PHOENIX-MG Properties of San Diego has acquired its third multifamily property in the market, the 360-unit Maya Linda Apartments, for $15.9 million. Another $1 million will be spent to upgrade its second acquisition in two months.

Located at 8222 N. 19th Ave., the class B complex caught MG's eye because of the asking price. "It was priced significantly below the cost of construction, around $44,000 a unit," notes Justin Smith, MG Properties' vice president of acquisitions. "I haven't seen anything priced like that in Phoenix for a long time."

Smith says the income-producing potential of the property also was a factor in the purchase. "The operations were improving and collected income was starting to increase," he tells GlobeSt.com. "We thought there was a nice cash flow recovery story there. It's a good, solid Phoenix infill location with some resurgence in the area."

He says along with the potential income came an attractive Freddie Mac 10-year loan at a fixed rate of 5.4%, with the first three years of interest-only payments and amortization beginning in the fourth year. "That helps enhance cash flow for us," Smith points out.

The complex, built in two phases in 1978 and 1980, was 94% occupied upon closing. The unit mix consists of 108 studios, each 433 sf for a monthly rent of $445; 184 one-bedroom units, ranging from 555 sf to 579 sf for $510 to $535; and 68 two-bedroom apartments with 779 sf to 879 sf for $660 to $685.

As of now, Smith says the investment group is satisfied with the Phoenix portfolio, but it doesn't mean the company will stop looking. "We're constantly seeking new investments in Phoenix that fit our parameters," he adds. Two months ago, the group bought the 460-unit Indian Springs Village Apartments in Mesa.