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PHOENIX-In its second acquisition this year in the metro, Irvine, CA-based Atherton-Newport Investments LLC has snagged the 428-unit Morgan Park Apartments for $28.8 million. The plan is to pump another $3 million into renovating the vintage asset.

According to Ashish Khatana, the Morgan Park acquisition is part of a plan to accumulate 2,000 to 3,000 units in Greater Phoenix within 18 months. “We buy late ’70s to early ’90s vintage buildings that are under-managed and under-capitalized,” says Khatana, who is Atherton-Newport’s co-founder. “We put in additional capital, bring the rents to market and take care of any deferred maintenance, then sell the property.”

Morgan Park Apartments, situated at 8902 N. 19th Ave., closed about six months after the investment group laid down $24 million for the 376-unit Northridge Apartments at 2140 W. Thunderbird Rd., also situated in Phoenix proper.

Though Atherton-Newport’s typical target areas are coastal markets, Khatana tells GlobeSt.com that the interest in the Phoenix market is due to its high job and population growth and limited new supply. “We believe the timing is good to be in Phoenix right now,” he says, “and think it’ll be a good market.” Underwriting the plan with a two- to three-year hold strategy, he says Atherton-Newport is continuing to scout for additional buys, but nothing is under contract right now.

Khatana says Morgan Park Apartments’ appeal us a positioning near the Downtown and the upside opportunity that will come from finishing a rehab started by its local seller. Atherton-Newport has retained locally based Alliance Residential Co. to manage and lease the complex.

The 87%-occupied complex has one- and two-bedroom units with 600 sf and 879 sf, respectively. Rents range from $590 to $740 per month. Cindy Cook, vice president with Colliers International’s Phoenix office negotiated the transaction.

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