- Berkadia Showcases Elan at Desert Ridge in Phoenix, AZ
Berkadia is pleased to announce the exclusive listing of Elan at Desert Ridge, a 370-unit apartment community, located at 21155 North 56th Street in Phoenix, AZ. The seller has engaged Mark Forrester, Ric Holway and Dan Cheyne of Berkadia's Phoenix office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Glendora Park Place in Glendora, CA Listed by Berkadia for $14.5M
Berkadia is pleased to announce the exclusive listing of Glendora Park Place, located at 641 West Route 66 in Glendora, CA. The asking price for the 50-unit apartment community is $14,500,000. The seller has engaged Peter M. Hauser of Berkadia's Newport Beach office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Mogharebi of Berkadia Presents Ariana at El Paseo in Palm Desert, CA for $7.65M
Berkadia is pleased to announce the exclusive listing of Ariana at El Paseo, located at 45278 Deep Canyon Road in Palm Desert, CA. The asking price for the 63-unit apartment community is $7,650,000. The seller has engaged Alex Mogharebi and Otto Ozen of Berkadia's Ontario office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Berkadia CEO Sees U.S. Property as Hot Space Amid Global Shocks
Justin Wheeler, who was named chief executive officer last week of the commercial-mortgage business owned by Berkshire Hathaway Inc. (BRK/A) and Leucadia National Corp. (LUK), said global investors are increasingly betting on U.S. property.
"People just want to pump dollars into the U.S." amid volatility in other markets, he said in a phone interview Tuesday afternoon New York time. Commercial real estate is a "hot space right now."
Wheeler's Berkadia Commercial Mortgage LLC originates and brokers loans, some of which are sold to U.S. government agencies. The company is also among the largest servicers of commercial real estate debt. Berkshire and Leucadia formed the company in 2009 after buying a business from bankrupt Capmark Financial Group Inc.
U.S. commercial property values surpassed the November 2007 peak by 2.4 percent, as measured by the Moody's/RCA Commercial Property Price Index. Prices in major markets, which include cities like New York and San Francisco, have exceeded prior records by about 16 percent, Moody's said this month in a report.
Markets have been rattled by plunging oil prices and central-bank moves like last week's decision by the Swiss National Bank to abolish a currency ceiling. That's driven investors to the U.S. even as its economy is still rebounding.
Chinese insurance companies are flooding into the global market for prime commercial real estate, helping to drive up property values. And Blackstone Group LP agreed to buy 36 apartment properties across the country for about $1.7 billion, two people with knowledge of the deal said this week.
The U.S. is the "tallest building in Idaho," Wheeler said, referring to one of the least-densely populated states.
Berkadia has expanded in recent years through acquisitions. In May, it bought Keystone Commercial Capital, a mortgage-banking company. In 2013, it purchased Hendricks & Partners, a firm that advises clients on multifamily real estate.
Wheeler, who used to work on mergers and acquisitions for Leucadia and has been acting CEO of Berkadia since April, said there will be more chances for Berkadia to buy businesses. The company's owners have the resources and long-term focus to do bigger deals when opportunities arise, he said. Berkshire is run by billionaire Warren Buffett and Leucadia by CEO Richard Handler.
"It's rare to be part of an organization that thinks in decades, not months and quarters," Wheeler said. "That's a real competitive advantage for us." [Bloomberg]
- Multifamily market to stay hot in 2015
Birmingham's red hot multifamily market in 2014 has reshaped the dynamic of downtown.
Although there is a lot of pint-up demand for apartment units in the Magic City, that isn't the only thing driving action in the sector.
Berkadia recently released its 2015 forecast for the nation, which looks at 60 metros, including Birmingham.
Overall, job growth across the country has driven urban apartment developments in metros like Dallas and Nashville.
While CBD job growth in Birmingham has not been as strong as other metros, investors see the Magic City as a place that provides solid vintage product, as well opportunities for new developments.
"It looks very positive," said David Oakley, partner at Birmingham's Berkadia office. "We're very excited about it. People are proceeding cautiously, but optimistically."
In 2014, Birmingham saw a small population increase of 0.6 percent, while employment grew at 0.5 percent. The median home price grew 1.2 percent to $166,800, while the median household income grew by the same percentage to $48,200.
Rising incomes facilitated rental demand, which led to 1,200 units being absorbed during 2014, compared to the 10-year average of 250 per year, the report said.
Developers delivered 1,100 units in the metro area, the highest number since 2005.
"I see it continuing," Oakley said, noting that developments like the 300-plus unit Highland apartment tower is seeing some demolition work on the site.
Also, Iron City Lofts developer KRE Development Holdings plans to start construction on the 67-unit development by Pepper Place this month.
Bomosada Group said it will break ground on a 300-plus unit development in Lakeview in late May or early June.
The development that will bring Publix, Starbucks and other retailers to 20th Street South and Third Avenue South also involves over 100 apartment units.
"We're seeing some newer deals come on online that are seeing some extremely strong demand, which is surprising a lot of people," Oakley said.
Oakley said he expects older product will continue to move in the area after over $150 million in apartments were sold between November 2014 and this month.
As far as new areas to look for for new development, Oakley said to keep an eye out for Irondale.
"The real area that I think is going to sneak up on everyone and surprise everyone is Irondale-east," Oakley said, noting recent traffic producers like Grant's Mill and Church of the Highlands as potential catalysts for development. "I think that market will be a point of interest in the next 24 months. It's prime for new development."
As young professionals continue to move to Birmingham because of downtown employers like UAB, Oakley said to expect night life and entertainment options to keep growing.
If that happens, there should be no slacking off in apartment developments near the central business district. [Birmingham Business Journal]
- Unpriced Two-Property Portfolio in Newport News, VA Listed by Berkadia
Berkadia is pleased to announce the exclusive listing of Hanover & Kopenhaven, a two-property, 113-unit multifamily portfolio, located in Newport News, VA. The seller has engaged David Hudgins and Alan Meetze of Berkadia's Newport News office to market the portfolio. For additional information, please visit the [Dedicated Property Website.]
