2500 Home Development in Tucson May Revert to Original Owners

By
Mortgage and Lending with SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) NMLS 223495

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
Mike Jones (Tucson Mortgage Company, LLC): Loan Officer in Tucson, Pima County, Arizona
image by Google Earth

Comments (26)

Latonia Parks
Top Bragg Realty, Fayetteville NC, Home of the 82d ABN DIV - Fayetteville, NC
Certified Military Relocation Expert
That is alot of money to lose if things don't work out.  Whew!!
Feb 08, 2008 12:18 AM
Matthew J Blum - (retired from the business)
Palm Beach Gardens, FL
Mike, So what happens now to the property? Is it just going to sit their partial developed? Sounds like a real mess
Feb 08, 2008 12:23 AM
Richard Lecinski
Long Realty Company - Oro Valley, AZ

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!

02/08/2008 07:17 AM

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.

Feb 08, 2008 12:23 AM
Jan Wood
None - Gallatin, TN
Mike:  Interesting post and more than likely happening in other places too.  That's a sizable loss!
Feb 08, 2008 12:53 AM
Bill Somerset
Re/Max Realty Group - Dover, NH
ABR, e-PRO - Realtor - NH Real Estate Agent
Ouch!  A huge loss for someone, yet a terrific opportunity for someone else to jump in and make a statement.
Feb 08, 2008 01:30 AM
Dawn Heinemann
Long Realty Company - Tucson, AZ
The Peter DeLuca Team

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!

Feb 08, 2008 01:44 AM
Bill Roberts
Brooks and Dunphy Real Estate - Oceanside, CA
"Baby Boomer" Retirement Planner

Mike, Do you think that the original owner might be inclined to sell individual lots?

Bill Roberts

Feb 08, 2008 03:01 AM
First Last
Eatontown, NJ
Please keep us posted on how the event unfolds.
Feb 08, 2008 04:01 AM
Tina Merritt
Nest Realty - Blacksburg, VA
Virginia Real Estate
When I was in India, there were a bunch of "investment oppotunity" ads for large parcels in Florida such as this.  With the value of the dollar so poor in Europe, there is a great amount of European investment in New York City...maybe it will trickle to the south and west too.
Feb 08, 2008 06:55 AM
Joan Mirantz
Homequest Real Estate - Concord, NH
Realtor, GRI, CBR, SRES - Concord New Hampshire

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!

Feb 08, 2008 02:42 PM
Mike Jones
SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) - Tucson, AZ
Mike Jones NMLS 223495

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

Feb 08, 2008 04:06 PM
Marzena Melby
Coldwell Banker Burnet Realty - Richfield, MN
Realtor, Twin Cities Minnesota Real Estate
Mike - Sign of the times, isn't it?  Good post!
Feb 09, 2008 01:12 AM
Terry & Bonnie Westbrook
Westbrook Realty Broker-Owner - Grand Rapids, MI
Westbrook Realty - Grand Rapids Forest Hills MI Re
I am seeing here also I recently listed two homes a for a small builder they are going back to the private investor on the 15th of the month. I doen't sound like a big deal but he was building 12 to 15 homes per year and now faces bankruptcy because of the 3 specs he had when the market softened 2 years ago.
Feb 10, 2008 03:40 AM
Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation
Interesting, Mike, but I would cite my source as a CYA measure.  Just a suggestion.  It sounds like someone might pick up a good deal.  I do have knowledge of someone looking for major real estate purchases (nearly 100 m) for a 1031 exchange, so contact me offline if you have any info I could pass on.
Feb 10, 2008 03:52 AM
John Hurbon
Homesmart International Tucson,AZ - Benson, AZ

Hi Mike,

With your help and example, I have reached 10,000 points and am now #1 in Benson, Arizona. My Dentist seems to be more friendly and the people I see on the street slap me high five as I pass by (total and complete strangers). Active Rain has poured out a blessing of great will and the possibilities of retiring to Fiji to become a Paranha trainer in 2026.

Keep Well and Sell, Sell, Sell.

 

John Hurbon

Benson Arizona -    Tierra Antigua Realty                              google me at  Benson Horse Property

Feb 10, 2008 03:55 PM
Ann Heitland
Retired from RE/MAX Peak Properties - Flagstaff, AZ
Retired from Flagstaff Real Estate Sales
Wow! Big hit for some stockholders. Nothing like that happening here because we're just not on that scale. Though construction is way down in Flagstaff.
Feb 11, 2008 06:20 AM
Kent Simpson
Realty One Group Mountain Desert - Tucson, AZ
Real Estate Is About People
One company's rutted-out, pothole-filled journey becomes another's thrill ride!  Hopefully the ownership will be able to get this project in gear--I wonder what will happen if the I-10 interchange situation delays the mall construction and starts a whole "snowball effect" going? 
Feb 12, 2008 12:03 AM
Shannon Lefevre
John R. Wood Properties - Naples, FL
Shannon Lefevre, PA Your Naples Smart Girl
Oh see just when I was about to say..."oh we don't have any lifestyle shopping malls" after hearing the description, I was wrong.  Hearing your comments about that article makes even more sense as to why they are building them that way.  Of course it rains everyday in the summer here so that made me question why they didn't do covered walkways.  Interesting article keep us up to speed about this deal...It will be curious how it all plays out! :)
Feb 12, 2008 10:40 AM
Donna Trevino
Exit Realty-Creative Group - Yakima, WA
I feel bad for them. It is crazy how the market is changing things as we knew them. Thanks for posting.
Feb 14, 2008 06:25 PM
Alek Hairapetian
WWW.CV3Drendering.com - Surprise, AZ

If you're a looking for affordable 3D rendering for your development projects please visit my site www.cv3drendering.com

Feb 20, 2008 09:55 AM