Richard and Sylvia Smith of San Diego acquired the late 1970s-built complex at 1825 E. Don Carlos Ave. from Denis Hannon of Phoenix. "The buyers had been looking for property in the area with a strong cash flow," Kyle Porter of Hendricks & Partners' Phoenix office, tells GlobeSt.com. "That's why we bid above the ask." He and Hendricks' colleagues Greg Thielen and John Kobierowski represented the buyer while James Kasten with RE/MAX Commercial Investment in Phoenix was on hand for the seller.
Porter says the buyers used exchange proceeds from selling the 20-unit 12th Avenue Villas at 4224 N. 12th St. in Phoenix. Financing came courtesy of a fixed-rate, three-year loan, with an interest rate of just over 7%, underwritten by Impac Cos. in Newport Beach, CA.
"The property doesn't have a huge income stream right now, plus the owners didn't have huge reserves, so we had to get a little creative with the financing," Porter explains. "Impac has a program for that type of situation."
The buyers decided to invest the exchange funds in Arizona Sun because of its location near the light rail line in Tempe, Porter adds. "This is a strict cash-flow asset," he notes. "There are no major plans for huge renovations and they're going to continue to operate them as apartments."
Arizona Sun, with occupancy hovering 90%, has one- and two-bedroom units, measuring 500 sf to 836 sf. Monthly rents are $400 to $525.
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