Nov 8, 2023 - News

One Camelback office-to-apartment conversion scheduled for auction after loan default

An office building with a rounded corner facing an intersection.

The former BMO Harris bank building at Central Avenue and Camelback Road. Photo: Jeremy Duda/Axios

A project to convert a former bank building in central Phoenix into luxury apartments has hit a series of roadblocks after the developer defaulted on its loan.

Catch up quick: Developers have spent years renovating the former BMO Harris bank tower at Central Avenue and Camelback Road to become a luxury apartment called One Camelback.

  • The developers initially projected it to open in the first half of 2021. By last November, they were eyeing an opening in the first quarter of 2023.

Yes, but: Camelback Owner, which owns the property, defaulted on its $71.3 million loan in June, the Phoenix Business Journal reported.

  • Lender Delphi Financial Group moved to foreclose, and an auction is now scheduled for Nov. 21.

Zoom in: Dale Phillips, founder of Stellar Properties, One Camelback's development consultant and leasing management company, told Axios Phoenix the project will presumably move forward once there's a new owner.

  • One Camelback's website still states that many apartments will be available starting Nov. 30. Phillips said that date should be disregarded.

The intrigue: A court-appointed receiver for the property asked the court to delay the auction until a comprehensive review of the project can be completed, while Delphi wants the auction to take place as scheduled, the Phoenix Business Journal reported last month.

The big picture: One Camelback is part of a growing nationwide trend of office-to-apartment conversions.

  • That's partly fueled by an increase in office vacancies combined with a high number of people who continued working remotely after the pandemic abated.
  • Nearly 22% of people in Phoenix worked from home last year, compared with more than 23% in 2021.

Of note: Attorney Jacob Maskovich, who's listed in court documents as a trustee for the property, told Axios Phoenix he couldn't comment because it's an ongoing legal matter.

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