Word has it that the development known as Saguaro Springs, a 2,500 home development in Marana, AZ (near Tucson) may have tanked, and will revert to the original sellers for the original sales price of $30,000,000., resulting in a loss of approximately $70,000,000 for a national developer who has invested that amount in roads and infrastructure.
Situated to the north of West Twin Peaks Rd in Marana, and west of Interstate 10, the project is an anchor of Marana's spectacular growth. The setback may hold up the planned construction of the Twin Peaks interchange at I-10, the cost of which will be paid not by the federal government, but by private development companies. It's unclear what the effect may be on the yet-to-be-built Marana Spectrum, a lifestyle mall approved by the Marana Council on the east side of the proposed Twin Peaks interchange. Marana Spectrum is expected to open in 2010.
As the infrastructure for Saguaro Springs is complete, or nearly so, there's no doubt that the project will find another builder. It's just a question of when.
And that's the real estate opinion of this Tucson, Arizona mortgage lender,
Mike in Tucson
Think of me as your local expert
image by Google Earth
Pat,
Here's a link to the article that describes the proposed mall.
Elizabeth,
I'm sure it will be an opportunity. Stay tuned.
Mike in Tucson
Mike,
I have seen this same thing going up here in Phoenix, but not to that magnitude. A lot of the national home builders are selling back their land to the investor they bought it from with contracts to buy it back later. All the builders are in a liquidation state right now until they can get a better footing on this new market. Great Post
7 Comments on 2500 Home Development in Tucson May Revert to Original Owners
So, Mike! What exactly is a life style mall? Haven't heard that one before!
by Patricia Kennedy
Life style malls started many 15 years ago. They have all the big name stores. Everything is outside rather then having to walk inside or roofed.
With any luck at all, it will take some time for a new developer to come in and start building. The last thing we need right now is 2500 more homes on the market! I understand that Red Rock is hurting, and they can't give 'em away in Continental Ranch and Gladden Farms. We need to allow some time for the existing homes to sell and bring the inventory down. As for the mall - at least there will be somewhere for all those people to shop, but it might be difficult for the stores to succeed...remember what happened to the Foothills Mall?
Just my opinion!
Mike, Do you think that the original owner might be inclined to sell individual lots?
Bill Roberts
This is only the tip of the iceberg in my opinion...new construction is taking a huge hit . In our area the largest inventory that is sitting is the new construction...a lot of people will lose their jobs!
Joan,
New construction is taking a big hit; I agree. I'm glad, though, that the project stalled at this stage instead of after the homes were built, give our inventory in Tucson.
Tina,
Overseas investment due to the relatively weak dollar has been on the rise across the country. Many Canadians have benefited from the appreciation of the Loonie vs the USD.
Michelle,
We'll do that.
Bill,
I think it's unlikely that the original investor will sell individual lots, but it could happen.
Dawn,
The saying for commercial real estate is that "retail follows rooftops." This bears watching. Thanks for a thoughtful comment.
Bill,
Exactly right!
Jan,
It's a lot of money to walk from.
Richard,
Thanks for your input. An article by Peter Van Allen of the Philadelphia Business Journal explains the concept as follows:
"The concept of lifestyle shopping centers is becoming more widespread nationwide. Most include the high-end retailers of regional malls (like the Court at King of Prussia or Cherry Hill Mall), but in more of an outdoor, storefront setting. Rather than massive parking lots, customers drive right up to nearby parking -- allowing time-rushed suburbanites the freedom to rush in and out of a store.
Shoppers spend an average of 57 minutes at a lifestyle center, compared to 78 minutes at a more traditional enclosed mall, according to 2002 research by the International Council of Shopping Centers. Despite their shorter stay, lifestyle shoppers spend an average of $84 an hour, vs. $57.70 at malls, ICSC reported. "
Matt,
No one knows for sure. The developer hasn't commented publicly, to my knowledge. Stay tuned. Video at eleven.
Latonia,
Things didn't work out. They've already lost the $70 million.
Judy,
We'll keep you up to date as we find out more.
Donna,
When things do turn around, they'll likely do so in a hurry. I'm doing many more loans now (purchases) than I was last quarter.
Gary,
Thanks for commenting. Where is your business coming from in Phoenix right now?
Mike in Tucson
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