X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

PHOENIX-Planning to move out of real estate, a 35-year local owner and operator is putting four properties up for sale. The 660-unit portfolio is valued at close to $26.6 million.

As part of the deal, Ed Klugman is offering seller financing with three-year terms, 70% loan to value and 6.5% fixed-rate interest. The financing terms call for interest-only payments. “He’s being very responsive and sensitive to the current economic times,” stresses Bert Kempfert, senior vice president for CB Richard Ellis in Phoenix. “With the credit markets in turmoil, if you were to try to finance a class C portfolio these days, you could probably get only 50% to 60% value on it.”

Seller financing also adds to the portfolio’s upside potential, Kempfert continues. “Because the seller is providing financing through 2011, by the time a new owner comes in to embellish or reposition these apartments, the problems we’re seeing today will likely be gone,” he tells GlobeSt.com. “When the seller financing runs out, the owner can refinance these or sell them more easily.”

Kempfert says the complexes were built in the 1970s, all infill locations. The complexes have 85% to 90% occupancies. The portfolio consists of the 159-unit Encato Park Apartments at 2322 W. Thomas Rd., 180-unit Seville Gardens Apartments at 4903 W. Thomas Rd., 181-unit Sans Souci Apartments at 3030 N. 35th Ave. and 140-unit Sterling Place Apartments at 4235 N. 35th Ave. The CBRE sales team includes first vice president Thomas P. Montgomery Jr., associate Chris Gonzalez and client services’ specialist Michelle Montgomery.

Kempfert says the marching orders are to accept one-offs and portfolio offers. There is there no best-and-final date. “We’ll consider orders as they come in,” he says.

Once the quartet is sold, Klugman will be left with three assets. Kempfert says it’s undetermined if the properties will be marketed individually or as a portfolio.

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
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. APARTMENTS SPRING 2021Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information
 

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 © 2020 ALM Media Properties, LLC. All Rights Reserved.