisioned – build high-end, amenitydriven apartments that didn’t exist in the Tucson market. HSL had been buying and managing existing properties for so long, but no one on the development team had actually been involved in building apartments. “The company had built apartments years ago, decades ago, and there was this institutional knowledge and experience, but there was a concern that none of us had done this before,” Mireles said. Fast forward to 2016 and by all measures, including occupancy rates, price points and demand for the product, it appears any anxiety HSL went through developing the Encantada brand, was well worth it. The brand launched in July 2011 when Encantada, Riverside Crossing opened on River Road east of La 134 BizTucson

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Cholla Boulevard. HSL took some time to watch it work in the market, then followed with two projects that opened within three years – Encantada at Dove Mountain in Marana in March 2014, and Encantada at Steam Pump in Oro Valley four months later. Today, the company is building the fourth project with the Encantada label across from historic Tucson National Golf Club on North Shannon Road just north of Cortaro Farms Road.

In a major city like New York or L.A., people are more apt to rent as a lifestyle and home ownership isn’t necessarily the ideal. That was really the market we were looking to capture – people who didn’t necessarily want to be tied down to a home. –

Lisa Rosenfeld, VP of Operations, HSL Asset Management

Signs of opportunity, then the wait

Encantada actually was conceived years before the first shovel was put into the ground for Riverside Crossing. In fact, HSL literally had its toe on the starting line for the project in 2008 when, as Mireles said, “the world fell apart” economically. Having gone through a number of

years with a strategy to buy existing properties rather than build new ones, the signs started to point toward getting back into the building business around 2007, said Christopher Evans, executive VP of HSL Asset Management. “We realized there was an opportunity here in Tucson,” Evans said. “For a number of years there had been no new development. Due to that fact, and the sell-off of the higher-end units into condos, there was a real void. All the higher-end units really went off the market.” HSL did its homework and came up with the concept of building a luxury development with all the amenities that now characterize the Encantada brand. “We had second-, third- and fourthgeneration properties that we owned and operated and we knew where all the pitfalls were,” Mireles said. “We knew exactly what we had to address.” The result was a plan for apartments that would incorporate a list of amenities more commonly saved for resorts. The common areas, pools and spas were designed with resorts in mind, with amenities that include poolside televisions and gazebos, coffee houses, state-of-theart fitness centers and stadium-seating movie theaters. They even planned for towel service by the pools, and lobbies more like hotel lobbies than rental offices. Inside the apartments, luxury staples include granite countertops, solid wood cabinets, high ceilings and full-sized laundry rooms. By 2008, the concept and design work for Encantada was done, and HSL was days away from closing on its construccontinued on page 136 >>> www.BizTucson.com


Encantada Riverside Crossing

Encantada at Dove Mountain

Encantada at Steam Pump

Location: 1925 W. River Road

Location: 4688 W. Tangerine Road

Location: 11177 N. Oracle Rd

Project Cost: $32 million

Project Cost: $30 million

Project Cost: $33 million

Units: 304

Units: 272

Units: 288

Opened: July 2011

Opened: March 2014

Opened: July 2014

Key amenities: Resort-style pool and spa, stadium style theater, Starbucks coffee bar, 24-hour professional fitness center, 1-acre Dog Ranch

Key amenities: Resort-style pool and spa, stadium style theater, Starbucks coffee bar, 24-hour professional fitness center with Kid Zone, gazebo with fire pits, and big-screen TVs, Dog Ranch Capturing the best of Encantada’s initial development, Riverside Crossing, was the strategy as Dove Mountain began to take shape, including elements as basic as flooring.

Key amenities: Resort-style pool and spa, stadium style theater, full-service coffee house open to the public, 24-hour professional fitness center with Kid Zone, gazebo with fire pits and big-screen TVs, Dog Ranch

The first of the Encantada projects brought a number of unknowns for HSL Properties. It included amenities and concepts that were new to the Tucson market and new to the company. Throughout the development process, HSL developers did extensive research to determine exactly what would draw the target resident to a property and they came up with a number of innovations. For the initial project, location was as key as the amenities, said Christopher Evans, executive VP of HSL Asset Management.

The apartments at Riverside Crossing used a “wood plank” flooring system in the wet areas of the apartments – the kitchen and the bathrooms. The flooring was so popular among residents, it is used in every room except bedrooms at Dove Mountain.

“For apartments, location is key. It has to have easy access to downtown, the University of Arizona and I-10. Riverside Crossing really hit that on the mark,” Evans said.

