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PHOENIX-A local investor has paid $24.5 million to acquire the 468-unit Willow Springs Apartments in the west central corridor. The 21-year-old complex, sold off market, was bought from its developer, who recently spent $1.1 million on renovations.

The Case Group had boosted occupancy to 94% at sale time to the Colgate Group, a locally based investment group. “The seller wanted to sell quickly and went with someone he knew,” comments Steve Bram, principal and co-founder with Los Angeles-based George Smith Partners, who arranged financing for the sale of the 4227 N. 27th St. property.

Bram tells GlobeSt.com that the $17.8-million loan was somewhat tough to obtain because there had been a history of security issues at the site. In addition, he says income historically had been low due to low occupancy prior to the renovation. “During the extensive rehab, units were off line,” he adds.

Bram says the non-recourse loan obtained through a New York City lender has a five-year term at interest-only payments based on the five-year Treasury plus 1.1%. While the new owner has a reserve built into the loan for additional upgrades, but Bram says the work left to be done isn’t major.

Willow Springs consists of 14 three-story buildings situated on 13.5 acres. The mix is 50-50 split of one- and two-bedroom units, averaging 669 sf. Monthly rents are $525 to $570 for one-bedroom apartments and $700 to $730 for two-bedroom units.

Bram says the buyer is on the hunt for more assets to buy. “They’re looking for value-add, but nothing is under contract right now,” he says.

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