The Fall of Century Plaza?

18 Comments so far (Add 1 more)

1. Curious Surfer – the law suit has not fizzled. I heard that it is still going strong and attorneys from both sides are talking about options/solutions.

   1. Will Daly on February 24th, 2009 at 3:35 pm

2. It looks like this fizzled out over the last two months. What is the latest with CP?

   2. Curious Surfer on February 24th, 2009 at 3:10 pm

3. Thanks for the info on price per square foot in Scottsdale & Tempe. For the listings you mentioned, it seems that they are on the first or second floors of their buildings – it would be interesting to know if they have “views” of much except the building(s) next door, or if any of them are ‘short sales’. Most of the prices I found in Scottsdale, either in high rises or on higher floors than 2 or 3, had prices hovering at $250 per square foot and much much more. I will be interested in what you find about midtown or even downtown PHX, on the light rail. Having looked at several high rise and midrise new buildings with views, I found nothing less than $240+/- per square foot (at Tapestry, a nice 6 story building — and units without views are less than $240) to much higher prices at places like 44 Monroe, Portland Place, Copper, etc. Older buildngs (eg, Regency) are often less, and also ‘short sales’ and bankruptcies are less (like in Portland Place) — but even bankruptcies aren’t $150 psf. But your information will be very interesting and helpful to see! Thanks.

   3. Potential Buyer on January 10th, 2009 at 10:20 am

4. I’ll put some work into the question of midtown Phoenix values later but for now consider the following asking prices:

   $249/s.f. ($429,900 for 1,727 s.f.) at 120 E. Rio Salado Pkwy, No. 101, Tempe (Edgewater at Hayden Ferry Lakeside, an A-Class community on Tempe Town Lake and a short walk to light rail)

   $192/s.f. ($285,000 for 1,483 s.f.) at 7301 E. 3rd Avenue, No. 202, Scottsdale (3rd Avenue Lofts, an A-Class community in downtown Scottsdale, easy walking distance to Old Town shops, restaurants, bars etc…)

   $228/s.f. ($569,000 for 2,498 s.f.) at 3801 N. Goldwater Blvd, No. G206, Scottsdale (Main Street Plaza, an A-Class community in downtown Scottsdale in the Arts District).

   $270/s.f. (650,000 for 2,410 s.f.) at 3801 N. Goldwater Blvd, No. G201, Scottsdale (Main Street Plaza, see above).

   I recognize that these areas are NOT mid-town Phoenix. However, I think that downtown Scottsdale and Tempe Town Lake in general will command higher prices than mid-town Phoenix.

   I am not the person who wrote that mid-town properties are worth $150/s.f. and I have to admit when I first saw that I felt the number was low. However, when one considers what can be purchased in downtown Scottsdale or on Tempe Town Lake one can see where $150/s.f. is fair or close to fair.

   Again, I will work on mid-town Phoenix values and post to this site in the near future.

   4. Will Daly on December 31st, 2008 at 10:09 am

5. Bystander: The developer got C of O’s in June and began closing homes in July (this is a matter of public record… the City wouldn’t allow move-ins without a C of O nor would lenders fund loans without one). The developer started sending ‘closing letters’ as the units were nearing completion in order to provide ample time for each buyer to finalize their loan and close (this is standard practice as anyone who has bought a new home can attest). The developer sent letters demanding closing and, ultimately, terminating contracts, after buyers failed to close per the terms of their contracts. Obviously you had a contract and refused to close. That is your decision but it is not the fault of the developer. You and PhxBabe attempt to split hairs with the notion of a Temporary C of O (TC of O) vs. a final C of O. Mo Glancy, Deputy Director of Phoenix Development Services, however, answered this question months ago in an email I posted on this site stating unequivocally residents could move in under a T C of O (moreover, again, residents actually did so). Now that the building no longer has a T C of O the hair splitting is moot but, really, considering people were closing and moving in I’m mystified why it ever gained traction to begin with.

   5. CP Truth on December 28th, 2008 at 2:16 pm

6. I think you are correct that $150 is a preciction for 2009 (although hopefully not likely), but that makes it difficult to determine your risk since none of us can predict the future. You seem to know quite a bit about current prices already, more than I do for sure. I think Will would be a good person to ask that question, he knows more about the market than anyone and will answer honestly.

