The condo market has definitely picked up some steam coming into 2011. While foreclosures and short sales continue to make up over 2/3 of the sales, “re-newed” condo sales are steady to strong in some buildings. Over the last year and a half, numerous fractured condo projects changed hands, relieving most debt and introduced new ownership structures, which has sparked a market for affordable re-newed condos.
Buildings such as One Lexington (formerly Century Plaza) just celebrated their 1-year anniversary since they started selling again and are currently 75% sold out. ST Residential, new owners of 44 Monroe were initially going to restart sales in late 2010, but switched to luxury rentals in January, and has been filling up quickly ever since. ST’s other recently acquired properties include 3rd Avenue Palms in midtown Phoenix and Safari Drive in downtown Scottsdale, both of which are selling at a good steady pace. Optima Camelview is merely months from completion of it’s final phase (Phase 3) which will bring the total development to 700+ units. Another iconic Scottsdale project, The Mark is selling very well with only 30% units remaining.
A lot of urban fans are excited to see West 6th (formerly Centerpoint) in downtown Tempe finish construction and potentially change the face of Mill Avenue…for better or worse? Originally planned as luxury condos, selling at the peak for $700+/SF, West 6th has finally found a new owner who has decided to lease the building for now.
Not all fractured condo buildings have been blessed with new ownership. Summit at Copper Square is “controlled” by Stearns Bank, the buyer of the original construction loan and owner of approximately 70 of the original 165 units. I put the word controlled in parenthesis because in my opinion Stearns is kind of stuck. It’s stuck because we believe most prospective buyers of the 70 unit package would want to rent those units out while waiting for the condos sales market to improve. Unfortunately, we believe that renting of the units may be prohibited by the CC&R’s and the law. Oh, and to make matters worse lenders will not make loans in the building.
Several other buildings around town are facing similar problems, which is hardly a great thing, but opens up one-of-a-kind opportunities for cash buyers to scoop up great condos at historically low prices. First time homebuyers, investors and second home seekers have a solid array of choices, matched with interest rates that are still very low. More and more people are buying which leads us to wonder, have we hit the bottom?
Coming sooner that later developments:
While a chunk of the once planned luxury fleet of high-rises in the urban valley have vanished, a few are hovering on the horizon and surprisingly a few new developments are picking up steam and filling up city council schedules. Safari Drive was originally planned to encompass nearly the entire Northeast corner of Scottsdale and Camelback roads, minus the Triyar development along Scottsdale with Chipotle and Sprinkles. Now, that vacant lot has a “next generation” vision according to Gray Development, the potential developers, with plans for a 750 unit, 3 building complex over 4.3 acres. The project is currently battling opposition from the local community and is in and out of council hearings with an undetermined completion date. Ownership is another hurdle for the developer, as ST Residential (Owner of Safari Drive) and Triyar Properties (owner of that retail along Scottsdale Rd) jointly own that parcel and the project is contingent on the sale of the land, among other obstacles.
It is great to see a little life in the development industry, as it was hibernating for nearly 2 years. Unfortunately, many grand visions during the latter half of the boom will never come to fruition, but in time, cranes will return to the urban cores.
Other notable development updates:
- The W Residences, comprised of 18 new penthouses on the top two levels of the hotel have re-opened sales, with starting prices of $800+/SF, yes I said 800.
- The unique 5-story, 21 unit Chateaux on Central found a new owner and relaunched sales at the beginning of the year. With units ranging from 5000-8000+ SF and prices STARTING at $1.3M, they are still waiting for their sale as of May 1st.
- Portland 38, Evergreen 9 and Roosevelt 11, (Jag Development) all have builder units still available although Portland 38 had very strong sales in 2010 and is almost sold out.
- Sage Scottsdale, a 50 unit townhome/condo community on the canal off Chaparral is steadily selling after a opening earlier this year.
- Corriente, on the outskirts of downtown Scottsdale, just off Indian Bend is actually building their last phase, with construction on the first building set to open later this year.
- Cityscape in downtown Phoenix opened its office and retail sections, with an eclectic array of shops, restaurants, grocery and drug store, bowling alley and full service gym.
- Scottsdale Quarter, a mixed-use complex just east of Kierland Commons opened last year and is continuing to expand with a great variety of shops and restaurants and appears to be quite popular. iPIC is definitely worth checking out.