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Construction Transformation to Urban Elegant Living featuring Dale Phillips

Patrick Antrim May 20, 2021


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A bold multifamily development is setting a new benchmark for urban elegant living in the Southwest. Dale Phillips, President and Founder of Stellar Residential, the management company for One Camelback is leading one of the most ambitious construction transformations ever undertaken in Phoenix. This boutique, Class A development will deliver a vibrant use of residential space, with soaring and dramatic floor-to-ceiling views of Central Phoenix, modern and functional floor plans, upscale amenities and first-class services – all under one 11-story roof, while aesthetically adding some more glamour and elegance to the Phoenix skyline. We will share the stage with Dale as we take you through the progress updates on One Camelback and talk about the multifamily technology making it all happen.

In May of 2018, Stellar Residential was invited to participate in a project. Initially, that was intended for their contributions in property management, but that changed. They started getting involved with the selection process with the architect and design team, then the general contractors. Dale Phillips created a comprehensive marketing plan with a “Vision Session” where the team brainstormed ideas.

“We decided to make this the most memorable development in all of our careers,” said Phillips. “So, with the support of ownership, we went down a path that included a theme. I’ve always been of thematic builds, where we make commitments in the very beginning that all of the partners, from design, architecture, they all are tied to one thinking. Because this is a 1985, very iconic structure, the commitment is to the building itself.”

That way, any time they’re faced with a challenging decision, they reflect back on the central theme of the building.

“Even though everyone involved in this project, to their credit, deserves to be part of it, based on their experience, the most critical component is the ability to work together and solve problems.”

Phillips says this could have been a merchant-minded project, where the intent of the investment was to redevelop and then sell. Instead, they decided to make this a legacy project.

“When a tough decision is necessary, you just have to think about the fact that there’s 120,000 cars that drive by that project every day, and he wants to be proud. That’s the perfect scenario for someone like me, who’s in the twilight of his career and wants to apply my experience and feel proud as well, because Arizona is my home.”

Phillips is focused on an adaptive re-use of the land. Stellar is still brand new, comparatively, but Phillips has had a long career where he’s worked with other adaptations and restorations that have prepared him for this new project.

“With our second architect, we’re well on our way to producing what probably will be the most exciting for-rent product that Arizona has ever seen.”

Phillips has also been inspired by things he’s seen in his travels. For instance, he’s adding a fitness boutique rather than just a basic fitness center, based on something he saw in Milan, Italy.

Stellar Residential’s role is unique this time around.

“Anybody that’s in property management that has participated in a lease-up, typically what we are tasked with is, the developer says, ‘I just built 300 apartments, now go find 300 customers’ and you have no influence on anything at that point – the ship’s sailed in terms of any form of alterations in the size of the apartments, the configuration, the amenities.”

Phillips says what normally makes things even blander from there, is that you just look up the demographics for who is most likely to live in your community, and you go after that subset of people.

“We worked it completely the other way around, where we identified 6 personas, such as single male/single female professional, married couple, empty-nester single, empty-nester family – we identified 6 critical personas that we believe would appreciate and could afford this project. And then I created a questionnaire of 25 questions surrounding expectations in the common area, preference in the floor plans, kitchen island over table. ‘If you have a kitchen island, would you like a cook top or a sink?’”

Phillips says he surveyed 6 people in each of the 6 personas and wrote up summaries on their responses. Then, he pushed that over to the architect to show what would work well for their customers. Everything is being built specifically for the people they’re being built for, not what the architect thinks might be best.

Phillips gives the example of the draw of the Peloton bike. People can hop right on the bike and get a workout from home with a beautiful view overlooking mountains right from their home window. That’s a better option than going a to a gym and staring at other equipment.

“Early on, the idea was to create spaces where people could have some level of flex space. If they chose to work out in their room, we’re going to provide them with a piece of cardio equipment, no charge. If that’s what makes your lifestyle great there, I’ll give it to you.”

They also did a feasibility report. Safety was the major concern, followed by size and price, but third was to see whether there’s enough space for storage. Because of that, he’s going above-and-beyond.

“So I have five stories or five floors of basement for parking. I’m over-parked. And I am going to build the largest storage containers in a basement that I think have ever been built, which is going to allow people to move a piano in. I’m going to have underground garages for your Ferrari and your Lamborghini. It’s going to be a building of convenience.”