- North County apartment complex sells for $6.1 million
The Springwood apartment complex in Bel-Ridge has sold to a Reading, Pennsylvania, corporation for $6.1 million.
Taterville LLC, organized by Gregory Zes of Chesterfield, on Dec. 30 sold the 272-unit complex to SM-T.E.H. Realty 1 LLC, its first purchase in the St. Louis region.
The complex, at 4212 Springdale Ave., about one mile from the University of Missouri - St. Louis, was built in 1967, and features one- and two-bedroom floor plans. Ken Aston and Andrea Kendrick of Berkadia Real Estate Advisors negotiated the transaction. [St. Louis Business Journal]
- Berkadia Markets Four-Property Portfolio in Missouri for $8.28M
Berkadia is pleased to announce the exclusive listing of the Southeast Missouri Portfolio, a four-property, 184-unit multifamily portfolio, located in Park Hills, Perryville and Farmington, MO. The seller has engaged Andrea Kendrick and Ken Aston of Berkadia's St. Louis office to market the portfolio. For additional information, please visit the [Dedicated Property Website.]
- Acting CEO Wheeler Takes Helm at Berkadia
HORSHAM, PA-Justin Wheeler, who has held the title of acting CEO at Berkadia Commercial Mortgage since this past spring, now gets the job on a permanent basis. Currently COO at Leucadia National Corp., which owns Berkadia in a 50/50 joint venture with Berkshire Hathaway, Wheeler stepped in as interim CEO for Berkadia when Hugh Frater relinquished the position to become chairman.
With his interim CEO duties now permanent, Wheeler will be stepping down from his position as Leucadia's COO, which he has maintained while serving as acting CEO for the Berkadia JV. He joined Leucadia as a VP in 2006, and previously served as president and CEO of American Investment Bank, a Leucadia subsidiary.
"As 50% owner of Berkadia, we will work closely with Justin to create further value at the company," Richard B. Handler and Brian P. Friedman, the respective and president of Leucadia. "We are sincerely grateful to Justin for all he has done for Leucadia, and we look forward to our continuing partnership with Justin and the outstanding team at Berkadia."
For his part, Wheeler says, "Over the previous 10 months, Berkadia has significantly strengthened its market position, brand and overall momentum." He looks forward "to working with our exceptional clients, employees and shareholders to further accelerate growth and leverage our unique platform." [GlobeSt]
- El Dorado Villas in Sherman Oaks, CA Listed by Berkadia for $21.5M
Berkadia is pleased to announce the exclusive listing of El Dorado Villas, located at 4510 Murietta Avenue in Sherman Oaks, CA. The asking price for the 33-unit apartment community is $21,500,000. The seller has engaged Brent Sprenkle of Berkadia's West Los Angeles office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Berkadia Presents Two-Property Portfolio in El Paso, TX for $11.35M
Berkadia is pleased to announce the exclusive listing of the Shadow Mountain Portfolio, a two-property, 236-unit multifamily portfolio, located in El Paso, TX. The seller has engaged Winston Black of Berkadia's Colorado Springs office to market the portfolio. For additional information, please visit the [Dedicated Property Website.]
- This Week's Chicago Deal Sheet
Berkadia SVP Ralph DePasquale completed the $26.3M sale (nearly $90k/unit) of the 300-unit Forest Cove Apartments, 1706 Forest Cove Dr in Mount Prospect. Berkadia's Matt Ewig and Jeff Robbins refinanced the 97% occupied asset in 2013 for seller Forest Cove Venture, allowing the new buyer to assume the existing debt. The buyer, TLC Ventures, headed by Stuart Handler, was attracted to the property for its renovation potential and has upgrades planned. [Real Estate Bisnow]
- Boulders on the River in Eugene, OR Listed by Berkadia's Portland Office
Berkadia is pleased to announce the exclusive listing of Boulders on the River, a 249-unit apartment community, located at 655 Goodpasture Island Road in Eugene, OR The seller has engaged Phil Oester and Joe Nydahl of Berkadia's Portland office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Firm brokers $27M sale of Smyrna Mission Galleria Apartments
Berkadia Real Estate Advisors, one of the nation's largest and most active multifamily investment banking and research companies, recently brokered a $27 million sale of the 416-unit Mission Galleria apartment community at 5000 South Lincoln Trace Ave. NE in Smyrna.
Andrew Mays and Paul Vetter, senior vice presidents at Berkadia's Atlanta office, represented the buyer RADCO Investments LLC on the deal and worked with David Oakley, partner in Berkadia's Birmingham office, who represented the seller Mission Galleria LLC.
"RADCO recognized in Mission Galleria an excellent value-add opportunity buoyed by the adjacent development of SunTrust Park, and moved expeditiously to get this done," said Mays.
"A deal of this size and complexity would have never come to fruition without the collaboration of our Southeastern offices using their creativity and leveraging existing relationships within the region," said Brent Long, president at Berkadia’s Phoenix headquarters.
Mission Galleria is within walking distance and adjacent to SunTrust Park, the future home of the Atlanta Braves, which is slated to open in 2017 at an estimated cost of more than $600 million, seating more than 40,000.
"Major developments like the Braves' SunTrust Park in Cobb County bring additional development opportunities creating a domino effect," said Vetter.
"Buyer and seller were exceptional to deal with and we were excited to bring the two relationships together for a successful transaction, the first of many our Atlanta team will deliver and I'm thrilled to be a part of their positive momentum," said Oakley.
