Seattle Buyer Antes Up $16M for Second Valley Asset

"We feel Phoenix is a market that is on the upswing," Michael J. Sauter, CEO of the Seattle-based investment group, tells GlobeSt.com of his firm's strong interest in the Valley's multifamily market. "We feel we can get in and take advantage of the up-market."

The firm's latest purchase, a 94%-occupied complex at 5402 E. Washington Ave. in Phoenix, comes just seven months after the group closed on Ventura Vista, 170 luxury units in Cave Creek which S-J, buying as Ventura Vista Associates, got for $14.3 million. The firm also plans to close May 14 on Mandarina's sister property, the Belaflora Apartments at 5302 E. Van Buren St.

Sauter says his company is particularly bullish on Phoenix because of the Valley's strong residential growth and its limited construction of new multifamily units. "We're looking for stabilized core assets in markets that we consider have high barriers to entry," he explains. "We're also trying to identify projects that retain their residual value, properties that are newer and are well 'amenitized' and projects that are 150 units or more." The firm also seeks out investments that can be purchased for $10,000 to $15,000 below the per-unit value and $30,000 to $40,000 below replacement costs.

Mark Forrester with Phoenix-based Hendricks & Partners says the listing attracted "seven or eight good offers," several of which met the $15.5-million ask. "This was the best offer and frankly the best buyer," he tells GlobeSt.com about the three-month sales push. "He had performed on other deals."

The Mandarina, Forrester adds, is a "strong class A property with all the class A amenities" and positioned east of Tempe line in the path of the light-rail system. Besides Forrester, Bob Bruno with Hendricks & Partners represented Phoenix Mandarina Apartments LLC of Delaware, a selling entity of the developer, Greystone Group of Newport Beach, CA. S-J Management LLC was self represented.