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MESA, AZ-In its second purchase within a year, MG Properties of San Diego has acquired the 460-unit Indian Springs Village Apartments for $24.8 million as part of a 1031 exchange.

The class C asset at 1031 S. Stewart St., eyed as a long-term hold by the investment group, will undergo moderate upgrades to the interior and exterior to the tune of $3,000 per unit, Justin Smith, vice president of acquisitions for MG Properties, tells GlobeSt.com. “We target properties that are in stable-to-resurging neighborhoods and we like older assets that have some repositioning opportunities,” he says. “The market in Mesa is starting to turn. That’s what appealed to us about the asset and the opportunity.”

Built in 1980, Indian Springs is a mix of 240 one-bedroom units, 184 two-bedroom apartments and 36 three-bedroom floor plans. The average unit is 811 sf while the current average rent is $626 or 77 cents per sf. It was 92% occupied at sale time.

MG Properties’ first acquisition in the area, which occurred in October 2004, involved the $9.5-million purchase of the 175-unit Suncreek Apartments at 15050 N. 59th Ave. in Glendale. Additionally, MG Properties has a contract in escrow for a 360-unit complex in the area. That deal is scheduled to close in one week.

Smith says the company is seeking additional properties to buy in the Phoenix metro. “We feel there’s a lot of market shift that’s taken place during the past six months to owners who are selling to condo conversion,” he says. “We’re looking for more affordable and middle-market properties.”

Rob Holland of the J. Kislak Property Inc.’s Woodbridge, NJ office represented the seller, JIK Mesa Investments LLC of Florida. The buyer of record is MG Indian Springs LLC/WG Indian Springs LLC.

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