Pavilions is Loftus' second multifamily buy in the Phoenix Valley. "[Loftus] sells in the Southern California market and takes the [1031] exchange money and invests it in Phoenix," says Jon Busse, a senior vice president with Colliers International's San Diego office. "They can get a better value in Phoenix." Earlier this year, Loftus acquired the Turn at 14602 N. 19th Ave. in Phoenix.
"They like Phoenix because it is expected to have significant population growth over the next 20 years, which bodes well for apartment ownership," says Busse, who represented the family in the transaction along with Duane Jones in Colliers' Phoenix office. He adds Loftus evaluated acquisitions in Seattle and Portland, OR, but felt more comfortable with the Valley.
Pavilions is located at 7400 W. Arrowhead Clubhouse Dr. near the Arrowhead Country Club. Built in 1997, the complex, which sits on 13.5 acres, was 92% occupied at the time of sale, according to Marc Huisken, a senior vice president with Grubb & Ellis/BRE Commercial LLC who represented DWP. It is comprised of 13 two- and three-story buildings with 82 one-bedroom units and 166 two-bedroom apartments. The average unit is 924 sf; rent averages $809 per month.
Huisken tells GlobeSt.com that Pavilions received more than 10 offers from national and local investors, allowing DWP to divest of its sole Arizona asset in a timely manner. "They decided to sell to take advantage of the market," he says.
San Diego-based MG Properties will assume leasing and management responsibilities for Pavilions, according to Busse. The firm also handles the leasing and management for the Turn. According to Busse, Loftus received a conduit loan for 75% of the acquisition price from the Houston-based LJ Melody & Co.
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