Built in 1975, and situated on more than 25 acres, Mission Galleria was 85-percent leased at the time of the sale. [Marietta Daily Journal]
- ColRich Adds to Valley Holdings- Picks Up 332 Apartments in $31 Million Deal
Scottsdale - A joint venture formed by ColRich in San Diego, Calif. (Danny Gabriel, principal) and Harbert Management Corp. in Birmingham, Ala. (Raymond Harbert, principal) paid $31 million ($93,373 per unit) buy The Cortesian, a 332-unit apartment community located at 7749 E. Camelback Road in Scottsdale. The seller was Camelback Cortesian LLC, a company formed by El Dorado Holdings Inc. in Phoenix (Mike Ingram, chairman). The deal was negotiated by Mark Forrester and Ric Holway of Berkadia in Phoenix. Maricopa County records show CH Cortesian Communities LLC (ColRich/Harbert venture) acquired the apartment property with a $7.79 + million down payment, by assuming a $12.657 million Freddie Mac loan owed to the registered holders of Deutsche Mortgage & Asset Receiving Corp. Multifamily Mortgage Pass-Through Certificates Series 2011-K11 and with $10.55 million in supplemental financing issued through Centerline Mortgage Partners Inc. The escrow was handled by Kristina Gooding of Thomas Title & Escrow LLC in Scottsdale. In April 2012, BREW reported the El Dorado Holdings entity paying $25.85 million ($77,861 per unit) to buy The Cortesian. The complex was developed in 1971. ColRich and Harbert Capital, both privately-held companies, have been active buying and selling multi-family properties in the Valley. At year-end 2014, BREW reported a company formed by ColRich and Harbert selling the 124-unit Solaire apartments at 801 E. McKellips Road in Tempe. The buyer in that $12.4 million sale ($100,000 per unit) was PAM Real Estate Group in Kirkland, Wash. (Michael Thayer, principal). Learn more from Gabriel at (858) 490-2303. Jon-Paul Momsen is the contact for Harbert Management . . . call him at (415) 442-8380. Jim Kenny, pres. of El Dorado Holdings, is at (602) 955-2424. Reach Forrester and Holway at (602) 955-1122. [Brew]
- Berkadia Markets Student Housing Property Near West Virginia University
Berkadia is pleased to announce the exclusive listing of The Lofts, a 218-unit student housing community, located at 5000 Station Street in Morgantown, WV. The seller has engaged Kevin Larimer and Michael Tassoni of Berkadia's Michigan office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Peppertree in Cypress, CA Listed by Berkadia's Newport Beach Office
Berkadia is pleased to announce the exclusive listing of Peppertree, a 136-unit apartment community, located at 9091 Holder Street in Cypress, CA. The seller has engaged Shane Shafer of Berkadia's Newport Beach office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Berkadia Lists Sandstones Apartment Homes in Pensacola, FL
Berkadia is pleased to announce the exclusive listing of Sandstones Apartment Homes, a 172-unit apartment community, located at 190 North Old Corry Field Road in Pensacola, FL. The seller has engaged Cole Whitaker and Hal Warren of Berkadia's Orlando office, Jason Stanton of Berkadia's Tampa office and David Oakley and David Etchison of Berkadia's Alabama office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Oregon Investor Jumps Back In The Pool...Buys 251 Apartments In Second Valley Deal
Avondale - After expanding into Arizona and making its first Valley real estate investment in August, Umbrella Properties Inc. of Coburg, Ore. (Ryan Thompson, principal) took just four months to make its second apartment property acquisition in the Phoenix market. Club at Coldwater Springs SIG LLC (Umbrella Properties entity) paid $24 million ($95,618 per unit) to buy The Club at Coldwater Springs, a 251-unit apartment project at 105 N. Links Drive in Avondale. The seller was PM Club at Coldwater Springs Avondale LLC, a company formed by PEM Investments Real Estate Group in Scottsdale (Paul Mashni, principal). The buyer was represented by Mark Forrester, Ric Holway and Dan Cheyne of Berkadia in Phoenix. The seller was represented by Steve Nicoluzakis and Dave Fogler of Cassidy Turley in Phoenix. Records show the buyer acquired the asset with a $16.1 million Fannie Mae loan issued by Greystone Servicing Corp. Inc. In June 2007, BREW reported PEM Investments paying $33.6 million ($133,865 per unit) to acquire the Avondale apartments. The complex was developed in 2005. In August, BREW reported Umbrella Properties paying $19.5 million ($93,750 per unit) to purchase the 208-unit Desert Sage apartments at 1737 N. Central Avenue in Goodyear. PEM Investments was also the seller. Find out more from Thompson at (541) 484-6595. Call Mashni at (480) 422-6930. Reach the Berkadia agents at (602) 955-1122. Talk to the Cassidy Turley agents at (602) 954-9000. [Brew]
- Student Housing Property in Knoxville, TN Listed by Berkadia
Berkadia is pleased to announce the exclusive listing of Quarry Trail, a 252-unit student housing community, located at 3999 Highland Crest Way in Knoxville, TN, NM. The seller has engaged Kevin Larimer and Michael Tassoni of Berkadia's Michigan office and Royce Emerson of Berkadia's Alabama office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Koreatown Apartments Flipped, To Be 'Repositioned'
Apartment buildings in Koreatown continue to be a popular buy for investors. Murano Apartments, a 46-unit multifamily property at 342-50 S. Catalina St., was sold recently to Beverly Hills real estate company SM Management for $11.6 million, or about $252,000 a unit. The seller, San Mateo investment group TDA Inc., had purchased the building for $5.1 million in 2002, according to CoStar. The property was entirely occupied at the time of sale.
Asking rents for the building's 31 one-bedroom units and 15 two-bedroom units range from $1,123 a unit to $1,675.
Brent Sprenkle, a partner in the Westwood office for Berkadia, a joint venture of Berkshire Hathaway and Leucadia National Corp., represented both buyer and seller in the deal. He said SM was willing to pay a big price for the 25-year-old building because it is confident the property can be repositioned.
"They see really heavy demand for rentals and a constrained market, and they feel strongly that they can raise rents in that building significantly," he said. "They also own a lot of other assets in the area, so they were familiar with the market."
