"The properties are well-positioned, they're in good condition, and can be considered B-plus to A-minus assets," says Omar Mireles, HSL Properties executive vice president. "They seem to be in somewhat of a niche location and submarket, in which all assets were performing in the low-to-mid 90s in terms of occupancy." He says HSL, which owns multifamily properties in Phoenix and Tucson, will manage the new acquisitions.

The 258-unit Desert Mirage apartments at 1333 W. Guadalupe Rd. in Gilbert, AZ; the 200-unit Alta Mesa apartments at 1865 N. Higley Rd. in Mesa, AZ and the 134-unit Montana apartments at 7611 S. 36th Street in Phoenix were once in the portfolio of S-J Management. The Seattle investor had aggressively sought out and acquired Phoenix-area properties between 2005 and 2007. S-J Management paid more than $76 million in 2006 to capture these particular assets, which were constructed in 2000.

However, Wachovia foreclosed on the portfolio in late 2008. They were brought to market last spring by Steve McKenzie of Eastdil Secured in Los Angeles, and Bobby Bull, Jack Hannum and Matt Lockin of Transwestern's Phoenix office.

Mireles tells GlobeSt.com the acquisition was financed with a Freddie Mac loan through Deutsche Bank, with 74% financing over the entire portfolio. The remaining amount was financed by HSL Properties, he says.

With this acquisition finished, Mireles says the company is interested in buying more and similar types of assets. He says he likes B-quality assets in similar and better submarkets, no older than mid-1990s vintage. "We don't have anything yet," he comments. "We're pursuing a couple of assets, but nothing is under contract."

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