   6. bystander on December 28th, 2008 at 11:42 am

7. TO BYSTANDER AND OTHERS RE PRICES PER SQUARE FOOT: It sounds like the $150 psf amount is a ‘prediction’ of where the mid-town/downtown condo market may be going in 2009. Actually, based on Maricopa County records of some recent sales (Oct/Nov recorded sales) at some buildings where it’s clear that contracts were signed in Aug/Sept/Oct (because the units were still for sale in June/July), the prices of contracts entered into in Aug/Sept/Oct still seem in the $230 – $325 psf range (Tapestry on the lower end, Century Plaza on the higher end). Yes, that’s still before the Oct/Nov meltdown, but they are relatively new contracts — not early 2008 or prior years.

   I would be curious if you know where there are CURRENT sales in mid-town/downtown in good quality newer buildings (not Regency, for example) where prices have gone below $230 psf? Thanks for your input.

   7. Potential Buyer on December 28th, 2008 at 9:28 am

8. I think what that person meant when he referred to $150 psf is that the segment on Channel 12 News about the state of downtown condos in general (and Century Plaza in particular) suggested that units would soon be selling for 50-60 cents on the dollar, based on the fact that so many projects are in financial trouble and going under. This can do nothing but bring the prices down no matter how good (or bad) any particular project is, that’s just the reality of it. Century Plaza has already defaulted on a 42 million dollar loan and been placed into receivership; other projects are in dire straits as well. Also, keep in mind that even $250 psf may not be representative of the true current conditions, because the buyers for many of those units that closed in the last 4-6 months signed up for them pre-real-estate-bust and/or pre-stock-market-crash. The question is, what would they sign up psf for one NOW? I would say $350 psf is way too high in this market, and $150 psf is a great deal.

   8. bystander on December 27th, 2008 at 8:49 pm

9. As a potential buyer who has looked at Century Plaza this month (Dec 2008), the building is impressive in many ways. However, after reading this blog — and others — about all of the problems, and especially about the potential viability of the entire project and the HOA, it makes one wonder: despite the apparent quality of the product, is it heading for a crash?

   Will the lender/receiver take over and conduct a ‘fire sale’? Will do many units fail to sell so that it becomes more of a rental building that a building where most buyers live there? Will the HOA be able to function without special assessments and added costs to unit owners?

   I am not saying that any of this will happen, and I really don’t know because I’m just an average potential buyer. But the uncertainties raised in the blog are enough to make anyone like me this: Am I crazy to buy in this building?

   One last point about one of the prior comments: someone mentioned that $150 psf is a “more reasonable price” for a condo in Midtown Phoenix — whereas Century Plaza is probably closer to $325-$350 psf even in Dec 2008. If anyone knows where one can get a good quality product for $150 psf, please post it here! If you look at other sales that are really happening at other new mid-town condos in the past 4-6 months, you’ll see that prices are in the range of $250 psf — and that is lower than pre-construction prices for these other new condo buildings. So for prices at Century Plaza to drop lower than $250 psf (or let’s say $225 psf) would probably mean something like the Great Depression is truly going to happen. It’s bad, but not that bad, and unliikely to get that bad.

   If anyone has insights– BASED ON FACTS — on any of this, especially on ‘the future’ of Century Plaza, please share your insights here. Thank you.

   9. Potential Buyer on December 27th, 2008 at 5:52 pm

10. Question: when did Equus get final CO’s? This month? And when did Equus start sending letters and demanding that buyers close or else in the midst of missing upgrades, etc? June? And when did Equus send us “precipitous and unjustified” letters cancelling our contracts? July? August? Nuff said, I think people can figure out the story on their own.

    10. bystander on December 26th, 2008 at 5:53 pm

11. And, for the record, I don’t “hate investors”, as you assert, but I do expect you to abide by your commitment… your word… your contract. And I get indigestion listening to a group of you (who voluntarily failed to close escrow) pose as innocent buyers and complain loudly about how you were wronged and flame the developer with specious claims of an unfinished building. That is a disgrace.

    11. CP Truth on December 26th, 2008 at 2:08 pm

12. Are there happy residents at Century Plaza? Yes there are. But don’t take my word for it: ask them! You want to spin a few issues with the elevator into a global problem with the building. Nice try. These are typical growing pains for any new building and, thankfully, they are solved (all three elevators are working fine).

