PHOENIX-BH Properties broadened its footprint in Arizona with the acquisition of two assets. The California company added the 79,380-square-foot Thunderbird Square retail center and the 410-unit Casa Bella Apartments in Tucson, AZ to its Grand Canyon State portfolio. BH Properties acquired both properties from receivers, spending north of $10 million combined on the deals.

“Our business model focuses on distressed assets and we’re seeing plenty opportunities in Arizona, Nevada and Southern California, which is closer to home,” says Steve Jaffe, BH Properties’ executive vice president and general counsel. “I can fly to Phoenix and be back home the same day. From a management standpoint, it’s much easier.”

Thunderbird Square at 13620 N. 35^th Ave. was built in 1975 and is 70% leased, with Big Lots as its anchor. BH Properties acquired the asset from Trigild Corp. of San Diego, CA. Jaffe tells GlobeSt.com that the deal offers a perfect value-add opportunity. “We like the location and plan capital investment to spruce the center up,” he adds. “We’re in the midst of signing leases for the vacancy now.”  Dave Murphy of Scottsdale, AZ-based Bernstein-Murphy represented Trigild in the deal. BH Properties was represented in-house.

Meanwhile, in Tucson, BH Properties acquired the class C Casa Bella from Massachusetts Mutual Life Insurance Co., which was represented by Art Wadlund with Hendricks & Partners’ Tucson office.  BH Properties relied on in-house representation. The 27-year-old complex is at 175 W. Valencia Rd. and was 89% leased at the time of sale.

Jaffe explains that the Casa Bella and Thunderbird Square purchases, along with four apartment complexes and two notes acquired in the Phoenix area during the past year, fit nicely into BH Properties’ model.

“The idea is to come in, find an asset at some level of distress, and buy it from the lender or REO,” Jaffe explains. “Then we invest some capital in the property to improve it.” He adds that there is no specific hold time for the assets, but says BH Properties typically holds assets long term.

Nothing more right now is in the BH Properties purchase pipeline, but the company is actively looking. “We’re very pro-Arizona,” Jaffe says.  “Our stack rank is apartments – multifamily is our highest priority. Then retail and a little further down, industrial and office.”