X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

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

SCOTTSDALE, AZ-In the wake of the condo slowdown, Alliance Residential Co. has acquired 660 units through separate off-market transactions. The 330-unit Foothills Apartments and 330-unit Joshua Tree Apartments, which were planned for condo conversions just a year ago, will be returned to the rental pool following extensive multimillion-dollar renovations.

The buyer isn’t saying how much it paid for the deeds. But, John Cunningham, Alliance’s managing director of acquisitions, says similar properties in the submarket have traded for $200,000 per door. “We’re significantly below that number,” he tells GlobeSt.com.

Cunningham says his company has close relationships with Foothills’ seller Oculus Development LLC of Chicago and SunVest Communities LLC, the Hallendale, FL company that owned Joshua Tree. When the market for condominiums slowed, Alliance decided to take the opportunity to reposition both assets through an 18- to 36-month capital improvement plan. Steve Goldstein with local Americon Realty Services Inc. represented both sellers.

“The location of both assets was very good,” Cunningham says. “The submarket has an extremely high barrier of entry for new construction. The underlying appeal is that both of these have gone through the process of being mapped to go condo if that market ever picks up.”

Cunningham says there also is some upside potential with the rents because current rates are $125 to $200 per unit below market. Joshua Tree’s occupancy is above 80%; Foothills is substantially lower. “This represents an opportunity to come in and accelerate the renovation program without the challenge of having existing occupied units,” he explains.

Joshua Tree Apartments at 11545 N. Frank Lloyd Wright Blvd. will be called Broadstone Oncala. Situated on more than 13 acres, the 22-building complex has one- and two-bedrooms ranging from 868 sf to 942 sf. Current monthly rents are $660 to $845.

Foothills Apartments will be renamed Broadstone Scottsdale Horizon. Located at 9259 E. Raintree Rd., the 30-building property contains one- and two-bedroom units from 765 sf to 1,006 sf. The rents go from $789 to $837 per month.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.