Phoenix Development News (3)

[CrestedSaguaro]

Originally Posted by combusean

How dare I get moderated by the new kid in town. You're fired Crested.

Haha, I figured you would get to it and I just got a jump on it for ya

[combusean]

^ My feeble brain eventually decides to moderate discussions only when they get out of hand like shouting-out real news or are otherwise incendiary by default like partisan politics.

Or I'm just grouchy and don't have a cloud to yell at.

Although, many moons ago, I created Coffee Talk just for what you used it for my sweet summer child. Thank you for reviving it as a hallmark to my final days on Earth--I hit the ripe old age of 38 recently.

[Diamonddave]

We'll going back to a PBJ article quoting the mayor of Phoenix stating that there would be four projects breaking ground this quarter. Looks like we're only going to get one unless three start up within the next few weeks we'll only be getting the hotel on 1st and Jefferson.

[biggus diggus]

Your buddy I've been saying it for a long time, every product bring built is the same thing. There's little housing diversity downtown.

[Obadno]

Originally Posted by YourBuddy

I have to strongly disagree on there not being a lack of family style condo units in downtown/midtown. Over the past year my research on condos in these areas has been disheartening to say the very least. Even looking at non active listings the amount of options as a whole are a joke. There is a lack of all styles of condo units not just family. I know that Downtown/midtown Phoenix isn’t like other downtowns, but jeez what is here is extremely limited.

There was a massive condo boom until 2006 and then most converted to apartments or simply died in the pre-planning stage.

The condo model does not necessarily work downtown (yet). I would guess they will become more popular once this round of apartments is done, I expect the next building boom cycle will feature more condos and office space.

[YourBuddy]

Everything looks the same and everything going up right now is apartments. The amount of condos and townhomes that are owned as primary residences has to to be minuscule. How many developments in the past 5 years between 7th ave and 7th street and from Jefferson to Camelback have even been developed primarily for ownership? Again I love it in Phoenix and I know it’s not like other downtowns, but even Minneapolis where I moved from has significantly more options for ownership in their downtown area.

[biggus diggus]

Recent condo buildings have not sold well, unfortunately. It seems like the type of resident downtown is more transient - 26 year old software engineer who wouldn't mind working remotely in London next year or Tokyo the year after - so rentals work really, really well. There are a lot more 20 somethings with low six figure salaries than I think most people realize, they can afford to buy a condo but they want to feel free - turning their home into an asset and being a landlord seems very low on their list of wants. That mindset might be slowly reversing but that's my opinion of why there are so few condos/townhouses downtown.

A friend runs the local arm of Sencorp, a Chilean developer, and they struggled massively with enHance. They were going to build more condos at the old car wash but the signs were not good. Disregard why their product didn't work (I could give a lot of reasons other than "the condo market") but I digress, their feeling is that condos don't work and they're obviously not the only ones right now.

My issue is more that the apartments being built are the same apartment over and over again. It's uninteresting and it doesn't bring a variation of race/age/income that I think is vital for a vibrant city.

[CrestedSaguaro]

Well. This could be changing soon. Article on potentially more headquarters and manufacturing plants coming our way:
https://www.abc15.com/news/region-ph...spite-pandemic

I really hope a couple of these can look at downtown for their headquarters. Could mean a couple new office towers and some need for condo's to be built.

[ASU Diablo]

Originally Posted by biggus diggus

A friend runs the local arm of Sencorp, a Chilean developer, and they struggled massively with enHance. They were going to build more condos at the old car wash but the signs were not good. Disregard why their product didn't work (I could give a lot of reasons other than "the condo market") but I digress, their feeling is that condos don't work and they're obviously not the only ones right now.

I'm really glad you brought this up. Does this mean that corner lot (Los Olivos Car Wash) is in a holding pattern or will they be pivoting to apartments?

[CrestedSaguaro]

Originally Posted by ASU Diablo

I'm really glad you brought this up. Does this mean that corner lot (Los Olivos Car Wash) is in a holding pattern or will they be pivoting to apartments?

Last I seen, there was a plan review submitted for retail to be built on the lot. I haven't followed up on it since. That was around a year ago.

[YourBuddy]

I think another part of it is that until right before the pandemic hit there wasn’t a grocery store in downtown before Fry’s. Not having that option close probably turned a lot of interested owners away from downtown. Now with that and the increased apartments and population in the downtown core, we will see other retail and entertainment options which will only help appeal to other people interested in owning downtown.

[biggus diggus]

Originally Posted by ASU Diablo

I'm really glad you brought this up. Does this mean that corner lot (Los Olivos Car Wash) is in a holding pattern or will they be pivoting to apartments?

They don't know anything about apartments and finding a partner hasn't worked for them, we don't discuss anything too specific. He has a different idea for the land every few months but nothing happens.

His branch of the company operates at a very limited capacity. They know how to build condos and they know one GC. But this is the same kid who's calling me asking to rent homes to re-let as AirBnB, he thinks AirBnB is the key to wealth and has at least 6-8 homes running right now. Fuck all. Doesn't make sense what he does.


Totally unrelated but I'd like to add one of my clients is a local microchip exec. I will not go into further detail about him! He says the Taiwan microchip company is making Apple's new chips and he expects a massive influx of supply chain companies coming into the area, his final expectation was that we should see another decade or more of tech growth.