Stellar has started getting engaged in social media, sending out little teasers. But it’s on a major road and with so many people passing it every day, wondering what the project is, Phillips isn’t particularly worried about whether people have heard about it. Right now, though, it isn’t obvious that the building will be a luxury apartment.

Phillips says they’re also starting to get information about the building out, like rental rates, which will be the highest in Phoenix.

There’s also some information about the floor plans, but the overall shape of the building isn’t revealed online. The building is offering lots of different floor plans, of varying sizes. It also has a penthouse option with windows extending all the way around.

Soon, they’ll start thinking more seriously about applicants.

The building is located in Uptown Phoenix – not Downtown, a distinction that’s very important to Phillips, though he says he still loves Downtown areas. Why does the difference matter?

“It’s the best of all worlds. You’ve got an insulation from the hustle and bustle and the traffic congestion. Anybody that knows Downtown – specifically Roosevelt Row – it’s vibrant, but it’s challenging to navigate if you’re trying to get in and out quickly, and you’re subject to a true Downtown living environment of noise and disruption and what have you. Uptown is upscale, it’s sophisticated.”

Stellar Residential leased an office space in a high-end plaza right across from the project, intending to do pre-leasing. They planned to print and hang up pictures of the floor plans for the apartments for people to view. But one of Phillips’ friends passed away, leaving behind a robust art collection. He hung that collection up instead, and found he generated more foot-traffic from people viewing the art than he would have from people looking at floor plans.

“It was not part of my marketing plan. It generated a good 200-250 leads that I may not have ever had. So I guess if there’s something to learn, it’s: as you’re crafting your path to success, keep some options open. Because if you’re open to new thinking, there’s always going to be an opportunity to explore,” said Phillips.

In a video of Philipps giving a tour to Patrick Antrim, the CEO of Multifamily Leadership, Philipps tells Antrim, “The story is all about the building first, the intersection second, the design third, then the floor plans and the views. Every challenging decision has to tie back to our theme. It is about the building, the integrity of the building – a 1985 build. It’s going to be here for the next 5 decades, so we have to get it right. We just don’t get knocked down when someone is tired of it. It’s going to be here forever. That’s our commitment. That’s what makes our decision-making somewhat easier – not always cheap, but I think we come away with the right decisions on what to do in this build.”

Phillips has been doing a lot of those tours, but not for potential renters yet. He’s just showing it off to people who are interested in the project. He says the building itself is his billboard right now.

“One of my favorite stories is when the first architecture firm would send over their draft of the floor plans. I think at one time, we were at 220 units. The average size was 20% smaller than what they are today. We had some very interesting shapes.

So I challenged them, because there was a heavy New York influence here. In the 25 years I’ve been working in Arizona, I’ve learned, we’re not New York. We can learn from there, but we can’t expect our customers to be New Yorkers. Yeah, we’ll get 10% of New Yorkers living there, but we have to compete with Arizona product, which is a larger product and they like fresh air,” said Phillips.

He started marking the floor plans and sending them back with notes.

“There was one particular studio that never changed. I kept re-writing it, crossing this out, re-directing the floor path, and it was based on – in my opinion, one of the best studios exists in the Optima Signature in Chicago. I’ve been in it, and it rocks. So, I kept sending the changes back, and it just kept coming back the same. So I read it, and beat my head against this. I thought, ‘Well, there’s one way to prove this. We aren’t going to go down to Chicago, but I’m going to go to Home Depot and I’m going to fill up my truck with two-by-fours.”

Phillips framed up the studio, building it from the specs. He got a refrigerator box and an oven box as placeholders for the studio so you could feel it. He walked the owners through it to show them that the design simply didn’t work. There wasn’t enough room.

“Yes, singles tend to be single occupants, but at the same time, they like company. They like to be able to cook a dinner, or whatever. It’s got to function. So the big suc- cess story there is, don’t give up in what you believe in. I didn’t want to have excuses for why 20 of the units didn’t rent. I didn’t want to say, ‘I told you so.’ I wanted to exhaust every option I had to convince someone to think differently.”

Philipps had retired before starting Stellar Residential, but he realized he had more fuel in the tank and he had more ideas. He tries to learn from all he can and hopes to impart a piece of himself that can have a lasting effect.

“You touched a little bit on the amenities throughout the building. It’s a very, very challenging building in terms of common area. We cannot compete with a new build. We’re working within some very strict restraints.”

