Phoenix-area condo projects to reopen next month

Three Phoenix-area condo projects that had been shut down and repossessed by their lender are expected to reopen for new sales in November, thanks in large part to the federal government.

The projects are 44 Monroe in downtown Phoenix, 3rd Avenue Palms in Phoenix and Safari Drive Scottsdale, near Scottsdale Fashion Square mall.

The properties are undergoing renovations and awaiting Arizona Department of Real Estate approval to reopen their sales offices, according to the new owner, Chicago-based ST Residential.

Safari Drive will have 89 units available for sale beginning at $249,500. 44 Monroe will have 196 units available starting at $197,500, while 3rd Avenue Palms will have 74 units available starting at $80,000, a company news release said.

ST Residential is an investment and debt-resolution firm that is 60 percent owned by the Federal Deposit Insurance Corp.

Unlike the Resolution Trust Corp., which the federal government formed to dispose of failed lender-owned assets two decades ago following the savings-and-loan crisis, ST Residential also involves a group of private-equity firms, led by Starwood Capital Group.

All three properties had been owned by Corus Bankshares Inc., the holding company whose bank was taken over by regulators in September 2009.

Corus, based in Chicago, sought protection from creditors in June, filing for Chapter 11 reorganization in U.S. Bankruptcy Court.

At the same time, ST Residential was formed for the sole purpose of buying $4.5 billion worth of residential real-estate assets that Corus had repossessed, ST Residential CEO Wade Hundley said in an interview Thursday.

Hundley said about 30 percent of the assets are owned outright by ST Residential, and the rest are being financed with "favorable lending terms" by the FDIC.

The result is that ST Residential has cash and time, something Hundley said that most condo project owners lack.

"While most companies are trying to cut costs and save money, we're investing in these properties," he said.

Two of the projects, 44 Monroe and Safari Drive, began construction in 2006, Hundley said. Third Avenue Palms was a condo-conversion project initiated in 2005 on an apartment complex that was built in 1999.

In all three cases, the original developers slammed into a wall when the condo market plummeted in 2007. Only 3rd Avenue Palms had sold a significant amount, about half of the project's 155 units.

The other two projects had sold just over a dozen units each when their sales offices were shut down about a year ago, said Mike Messenger of Geoffrey H. Edmunds Realty, the Scottsdale company hired to handle sales and marketing for all three properties.

Edmunds also will set prices for the new units and help manage the homeowners associations.

"These are projects that we're bringing back to life, so to speak," Messenger said.

by J. Craig Anderson The Arizona Republic Oct. 22, 2010 12:00 AM



Phoenix-area condo projects to reopen next month