- 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.]
- Koman Group shops Motor Lofts, building in Lafayette Square
The Koman Group is hoping to sell the Motor Lofts building downtown and its stake in another apartment building in Lafayette Square.
A rehab of the Motor Lofts, at 2207 Washington Ave., about two blocks east of Jefferson Avenue, was completed in 2008. It has 56 units, which bring in $772,356 in annual rent, according to a marketing flier circulated by Ken Aston and Andrea Kendrick of Hendricks-Berkadia. It's listed for $6.3 million. The Downtown Children's Center is located on the building's first floor.
The flier says an investor could continue bulk or individual sales of the building's units.
The Union Club, at 2340 Lafayette Ave., in Lafayette Square, is a newly constructed replica of a building that once stood at the site, according to Hendricks-Berkadia.
The Koman Group, which did not immediately respond to a request for comment, is a co-owner in the building, according to previous Business Journal reports.
The owner is Union Club Partners LLC, according to St. Louis property records.
It's not clear who are other owners of the building, which is listed for $4 million, and has an appraised value of nearly $4.7 million.
The property, which has 39 units that bring in $567,216 in annual rent, according to Hendricks-Berkadia, features 8,000 square feet of commercial space.
A buyer could purchase a tax increment financing note for each property. Under the TIF, property taxes are frozen and the property owner makes payments in lieu of taxes to a special allocation fund, according to Hendricks-Berkadia.
The Motor Lofts TIF note is valued at $613,000; the Union Club TIF note is valued at $665,000, according to Hendricks-Berkadia.
The Koman Group has developed more than $1 billion in projects in Illinois and Missouri. [St. Louis Business Journal]
- Heritage Apartments in Pensacola, FL Listed by Hendricks-Berkadia
Hendricks-Berkadia is pleased to announce the exclusive listing of Heritage Apartments, a 194-unit apartment community, located at 6115 North Davis Highway in Pensacola, FL. The seller has engaged Cole Whitaker and Hal Warren of Hendricks-Berkadia's Orlando office, Jason Stanton of Hendricks-Berkadia's Tampa office, and David Oakley 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.]
- Hendricks-Berkadia Presents Emerson Lofts in Denver, CO for $12.6M
Hendricks-Berkadia is pleased to announce the exclusive listing of Emerson Lofts, located at 777 Emerson Street in Denver, CO. The asking price for the 42-unit apartment community is $12,600,000. The seller has engaged Frank Farrell and John Laratta of Hendricks-Berkadia's Denver office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Canadian Investment Fund Picks Up 152 Units Within Scottsdale Multi-Family Project
Scottsdale - A limited partnership formed by Optimus US Real Estate Fund in Calgary, Alberta, Canada, (Arthur Wong, CEO) paid $19 million ($125,000 per unit) to buy 152 units within The Allison condominium project at 14145 N. 92nd Street in Scottsdale. The seller was Holualoa Allison LLC, a company formed by Holualoa Arizona Inc. in Tucson (Mike Kasser, principal). The deal was brokered through Mark Forrester, Ric Holway and Dan Cheyne of Hendricks-Berkadia in Phoenix. Maricopa County records show Optimus Allison Borrower LP (Optimus US Real Estate Fund) acquired the units within The Allison with a $10 million loan from B2R Finance L.P. in Charlotte, N.C. That limited partnership is owned by Blackstone Group LP in New York City, N.Y. (NYSE:BX). The escrow was handled by Kristina Gooding of Thomas Title & Escrow LLC in Scottsdale. In April 2011, BREW reported the Holualoa entity paying just under $10.338 million ($72,802 per unit) to buy 142 units at The Allison. Holualoa was able to acquire another 10 units within the broken condominium project in Scottsdale before agreeing to sell all 152 condos to the Optimus fund. The previous owner of The Allison sold 190 units within the 332-unit community before being foreclosed on the remaining residences. The multi-family project, which was converted to for sale condominiums in 2006, was developed in 1988 as Scottsdale Desert Shadows apartments. In July 2006, BREW reported a company formed by a group of private investors from Chicago, Ill. paying $45 million ($135,542 per unit) to acquire the 332-unit Scottsdale Desert Shadows apartments. The Chicago investors sold 190 units as individual condominiums before defaulting on a loan that was secured by the remaining condos and losing the balance of the project to foreclosure. The Allison is the third multi-family investment in the Phoenix area for the Calgary-based firm, which is eventually expected to resell all of the units as individual condominiums. Wong, Grant Sardachuk and Jeff Larson are the managing directors of Optimus US Real Estate Fund. Sardachuk has an office in Scottsdale and has been spearheading the Phoenix area deals. Optimus US Real Estate Fund is interested in more multi-family investment opportunities in the Valley. In August 2012, BREW reported Optimus US Real Estate Fund paying $16.05 million ($82,732 per unit) to buy the 194-unit La Costa apartments at 1820 W. Lindner Avenue in Mesa. In December 2009, BREW reported Optimus US Real Estate Fund paying $4.875 million ($62,500 per unit) to purchase 78 units of the 240-unit Riverwalk apartments at 5345 E. Van Buren Street in Phoenix. The Optimus fund has been operating the units at both Riverwalk and the La Costa as rentals. [Brew]
- Call For Offers June 24th for Hendricks-Berkadia-Listed Hoover 3 Portfolio
Hendricks-Berkadia is pleased to announce the exclusive listing of the Hoover 3 Portfolio, a three-property, 825-unit multifamily portfolio, located in Hoover, AL. The seller has engaged David Oakley, David Etchison and Royce Emerson of Hendricks-Berkadia's Alabama office to market the portfolio. For additional information, please visit the [Dedicated Property Website.]
