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SCOTTSDALE, AZ-A failed condo conversion at the 264-unit Sonoran Vista Apartments, bouncing into a court-ordered receivership, has been sold to an investment group from Seattle for $49 million. The buyer plans to put another $12,000 per unit into interior upgrades and run the class A complex as a rental.

“The seller had completely rehabbed the exterior to make it ready for conversion so we’ll finish rehab on the interiors with granite countertops, new stainless steel appliances, cabinets, paint and top-of-the-line fixtures,” says Lonnie Nadal, managing director of acquisitions for Security Properties Inc. Sonoran Vista at 9340 E. Redfield Rd. is the third multifamily buy in the past 18 months in the metro for the company, which partnered with Capmark Finance Inc. for the newest acquisition.

Oculus Development LLC of Chicago and its partner, a Korean financial company, acquired the 10-year-old complex in early 2006 with conversion plans. Nadal tells GlobeSt.com that Oculus ran into financial difficulties when the condo market slowed, driving the still 50%-occupied Sonoran Vista into court receivership.

Nadal believes the asset has a lot of things going for it. “Number one, it’s the North Scottsdale area, the premier area of job growth,” he says. He adds the exterior architectural style is distinctive from neighboring complexes. “Once our interior rehabs are completed, we’ll be a step above other properties in the area,” he says.

Nadal also stresses that the location is in a submarket with high barriers to entry. “There’s no further building because there isn’t any land available for apartments,” he explains. “There are no future units to compete with for the foreseeable future.”

Sonoran Vista Apartments has one-, two- and three-bedroom units, ranging from 780 sf to 1,223 sf. Rents start at $730 and end at $1,075 per month.

Brent Long, associate partner with Phoenix-based Hendricks & Partners. The debt and equity financing, totaling $56 million, was arranged by Jason Krupoff, assistant vice president in Capmark’s Orange County office.

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