Joint Venture Acquires 472 Tempe Apartments for $30.3m

Vizzda—July 22nd, 2013 — John Gochberg of TGM Associates completed the sale of two multifamily assets in the Tempe market at the end of last week for a total of $30.3m for 472 units or $64,195 per unit. The buyer was a joint-venture formed by Stratford Partners of Del Mar and JLL Ventures of San Diego, California. Andy Crews and Jesse Wilson are the principals of Stratford, while JLL is made up of Luis and Jack Maizel and Leonardo Simpser.

Somerset Village is a 276-unit apartment complex in fifty eight one and two story buildings totaling 246,891 ft2 built in 1981 on 13.33 gross acres. The $18.3m sale price was furnished as $3.66m in cash and a $14.65m new loan from Berkeley Point Capital maturing August 1st, 2023 and assigned to Freddie Mac (FHLMC) at origination. TGM Associates had previously acquired the property on October 2nd, 1996 for $11.1m or $40,217 per unit and did not encumber the property over its holding period.

El Dorado Village is a 196-unit apartment complex in nineteen two and three story buildings totaling 164,557 ft2 built in 1985 on 2.14 gross acres. The $12m sale price was furnished as $2.4m in cash and an additional $9.6m in new debt with Berkeley Point Capital—also assigned to Freddie Mac and bearing the same maturity as the above referenced note. TGM Associates had previously acquired the property on August 1st, 1996 for $8.05m or $41,071 per unit. As with Somerset Village, the property did not secure any new debt under TGM Associates.

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By:

Paul Dionne

Director of Analytics

Vizzda.com

The Sonora Canyon Apartments sell for $30m

Vizzda – July 16, 2013 – The Sonora Canyon Apartments were sold Monday to Lone Star Funds for $30.0m or $ 77,320 per door. The apartments had been owned by Orix Real Estate Capital. Scott Cronister chief operating officer of Orix and Marc Lipshy vice president of Lone Star closed the deal. Lone Star financed the deal with a $494,262,293 acquisition loan funded by Citibank & Royal Bank of Canada maturing July 8, 2015.

The Sonora Canyon Apartments are located south of the southeast corner of Gilbert Road and University Drive  at 265 N Gilbert Rd in Mesa.  This 388-unit 2-story apartment complex totals 33 buildings and was built in 1984 on 15.80 acres zoned RM-4. Sonora Canyon features a mix of eight different unit styles with 224 one-bedroom and 164 two-bedroom apartments totaling 312,880 rentable square feet. The apartments are individually metered for electricity.

 Mercury Investments of Duluth previously acquired these apartments from a Capital Associates joint venture on August 21, 2000 for $16.875m or $43,492 per door with $14.428m debt with First Union Bank. Mercury Investments sold to Security Properties of Seattle on September 21, 2005 for $22.15m or $57,087 per door with $22.15m debt with GMAC Commercial Mortgage. Security Properties sold to Orix Real Estate Capital on January 17, 2007 for $33.3m or $85,824 per door with no debt. 

Edward Moore
Director of Research

www.vizzda.com

The Pavilions on Central Apartments sell for ~$47m

VIZZDA – June 26, 2013 – The Pavilions on Central were sold on Monday by a joint venture between Gray Development of Phoenix and The Reliant Group of San Francisco to Crow Family Holdings of Dallas for $46,918,720 or $184,719 per door. Caskie Collet, chief operating officer of The Reliant Group, closed the deal. Crow Family Holdings is a family office charged with managing the wealth of the late real estate developer, Trammel Crow. 

The Pavilions on Central is a located north of the northwest corner of Central Ave and Indian School Rd at 1 West Campbell Ave in Phoenix. It is a 254-unit “Class A” three-story apartment complex of eighteen buildings built in 2001 on 6.76 acres. The Pavilions features a mix of 1, 2 and 3 bedroom units totaling 281,619 rentable square feet in nine different product types with various amenities. The buildings feature two levels of living space over ground floor garages – each unit has a garage with washer and dryer. Units are individually metered for electricity.

A Gray Development—in a joint venture with MJ Olson Investments and Joseph E Meyer—sold the land for the pavilions to a joint venture between itself and Northwestern Mutual Life Inurance on September 7th, 1999 for $3,614,850 or $10.36 per ft2, financed with $20.1m in new debt with Northwestern Mutual. This debt was modified on October 10, 2008 and on January 9, 2009 each time to extend the maturity date. On April 21, 2010 ownership of the Pavilions was transferred to the Gray Development and Reliant Group joint venture with a new HUD loan of $21.452m originated by Red Mortgage Capital.