Multifamily vacancy in the Central Los Angeles submarket, where Koreatown falls, was 6.5 percent in the third quarter, up from 6 percent in the same period a year earlier, according to data provided by Berkadia. Still, rents have continued to climb, rising 6.9 percent year over year in the third quarter to $3,058 a month. [Los Angeles Business Journal]
- Austin broker handles $335M deal while battling cancer along the way
A team of brokers from the Austin offices of Berkadia recently closed a $335 million national apartment portfolio deal involving 5,704 units in six states.
George Deuillet, senior vice president of Berkadia in Austin, and Vice President Forrest Bass were selected by a court-appointed receiver to market the deal even though none of the properties are located here. The apartments are in Texas, Ohio, Louisiana, Kansas, Oklahoma and Tennessee.
The process of picking the best buyers - eventually Cortland Partners based in Atlanta - took several months and involved sorting through 85 offers, assisting the with possible financing and dealing with the always complex court process.
All of this was happening while Deuillet faced the toughest personal challenge - battling cancer.
"I'm doing fine. I'm on chemo right now and I seem to be responding well to the chemo," Deuillet said.
He credited Bass for keeping everything moving forward while he coped with the rigors of treatment and the accompanying fatigue.
Deuillet's previous relationship with the seller - Management Solutions Inc. - probably played a key role in securing the weighty assignment.
"I knew those folks from the late 1990s and I was involved with this from day one," Deuillet said.
The sale of the portfolio was ordered by the court after the U.S. Securities and Exchange Commission took control of MSI in late 2011.
The SEC accused the MSI founders and operators - Wendell A. Jacobson and his son Allen R. Jacobson of Utah - of violating securities laws and using their relationships with members of the Church of Jesus Christ of Latter-day Saints to commit fraud.
Ultimately after much publicity and rancor involving about 200 investors, the Jacobsons settled the case without admitting guilt, though they were each fined $150,000, according to an account in the Wall Street Journal.
Without elaborating on the specifics, Deuillet said he knew the Jacobsons well and was contacted by them when the issues with the SEC surfaced. Still, he said, the assignment to market the large portfolio was made by the court-appointed receiver John A. Beckstead of law firm Holland & Hart LLP based on Berkadia's merits. Deuillet and Bass won the nod over seven competing brokerage teams.
Formerly Hendricks-Berkadia, the multifamily-focused brokerage has been beefing up its presence in Austin. Handling a deal of this magnitude should help the company grow its book of business locally and regionally, Deuillet and Bass said.
The MSI transaction involved several Berkadia offices, including San Antonio; Dallas; Houston; Oklahoma City; Kansas City, Missouri; and Baton Rouge, Louisiana.
Though most of the deal has closed, some of the transactions will be completed by the end of the year.
"It's been a significant deal. I haven't had the privilege of doing something this big in my 22-year career," Deuillet said. "Sure, it looks good on my resume, but it looks even greater on Berkadia's resume." [Austin Business Journal]
- Major Piece of MSI Portfolio Closes at $239M
PHOENIX-A multi-region team effort went into the marketing of the MSI National Apartment Portfolio, with the $239-million sale having just closed on a major portion of the 5,380-unit portfolio, GlobeSt.com has learned exclusively. Locally based Berkadia was engaged to sell the portfolio in September 2013 by its court-appointed receiver, as GlobeSt.com first reported last year. It brought in about 85 letters of intent from qualified purchasers, although not all wanted to buy the MSI portfolio lock, stock and barrel.
For the buyer, Atlanta-based Cortland Partners, the decision to buy the entire portfolio was driven partly by its diversity, geographic and otherwise, and partly by the quality of some of the assets, particularly those in Texas and Ohio, Berkadia SVP George Deuillet tells GlobeSt.com. The Columbus, OH portion represented the single largest concentration in the portfolio with 2,146 units across eight properties; the sale of the eight those assets, which Deuillet describes as "all in the B-plus range with pretty significant upside," has closed at more than $111 million. The Texas assets spanned the Dallas, Houston and San Antonio markets, with 1,586 units across seven properties that comprised $99.4 million of the total.
"What Cortland felt was that in order to get control of those, they needed to take the smaller ones in Iowa and Kansas that were sort of lumped in," Deuillet says. While Cortland plans to spin off some of those smaller communities, the deal will do much to broaden its reach outside its Southeast home base.
From the standpoint of the seller, Cortland’s experience with managing apartment assets and the strength of its balance sheet were deciding factors. Furthermore, says Deuillet, the Berkadia team convinced receiver John A. Beckstead of law firm Holland & Hart LLP to sell the portfolio in its entirety, although the properties had been marketed as either a complete portfolio, three sub-portfolios or individual assets. "We told the receivers, 'You can't cherry-pick. You don't want to be stuck with the four 38-unit assets in Iowa.' "
Brent Long, president of Berkadia Investment Sales, says the portfolio is "certainly one of the largest listed and sold transactions across such a diverse array of markets." It came to market after the SEC filed a civil suit against Utah-based Management Solutions Inc. and seized control of the portfolio. A federal judge at US District Court in Utah appointed Beckstead to dispose of the properties in 2011, and Deuillet says navigating the court process took the receiver two years before he selected Berkadia to market the assets.
Along with the 20 properties that have now sold to Cortland—located across Louisiana, Kansas, Oklahoma and Tennessee, in addition to the Texas and Ohio assets—it includes another eight properties totaling 1,230 units. The sale of this smaller portion of the portfolio, located mainly in the South and Midwest, is expected to close by the end of the year for just under $100 million.
