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| - Some friends and a relative are inquiring about making a move to Phoenix and are interested in living downtown, so I did some research for them. One of my targets was the Orpheum Lofts. What I found out is something that needs to be very publicly disclosed to anyone interested in buying here, so I figured I'd publish what I found, on Yelp.
The Orpheum is a gorgeous historic building (built in 1931) in the heart of downtown Phoenix's financial district. What few highrise buildings we have, Orpheum is smack in the middle of, giving you a sense of urban living that's basically impossible to achieve anywhere else in the Valley. It's located a 15 second walk across the street from one of my favorite historic structures downtown, the Orpheum Theatre. The interiors of the lofts are elegant and luxurious. There's a beautiful lobby and a gym for residents as well.
The price for the smallest unit available (850 square feet) is about $250,000, right now in December 2007 during a national housing slump that has also affected the Valley. Doesn't sound all too bad for a swanky condo space, does it?
That's because there are 2 major catches.
First, the Orpheum has been hit with a major and as-yet-unresolved parking crisis. When the original owners bought these condos a couple years ago, they (in my judgment) failed to do due diligence and did not realize that their titles did not include any space deeded to them for parking. The Orpheum allegedly boasted to prospective buyers that they would have valet parking with a full-time valet on the property. The "property", however, was sold by the builder to someone else, who was then merely allowing Orpheum folks to park there temporarily. Ultimately, that neighboring owner decided to build his own condo structure on that spot. The Orpheum owners' parking spaces? *poof* Gone.
In a panic, Orpheum's owners negotiated a tentative deal with the neighboring property owner. As of now, the neighboring owner has agreed to design a near-by parking structure that will have space available for those Orpheum owners who choose to buy parking spots from him. The cost for each spot? Unknown as of yet, but the estimate is $30,000 to $35,000. For just one spot. Which doesn't exist yet. A lawsuit has been filed by at least one unit owner I'm aware of, which is still in litigation. It's possible the litigation could resolve some of these issues, perhaps by transferring the financial burden from the owners to the builder. But that's just speculation by me, and it could take years for anything like that to happen.
There's a second catch. It turns out that to run a swanky loft complex downtown with a private gym and parking valet and luxurious couches in the lobby etc., you need a lot of money. That money comes from each unit owner's Homeowners Association dues. At Orpheum the dues are decided according to how many square feet you own, and the current rate is 58 cents per square foot. For an 850 sq ft unit, that means you pay $493 in HOA fees per month, in addition to your mortgage, property taxes and everything else. Almost 6 grand a year. And that's AFTER they fired the valet company and made other cuts.
The bottom line is this: move into the Orpheum only if you've done your financial homework. A $250,000 unit will actually cost you as much as $285,000 if you want ownership over a single parking spot. (Note: You can also rent parking spots in other near-by garages, for about $65/month, but that will entail taking a stroll downtown every time you get in and out of your car). Just five years of HOA fees, under the unsafe assumption that they will remain stable, will amount to an additional $30,000 over time. Most young professionals I know can't afford all that on a Phoenix-based salary, which is often discounted from other cities because of what's supposed to be our low cost of living.
I told my curious friends to look elsewhere and they agree with me.
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