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.

To Contact the Author: 

Paul Dionne - pdionne@vizzda.com

Fernwood Manor Apartments Sold to Canadian Investor for $17.525m

VIZZDA—December 13^th, 2012 — Another major multi-family asset in the Southeast Valley changed hands this week as Nancy Swetnam and Patricia Conahan sold Fernwood Manor Apartments for $17.525m. The Buyer, Robert Petryk of Petwin America Corp, paid $4.825m cash for the property and secured $12.455m in financing through a 10-year multi-family loan with Prudential Mortgage Capital and assigned to Freddie Mac at origination.

The 252-unit complex is comprised of thirty 2-story buildings totaling 240,203 ft². Construction on the 11.77 acre site South of the Southwest corner of Rural Road and US-60 was completed in 1971. It is master-metered for utilities and is managed professionally managed by Greystar. Property management reports 98% occupancy. The unit-mix and base rents are as follows:

No. of Units	Beds	Baths	Average ft2	Base Rent
64	1	1	630	$729
88	2	1	942	$869
80	2	1	1016	$879
20	2	2	1016	$944

The property was acquired by an entity affiliated with the current sellers on October 2^nd, 1975 for $4.47m. Gordon Reeson paid $250k in cash and financed the remainder with new debts of $1,918,489 and $773,731 with First Federal Savings and Loan as well as $909,860 and $617,918, seller carry. Following a related entity quit-claim, the property was further encumbered with $2.75m debt with Citibank of Arizona. A subsequent related entity transfer resulted in another $2.45m encumbrance with the current lender. Johnson Capital issued a final loan in the original principal amount of $5.35m on June 3rd, 2003.

The $17.525m purchase prices represents a $69,534.65 per unit price and a ~7.8% annualized rate of return—ignoring cash flows—for the selling entity.

By:

Paul Dionne

Director of Analytics

Vizzda.com