Two groups, one a partnership between two Israeli firms, BSR and Africa Israel, and the other SW Development Group have proposed two different high rise condo buildings for the intersection of Central and McDowell.
The Israeli Group’s building is currently named One Phoenix (not to be confused with One Scottsdale currently under construction) and would have 921 condominiums and a heighth of 375 feet. The site is at the north west corner of the intersection.
SW’s building is not yet named, would have 650 condo units and a heighth of 500 feet. Their site is the south east corner of the same intersection.
Both developers claim that although the condo market is slower in Phoenix, Scottsdale, Tempe and surrounding cities that the proximity to the light rail and downtown Phoenix will make their projects successful. They also hope that by the time their condos were ready to go to market that the Phoenix condo market would have improved.
Although I am a huge fan of the Central Phoenix Corridor, the light rail development, and high rise condos in general, I question if the demand will be there to absorb almost 1600 condos anytime soon.
After all, Orpheum condos are still slow to sell, 44 Monroe High Rise, Summit at Copper Square, and Portland Place are currently delivering or just months away from delivering condos to buyers and I believe at least 30-50% of these are investor owned.
The investor owned codos would have to sell before there’d be much demand for new condo product and I believe that the absorption could take two to five years.
I’m being super optimistic when I say two years.
Afterall, Crystal Point High Rise was completed about the same time of the RTC crisis (our last real estate meltdown) and the investor owned condos in that building took TWELVE YEARS TO SELL!!!
Now of course the high rise condo market is much more developed today, there are tons more reasons to live in Central Phoenix now, and the investor who owned the Crystal Point units referenced above was an extremely unmotivated seller but with all the inventory about to come back on today’s resale market I definitely see us heading for a log jam.
Anyway, I’d love to see some condo towers at Central and McDowell to help dress the area up along with the Phoenix Art Museum and Phoenix Library. But I hope that expectations are realistic, that the City of Phoenix does not allow speculative over building and we give ourselves a chance to recover sooner than later. Heck, let’s see what happens with Century Plaza at Central and Osborn before any other high rise condos are approved in Phoenix. W
