Phoenix's One Camelback Tower Revived After Five-Year Dormancy

PHOENIX, AZ – December 29, 2025 – A prominent but long-dormant fixture of the Phoenix skyline is set for a new lease on life. Kinella Capital, LLC, a boutique investment real estate firm, has officially acquired the stalled One Camelback project, a high-profile office-to-residential conversion that has sat partially finished for nearly five years. The acquisition promises to restart construction on the landmark building, located at the critical intersection of Central Avenue and Camelback Road, and finally deliver 163 much-anticipated residential units to the market.

The project, which had become a visible symbol of development challenges, will now be spearheaded by a firm that specializes in complex, distressed assets. With financing secured from Post Road Group, Kinella Capital plans to deploy its integrated 'builder-operator' model to see the ambitious conversion through to completion, marking a pivotal new chapter for the iconic tower and the Uptown Phoenix neighborhood.

A Landmark's Troubled Past

The journey of One Camelback has been a cautionary tale in urban redevelopment. The ambitious project to transform the former BMO Harris office tower into luxury apartments began in 2018. However, construction ground to a halt with the building approximately 80% complete, leaving a skeletal structure looming over one of the city's busiest corridors.

The project's failure was the result of a perfect storm of financial and logistical crises. The previous owner, Camelback Owner LLC, ultimately defaulted on a $71.3 million loan in mid-2023 after being battered by a series of setbacks. Soaring inflation drove up construction material costs, while the COVID-19 pandemic introduced significant supply chain disruptions and labor shortages. Compounding these issues, rising interest rates made the project's financial calculus untenable for the original developers.

Further complicating matters were numerous contractor disputes, which resulted in at least a dozen mechanic's liens filed against the property, totaling nearly $1.5 million. The project's ownership eventually transferred to the lender, Acore Capital, through a foreclosure sale, leaving its future uncertain until now. Despite the prolonged abandonment, the core architectural vision—including a stunning 150-foot atrium and floor-to-ceiling glass offering expansive eleventh-floor views—remained intact, awaiting a developer capable of navigating its troubled history.

A New Blueprint for Urban Rescue

Enter Kinella Capital, a firm that has built its reputation on tackling the kind of complex projects that other investors often avoid. Led by CEO TK Stratton, the company operates under a unique, fully integrated builder-operator model. By holding its own KB-1 general contracting and A-1 engineering licenses, Kinella maintains direct, in-house control over the entire construction and engineering process. This vertical integration is designed to mitigate risk, control costs, and ensure a streamlined path to completion—a critical advantage for a project as entangled as One Camelback.

This hands-on approach was a key factor in securing debt financing from Post Road Group, an alternative investment firm known for backing special situations and value-add projects that traditional lenders might overlook. For Post Road, Kinella's ability to self-perform the technically demanding construction work removed significant uncertainty that often plagues stalled developments.

Kinella Capital views the One Camelback acquisition as more than just a single project; it is a case study for a new model of urban revitalization. The firm intends to use it as a blueprint for rescuing other distressed adaptive reuse towers across the country, turning underperforming commercial assets into valuable residential properties. This strategy is particularly relevant as cities nationwide grapple with high office vacancy rates in a post-pandemic world.

Navigating the Adaptive Reuse Maze

Transforming a mid-century office building into modern residential units is a notoriously complex undertaking, a fact underscored by One Camelback's previous failure. Industry experts note that such conversions are fraught with structural, mechanical, and regulatory hurdles. Office buildings are designed with centralized plumbing and HVAC systems, which must be completely re-engineered to serve individual apartments. Electrical systems require significant upgrades to handle the higher loads of residential appliances, and creating logical, livable floor plans within the constraints of an existing commercial structure can be a puzzle.

Furthermore, the building's deep floor plates—the distance from the central core to the exterior walls—can make it difficult to ensure every unit receives adequate natural light and ventilation, a strict requirement under residential building codes. These conversions also demand rigorous updates to meet modern life-safety standards, including fire suppression and egress, which are often stricter for residential use. The high costs associated with these extensive modifications, coupled with the potential for discovering hazardous materials like asbestos in older buildings, can quickly derail a project's budget.

The successful revival of One Camelback will depend on skillfully navigating this maze, a task for which Kinella Capital's specialized, in-house expertise is uniquely suited. The ability to manage these engineering and construction challenges directly is what separates a successful conversion from a stalled one.

Addressing Phoenix's Housing Puzzle

The completion of One Camelback arrives at a complex moment for the Phoenix housing market. The metropolitan area has been experiencing a record-breaking construction boom, which has pushed the multifamily vacancy rate to over 11% and led to a slight softening of average rents. With tens of thousands of new units coming online, the market has shifted from the frenzied demand of recent years.

However, this broad market trend doesn't tell the whole story. Demand for high-quality housing in prime, established submarkets like Uptown Phoenix remains consistently strong. The 163 premium units at One Camelback are poised to enter a segment of the market where new inventory is limited and demand for a walkable, urban lifestyle is high. The project will provide a significant infusion of luxury housing stock, complete with modern amenities like a rooftop pool, in one of the city's most desirable locations.

While the overall market navigates an influx of supply, the targeted delivery of high-end apartments at One Camelback is expected to be well-absorbed. For Phoenix, the project's completion represents a dual victory: it removes a significant urban blight while adding valuable housing density to a key transportation and economic corridor. Visible progress on the site is expected within the next twelve months, with a phased occupancy plan to follow as the tower is finally brought to life.