From the outside it is hard to tell a difference. The gleaming former Century Plaza tower on Central Avenue looks like it has just been sitting there, waiting for the market to rebound. Yes, a new name, One Lexington, adorns its walls, but unless you were paying special attention, you would have no idea of the changes being made just beyond the front door.
The timing couldn’t be better for Macdonald Development Corporation, the company that recently purchased the building. Familiar with office-to-condo conversions, the opportunity to secure the Century Plaza building seemed like a no-brainer.
“Our business, for the last 30 years, has been to acquire properties where markets have crumbled,” says Robert Macdonald, President of Macdonald Development and principal of the One Lexington project. “Markets collapse for various reasons. It could be a financial catastrophe like this recent example. At the end of all that, we come in and buy.”
The company’s previous successes are evident. Just look at rejuvenated skylines in Vancouver, Edmonton, Sacramento, San Diego and Atlanta, among others.
Macdonald and his partner in the project, Rob Hubbard, have been visiting Phoenix for decades, both for leisure and to survey the real estate landscape. The two were looking at several distressed markets — Las Vegas, Southern California and Phoenix, in particular — to make their next move. Phoenix made the most sense.
“We like Phoenix,” Hubbard says. “We have been here, we have contacts here. Out of the two [Las Vegas and Phoenix] markets, I’ve always preferred [Phoenix], because Vegas can change very quickly. Phoenix was always the first choice.
“In the early part of ’09, it became obvious in this market that there was a dramatic draw-down,” Hubbard continues. “It went from an 18-month supply to almost in balance — about a six-month supply — in fairly short order. That seemed like a good time to move forward.”
Hubbard and Macdonald searched several areas of the Valley — Downtown Phoenix, Tempe and Scottsdale among them — looking at properties.
But, to fully understand the complexity of searching through numerous properties in a quest for a true gem, we have to travel back to the very beginnings of the market collapse in early 2008. Macdonald and Hubbard were already searching around the Valley for “problem” properties that caught their attention.
“[The One Lexington building] stood out like a sore thumb,” Hubbard says, smiling. “First of all, it’s a high rise. It’s concrete; it’s well located — certainly a building that is substantially better looking than anything we saw. We just got right on it.”
“We weren’t really familiar with this [Midtown] location,” Macdonald says. “We’ve been coming [to the Valley] for 30 years, but we’d stay at the Phoenician or play golf in Scottsdale, so that’s the area we were used to. When we got to know this area, we thought it was just fantastic.”
Both Macdonald and Hubbard cite the light rail and the significant architectural advances in the city core as their main reasons for the excitement in the Midtown location.
Macdonald Development had the building under contract within three or four days of that initial visit, and it progressed quickly from there, though you wouldn’t know it from outside. The building continued to sit, a nearly vacant shell, with the Century Plaza sign still shining out to onlookers. But, as cars drove up and down Central Avenue and the light rail whizzed by, improvements and a rebranding was already being laid out.
Macdonald Development was able to get the building for a steal — 30% of the mortgage cost — mostly because it went under contract last April. Post-foreclosure, they were able to buy the building from the bank and make the announcement in February.
“We respect what the previous developer was trying to do,” Macdonald says. “By our observation, the guy did a great job. We were excited about that, because we’ve been in his shoes.”
“The neat thing is, you have a brand new building,” Hubbard chimes in. “This thing was taken down to the concrete columns. It’s exceptional, with the commercial ceiling height (at more than 11 feet). For the most part, no one [offers] that.”
This brings up a unique point about One Lexington: the building is exceedingly well built. The previous remake of Century Plaza stripped the building to its sound concrete skeleton — originally constructed in the mid-’70s — and built it back up with its fancy aqua-tinted skin and steel shell. A building wouldn’t be built this well today.
“Because of the deal we were able to get on the building, we were able to price it out way below the price of construction,” says David Newcombe of Russ Lyon Sotheby’s International Realty, the sales and marketing company for the building. “People need to hear that loud and clear. The market has bottomed — actually, it’s gently going up — it’s the right time to buy.”
Indeed, the units will now be offered at substantially lower prices — nearly 50% what they were previously going for. But, don’t think that these are hastily built living spaces. The views from any direction are incredible — you literally feel on top of Central Avenue and can see far-flung suburbs at ease — but the attention to detail in every unit is exceptional.
As for the rebranding under the One Lexington name, it really made sense to move away from the building’s previous moniker, as it really is a completely different building now. Since acquiring the building, Macdonald Development has significantly upgraded the entire place — everywhere from recessed lighting and shiny new walls in the lobby area to improved elevator entryway façades and livelier, lush areas around the pool.
That doesn’t even get into the improvements made to the units themselves. Lavish upgrades include Caesarstone countertops, bamboo flooring, Bosch appliances, Kohler fixtures and marble showers and surrounds. The resort-style pool and expansive fitness center (complete with yoga room) outmatch anything available in Central Phoenix.
