Waterstone Apartments in Mesa Sold for $17.125m

By: Paul Dionne | Vizzda.com

Peter Slaugh of Open Path Investments completed the $17.125m acquisition of the Waterstone Apartments in Mesa from Steve Wasserman of Gelt, Inc. on April 30^th, 2014. The sale price represents a per unit price of $63,661. Mr. Slaugh paid $3.381m in cash and secured the property under a $13.744m deed of trust originated by Northmarq Capital and assigned to Freddie Mac concurrently with the sale. The note matures May 1^st, 2021.

The 269-unit apartment complex is located at the southeast corner of Dobson Road and the US-60 in Mesa. It is comprised of fourteen buildings totaling 161,450 ft² built in 1979 on an 8.02 acre site. The property features a combination of renovated and un-renovated studios, one bedroom, two bedroom and three bedroom units with the following unit mix:

Floor Plan	# of Units	SF	Asking Rent	Rent/SF
Studio Renovated	18	380	$499	$1.31
Studio	15	380	$449	$1.18
Studio Renovated	16	450	$479	$1.06
Studio	17	450	$469	$1.04
One Bed Renovated	44	550	$519	$0.94
One Bed	29	550	$489	$0.89
One Bed Renovated	47	600	$619	$1.03
One Bed	19	600	$589	$0.98
Two Bed Renovated	18	800	$739	$0.92
Two Bed	13	800	$699	$0.87
Two Bed Renovated	23	870	$809	$0.93
Two Bed	8	870	$769	$0.88
Three Bed	2	1013	$899	$0.89
Average			$617	$0.99

The property was previously acquired in early 2007 for $15.45m or $57,434 per unit with $2.29m down and $13.16m in new purchase money debt with Nomura Capital in two notes of $11.16m and $2m, maturing March 11^th, 2012. These notes were pooled into a commercial mortgage-backed security and assigned to a Wells Fargo entity in May of 2008. At that time, the combined note was bearing interest of 6.18% and the property had been appraised at $17.6m for a loan to value (LTV) of 74.77%. 

The first public indication of distress on the property came in the form of a May 2011 notice of trustee sale on the combined $13.16m CMBS debt. The property reverted to Wells Fargo as trustee for the CMBS certificate holders on October 7^th, 2011 with a $7.7m credit bid. Roughly six months later, Gelt Inc. acquired the property from the bank for an undisclosed amount and encumbered the property with $7m in new debt with LNR Partners. Gelt refinanced that note with $8.824m in new debt with CBRE Capital Markets and undertook a series of renovations to the property.