News > New Luxury Condos for Rent As Builder Turns Away From Sales

published on 2012-08-11 by Liz Suto

When the  real estate market turned downward from 2008-2011, Scottsdale luxury condo builders were left with expensive projects that couldn't make a profit.  Bankruptcy,  foreclosures and distressed sales followed and now these major projects have new owners with a lower cost basis.  Those new owners had new choices – Sell the completed units or rent them.

Some have decided to become landlords.  Because of a smaller pool of qualified buyers (from a lender standpoint) and other buyers nervous about the future of real estate and perhaps their own financial stability, rents have climbed in the valley and new condo owners are taking advantage.  This trend is occurring in Tempe and Phoenix as well, with recently built condo developments going totally rental.

One of those communities is Ten Wine Lofts, which was originally offering units at around $400,000.  Before any units closed,  the builder cancelled escrows in 2010 and the building went to Trustee's Sale,  and has been left empty for the last several years.  Under new ownership, Ten Wine Lofts is now offered as rentals starting at $2100 per month.

The Optima builders are starting a new luxury condo development, Optima Sonoran Village , on Camelback Road a block away from the Scottsdale Fashion Square.  Though buildings are still early in the construction phase, word is that Optima Sonoran Village will  start out as a rental community.

In addition to condo projects, several builders are in the planning stages of downtown Scottsdale apartment complexes to add to the inventory.

The behavior of builders and large-scale investors show one thing – their confidence that Scottsdale luxury condo prices will rise in the next few years.  They are taking advantage of high rents for now and hoping for high sale prices later.   For now, the lack of new condo developments leaves Scottsdale luxury condo buyers with fewer choices, but those that are able to get in now are betting with the builders that prices are going up.

 

Though not guaranteed, information and statistics in this article have been acquired from sources believed to be reliable.