TUCSON-Paragon Management Co. LLC of La Jolla, CA, takes on a class B value-add as its next repositioning play in the region. The 224-unit Sienna Springs, listed for $8.7 million, will undergo $300,000 of interior and exterior upgrades.
Ricardo Jinich, Paragon's co-founder, won't discuss the purchase price of the 90%-leased complex at 2650 N. Oracle Rd. asset, but did say it was reasonably priced. The complex, bought from Bridge Investment Group LLC of Salt Lake City, sits in a pocket where comparable assets are selling for $40,000 to $43,000 per door. Sienna Springs' seller was asking $38,839 per unit.
The purchase is Paragon Management's sixth in the area, bringing its total number of units to more than 1,000. Jinich says the Tucson properties are doing very well, which is why Paragon Management is continuing its local buying. "We've been able to raise rents and occupancy and saw the opportunity to do the same thing here," Jinich tells GlobeSt.com.
Built in 1978 and situated on 6.5 acres, Sienna Springs has one- and two-bedroom units in 11 one- and two-story buildings. The one-bedroom units, ranging from 418 sf to 604 sf, are bringing in rents of $444 to $535 per month. The two-bedroom apartments, each 868 sf, go for $675 per month.
Art Wadlund, principal with Hendricks & Partners' Tucson office, brokered the transaction. The acquisition loan was obtained from Fannie Mae. Pinnacle Realty Management Co. of Seattle will lease and manage the complex.
Jinich tells GlobeSt.com that Paragon Management is targeting areas with large Hispanic populations and fundamentals like population and employment growth. The company owns complexes in California and Nevada as well as Tucson. Paragon Management is on the lookout for value-add opportunities in Phoenix and would like to enter Utah, Colorado and Washington.
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