(To read more on the multifamily market, click here.)

MESA, AZ-Making its first acquisition in the metro, Orix Real Estate Capital Inc. has acquired the 388-unit University Green for $33 million. The new owner also will complete a $3-million renovation started by the Seattle-based seller.

“This is an infill property that had already undergone extensive renovation,” says Eric Wollan, senior vice president of acquisitions for the Chicago-based buyer. Security Properties Inc. had completed two-thirds of what needed to be done on the class B asset at 265 N. Gilbert Rd. “There were some additional items the seller had contemplated doing, but it just wasn’t in the original business plan,” he adds.

In addition to being an infill property with 97% occupancy, Orix liked the complex because of the potential upside. Wollan tells GlobeSt.com that the renovations coupled with a re-gentrifying area and more retail components coming on line were good signs for investment.

According to John Butler, Orix’s vice president of acquisitions, University Green traded at a cap rate just under 7%. “The fact that occupancy continued to be high even during renovation showed the demand was there,” he says.

University Green is Orix’s first acquisition in the region, but it’s not a newcomer to the market. Orix and Zaremba Residential Co. of Cleveland have just completed work on the Waterford at Superstition Springs, a 280-unit ground-up project at 7311 E. Southern Ave.

University Green, built in 1985, has one- and two-bedroom units, ranging from 579 sf to 1,042 sf. The rent is $640 to $840 per month.

Steven Goldstein and Jason Buxbaum of Scottsdale-based Amercon Realty Services Inc. represented the seller. The local Alliance Residential Co. will manage and lease the complex.

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