PHOENIX-A back-up buyer for a 156-unit multifamily property is put in the driver’s seat after brokers cancel a contract that’s in hand for one with up-front, non-refundable earnest money.

The Luis A. Macaya Trust/Checkmate LLC and Northridge Eight LLC from California paid $7.45 million or just $500,000 below the ask for the Verdana Apartments at 5704 W Thomas Rd. “The property had been under contract with someone else. When it was clear this was someone not interested in performing, we brought someone else in,” explains Julie Vaughn, senior vice president for Sperry Van Ness’ Paradise Valley, AZ office. She represented the buyer and the seller, BNR Veranda Associates of Seattle.

Vaughn tells that the California group came along with a very strong offer as well as up-front non-refundable money. “This is something new in Phoenix,” she says. “You usually don’t see non-refundable money put down, at least, until the financing is in place.”

The 10-building complex was developed in 1986 on 5.36 acres. It was 95% occupied at closing. The unit mix is 80 one-bedrooms and 76 two-bedroom, with monthly rents ranging from $490 to $650.

Vaughn points out the buyer is investing in the complex’s future potential and changing demographics rather than the present dynamics of its location, which isn’t one of the city’s better areas. “This is the fastest-growing area in Phoenix,” she adds. “We’re using a lot of units for condo conversion. That, plus lack of new apartment construction, indicate that there will be a high demand for multifamily housing during the next several years.”

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