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-   -   Phoenix Development News (3) (https://skyscraperpage.com/forum/showthread.php?t=173764)

Diamonddave Dec 14, 2020 3:27 PM

I drove around downtown Saturday morning late love to see the activity with construction along with the people. Is it just me or does the Derby going at a snail pace?

phoenixwillrise Dec 14, 2020 4:47 PM

Condos
 
Quote:

Originally Posted by DesertRay (Post 9131764)
THIS!!! The condos that combine higher quality finishes and quality management in the downtown area sell quickly. You can tell which condos don't hit this well (look across from the Heard, and the Orpheum). It takes work to do this. EnHance had the misfortune of also being right in the homeless zone. This will likely change over the next 3-5 years as the Hance Park area fills in, but enHance was probably five years too early (and also just feels like it cuts corners on the finishes--fair or not).

Isn't the major problem why they are not building condos is the potential litigation from defective workmanship for up to 10 years on condo construction? That lending institutions are leary of loaning money to condo builders for that reason? From what I hear ambulance chaser attorney's would help incite a feeding frenzy in condo complexes for close to bogus construction defects and get hefty settlements either by extortion or perfecting the lawsuits. Hence not a whole lot of condo construction most especially on a large scale like a high rise.

biggus diggus Dec 14, 2020 4:52 PM

There's a construction defect lawsuit on almost everything lately. The drama at Landmark and Contour are two I'm aware of that would probably make anyone think twice, but this is the USA. Anyone can sue anyone for any reason no matter how ridiculous it may seem - recent news will support that.

There's a risk of lawsuits when you develop apartments, as well.

Obadno Dec 14, 2020 4:53 PM

Quote:

Originally Posted by phoenixwillrise (Post 9133257)
Isn't the major problem why they are not building condos is the potential litigation from defective workmanship for up to 10 years on condo construction? That lending institutions are leary of loaning money to condo builders for that reason? From what I hear ambulance chaser attorney's would help incite a feeding frenzy in condo complexes for close to bogus construction defects and get hefty settlements either by extortion or perfecting the lawsuits. Hence not a whole lot of condo construction most especially on a large scale like a high rise.

Yes construction defect, that is to say lawsuits about construction defect, is a big problem for lenders and for insurance.

PHXFlyer11 Dec 14, 2020 5:18 PM

I get the construction defect issue. We had our own here as well. However condos are still going up all over the country so to me it doesn't fully explain the lack of high-rise condos here.

I thought initially One Camelback would be condos, but not it looks like it's apartments. Very weird. That seemed like the perfect case for luxury condos. There are no balconies however, so I wonder if that is a deal-breaker for condo buyers? I could understand that if it's the case. I'm not sure I'd love to buy a place and have zero outdoor space or be able to step outside to enjoy the view.

Obadno Dec 14, 2020 5:28 PM

Quote:

Originally Posted by PHXFlyer11 (Post 9133282)
I get the construction defect issue. We had our own here as well. However condos are still going up all over the country so to me it doesn't fully explain the lack of high-rise condos here.

I thought initially One Camelback would be condos, but not it looks like it's apartments. Very weird. That seemed like the perfect case for luxury condos. There are no balconies however, so I wonder if that is a deal-breaker for condo buyers? I could understand that if it's the case. I'm not sure I'd love to buy a place and have zero outdoor space or be able to step outside to enjoy the view.

Initially One Camelback was advertised as luxury Condos and North Central is a nice upscale neighborhood but still turned into rentals.

I really don't know why Condo's have not been built downtown but im sure if developers thought they could make money on condos they would be building them.

biggus diggus Dec 14, 2020 5:41 PM

Quote:

Originally Posted by Obadno (Post 9133296)
if developers thought they could make money on condos they would be building them.

This really is all that needs to be said regarding condos vs. apartments and I tried to explain it nicely the other day. No one likes to accept "this didn't happen because the end result wasn't as enticing as this other option." :shrug:

Thanks.

PHXFlyer11 Dec 14, 2020 6:40 PM

Quote:

Originally Posted by biggus diggus (Post 9133308)
This really is all that needs to be said regarding condos vs. apartments and I tried to explain it nicely the other day. No one likes to accept "this didn't happen because the end result wasn't as enticing as this other option." :shrug:

Thanks.

Perhaps, but that ignores the element of risk. Condos likely are more profitable if the developer knows what they are doing, but apartments less risky. So it's not just reward but a risk/reward equation.

I think overall we have a lock of experienced condo developers in town, so we'd need to see developers coming in from other cities. I still would LOVE to see an Optima signature project downtown. I love how they do those projects where it somehow delivers privacy still while being more of a tower-esk design with all the vegetation, balcony variations, etc. My dream would be to see a 30-story version downtown.

biggus diggus Dec 14, 2020 6:49 PM

Quote:

Originally Posted by PHXFlyer11 (Post 9133380)
Perhaps, but that ignores the element of risk. Condos likely are more profitable if the developer knows what they are doing, but apartments less risky. So it's not just reward but a risk/reward equation.

This is true of all investments.