- Hendricks-Berkadia announces sale of Vantage at Kitty Hawk
The fundamentals of San Antonio's multifamily sector have beckoned another buyer.
Hendricks-Berkadia has announced the sale of Vantage at Kitty Hawk, 7461 Kitty Hawk Drive, in the city of Converse.
The 288-unit community was 97 percent occupied at the time of the sale.
Mike Miller, Chris Ross, Will Caruth and Cody Courtney of the firm's San Antonio office negotiated the transaction.
The seller was AOH-Vantage at Kitty Hawk LLC of San Antonio. The buyer was simply described as a private party.
Vantage at Kitty Hawk is one of the latest multifamily assets in the San Antonio area to change hands.
In early May, for example, Presidium Group LLC closed on its fifth local asset - a North Central Side property known as Rayo del Sol.
Investors have been interested in the Alamo City for some time.
Go as far back as 2011, for example, and you'll find a deal for a four-unit portfolio that was previously owned by Vantage Communities.
The sale included three Vantage properties in the cities of Converse (Vantage at Kitty Hawk), New Braunfels and Schertz - all outlying cities in the greater San Antonio area.
Vantage sold the portfolio to what was then an undisclosed buyer.
Hendricks-Berkadia (then known as Hendricks & Partners) negotiated that deal as well. [San Antonio Business Journal]
- Radium Grabs Tucson Multifamily
TUCSON-Radium Investments I LLC of Phoenix purchased Posada del Rio, located at 7424 E. Speedway Boulevard, from Rio Properties LLC of Tucson. Art Wadlund and Clint Wadlund of Hendricks-Berkadia's Tucson office negotiated the transaction. Posada del Rio sold for $8.1 million. The sales price reflects a per-unit price of $50,625, or $82 per square foot. The property closed escrow at a cap rate of 6.95%.
Built in 1980, the 160-unit property features one- and two-bedroom floor plans and is situated on approximately 4.4 acres of land. Additionally, the property amenities include a clubhouse with a kitchen and billiards table, recreation center, heated swimming pool, spa, fitness center and laundry facilities. Each unit offers air conditioning, fully equipped kitchens, private balconies or patios, walk-in closets, washer/dryer connections and cable-access. Select units include wood-burning fireplaces, ceiling fans and storage. Washers and dryers are also available for rent.
The asset is close to Interstate 10, providing residents access to the entire Tucson area. Posada del Rio is less than two miles from Dorado Country Club Golf Course and seven miles from University of Arizona. Top employers in the immediate area include Davis-Monthan Air Force Base, St. Joseph's Hospital, Afni and Health Net of Arizona.
"Posada del Rio is located in the East Central submarket," Art Wadlund tells GlobeSt.com. "It's an infill submarket with predominately 1980s apartments, a lot of retail and service jobs, malls and big box stores. The buyer owed another property two miles away and has had a successful experience with that property. It is a clean, straightforward property."
Wadlund says the buyer will make some modest upgrades to the apartments and will refurbish the leasing office, fitness center and clubhouse.
Vacancy in the Tucson metro was at 7.9% in the first quarter, while asking rents were $659 per month on average. [GlobeSt]
- Forty-Five-Unit Los Angeles, CA Property Listed by Hendricks-Berkadia for $6.2M
Hendricks-Berkadia is pleased to announce the exclusive listing of The Hillside, located at 4641 West Slauson Avenue in Los Angeles, CA. The asking price for the 45-unit apartment community is $6,200,000. 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.]