    The truth is the developer DID perform and the evidence is quite easily obvious to anyone: the building and its amenities are finished, they are gorgeous and the City has issued a final C of O (look it up yourself at http://www.phoenix.gov). Nothing you can say can alter these facts. As such your negative spin is hollow and groundless and clearly only seeks to hide your true reason for not closing: you couldn’t extract a 30% price discount out of the developer so you could make a buck on a quick flip. You don’t want to close? That’s fine. That is your decision and (other than you going back on your commitment) I have no problem with that. But to then talk post smack on blogs about the building is really weak sauce from the sourest of grapes and for that you should be ashamed of yourself.

    (And good luck trying to convince people that the *seller* is wrong when a buyer doesn’t close on their contract! That is simply beyond illogical.)

    Finally, please don’t pretend to have knowledge about the inner workings of M & I Bank, their loan, or accounts payable from one of the property’s vendors (or, more specifically their supplier… not even contracted with the developer!). *** YOU DON’T *** This is just so much spin to force feed your negativist agenda. Century Plaza is fine and will remain so in spite of your contrarian campaign. When the dust settles (which will happen sooner than you can imagine) all of your hollow words will simply evaporate.

    12. CP Truth on December 26th, 2008 at 1:32 pm

13. Equus, are there very many happy residents? I don’t think getting stuck on the bottom floor (when your unit is on the 11th floor) makes for a happy resident. Only 14 people have closed out of 145, and some of those few occupied units are rentals…and one of the renters has already called their property manager and complained that the elevators weren’t working…again! Since you haven’t paid your granite vendor, our units didn’t have granite in them, either, this is only one of various problems people have experienced. We would be stupid to close under these circumstances with vacuous promises from the developer that they will be fixed someday, and that goes for people who intended to live there AND investors. Wrong is wrong regardless of who the buyer is. And you have the nerve to call us “investors” like you hate investors (some are, some aren’t); but Century Plaza specifically allowed and encouraged up to 20% investors. You were more than happy to take my money more than 3 years ago, so no one “lied” about it, you happily banked our money, no questions asked, and didn’t even put it in escrow. When you couldn’t perform and get everything completed and CO’d BEFORE you wanted our money and demanded us to close months ago, now suddenly you hate investors. Are you not aware that Equus has defaulted on 42 MILLION dollars construction loan? Also, you didn’t pay your granite people and have ripped them off as well, which explains the “no granite” situation. And you wonder why we didn’t want to close?

    13. bystander on December 25th, 2008 at 9:12 pm

14. If you don’t close escrow on your purchase contract it is perfectly reasonable for a seller to cancel your contract. What else is a seller supposed to do? How long is a seller supposed to wait to cancel a contract after a buyer deliberately fails to perform? Well, the Century Plaza seller didn’t wait one day or even a few days; they waited weeks… several weeks, in some cases.

    The notion that it is somehow wrong for a seller to cancel a buyer’s contact when the buyer fails to perform is beyond illogical; it is from the realm of Alice in Wonderland.

    And let’s talk about ‘character’: what is truly telling of character is someone who signs a contract then deliberately fails to close escrow and then goes to the press and posts on blog sites about how THEY were wronged. This is shameful. The developer delivered a great product as promised (don’t take my word for it, go see Century Plaza for yourself). Then these investors BACK OUT of their contracts because why? C of O’s? Unfinished units? Final inspections? No, no, not at all. They back out because they couldn’t make a quick flip for a profit and the developer would not agree to reduce an already good price by 30% as these ‘buyers’ demanded. Linda Dorsey, you should be ashamed of yourself. You don’t want to close on the three units you bought? That is fine. Your friends and family don’t want to close on the five they purchased? That is fine too. That is your decision to make. But to then go out to the press and post on multiple blogs and flat lie about how the developer somehow wronged YOU? And to further speak disparaging about the building and the construction and THEIR character? Disgraceful.

    And Will, seriously, stop pandering to these investors already. We’ve talked about this and I know you know better. At least admit that you and I spoke and you stated you intended to address their specious claims or take down the blog because it got so out of hand. I’m willing to admit that hiring an attorney might have been a bit heavy handed but I’m also sorry I didn’t address the obviously dubious statements by these investors earlier and with greater energy. These are very trying and difficult times for our company and for me personally and I really don’t have time to answer all of these outlandish assertions. But these investors need to be unmasked and the truth needs to be told.

