Phoenix Development News (3)

[Don B.]

A cock in the hand is worth two in the bush.

Actually, I prefer to read positive news. But Phoenix is on a roll lately..."just the facts, maam."

The Phoenix area had the steepest drop in rental rates of any U.S. city in Q4 2009 at -8.7%.

http://www.azcentral.com/business/realestate/articles/2010/03/02/20100302biz-catherine0303.html

Pre-foreclosures in metropolitan Phoenix climbed in February, dashing hopes that the housing market is starting to recover from the crash. But in February, there were 7,604 pre-foreclosure notices filed by lenders in metro Phoenix, up from the 6,762 in January, the Information Market reports.

http://ebr.eller.arizona.edu/DataEntry/Forecast.aspx

In Arizona, the economy is still contracting and it will be well into 2011 before recessionary forces recede. A great deal of damage has been wreaked, and it will take years to repair. It will be 2013 or beyond before Arizona’s nonfarm employment returns to its pre-recession levels and for unemployment to drop below 6%.

http://abcnews.go.com/Business/commercia...rns-congressional-panel/story?id=9799869

Commercial Real Estate Threatens Economic Recovery (2-11-10)

Commercial real estate losses -- empty office buildings, shops and hotels whose owners cannot make mortgage payments -- pose a serious threat to the stability of the country's banks and the ongoing economic recovery, a watchdog group warns in a new report out Thursday. A new study shows that home prices are seven percent below last year."A significant wave of commercial mortgage defaults would trigger economic damage that could touch the lives of nearly every American," says the Congressional Oversight Panel, which was created by Congress in 2008 to "review the current state of financial markets and the regulatory system."

--don

[Leo the Dog]

Don, I don't know why they're hating on you, we have major hurdles to clear before we are out of the woods. We may actually be in worse shape right now than pre-crash 9/08.

And because we are all inter-twined together as a nation and world, (Globalization) when one of us goes down the tubes, we drag the rest with us. It was only a few localities (Phx, LV, SoCal, S.Florida) that destroyed the entire US housing market and spurred bank failures essentially freezing credit nationwide.

So when Greece fails, it'll drag Europe down, which will effect the US which will hurt China. And when CA fails, that'll hurt everybody in the US, which will hurt Europe and China. Japan holds more US debt than China currently and they're the Greece of Asia. Many countries' credit rating is about to drop, making their debt payments skyrocket. Its a game of domino's, a house of cards, whatever one wants to call it, but the worldwide financial system is in worse shape today than ever before.

[Vicelord John]

Whats so great about greece that you liken it to japan?

[Leo the Dog]

Originally Posted by Vicelord John

Whats so great about greece that you liken it to japan?

I'm just talking about their finances. The one and only thing they have in common is their financial situation. Greece may have to sell off some of their islands to make debt payments. Its not just Greece, one can toss in Spain, Portugal, France, Ireland and the UK into the mix too.

[PHX31]

Originally Posted by HooverDam

Do you beat off to bad news? you sure seem to love it.

Yes, he does, he has a whole fantasy about reading bad news about Phoenix while the Titanic is sinking and he's stuck in the bathroom.


Here's some good-ish news, which will turn off don:

While much of
our city, state and country has been experiencing economic contraction, Downtown
Phoenix has actually been experiencing gains and growth in certain segments of
it's economy. Here are a few stats for your consideration:

. Retail Sales in citywide Phoenix were down 5.5% in the 3rd Quarter of 2009, they
were up 4.1% in Downtown.

. Hotel revenues in the same Quarter were down 5.5% Citywide, but up 5.6% in Downtown.

. Since 2007, Downtown Phoenix has experienced a net gain of 29 new Restaurants.
9 more are expected to open in 2010.

[glynnjamin]

Actually you need to be more worried about Spain than Greece.

And Leo, I think your hyperbole is a poor example. The reality is that when different currencies do poorly, others benefit. So if/when Spain fails and ruins the Euro, Americans will benefit because we will be able to get more european goods and services for cheaper. That will, in turn, begin to drive their economy, and strengthen it. Basically, when California fails, the Chinese are able to buy up a bunch of stuff in California and make investments there because their money will go farther. That helps California because it eliminates certain financial burdens and puts money into the market that can then be used to purchase other goods.

