Starpointe acquired Scottsdale Courtyard apartments for $26.5 million. Scott D. McPherson of Phoenix-based Capital Advisory Group tells GlobeSt.com that the plan is to perform full exterior and interior renovations of the class A apartments and then turn the units into "for sale" condominiums. McPherson and Eric T. Inabinet arranged the bridge loan.

McPherson says the loan is structured with collateral release provisions allowing the sale of individual units. McPherson explains the collateral is based on smaller and smaller percentages as units sell. The structuring is obviously more risky for the lender, but helpful to the developer because it allows for the closing of condos before all property is sold. McPherson says there is some accelerated pay-down requirements in the loan structure to offset lender risk. He says Starpointe has done many of these types of conversions.

The Scottsdale Courtyard complex is located at the edge of Scottsdale and Paradise Valley, one of the most expensive residential areas in Phoenix. The condominiums will sell for about $110,000 for a one-bedroom unit and $145,000 for a two-bedroom design. McPherson says the condos will provide excellent entry-level housing in a tight, high-brow area. Most single family homes in the area, he says, sell for between $240,000 and $400,000.