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PHOENIX-Alliance Residential Co. has sold the 264-unit Broadstone at Desert Harbor Apartments, rescued from bankruptcy court in January 2005, for $29 million to Archstone-Smith. The 19-month repositioning has yielded a $10-million gain in an off-market transaction.

Brad Goff with Apartment Realty Advisors in Phoenix says the transaction was an unusual one by Alliance Residential’s standards from start to finish. “Alliance typically buys A-quality products for long-term holds and appreciation,” says Goff, who brokered the handoff to Archstone-Smith and Alliance’s bankruptcy rescue of 8885 W. Thunderbird Rd. in early 2005. He says “this was in the path of growth in Phoenix and the market took off so they determined it was time to sell.”

Goff says the deal was quietly shown to several potential buyers. “We had significant offers on the table that were higher than Archstone’s,” Goff says. “But, Archstone had such strength in the marketplace we went with them.” The ARA brokerage team included Bret Zinn, Karyn McClintock and Stephanie Blackwell.

The Phoenix-based Alliance did interior and exterior work on the 2001-constructed complex before bringing it to market. But, Goff tells GlobeSt.com that Alliance’s most significant contribution was improving operations. “The professional management was probably the biggest thing they did,” he says. As a result, the physical vacancy dropped from 12% to 4% during Alliance’s ownership while “the economic vacancy went from 25% to 10%,” Goff adds.

In keeping with the Englewood, CO-based buyer’s MO, the complex has been renamed to Archstone Desert Harbor. The one- and two-bedroom units rent for $725 to $915 per month.

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