Deuillet and VP Forrest Bass, both based in Berkadia's Austin, TX office, led a group of investment advisors from eleven offices to market the properties nationally. As GlobeSt.com reported a year ago, the company landed the marketing assignment on the basis of its specialization in apartment investments, national scope and integrated capital markets platform. [GlobeSt]
- Lennar Buying Site In Chandler For 283-Unit Apartment Complex
Chandler - After announcing in May 2013 that the company planned to build apartments in the Phoenix area, Lennar Mutifamily Communities already has 1,374 units targeted for four Valley locations. The company has closed on land acquisitions in Tempe and Phoenix to build 678 units in two projects and the subsidiary of Lennar Corp. in Miami, Fla. (NYSE:LEN) has deals pending to buy sites in Chandler and Tempe to develop another 696 apartments in two more multi-family communities. In a purchase slated to close the first week in November, Lennar Multifamily is acquiring a parcel in Chandler to develop 283 apartments. The 10.8-acre site wraps the northeast corner of Chandler Boulevard and McClintock Drive. Lennar Multifamily is expected to pay $4.5 million to acquire the land. The seller is Desert Viking Apartments LLC in Chandler (Niels Kreipke, principal). The cash transaction is being brokered by Mark Forrester, Ric Holway and Dan Cheyne of Berkadia in Phoenix. Kreipke's company paid just under $2.844 million to buy the property in May 2013 from the developer of the 104-room Staybridge Suites. The extended stay hotel, which opened in July, is located at the immediate corner of Chandler Boulevard and McClintock Drive. Jason Ottman, pres. of development Southwest for Lennar Multifamily, says the company hopes to start construction first quarter 2015 with completion to follow first quarter 2016. Contractor still to be selected. Development cost (land and buildings) estimated at $43 million. Lennar Multifamily is likely to bring in a joint venture partner to develop the community. Construction financing has yet to be arranged. Design plans from Whitneybell Perry Architecture Inc. in Phoenix shows three- and four-story buildings with units ranging from about 650 sq. ft. to 1,300 sq. ft. Monthly rental rates on the studio, one-, two- and three-bedroom units projected to run from $900 to $1,600. BREW has previously reported Lennar Multifamily planning to develop two apartment communities in Tempe and one in Phoenix. In the first apartment property to open in the Valley, Lennar has teamed up with The Resmark Cos. in Los Angeles, Calif. to develop a 328-unit complex along the Tempe Town Lake at 601 W. Rio Salado Parkway in Tempe. That project, called Skywater at Town Lake, opened this summer. In July, BREW reported Lennar Multifamily planning to develop 395 apartments in another community located near Arizona State University. That 6.7-acre site, located at Dorsey Lane and Apache Boulevard in Tempe, is being assembled in two acquisitions set to close in mid-2015. The planned apartments, being called The Hayden at Dorsey Station, should be under construction third quarter 2015. In a $12.75 million sale completed earlier this month, a company formed by Lennar Multifamily purchased a 5.5-acre parcel at the northwest corner of Central Avenue and McDowell Road in Phoenix that will be developed as a 368-unit apartment complex called The Muse. Construction is set to start mid-2015. Ottman says Lennar Multifamily is looking for parcels to develop additional multi-family communities in the Valley and would especially like to secure an apartment site in Old Town Scottsdale. Kreipke, who operates as Desert Vikings Cos. has been buying urban infill properties to develop residential and commercial projects in the Valley. Kreipke is interested in more real estate investment and development opportunities. Find out more from Ottman at (480) 718-1377. Call Kreipke at (480) 216-1195. Reach the Berkadia agents at (602) 955-1122. [Brew]
- Multifamily Asset Sells for $21M
PHOENIX—Berkadia Commercial Mortgage LLC announced today the sale of Esteban Park, located at 5611 S. 32nd St. in Phoenix. The multifamily asset sold for $20.7 million. The seller was Esteban Park Apartments LLC of Scottsdale; the buyer was Carlibach LP of Mill Valley, CA. The property was 98% occupied at the time of sale.
Senior partner Mark Forrester, partner Ric Holway and vice president Dan Cheyne of Berkadia's Phoenix office negotiated the transaction.
Built in 2008, the 204-unit property features one-, two- and three-bedroom floor plans. Each unit features fully equipped kitchens, granite countertops, custom cabinetry, washers and dryers, ceiling fans, hardwood flooring, air conditioning, spacious closets and balconies/patios. Community amenities include a swimming pool, Jacuzzi, spa, ramadas, clubhouse, fitness center, volleyball, billiards, carports and controlled-access gates. Select units have pantries, extra storage and mountain views.
Forrester tells GlobeSt.com, "There are not a lot of apartments in the area. In fact it is very difficult to get zoning for apartments in that location. Esteban Park is only one of four or five in the general area."
Forrester also said the deal took a little longer to execute because it was an assumption of an FHA loan. "The terms were 35 years at 4%. It just takes longer when it's an FHA loan," he says.
The community is located convenient to Interstate 10 and State Route 60, providing residents access to the entire Phoenix area. Esteban Park is less than five miles from Phoenix Sky Harbor International Airport and six miles from South Mountain. Top employers in the immediate area include Southwest Airlines, Phoenix Sky Harbor International Airport, Arizona Grand Resort and Honeywell Aerospace.
Forrester says the buyer will keep the same management company has no major plans for upgrades.
At 6.4 percent in the third quarter, Phoenix metro vacancy was down 20 basis points from one year ago. Operators advanced rents 2.6 percent during the last four quarters to $837 per month. [GlobeSt]
- EXCLUSIVE: Multifamily in Mesa Goes for a Song
PHOENIX—Berkadia Commercial Mortgage LLC has facilitated the sale of Villas de Merced, located at 520 N. Mesa Dr. in Mesa. The seller was Mercy Housing Arizona-I LP of Denver. The buyer was Sonoma Heights LLC of Scottsdale.
Vice president Dan Cheyne of Berkadia's Phoenix office negotiated the transaction.
Villas de Merced sold for $6.2 million. The sales price reflects a per-unit price of $64,583, or $71 per square foot. The property was 98% occupied at the time of sale.
Cheyne tells GlobeSt.com the property is well-positioned: "It's just north of downtown Mesa and within one mile of the extended light rail, in areas of high growth."
"The property is deed restricted. The land use restriction designation requires that the 100% of the property be leased to those with 60% of area median income," says Cheyne.
Built in 2000, the 96-unit property features one-, two-, three- and four-bedroom floor plans. Property amenities include a swimming pool, business center, child-care center and laundry facility. Select units have washer and dryer hookups.
