Archive for June 9th, 2009

AZ Central – 250-room hotel on rise at City-Scape

Published June 9, 2009 Blogroll , Phoenix , Real Estate , Real Estate Articles Leave a Comment

by Jahna Berry – Jun. 9, 2009 10:46 AM
The Arizona Republic

As more windows go up on CityScape’s office tower, the beginnings of a 250-room hotel has begun to rise out of the ground at the CityScape construction site.

The three-block $900 million project will bring shops, offices, restaurants, a grocery store and a pharmacy to downtown Phoenix, the developer says. When it’s complete, CityScape will stretch from First Avenue to Second Street and from Washington Street to Jefferson Street in downtown Phoenix.

The office tower is expected to top out – reach its highest point – around July 15, officials say

“We are getting a floor and half (of windows) up a week,” said Brent Leif construction manager at Hunt Construction Group. “We are right where we want to be.”

Crews recently assembled a third tower crane on the site, which will help build a garage and, later, part of the hotel, Leif added.

In 2011, the San Francisco-based Kimpton Hotels & Restaurants chain plans to open Hotel Palomar, which will include about 165 condos.

The 29-story building will have two levels of shops, 10 hotel floors and 17 floors of residential space, said Jeff Moloznik, development manager for RED Development, the project’s developer.

Construction continues on the first two Cityscape blocks, but the economic slump has delayed work on the third block.

Early plans called for 1,000 condos and a second hotel to be built on the block bound by Washington, Jefferson, First and Second streets.

The developer for that block, Barron Collier, says that it plans to build when the economy improves.

City leaders are closely watching CityScape’s progress.

More than $120 million in city incentives is linked to the deal.

Phoenix agreed to purchase the project’s underground parking garage and pay for repairs to an existing parking garage at a cost of $96.5 million.

In addition, it will waive the property taxes on key components for eight years, worth at least $26 million, according to past city estimates.

www.theholmgroupaz.com

AZ Central – Debt woes challange developer Opus West

Published June 9, 2009 Blogroll Leave a Comment

by J. Craig Anderson – Jun. 7, 2009 12:00 AM
The Arizona Republic

One of the Valley’s largest and most influential developers is considering bankruptcy as its construction debt continues to mount.

Phoenix-based Opus West Corp., the Valley’s second-most-prolific commercial builder in 2008 after retail giant Vestar Capital Partners, confirmed Friday that it has hired an attorney to “explore restructuring options.”

Because of its size and long history, Opus West is considered a bellwether of the local commercial development industry. Recorder’s Office, California-based Bank of the West is seeking repayment of a $30.9 million construction loan for Phase 1 of the center. The center is a 300,000-square-foot complex between 99th Avenue and Loop 101, west of University of Phoenix Stadium. A foreclosure auction is scheduled for Aug. 13.

Right now, that industry is in serious trouble.

“When it can happen to them, it truly can happen to anybody,” said analyst John Smeck, principal and managing member of Johnson Capital in Phoenix, who counts Opus West among his list of clients.

The most recent threat to Opus West’s stability is a pending foreclosure action on its Glendale Corporate Center.

According to documents filed with the Maricopa County

Debt-restructuring agreements with its creditors remain a possibility. Opus West typically provides about 75 corporate jobs, regular employment for hundreds of contractors, and thousands of dollars in contributions to local charities as part of a longstanding pledge to donate 10 percent of its annual profits.

Opus West has built a variety of projects, including the Scottsdale Waterfront Residences high-rise condos, the Arizona Department of Environmental Quality headquarters in Phoenix and portions of the Camelback Esplanade.

It completed nearly 1 million square feet of office, industrial and other commercial space in Arizona last year and manages about 4 million square feet statewide.

Most commercial projects are built with short-term loans that mature within a few years. The developer either must sell the building to pay off the loan or seek long-term financing based on lease revenue from tenants.

In the current economic climate, though, most commercial buildings are worth less than the value of their construction loans, and new tenants are scarce.

Smeck said Opus West is in such straits because it was involved in so many projects when the commercial lending market imploded and property values plummeted last year.

“They were the most active,” he said. “They had the most chips on the table when the music stopped.”

The pending foreclosure is just one of numerous financial blows to strike Opus West, one of six regional operating companies formed by Minneapolis-based Opus Corp.

Those include a lawsuit filed in April by 10 banks contending that Opus West owes them $160 million, the pending foreclosure and bankruptcy of a Texas shopping mall financed with those loans, and the bankruptcy of its Atlanta-based sister company, Opus South, in April.

