"In this particular case the transaction took place at that price level only because it was potentially a condo conversion," Paul Gross, a principal at Cushman & Wakefield of Arizona Inc. in Phoenix, tells GlobeSt.com. "They're not really being converted for the snowbirds coming down from Minnesota. They're being converted for the first-time home buyers."
Riverside South Inc. of Phoenix purchased the 25-year-old complex at 1224 E. Evergreen St. from Norman and Annette Arce of San Marino, CA, after 90 days of escrow. The property had been on the market since mid-December 2003, according to Gross.
Mesa Terrace had fallen into disrepair in recent years and boasted a little less than 50% vacancy at the time the sale closed, Gross says. Upside potential came in the form of all two-bedroom units, he adds, offering an easy condo conversion opportunity.
Based on location, individual condos could sell anywhere from $60,000 to $110,000--a perfect range for the first-time home buyer, says Gross. The low occupancy also helps the new owner once conversion starts by maintaining steady income.
"In their case, that wasn't a real significant factor. It provided some units to jump on and get started with conversion. Most people that do these conversions want people living there so they have cash flow," says Gross, who along with C&W's Todd Braun represented the seller. 1st United Properties Arizona handled the buy side.
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