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

Week in Review - July 11th, 2014

With Land Swap, Rivulon Development is Underway 

With the transfer of 5.345 acres from Nationwide Realty Investors--as master developer--to LA Fitness in exchange for 17.06 acres at the northwest corner of the same development, Phase I of the 252-acre Rivulon mixed-use development in Gilbert is officially underway. When complete, Rivulon will total 3.1m SF of new office space and 500k SF of integrated restaurant and retail use on a 252-acre parcel at the northeast corner of the Loop 202 San Tan Freeway and Gilbert Road. According to Nationwide, construction is set to begin on Phase I in the Fall of 2014. 

Formerly Distressed Student Housing in Tempe Sold for $38.7m 

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. 

Jabil Circuit Manufacturing Facility Sold in Tempe 

The soon-to-be-vacant manufacturing and distribution facility that served as the regional headquarters for Jabil Circuits, Inc. was sold yesterday for $11.415m or $60.73 per square foot in an all cash deal. Jabil will vacate the property over the next two to three months after announcing it would cease operations at the facility in September of last year. The buyer was Denver-based Alliance Commercial Partners through its Phoenix Director of Acquisitions, Curt Kremer.  

Pecan Promenade Shopping Center Sold for $19m 

CIRE Equity—a California-based private real estate investment company in the value-add and opportunistic investment space—has acquired the Target-anchored Pecan Promenade shopping center in South Phoenix. The $19m purchase price represents $135 per square foot and was financed with $15m in new purchase money debt with Prime Finance Partners. The sellers were James D Tate and J Kenneth Tate of Miami-based Tate Capital. Tate previously sold three of the pad spaces for a combined $4.244m for a total payout on this deal of $23.244m, net of acquisition and operating costs. 

Anthem Chase Bank Branch sells for Over $700 Per Square Foot 

Florida-based Real Estate Investment Trust, National Retail Properties ($NNN), has sold a single tenant pad leased to Chase Bank for $3,534,000 or $785 per square foot. The buyers were a group of investors out of Chicago who financed the deal with $1,464,140 in new debt with Lakeside Bank. Located within the North Phoenix master-plan community Anthem at 39516 N Daisy Mountain Drive- the 4,500 SF bank branch was constructed in 2007 as an out-parcel of the “Anthem Crossing” neighborhood shopping center.

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