PHOENIX-Bascom Arizona Ventures LLC, adding a new local partner, has spent nearly $11.4 million, or $45,203 per unit, for the 252-unit Heather Ridge Apartments in East Phoenix. The next step will be to kick off a $1.76-million renovation within 60 days.

Buying into the Bascom play for the 4707 E. McDowell Rd. property is Jeff Newburg of Broadmoor Real Estate Group in Scottsdale. "We've known Jeff for 15 years. We hope this is the beginning of a long-standing relationship," says Jerry Finney, Bascom Arizona's manager.

The class B complex was 98% occupied at sale time, but 20% of the units fall under rent restrictions controlled by Industrial Development Authority financing, Finney tells GlobeSt.com. He says rent restrictions are in place beyond 2010, clearly longer than Bascom's anticipated hold. "We are repositioning it," he explains. "We will let the rent roll grow over and two-year period." And then, he adds, the decision will be made to sell or hold for maybe another two years.

Bascom's upside lies in bumping rents after the full-scale renovation. "We expect to increase the rents substantially beyond where they are today," Finney says. The average rent wasn't readily available, but that and an improving market offer the only upside since it's a concession-free property making full use of the utility assessment, he explains.

The 16-building complex was built in 1983 on 7.96 acres within a few miles of the Scottsdale city line and Sky Harbor International Airport. Units range from 400 sf for a studio to an 850-sf, two-bedroom, two-bath layout.

Finney and Bascom Arizona co-manager Glenn Daiutolo had the highest offer on the table after a one-month marketing that produced close to 10 bids for a Denver seller, who was represented by Sean Cunningham of CB Richard Ellis in Phoenix. Randy Zonge was Bascom Arizona Ventures' consultant for the transaction. Lee Norman and Gary Mozer of Los Angeles-based George Smith Partners Inc. secured acquisition financing from Wells Fargo Bank. Morrison, Ekre & Bart Management Services Inc. of Phoenix has been hired to manage and lease the asset while Commercial Services Building Inc. of Anaheim, CA is overseeing the renovation.

The latest play takes Bascom Arizona Ventures to 14 multifamily properties, with more than 6,000 units, and a payout of more than $297 million in the past two years. The buyer is a joint venture between the Irvine, CA-based Bascom Group LLC and Multifamily Advisors LLC of Scottsdale. Finney says he's got a contract down on a Tucson deal and expects to be in escrow on a total of nine by August.