PHOENIX-A joint venture has entered the metro with the $13-million acquisition of the 310-unit Santa Fe Springs. Praedium Group LLC and Coastline Capital Partners LLC of Hermosa Beach, CA acquired the complex in a direct deal from an East Coast institutional investor.
The acquisition of the West Glendale Avenue asset is the partnership's seventh transaction, and first in Phoenix. "As a partnership, we're in constant communication with a wide network of people regarding deal flows," says Bob Murray, director of the New York City-based Praedium Group. "This was a scenario where our hard work paid off."
Murray and Steven Ludwig, Coastline Capital Partners' principal, tell GlobeSt.com that Santa Fe Springs' appeal was its upside potential. "We felt that by bringing capital to this property, we could significantly reposition it in the marketplace," Murray says. "These are the types of opportunities we like to identify: undercapitalized and mismanaged properties in markets we think have strong fundamentals."
Specific fix-ups for the 1974-constructed complex at 1717-25 W. Glendale Ave. will include repainting, stucco work and other exterior changes. Then, the new owner will begin an interior renovation, allocating $5,000 per unit for the makeovers. Murray and Ludwig estimate the exterior and common areas will take about a year to renovate while the staged interior work will require an additional two years. Management and leasing will be handled by Stratus Real Estate Inc. in Woodland Hills, CA.
The 98% occupied complex features studios, one- and two-bedroom apartments, averaging 726 sf. The average rent is $600 per month.
Though Phoenix offered strong enough fundamentals to entice the partners, Ludwig says Central Phoenix is coming into its own. "There have been several acquisitions and new developments on the retail and residential-multifamily side," he explains. "When we see an improving community like that, we like to jump on the ship and do our part in the community as well."
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