[biggus diggus]

Originally Posted by CrestedSaguaro

Last I seen, there was a plan review submitted for retail to be built on the lot. I haven't followed up on it since. That was around a year ago.

That was one of his half-baked ideas that disappeared as fast as it came up.

[Obadno]

Originally Posted by biggus diggus

Recent condo buildings have not sold well, unfortunately. It seems like the type of resident downtown is more transient - 26 year old software engineer who wouldn't mind working remotely in London next year or Tokyo the year after - so rentals work really, really well. There are a lot more 20 somethings with low six figure salaries than I think most people realize, they can afford to buy a condo but they want to feel free - turning their home into an asset and being a landlord seems very low on their list of wants. That mindset might be slowly reversing but that's my opinion of why there are so few condos/townhouses downtown.

You are pretty spot on (except of the salary amounts ) but basically as somebody who just wrapped up his 20's with buying a condo I plan to turn into a rental and friends of mine who are at long last purchasing homes. The millennial patter is basically to do everything about 5-7 years after what was considered normal for Baby Boomers and Gen X. This is both cultural and due to the relative cost of things like College and housing to incomes and high debt burdens.

20 years ago people were buying homes and starting their families at 25 now they are doing it at 30 Remains to be seen if that is long term good or bad.

[biggus diggus]

I think waiting to make sure one is comfortable with their decision is a good sign, personally.

Congratulations on your new condo.

None of this bothers me, I own a lot of rentals so this generation of twenty-somethings is making me a lot of money. The gravy train will stop when they all decide they want to be homeowners. Ebb and flow. I might be dead before that happens.

I must tell you, though. This year I have had a lot of interaction with these kids. I've got a girl who works in tech renting my Coronado house who grosses about $140K with no kids or husband. Just a dog and a Jeep Liberty. Credit was good enough she could have bought a $400K - $600K house no problem, but she wanted to rent. I'd say I've dealt with 6-8 versions of her this year.

[Obadno]

Originally Posted by biggus diggus

I think waiting to make sure one is comfortable with their decision is a good sign, personally.

Congratulations on your new condo.

None of this bothers me, I own a lot of rentals so this generation of twenty-somethings is making me a lot of money. The gravy train will stop when they all decide they want to be homeowners. Ebb and flow. I might be dead before that happens.

I must tell you, though. This year I have had a lot of interaction with these kids. I've got a girl who works in tech renting my Coronado house who grosses about $140K with no kids or husband. Just a dog and a Jeep Liberty. Credit was good enough she could have bought a $400K - $600K house no problem, but she wanted to rent. I'd say I've dealt with 6-8 versions of her this year.

I've had the condo for about 2.5 years but I was early for my general peer group beside the old school outliers who got married to their college sweethearts young (and young for millennials means like 24/25)

[CrestedSaguaro]

Originally Posted by biggus diggus

That was one of his half-baked ideas that disappeared as fast as it came up.

Thank God. That's why I didn't even bother posting it. I just shook my head and moved on (probably after uttering a few not so nice words to myself).

Seriously though. It seems apartments are a safe bet even with an epidemic raging. Why are they so resistant on putting up a 4 or 5 story development? It would probably do quite well on that corner.

[biggus diggus]

They don't know how. Developers with experience don't want to partner with someone who has never done it. He's in over his head, just look at the results with enHance. If you're the type of person who thinks renting houses, furnishing them, and operating them as AirBnBs is the key to wealth, you're definitely in over your head and have no business developing apartments.

[PHXFlyer11]

I don't believe that condos downtown don't work. I think that condos that LOOK LIKE apartments don't work. For example, the townhome models seems to work very well in the core, but it's not completely realistic in most areas of downtown.

In addition, I think high-end condos works, ceiling to floor windows, high quality construction, nice finishes, etc. The problem is many of the condos built are not that, they are apartments trying to me marketed as condos. That's for example why The Edison did so poorly (look at the building BTW, it's crooked all over) it looks cheap. It looks like apartments.

On the other hand, I live in one lexington and you can't even find a place in here unless you want the penthouse for a cool $1.2M. This makes me think something like proposed Jefferson would do very well. But not much of a market anywhere cheaply done condos.

[ASU Diablo]

Originally Posted by PHXFlyer11

I don't believe that condos downtown don't work. I think that condos that LOOK LIKE apartments don't work. For example, the townhome models seems to work very well in the core, but it's not completely realistic in most areas of downtown.

In addition, I think high-end condos works, ceiling to floor windows, high quality construction, nice finishes, etc. The problem is many of the condos built are not that, they are apartments trying to me marketed as condos. That's for example why The Edison did so poorly (look at the building BTW, it's crooked all over) it looks cheap. It looks like apartments.

On the other hand, I live in one lexington and you can't even find a place in here unless you want the penthouse for a cool $1.2M. This makes me think something like proposed Jefferson would do very well. But not much of a market anywhere cheaply done condos.

Agreed.

MetroWest has had success with townhomes with both of their recent projects, Townhomes on 3rd and McKinley Row. The market is hot right now. Which is why I'm confused as to why Residences on 2nd (NWC of 2nd Ave n McKinley) has not yet broken ground. Not sure what the delay is...