CHANDLER, AZ-The 200-unit Chandler Pointe, renamed Chandler Meadows, has sold to Portico Properties for $16.6 million. The buyer is jumping in to finish a renovation, seizing upside from a 55% vacancy and bumping rents over time to market rate.

Portico's acquisition of the 54-building complex, built in 1983 at 3175 N. Price Rd., is its third pick-up this year in the metro. "That's it for now," Alan D. Collenette, principal of the San Francisco-based investment group, tells GlobeSt.com. "We're going to focus on the renovations and the occupancies."

Collenette says $1.8 million of upgrades are under way at the just-bought Chandler Meadows. The renovation is a 50-50 split of exterior work and interior changes to bump it to a class B-plus status.

Chandler Meadows sits on 15 acres directly across Price Road from Arizona State University's research campus, close to Santa Clara, CA-based Intel Corp.'s complex and three miles from Chandler Fashion Mall, creating a ready pool of future residents. Portico has hired Sullens & Euchner of Phoenix to manage and lease its new prize as it does with its other assets in the region. Earlier this year, Portico bought the 269-unit Waterstone Apartments at 1651 S. Dobson Rd. in Mesa and the 420-unit Biltmore on the Lake at 11050 N. Biltmore Dr. in Phoenix, where renovations also are underway.

David Fogler and Steven Nicoluzakis, both senior vice presidents at Phoenix-based Grubb & Ellis/BRE Commercial LLC, reeled in at least a dozen offers during a two-month marketing period for Pacific Property Assets of Long Beach, CA, a well-known condo converter that owned the asset about one year. "They had a lot going on in this market and it was an opportune time to sell," Fogler says.

Industry sources speculated the changed condo market led Pacific to sell. And, they say Pacific Coast is considering or has listed two other complexes with another brokerage house, both in similar scenarios with low occupancies and partially renovated for condo plays that never materialized. As the industry knows, converters often empty buildings to set up the play.

Portico has picked up the play with 20 units already renovated. The mix of one-, two- and three-bedroom units range from 720 sf to 1,444 sf for an average of 866 sf. In-place rents are $725 to $1,295 per month, working out to an $842 average prior to renovation.

Collenette estimates it will take five months to complete exterior renovations, adding new colors and signs, and one year to finish interiors, some of which will be getting washers and dryers as perks. "We won't move to full-market rent until we complete the renovation," Collenette says, citing a 10% to 15% uptick is possible. "Our main this is not to lose good existing tenants. We help compensate them in rents for having stayed with the property."