- Hendricks-Berkadia's Virginia Office Lists Newmoor Properties in Gloucester, VA
Hendricks-Berkadia is pleased to announce the exclusive listing of the Newmoor Properties Portfolio, a seven-property, 128-unit multifamily portfolio, located in Gloucester Point, VA. The seller has engaged Alan Meetze and David Hudgins of Hendricks-Berkadia's Virginia office to market the portfolio. For additional information, please visit the [Dedicated Property Website.]
- The Embers in Lake Charles, LA Presented by Hendricks-Berkadia for $10.9M
Hendricks-Berkadia is pleased to announce the exclusive listing of The Embers, located at 3619 Texas Street in Lake Charles, LA. The asking price for the 209-unit apartment community is $10,900,000. The seller has engaged Gregg Cordaro of Hendricks-Berkadia's Louisiana office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Hendricks-Berkadia Markets The Chalet in Topeka, KS for $12.9M
Hendricks-Berkadia is pleased to announce the exclusive listing of The Chalet, located at 4140 SW 6th Avenue in Topeka, KS. The asking price for the 233-unit apartment community is $12,900,000. The seller has engaged Bill Powell of Hendricks-Berkadia's Kansas City office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Springwood in St. Louis, MO Listed by Hendricks-Berkadia for $6.985M
Hendricks-Berkadia is pleased to announce the exclusive listing of Springwood, a 272-unit apartment community, located at 4212 Springdale Avenue in St. Louis, MO. The seller has engaged Andrea Kendrick and Ken Aston of Hendricks-Berkadia's St. Louis office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Berkadia Buys Keystone Commercial Capital
Berkadia Commercial Mortgage L.LC. added new offices in three U.S. cities to its growing company and more than $2 billion in commercial real estate loans to its servicing portfolio with the acquisition of Keystone Commercial Capital.
Headquartered in Phoenix, Keystone is a full-service commercial mortgage banking company with 16 employees that also has offices in Boston and San Diego. Terms of the deal were not announced. Keystone was founded in 2007 by Managing Partners Charlie Williams and Scott Holland, who will remain on along with Partners Jon Krieger, Ryan Nelson, Gene Kim and the entire Keystone origination and support staff. Williams will continue to oversee operations in all three offices for Berkadia, which is headquartered in Horsham, Pa.
Keystone services more than $2 billion in commercial real estate loans for a diverse base of capital providers and maintains relationships with 23 of the country's leading life insurance companies.
"The number of capital providers has grown in recent years, and Berkadia has invested significant time in developing relationships - particularly with life insurance companies - to expand our financial capabilities," Ernie Katai, executive vice president & head of production at Berkadia, said in a news release. "This demonstrates our continued commitment to that expansion, and we look forward to leveraging Keystone's resources and expertise in order to provide our clients with an even more robust portfolio of service offerings."
Katai told Commercial Property Executive Keystone's experience in the life insurance company market as well as its three office locations, particularly in Phoenix, were attractive to Berkadia. Calling it a "strategic and critical" move, Katai said Berkadia wanted a commercial mortgage company in Phoenix to complement the multi-family investment sales expertise of a previous Berkadia acquisition - Hendricks & Partners, another Phoenix-based firm it had purchased in late December 2012. Now known as Hendricks-Berkadia, it offers multi-family advisory services and investment sales through more than 180 apartment professionals and 37 offices.
Keystone was the "first sizable" acquisition for Berkadia since Hendricks & Partners, Katai said but it likely won't be the last.
"We're in growth mode," he told CPE. "Our goal over the next five years is to double our production."
Katai said that growth will come from both organic growth and acquisitions.
"We want to expand in all food groups and not just one particular segment of the business. We want to continue to diversify our capital base," Katai said.
The Keystone acquisition was "a good strategic opportunity to make a big impact quickly," Katai noted.
"We'll continue to look for those opportunities," he added.
For Keystone, becoming part of Berkadia gives its team more direct access to Fannie Mae and Freddie Mac.
"Berkadia has one of the most extensive origination platforms and strong relationships with the GSEs, as well as servicing and investment sales capabilities," Williams said in the news release. "We look forward to helping grow Berkadia's already strong life company pipeline, building on the company's outstanding agency relationships and integrating our operations to help both current and prospective clients."
A joint venture of Berkshire Hathaway Inc. and Leucadia National Corp., Berkadia manages a portfolio of more than $229 billion as of March 31. It will now have more than 130 production employees working out of more than 50 offices across the United States, according to Katai. [Commercial Property Executive]
- Hendricks-Berkadia's Las Vegas Office Markets Hampton Court
Hendricks-Berkadia is pleased to announce the exclusive listing of Hampton Court, a 420-unit apartment community, located at 3955 Swenson Street in Las Vegas, NV. The seller has engaged Carl Sims, Angela Powers-Armstrong and Nick Ingle of Hendricks-Berkadia's Las Vegas office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Unpriced Offering in Glendale, AZ Listed by Hendricks-Berkadia
Hendricks-Berkadia is pleased to announce the exclusive listing of Olive Tree, a 762-unit apartment community, located at 6201 West Olive Avenue in Glendale, 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.]
