Tempe's Centerpoint Condominiums Puzzle

Several articles have run recently regarding the financial challenges facing Centerpoint High Rise community in Tempe.

The gist of the articles suggest that all is fine with the development per Ken Losch, one of the principals of Avenue Communities, the developer of Centerpoint.  In general, these kinds of articles don't really offer any kind of substantive information but are really more filler and background info.

However, we did glean something of value; at least we think we did.  Rumors have been circulating that sales at Centerpoint are approximately 30%.  The question was whether that was 30% of the first tower alone or 30% of the two high rise towers combined.  We had suspected that it was 30% of the first tower only
and we now believe we have confirmation thanks to the East Valley Tribune article http://www.eastvalleytribune.com/story/120971.

In that article Losch is quoted as saying that they have sales of approximately $24 million.  The article also confirmed that tower one has 171 units while the second tower has 204.  Well, $24 million in sales would equal approximately 30% of 171 units.  This is based on a very rough guestimate that works out as follows:

Take an average sales price of $500,000 (a total guess) and divide that into $24,000,000 to get 48 units.  Divide 48 by 171 to get 28.07%.  If we are wrong and the average sales price is higher then that would mean even fewer than 30% have sold. If the actual cost per unit is lower then the percentage of units sold would go up.  We feel pretty safe using a number of $500,000.

If our numbers are right (and again please understand that we are guessing) and only 30% of the first tower has sold and zero condominiums have sold in the second tower then Avenue Communities has a looooong road ahead of them.

Now, please know that we are huge fans of Centerpoint and Ken Losch and we are totally rooting for the success of Centerpoint.  We believe it is bringing a truly urban experience to the most urban city in the Valley, Tempe.  However, we are certainly concerned.