TUCSON-Before the month ends, Bascom Arizona Ventures LLC will put $112.35 million into play in back-to-back closings to acquire 2,914 units in 12 multifamily properties in the city. Another $29.35 million is ticketed for across-the-board upgrades.

Bascom Arizona teamed with Broadmoor Real Estate Group LLC, managed by Jeff Newburg of Phoenix to place the highest offer, $62.5 million, for a seven-property, 1,566-unit portfolio marketed by a CB Richard Ellis team for local seller, Shomac Properties. Bascom Arizona partner Jerry Finney tells GlobeSt.com that another 1,348 units are rolling into the Tucson footprint for slightly more than $49.85 million in pickups from five sellers, of which three deals are left to close. The rash of closings began five days ago.

Finney says the class C-plus and B-minus properties are being packaged for a three-year hold. "As soon as the NOI grows, then we'll go back to market with them," he says. The deals, on average, closed at a 6% cap rate for the Irvine, CA-based Bascom and Multifamily Advisors LLC of Scottsdale.

Finney says there is no high concentration in any one submarket of what's been closed and what's yet to come. On average, the assets' occupancies are pushing 95%.

The Shomac portfolio included only one property not in Tucson proper--the Loma Verde Apartments at 1335 W. Roger Rd. in Sierra Vista. The others are Lakeside Village at 8250 E. Gulf Links Rd.; Mission Heights at 2800 S. Mission Rd.; Rancho Mirage at 750 E. Irvington Rd.; Santa Clara at 6340 S. Santa Clara Ave.; Southwind Village at 2020 S. Columbus Blvd.; and Spanish Village at 8600 E. Old Spanish Trail. The properties, ranging from 19 to 23 years old, average 223 units, predominately one- and two-bedrooms.

In the deals with five sellers, Bascom is picking up the 314-unit Meridian East Apartments at 8110 E. Speedway Blvd.; 306-unit Montierra Village at 5353 E. 22nd St.; 275-unit La Hacienda at 6161 E. Pima St.; 93-unit Ria Nova at 6850 E. Gulf Links Rd.; and 360-unit Casa Allegre at 1252 S. Craycroft Rd.

Finney says $16.5 million will go into renovations for the Shomac portfolio and nearly $12.85 million has been earmarked for the other value-adds. He says renovations will take eight months to complete, with the first work to get under way in November.

The JV tapped the Fairfield, CT-based GE Capital for acquisition financing for the Shomac portfolio. Gary Mozer and Lee Norman with George Smith Partners Inc. in Los Angeles arranged the financing. Nicolosi & Fitch of Tucson has been hired to manage the package. Shomac's sales team consisted of CBRE's Bert Kempfert and Mike Chapman and Justin Lanne with the Lanne Co. Steven Goldstein of Amercon Realty Services Inc. represented the buy side, which also had in-house exec Randy Zonge as a consultant for its interests.

The back-to-back deals have whetted the JV's appetite in Tucson, but not satisfied it. "It doesn't mean we're done," Finney stresses. "We're still looking diligently in Tucson." The market dynamics fueling the interest are steady dips in vacancy, concessions and construction and "a dramatic rise in net-effective rents," he adds. In addition, the gap is widening between single-family housing costs and rents, according to the JV's research. "We expect to see strong increases in rental rates over the next couple of years," Finney says.

Glenn Daiutolo, Finney's partner and co-manager of Multifamily Advisors, says the plan is to acquire $600 million of properties in the state. To date, $370.9 million has been spent in Phoenix and Tucson.