- ABQ apt vacancy rates improve in Q1
ALBUQUERQUE, N.M. - The apartment vacancy rate improved in the Albuquerque metro area during the first quarter, dropping from 7.9 percent at the beginning of 2013 to 7 percent this year, according to Phoenix-based Hendricks-Berkadia.
Apartments built after the 1970s are doing better than the market as a whole, with some owners reporting a recent shift downward in the vacancy rate to the 5 percent range, the report says. The seasonal upswing in renter demand as summer approaches could push vacancies at some properties toward 3 percent.
Hendricks-Berkadia forecasts the metro-wide apartment vacancy rate to drop to 6.2 percent by the end of 2014.
Average monthly rental rates have been stagnant in the metro for the past two years, but are forecasted to rise by just less than 1 percent year over year by the end of 2014.
Apartment vacancy rates and average rental rates tend to move fairly slowly and within a narrow range in Albuquerque, said Bill Fox of Hendricks-Berkadia's Albuquerque office.
"That's our claim to fame," he said. "Our good and bad is not far apart."
While the slow movement in a narrow range makes Albuquerque's apartment market comparatively low risk, it hasn't provided the returns in recent years that attracts a lot of real estate deals.
"Nevertheless, the Albuquerque apartment market remains on investors' radars," the first quarter report notes.
Hendricks-Berkadia was formed in late 2012 when Berkadia Commercial Mortgage, a Berkshire Hathaway affiliate, acquired privately held Hendricks & Partners, a multifamily sales and research company. The company now offers a fully integrated investment banking platform, from construction loans to refinances.
We're able, in most cases, to offer non-recourse loans," Fox said.
In a transaction announced earlier this month, Fox teamed with Dave Christensen of Berkadia Commercial Mortgage in San Francisco to arrange a $3.6 million loan to refinance the Uptown Square office building at 6605 Uptown NE. The loan was funded by a national bank. [Albuquerque Journal]
- Hendricks-Berkadia Negotiates Sale of Hunter's Ridge at Walden Lake Apartments in Plant City
TAMPA, Fla. - Hendricks-Berkadia, one of the nation's largest and most active multifamily investment banking and research companies, recently negotiated the sale of Hunter's Ridge at Walden Lake Apartments, 1400 Plantation Blvd. in Plant City.
Hendricks-Berkadia's Vice President Jason Stanton, based in Tampa, along with Orlando-based Partners Cole Whitaker and Hal Warren, negotiated the sale of the 352-unit apartment community that included updated resort style swimming pool and spa, racquetball, tennis and basketball courts.
Stanton represented CFLP, LLC seller of the property that was built between 1990 and 1991, with capital improvements starting in 2006 and totaling more than $3.8 Million.
MIC HR LLC purchased the property for $23 Million. [Tampa Bay Newswire]
- Call For Offers 6/3 for Hendricks-Berkadia-Listed Karbon in Newcastle, WA
Hendricks-Berkadia is pleased to announce the exclusive listing of Karbon, a 105-unit apartment community, located at 6800-6802 Coal Creek Parkway SE in Newcastle, WA. The seller has engaged Kenny Dudunakis, Ben Johnson and David Sorensen of Hendricks-Berkadia's Seattle office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Waterstone on Sunset Listed by Hendricks-Berkadia's Newport Beach Office
Hendricks-Berkadia is pleased to announce the exclusive listing of Waterstone on Sunset, a 141-unit apartment community, located at 725-745 North Sunset Avenue in West Covina, CA. The seller has engaged Shane Shafer of Hendricks-Berkadia's Newport Beach office to market the property. For additional information on the property, please visit the [Dedicated Property Website.]
- Bridge financing for 954 E. Union
Louis Weisman of Berkadia Commercial Mortgage and Tim Ufkes of Hendricks-Berkadia closed $14.7 million in bridge financing for a six-story, 79-unit apartment building now under construction at 954 E. Union St. on Capitol Hill. The developer, Seawest Investment Associates, is using the money to finance construction. The building is one block from the Seattle Streetcar line, which is scheduled to open later this year. Berkadia Commercial mortgage provides acquisition, construction and refinance loans for real estate properties and manages a portfolio of more than $229 billion. [Daily Journal of Commerce]