Universities are generally very good neighbors to the real estate around them in terms of rising land value. Real Estate near Arizona State University’s Tempe and downtown Phoenix campuses have seen steady climbs in prices. Both areas have ranked as two of the hottest development zones in the Valley. But what about land value around Grand Canyon University?
GCU: From tiny school to major university
The private, Christian University occupies some 300 acres near 27th Avenue and Camelback. And it has grown by leaps and bounds. Just 11 years ago, GCU had 900 students and a tiny campus. Today, more than 20-thousand students attend GCU and that tiny campus is now home to things such as apartment style dorms, a luxury hotel that also serves as a classroom for hotel management students, restaurants and the latest addition – a 325-thousand square foot business office complex. Big things are happening on the campus. But what impact has it had on the surrounding real estate?
GCU area, the worst crime rate in Phoenix
First, some things you should know about GCU’s neighborhood. In 2010, back in the days when less than 1000 students were registered to be Antelopes and forever honor the color purple, the area had the highest crime rate in the City of Phoenix. In fact, GCU’s ‘hood was considered one of the city’s 168 Opportunity Zones. These are designated areas that offer tax incentives to investors in those zones. Put it this way, if you live in an “Opportunity Zone”, it is rarely a beautiful day in the neighborhood when looking at property and violent crime. Students who attended GCU lived on an academic island in a sea of urban decay and had little or no interaction with the surrounding neighborhoods.
GCU: We’re moving on up, and taking our neighbors with us
Back in 2004, GCU sold to private investors – private investors with a major vision and deep pockets. In redeveloping GCU, owners didn’t just want to grow its university island and block out the neighborhood. They wanted to bring up the surrounding community with GCU. So it partnered with the City of Phoenix on a crime suspension program. Each contributed $500,000. The money paid for things such as police overtime to beef up security in the GCU corridor. The school also took over management of the Maryvale Golf Course. At the time, the city course was losing nearly a quarter of a million dollars a year. When GCU took it over, it built all new fairways, greens, and a clubhouse and transformed a failing entity into one that is now pulling in more than a million dollars annually. GCU also joined forces with Habitat for Humanity and committed to rehabilitating 700 homes in the area.
Astounding results
The results are nothing short of astounding. Governor Doug Ducey recently announced that land values around GCU have risen 30 percent while crime has gone down by the same percentage. A 2018 economic study estimated that GCU’s economic impact is in the $1 billion range. Such changes are attracting investment beyond GCU. Case in point: a Scottsdale company announced last year it was spending millions to renovate a 164 unit apartment complex near GCU. That same company also bought a retail center at 35th Avenue and Bethany Home Rd. Walmart anchors the center and the purple paint job and name Grand Canyon Crossing are a clear nod to the nearby university.
GCU vs. ASU land values
The GCU corridor will continue to see land values increase, although, not to the degree real estate around ASU’s campuses will likely increase. As ASU has grown exponentially, employers have been lured to the neighborhood by proximity to its large, healthy supply of qualified employees. The reverse is true as well – students are attracted to ASU by the promise of quality jobs. On top of that ASU has been able to offer businesses who locate themselves on university land – a number of tax breaks. Plans for a new law school and medical school downtown are also driving fevered investment. The GCU corridor has yet to see development to that degree. The biggest employer in the GCU neighborhood is GCU. It hasn’t pulled in outside employers the way ASU has, so the things feeding property values around GCU are not as diverse. Nevertheless, GCU’s broad mission bodes well for real estate values around the campus and its innovative model for public-private partnerships and the resulting successes lay the groundwork for future collaborations.
Whether you are an Antelope, a Sun Devil, a Wildcat or a Lumberjack, at Landmark Title we provide title and escrow services for both residential and commercial real estate transactions. To learn more, visit our website or contact us at (602)748-2800.