    Again, I encourage those interested in Century Plaza to listen to the comments of residents who are actually living in the community and take these bitter investors statements with a well-deserved grain of salt.

    14. CP Truth on December 25th, 2008 at 1:10 am

15. Century Plaza is a beautifully designed, well built building in a great location. It has extraordinary standard features, generous amenities and spectacular views that are the envy of its competitors.

    Unfortunately, there are certain investors (ahem, Phoenix Babe) who voluntarily failed to close escrow and are now speaking disparagingly about the property and its developer in the press and on multiple blogs – including, regrettably, this one. Their words speak as if from disgruntled ‘buyers’ but the truth is they are investors who never intended to close (even if they had the wherewithal to do so). Their self-described ‘class action lawsuit’ is nothing but an attempt to salvage earnest deposits after backing out of their contracts. They talk about “final inspections” and “C of O’s” and “unfinished units” but, in truth and in fact, the building and units are complete (with a final C of O) as evidenced by the multiple residents who actually closed escrow and have been living happily in the building for nearly six months. These investor’s lies and deceptions are nothing more than red herrings to promote their own agenda: get their money back and shed an unfavorable light on the developer and the building. Well… shame on them (and those who might promote them!).

    I encourage potential buyers – and the curious public – to personally see Century Plaza and listen to the praises from actual residents of the building. And I encourage you not to listen to deceptive vitriol from bitter investors with negative agendas who do not live there and, voluntarily, never will. Visit the community… talk to residents… see and decide for yourself. You’ll be glad you did!

    15. CP Truth on December 24th, 2008 at 11:16 pm

16. I also think it’s very telling of Equus’ character that they have been sending people “precipitous and unjustified” contract cancellations for not closing on their units on the day that they were ordered to, when Equus couldn’t even produce a final Certificate of Occupancy when requested before closing. HELLO, the units aren’t done! For example, one unit was missing an entire cabinet run in the kitchen, plus a hardwood floor that was not the correct color and had ridges and “humps” in it. Also, some units did not have the ordered (and paid for) granite in them, either… not only did they not have the upgraded granite, they had NO granite! Now we find out that Equus has not paid their granite vendor, either, which explains why we have no granite. Also, the elevators periodically dont work, this has been a problem from the very beginning (for 3 years), so this problem apparently is inherent in the design and is never going to go away. God knows what else is wrong behind the walls. But Equus says, “dont’ worry about it, just close anyway because we said so, or else we will cancel your contract and claim the right to keep all your money”. Would YOU close on a unit under these conditions??? Most people who signed up for these units are not investors, they had plans to live there, and they are being treated the same way and are having the same problems as everyone else. I am starting to come to the conclusion that someone from the City (or state or federal) needs to investigate this.

    16. Phoenix Babe on December 23rd, 2008 at 9:57 pm

17. I also think building the penthouses was a mistake. By Doug’s own admission at the Grand Opening Event, building those extra units cost an extra year of construction. How many more people would have closed if construction was completed summer of 2007 as opposed to summer 2008? I’d bet at least two to three times as many.

    17. Will Daly on December 22nd, 2008 at 10:10 pm

18. Kudos Will!
    This is very telling of Equus’ character regarding Century Plaza. Many have tried to sue blog owners for blog comments in the past but not one has yet to win in the U.S. Nobody would blame you for removing the last post, but the public deserves an outlet like this to discuss this issue freely. Afterall, you cannot get an honest answer from the developer or their spokespeople!

    This whole “Century Plaza meltdown” situation could have easily been avoided had the principals of Equus just listened to the people. The vast majority of these buyers were complaining that the project has taken more than 3 years to complete, and in that time frame the median price of a home in the area has dropped 35% and even more on new construction condos. Equus should have negotiated with the bank and with the buyers. They should have worked with buyers on their contracts, reducing prices say, 20% around the board and more would have wanted to close. It is that kind of attitude that helps projects succeed in gloomy times.
    Promising 1 year for construction and still not delivering in 3 years does not seem very honorable.
    You need to have the people supporting the project. They should have rewarded the people who stayed in it for the duration.
    In this case, the principals seemed to act above the clouds, when in fact it was more comparable to having their head buried in the sand.

    Cool project, my advice= wait until the bank takes the project back and grab one for $$150 psf, which is a more reasonable price for Midtown Phoenix post boom anyways.

    18. just an observer on December 22nd, 2008 at 12:27 pm