SKB's $37M Buy Includes Development Potential

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RIVERSIDE, CA-Scanlan Kemper Bard of Portland, OR has acquired the 296-unit Copper Canyon Apartments for $36.5 million and plans capital improvements including new roofs, parking lot repairs and upgrades to the interior of 44 units at the property, which is situated a few blocks from the University of California’s Riverside campus. In addition, the deal included excess land that can be converted to additional parking, additional amenities, or built-out with an additional apartment building or garages for lease, SKB notes.The apartment complex, which was built in 1986 and occupies an 11.87-acre site, is a 32-building development of two-story buildings with exterior stairs to the second floor apartment units. The complex, which SKB acquired in partnership with Griffen Investments LLC, was 97% leased at the time of the sale.SKB principal Bob Scanlan notes that UC-Riverside has doubled enrollment in the last seven years and is now adding facilities to accommodate past and expected future growth. He points out that the $121-million capital improvement program now under way at the campus is the largest its 50-year history.SKB has only recently entered the lower-risk, lower-yield apartment market in response to the requests of investors seeking “certainty of yield versus higher returns with less certainty,” says SKB principal Todd Gooding. SKB and Griffin Investments have partnered on two previous apartment transactions, including the 148-unit Alder Creek Apartments, located about a half mile from Copper Canyon Apartments.GE Capital provided first mortgage financing of $27.5 million for the SKB-Griffin purchase. Griffin will oversee the day-to-day property management of Copper Canyon and execute the business plan, with SKB to act in an asset management role.Scanlan notes that Griffin and its principal, Sol Rabin, have substantial expertise in acquiring, pricing, and adding value to apartment properties in the Inland Empire. Those deals include eight Inland Empire apartment acquisitions by Griffin.