Today signage was changed and banners hung on the midtown Phoenix high rise condo building that was until today known as Century Plaza. The new name is One Lexington Place.
Last week the financially crippled high rise community was sold by its construction lender, M&I Bank to Canadian company, Macdonald Development Corporation. We Know Urban Realty expects the remaining 130 condominiums to go back on the market soon (evidenced by the brand new banners announcing "new ownership" and "reduced priced" condos).
Over the last year, investors had approached our company asking for help in determining sales values of the condos. Most investors we talked to were looking to offer two bedroom condos at the high $100k range and one bedroom condos at the mid $100k range. We have yet to see at what price Macdonald will offer the units. Stay tuned....
Will Daly, Broker
We Know Urban Realty
(480) 510-8755
Will@WeKnowUrban.com
Talk to Phoenix high rise developers trying to hawk their goods and they'll tell you their prices make all the sense in the world. If so, how come no one's buying? Sure the market is slow and its harder to get loans today but some people are buying but not at the brand new condominiums in midtown and downtown Phoenix. Sounds like a price issue doesn't it?
Because high rise living is so relatively new to Phoenix one way to get a perspective on values is to look at what's going on in other markets.
The San Diego high rise boom began several years before our boom in Phoenix AND the number of condos built there dwarfs what's happening here. Because of this San Diego MAY be a great indicator of where our market is heading.
The Legend is an A-Class building in downtown San Diego overlooking the Padres Ball Park. Prices are advertised at about $550 per foot plus discounted interest rates and 3 years of HOA fees. How much you want to bet that the $550 per foot is soft at that?
Now, I love Phoenix, but I don't think that the average buyer would consider downtown or midtown Phoenix to be "comparable" to San Diego. So, is it reasonable that someone pay as much to live in Phoenix as San Diego? Probably not. Century Plaza recently advertised prices in the $480 to 500 per foot range. And even though Century Plaza is a really good looking building it is not comparable to The Legend and even though Century Plaza is on the Phoenix Light Rail that is not comparable to The Legend location. Gang, IF The Legend sells at $550 per foot (again IF) then there is no way that Century Plaza is worth anywhere close to that number.
But now here's where things get really subjective. Compared to downtown San Diego what are high rise condos in midtown or downtown Phoenix worth? Ten percent less? Twenty percent less? Fifty percent less? What do you think? Should prices for a high rise condo in downtown Scottsdale be about the same as downtown San Diego? MAYBE. But wouldn't most of you take a condo in downtown San Diego over a comparable condo in Scottsdale. I would. I believe that San Diego prices should be about double what a comparable place in midtown or downtown Phoenix and maybe as much as 50% more than the same unit in downtown Scottsdale. Thoughts?
I can't imagine that anyone will think that Century Plaza prices make sense in this light. Fortunately prices at Century Plaza are about to come down; way down.
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.
It is our opinion that there are great deals out there for those who know where to look AND who meet certain other criteria. If interest rates do go up, and I strongly believe they will, then you might want to take advantage of today's low rates, take advantage of the many sellers who really do need to sell (at lower prices), and get yourself a great urban condo now rather than later. Don't be one of those folks who years from now say "boy I really wish I had bought when I had the chance." Call us at We Know Urban Realty and get our help. We don't sugar coat stuff and we know where the deals are and can show you why they are good deals.
The Camelback Corridor to us runs from approximately 44th Street, west along Camelback Road, to about 12th Street. It also runs north and south from Camelback Road from about Bethany Home Road to about Osborn or so. Some of the condo communities to the right do not fit exactly within these parameters but they fit better in Camelback Corridor than any other geographic category. Camelback Corridor is largely defined by Biltmore Fashion Park and the intersection of 24th Street and Camelback. The area thrives with high rise condo buildings like Esplanade Place, 2211 Camelback, and Optima Biltmore as well as equally intriguing but less obvious developments like Galleries at Turney, the future Aura at Camelback, and George Lofts.
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WeKnowUrban specializes in the high rise & loft condo market in Phoenix, Tempe, Scottsdale & more. It's agents have been the number one resale agents of high rise & loft condos in Phoenix since 2003.
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