Residential replacing retail, a new trend stemming from e-commerce

SCOTTSDALE, Ariz. (KSAZ) - It is the end of the road for the Papago Plaza on the southwest corner of McDowell and Scottsdale Road.

"It was built in the 70's. For two and a half years, we've been working on re-developing it. It will be mixed use," Judi Butterworth said.

Butterworth of Orion Investments says the strip mall will be raised, and in its place will be apartments, a hotel, restaurants and other retail spots.

This is a trend that is being repeated across the valley. Empty commercial spaces turning into mixed use buildings.

"We're seeing that we don't have as many users, tenants, because of e-commerce, so we ended up having to rethink the whole project and go from strictly retail to mixed use because people want to be in an area that's walkable. There's a demand for higher-end apartments," Butterworth said.

Take the luxury condos that were built just down the road from Papago Plaza at 68th Street and McDowell.

The homes were built where an old car dealership sat empty for years.

The homes retail for upwards of $400,000.

Butterworth says cities, like Scottsdale, are starting to understand times are changing and relaxing the rules on rezoning.

"The cities understand today that retail tax dollars, that is really bringing more mixed use, especially in the high-end areas where there is certainly more demand," Butterworth said. "Everything has changed because of e-commerce."