During part of his demographic analysis, he found 40% of responses were dedicated to common areas and space. For instance, people said having a fitness center was absolutely crucial in the building, even for people who said they wouldn’t use it. That means it isn’t going to be packed in that center, so they might as well limit the space and fill it with a few nice things, rather than wasting space that will go unused.

The basement space will be catered to the services that make life easier. For instance, they can have on-site car detailing.

Antrim points out, people tend to ask solely about square footage and pricing, but that may not just be because those are the only things they care about; they might not know what else to ask.

“I’ve always been a student of consumer behavior, and even more so, specific to the renter’s behavior and what motivates them to make a decision to come live in one of my communities and pay me rent every month,” said Phillips. “There’s a word I like to use, which is, the ‘reveal.’ The reveal is, when you’re walking into a space that has impact. Most communities, it’s walking up to the clubhouse, going past the pool, into the model, and those are the points of reveal. Our point of reveal is, imagine you’re standing in the bottom floor of the building, the center of the atrium, and there’s a 7-story art sculpture dropping down over your head. You’re not thinking about square footage and rent anymore.”

Phillips says the appeal of wanting to show that off to their friends is a big draw, even for everyday life. Because of that, it’s his team’s job to make sure to give people time to talk about what they see as the building is first being shown off.

“I almost envisioned that, with my team gaining a little confidence, if they follow my lead, if they trust me, to say, ‘Please bring someone right here and just have them stand here and let them look around. The first thing you should think about saying is: It’s not for everyone.’”

Phillips says when he started Stellar, he thought he’d build a third-party management company off his experience and the relationships he’s built.

“While that is in play, and it’s growing – it’s a growing part of our company… I’ve looked at more site plans and floor plans and blueprints in the last 3 years than I did in the first 25 years.”

Stellar also just built 150 apartments in Prescott, setting records in rent. Phillips is proud of that.

“When somebody asks me, ‘What does Stellar do?’ I say, ‘There’s nothing that we don’t do, as it relates to apartments.’ We’re building, we’re managing, we’re buying, we’re involved in all aspects of it, and it feels good.”

Phillips says his second piece of business with Stellar was the Empire Group. They felt they could be a competitor in the single-family for-rent market, which is quite popular in Arizona. That’s an average square footage of 670-1200 square feet, with no one living above, below, or beside you, with small yards. It’s been extremely successful so far.

Stellar stabilized 180 units in 6 months and it’s now going to market.

“I don’t think you can build enough of that product. There’s a lot coming, don’t get me wrong. But the net migration numbers for Arizona are staggering.”

Phillips expects population numbers are going to continue trending upwards. If four out of ten people need apartments, the city is under-developed.

“If COVID has had a positive affect on any asset class, it’s the single-for-rent product. Because they’re easy living, and now that you don’t have to commute in and out of the city, they’re located out in the periphery, where the land is more affordable.”

To manage them, Phillips says, all you have to do is get out of the way.

“Our branded tagline is Living Simplified,” said Phillips. “We stepped back from every aspect of finding an apartment, touring an apartment, renting an apartment, and living in one to determine if there was anything we could do. We found a handful of items that would make it easy on someone to support our tagline, because I didn’t want to have an empty promise.”

That tagline extended into the design of the apartments. They include specific furnishings that are extremely efficient, helping to make use of a small space.

As for Stellar’s lightbulb logo? “What’s it mean to you?” says Phillips. 

Antrim guesses innovation and ideas.

Phillips jokes that the light is out in the logo. He links that back to their hands-off approach: The lights are out!

Really, he says, it’s just a thought-provoking image.

“We have a little commitment amongst ourselves that every milestone we hit, we’re going to create our new logo. That’s our second – that’s 2.0. 3.0 is in the workings. We just don’t take ourselves too seriously, as you can tell.”

Connect with Dale and Stellar Residential:

LinkedIn: https://www.linkedin.com/in/dale-phillips-65371015a/
Website: https://www.stellarresidential.com/
Instagram: @stellarresidential

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Patrick Antrim

Patrick Antrim is the Founder of Multifamily Leadership, LLC, a thought leadership platform providing streaming content around technology, innovation, and leadership. He also produces two of the highest level events in the Multifamily Apartment industry. The Multifamily Leadership brand is preparing Multifamily Leaders for the FUTURE. They honor the Best Places to Work in Multifamily®️ at our annual leadership Innovation summit.

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