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Edward Moore
Director of Research

emoore@vizzda.com
www.vizzda.com

Arcadia Cove Apartments sells for $40.725m

Vizzda – June 18, 2013 – The Arcadia Cove Apartments sold on Friday for $40.725m or $94,271 per door with $700k down per affidavit and $35.0m new debt with HSBC Bank. The seller entity was a joint venture between JP Morgan Investments and BRE Properties and the buyer was The Bascom Group. Constance B Moore, president of BRE Properties, and Glenn R Daiutolo, vice president with The Bascom Group, closed the deal.

The Arcadia Cove Apartments is a 432 unit two and three-story apartment complex of twenty-seven buildings built in 1995 on 17.94 acres zoned R-3A. It is located north of the northwest corner of 44th Street and McDowell Road at 2252 N 44th St in Phoenix. The apartments total approximately 380,600 ft2 in a mix of 1, 2 and 3 bedroom units.

BRE Properties acquired the apartment complex from Picerne Development on September 18, 1996 for $22,180,099 or $51,342 per door with $22.5m down per affidavit and no debt. On July 11, 2007 BRE Properties sold the apartments for $44.2m to the current selling entity. BRE Properties’ third quarter 2007 SEC filing reveals that they had sold the apartments to a joint venture with JP Morgan Investments in which they [BRE Properties, Inc] had retained a 15% stake in the apartments and were to manage the property; the apartments had been valued at $52m at that time.

Edward Moore
Director of Research

emoore@vizzda.com
www.vizzda.com

Camden USA Acquires Three Entitled Multi-family Parcels for $25.75m

VIZZDA—June 15th, 2013 — Equity Residential (EQR) is continuing it’s massive divestiture from the Phoenix market by selling three parcels of final platted land totaling 38.764 acres and planned for 834 units, for $25.75m to Camden USA. As their recently filed final plats suggest, these parcels came to EQR by way of their recent acquisition of the Archstone Enterprises portfolio from the bankruptcy estate of Lehman Brothers.

Camden paid cash for the three properties, described as follows:

  • Archstone at DC Ranch – 9.254 acres of raw infill land, zoned PNC PCD. Planned for a 220-unit apartment complex in 16 buildings totaling 350,000 ft2 for a proposed project density of 7.6 DU/AC. Sale Price: $11m; $27.3/ft2
  • Archstone Tempe – 7.8 acres of existing commercial development, zoned R-5 PAD. Planned for a 234-unit apartment complex in eight buildings comprised of 96 one bedroom, 113 two bedroom and 25 three bedroom units. Sale Price: $9.243m; $27.20/ft2
  • Archstone at Village Crossing – 21.71 acres of agricultural land, zoned C-3. Planned for 380-unit apartment complex in fifty-one 2 & 3-story buildings for a proposed project density of 17.5 DU/AC. Sale Price: $5.507m; $5.823/ft2 

Archstone acquired the parcels in three transactions beginning with the November 9th, 2011 purchase of 9.254 acres infill land in the DC Ranch community for $8m, followed by  $8.5m for 7.8 acres at the northwest corner of Scottsdale and Curry Roads–discussed hereand finally acquiring a 21.71 acres of agricultural land in Chandler for $3.25m on December 24th, 2012. EQR announced its plans to acquire the Archstone portfolio in the Fourth Quarter of 2012 and completed the acquisition in the First Quarter of 2013. Prior to their acquisition by Archstone, each of the three parcels was either bank-owned or had recently moved off of a bank balance sheet to a short-term investor at a significant discount to debt outstanding. 

The DC Ranch parcel was acquired from developers on December 27th, 2006 for $5,830,608 or $14.45 per square foot with $192,960 down and $7m new seller-carryback financing. The property was refinanced through Home National Bank and the principal balance outstanding was increased to $15,612,993. Home National Bank took the property back deed-in-lieu of foreclosure on December 8th, 2009 and sold concurrently to Avenir Group for $13.24m or $32.84 per square foot with assumption of the outstanding debt with Home National Bank, stipulated to be $13.12m at the time of sale.