[Don B.]

^^ That's good to see, but downtown Phoenix is not an island unto itself. As the suburbs go (and Phoenix's suburbs are massive and substantial), so goes the city.

--don

[Vicelord John]

Originally Posted by Don B.

^ That's good to see, but downtown Phoenix is not an island unto itself. As the suburbs go (and Phoenix's suburbs are massive and substantial), so goes the city.

--don

Yes it is. Everything north of Campbell does not exist.

[Don B.]

^ LOL...

--don

[gymratmanaz]

THANKS PHX31. Cool news!

[Vicelord John]

http://blogs.phoenixnewtimes.com/bella/2010/03/craig_demarco_planning_new_res.php

Craig DeMarco Planning New Restaurant and Sweet Shop
By Michele Laudig in Chow Bella, Laudig, New Restaurant Alert, NewsWed., Mar. 3 2010 @ 3:52PM


​Last summer, when Postino founder Craig DeMarco bought a vintage strip mall just north of Postino Central, he promised that a new concept was in the works.

Now, after months of research, plans are finally rolling for not one but two new places he'll be opening in the 1940 building at Central Avenue and Oregon.

There will be a new restaurant called The Windsor --- named after the Windsor Square neighborhood where it's located -- as well as a homemade ice cream and pastry shop called Churn. The goal is to open both on September 1.

 

"We really want these to be for the neighborhood," DeMarco says, noting that Postino Central already attracts a strong local following, evidenced by many more pedestrians and folks on street cruisers coming to the restaurant.

DeMarco and his wife Kris have teamed up with Lauren and Wyatt Bailey (who are also partners at Postino Central) for the new project. Although DeMarco is a partner with LGO Hospitality, this will not be affiliated with the restaurant group.

There will not be a retail presence here, he explains. "It'll be more of a modern diner with a responsible bar," a la the original Postino location. Merz Project is working on the restaurant design.

The Windsor will serve breakfast, lunch, and dinner, with classic comfort foods as well as lighter dishes and salads. One decadent option will be a "horseshoe," with hamburger meat, cheese, and fries, all pressed between slices of Texas toast.  There will also be homemade soda on tap, made from seasonal fruit.

"There's a pent-up demand for this," says DeMarco.

[bwonger06]

Originally Posted by combusean

^ Viad center's owners faltered at spending other people's money at the detriment of everyone else. That doesn't surprise me.

National Electric Benefit Fund came to Arizona with their own money, built 1CPE, saw that it was faltering and put MORE money into it and now it's 100% occupied.

The people that actually invest themselves here will do just fine.

Not true... developers never put all their equity into their developments. They put enough to get a construction loan, get the placed filled up and then sell it to a private equity/reit/trust/etc.

Viad so happened to be one of these private equity companies that bought the property from the developer (or more likely from another private equity). They bought the property back in the boom of the market and with Cap Rates shooting up, rental rates going way down, and very high vacancy, it makes no sense for Viad to pump more equity into the property because it is going to take a very long time before they break-even.

[HooverDam]

Originally Posted by Leo the Dog

Don, I don't know why they're hating on you, we have major hurdles to clear before we are out of the woods.

Its not whats being said, its sometimes how its being said. Its like Talton, I agree with his end goals and a lot of what he has to say, but he comes across as such a negative gripper, it gets tiring. Lately Don seems to just be highlighting the negative and it can be sorta a drag.

Originally Posted by VicelordJohn

http://blogs.phoenixnewtimes.com/bella/2010/03/craig_demarco_planning_new_res.php

Craig DeMarco Planning New Restaurant and Sweet Shop

I read that as 'sweat shop' 3 times because Im stupid.

[Don B.]

Personally I prefer negative griping to negative gripping, but I digress.