"This property really caters to families," Cheyne says. "It's extremely unusual to see a four-bedroom unit in a property built in 2000. There are also very big patios for this year of building."
The community is located convenient to State Route 60 and Loop 202, providing residents access to the entire Mesa area. Villas de Merced is fewer than two miles from downtown Mesa and two and a half miles from Mesa Country Club. Top employers in the immediate areas include Banner Desert Medical Center, Mesa Community College, Hospice of the Valley and General Dynamics C4 Systems.
Cheyne says the deal was a buy and hold cash flow acquisition.
At 6.4 percent in the third quarter, Phoenix metro vacancy was down 20 basis points from one year ago. Operators advanced rents 2.6% during the last four quarters to $837 per month. [GlobeSt]
- EXCLUSIVE: Hot Market MF Sells
TUCSON-Berkadia Commercial Mortgage LLC announces the sale of Zona Rio, located at 1001 West St. Mary's Road in Tucson. Senior partner Art Wadlund and associate Clint Wadlund of Berkadia’s Tucson office negotiated the transaction.
Zona Rio sold for $9.7 million. The sales price reflects a per-unit price of $46,381, or $74 per square foot.
Clint Wadlund tells GlobeSt.com, "The submarket is really strong - it's one of the hottest markets, right near the new, modern streetcar path that goes right up to the University of Arizona. There are hundreds of millions of dollars of amenities - restaurants, student housing, multifamily, shopping, housing and entertainment in the area. It's a market rate property - about 40% students - so it's a great property for that market."
Built in 1983, the 210-unit property features one- and two-bedroom floor plans. Additionally, property amenities include a resort-style swimming pool, spa, volleyball court, clubhouse with kitchen, theater room, 24-hour laundry facility, barbecue areas, direct access to hiking, biking and jogging along the Santa Cruz River Park Trail and free X-Fit and yoga classes. Each unit offers fully-equipped kitchens, balconies/patios and cable/internet access. Select units feature walk-in closets and outside storage.
The seller was an entity of Capital Texas Properties of Austin. The buyer was Zona Rio Investors LLC of Newport Beach. [GlobeSt]
- EXCLUSIVE: LA Buyer for Tucson Townhomes
TUCSON—Berkadia facilitated the sale of Paseo Del Sol Townhomes, located at 6280 S. Campbell Ave. in Tucson. The seller was Bayview Loan Servicing LLC of Coral Gables, FL; the buyer was Summit Paseo Del Sol LLC of Los Angeles.
Art Wadlund and Clint Wadlund of Berkadia's Tucson office negotiated the transaction.
Clint Wadlund tells GlobeSt.com the submarket is due south of the University of Arizona.
"It is a very unique property in that it features all three- and four-bedroom units," says Clint Wadlund. "It's also a very tight-knit community centered around the nearby school—Sunnyside—they take a lot of pride in their community."
The asset traded at a 7.8 cap rate. "It was definitely a yield-driven property. We will see some improvements made by the buyer."
Built in 1994, the 152-unit property features three- and four-bedroom floor plans and is situated on 11.3 acres of land. Additionally, the property amenities include a swimming pool with sundeck, laundry facility, barbecue grills and dog park. Each unit offers a full-size washer/dryer connection, air conditioning, fully equipped kitchens, breakfast bars and private entries. Select units include wooden plank floors.
Paseo Del Sol Townhomes sold for $8.4 million. The sales price reflects a per-unit price of $54,934, or $50 per square foot. The townhomes have been 95% to 100% occupied over the last six months. [GlobeSt]
- North L.A. Multifamily Attracts Investors
LOS ANGELES—Two separate investors have purchased three multifamily properties in West and North Los Angeles for a total of $34 million, GlobeSt.com has learned exclusively. A private investor purchased two of the apartment properties, which have a total of 101 units, from Dornin Investment Group. Gemland Properties LP purchased the third property, a new construction condo development with 40 units, from 5845 Carlton Way Partners LLC.
Located at 5845 Carlton Way in Hollywood, the condo development was completely vacant at the time of the sale. The transaction included a tract map so the Gemland Properties can sell the 40 units individually. Attracted to the property’s location in the heart of Hollywood as well as its high-end finishes, the buyer purchased the property for $21.3 million, or $531,500 per unit. Chris Malcolm of Berkadia's North Los Angeles office negotiated the sale.
"The seller thought the timing was right in the market to sell this brand-new asset and move the equity to other projects," Malcolm tells GlobeSt.com. "We had very strong interest, with REITS to large syndicates, due to the quality construction and location." He received very strong interest with five total offers on the property. Gemland Properties in an all-cash exchange transaction.
Located at 720 South Normandie Ave. and 709 South Mariposa Ave. in Los Angeles, the remaining two properties were purchased by the private investor for $12.5 million. Brent Sprenkle of Berkadia's West Los Angeles office negotiated the transaction. With a combined 101 units, the two properties have a mix of studio, one- and two-bedroom units. Onsite amenities at both properties include a fitness center, outdoor courtyards and laundry facilities.
"The seller was transitioning their investments from apartments into office and this was part of their business plan," Sprenkle tells GlobeSt.com. Although the sale attracted strong interest from buyers, the seller was looking for the buyer to assume the remaining debt of a Fannie Mae loan, making the sale more challenging. "Between low leverage of about 60% LTV and a 25-year amortization, the extra principal reduction ate into the cash flow," says Sprenkle. "Additionally, the loan had substantial impounds for property taxes, insurance and reserves, which can also reduce cash flow." In the end, he received more than 12 offers on the property from private capital investors.