Since the announcement of the rebranding, the buzz about One Lexington has been on the rise. It’s not surprising when you take a look at the product being offered. The neighborhood is ready for the building to come alive.
“It is another signature development that adds to the neighborhood’s eclectic mix of chic urban living and historic homes,” says Julia Tourville of the Midtown Museum District Neighborhood Association.
“There have been a lot of people waiting to make the jump [to buy],” Newcombe says. “We’re extremely lucky. This is a really unique building. This is the perfect package to come to market now.”
In the Know: One Lexington
1 E. Lexington Ave. in Midtown
Opening date: March 2010
Units: 130 units, starting at approximately $165,000
1 bedrooms: 734-780 sq. ft.
2 bedrooms: 1,096-1,283 sq. ft.
3 bedrooms: 1,974 sq. ft.
Penthouses: 1,706-2,865 sq. ft.
On-site parking structure
Approx. 11,000 sq. ft. of ground-level commercial space available (more news to come on right here on DPJ!)
I recently figured out why I think living in neighborhoods with real streets is so important. Before I get started, I want to disclaim that I am not an urban planner, New Urbanism expert, population density wonk or really even that good at reading a map. I’m not some nut job who wants to turn every navigable roadway into a tree-lined pedestrian mall. I am just an average guy who loves living in the city.
I was telling my friend, a Gilbertian, that I walked from my friend’s house at Century Plaza to join friends at Fez. As I was telling her about my short walk, I noticed that I knew the names of all the streets between the two locations, and that I had a pretty good idea of what was located on each. This is in stark contrast to the experience of visiting my friend in her comfortably cul-de-sac’d neighborhood with one way in and one way out. My friend in Gilbert couldn’t name any of the other streets within a block of hers, because there was rarely, if ever, a reason to drive on them. As long as she knows her way on and off of the arterial road (in this case it is euphemistically called “Drive”) she is fine.
I used to think that what made the city special was the convenience of walking to and from the coffee shop and bumping into my pierced, artistic friends who just happened to be there at the same time. In fact, what I realized is that one of the biggest distinctions between Downtown and the suburbs is the way you drive in them. When I come home to my place in the city, I can choose one of 25 ways to get to my driveway. There is a complete grid of streets from which I can chose the most labyrinthine combination of turns to get to my destination, if I want to. I can choose how I want to experience my neighborhood in my car. I can choose what businesses I want to drive past, which types of buildings I want to drive by and which coffeehouses I want to drop in on.
In contrast, the suburban experience is all about control. Neighborhoods only have one way in and one way out. There is only one freeway exit within a reasonable distance of home. And, because you can only take arterial streets to get to your destination, you are cursed to drive past the same chain restaurants and stores that you would see on any other suburban arterial street anywhere else in the country. The suburban experience controls where you shop, where you drive, what it looks like. The suburbs tell you how you are supposed to experience your neighborhood.
The controlled experience of the suburbs is especially ironic since suburbs were originally designed for the freedom of country living within the reach of city dwellers. Just the opposite has happened. The suburbs are restricted places, and the core of the city is liberated.
Of course, of you already live Downtown, you know this. What I would encourage you to do is to take a different way home every day this week and experience your city the way people who live on streets with names like “Vista Del Mar” could never dream to.
The next meeting of the Midtown Museum District Neighborhood Association will be held on Wednesday March 25, 2009 at the Century Plaza Condominiums. The meeting will start promptly at 6:30PM as we have Deputy Mayor, Councilman Tom Simplot as our Keynote Speaker for the evening. After the meeting, there will be an opportunity to view the beautiful condos at Century Plaza.
The next Social event will be on Friday March 20, at Switch. This event will start at 5:30PM followed by a short walk to the Heard Museum to enjoy their Third Friday event. Tickets for Switch will be $9 per person for one drink and an appetizer buffet. RSVP to email@example.com
Don’t forget to check out the new Farmer’s Market at Switch every Sunday from 10.00am to 3.00pm, and just a reminder that Pink Spot Ice Cream has Family Game Nights on Thursday evenings starting at 6:00PM.
April is going to be a busy month with Earth Day on April 22. Mayor Phil Gordon will be presenting Keep Phoenix Beautiful awards at an event at Cesar Chavez Plaza in Downtown Phoenix from 11:00AM to 1:30PM. There will also be a special event at the Phoenix Public Market on April 22, from 4:00PM to 8:00PM, where you can enjoy food, drinks and creative products by talented artisans and local small businesses.
The next Neighborhood meeting will be on Wednesday April 29, at 6:30PM (watch this space for the venue!) and the keynote speaker will be Philip McNeely, Phoenix Environmental Sustainability Program Manager.
The Midtown Museum District Neighborhood Association is a partnership of residents and businesses along Central Avenue, between McDowell and Indian School Roads. For more information, email firstname.lastname@example.org.
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