Homes that fall into foreclosure in Phoenix are sold at a public auction. The highest bidder becomes the new owner. The former owner then has to move out.
Departing owners have five days under Arizona law to vacate the property. But in the overheated foreclosure market that has come in the wake of the metropolitan Phoenix housing crash, some people are being told to get out the same day their house is sold at auction. more…
Several new businesses, including a grocery store, a bookstore and a variety of restaurants, are opening on Camelback Road between Central Avenue and 40th Street.
Retail brokers say the market is showing more activity, as retailers that once couldn’t afford to locate in the Camelback Corridor are finding good buys there during the recession.
“Welcome to the new decade, where rents are advantageous for renters,” said Larry Ortega, senior vice president of retail properties for Colliers International in Phoenix.
Todd Folger, senior vice president of SRS Real Estate Partners in Phoenix, said rents along Camelback are down on average between 10 percent and 15 percent, compared with 35 percent to 50 percent in outlying areas of the Valley.
Although rents haven’t declined nearly as quickly as they have in other neighborhoods, the Camelback Corridor has become accessible to some retailers that wouldn’t have considered it before.
A case in point is Half Price Books, which opened last month at 2102 E. Camelback Road in a former snowboarding shop.
“Three or four years ago, we would not be able to find a home for them in the Camelback Corridor because rents were so inflated at the time,” said Folger. “Obviously, with the recession, they were very excited to take advantage it.”
This is Half Price Books’ third location in the Valley. The Dallas-based retailer has about 100 stores in 16 states.
A franchisee for Culver’s, a Wisconsin-based burger and custard chain, was able to secure an empty lot at 825 E. Camelback through an unconventional transaction.
James DeCremer, vice president of Strategic Retail Group in Phoenix, represented an investment group that wanted to sell the promissory note attached to the property. After determining the best use for the property might be a fast food vendor, DeCremer made a connection with a Culver’s franchisee.
“This is not a typical cookie-cutter real estate deal, but this particular franchisee was a little less risk-averse,” DeCremer said.
The franchisee purchased the note and built the restaurant within about a year, opening in early February. Culver’s now has five locations in metro Phoenix and about 400 across the country.
Another burger joint is scheduled to open March 10. Smashburger, which already has two locations in the Valley, has opted for a site at the Camelback Colonnade, at 1949 E. Camelback.
At the southwest corner of Camelback and 40th Street, a Fresh & Easy Neighborhood Market is moving into the space once occupied by Wild Oats. The small neighborhood shopping center is undergoing an exterior remodel, with Fresh & Easy being the focal point.
At the Esplanade on the southeast corner of Camelback Road and 24th Street, two new tenants have signed leases. Picazzo’s Gourmet Pizza, Salad & Pasta will open by summer, and City Market & Deli should be open within a month, according to Summer Davis, a senior associate with Cushman & Wakefield of Arizona, which participated in the deal.
Perhaps the biggest action along the Camelback Corridor is the new Camelback Toyota dealership being built on the northwest corner of Camelback and 16th Street. The $20 million facility will open in May, according to Michael Pacheco, director of real estate construction for Van Tuyl Group, owner of Camelback Toyota.
Pacheco said another dealership the company owns will move into Camelback Toyota’s current location at 1333 E. Camelback Road.
David Vine, director of real estate for Smart & Final, said the company will open a grocery warehouse in September at 20th Street and Highland Avenue, in the former Linens ‘N Things site.
New to Camelback Corridor
Yogurtology: 2025 E. Camelback Road, coming soon
Tavern: 2650 E. Camelback Road, coming soon
Stingray Sushi: Biltmore Fashion Square, opening soon
Zinburger: Biltmore Fashion Square, opening soon
Fitness 4 Home Superstore: 1577 E. Camelback Road, opened recently
St. Francis Restaurant: 111 E. Camelback Road, opened late last year
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.
Dave Clark, CEO of Mainstreet Ingredients of La Crosse, Wis., confirmed that his company is behind the winning bid. Mainstreet recently created MSI West, a limited-liability company registered with the Arizona Corporation Commission.
