PHOENIX-Following a two-year hold, a San Diego company sold the 175-unit Sun Creek Apartments for $12.7 million at a 5.5 cap rate, realizing more than a $3-million gain on the transaction. Seller MG Sun Creek Apartments LP acquired the class B complex in October 2004 for $9.5 million, and determined that it was an "opportunistic time to sell," according to David Fogler, senior vice president with Grubb & Ellis/BRE Commercial LLC's Phoenix office.
"I think the seller's original intent was to hold the property for three to five years. The building was performing well, and the time was right in the market, so he sold a little earlier," adds Fogler, who with colleague Steven Nicoluzakis, brokered the transaction for both sides.
He tells GlobeSt.com that buyer RK Multifamily Income Fund XVI LLC of Long Beach, CA beat out nine other offers during the 45- to 60-day marketing period because of a strong offer. In addition, "the timing was good, they did a lot of due diligence up front and were looking for a low LTV loan," Fogler says. "We were confident we wouldn't have lending issues, and the buyer had a good track record in Phoenix."
Fogler indicates that the mid-1980s complex at 15050 N. 59th Ave. should require little in the way of upgrades by the buyer. Though more than 20 years old, the property was in good shape, with strong curb appeal and a good upside potential for the new owner, he notes.
The 95% occupied complex has a mix of one- and two-bedroom units measuring between 650 sf and 900 sf. The monthly rent ranges between $625 and $740.
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