FLAGSTAFF, AZ-A Southern California family trust has closed on its second area asset, paying $28.5 million for the Lodge Apartments, a 252-unit, class A complex. The two-year-old project was 95% leased at sale time.
David Fogler, senior vice president in Grubb & Ellis|BRE Commercial LLC's Phoenix office, says the San Diego-based Bassham Family Trust ultimately beat nine other offers for 3601 Lake Mary Rd. property due to its familiarity with the area and willingness to assume a $19.3-million HUD loan. He says the assumed debt can't be prepaid until 2009, but it is locked at a 6% interest and 40-year amortization.
"She's assumed a number of HUD loans. We've sold other properties to her and she had the proceeds ready to go," Fogler says. The seller of record is Lake Mary Road Apartments LLC of Phoenix, which developed the property.
Fogler tells GlobeSt.com that there is excellent upside potential with the deal because Flagstaff has high barriers to entry. In addition, existing multifamily units are being converted to condominiums. "You have a combination of growth in the market and a declining supply of existing rental units. That should make for a continued tight market," he says.
Bassham Family Trust already owns the 200-unit Woodcrest Apartments at 800 West Forest Meadows St., which is less than a 1.5 miles from the Lodge Apartments. A week ago, the trust also bought the 302-unit Alexan Palm Valley at 2100 N. 145th Ave. in Goodyear.
The Lodge Apartments has one-, two- and three-bedroom floor plans measuring 676 sf to 1,106 sf. The monthly rents go from $760 to $1,075. Grubb & Ellis|BRE senior vice president Steven Nicoluzakis worked with Fogler on the transaction.
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