The hardest part about development, and it's what keeps little guys like me from playing, is having to front the money with no guarantee you'll get it back. I even have trouble stomaching the money being temporarily gone when doing a flip, can't imagine how a first-time apartment or condo developer might feel waiting to sell 80% of their inventory to see the thing pencil out or waiting to get the cap to 6% to make the sale.

phoenixwillrise Dec 14, 2020 7:14 PM

Condo's all over the country?
 
Quote:

Originally Posted by PHXFlyer11 (Post 9133282)
I get the construction defect issue. We had our own here as well. However condos are still going up all over the country so to me it doesn't fully explain the lack of high-rise condos here.

I thought initially One Camelback would be condos, but not it looks like it's apartments. Very weird. That seemed like the perfect case for luxury condos. There are no balconies however, so I wonder if that is a deal-breaker for condo buyers? I could understand that if it's the case. I'm not sure I'd love to buy a place and have zero outdoor space or be able to step outside to enjoy the view.

Where? That isn't true of Phoenix, nor San Deigo and not Seattle. Where are you talking about?

PHXFlyer11 Dec 14, 2020 8:04 PM

Quote:

Originally Posted by phoenixwillrise (Post 9133417)
Where? That isn't true of Phoenix, nor San Deigo and not Seattle. Where are you talking about?

I think part of the confusion is semantics. In more urban cities likes Chicago, New York, San Francisco, Seattle often apartments are condos. You buy an apartment. Here, I think apartments are always rentals. Miami I believe they say condo. It's very strange.

Basically what I'm saying is there are lots of high-rise building going up around the country where you can purchase to own. Here it seems like all high-rise development are rentals.

PHX06 Dec 14, 2020 11:24 PM

Lucky 44 Monroe decided to convert to rentals back in 2011, since the builder is now caught up in a 3+ year lawsuit regarding defective balcony railings. Still no access since they were locked up in September 2017, and I'm sure the litigation will drag on for several more years.

CrestedSaguaro Dec 14, 2020 11:34 PM

Quote:

Originally Posted by PHX06 (Post 9133669)
Lucky 44 Monroe decided to convert to rentals back in 2011, since the builder is now caught up in a 3+ year lawsuit regarding defective balcony railings. Still no access since they were locked up in September 2017, and I'm sure the litigation will drag on for several more years.

Strange that their website still advertises balconies. Also, the pool was closed for 2 years and didn't open back up until this past June or July.

PHXFlyer11 Dec 15, 2020 12:30 AM

Quote:

Originally Posted by CrestedSaguaro (Post 9133682)
Strange that their website still advertises balconies. Also, the pool was also closed for 2 years and didn't open back up until this past June or July.

What a shame. It's a nice looking building. Crazy to cut corners to save a buck and basically have a defective high-rise now.

fawd Dec 15, 2020 5:01 AM

Quote:

Originally Posted by PHX06 (Post 9133669)
Lucky 44 Monroe decided to convert to rentals back in 2011, since the builder is now caught up in a 3+ year lawsuit regarding defective balcony railings. Still no access since they were locked up in September 2017, and I'm sure the litigation will drag on for several more years.


You're joking... That's still going on?

Lived in 44 for 5 years and moved out a few months after the balcony situation started... 3 years ago-ish?

I can't believe that hasn't been sorted out yet. HSL is a pile of garbage!

PHX06 Dec 15, 2020 1:28 PM

It's still going on but the 10% discount and the fact that the units are so massive compared to most of the available apartment stock downtown makes it very much worth it. Any price you see online is before the 10% discount.

Not to mention you're only 4 screws away from having balcony access at your "own risk"...

Obadno Dec 15, 2020 5:26 PM

Also most of the residents have found ways to get out non the balcony's anyway

DesertRay Dec 15, 2020 9:21 PM

Quote:

Originally Posted by Obadno (Post 9134327)
Also most of the residents have found ways to get out non the balcony's anyway

Wow!

Honest question: because Arizona doesn't strike me as a particularly tort-friendly state, does the fact that HOAs are so powerful tip the balance away from developers? I would think that with so much development, folks building subdivisions would get hella sued as well if it was totally easy to sue for crappy construction.

biggus diggus Dec 15, 2020 10:06 PM

Not necessarily.

Developers typically turn the community over to the HOA board after all the sales are completed. Almost every HOA board that finds itself spending money on repairs will have an attorney (or twelve) calling them to drum up a case. It happened at Landmark on Central and few attorney homeowners decided to take it to court and they won a substantial judgment. The GC who did the work when they converted from apartments to condos went insolvent and it became a fight with insurance. First it was the plumbing that had to be replaced, now it's the balconies, next it's going to be the HVAC system one stack at a time. They're getting rocked. If you think Arizona isn't a tort-friendly state talk to those guys, they've figured how to to rock the court's wheels off.

Where I'm going with this is the original developer got dragged into this and is also being held responsible.

combusean Dec 16, 2020 12:44 AM

I was under the impression that with Landmark the developer bought a moribund apartment building, slapped a coat of paint on it, and sold it off as renovated condos with problems occurring almost immediately after.

I can think of better examples in tort fingerpointing than the scam those poor buyers suffered. The developer must have certainly known that it was hardly worth the concrete it was made of when they converted it.


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