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GLENDALE, AZ-In an effort to enlarge its footprint in the area, a California investor has acquired the 184-unit Greentree Apartments from a Texas company. Paying $15.7 million for the class B complex, the new owner is planning to pump $4,300 per door into interior upgrades and another $175,000 for exterior fixes and landscaping.

“This is a ‘raise-the-rent’ scenario and a lowering of concessions,” explains Ryan Somers, vice president of acquisitions and dispositions for the buyer, RK Properties Inc. of Long Beach, CA. He tells GlobeSt.com that occupancy for the class B complex at 5959 W. Greenway Rd. is just under 90%, but anticipates it will hit closer to 95% once upgrades are completed and concessions burn off.

Last fall, RK Properties, which acquired the 1986-built Greentree Apartments from the Lynd Co. in San Antonio, bought the nearby 175-unit Sun Creek Apartments at 15050 N. 59th Ave. He says Sun Creek has been upgraded to the point that rents are being raised, He hopes for the same results with Greentree. “We beat our pro forma on Sun Creek by about $15 to $20 and pretty quickly,” he adds.

Somers says the company wants to make more investments in the area, preferably through value-add opportunities. “We love new construction too,” he explains, citing the purchase of the 160-unit Laguna at Arrowhead Ranch at 20251 N. 75th Ave. in Glendale, which is relatively new.

Somers says the company strategy is to buy and push properties to higher cap rates, which is more difficult to do at class A complexes. “But I can come in with a value-add play and raise the cap by 100 basis points by putting capital into it,” he says.

The Greentree acquisition was financed through John Hancock Life Insurance Co. to the tune of $7.85 million. The 12-year loan has a fixed rate of 6.05% and is interest-only for the first five years. It also has a 30-year amortization. Brad Goff, principal with Apartment Realty Advisors in Phoenix, represented the seller.

Situated on 6.82 acres, the 10-building Greentree Apartments is a mix of one- and two-bedroom units, ranging from 570 sf to 900 sf. The monthly rents range from $651 to $816.

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