[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.
Residence on the Rail
Every student needs a place to live — and come spring, it’s on everyone’s mind. Incoming freshman shop around with anxious parents for the perfectly cool apartment complex, while commuter students finally decide to make the move out of Mom and Dad’s. Others tire of the on-campus experience after a year or two of shared living with roommates, suitemates, hallmates and floormates. Eventually, privacy and freedom beckon in the form of (often cheaper) off-campus apartments.
For most students, living near the Metro Light Rail has serious appeal. Driving to and parking on campus gets expensive, and many students commute between multiple campuses. Light rail-adjacent apartments market themselves as such, drawing more and more residents with each dollar rise on the gas pump.
But not every place suits every student. Some are for the quiet and studious, while others are designed for the social, college experience. Here’s a look at the culture of some popular apartments on the rail near the ASU Tempe and Downtown campuses.
Alta Phoenix Lofts
Phone number: 602-374-7133
Light rail stop: Van Buren Street and Central Avenue
Amenities: fitness center, cyber cafe, clubhouse with billiard and poker tables, pool, art gallery, local business on property, acupuncturist, tattoo parlor, personal trainer
Price range: $960 – $3,500
Sitting catty-corner from the College of Nursing and Health Innovation building, Alta Phoenix Lofts boasts an urban style. Residents find themselves walking through halls with exposed copper pipes and duct work. Property manager Chiara Elie says the light rail is another way to give residents an urban experience.
“We go for the whole downtown vibe, participating in First Fridays and reminding residents the light rail is nearby,” she says, sitting in her pool-facing office.
Elie says not many students live at the Lofts because they are higher-priced than other apartment complexes in the area. She says she tries to hold at least two or three events per month so residents get what they pay for. She says the active student would appreciate living at the Lofts.
Modern decor inside the Alta Phoenix Lofts. Photo by Vivian Padilla.
“Our biggest appeal to students is we’re very close to the Downtown campus,” she says. “But we also have so much to offer in terms of amenities and activities.”
Nursing senior Barbie Frazier says she chose to live at Alta Phoenix Lofts after looking at The Met and Roosevelt Square. She says Alta won her over because she thought it was the best deal for what she paid for.
“The lofts were bigger than the other places I looked at and it has this really big balcony with a pretty view, which The Met and Roosevelt Square didn’t have,” Frazier says. “The balcony just makes it so much more open and I like having my own space outside.”
Frazier says one of the frustrating things about living at the Lofts is wasted space in the apartment, which makes cleaning difficult. She says she had to buy a stepstool to reach a lot of her cabinets and storage space.
Frazier says she thinks ASU students who are studious, but also social, would enjoy living at the Lofts.
“People here are pretty nice so I don’t think anyone would call the cops on you for having a party,” she says. “As a nursing student though, I have to be studious and I never hear anyone so it’s easy to study.”
Phone number: 602-258-6387
Light rail stop: Van Buren Street and Central Avenue
Amenities: pool, hot tub, fitness center, 800+ DVDs for free rental, Wi-Fi throughout the property
Pet friendly: Cats and caged animals only
Price range: $779 – $1,264
Rising only three stories high, The Met apartment complex is one people might miss, especially as it’s surrounded by buildings with 10-plus stories. The city has grown around it; journalism sophomore Liam Hausmann says he enjoys living there because it’s so close to the Downtown campus where he takes classes.
“I don’t live as close to the light rail as some other places, but it’s worth it to me to be able to walk back and forth to campus four times a day without it being a hassle,” Hausmann says.
The Met is often overlooked because of its smaller size. Photo by Diana Martinez.
Hausmann rents a two-bedroom two-bath with his roommate and says he gets the most use out of the Jacuzzi. However, he says he has a rocky relationship with management, though it doesn’t affect his enjoyment of his living experience.
“I got a message from [management] complaining to me about people parking in The Met guest parking spots and then leaving,” he says. “They blamed me and my roommate and my roommate had to go the office and basically say it’s not our job to watch the parking lot, regardless if the people doing it are people we know or not.”
Hausmann says while the facilities are very nice, management tends to treat students as if they aren’t full and responsible adults.
“If you take management not appreciating students out of the picture, the location, the amenities and stuff is all awesome,” he says. “It’s not really a hustle and bustle place, it’s really mellow and I think it’s good for students who work on campus.”
Assistant manager of The Met Kathy Kimminau says they don’t treat students any different than other residents but admits they do give them more noise complaints notifications if other residents are voicing complaints.
“The studious student would prefer to live here because we are strict about noise complaints,” she says. “We still want people to have fun and have people over and party, just not late at night. We’ve never evicted someone for too many noise complaints but we would if we had too.”
