"This was not a typical real estate transaction," Richard Butler, an investment specialist at Marcus & Millichap in Phoenix, tells GlobeSt.com. "It was a nonprofit organization that owned it. It's an affordable-living property in Tucson. They added board members who invested money into the complex and earned the right to take over the decision-making process for the property."
Brian and Nouria Edwards of Van Nuys, CA, purchased the 1502 S. Columbus Blvd. property in the south-central submarket after being elected to the board of directors of Firm Foundations, a Phoenix-based organization that builds affordable housing around Arizona and the US. Their investment in the 93%-leased complex essentially allows them to control its business operations although Firm Foundations Columbus Village Inc. will remain as the ownership entity.
The Edwards' investment also makes them responsible for making payments on a 30-year, $12.4-million HUD loan provided at about 6.5% interest when Firm Foundations first purchased the property in 1998. More than $1.5 million was immediately funneled intoextensive interior and exterior renovations at that time, totally revamping the property.
"There was so much interest in this property, you wouldn't believe it," Butler says, adding 30 days of marketing generated some 10 offers. Instead of the typical escrow process, the couple wrote a contract that was signed by Firm Foundations that gave themcontrolling interest in the property upon their election to its board of directors.
Built in 1981, Columbus Village has 130 two-bedroom apartments and 130 three-bedroom units, with rents ranging from $590 to $650 per month. Butler and Michael Pesci of Marcus & Millichap's Los Angeles office represented buyer and seller in the transaction.
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