PHOENIX-Racing to meet a 1,000-unit acquisition goal by year end, local condo converter Right Place Properties has acquired the 86-unit North Point Apartments at a 4.7% cap rate. The buyer, which shelled out $5.35 million or $62,209 per unit, will keep the property as a rental for a couple years until it's upgraded.
"These need a lot of work," acknowledges Natan Jacobs with Red Door Commercial Inc., which represented the buyer of 6315 N. 16th St. "This was built as a condominium during the 1960s. We're going to do minor improvements and lease it up."
Jacobs tells GlobeSt.com that the standard investment for upgrades will be $2,000 to $5,000 per unit, with improvements including roof replacement and some interior upgrades. "We're also way below market on rents so we'll increase those as we finish upgrades," he adds. The seller is local investor John Renner.
In keeping with its MO, Red Door will convert the units as leases expire. "What we do is put tenants in and get a little income. When the market comes back, we can sell the individual units," Jacobs says.
The complex, which is 15% vacancy, has two- and three-bedroom units measuring from 841 sf to 1,026 sf. The monthly rents are $650 to $850.
The North Point Apartments acquisition comes on the heels of a recent purchase of Southbank Apartments at 214 N. Gilbert Rd. in Mesa. Earlier in the fall, Right Place also acquired the 122-unit Mountain Springs Terrace at 18202 N. Cave Creek Rd.Jacobs says the latest acquisition puts Right Place's portfolio at just under 1,000. More closings are already planned for early 2007.
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