Monday, September 6, 2010

Centerpoint condos sold for $30 million

Downtown Tempe business owners are celebrating Thursday's announcement that Centerpoint Condominiums had been purchased by the Zaremba Group, a national real-estate company based in Cleveland with an office in Scottsdale.

The condos sold for $30 million, dramatically less than the $135 million loan Mortgages Ltd. provided the developer Tempe Land Co. to build the towers.

The condos were marketed for sale after failing to sell at an April foreclosure auction. ML Manager LLC, successor to Mortgages Ltd., was allowed to foreclose on and later sell the towers after developer Tempe Land Co. converted its bankruptcy motion from Chapter 11 reorganization to Chapter 7 liquidation.

Mark Winkleman, chief operating officer of ML Manager, said the sale was a relief to investors.

"This is the largest loan that Mortgages Ltd. made and it's (Centerpoint) our largest asset," he said. "It's important to the investors of Mortgages Ltd. that it be sold."

Mortgages Ltd.'s high-profile backers included former Phoenix Suns players Penny Hardaway and Mark West, professional golfer Jeffrey Quinney, Dial Corp. CEO Malcolm Jozoff and Bill Lewis, whose family founded Phoenix's KTVK-TV (Channel 3).

Winkleman said the sale was the result of "a very intense marketing process that lasted several months. We had initial interest from over 300 potential buyers throughout the United States, Canada and England. Even though the process (resulted in) substantially less than the investors had invested in it, we are confident that this is the highest amount we could have got, and the best buyer for this project."

The sale is subject to approval from the U.S. Bankruptcy Court in Phoenix and a vote by investors. Zaremba owns Barolo Place, a condominium project in Scottsdale, and apartments in Mesa and Peoria.

Seeing the project complete would be a major boost for downtown Tempe, which has struggled in the economic downturn. For downtown business owners who had hoped to see the condos fill with people who would shop their stores and eat at their restaurants, completion of the condos is long overdue.

Vic Linoff is a longtime downtown Tempe landowner and operated a used bookstore on Mill Avenue for more than three decades.

"Obviously, this isn't going to happen overnight . . . but it is a very good thing for downtown," he said. "The buildings are an eyesore. To have people living there is part of what we long envisioned for downtown."

Development of the Tempe condos and several other major Valley real-estate projects funded by Mortgages Ltd., which was Arizona's largest private real-estate lender, stalled after the lender was forced into a high-profile 2008 bankruptcy.

The 22-story tower is nearly complete, while extensive work is needed on the project's 30-story tower. The towers have 375 residential units.

CB Richard Ellis marketed the condo project.

by Dianna M. Náñez The Arizona Republic Sept. 4, 2010 12:00 AM

Centerpoint condos sold for $30 million

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