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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: biometricgngboy who wrote (15144)	11/16/2003 8:35:43 AM
From: biometricgngboy	Read Replies (1) \| Respond to of 306849

A high-rise house of cards? Luxury-condo boom raises concerns Glen Creno and Catherine Burrough The Arizona Republic Nov. 16, 2003 12:00 AM The sudden rush to build luxury high-rise condos in metropolitan Phoenix has some wondering who's going to fill the plush new pads and others asking why the city didn't have them sooner. The success of Esplanade Place, which sold out to business big shots, sports stars and other deep-pocketed buyers, helped bring other developers into the game. Now, there are at least six other pricey condo projects chasing buyers ready to shell out hundreds of thousands, or millions, for a piece of the trend. What's the attraction in a city where $1 million still isn't chump change in residential real estate? Developers say these buyers want the so-called urban lifestyle where they live in the thick of restaurants and shopping but don't have to take care of a big back yard. "These people want a maintenance-free lifestyle," said Keith Mishkin, a broker for Cambridge Properties, who sold the Esplanade and represents other condo projects. "They've been there, done that, had the yard. They want to be able to lock it and leave and go enjoy life." Of course, condos aren't new to metro Phoenix. There are plenty of them scattered around the region in low-rise complexes, offering various levels of amenities. What is new is the surge of interest in elite, high-rise buildings sporting condos that are dressed to kill, accessorized with plasma televisions, Sub-Zero fridges and splashy art. But in a city known for its preoccupation with "affordable" housing, there's a question about when this niche market will top out. Several analysts caution that no one has a reliable reading on that. They noted that at least one notable luxury project, Crystal Point in Phoenix, stumbled coming out of the gate before Esplanade Place clicked. They worry about when the next big building will be one too many. "The success of the Esplanade has been read far and wide and now we're going to have clones of the Esplanade," Arizona housing analyst R.L. Brown said. "And each of those developers expect to have the same success. But no one really knows what the depth of the luxury-condominium market is in the region. "It's always scary to me when you get these celebrity ego trips going on," Brown added. "Those are not real. Sure, they bought the unit, they paid the money. That doesn't mean you will have that many celebrities at the other deal." Esplanade Place benefits from its choice location at the southeast corner of 24th Street and Camelback Road. The Arizona Biltmore resort is a short hop up the street, chichi Biltmore Fashion Park is steps away and the Ritz-Carlton hotel is next door. The intersection is packed with prestigious office buildings. Tony and Jonna Christensen, who own the Copenhagen furniture stores in the Valley, moved from a house near the Phoenix Mountains Preserve to Esplanade Place. They like that the location is close to restaurants, stores, the airport, Scottsdale and their headquarters store, which is just down the street. "We just love the freedom we have now, not having a big yard and pool, close to where everything is happening," Tony said. "We have a great view. We can walk to everything." Three other condo towers are ready to crash the party there. Real estate mogul Donald Trump and the Bayrock Group want to build 100 condos and a Trump International Hotel just east of the Esplanade on the site of a nearly vacant shopping center. The Patrinely Group of Houston is marketing the Residences at 2211 Camelback Road, a planned 12-story building with 86 condos on the south side of Camelback. And Optima Inc. of Chicago expects to start construction in May on a 15-story, $90 million condo tower near the southwestern corner of the intersection. Optima President David Hovey said the building should be ready in 2005 with 250 condos, ranging from $200,000 to $1.5 million. Other condo projects in the works: the Scottsdale Waterfront, the Landmark near Kierland in Phoenix, and Hayden Ferry Lakeside in Tempe. "If it all hit at the same time, there would be too much competition," Mishkin said. Despite the slew of luxury high-rises under way, some analysts say the Valley is still behind the trend. Other Sun Belt cities like Denver, Las Vegas and Dallas have many more new residential towers with even loftier prices. "It has already happened in other areas, why not Phoenix?" said Stanley Paul Cook, a real estate analyst with Landiscor Aerial. "The Valley has a strong second-home market, and some people don't want to drive 45 minutes out to Carefree or north Scottsdale." azcentral.com