“We are looking to diversify,” Clark said. “We’re very excited about this.”
The company has purchased real estate in other states and started looking around the Phoenix area last year.
“We like what we see in downtown Phoenix,” Clark said. “We feel this will be a good investment, but we’re not here to turn a dollar.”
Clark said he didn’t want to talk about plans or other participants in the deal until the transaction closes, but said he expects the community and city officials to be pleased when that information is revealed.
He did not disclose whether the property would remain a luxury brownstone community of multimillion-dollar homes — the original vision of Phil and Mollie Anderson, owners of Pro Star Realty Inc. and founders of Central PHX Partners LLC, the Chateaux’s development entity.
The project was designed as 21 five-story residences with private elevators and rooftop terraces. The announced prices ranged from $2.8 million to $4.5 million per unit, but none were sold.
Desert Hills Bank provided the first construction loan, but the relationship soured when the bank filed a lien on the property. The late Scott Coles, then CEO of Mortgages Ltd., stepped in to salvage the project, saying he believed in what the Andersons were trying to accomplish.
According to Winkleman, Mortgages Ltd. loaned Central PHX Partners $37 million. When that was not enough to complete the development, Coles took back the property in spring 2008.
In an April 2008 story by the Phoenix Business Journal, Coles said the loan was in default. “I always try to work with these guys, but I have to protect my investors,” he said in that story.
Coles committed suicide on June 2, 2008, thrusting the entire Mortgages Ltd. loan and property portfolio into limbo.
Within a month of Coles’ death, several borrowers forced Mortgages Ltd. into Chapter 11 bankruptcy. After more than a year, a reorganization plan was put into place with Winkleman, former commissioner of the Arizona State Land Department, named to administer the loans.
Winkleman said his sole responsibility is collecting on those loans, either from the borrowers or through foreclosure actions, and paying investors whatever can be collected from the proceeds. Winkleman said several bids were submitted prior to the Chateaux on Central auction.
“We received several offers, but this buyer took the time to carefully inspect the project and proved to us that they had the funds to close the transaction,” Winkleman said.
According to Mainstreet Ingredients’ Web site, Clark founded the company in 1989 “with an in-depth understanding of the dairy and food markets and a commitment to the highest possible standards for the food industry.”
The company employs food scientists who have created trademarked food stabilizers, protein products, and dairy-based and bakery ingredients. The company shipped 125 million pounds of product last year, according to the site.
Get Connected
Mainstreet Ingredients: www.mainstreetingredients.com
Chateaux on Central: www.chateauxoncentral.com
ML Partners LLC: 623-234-9560
This spring and summer, downtown Phoenix’s $900 million CityScape development will start to show signs of life.
In early April, the first office tenants will begin to move into the 27-story tower at First and Washington streets. As the weather gets warmer, shops, restaurants and a reconfigured Patriots Square Park will open. Next year, there will be more to see: Travelers will be checking into the 240-room Hotel Palomar near Central Avenue and Jefferson Street. more…
Pre-foreclosure in metropolitan Phoenix climbed in February, dashing hopes that the housing market is starting to recover from the crash.
In January, pre-foreclosures, known as notice-of-trustee sales, fell to their lowest level since late 2008. The significant drop had some housing-market watchers hopeful more lenders were working with borrowers on loan modifications early on and more borrowers could afford their monthly mortgage payments. more…
Question: At a bank foreclosure sale, our investment group purchased a home in Gilbert. Our plan was to “flip” the home to another buyer for a profit after we made $20,000 worth of improvements and repairs to the home. Although we knew there was a tenant in this home, the bank’s agent had said that this tenant had only a verbal month-to-month lease. When we furnished the tenant with a five-day notice to move out, as we have done with other foreclosure homes that our investment group has purchased, the tenant showed us a one-year lease signed by the former owner of the home. This lease has seven months remaining. more…
Westcor plans to pull out of the landmark Metrocenter mall and leave its former partners with the task of inventing a viable future for the troubled property.
The longtime Phoenix mall developer confirmed it is “transitioning out” of the management of the 1.4 million-square-foot center and will give up a 15 percent ownership stake in the property. more…