Duo Starts Buying Spree With 156-Unit Complex

PHOENIX-A local partnership, armed with a plan to buy 1,500 apartments, has acquired the 156-unit Veranda Apartments for $8.48 million. The new owners are planning to invest another $1 million to upgrade the 20-year-old complex.

Buyer Craig Haskell tells GlobeSt.com that he and Thomas Christensen are targeting assets in minority markets, just like the 88%-leased Veranda Apartments at 5704 W. Thomas Rd. The buyers plan to upgrade each complex, add value and then sell them in three to five years. Haskell says the goal is to acquire 1,500 units in select markets in the metro area in the coming year and then expand into other Southwest US cities.

"We want to buy three or four more of these in the local area, then we'll put together a joint venture with an institutional player," Haskell explains. "Once we can get those initial ones under our belts, we can take it back to the interested parties."

Haskell says ideal assets will be located in areas where the minority population is 30% or greater. "We've done research on the demo and their likes," Haskell adds. "One of the key factors is that the complex needs to be close to other family, schools and friends so that's what we're focusing on too."

The partnership is seeking class C complexes with unit mixes that can be turned into class B assets via renovation and amenity packages that appeal to families. For example, Veranda Apartments has a large piece of land in the middle of the property, which will be converted into a park with playground equipment.

Situated on 5.36 acres, Veranda Apartments has one- and two-bedroom units, measuring from 520 sf to 702 sf. The current monthly rents are $560 to $660, but Haskell says the plan calls for a $125-per-month rate hike once renovations are completed.

Michael P. Hubl, senior investment associate with Marcus & Millichap Real Estate Investment Services in Phoenix, represented the buyer, while Alon Shnitzer, a senior associate with the brokerage firm, negotiated on behalf of the local seller, Checkmate LLC. Morrison Ekre & Bart Management Services Inc. in Phoenix will oversee the complex.