Fairfield Residential Buys Lakeview at Superstition Springs

By: Paul Dionne | Vizzda

In one of the largest transactions in terms of dollar value thus far this year, Chicago-based investment management firm, Heitman, sold one of the largest apartment complexes in the valley—the 676-unit Lakeview at Superstition Springs for $66.6m. The buyer was San Diego-based multifamily developer Fairfield Residential who paid $19.2m in cash for the property and secured an additional $47.4m in funding from CBRE Multifamily Capital, assigned to Fannie Mae at origination. Fairfield owns or manages ten other properties in the greater Phoenix area.  The $66.6m sales price equates to $98,520 per unit.

Lakeview at Superstition Springs’ 676 units are situated in eighty-nine residential buildings totaling 636,963 ft² in addition to a leasing office and clubhouse that bring the total improved square footage above 640,000. The property was built in two phases: forty-two buildings totaling 287,135 ft² built in 1996 and forty-nine buildings totaling 356,668 ft² built in 1998. The gated complex sits on 42.72 acres net of the lakes complex that runs through the property and features four resort-style pools. The one bedroom floor plans range from 660 ft² to 776 ft², the two bedrooms range from 916 ft² to a 1,314 ft² split-level and three bedroom floor plans range from 1,181 ft² to 1,214 ft².

Heitman previously acquired Lakeview at Superstition Springs in March of 2006 for $59.4m or $87,869 per unit from Nearon Enterprises. At the time of sale, Heitman assumed $38m in existing CMBS debt in care of Lasalle Bank and secured additional funding in two notes with Deutsche Bank Berkshire Mortgage of $8.957m and $29.543m, maturing April 1^st, 2011 and both of which were assigned to Fannie Mae at origination. Those debts were released in May of 2012 and replaced with $36m in new debt with CW Capital. Ignoring financing and carry costs and operational proceeds, Heitman earned a 12.1% absolute rate of return and a 184.6% cash-on-cash return.

To Contact the Author:

Paul Dionne – pdionne@vizzda.com

MIG Continues Multifamily Buying Spree

By: Paul Dionne | Vizzda

Less than two months after his brother, David Merage of Consolidated Investment Group, closed on the distressed Block 1949 Apartments in Tempe, Greg Merage of MIG Real Estate has acquired Symphony Apartments in Chandler for $34.164m or more than $150k per unit. This is the second major multifamily acquisition by MIG this year following the $41.85m purchase of the Quadrangles in April and the fourth major acquisition since the start of 2013, totaling $126.564m for 1,048 apartment units and a 90k SF office building. MIG put $10.65m down and secured an additional $24.85m in funding through a Fannie Mae loan originated by CBRE Multifamily Capital.

The 234-unit apartment complex is comprised of fifteen 2 and 3-story buildings totaling 246,611 net rentable square feet completed in 1998 on a 15.30 gross acre site featuring two resort-style pools. The units are a mix of one, two and three bedrooms with seven floor plans, detailed in the table below:

Unit	Number	Beds	Baths	SF
Handel	48	1	1	729
Mozart	33	2	1	1240
Mahler	55	2	2	1069
Schubert	22	2	1	1142
Beethoven	11	2	1	915
Bach	32	2	2	1022
Chopin	33	3	2	1262

The complex was converted to condominiums in 2005 under an agreement that stipulates to slightly smaller unit sizes, resulting in a net rentable square foot total of 237,476 for the project. The units are individually metered for electricity. 

The seller was Hartford Investment Management Company, who had previously acquired the property in 2010 when then-owner Graystar defaulted on a purchase money note secured by the property and transferred ownership to Hartford, deed-in-lieu. The previous arms-length sale of Symphony was in January of 2007, when the Greystar bought the complex for less than it's begin acquired for now: $34.164m or $146,000 per unit with $7.864m down and the $26.3m new debt which caused Greystar to give up Symphony less than five years later.

To Contact the Author:

Paul Dionne - pdionne@vizzda.com

One Day after $165.8m Portfolio Sale: $75m in Sales and a $60m Notice

By: Paul Dionne | Vizzda 

Verano Townhomes Leasing Office

Before the ink was dry on PB Bell’s acquisition of seven multifamily assets from the Bethany Kingdom I portfolio, an additional 775 units in two assets were sold for a combined $75.5m and a third, 856-unit asset was noticed for trustee sale on a $59.4m outstanding debt. The assets in question are the 360-unit Verrano Townhomes which sold for $49m, the 415-unit Colonnade Apartments which sold for $25.5m and the Saratoga Ridge Apartments, which were noticed for trustee sale by an affiliate of AIG Life Insurance Company. The three deals today bring the total amount of economic activity in the 100+ unit multifamily space to $464.8m since the beginning of last week. 

