TUCSON-Working a 2006 plan to spend at least $500 million on multifamily properties in Arizona, Bascom Arizona Ventures LLC has closed its first deal this year in the city with the $16-million purchase of the 410-unit Tierra Bonita Apartments.
The JV buyer is a marriage of the Bascom Group LLC from Irvine, CA and Multifamily Advisors LLC of Scottsdale. Though Tierra Bonita at 175 W. Valencia Rd. is this year's first, the buyer expects to pick up another 625 units in two closings this summer. Art Wadlund with Hendricks & Partners' Tucson office represented the seller, Timothy White of Seattle. Bascom's Randy Zonge represented the buy side.
Jerry Finney, Multifamily Advisors' manager, says Tucson represents a logical choice for the JV investors especially since Phoenix, to the north, is becoming a more costly market. "Tucson's market is similar to Phoenix, though a little behind the recovery," he says. "But, it's regaining in strength. Rents are beginning to move up; concessions are dropping. So, it made sense for us to go in there."
Situated on 12.4 acres, Tierra Bonita was built in two phases in 1984. Bascom plans to invest $5,000 to $12,000 per unit to renovate the asset. Following renovation, the Bascom JV plans to keep the deed just as a short-term investment, Finney tells GlobeSt.com.The acquisition was financed with a three-year, floating-rate loan from Boston-based Babson Capital LLC/MassMutual Life Insurance Co. Finney says the rate floats at 180 points over Libor. Gary Mozer and Lee Norman with Los Angeles-based George Smith Partners Inc. arranged debt and equity financing.
The JV has tapped a local company, Morrison, Ekre & Bart Management Services Inc., to lease and manage the 98%-leased complex. The one- and two-bedroom units, measuring 536 sf to 864 sf, rent for $380 to $485 per month.
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