Opus West’s president and chief executive officer of the past 20 years, Tom Roberts, stepped down in May and was replaced by John Greer, former executive vice president.

Opus Corp. spokeswoman Winston Hewett in Minneapolis indicated that Opus West is considering Chapter 11 bankruptcy reorganization. “We’ve hired an attorney to explore restructuring options,” Hewett said.

Hewett added the company would make an announcement if Opus West files for reorganization, just as it did when Opus South filed on April 22, and when Texas mall operator Hill Country Galleria filed on May 5.

A group of 10 construction lenders led by Bank of America initiated foreclosure action April 14 on the Austin-area mall, which is 73 percent owned by Opus West, according to documents filed with the U.S. Bankruptcy Court for the Western District of Texas.

The banks then filed a lawsuit April 23 in Maricopa County Superior Court, demanding $160 million in past-due loans, interest and legal fees.

Smeck said that every commercial developer is feeling some amount of financial pain and that continued job losses are likely to prolong it.

“Until we get some economic stability, the commercial real-estate market is not going to get better,” he said.

www.theholmgroupaz.com

AZ Central – Take extra steps to spur home sale

Published June 9, 2009 Blogroll , Real Estate , Real Estate Articles Leave a Comment

by Ellen James Martin – Jun. 8, 2009 06:06 PM
Universal Press Syndicate

The house was what real-estate agents call a cream puff. Located in a desirable suburban neighborhood, the “For Sale” property was immaculate inside and out.

But after 10 showings in as many days, the home’s owners were nervous because not a single visitor submitted a bid. Only after they reduced the home’s price by a notch below market value did a serious bidder emerge to buy the place, recalls Lisa Atkinson, a veteran real-estate agent who listed the property.

“These days, buyers are extremely hard to satisfy. This creates major frustrations for the owners of unsold property. To succeed as a seller, you have to deal with the situation proactively,” says Atkinson, who’s affiliated with the Council of Residential Specialists.

Given the high level of inventory on the current real-estate market, owners in many neighborhoods need to take extra steps to hasten the sale of their property. One key move that could intensify interest in your unsold home is to reset the list price slightly below comparable properties in the same area.

Atkinson also says many sellers should resist the urge to submit a counteroffer to any bid that is reasonably close to the current fair market value of their place.

Here are a few tips for homeowners seeking to hasten the sale of their property:
• Consider hiring a professional “stager” for a minimal level of advice.

Staging is the art of transforming a property so potential buyers can visualize themselves living there. Properly done, staging accentuates a home’s attractive features and minimizes its drawbacks.

Many real-estate agents are convinced that hiring a talented stager can increase the odds of selling a property promptly. Working under a full-service contract, most stagers will provide an array of services, such as removing excess furniture and personal items and rearranging the remaining pieces. Often, they also supplement the owners’ furnishings with eye-catching accessories of their own.

Unfortunately, the cost of hiring a professional stager for a full-contract menu of services can run $500 or more and exceed the amount many home sellers can afford, says Michelle Minch, the owner of a staging company called Moving Mountains Design.

But she says cash-strapped sellers don’t necessarily need a stager’s full range of services; some stagers may provide recommendations on furniture arrangement and paint colors, for example.

To find a stager, Minch suggests you visit the Web site of the Real Estate Staging Association (www.realestatestagingassociation.com), or look for stagers in your area and check their Web sites for examples of their work.
• Throw a home-selling party with friends.

Atkinson says traditional open houses rarely lead to a sale because they typically attract few qualified home- buying prospects and are more likely to draw curiosity seekers. Most serious buyers see homes on an appointment basis, she says, during a tour led by their agent.

A better way to ignite renewed interest in your place is to throw a “home-selling party,” inviting your close friends and relatives. This is more likely to lead to a sale because those closest to you will be more motivated to promote the sale of your home than strangers.
• Ask your listing agent to burn up the phone lines with calls about your home.

During the heady seller’s market a few years back, well-priced properties in popular neighborhoods practically sold themselves and listing agents had relatively fewer marketing duties. But now that the buyer is king, the well-honed marketing skills of an experienced listing agent are more important than ever.
• Take full advantage of blooming plants.

It’s nice to have fresh-cut flowers on display throughout your home’s interior. But the cost of keeping fresh flowers around the house could mount up to a tidy sum.

An easier, less expensive alternative during the summer months is to display flowering, potted plants indoors and also to install such blooms in your outdoor gardens, especially in front of your house.

The color of blooming plants is a great way to make any home more attractive, says Minch.

www.theholmgroupaz.com

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