Phoenix to Reignite Real Estate Market?
- Mar 24, 2011
Phoenix has struggled to finish big developments that were part of the pre-recession wave in the downtown area. A series of companies have been finding it difficult to complete their goals in the challenging economic climate created after the real estate market bubble burst in 2007.
This development downturn has lasted for quite a few years, but the city of Phoenix can now see a potential revitalization, with a number of encouraging moves in the real estate market. This is also supported by claims made by such industry professionals as Steve Ellman, the current owner of Westgate City Center, concerning a re-emergence of commercial and residential development. As current reserves of available space begin to run out, new deals will start being made that will jump-start the Phoenix real estate sector.
One such deal is the sale of the plagued Tempe Towers, probably the most eloquent example of how the recession hit the city of Phoenix. The Centerpoint Condominiums will finally be opened this summer, overshooting the original deadline by three years. After a deal worth $30 million, the new owner, Zaremba Group of Ohio, has high hopes for the high-rise condominium complex. The 22-story tower will open this summer as luxury rentals directed to more youthful residents, while the larger 30-story tower is set for a December inauguration. One statement regarding the new life of the development is the fact that it has been redubbed “West Sixth,” a decision made to reflect the address and the fresh start of the troubled project.
Also making headlines in Phoenix, recent news confirms General Growth Properties’ sale of Arizona Center to Commonwealth REIT. The reported value of the deal stands at $136.5 million, making it the most substantial real estate transaction since the start of the recession in 2008. The sale was mediated by CB Richard Ellis Group Inc. in Phoenix, Chicago and Los Angeles for the seller, while Commonwealth represented itself. This comes as a result of General Growth’s reorganization plan, contained in its filing for Chapter 11 bankruptcy protection.
In development news, the parcel currently serving as a two-acre parking lot near the landmark CityScape in downtown Phoenix could possibly become the next big project in that area. A spokesman for Barron Collier Cos. reported that the lot, which prior to the recession was set to become a condo development, could be the site for a new Hilton Worldwide venue. The office and residential sectors have taken a hit, and there is little chance that a project concerning the two sectors could take life downtown, but the hotel industry seems more than interested in setting up a new location on that very site. RED Development, which constructed CityScape, has itself already begun building a $90 million boutique Palomar Hotel, which will be managed Kimpton Hotels, thus proving the hotel industry’s recent interest in the city of Phoenix.