Bascom Northwest Buys Distressed Apartment Complex

SALT LAKE CITY-Bascom Northwest Ventures LLC has picked up a distressed apartment property near here for 25% of replacement cost. The Bascom Group affiliate picked up the 126-unit Mill Creek Apartments in Midvale for $3.6 million. The seller was a mortgage opportunity fund that purchased the note as one of a portfolio of under-performing loans. Built in 1977, the property is barely 30% leased. The purchase price translates to $28,571 per unit, which is one of the lowest unit values for any apartment community above 100 units sold in the last decade in the Salt Lake City Metro Area. Bascom Northwest managing director Brian Wirtz oversaw the acquisition from the company’s San Francisco office. Bascom Group managing director David Kim will manage the operations and repositioning of the property. Apartment Management Consultants LLC, which has a large portfolio in the Salt Lake Metro area, has been retained to manage the asset and perform necessary upgrades. The previous owner, a non-profit, had acquired the property and renovated a portion of the units but was unable to complete its work, according to Bascom. They ceased leasing vacant units “some time ago,” resulting in the low occupancy rate at closing, according to Bascom, which says it will immediately start turning units and begin its lease up.”Acquiring a low density asset such as this for nearly 25% of replacement cost is our core strategy on the West Coast,” says Wirtz. “Although the Salt Lake apartment market has suffered like many others on the West Coast, it has a stable employment base (that) we expect will improve over the coming year.” Formed in 1996, Bascom Northwest Ventures is the San Francisco-based apartment redevelopment unit of the Irvine, CA-based Bascom Group. The unit was formed by Brian Wirtz, a former vice president of acquisitions for both Essex Property Trust and AvalonBay Communities. Wirtz’s charge is to redeploy capital from the sale of the Bascom Group’s Southern California assets into the Bay Area, Salt Lake City, Portland and Seattle. The company’s game plan is to acquire communities in good locations and then execute a market repositioning with extensive capital improvements and institutional-quality property management resulting in increased rents, reduced expenses and, as a result, significant added resale value. Wirtz says Bascom Northwest is on track to acquire over $100 million of 50-plus-unit, value-add apartment communities this year and $300-million worth over the next three years.