Home builder Tom Doucette has adjusted to the painful “new reality” that has taken hold of the economy, and the real estate and banking industries. Land values have collapsed, home sales have dropped to monthly record lows, and lenders are systematically foreclosing on troubled loans.
“It gets to the point where you realize, if you’re smart, it’s not worth trying to save the project and hold onto it,” said Doucette, owner of Doucette Homes, Inc. “It’s a new reality out there for bankers, developers and realtors.”
Case in point is his 34-lot subdivision in Corona de Tucson. With a $5 million line of credit in hand, Doucette had set out “to build high-end homes at the height of the market.” After getting four homes built and selling two, the economy sputtered and with it, buyers vanished.
Bank of the West has filed a trustee’s sale notice on the project, calling for it to be auctioned off in September. Doucette’s financial exposure however, is not $5 million since the 30 remaining vacant lots have ended up in the control of Lennar Homes Arizona through an investor-buyer transaction.
“That released me from the $5 million obligation,” he said. “My exposure is about $425,000, the value of the two remaining completed homes.” If he can sell the homes before the trustee’s auction, he said that would settle the bank’s claim.
The project is on Adytum Place, located off south Houghton Road on east Camino del Toro, across from Fagan Ranch, a development that went into foreclosure last fall.
“The reality is that Lennar now has the rights to develop those lots. In fact, they just built a new model at the site,” he said.
If the two homes do not sell, the auction will be held at 11:30 a.m., Sept. 8, on the steps of the Pima County Courts Building, 110 W. Congress St.
During this Great Recession, not many commercial property owners have been able to retire their mortgages. An exception is the Splendido continuing care retirement community, 13500 N. Rancho Vistoso Blvd., Oro Valley, where the owners last month hosted a mortgage-burning party.
In just four years, owners Mather LifeWays and Plaza Companies paid off the $80 million mortgage on the $100 million, 27-acre, resort-style facility. Continuing care communities offer four levels of accommodations: independent living, assisted living, memory support, and skilled nursing care.
“The entire mortgage was repaid with proceeds from the sale of homes at Splendido. Considering the challenges in the economy and the real estate market, we consider this to be a testament to the demand for these communities in Southern Arizona,” said Mary Leary, president of Mather LifeWays.
LifeWays is based in Evanston, Ill. Arizona-based Plaza Companies is headquartered in Peoria.
Sundt on the move
Early next year, Sundt Companies will move into its new $8.6 million, 47,000 square-foot headquarters at 2015 W. River Road. Construction has begun with a site pad pour and the raising of tilt-up, concrete wall panels.
The complex will host 100 employees and replace the company’s 35-year-old facility at 4101 E. Irvington Road. That site is up for sale. The move puts Sundt closer to Interstate 10 and will provide faster access to its operations in Tempe.
The facility is being built to attain U.S. Green Building Council LEED (Leadership in Energy and Environmental Design) Gold certification. Senior Project Director Kurt Wadlington said the company “wanted to be in an area of high-quality and master-planned commercial development.”
Tribal justice center
Construction has begun on the new $12.75 million multi-justice center for the Pascua Yaqui Tribe. The two-story, 62,700 square foot facility at 7777 S. Camino Huivisim is being built by T.L. Roof & Associates Construction.
The project, designed by Durrant Architects of Phoenix, consists of training rooms for police and justice department personnel, holding cells, courtrooms, and office space. It has a one-year construction timetable.
Sales and leases
• Tangerine Investment Partners LLC purchased 167 acres of land on Tangerine Road east of Interstate 10, for $3.3 million from BP Tangerine Investors LLC. The seller was represented by Will White, Ted Herman and Greg Vogel of Land Advisors Organization. According to public records the buyer is Venture West Operations LLC, comprised of Santa Rita Properties LLC, Stephen and Pamela R. Shell Trust, and Richard and Vonda Spross, all of Tucson.
• Desert Cheer Athletix LLC leased 12,500 square feet at 1859 W. Grant Road, Suites 109-110, from Walker Tucson Properties LLC. Robert Glaser, Picor Commercial Real Estate Services, represented the landlord.
• Schlumberger Water Services USA leased 10,820 square feet in Broadbent Interstate Center, 2045 N. Forbes Blvd., Suites 103-104, from Forbes Tucson LLC. Rob Glaser, Picor Commercial Real Estate Services, represented the landlord. Buzz Isaacson, CB Richard Ellis, represented the tenant.
• K12 Management Inc. leased 4,980 square feet in Butterfield Business Center, 4605 S. Palo Verde Road, Suite 605, from Presson Equity Partners LLP. Rob Glaser, Picor Commercial Real Estate Services, handled the transaction.
• Orange Grove Pediatrics of Tucson leased 4,123 square feet at 1925 W. Orange Grove Road from Healthcare Realty Trust Inc. The landlord was represented by Rajal Lal, Picor Commercial Real Estate Services. Bruce Suppes, CB Richard Ellis, represented the tenant.
• Pro Tires and Wheels leased a 4,057 square-foot building at 5015 E. Speedway from the Larry Spector Trust. Rick Borane, Volk Company Commercial Real Estate, represented the landlord.
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