Aetna and Security Properties Acquire Sonora Canyon Apartments

Sonora Canyon Property Map

By: Paul Dionne | Vizzda 

Capping off a seven-day period in which 915 multifamily units changed hands for nearly $125m, The Sonora Canyon Apartments were purchased by a joint-venture between Seattle-based multifamily investors, Security Properties, and health insurance giant, Aetna, for $30m or $77,320 per unit. The seller was Marc Lipshy of Lone Star Funds, who acquired the property almost exactly one year ago for the same amount. Security and Aetna paid $8,102,501 in cash for the apartment complex and secured $24.999m in new agency debt originated by Prudential Mortgage Capital, assigned to Freddie Mac and maturing August 1^st, 2021.

The 388-unit apartment complex—located south of the southeast corner of Gilbert Road and University Drive in Mesa—is comprised of thirty-three 2-story buildings totaling 312,880 net rentable square feet built in 1984 on a 15.8 acre site. There are four one-bedroom floor plans totaling 224 units and ranging in size from 570 ft² to 768 ft² and four two-bedroom floor plans totaling 164 units and ranging in size from 882 ft² to 1,042 ft². All units are individually metered for power and master metered for water, sewer and trash. There are three resort-style pools on site as well as a basketball and tennis court.

Sonora Canyon Communal Space

Vizzda tracked the history of this asset back to 2000, when it was purchased by Duluth-based multifamily investor, Mercury Investments, for $16.875m or $43,492 per unit with $14.428m in new debt with First Union Bank for a loan-to-value (LTV) ratio of 85.5%. In 2005, Mercury sold the property to one of the current buyers, Security Properties for $22.15m or $57,087 per unit, fully financed by GMAC Commercial Mortgage. Orix Real Estate Capital picked up the complex for $33m in 2007 and sold to Lone Star Funds on July 17^th, 2013 for $30m. Lone Star Funds encumbered the property under an existing $494,262,293 deed of trust with Citibank and the Royal Bank of Canada secured by eight additional properties.

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Paul Dionne - pdionne@vizzda.com

The Sonora Canyon Apartments sell for $30m

 Vizzda – July 16, 2013 – The Sonora Canyon Apartments were sold Monday to Lone Star Funds for $30.0m or $ 77,320 per door. The apartments had been owned by Orix Real Estate Capital. Scott Cronister chief operating officer of Orix and Marc Lipshy vice president of Lone Star closed the deal. Lone Star financed the deal with a $494,262,293 acquisition loan funded by Citibank & Royal Bank of Canada maturing July 8, 2015.

The Sonora Canyon Apartments are located south of the southeast corner of Gilbert Road and University Drive  at 265 N Gilbert Rd in Mesa.  This 388-unit 2-story apartment complex totals 33 buildings and was built in 1984 on 15.80 acres zoned RM-4. Sonora Canyon features a mix of eight different unit styles with 224 one-bedroom and 164 two-bedroom apartments totaling 312,880 rentable square feet. The apartments are individually metered for electricity.

 Mercury Investments of Duluth previously acquired these apartments from a Capital Associates joint venture on August 21, 2000 for $16.875m or $43,492 per door with $14.428m debt with First Union Bank. Mercury Investments sold to Security Properties of Seattle on September 21, 2005 for $22.15m or $57,087 per door with $22.15m debt with GMAC Commercial Mortgage. Security Properties sold to Orix Real Estate Capital on January 17, 2007 for $33.3m or $85,824 per door with no debt. 

Edward Moore
Director of Research

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