Sunday, August 7, 2011

Residents fill long-empty Tempe tower

Moving trucks lined Mill Avenue side streets as more than 250 residents lugged their belongings into West 6th, the 22-story apartment high-rise in downtown Tempe that opened Monday after sitting vacant for years.

Business owners, developers and city officials watching the mass move into West 6th called the spectacle a much-needed boost for the Valley's real-estate market.

The 2008 bankruptcy of Mortgages Ltd., then the state's largest private commercial-real-estate lender, sunk dozens of prominent Valley developments.

West 6th, then Centerpoint Condominiums, was the failed lender's biggest asset. Investors put between $135 million and $180 million into developing the 22- and 30-story towers on 5 acres just west of Mill.

In February, the property sold for a bargain of $30 million to Zaremba Group, an Ohio-based developer with an office in Scottsdale.

"They've taken an eyesore and turned it into an icon," Tempe Mayor Hugh Hallman said of Zaremba finishing Tower 1 within six months of buying the property.

Kent Chantung, director of development for Zaremba's Scottsdale office, announced that Tower 1's 189 units are all leased. And leasing of West 6th's 30-story Tower 2, scheduled to open in December, is under way.

"After so much time of (the project) just sitting, and so much hard work to get it done, it's a real milestone," he said. "It's the largest project of its kind in the state right now. The towers are a bold presence . . . a signal that we're seeing in the Valley a resurgence of this type of investment."

Chantung said Zaremba is marketing West 6th nationally as a flagship property and proof to lenders that there is demand for luxury multifamily housing.

Residents moving in said that renting a two- or three-bedroom unit did not cost significantly more than similar newer apartments close to downtown Tempe and Arizona State University.

Three-bedroom units, at $1,995 a month, are the most affordable for roommates to share. Studios start at $945, one-bedrooms at $1,175 and two-bedrooms at $1,550.

Matthew Fabros, 22, is sharing a three-bedroom with fellow ASU student Nico Svoboda, 22, and another roommate.

Monday was the first time Fabros saw his apartment.

"The view is amazing," he said, as he peered at the Valley's skyline through the ceiling-high windows of his 18th-floor unit.

Svoboda's mom, Heidi, said she was surprised by how lavish the units were.

"This place is only a little more than where he was living before, but it's a lot safer and you get so much more," she said. "He's going to be living better than we're living. I mean, come on, he has granite countertops."

Svoboda and Fabros said they would save on gas money because the campus and restaurants and entertainment on Mill are within walking distance.

"I'll skateboard to get around," Fabros said, who counted Zuma Grill, Mill Cue Club and Canteen Modern Tequila Bar among his favorite downtown haunts.

Mill Avenue businesses are already marketing to the residents. Many businesses are working with the leasing office to offer residents discounts.

"We're getting hundreds of residents within stumbling distance," said Nic Kelly, Canteen's manager. "In this economy . . . we're welcoming them with open arms."

Zaremba is eyeing similar areas where high-end multifamily housing would flourish. High on that list are sites near Chandler Fashion Center as well as properties in downtown Scottsdale and the Scottsdale corridor.

Chantung revealed that he has looked into purchasing Elevation Chandler, a 10.6-acre site that remains undeveloped as ownership of the property is mired in legal proceedings.

Mark Stapp, an ASU real-estate professor and Valley developer, applauds Zaremba for completing West 6th.

But he cautioned that the commercial-real-estate market will continue to lag in recovery until jobs rebound and investors make more loans.

by Dianna M. Náñez The Arizona Republic Aug. 2, 2011 12:00 AM

Residents fill long-empty Tempe tower

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