PHOENIX-Following a five-year hold, Sabino Management Co. sold the 188-unit Foxfire Apartments at a 6.18% cap rate. The Austin, TX seller received $15.3 million from local buyer PEM Investments LLC for the class B asset, realizing close to a $6-million gain in the transaction.
Alon Shnitzer, an investment associate with Marcus & Millichap Real Estate Investment Brokerage Co.'s Phoenix office, says Sabino is exiting the multifamily market and redeploying equity from the complex at 1701 E. 8th St. into retail projects. "They're concentrating on retail anywhere on the West Coast," says Shnitzer, who with Marcus & Millichap vice president Peter Katz, negotiated the deal. "Foxfire was their only multifamily asset in the area."
While the seller is moving capital out of multifamily assets, PEM Investments is headed in the opposite direction. The buyer has acquired seven multifamily properties throughout the area during the past 18 months. Recent PEM deals include the $25.5-million acquisition of the 204-unit Indigo Springs Apartments at 1464 S. Stapley Dr. in Mesa and $21.5 million paid for the 208-unit Desert Sage Apartments at 1737 N. Central Ave. in Phoenix.
Shnitzer, who indicates that PEM is in the market for more properties, tells GlobeSt.com the buyer's track record and location helped beat out 10 other qualified offers for the mid-1980s built Foxfire. In addition, "he had a significant earnest deposit up front and agreed to the timeframes the seller wanted," Shnitzer adds.
Situated on 7.39 acres, the 100%-occupied Foxfire Apartments has a mix of studio apartments along with one- and two-bedroom units. Apartment sizes range between 412 sf and 868 sf and are priced at between $580 and $825 per month.
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