Tuesday, July 8, 2014

Formerly Distressed Student Housing in Tempe Sold for $38.7m

By: Paul Dionne | Vizzda.com
Block 1949

Block 1949—the “Class A” student housing and multifamily development located east of the southeast corner of McClintock and University Drives—was acquired by a tenancy-in-common (TIC) group comprised of Consolidated Investment Group (CIG) and CWS Capital Group (CWS) for $38.7m or $172k per door. CIG is the majority interest in the new ownership structure—acquiring 85% of the TIC interest in the property in an all cash purchase. In an interesting wrinkle to the deal, CIG was founded by David Merage who is the brother of Greg Merage, whose MIG Capital acquired the nearby Quadrangles Apartments in April of this year.

Block 1949 is a 225-unit, 640-bed apartment and student housing complex in one 4-story, courtyard style building totaling 264,555 net rentable square feet. The project sits on 6.35 acres of MU-4 zoning in Tempe and was completed in 2009. There are twenty-five studio units, ten live/work units, sixty-four two-bedroom, twenty-seven three-bedroom and ninety-nine four bedroom units. The five-level on-site garage has 702 parking spaces or 2.75 spaces per unit. The new ownership plan to re-brand the property as Regents on University.

Block 1949 Apartments and Shuttle
The property was originally acquired by JLB Partners as raw land in April 2008 for $6.15m or $22.22 per unimproved square foot. JLB financed $4m of the purchase price, which they took out with $30m in construction debt with Compass Bank.  Less than a month later, a Final Plat for Block 1949 was recorded and construction began. A joint venture between Pierre Education Properties and Partners Group acquired the completed project in March of 2011 for $52m or more than $230k per door, with $13.5m down and $38.5m new debt with Deutsche Bank. The property was placed into receivership in September of 2013 and reverted to affiliates of Deutsche Bank in January of 2014 with a $44m credit bid. 

To Contact the Author:
Paul Dionne – pdionne@vizzda.com


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