Multifamily rents in the West Los Angeles submarket, where the latter two properties are located, average $2,508 per month, while vacancy rates have dropped by 60 basis points since mid-2013. In August, Berkadia also negotiated the sale of a new construction multifamily property in the area. That property traded hands for $15 million, or $538,571 per unit. [GlobeSt]
- San Diego-Based Investor Makes First Valley Buy...Drops $48M For 582 Apartments
Phoenix - Phoenix Uprising LLC, a company formed by investor Donald Dougher, II of San Diego, Calif., paid $48 million ($82,474 per unit) to acquire the 582-unit Sierra Ranch apartment complex located at 4722 E. Bell Road in Phoenix. The seller was FSC Saddleback Associates LLC, a company formed by FSC Realty Inc. in Beverly Hills, Calif. (Stanley Fimberg, Albert Baril, principals). The seller was represented by Mark Forrester and Ric Holway of Berkadia in Phoenix. The buyer was represented by Maury Panza of DAUM Commercial Real Estate Services in Newport Beach, Calif. Maricopa County records show the buyer acquired the project with a $26.5 million down payment and a $21.5 million loan from Voya Insurance and Annuity Co. Financing was arranged by Charlie Williams of Berkadia Commercial Mortgage LLC in Scottsdale. The investment is the first in the Valley for the San Diego-based investor. Based on limited information available on the internet, Dougher appears to be a low key, private investor. In July 2006, BREW reported the FSC Realty company paying $43.225 million ($74,270 per unit) to acquire Sierra Ranch (at that time called Saddleback apartments). The complex was developed in 1984. Westwood Residential has been managing the property, but no word on the status of that assignment. From November 2004 until April 2013, FSC Realty invested $197.6 million in buying six Valley rental communities totaling 2,594 units. The privately-held FSC Realty still owns 1,502 apartments in four of those projects. With the sale of Sierra Ranch, FSC Realty has now sold two of three multi-family properties the company acquired in 2006 at the peak of the market. In April, BREW reported FSC Realty selling the 510-unit Quadrangles Village apartments located at 1255 E. University Drive in Tempe for $41.875 million ($82,108 per unit). On the same day FSC Realty purchased Sierra Ranch, the company paid $37.725 million ($49,508 per unit) to buy the 762-unit Olive Tree apartments located at 6201 W. Olive Avenue in Glendale. No word on FSC Realty’s plans for Olive Tree, which was also acquired at the height of the market in 2006. FSC Realty has now sold two apartment properties acquired in the Phoenix area just before the economy tanked, and the company has purchased two Valley multi-family communities in the past two years. FSC Realty is interested in additional apartment investments in the Phoenix area. In April 2013, BREW reported FSC Realty paying $21.6 million ($135,000 per unit) to buy the 160-unit MMorningside apartments at 10455 E. Via Linda in Scottsdale. In April 2012, BREW reported a tenant-in-common (TIC) group led by FSC Realty paying $38.5 million ($106,944 per unit) to purchase the 360-unit Alanza Place apartments at 1121 N. 44th Street in Phoenix. The Beverly Hills-based firm continues to hold Alanza Place, Morningside, Olive Tree and the 220-unit Rancho Ladera apartments at 9605 S. 48th Street in Phoenix. FSC Realty entered the Valley market in November 2004 when the company paid $12.8 million ($58,182 per unit) to acquire Rancho Ladera. FSC Realty also owns apartment properties in other markets across the U.S. as well as shopping centers and office projects. The contact for Dougher is Panza of DAUM . . . reach him at (949) 724-1900. Talk to Fimberg and Baril at (310) 278-2434. Forrester and Holway are at (602) 955-1122. [Brew]
- Class "A" Apartments in Hollywood, CA Sold
Berkadia is pleased to announce the sale of the apartment property at 5845 Carlton Way in Los Angeles. Chris Malcolm of Berkadia's North Los Angeles office negotiated the transaction. The property sold for $21,260,000 on August 28, 2014. The sales price reflects a per-unit price of $531,500, or $865 per square foot.
Newly constructed in 2014, the 40-unit, Class A property features two- and three-bedroom floor plans. Amenities include elevators, fitness center, recreation room, central garage, barbeques, extra storage and rooftop deck with WiFi and views of Los Angeles, including the Hollywood sign. Each unit offers fully equipped kitchens and washers and dryers. Select units have offices.
The community is close to State Route 101 and Santa Monica Boulevard, providing residents access to the entire Los Angeles area. The property is one and a half miles from Hollywood & Highland Center and two miles from the Hollywood Bowl. Top employers in the immediate area include Cedars-Sinai Medical Center, Walt Disney Company, NBC Universal and Paramount Pictures Corporation.
The seller was 5845 Carlton Way Partners LLC of Culver City, Calif. The buyer was Gemland Properties, LP of Los Angeles. The building, a cash purchase, was delivered vacant with a condo tract map so the units may be sold individually. The buyer was attracted by the property's high-end finishes and construction, and the asset’s prime-Hollywood location.