Kimminau says she thinks students would want to live at The Met because of the proximity to campus, as well as the availability of Wi-Fi.
“We’re also located right next to a lot of places to eat and entertainment, like the movie theater,” she says.
Roosevelt Square offers students and residents refined living within walking distance to the downtown campus and light rail station. Photo by Jessica Heigh.
Phone number: 602-258-7678
Light rail stop: Roosevelt Street and Central Avenue
Amenities: 24-hour gym, pool, on the bus line, dog-walking area, 24-hour sky terrace, local businesses on property, four restaurants, dry cleaner
Pet friendly: Yes, except for larger, aggressive breeds of dog
Price range: $563 – $1,500
Three separate buildings make up Roosevelt Square, its own small community where assistant manager Wes Carmichael says many residents have referred each other.
“We have a mixture of young professionals and students,” he says. “A lot of students move here after their first year or two on campus because it’s cheaper to live here than on campus.”
One of the three apartment complexes that make up Roosevelt Square. Photo by Jessica Heigh.
He says some reasons students might enjoy living at Roosevelt Square is the proximity to First Fridays, a monthly art walk, as well as plenty of local shops and eateries to walk to. He says they are also extremely pet friendly.
“We have almost as many pets as residents I think,” he says.
Sustainability and journalism senior Lexie Runge lives at Roosevelt Square with her dog Maverick and says she loves living so close to the light rail.
“I almost never drive anymore because I can walk to my journalism classes on the Downtown campus and take the light rail to my other ones on the Tempe campus,” she says.
Runge says she feels the complex is for students who are respectful but like the urban life.
“Most residents here really do respect each other,” she says. “It’s a lot of young people and young couples and everyone has this understanding that this isn’t for cranky older people and there’s no underclassmen who want to party constantly. I think it’s a place for people who have their priorities straight.”
Carmichael says if students are looking to rent in the fall, they should begin the process about 75 days in advance. He says the Phoenix Mercury are already inquiring about renting apartments there again. Last year the team leased 14 units, he says.
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See the original article for residences along the rail in Tempe.
[Source: Jan Buchholz, Phoenix Business Journal]
From the “that didn’t last long” file, word comes today that the sale of condos at 44 Monroe in downtown Phoenix is off.
In early November, the new owner of most of the project — it was purchased by ST Residential after the lender took it back — said they would sell the units for nearly half of their original pricing.
The high-rise at First Avenue and Monroe Street has 196 units, with 14 occupied by residents who bought at the height of the market, when they cost between $450,000 and $3.2 million.
But now the plan is to lease them. In a letter sent to brokers and other interested parties Thursday afternoon, a representative from the sales team said the market dynamics don’t support sales. No word yet on what rents will run, but look for a mix of Arizona State University students and staff, and young professionals working downtown to settle into the high-rise lifestyle.
[Source: Si Robins, Downtown Phoenix Journal] — The beauty of our Downtown is that it’s always evolving. There was no greater evidence of this than the grand reopening of an old favorite, Modified Arts, this past Friday. Packed to the brim, beautifully touched up and deliciously catered, this opening weekend was a perfect reaffirmation that there is a great sense of community in the city core. On the other side of Downtown Phoenix, another familiar gallery, .anti_space, is planning its own grand reopening later this year. DPJ got a sneak peek at the expansive space, and it may just change the face of the Phoenix arts scene. Speaking of changes, now is the perfect time to visit Grand Avenue on First or Third Friday, as the Insecure Critic claims it’s Downtown’s new hip spot. And, if you haven’t made the move Downtown just yet, now is the right time. There are plenty of bank-owned condos with soaring views of Downtown, but they won’t last for long.
[Source: Mike Sunnucks, Phoenix Business Journal] — Phoenix Mayor Phil Gordon extolled the economic resilience of downtown Phoenix [last] week during this annual “State of Downtown” speech. Gordon said Arizona State University’s expansion of its downtown campus, construction of the mixed-use CityScape project, and the light rail system are helping the area. He also said while sales tax revenue is down citywide, it is up 13 percent in downtown Phoenix. “Yes, it’s been a tough year economically for everyone. You’ve heard all about it, read all about and felt it,” Gordon said. “But in spite of it all, we’ve still got a lot going on in downtown Phoenix.”
Notwithstanding the mayor’s optimism, downtown Phoenix faces some economic problems. High-rise condominium developers face questionable financial futures because of troubles with pricing and occupancy. The Hotel Monroe redevelopment at Central Avenue and Monroe Street remains stalled, and the boarded-up building has become a haven for pigeons. The total amount of vacant space in downtown Phoenix stands at 1.05 million square feet — up from 630,400 square feet in the first quarter of 2007, according to Colliers International. The downtown vacancy rate is 13.8 percent, compared with 8.5 percent in first-quarter 2007, according to Colliers.
