700-Unit MF Portfolio Hits Market

PHOENIX-A court appointed receiver has placed two class C apartment communities on the market. The properties, the 486-unit Northern Point and the 214-unit Paseo del Sol, are being marketed by Steve Gebing, Cliff David and Rich Butler of Marcus & Millichap's National Multi Housing Group.

Northern Point and Paseo del Sol can be purchased individually or as a portfolio. They have no list price, according to Gebing.

However, the properties will likely mirror pricing at two similar multifamily assets in the surrounding area that have sold recently. Casa Carranza, a 272-unit, class C property, sold for $4.6 million, or $16,912 per unit, while Brook View, a 157-unit, class C property, sold for just under $3.3 million, or $20,701 per unit.

Using those comps, Northern Point and Paseo del Sol should sell for $11.8 million to $14.5 million, collectively.

Both properties were developed by Granada Construction and most recently owned by Teresi Investments in San Jose, CA. They will be sold through a court appointed receiver with ING Clarion as the special servicer.

Teresi Investments acquired Northern Point for $20 million in July 2006, and the property was placed into receivership in July 2009. Similarly, the firm bought Paseo del Sol for $8.8 million in July 2006, and the property was placed into receivership in July 2009.

Both Northern Point and Paseo del Sol can be purchased with existing fixed-rate financing, Gebing tells GlobeSt. The seller will consider providing assumable financing by modifying the existing loan terms.

Northern Point has an conduit loan for $15.5 million with an interest rate of 6.34% that matures in August 2016. Paseo del Sol has an existing conduit loan for $6.8 million with an interest rate of 6.39% that also matures in August 2016.

Situated on about 14.5 acres, Northern Point consists of 27 two-story and three-story buildings and offers a unit mix of 192 studio apartment homes, 222 one-bedroom, one-bath apartment homes and 72 two-bedroom, one-bath apartment homes. The community offers an average unit size of 475 square feet.

Built in 1981, Paseo del Sol is comprised of 11 three-story buildings offering 79 studio apartment homes and 135 one-bedroom, one-bath apartment homes with unit sizes averaging 462 square feet.

Gebing tells GlobeSt. that both assets are well positioned within their respective submarkets to attract residents as demand returns to the market. For example, Northern Point enjoys 210,400 square feet of anchored retail shopping within walking distance.

MEB Management Services Inc. of Phoenix is handling leasing and management for both properties. Northern Point currently has an 83% physical occupancy (up from 62% in November 2009) and Paseo del Sol is currently at 94% physical occupancy (up from 59% in January 2010).

"The professional third-party management engaged by the receiver has ignited a sense of community at both Northern Point and Paseo del Sol," Gebing says. "The benefit has become apparent in the properties’ fundamentals – recent trends indicate both assets are gaining tremendous operational momentum."