"This was an opportunity purchase," Mike Hubl of Marcus & Millichap's Phoenix office tells GlobeSt.com about the acquisition from Scott B. Wilson of Yuma. "The buyer is going to self manage the asset and reposition it, charge higher rents and put it back on the market in the near future."
Collins made a 30% down payment and assumed an existing Orix loan that was originally provided by Bank of America. The note is due in 2008 at a fixed rate of 7.16%, according to Hubl, who represented both parties.
The 1986 apartment community is located at 145 S. Avenue B. It has 24 one-bedroom and 24 two-bedroom units averaging 745 sf. Rents for the one bedrooms run $400 while two-bedroom rents hover $475 per month.
Hubl noted several advantages to the purchase, including a 12% cash flow, 9.9% cap rate and 4.8 gross-rent multiplier, considered "outstandingly low" in that market. Only two units were vacant at closing. Yuma's tertiary market offers a solid economic base for multifamily development, adds Hubl. Collins plans some renovation on the Las Flores complex, though specifics were not given.
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