Blog Archives
Downtown Phoenix Journal recap (02/08/10)
[Source: Si Robins, Downtown Phoenix Journal] — When DPJ’s Phoenix Suns blogger and I paid a visit to US Airways Center last week to interview guard Goran Dragic, we didn’t know what to expect. The guy is in his early 20s and from Slovenia, and before arriving in Phoenix via the NBA Draft a year-and-a-half ago, he spoke very little English. So, we weren’t sure he’d be able to give the DPJ crowd much insight on what he likes about Phoenix culture. We were right, in some respects. Dragic, who lives in a condo overlooking Tempe Town Lake, really only ventures into Downtown Phoenix for practice and games. He spends the rest of his time perusing the East Valley. It brings up a question that we at DPJ ask ourselves a lot: How do we get people from over there to come over here? When I take a look at the content we featured this past week on the site, there are plenty of reasons to spark a trip Downtown for those that live in outlying areas. I compiled a list of unique Grand Avenue locales worth checking out on a First Friday. There’s a growing Scrabble night at Urban Beans for those looking for a mellow, fun school night out of the house. And there is a whole plethora of nightlife fun, including the massive martini list at FEZ. These are just a select few. Keep telling your friends and family to venture Downtown. There is something for everyone, and there’s a whole lot of it.
Metro Phoenix commercial foreclosures rocket
[Source: J. Craig Anderson, Arizona Republic] — More than 2,000 commercial properties in Maricopa County have received 90-day foreclosure notices since Jan. 1, representing $6.3 billion in real-estate loans on which the borrowers have failed to make payments. That number is staggering when placed in contrast with the average commercial foreclosure rate over the past decade, which has been practically zero.
The problem, sparked by property-value declines and a paucity of refinancing options, has produced a steady flow of distressed commercial properties onto the market, with a heavy emphasis on small and midsize office and retail centers. Industrial and warehouse properties also have suffered tremendously, due in large part to disappearing jobs. More than 1 million square feet of previously occupied industrial and warehouse space was vacated in the second quarter.
Commercial-real-estate broker Bret Isbel has been tracking actual foreclosure sales in Maricopa County, which can take several months to occur following the issuance of a foreclosure or trustee’s sale notice. The number of notices issued has been holding steady at between 300 and 400 a month since January, but actual foreclosures vary more widely, because it can take months — potentially even years — for a property in default to be repossessed by the lender or sold to a third party. In Arizona, a lender can foreclose in either of two ways: It can take the borrower to court via foreclosure, or it can bypass the court system and call for a trustee’s sale, which is quicker and less expensive but requires the lender to waive certain legal rights.
Isbel said there’s no indication that the pace of commercial foreclosures is about to taper off. If anything, it’s still building momentum. “We’re at the tip of the iceberg, there’s no doubt,” said Isbel, of Scottsdale-based GPE Commercial Advisors. “It’s just a question of how big it is underneath.”
The inescapable problem for many commercial developers is that they’ve had to maintain the same construction loan payments while lowering rents because of dwindling demand for leased commercial space. While the federal government has created programs to help homeowners in danger of foreclosure negotiate lower mortgage payments, no such program exists for commercial-property owners, and none is expected.
By and large, commercial-mortgage lenders are not modifying commercial-real-estate loans, even as commercial-lease rates have plummeted as much as 75 percent in some areas. Isbel said county records show more than 50 commercial foreclosure sales in June, the most recent full month available, with a total mortgage value of about $54 million. Geographically, they’re all over the map, including the East Valley, West Valley, Scottsdale, and downtown Phoenix. [Note: Read the full article at Metro Phoenix commercial foreclosures rocket.]