In the three years after construction started at Riverside Crossing, there were some new products that increased efficiencies at the new sites, including better insulation and sound proofing.

The layout of the property was designed to provide residents with a “sense of community.”

The common areas came with a new feature: fire pits in the gazebo area that also featured big-screen TVs.

“The whole sense of community and service was important,” Evans said. “From the way we laid out the buildings, the pool, the common areas, patio spaces, grill spaces, community was the common theme. It was important for people to have a sense of community and a sense of home.”

The property was intentionally designed with a “low-density feel,” said Christopher Evans, executive VP of HSL Asset Management. Patios and balconies were expanded and, as a result, there is more space in the common areas.

That sense of home includes the Dog Ranch with a gazebo area. “Pets are a very important part of peoples’ lifestyles. The Dog Ranch was the first of its kind for us,” Evans said.

Like the other Encantada properties, there is a stadium-style movie theater for residents, and the popular Dog Ranch is included. Evans said HSL made a point to make the theaters more enticing and useful than what might be found in a standard clubhouse. The theater has stadium seating for 27 people. Residents can bring their own movies or select from a library that all residents can access. At Dove Mountain, technological components were enhanced to allow residents to use the theaters for business meetings with high-end presentation capabilities.

Part of Oro Valley’s planned Steam Pump Ranch community, Encantada at Steam Pump is a near twin of the Dove Mountain development that opened three months earlier. One distinct difference is the addition of a full-service coffee house, locally owned Savaya Coffee Market, which is open to the public. The Town of Oro Valley required a commercial element in the project, said Christopher Evans, executive VP of HSL Asset Management. “This product, in particular, provides a connectivity to the community. “Working with the Town of Oro Valley and amongst our team, we felt a coffee shop would be the best scenario so we partnered with a local owner,” Evans said. “We love the product type, and it fit our profile. It was a place with a true a barista setup and high-quality coffee.” Like the Riverside Crossing property, Steam Pump has an inventory of Cannondale bicycles for check-out so residents can take advantage of a ride on the direct-access river walk.

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BizLIVING continued from page 134 tion loan for Riverside Crossing when the economy crashed, Mireles said. The initial project was put on hold and HSL waited for the economy to turn and the market to perk up. That wait lasted until 2011 when Riverside Crossing opened in the summer. Even then, the original plan for Riverside Crossing had gone through some revisions to what it is today, which regenerated some of the original apprehension that came with launching the brand. “We went through some more iterations and said we cannot get this wrong,” Mireles said. “Clearly we had an incredibly capable team to make it happen and all the pieces were there, but we really hadn’t done it. So after we had that first success, it paved the way.” Creating a lifestyle

In its simplest form, Encantada is intended to attract residents who want a home with high-end amenities and a certain lifestyle that meets their standards, but don’t necessarily want to buy a house, said Lisa Rosenfeld, VP of operations for HSL Asset Management.

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“It’s a more urban train of thought,” she said. “In a major city like New York or L.A., people are more apt to rent as a lifestyle and home ownership isn’t necessarily ideal. That was really the market we were looking to capture – people who didn’t necessarily want to be tied down to a home. Many renters are not renters by choice. The people we are targeting are renters by choice.” It didn’t take long for the brand to take hold, Evans said. When Riverside Crossing hit the market, it took only eight months for it to be completely leased. “For our industry, that’s a very fast absorption of a new product,” he said. “At that point, we realized we had some further opportunity so we started looking at a number of sites around town.” Encantada at Dove Mountain and Steam Pump came about on near parallel paths to open just four months apart. Along the way, HSL was looking for ways to continue to improve the product and learn from the residents and the HSL team members who were close to the apartment communities. “One thing that set us apart when we started developing Encantada at Dove

Mountain is that we really went back to our clientele and to our team members who were on site (at Riverside Crossing) and asked, ‘What are we doing well and what are we doing that needs some improvement?’ ” Evans said. After the first three apartment communities were in place, HSL realized there still was a demand for their product and plans began for number four at Tucson National. By then, they sensed it was time to rework the entire concept rather than build another one just like the others. “Tucson National is a complete redevelopment,” Evans said. “There’s a new architect, the spaces are different, apartments are larger, but the overall feel and the amenities remain the same with an eye toward changing the way people live in apartments. “We really factor in the lifestyle, not just the living environment,” Rosenfeld said. “We talk a lot about what people want to be able to do. The amenities that we added actually add value to the product itself and really create a lifestyle that is different than anywhere else in Tucson.” Biz

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