The Arizona Republic recently reported on infrastructure problems at the high rise condo building Landmark on Central and alleged misrepresentation by sales agents at both Landmark and the downtown high rise condo building Orpheum Lofts.
I certainly can not defend the situation or the conditions at either building. We have been hearing rumors on problems with the electrical, pluming and air conditioning stystems at Landmark on Central for at least six months and believe that they are true. And the problems with the parking at Orpheum have been well documented and pubicized for years.
Now, I can’t say whether or not all these buyers were mislead or duped by unscrupulous Cambridge Properties sales agents. The courts will have to decide that.
However, I do not believe that the buyers were totally innocent either. I think the desire for profits undermined common sense and reasonable precautions.
When Orpheum was first marketed for sale the real estate market was just starting to heat up. People wanted to buy in the next hot high rise building and MANY of them were solely interested in profit. And many of these investors did not intend to keep their purchase but rather intended to flip them for a quick dollar to the next guy or gal.
How do I know this?
In late 2005 we noticed that almost 30% of the condos in Orpheum that the developer had sold to the public were already back on the market for rent or resale and this doesn’t count the units that weren’t on MLS. Clearly a ton of investors had purchased at Orpheum. I too was one of them.
Early in the sales process I reserved a condo for myself and also one for each of two clients. Within a couple months the problem with the parking became obvious. When the developer would not put his promises of building more parking in writing my clients and I bailed out. We knew better than to bank on an undocumented promise. Thank goodness!
I find it hard to believe that all the other investors were oblivious to the problem. I suspect instead that many of them weren’t concerned with the parking issue as they thought real estate was a “sure bet” and afterall they weren’t going to live there anyway. [Note: I will say that I did hear a senior person at Cambridge Properties state that parking at Orpheum wasn't important as he "could sell around it."] Nonetheless I do not believe that this relieves the buyer from asking the right questions and protecting his and her own interests.
I wasn’t involved in any transactions at Landmark on Central. But I would not be surprised if the same irrational investor exuberance that clouded good judgement at Orpheum didn’t also exist at Landmark on Central. The condos sold very very fast and I believe it was mostly profet inspired. And again, right after closing about 30% of the units were right back on the market for sale or rent. These folks weren’t in this for the long haul and I doubt they asked questions or investigated the building infrastructure.
