Bascom Arizona Ventures Adds Two Major Distressed Multifamily Properties

VIZZDA—October 1st, 2012 — Bascom Arizona Ventures, a wholly-owned subsidiary of the Bascom Group, has completed the purchase of Brookstone at the Foothills and Madera Point Apartments for a combined purchase price of $49.92m. The seller—AIG Global Investment Group through its representative Keith Honig—was the beneficiary named on two deeds of trust securing the properties during their prior acquisition by Redhill Realty.

Brookstone at the Foothills is a 528-unit complex comprised of 65 buildings totaling 473,659 ft2 on 23.44 acres built in 1986 and zoned R-4. It is located West of the Northwest corner of the I-10 & Baseline Road at 4424 E Baseline Road in Phoenix. Redhill Realty acquired the property on December 18th, 2006 for $46.8m or $88,636 per door. Redhill paid $13.5m cash for the property and secured $43.2m in financing with AIG Global Investment Group maturing January 1st, 2012.

Redhill was served with a Notice of Trustee Sale on September 26th, 2011 and it reverted to AIG with a $35m credit bid, after which it spent 8.5 months as REO. While the $35.57m—or $67,367.42 per door—sale price was in excess of the credit bid amount, it represents a 17.6% write down to the amount loaned and a 24% discount to the previous purchase price. Bascom paid $12,995,971 cash for the property and secured $25.85m new debt with Bank of America.

Madera Point is a 256-unit complex comprised of fourteen buildings totaling 179,296 ft2 on 9.44 acres also built in 1986 and zoned R-4. It is located South of the Southeast corner of Dobson and Broadway Roads at 455 S Dobson Road in Mesa. Redhill acquired the property October 24th, 2006 for $21.25m or $83,008 per door. Redhill paid $6,133,719 in cash at the time of purchase and placed $19.024m in debt with AIG Global Investment Group on the property. An additional $5,066,880 industrial development bond with the Bank of New York was assigned at purchase.

Redhill was served with a Notice of Trustee sale after defaulting on the senior AIG note January 14th, 2011 and it reverted April 20th, 2011 with a $16m credit bid. The property spent one year and five months as REO before being sold to Bascom for $14.35m or $56,054.68 per door. This sale price is significantly below the credit bid amount and represents a 24.5% write down to the amount loaned and a 32.5% discount to the prior purchase price. Bascom paid $8,607,547 cash for the property and secured $10.85m new debt, again with Bank of America, for a total outlay of $21,603,518 and new debt of $36.7m.

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