Hotel to be razed
for 'affordable' units, developer says
A hotel on
North Central Avenue in Phoenix will be
knocked down to make way for condominiums in
the increasingly competitive midtown market.
The Holiday Inn at 4321 N. Central will be
razed to clear a spot for three five-story
condo buildings to be developed by Cresleigh
Homes Arizona. Cresleigh Vice President Wade
Kempton said demolition of the hotel begins
in July. He expects residents to begin
moving into the planned 257 condos late next
year.
Kempton declined to project prices for the
condos, which he said would run from
600-square-foot studios to three-bedroom
units of 1,400 square feet. He said they
would be "affordable" and be within the
price range of college students and people
who work for the city.
Affordability is a key issue in
metropolitan Phoenix housing in general
and especially in the area's fledgling condo
market. Condos have become an alternative to
the starter home as prices for single-family
houses soared.
But so many condo projects aim for the
affluent buyer. If the prices aren't in the
millions, many of the high-rise towers are
asking for several hundred thousand dollars
as the entry point, matching or exceeding
prices for typical single-family homes in
the Valley.
The Cresleigh project is in an area of
relative affordability. The Landmark on
Central has prices starting below
$200,000, but the planned Century Plaza
conversion will have some units selling for
more than $1 million.
Condo developers recite a similar mantra
about Central Avenue.
They believe the planned light-rail system
will be a big selling point and talk up the
area's proximity to the city's downtown.
Central is gradually shedding its identity
as an office hub as condos crowd into the
mix.
Some analysts think there are too many condo
projects in the works, especially those on
the most-expensive side of the ledger. They
say the market is unproven in a city where
the single-family home has been king.
"The easiest thing to do in this town is
issue a press release about your high-rise
condo," said RL Brown, publisher of the
Phoenix Housing Market Letter. "There's
nowhere near the demand for expensive
downtown condos for the supply that has been
proposed."
Brown said there will be some condo projects
that will succeed as workforce housing,
although "no one is positioning downtown
condos for the workforce that needs them."
He said Cresleigh has a good site and thinks
the project will sell at the right price.
Kempton doesn't think there are too many
projects in the works.
"We think Central Avenue has a tremendous
amount of potential," he said. "These
properties in the high-rise zoning category
tend to be a little more pricey. They don't
affect us."
Keith Mishkin, a broker with Cambridge
Properties, said the Cresleigh project would
benefit from its location near Steele Indian
School Park. He doesn't think too many
condos are piling into midtown.
"It's way underserviced and underbuilt," he
said. "There's a lot of empty space out
there. When midtown really starts to
develop, it helps the retailers, it helps
everything. . . . We see a huge demand for
good price points throughout that corridor."
One wild card for the area: The Barron
Collier Co. owns 15 vacant acres along
Central north of Indian School Road. It
hasn't announced plans for that property.
"A developer like Collier could create an
entire neighborhood," Mishkin said. "There
are tremendous opportunities. I see that
area going through a lot of change."
Glen Creno
The Arizona Republic
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