Downtown also is feeling the effects of pulled-back consumer spending. A number of downtown businesses have closed because of the recession, including Weiss Guys Car Wash at Grand Avenue and Van Buren Street and the China Inn restaurant at the Colliers Center.
The two downtown pro sports teams also face economic challenges. The Arizona Diamondbacks had a poor season on the field and drew about 381,000 fewer fans than in 2008, according to ESPN. The Phoenix Suns have gotten off to strong start on the court — but, like other sports teams, they face hurdles in attracting and keeping fans during the consumer doldrums. [Note: Read the full article at Despite mayor’s optimism, downtown Phoenix feels real estate, consumer stress.]
[Source: Arizona Republic] — They arrived late to the real-estate-boom party a few years ago. Now mid-rise urban condominiums are like the odd guest that everyone is afraid to approach. Hundreds of pricey condos were built in the past five years, creating an inventory of units primarily in downtown Phoenix, Scottsdale and Tempe, and the Biltmore and Kierland areas. Some developers and investors took a bath as condo prices collapsed and financial troubles cast a shadow on some complexes.
Buyers are carefully weighing a condo investment as they look at what each area has to offer and what they can afford. Realtors and developers say they are seeing an uptick in interest as prices have fallen. In Phoenix, condo towers are part of an emerging mid-city renaissance that includes light rail, students, restaurants, galleries, and restored housing. “We might be crawling, but we’re crawling in the right direction,” said Realtor Michael Fitzpatrick of Phoenix Urban Living. [Note: Read the full article at Metro Phoenix condo agents bank on the draw of city life.]
[Source: Arizona Republic] — As the [global] economic downturn grinds on, downtown Phoenix boosters have been anxiously watching sales at several new condo projects, including 44 Monroe at the intersection of Monroe St. and 1st Ave. City leaders want to revive downtown Phoenix, and getting more people to live there is a crucial part of that plan.
Although 44 Monroe wrapped up construction this year, units have been slow to sell… According to Ryan Zeleznak, Grace Communities principal, of the 196 units in the 34-story building, 96 (49%) are in escrow and about a dozen (6%) have sold (including one for $1.55 million last week).
[Source: Arizona Republic from U.S. Bankruptcy Court records] — Bankrupt construction lender Mortgages Ltd. has reached settlements with seven developers that account for more than one-half the company’s $925 million loan portfolio. Under the agreements, Mortgages Ltd. will subordinate investor interest, find additional capital for certain borrowers, and reduce interest rates for others. The borrowers agree to drop pending lawsuits against the company.
- SOJAC I LLC — Proposed Jackson Street Entertainment District in downtown Phoenix.
- MK Custom Residential Construction LLC — Various condo projects in central Phoenix.
- Grace Communities — Hotel Monroe in downtown Phoenix, X Wine Lofts in Scottsdale, and others.
- University & Ash LLC, Roosevelt Gateway LLC, Roosevelt Gateway II LLC — Various proposed condo developments in Phoenix and Tempe.
- Rightpath Ltd. Development Group LLC — Main Street Glendale near University of Phoenix Stadium.
- Avenue Communities LLC — Centerpoint Condominiums in Tempe
- Bisontown LLC — Residential communities.
[Source: Associated Press] — Some downtown Phoenix residents living in the Roosevelt Neighborhood are expressing concern about parking for Arizona State University students both now and in the future. Some condo and office building developers waiting for the soft real estate market to rebound are instead turning their downtown land into parking lots for ASU students and others. That has some members of nearby neighborhood associations worried. “Ideally, we don’t want a parking lot there,” said Steve Brueckner, president of the Roosevelt Action Association.
Neighbors said they fear that parking, even if it’s temporary, could lead to more permanent downtown lots. Besides relying on light rail to get students downtown, ASU will also need thousands of parking spaces, according to university figures. This fall, ASU expects to have 4,500 students and as many as 900 staffers on campus, said university planner Richard Stanley. The school currently has 1,100 parking spaces and agreements to lease 3,400 other spaces some for daytime use only from the city of Phoenix, near Chase Field; the Mercado complex; and the Phoenix Convention Center. By 2020, ASU estimates it will have 15,000 downtown students and may need up to 6,000 spaces by then.
Hoping to calm neighborhood fears, the City of Phoenix says some landowners must seek a zoning change or special permit to create a parking lot, said Debra Stark, the city’s planning director. “The city also has specific lighting and landscaping requirements,” Stark said. ASU officials said they are still working on a long-term parking fix downtown. Planning for parking does not include disrupting residential neighborhoods surrounding ASU, Stanley said.