[Source: Kara G. Morrison, The Arizona Republic]
Central Corridor condo market shows signs of revival
When Michael Hauer decided to buy a home, the 25-year-old looked for something with architectural flair close to his midtown-Phoenix office.
In December, he chose a 734-square-foot condo in One Lexington, a high-rise on Central and Lexington avenues.
Once called Century Plaza, the steel-and-glass former commercial building went through bankruptcy during the housing collapse, and the new owner cut condo prices by about half.
Hauer thinks his new home is a good investment at $181,950 plus a $299 monthly HOA fee (based on his unit’s square footage), which he’ll start paying at the end of the year.
Such luxury-condo developments, meant to capture buyers wanting an urban lifestyle with access to Metro light rail and Phoenix’s burgeoning restaurant and nightlife scene, are showing signs of life after the housing crisis sent several such properties into bankruptcy.
Will Daly, a Phoenix broker who specializes in urban properties and lives in a midtown-Phoenix high-rise, said he’s starting to see an uptick in interest for high-rise and urban-living options.
“The urban-condo market in Phoenix is relatively small and relatively new,” he said. As the economy picks up, he says, “it seems like some major pieces are now in place for development to continue along light rail and in downtown Phoenix.”
Mini urban mansions
Just down the road from One Lexington at Central Avenue and Palm Lane (just north of the Phoenix Art Museum) is another luxury development that went through months of financial turmoil but is back on the market under new ownership.
Chateau on Central is a development of 21 luxury townhomes that looks like miniature brick castles, complete with turrets. These Queen Anne Victorian-style townhomes boast 5,200 square feet of living space or more on five floors.
The homes went on the market for $1.389 million to $2.459 million in December (plus a $575 monthly HOA fee), when the new developers unveiled two model homes decorated by the Scottsdale design firm Est Est.
None of the units has sold yet.
Prices are about half of the townhomes’ original asking price of $2.8 million to $4.5 million in 2007.
MSI West Investments bought the 21-townhouse development for $7 million last year after its financer, Mortgages Ltd., declared bankruptcy.
Each home has four floors plus a basement, a private four-person elevator, a two-car garage, a top-floor terrace and balconies.
There are no shared community amenities, such as gyms, swimming pools or cigar clubs, at Chateau. Joe Morales, a real-estate agent with Arizona Great Estates-Realty One Group, said that’s because luxury buyers prize privacy over shared spaces. All the townhomes are zoned as work/live spaces, so buyers could set up professional offices in the basement or on the first floor.
Morales said he may seek a light-commercial buyer, such as a high-end restaurant or law firm, for the largest townhome: an 8,252-square-foot corner property on Central Avenue, currently listed at $2.459 million.
Sell vs. rent
One Lexington and Chateau on Central are bucking a trend. Other developers are putting rental signs on luxury and high-rise urban properties built during the height of the market and meant to sell as luxury condos. The 44 Monroe building in downtown Phoenix and West Sixth, formerly called Centerpoint in Tempe, are two such properties whose units will be leased rather than sold.
Two years ago, Daly, the Phoenix broker, conducted bus tours, taking dozens of urban-living enthusiasts to see high-rises and new condo developments around the Phoenix, Scottsdale and Tempe city centers. The economy put many of those developments, and his tours, on hiatus.
Today, Daly said he’s getting more inquiries from out-of-towners looking for investment properties and second homes. And Valley residents are asking when his tours will resume.
“Right now, it’s just a matter of time and energy,” he said. “I think we’ll be firing them up again in the next two to three months.”
For Hauer, an architect in training with Gabor Lorant Architects, the clean lines of the contemporary One Lexington building won out over some older downtown high-rise properties he considered.
Remaining units at One Lexington (owned by the Macdonald Development Corp.) range from $165,400 to $981,900 for a two-story, 2,846-square-foot penthouse.
“The finishes were a big part of it,” Hauer said, listing the Caesarstone countertops, stainless-steel Bosch appliances, bamboo floors and modern kitchen cabinetry.
The building’s amenities include a pool, gym, community room, parking and a small dog run, which comes in handy for Hauer’s longhaired Chihuahua, Margarita.
Hauer said he also enjoys sitting on his small 14th-floor balcony, looking north over the stunning midtown Phoenix skyline and the distant mountains, reading his iPad.
“That’s the icing on the cake,” he said.
[Source: Catherine Reagor, Arizona Republic] — The brick mini-mansions sitting empty on Phoenix’s Central Avenue is first on the New York Time’s list of “Ruins of the Second Gilded Age.” The newspaper commissioned a photographer to go across the country and capture physical evidence” of the real estate bust.
Phoenix’s Chateauxs were supposed to sell for more than $4 million and be topped with copper turrets. But in late 2007, PHX Partners — developer of the unusual project project — filed for bankruptcy. Phoenix-based commercial lender Mortgages Ltd. then financed the project and took it over through foreclosure. In mid-2008, Mortgage Ltd. was forced into bankruptcy. Chateaux is a high-priced, nearly built castle-esque ghost town on Central Avenue now.
A Charlevoix Homes subdivision in Chandler was no. 2 on the Time’s list. President of the home builder Michael Roberts filed for bankruptcy last year. The subdivision sits half built. [Note: To read the full blog post, click here.]
[Source: Andrew Johnson, Arizona Republic, June 20, 2008] — A developer behind several high-profile real estate projects and a construction contractor filed a petition late Friday to force lender Mortgages Ltd. into bankruptcy. Grace Communities, which is developing the 44 Monroe condominium tower and Hotel Monroe in downtown Phoenix, filed motions in U.S. Bankruptcy Court for the District of Arizona asking a judge to put Mortgages Ltd. into Chapter 7.
Separately, the firm also filed a lawsuit against Mortgages Ltd. seeking the $48 million in financing it claims it is owed for the Hotel Monroe project and to get a $100,000 bond from the lender’s regulator, the state Department of Financial Institutions. If a judge accepts the bankruptcy petition, the Phoenix-based financier would be required to sell its assets. Grace Communities also filed an emergency motion to appoint an independent trustee to take over Mortgages Ltd.’s operations. [Note: To read the full article, click here.]
Other notable Mortgages Ltd. projects funded in and around downtown Phoenix: