By Christy Krueger –
A new, upscale rental community called Encantada Riverside Crossing was recently completed on the near west side, with 304 luxury apartments. Developer Humberto S. Lopez says they are going like hot cakes.
Lopez, of HSL Properties, said reaction to the development is a positive sign that this segment of the housing industry is trending upward.
Lopez came to Tucson in 1980 with plans to retire. He quickly discovered that retirement wasn’t for him and he returned to buying, selling and developing properties as he had in California.
With a keen sense of real estate foresight, his investment decisions are purposefully made. During the 1980s, Lopez built large apartment complexes, but six years later market trends told him to switch gears.
“In the early ’80s, it was cheaper to build,” he said. When that changed, he began purchasing existing properties. “I got back into development in the last year.”
Between those phases, he bought and sold, depending on market shifts. “Apartments were converted to condos in 2005, so the high-end apartment market disappeared.” While some of those projects were successful, others were not, so Lopez jumped at the opportunity to buy at the right price.
One investor group paid $12 million for a condominium conversion property and added $8 million in renovations, but couldn’t sell any units. Lopez purchased it for $12 million. He paid $14 million for another complex that condominium converters had purchased for $30 million.
The home market fell in recent years due to a number of factors, Lopez said. Among them were excess inventory and renters buying homes they couldn’t afford.
“What happened, people moved out of apartments into homes. We lost good tenants that shouldn’t have bought a home, but they came back. And a lot were bought by investors. Their homes also went vacant, and at the market collapse, there were too many homes.”
Rentals did not experience significant swings during this period. “Apartment occupancies remained about the same. We started making concessions, such as one to two months free, so rental rates dropped,” Lopez stated. “Now concessions are half a month or none. Occupancies at the lowest were 88 percent, now it’s 90 percent.”
What has changed, Lopez noted, is the number of people who can afford to buy homes but are opting for upscale rentals with lots of amenities. “The average income is $110,000 at Encantada. They’re renting by choice. It’s the lifestyle they’re looking for.”
That includes granite countertops, high ceilings, a resort-like pool, 24-hour fitness center, a theater, dog run and a Starbucks coffee bar. “We’re the first large builder certified by Tucson Electric Power,” Lopez said, with a guaranteed utility rate of $1 per day per unit.
Rillito River Park is located right out the door and tenants can check out bicycles at no charge. Monthly rental rates at the gated community range from $869 to $1,299, and a variety of floor plans are available up to 1,313 square feet.
HSL has purchased land at two other sites for the construction of additional luxury apartments. Lopez anticipates Encantada Dove Mountain to break ground this summer and construction to start at Encantada Steam Pump later this year.
Lopez said he’s owned and operated approximately 20,000 apartment units over the years. He currently has close to 10,000 units in Arizona, spread out over 40 properties. Thirty of those are in Tucson.
While running the business keeps him on his toes, Lopez has always made time for community work. He’s served on numerous boards and chaired several organizations, among them University of Arizona Sarver Heart Center, United Way, 88-Crime, YMCA and UA Foundation.
He was recognized as Man of the Year by Tucson Metro Chamber, Business Man of the Year by the Tucson Hispanic Chamber of Commerce and Father of the Year by the Father’s Day Council Tucson. His top achievement, he said, is his family. He’s also developed the HS Lopez Family Foundation.
“My wife and I have given millions to charities. My goal is to have most of my estate go to the foundation. Hopefully, the foundation will be around for a long time.”