Actually, I'd post positive economic news for Phoenix, but there isn't much of that lately, now is there? This is what happens to a one-horse economy built around sprawl and construction of single family homes as your dominant industry, and Talton warned of these things years ago when the party was still roaring hard. This is why Phoenix is facing $200+ million deficits and the state is selling off their office buildings for a lease back scheme. Face it, especially when it comes to state funding, Arizona is the poster child for running a Banana Republic within the United States. Mississippi of the west comes to mind...

Let's see:

313,000 jobs lost since 2006 (second highest percentage lost of all major U.S. cities)
Unemployment rising to nearly 10% from 3%
A dozen high-rise buildings abandoned or in foreclosure, perhaps more
23% of the single-family homes in Phoenix have been foreclosed, are in foreclosure, or are behind as of this writing
Whole suburban neighborhoods ravaged
New construction reduced 90% from 70,000 homes per year to 7,000
A median real estate price of $125,000, down from $266,000 in 2006 and now lower than cities like Salt Lake City, Kansas City, etc. (fourth worst in the U.S.)
17,000 businesses lost in Phoenix since 2006
A 17% drop in retail sales since 2006

Just calling a spade a spade. Sorry I don't run around with my fairy wings on with fruity tights trying to bring oodles of joy to people's lives as you seem to think that's the only thing I should do.



--don

[dtnphx]

Wisconsin company to buy Chateaux for $7M
Phoenix Business Journal - by Jan Buchholz

A Wisconsin company that manufactures and distributes food-processing ingredients has been selected to purchase the opulent Chateaux on Central brownstone project. The winning bid: $7 million.

The unfinished residential development at the northwest corner of Central Avenue and Palm Lane has been financially troubled since construction started in 2005. All forward movement stopped when the lender, Mortgages Ltd., took it back in 2008 shortly before that company was forced into Chapter 11 bankruptcy protection.

Mark Winkleman, chief operating officer of ML Manager LLC, said MSI West Investments LLC submitted the winning bid for the Chateaux. Closing on the property is scheduled for March 12.

ML Manager is the court-approved entity administering the Mortgages Ltd. loan portfolio in the wake of the lender’s bankruptcy. The Chateaux is one of the first Mortgages Ltd. properties to be sold off.

-------------------

First, Hotel Monroe, Century Plaza then this, and next month Centerpoint in Tempe goes to auction. It's all good. Investors get properties for pennies on the dollar. Now the properties won't languish because now they have investors who need to maintain (or grow) value. Just as Century Plaza turned into One Lexington and brought a new price point and energy, is what will begin to happen here. Maybe the Hotel Monroe turns into offices, or stays as a proposed hotel or Chateau being scalled back as apartments or subdivide the massive floorplans into condos, this is what starts recoveries....

[nickkoto]

^
Heh. Wasn't that the asking price of about 3-4 units?

[PHX31]

OK, Don, it's not so much the "gripping" or the negativity... it's the broken record. We get it. I swear you could be a forumbot, programmed with 5 responses to any thread out there:

1. posting short short pictures
2. posting the same crap about Phoenix
3. posting the same crap about illegal immigrants, which also ties into Phoenix
4. cutting and pasting legal verbiage
5. posting a picture of the titanic (can be in reference to Phoenix or law school).

[PHX31]

Originally Posted by nickkoto

^
Heh. Wasn't that the asking price of about 3-4 units?

I think the asking price of a single unit was a long the lines of $5M, wasn't it?

Say what you will about the faux-victorian/brownstone architecture. They're in a sweet location and having 5 really nice stories of an urban brownstone would be awesome. I hope someday they open.

[pbenjamin]

Originally Posted by PHX31

I think the asking price of a single unit was a long the lines of $5M, wasn't it?

I think that they started just under $3M.

[Leo the Dog]

Originally Posted by PHX31

I think the asking price of a single unit was a long the lines of $5M, wasn't it?

Say what you will about the faux-victorian/brownstone architecture. They're in a sweet location and having 5 really nice stories of an urban brownstone would be awesome. I hope someday they open.

I absolutely love the look. If only developers in Phx would build more of these (for both rent/sale), we have plenty of dirt lots in DT, lets build row houses/brownstones and actually develop real neighborhoods.