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PHOENIX-Domain Communities has closed on a second property from its $84-million, 1,339-unit, six-complex portfolio. The New York-based company sold the 120-unit Oxford Place to Phoenix Queen LLC of Calabasas, CA for $5.7 million.

The buyer plans an additional $200,000 to $300,000 investment in upgrades to the class B complex at 6801 N. 25th Dr. “He plans to add fencing around the property, paint the building and raise the rents,” says Alon Shnitzer, an investment associate with Marcus & Millichap’s Phoenix office, who represented the buyer.

Shnitzer tells GlobeSt.com that the buyer liked the 91%-occupied Oxford Place because of its strong upside potential. The price was also right. “The price per sf on this ended up being below $70, and the average is $80 per sf,” he adds. “You can’t find anything much lower around here.”

The complex has a mix of one- and two-bedroom units, with sizes ranging between 700 sf and 800 sf. The monthly rents are between $419 and $489.

The Oxford Place closing follows the first sale of 442-unit Villages on Mill at 4130 S. Mill Ave. in Tempe to a different buyer. According to Rich Butler, Marcus & Millichap’s senior investment association and director of the national housing group, three of the portfolio’s properties are under contract with imminent closings; two going to one buyer, while one remains on the market.

Domain Communities acquired the apartments 10 years ago from the Resolution Trust Corp, placing tax-exempt bonds on the properties in the process. Butler says five out of the six properties have an income restriction and 20% set-aside for affordable housing, with Oxford Place having an outright deed restriction on how high rents can go. Still, the restriction won’t hamper any upside potential on Oxford Place. “There’s still $100-plus under the maximum rent allowable limit on those,” adds seller representative Butler.

The portfolio represents Domain Holdings’ one asset in Phoenix, and once the final property is sold, the seller will exit the market. “The seller wants to redistribute capital across better areas, investments and locations in the US,” says Butler, who is working with Marcus & Millichap’s Richard Holway and Adam Arkfeld on the listing.

Properties under contract or still on the market are the 208-unit Advantage Point, 5038 N. 55th Ave. in Glendale; the 124-unit Arrowhead at 4038 E. McDowell Road in Phoenix; the 265-unit Riviera Pointe at 1800 E. Covina St. in Mesa and the 180-unit Timber Lake at 2045 E. Broadway Road in Tempe. The properties were constructed in the late 1970s and early 1980s and have average occupancies in the lower 90s.

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