As part of the deal, Ed Klugman is offering seller financing with three-year terms, 70% loan to value and 6.5% fixed-rate interest. The financing terms call for interest-only payments. "He's being very responsive and sensitive to the current economic times," stresses Bert Kempfert, senior vice president for CB Richard Ellis in Phoenix. "With the credit markets in turmoil, if you were to try to finance a class C portfolio these days, you could probably get only 50% to 60% value on it."
Seller financing also adds to the portfolio's upside potential, Kempfert continues. "Because the seller is providing financing through 2011, by the time a new owner comes in to embellish or reposition these apartments, the problems we're seeing today will likely be gone," he tells GlobeSt.com. "When the seller financing runs out, the owner can refinance these or sell them more easily."
Kempfert says the complexes were built in the 1970s, all infill locations. The complexes have 85% to 90% occupancies. The portfolio consists of the 159-unit Encato Park Apartments at 2322 W. Thomas Rd., 180-unit Seville Gardens Apartments at 4903 W. Thomas Rd., 181-unit Sans Souci Apartments at 3030 N. 35th Ave. and 140-unit Sterling Place Apartments at 4235 N. 35th Ave. The CBRE sales team includes first vice president Thomas P. Montgomery Jr., associate Chris Gonzalez and client services' specialist Michelle Montgomery.
Kempfert says the marching orders are to accept one-offs and portfolio offers. There is there no best-and-final date. "We'll consider orders as they come in," he says.
Once the quartet is sold, Klugman will be left with three assets. Kempfert says it's undetermined if the properties will be marketed individually or as a portfolio.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more inforrmation visit Asset & Logo Licensing.
