According to officials at Grubb & Ellis Co. who arranged the$29 million loan to refinance 24 apartment communities owned andoperated by Fifteen Group of Miami, a stable tenant base and lessdownside risk are attracting buyers to similar B and C buildings.The Fifteen Group portfolio includes 6,868 apartments located inmajor metro markets including Atlanta, Dallas, Houston, Miami, SanFrancisco, Sacramento, Tampa and Birmingham.

"What we are seeing is that in times of economic volatility,like we are experiencing now, B and C apartment properties mayprove to be a more stable investment," says G&E senior vicepresident Herb Chase, brokered the deal along with fellow seniorvice presidents Curtis Palmer and John Brown. The lender wasPhiladelphia-based investment fund CMS, which replaced the equityand mezzanine capital of Credit Suisse First Boston.

"B and C level apartments usually have more blue-collar-typeresidents who earn a modest but steady income," says Keith Misner,managing director of G&E's Multi-Housing Investment Group."They tend to remain residents for longer periods of time, whichkeeps tenant turnover and vacancy rates down." Misner adds thatrenters at B and C properties "tend to remain residents for longerperiods of time," and "may hold off planned home purchases andremain in cost effective apartments longer, thus helping tostrengthen demand.