Sales are brisk at Chandler‘s first large condominium conversion, Lakeshore at Andersen Springs, and at least two other apartment complexes are planning conversions.
Stonegate Village plans to sell its 234 units at Frye and Dobson roads, and San Tierra, near Ray Road and McClintock Drive, plans to sell its 284 apartments. The owners of those complexes still need to seek permission from the city to convert.
In the first two weeks that Lakeshore units have been for sale, about 225 units have been reserved, said developer Robert Sheridan of Chicago.
About 20 percent of the reservations have been made by current residents of the 299-unit complex at 1825 W. Ray Road east of Dobson Road.
Sheridan’s first condominium conversion in the Phoenix area, begun 11 months ago, was Las Brisas at Seventh Street and Northern Avenue.
"We underwrote Las Brisas in north-central Phoenix to be sold out in 24 months, and it sold out in five," Sheridan said. "We’re selling in Chandler at a much faster rate."
Starting prices for non-residents at Lakeshore are $112,000 for a one-bedroom unit of 670 to 740 square feet; $152,000 for a two-bedrooms two-bath with 910 to 970 square feet, and $164,000 for a three-bedroom, two-bath with 1,080 square feet.
Buyers can upgrade appliances and flooring for an extra fee.
Current residents receive a discount of $3,000 to $7,000 on the price of a unit.
Shannon Clarke, who is on the staff at Lakeshore, is buying the two-bedroom unit she’s living in, and it will be her first owned home.
"Once you drive onto the property, you just know it’s home, and nowhere else has the lake view here. It almost feels you’re not in Arizona sometimes," said Clarke, who moved here from Montana.
But it was price that persuaded her to buy.
"I thought about it for a while to make sure it’s the right investment for me for my first time," she said. "If you look at all of the other prices out there, it ended up being the best investment right now."
In Chandler, the median sales price of a townhouse or condominium in August was $164,375, according to the Arizona Real Estate Center at Arizona State University. A year ago, the median price was $112,250.
The condominium market is being fueled by single-family home prices that have soared out of reach for many.
"The demand for home ownership is trying to be met by condo conversions," said Pete TeKampe, senior investment associate at Marcus & Millichap in Phoenix.
"Housing affordability is at its lowest point ever since statistics have been tracked in this marketplace."
The conversion craze in the Phoenix metro area began in 2003 when 357 units were converted. That number rose to 2,119 units in 2004, according to New York-based Reis Inc., a market research company. In the first half of 2005, a total of 2,268 units were converted.
The Lakeshore complex is undergoing a $2.75 million renovation, including the addition of wireless Internet service and gates.
Workers are patching stucco, painting the exteriors, doing roof work, adding exterior lighting, adding landscaping, replacing and repairing watering systems, refurbishing the clubhouse and adding new equipment to the fitness room and new furniture at the three pools.
Monthly homeowner association dues will range from $134 to about $210.
The first 200 units of the complex were built in 1989 by Evans Withycomb, and the final 99 units were built in 1993. In June, Sheridan bought the complex, then called The Shores, from San Diego-based Douglas Allred Co.
The complex is part of a 450-acre master planned community, Andersen Springs.
Sheridan said he provided more flexible terms to current residents than Chandler requires when an apartment complex is converted to condominiums.
Chandler’s code mandates a resident has a 60-day exclusive right to buy his unit when it goes on the market. But that could freeze out some buyers because not all units are put on the market at once.
So Sheridan has provided more flexibility and gave all residents the right to buy, regardless of when their unit was going on the market and regardless of when their lease expires.
He also gave residents a chance to buy a vacant unit.
"We gave (residents) what the code intended, and we actually gave them more than that," Sheridan said.
Sheridan says he is buying a large apartment complex in Scottsdale Ranch, a master-planned community, and expects to start converting toward the end of the year.
In Chandler, Stonegate Village expects to go before the City Council in early December for approval to convert. No prices have been set yet, manager James Oslin said. He said residents would be offered a 60-day option to buy their units at the end of their leases.
Luci Scott
The Arizona Republic