On July 9th, 2010, Home National Bank was closed by the FDIC, which named Enterprise Bank and Trust as Acquiring Financial Institution. Enterprise also had occasion to take the property back deed-in-lieu before selling to a Wichita, Kansas-based investor group, HCW Development, for $5,488,104 on August 15th, 2011. HCW realized a roughly 189% annualized rate of return on their sale of the property to Archstone Enterprises following a three-month holding period.

The Tempe parcel was acquired as roughly 13.5 acres in January of 1999 for $9.775m and operated as a fitness center. The prior owner paid $2,765,879 in cash and assumed $7.1m in existing debt with Northland Financial. Lehman Brothers lent an additional $7.2m on the property and securitized the note with Wells Fargo as Trustee and LNR Partners as Special Servicer. That note was served a notice of trustee sale on July 26th, 2010 and sold to Bruce Shapiro and Martin Landis on July 14th, 2011. Landis and Shapiro foreclosed on the property on July 26th, 2011 with a $6.25m credit bid.

The Chandler parcel was acquired as 39.96 gross acres by local investors Wayne Howard and Michael Lieb for $2.9m or $1.67 per square foot. Stearns Bank was the seller and lent $1.45m against the property, maturing March 4th, 2014. That parcel was then split into the 21.71 acre multi-family parcel and 13.84 net acres for future commercial development. The investor group retained the commercial portion. Not only does this sale completely clear the cost basis for the larger assemblage, but on a per square foot basis, Howard and Lieb were able to realize a 110% annualized appreciation for their property.

By:

Paul Dionne

Director of Analytics

Vizzda.com

Scottsdale Meadows Apartments sells for $20.63m

Vizzda – June 13, 2013 – The Scottsdale Meadows Apartments sold yesterday for $20.63m or $122,797 per door with $5.158m down and $15,472,000 new agency debt originated by Walker and Dunlop Real Estate Finance of Bathesda, MD, and assigned to Freddie Mac (FHLMC). The seller was Equity Residential, represented by vice president Dede Berdelle, and the buyer was Aukum Management, represented by president Jason Fuchs.

The Scottsdale Meadows Apartments is a 168 unit two-story apartment complex of eleven buildings totaling 149,520 ft2, built in 1984 on 7.81 acres. It is located to the northwest of the intersection of Scottsdale Road and Shea Boulevard at 10888 N 70th Street in Scottsdale.

Equity Residential had acquired the Scottsdale Meadows pursuant to their $1.06 billion acquisition of Evans-Withycombe in 1997; Evans-Withycombe had owned the apartments since at least June 21, 1993. The most recent debt on the property was a $9.27m Fannie Mae (FNMA) loan dating to July 7, 2011, which was released with sale.

Edward Moore
Director of Research

emoore@vizzda.com
www.vizzda.com

Hanover Company Adding 341 Units More Multifamily to Mill Avenue District

VIZZDA—6/3/2013– Houston based Hanover Company acquired a 2.76 acre (net) site from an entity formed by DMB for $7,000,000 or $58.22 per square foot. Hanover began the re-entitlement process with City of Tempe 10/24/2012 and was recently approved by Council January 10th, 2013.

Plans call for a 341 Unit 6-story multifamily building- 84’8” high and covering 83.5% of the lot. The project will total 574,670 square feet, of which 277,717 is Rentable Square Feet; (814 square foot net avg unit- 260 one bedrooms & 81 two bedrooms). 123.6 DU/AC. Parking will total 718 spaces, including a 7-story above ground with one below.

No new debt was recorded with the sale. Hanover acquired the site per an earlier purchase agreement with DMB dated 3/25/2012 and includes a first right of refusal; plus development & parking agreements.  Hanover also entered a deferred compensation agreement with DMB, where 1.5% of gross condo unit sales are paid over a 25 year term from certificate of occupancy.

DMB previously acquired the subject the parcels 2/18/2011 from the Zaremba Group (purchaser of West 6th — W6 towers –pictured above) for $875K or $7.28 per square foot. The land is part of the larger Centerpont on Mill project; originally master planned by DMB in 1987.

DMB Contact Info

By:

Hadden Schifman

Managing Director

Vizzda.com

Rendering from site plan, positioned from the northeast corner of Maple Ave & 5th Street, southwest

Image dated 6/3/2013, positioned from the northeast corner of Maple Ave & 5th Street, directed southwest.