Real Estate Media's Newsletter Division
PHOENIX-In what is being termed Arizona's biggest dollar-volume transaction for a multifamily property, the New York City-based ING Clarion has shelled out $64.3 million for the 497-unit Desert Club Apartments, beating out 14 other bidders vying for the one-year-old trophy asset. Englewood, CO-based Ameriton Properties Inc., a unit of Archstone-Smith, is the seller.
The sale culminated marketing that started in April, landed a contract in June and closed in recent weeks. "We had more than 90 signed confidentiality agreements from interested buyers and we received probably 15 worthwhile bids," H. Duane Jones of Colliers International's local office tells GlobeSt.com. "We went back to a best-and-final offer on the five highest and that was ING Clarion." Colliers International represented both the buyer and the seller.
But, according to Curtis Palmer in Collier's Los Angeles office, the best offer "was not the highest bidder, but it represented the best terms."
The 87%-leased Desert Club is ING Clarion's first metro-area multifamily holding although the institutional investor owns several office properties in the metropolitan area, including the 469,000-sf Camelback Esplanade complex at 2425 and 2525 Camelback Rd. Archstone-Smith still owns four apartment complexes in the city.
The Desert Club's enthusiastic reception among potential buyers was due to a positioning on the Phoenix-Scottsdale line and the high-income demographics that goes along with the address, Jones says. "This is probably the best location in the entire metro area," he adds. "The average home value is more than $500,000, retail is strong and the job market is one of the strongest in the entire state."
The North Scottsdale/Airpark, a thriving regional office district located near Desert Club, serves roughly 45,000 employees of various companies. The Desert Club, with units averaging 900 sf, is adjacent to vacant land, but it is state-owned, eliminating competition as well as expansion possibilities.
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