Vacancy fell 70 basis points to 4.6% in the North Los Angeles area during the second quarter. Average rent ascended 5.3% year over year to $1,630 per month in June. [Berkadia]
- Oregon Investor Makes First Valley Deal...Pays $19.5M For Goodyear Apartments
Goodyear - A company formed by Ryan Thompson of Umbrella Properties Inc. in Coburg, Ore. paid $19.5 million ($93,750 per unit) to acquire the 208-unit Desert Sage apartments located at 1737 N. Central Avenue in Goodyear. The seller was PM Desert Sage Goodyear LLC, a company formed by PEM Investments Real Estate Group in Scottsdale (Paul Mashni, principal). The sale was brokered through Ric Holway and Mark Forrester of Berkadia Real Estate Advisors in Phoenix. Maricopa County records show Desert Sage SIG LLC (Thompson's entity) acquired the multi-family community with a $12.675 million Fannie Mae loan issued through Greystone Servicing Corp. Inc. The investment is the first in the Valley for Thompson. In October 2006, BREW reported PEM Investments paying $21.5 million ($103,365 per unit) to acquire Desert Sage. The complex was built in 2001. Find out more from Thompson at (541) 484-6595. Call Mashni at (480) 422-6930. Reach the Berkadia agents at (602) 955-1122. [Brew]
- PASSCO Venture Buys 270-Unit Apartment Project in $25.85 Million Deal
Tempe - A company formed by PASSCO Cos. LLC in Irvine, Calif. (William "Bill" Passo, CEO) and InSite Investment Realty in Newport Beach, Calif. (Mike Marcu, Michael Sun, principals) paid $25.85 million ($106,852 per unit) to purchase the 270-unit Monarch at Tempe apartments at 4505 S. Hardy Drive in Tempe. The seller was Monarch Greenwood Venture L.P., a limited partnership formed by Monarch Group in La Jolla, Calif. (Rodney Stone, et al., principals). The sale was brokered through Mark Forrester and Ric Holway of Berkadia Real Estate Advisors in Phoenix. Maricopa County records show PI Oat SPE LLC (Passco venture) acquired the Tempe apartments with a $20.68 million loan from KeyBank. In August 2007, BREW reported the Monarch Group limited partnership paying $29.7 million ($110,000 per unit) to buy the multi-family community (then called Greenwood Village apartments). The complex was developed in 1984. The new owners have changed the name to Ovation at Tempe. Passo says the venture intends to renovate the property and hold the asset for three years. It has been more than four years since PASSCO's last Phoenix area investment, but the next deal does not figure to take that long as the privately-held company is looking for additional investment opportunities in the Valley. Although Ovation at Tempe is considerably older than its target investment, PASSCO is looking for Class A and B stabilized multi-family properties built after 2000 . . . prefers garden style with at least 200 units and priced at $20 million and up. While PASSCO has previously only bought and sold multi-family assets in the Phoenix area, the company is also interested in purchasing retail centers . . . likes core, value-add and opportunistic anchored and unanchored plazas in deals of at least $3 million. In its last Valley investment reported by BREW in June 2010, a company formed by PASSCO paid $32.63 million ($161,535 per unit) to buy the 202-unit Desert Parks Vista apartments at 9393 E. Palo Brea Bend in Scottsdale. In April 2012, BREW reported PASSCO selling the 360-unit Alanza Place apartments at 1121 N. 44th Street in Phoenix. According to its website, PASSCO presently owns 69 multi-family, office and industrial properties located in 20 states. The Tempe investment is believed to be the first Valley deal for InSite Investment Realty. The privately-held firm strictly buys apartment projects primarily in California. Larry Sullivan is pres. of PASSCO . . . reach him at (949) 442-1000. The principals of InSite Investment Realty are at (949) 679-8800. The contact at Monarch Group is Steven Paull . . . call him at (858) 490-3300. Talk to Forrester and Holway at (602) 955-1122. [Brew]
- Hendricks-Berkadia Brokers Sale of Phoenix Area Apartments for $15 Million
MESA, ARIZ. - Hendricks-Berkadia has brokered the sale of Sendero Ridge, a 288-unit multifamily property in the Phoenix suburb of Mesa, for $15 million. Constructed in 1986, the complex includes one- and two-bedroom apartments, plus amenities such as a swimming pool, volleyball court, laundry facility and barbecue area.
Situated on 12 acres at 935 W. Broadway Road, the community is in proximity to State Route 87, State Route 60 and Loop 101, as well as the Mesa Arts Center and the spring training facility of the Chicago Cubs.
Mark Forrester and Ric Holway of Hendricks-Berkadia negotiated the transaction between the seller, New York-based Pimal Property Inc., and the buyer, Toronto-based 945 W. Broadway Rd. LP. [Western Real Estate Business]
- Sierra Ranch in Phoenix, AZ Listed by Hendricks-Berkadia
Hendricks-Berkadia is pleased to announce the exclusive listing of Sierra Ranch, a 582-unit apartment community, located at 4722 East Bell Road in Phoenix, AZ. The seller has engaged Mark Forrester, Ric Holway and Daniel Cheyne of Hendricks-Berkadia's Phoenix office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Bid Deadline 7/15 for Hendricks-Berkadia-Listed Michigan 4 Portfolio
Hendricks-Berkadia is pleased to announce the exclusive listing of the Michigan 4 Portfolio, a four-property, 814-unit multifamily portfolio, located in Northville, Romulus, and Lansing, MI. The seller has engaged Kevin P. Dillon, Kevin Larimer and Michael Tassoni of Hendricks-Berkadia's Michigan office to market the portfolio. For additional information, please visit the [Dedicated Property Website.]
- Hendricks-Berkadia's St. Louis Office Markets Motor Lofts & Union Club
Hendricks-Berkadia is pleased to announce the exclusive listing of the Motor Lofts & Union Club Portfolio, a two-property, 95-unit multifamily portfolio, located in St. Louis, MO. The seller has engaged Ken Aston and Andrea Kendrick of Hendricks-Berkadia's St. Louis office to market the portfolio. For additional information, please visit the [Dedicated Property Website.]
- Greentree in Mobile, AL Presented by Hendricks-Berkadia
Hendricks-Berkadia is pleased to announce the exclusive listing of Greentree, a 178-unit apartment community, located at 6200 Airport Boulevard in Mobile, AL. The seller has engaged David Oakley, David Etchison, Royce Emerson and William Parkhurst of Hendricks-Berkadia's Alabama office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Hendricks-Berkadia Lists Spring Mountain in Corning, CA for $11M
Hendricks-Berkadia is pleased to announce the exclusive listing of Spring Mountain, located at 240 Edith Avenue in Corning, CA. The asking price for the 184-unit apartment community is $11,000,000. The seller has engaged Alex Mogharebi and Otto Ozen of Hendricks-Berkadia's Ontario office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Unpriced Offering in Huntsville, AL Listed by Hendricks-Berkadia's Alabama Office
Hendricks-Berkadia is pleased to announce the exclusive listing of Stone Crossing, a 276-unit apartment community, located at 3784 University Drive NW in Huntsville, AL. The seller has engaged David Oakley, David Etchison and Royce Emerson of Hendricks-Berkadia's Alabama office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]