The Rental Reimagined

DSW Commercial, HercuTech Partner in New Green Venture

By Dave Perry

For years, Tucson developers Michael Sarabia and James Hardman pondered the attributes of an ideal rental home. It would need a garage, a workstation with smart technology, a place for pets and more − all within a contemporary space that looks and feels different.

They’re done contemplating. They’re building.

DSW Commercial Real Estate, long successful in office and retail ventures, is branching into the residential sector with La Vida at 1100, a 29-unit “build for rent” townhome project rising on two acres of land on the north side of River Road west of Oracle Road and east of La Cañada Drive.

“We want to build something totally different in the Tucson market,” said Sarabia, who grew up here and is CEO of DSW Commercial. “We haven’t seen anything like what we’re combining, all together, and in Tucson. There’s a risk but we believe it’s what the market is actually looking for.”

In their travels, particularly in California, Sarabia and Hardman have seen appealing, smaller infill townhome rental projects. They took pictures, shared preferences, and gave it to James E. McMahon Architecture and Planning, which created the La Vida product line.

A townhome at La Vida at 1100 will have an open floor plan, a small backyard, a wrap-around patio on the second story, and 1-gigabyte internet connectivity.

A La Vida home must also be “in harmony with the environment,” with lower energy and operating expenses, Sarabia said.

DSW Commercial found the right green partner in HercuTech, a Tempe-based innovator in framing and wall technology.

La Vida at 1100 is the first project in Southern Arizona to be built with that company’s HercuWall, touted for its environmental benefit, near-zero waste, soundproofing, pace of construction, savings in both construction labor and energy, and low-cost, long-term maintenance.

HercuWall is an International Code Council-certified panelized exterior and demising wall system. The prefabricated wall panels are made of expanded polystyrene foam, reinforced with a patented steel HercuStrip™ technology, and laminated with a weather-resistant barrier. 

The panels, typically weighing 35 to 45 pounds, are numbered in the Tempe factory, then pieced together like a puzzle, each tongue-and-groove piece placed in proper order atop rebar extended upward from a post-tension slab. Panels are then strengthened with site-integrated concrete.

The technology “reduces the amount of skilled labor required,” said HercuTech CEO Jason Rhees. “It’s faster, with fewer workers.”

HercuWall maintains steady inside temperatures. The walls are the equivalent of R-31 insulation value − that’s nearly 10 inches of conventional insulation − providing up to 40% energy savings as compared with wood construction. Such efficiency allows right-sizing of HVAC systems, saving money for tenants and owners, all of whom should “recognize significantly lower utility bills,” Rhees said.

The walls are quiet, too. “You won’t be able to hear your neighbors next door,” Rhees said, adding “there’s no food for mold, no termites, no insects.”

A two-bedroom unit at La Vida at 1100 is 1,026 interior square feet. The three-bedroom unit is just under 1,200 square feet, with outdoor spaces and garages. Completion is expected by year’s end, with the first rentals in early 2024. 

More are on the way across the city. DSW intends to own the properties and manage them in association with a local multi-family residential management company.

“We’re excited, for sure,” said Sarabia, who credits Pima County government and its development services staff for cooperation on an infill project. “We believe this is a marriage of sustainability, affordability and profitability that makes sense. We’re able to lower the cost for people, and make apartments seem like expensive townhomes.” 

“Developers are wanting to build better, and differentiate themselves in a very competitive market,” Rhees said.

Workers are trained in Tempe on HercuWall installation. Once everyone understands their role, “you can build them very quickly, which in turn should save carrying costs,” he said.

DSW Commercial is also launching a workforce housing division with plans to create 150 doors in the accessible housing space. “For every market-rent deal we do, we want to do a workforce housing project as well,” Sarabia said. “We love Tucson, we believe in Tucson. We want more housing options for all of us.

“I believe it’s incumbent on local developers to step out of the box and keep raising the bar in Tucson,” Sarabia said.

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