PHOENIX-Despite challenges from a HUD loan, a first-time metro buyer from Orange, CA has snagged the 144-unit Colonia del Sol Apartments for $12.52 million. However, Investment Concepts Inc.'s prior experience with similar loans that helped to trump six other offers on the one-year-old development.
"This buyer had done some HUD assumptions in the past and that helped a lot," says Bret Zinn, a vice president in Apartment Realty Advisors' Phoenix office, who represented the seller of 5405 S. 19th Ave. "This went into escrow in February and just closed."
Zinn says the condo conversion market was strong when the 97%-leased Colonia del Sol was first introduced to the market in October 2005. He tells GlobeSt.com that the HUD loan with a 10-year lockout provision effectively dampened any firm offers from potential converters although there were a lot of tire-kickers. The HUD loan for $9.26 million at a 5.8% fixed-rate interest doesn't expire until 2015.
Zinn says the local developer, Visiquest Properties, intended the complex to be a long-term hold, but a rapid lease-up caused a change of heart. "This was down in south Phoenix, a typically rough part of town, and the developer took a risk," he explains. "But, it paid off in the end. The building is phenomenal, the unit sizes are great, the amenities are great and the nearest competition is about four or five miles away. This is definitely the best property down in that area."
Colonia del Sol, situated on 7.11 acres, has one-, two- and three-bedroom units measuring between 584 sf to 1,007 sf. The monthly rent is $625 to $945.
The Apartment Realty Advisors team included Brad Goff, Stephanie Blackwell and Karyn McClintock. The buyer was self-represented.
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