Late last week, a Denver based real estate investor purchased the remaining 64 unsold condominiums in Hayden Ferry Lakeside’s Bridgeview tower for $20.3 million. Suncor, master developer of the mixed-use complex has been hit very hard by the economy and unfortunately had to let go of their gemstone development, in addition to a reduction of 95% of its staff.
Denver-based Condo Capital Solutions, led by Peter Wells and Marcel Arsenault were able to purchase the luxury condos at an unbelievably low price, around $317,000 per unit. The Denver duo is very pleased with their purchase as previous Suncor offers were much higher and it was a very significant discount from the original construction loan. The construction loans for both Edgewater and Bridgeview totaled just over $210,000,000. It is tough to get a precise comparison without a breakdown of all construction costs, but either way, this was a great deal for Condo Capital Solutions and an unfortunate reality for Suncor, a subsidiary of Arizona Public Service Company owner Pinnacle West.
This deal is highly indicative of the extremely poor nature of the luxury condo market in the valley, but great news for buyers with some capital. Around town, most other bulk sales or full buyouts of unsold units in a community are going for minimal fractions on the dollar and is drastically changing the shape of the condo market as we speak. We wont be seeing anything sold for over $500/SF for many years, as those prices are simply unrealistic. At Bridgeview, units originally started selling at much more than the average price of the recent sale’s price per unit of $317,000, which is a clear indication on how much cheaper they can be sold for now. Here’s an example of another deal near midtown Phoenix called Citi at Camelback, which was selling on average for $275,000/unit just in 2006, and the remaining units were recently purchased for just over $70,000/unit.
It is clear that the condo market here in the valley is at or near the bottom and while many have suffered, others will make huge gains in the near future. It is unknown how much Wells and Arsenault will market the remaining units at, or even if they plan to market them now for sale. Many other condo projects and condo conversions around town have been quickly changing or reverting to rentals ever since the market fell apart. As for Bridgewater, it might be harder to lease them as problems could spark with the HOA, but either way, people with capital will have once in a lifetime opportunities all over town.
Here are some other distressed projects that have or will be sold in the near future:
Summit at Copper Square’s unsold 74 units will be sold at trustee sale on October 14, 2009, unless developer David Wallach, principal of W Developments can work out a deal with the new lender, Stearns Bank of Scottsdale.
Century Plaza developer Equus Development recently filed Chapter 11 Bankrupty protection, most likely to avoid foreclosure on a unpaid loan balance of $23 million with M&I Bank. The original construction loan, in the amount of $42 million was for a conversion of an office tower into 145 luxury condominiums. To date, only 14 units have been sold, and the property is assessed at $19 million. Someone will come in and buy nearly 90% of the tower for an extremely low price, but it might not be in the near future as bankruptcy can elongate the process far more than a 90-day notice of trustees sale.
Biltmore Palms’ remaining 37 units were sold to a Canadian investor for $4 million, which equates to just over $108,000/unit.
As new bulk sales or remaining unit buyouts come to our knowledge, we will post and elaborate as soon as possible. Opportunities are out there that will most likely never be seen again!
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