Apartment Changes Hands in $16M Deal

PHOENIX-A Laguna Hills, CA buyer began building a local portfolio with his first area acquisition of the 290-unit Metro Village Apartments. The buyer forked over $15.9 million for the vintage asset, and will invest $4 million more in renovations.

According to John McDonnell, multifamily specialist with Axxiom Partners LLC of Scottsdale, Ken Black plans full interior and exterior rehabs for the complex at 3106 W. Vogel Ave. Included in the overhaul plans are a landscape redesign, creation of a fitness center and club house, and relocation of the rental center.

"He's trying to set the standard for rehab, and is putting in amenities that you'd normally see in Scottsdale apartments," McDonnell comments. McDonnell represented Black in the off-market transaction with the Phoenix private seller, which was represented by Art Wadlund, partner with Hendricks & Partners' Tucson office.

Black is in the process of selling his 2,500-unit Southern California portfolio with plans to invest the proceeds in more Phoenix area assets. "He said he wants to start here with between 600 and 1,000 units, but there's no deadline as to when he'll buy them," McDonnell tells GlobeSt.com. He adds that Black is considering two potential deals in the vicinity of Metro Village.

"He's looking for value-add deals, rehab deals in which he can change the dynamics to create value," McDonnell explains. The location needs to be exceptional, with area fundamentals supporting the rehab investment.

This is what made the Metro Center Apartments so appealing. "The property is literally right next to the Metro Center Mall, with redevelopment going on," McDonnell says. "Also, there's been increased patrol and a community program dealing with crime awareness that Ken liked as well."

Metro Village Apartments was built in 1979 and is 74% occupied. Situated on 11.5 acres, the complex has studio units, and one-, two- and three-bedroom apartments. The average unit size is 771 sf, and rents range from $472 to $985.