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MESA, AZ-Nearly a third of the units were vacant and rent collections were only at 80%, but that didn’t stop buyers from bidding on the Southbank Apartments here.

For more than a year, the 113-unit complex at 214 N Gilbert Rd. fell in and out of escrow, drawing offers up to $5.4 million from eight competing bidders. But, the two-story, garden-style development could never pass due diligence because management problems made the acquisition questionable.

“The property looked great but collections were only around the 80% mark and nobody could get it to pencil,” Steven Levenson with Advanced Equities Investment Real Estate Services Inc. of Phoenix tells GlobeSt.com.

But then Dave Chamberlin of Chamberlin and Associates stepped in to manage the property and both collections and occupancy rates increased. By the time a partnership put together by Eugene Vollucci of Cal State Cos. in Palos Verdes, CA came to seller Seville Gardens LLC, of Portland, OR with a $4.8-million offer, only 23 apartments remained vacant and rent collections were on the rise.

“When Chamberlin came in and put a good marketing plan in place it turned the corner,” Levenson says. “They did a bang-up job.”

But, the buyer still had hurdles to overcome. “The lender in this transaction challenged the buyer at almost every step of the way, first with the amount of reserves required because of the vacancies, then with the way the buyer wanted to take title,” says Levenson, who represented the seller in the transaction. Cal State Cos., which was self-represented in the deal, surmounted those obstacles to take title to a property valued at $700,000 above the sales price.

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