Foreclosure Auction Set for Centerpoint

TEMPE, AZ-The developer of the embattled 275-unit Centerpoint Condominiums has had its day in bankruptcy court and now the luxury towers are headed for the sales block. The Arizona Republic reports that the foreclosure auction date is set for April.

The article reports that ML Manager LLC, acting on behalf of investors in the project at 110 E. 7th St. placed the unpaid principal of the developer, Temple Land Co. LLC, at $135 million. Part of the difficulty with the project involved the recession. The other problem was that the project had been originally financed by Mortgages Ltd., which itself declared Chapter 11 in 2008, weeks after the suicide death of its CEO, Scott Coles.

Ken Losch, who headed up Tempe Land Co. tried everything he could to keep Centerpoint going, even going so far as to file for voluntary Chapter 11 protection in late 2008. But Losch had little luck with the frozen credit markets. As a result, Centerpoint is only half complete, with its 22-story tower close to completion and its 30-story tower about half done.

Jack Hannum and Bret Zinn, vice presidents with Transwestern’s Phoenix office, say Centerpoint’s pending auction unfortunately isn’t too surprising, given the difficulty of obtaining any kind of construction financing during the past year and a half. The brokers tell GlobeSt.com that more such high-end condo projects are likely to meet the same fate in the coming year.

“They probably won’t be this size, but they’ll be projects that are partially completed, then stopped,” Zinn adds. “Then groups will come in, buy and finish the product, and rent the units until the sales market comes back.”

If there is any good news in this scenario, it’s that Centerpoint likely won’t have a lack of buyers. Hannum says a significant number of investors tracked the Centerpoint saga while it unfolded and are ready to come in and buy. “There are a significant number of private investors who are interested I this,” he comments. “We’re also seeing some institutions becoming interested in this.”