Verano Townhomes is located north of the northeast corner of 44^th Street and Ray Road in Phoenix. Its 360 units comprise thirty residential buildings totaling 435,840 ft² on a 22.23 acre site. It was built in 1996 and substantially renovated in 2006. It was previously acquired by Cornerstone Real Estate Advisors in July of 2011 for $44.55m or $123,750 per unit with $25m in new debt with People’s United Bank, maturing September 1^st, 2016. Yesterday, ColRich Multifamily acquired Verrano Townhomes from Cornerstone for $49m or $136,111 per unit with $10.19m down and $39.2m in new agency debt underwritten by CBRE Multifamily Capital and assigned to Fannie Mae at origination.

The Colonnade Leasing Office

The Colonnade is located east of the northeast corner of State Route 51 and Camelback Road in Phoenix. As mentioned above, it has 415 units in twenty four 3-story buildings built in 1970 and 1974 on a 9.57 acre site. There are 196 studios, 236 one-bedroom units and fifty two-bedroom units, all of which are master metered. Steve Wasserman of Gelt, Inc. previously acquired the property in two sales in 2011: the 219-unit Fern Tree Apartments for $9.3m and the 197-unit Colonnade Gardens for $6.95m. Gelt sold its interest in the property yesterday to a tenant-in-common group comprised of affiliates of Mica Creek-Sagamore Capital Partners who paid $3.1m in cash and financed the remainder of the purchase price with $22.4m new agency debt originated by Greystar and assigned to Fannie Mae at origination.

Saratoga Ridge Apartments is located west of the northwest corner of 16^th Street and Bell Road in Phoenix. It is one of the largest apartment complexes in the valley, with 856 units in seventy four two-and-three story buildings totaling 732,406 ft². The complex was built in 1984 on a 38.37 acre site and features four pools. Pacific Coast Capital Partners previously acquired this complex in September of 2004 for $42.65m or $49,825 per unit. After investing another $9.35m in rehabilitating the property, PCCP sold to Greystar in June of 2007 for $70.4m or $82,243 per unit, $14.214m of which was tendered as cash and $59.4m of which was secured under a deed of trust with Variable Annuity Life Insurance Company, an affiliate of AIG. Variable Annuity served notice to Greystar that it was in default of the $59.4m loan—stipulated to have an unpaid balance of $58,320,577—yesterday.

To Contact the Author:

Paul Dionne – pdionne@vizzda.com

New Entrant to the Phoenix Market Buys Chandler Multifamily

By: Paul Dionne | Vizzda.com

Oregon Pacific Investment & Development Company (OPID) of Portland, Oregon has completed the acquisition of Pinnacle Creek Apartment Homes in Chandler for $33.3m. The seller was a joint venture between Essex Property Trust as successor-by-merger to BRE Properties and Northwestern Mutual Life—which financed the prior land acquisition and development of the property. The sale was structured as a 1031 exchange and financed with $22.712m in new debt with CBRE Multifamily Capital, assigned at origination to Fannie Mae. OPID tendered the balance of the purchase price as cash.

The 252-unit apartment complex is located east of the northeast corner of Alma School and Queen Creek Roads. It is comprised of nineteen 2-story buildings totaling 263,460 ft² built in 1999 on 16.89 acres. The property features the following unit mix: 

Number of Units	Beds	Baths	SF	Base Rent	Base Rent PSF	Potential Base Rental Income
56	1	1	767	$802	$1.05	$44,912
28	1	1	814	$855	$1.05	$23,940
68	2	2	1087	$1,007	$0.93	$68,476
40	2	2	1206	$1,105	$0.92	$44,200
20	2	2	1254	$1,174	$0.94	$23,480
40	3	2	1262	$1,092	$0.87	$43,680
					Total	$248,688

The aforementioned joint venture acquired the property as vacant land from Bradley Wilde for $2.05m in April of 1999. Northwestern Mutual committed $10,681,202 in debt for the project, which was slated to mature June 15^th, 2011. The debt was repaid and the security interest released on May 20^th, 2011. BRE Properties announced their merger with Essex Property Trust on April 2^nd, 2014. The current transfer was administered by First American Exchange Company.

To Contact the Author:

Paul Dionne – pdionne@vizzda.com