ICC managing director Karl Abert tells GlobeSt.com that seller Shallendor LLC of Fountain Hills AZ went before the bankruptcy judge in late January and requested that Abert and ICC Real Estate be allowed to continue marketing the property at 1855 E. Don Carlos Ave. Abert, who represented the seller in the transaction, says between January 30 and close of escrow, the 1980s asset generated three offers above the debt amount and fourteen below it.
"The reason why there was substantial interest was because this is late '80s construction, all two- and three-bedrooms and is close to the light rail," Abert comments. "Plus this was in Tempe. Tempe is a desirable market to be in." The buyer, who was represented by Jody Poling with First USA Commercial Properties, plans a full rehabilitation of the complex, including a name change.
Abert says Shallendor LLC is a long-time property owner, and Reach Apartments had been the partnership's final holding. The property took a big hit when Hispanics left, falling to between 65% and 75% occupancy. "They eventually marched it up back to 90%, but never recovered capital-wise."
But the story did have a happy ending, he continues. Because of the interest generated in the property, Fannie Mae was willing to let the buyer assume the loan, which has a fixed interest rate of just over 6% and seven years remaining on its term.
Abert says both he and Shallendor were happy that Fannie Mae and the bankruptcy judge were willing to be cooperative regarding Reach Apartments. "We were just days from foreclosure," he comments. "The seller would have lost everything."
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