Sun, Jul 06, 2008

![]() Martin Soto, with Benchmark Concrete Co. Inc., shovels dirt into a wheelbarrow as he and other construction crew members work in a ground-floor area of the 44 E. Broadway building project. The developer of the loft project says there have been hundreds of inquiries from potential buyers.. Benjie Sanders / Arizona Daily Star
More Photos (1):
Xentel Expanding call center. New Hiring Bonus! Trades/Construction Baker Brothers Plumbing Dry Wallers Trades/Construction Pioneer Landscaping Yard Person/Loader Operator Production and Manufacturing Pioneer Landscaping Crushing Crew Driver/Transportation CPC Southwest Materials Drivers Trades/Construction Pioneer Landscaping Yard Person/Loader Operator Driver/Transportation RENZENBERGER ROAD AND YARD VAN DRIVERS BusinessNot quite lofty here
Outlooks for lofts are mixedArizona Daily StaR
Tucson, Arizona | Published: 04.06.2008
Loft-style condominiums have sprung up in city centers across the country over the last decade. Eventually, developers in Tucson thought, "Why not here?"
They launched projects promising hundreds of new loft-like dwellings in Tucson's central core. But now, many remain vacant lots or gutted buildings.
So, what gives?
Some developers blame the housing slump. Others say infill projects are especially costly and time-consuming. A few also worry that Tucsonans may not be as eager to shell out luxury prices for living Downtown as they originally had thought.
"What can and will consumers pay for?" wondered Steve Quinlan, chairman of Long Companies and an investor in two loft projects.
"If this was in Los Angeles or some other markets, then the answer would be easier," he said. "Affordability is a problem here."
Traditionally, lofts are converted from old warehouses or other industrial buildings, said Randi Dorman, developer the Ice House Lofts, a converted warehouse at South Park Avenue and East 16th Street. They usually have high ceilings, exposed brick and duct- work, big windows and open- floor plans, she said.
In that sense, the Ice House Lofts are the only "authentic" lofts in Tucson, she said. But other developers have incorporated loft features into their own projects and called them lofts.
The Star talked to several loft developers in Tucson about the problems that have kept some loft projects grounded, so to speak. Here's what they said:
Bad timing
The loft building boom got under way in Phoenix in 2003 and 2004, said Scott Merrill, a real estate agent specializing in the downtown Phoenix market. But in Tucson, lofts didn't catch on until after the 2005 success of the Ice House Lofts.
That put the beginning of Tucson's loft movement about at the peak of the market. Now that the market has slowed, demand for all types of housing, including Downtown-area lofts, has dropped, developers said.
"I think that market is affected just like the rest of the real estate market," said Steve Fenton, developer of the rental and condo project Academy Lofts, 35 E. 15th St.. Fenton said he had no trouble finding renters for the 25 apartment units in the project, but could only sell six of 11 condominiums.
Investors in one would-be loft project at 1047 N. Main Ave. are considering alternatives for the site because of the slowdown, said Jerry Yarborough, a real estate agent representing the New Jersey property owners.
"It never really went anywhere," Yarborough said about the investors' condo plans. "We kind of missed the market."
Too much for too little?
Regardless of whether developers are using existing buildings or constructing condominiums from the ground up, the costs for Downtown-area lofts are generally higher than for other types of housing in Tucson, developers said. That makes it necessary to charge higher prices.
James LeBeau, who is developing 44 E. Broadway, said he plans to charge about $350,000 to more than $500,000 for condos averaging about 1,300-square feet.
Quinlan said he expects to charge around $200,000 to $800,000 at his developments.
But some buyers interested in living Downtown might not be willing to pay an added premium, said Ross McCallister, a developer who was interested in the property for Bourn Partners yet-to-be-started The Post, 56 E. Congress St.
"You don't have the whole package," McCallister said, referring to dining and entertainment options. "If you moved Downtown, what's going on to keep you down there?"
One North Fifth, the former Martin Luther King Jr. building near the Hotel Congress, is being converted into apartments, not condominiums, mainly because buyers are unlikely to pay the prices needed for condos, said developer Ron Schwabe.
Artist Todd Karleskein, said he's interested in living Downtown, but not for a luxury price.
"The neighborhoods don't feel safe enough yet, and it really doesn't warrant paying those prices," he said.
Still some optimism
But the visions of vibrant loft developments in Tucson aren't dead. LeBeau, who hasn't started selling lofts yet, said he's been contacted by hundreds of potential buyers. Other developers say higher gasoline prices are bound to send more buyers toward the city center and away from far-flung suburbs.
Some developers are also certain there still must be a pent-up demand for lofts.
"It's there in every other major city," said Raul Reyes, of Town West, who is working on the mixed-use El Mirador project at 50 W. Franklin St. "So I think, eventually it will be here."
● Contact reporter Christie Smythe at 434-4083 or csmythe@azstarnet.com.
|