The Pavilions on Central Apartments sell for ~$47m

VIZZDA – June 26, 2013 – The Pavilions on Central were sold on Monday by a joint venture between Gray Development of Phoenix and The Reliant Group of San Francisco to Crow Family Holdings of Dallas for $46,918,720 or $184,719 per door. Caskie Collet, chief operating officer of The Reliant Group, closed the deal. Crow Family Holdings is a family office charged with managing the wealth of the late real estate developer, Trammel Crow. 

The Pavilions on Central is a located north of the northwest corner of Central Ave and Indian School Rd at 1 West Campbell Ave in Phoenix. It is a 254-unit “Class A” three-story apartment complex of eighteen buildings built in 2001 on 6.76 acres. The Pavilions features a mix of 1, 2 and 3 bedroom units totaling 281,619 rentable square feet in nine different product types with various amenities. The buildings feature two levels of living space over ground floor garages – each unit has a garage with washer and dryer. Units are individually metered for electricity.

A Gray Development—in a joint venture with MJ Olson Investments and Joseph E Meyer—sold the land for the pavilions to a joint venture between itself and Northwestern Mutual Life Inurance on September 7^th, 1999 for $3,614,850 or $10.36 per ft², financed with $20.1m in new debt with Northwestern Mutual. This debt was modified on October 10, 2008 and on January 9, 2009 each time to extend the maturity date. On April 21, 2010 ownership of the Pavilions was transferred to the Gray Development and Reliant Group joint venture with a new HUD loan of $21.452m originated by Red Mortgage Capital.

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Edward Moore
Director of Research

emoore@vizzda.com
www.vizzda.com

Tempe Grove Apartments Purchased by Fairfield Residential

VIZZDA – September 5, 2012 –  a 408-unit apartment complex at 909 W Grove Parkway in Tempe was sold by Archstone Apartments for $39.5m or $96,813 per door. The deal recorded August 31st, 2012 with $400k down per affidavit and a $29.625M Freddie Mac Multifamily Loan, maturing 9/1/22, originated through CBRE Capital Markets.  The three and four story apartment complex consists of 17 buildings built in 1998 on 20.17 acres zoned R-4. The brokers, Cliff David and Steve Gebing of Marcus and Millichap, report ±$3M in capital improvements since Archstone acquired the property in 2006. Asking price on the May 31st, 2012 broker flyer was $42.0M.  See the broker flyer here.

The apartments feature one, two and three-bedroom apartments and two and three bedroom townhomes. The brokers’ pro forma indicates that the apartments are 95% occupied. The apartments’ unit mix--taken from the linked flyer--is reproduced here:

 

The apartments were developed by Jay Wilton of Wilton Partners of Los Angeles who acquired the 20.17 acre parcel of vacant land for $1.63M or $1.85 per square foot, no debt recorded with sale.  Wilton Partners recorded a $871K related debt  on the property May 21st, 1996 by which the principles of Wilton Partners loaned themselves these funds. This debt was released September 4th, 1996.  Wilton Partners also borrowed $1.15M from Bank One August 2nd, 1996, released March 17th, 1998. 

However, the critical debt history on the property began August 29th, 1997 when Wilton Partners acquired a $24.588M note with TRI Capital Corp (6.5% APR, maturing January 1st, 2039) with a US Department of Housing and Urban Development (HUD) agreement binding the property with leasing restrictions requiring an absolute preference in leasing to displaced persons or families per section 221(d)(4) of the National Housing Act. 

This debt was modified June 22nd, 2001, increasing outstanding principle to $25.99M. On July 24th, 2004 TRI Capital assigned debt to Midland Loan Servicing who immediately re-assigned to HUD.  On April 5th, 2005 HUD released the property from any leasing restrictions and sold the note to a Delaware corporation including Archon Group.  On July 31st, 2006, Wilton Partners returned the property to Ameriton Properties, the capital arm of Archstone-Smith, through Deed-in-Lieu. On October 5th, 2007, Archstone-Smith was acquired by a Tishman Speyer and Lehman Brothers FSB partnership - this ownership entity was rebranded as “Archstone” February 19th, 2008. 

Richard L Boynton (VP) of Fairfield Residential and Brett C Johnson (VP) of Archstone closed the deal.

Links:

Seller

Buyer

Developer / Prior Owner

By:

Edward Moore
Director of Research
emoore@vizzda.com