Feiga Tiburon LP of Great Neck, NY, was the seller of the 93%-leased, class B complex at 901 S. Country Club Dr. here. "This buy fits the Bascom MO to buy value-added properties and clean them up," says Glenn Daiutolo of Bascom Arizona, who searches out acquisition opportunities for the partnership along with partner Jerry Finney. "Tiburon has fallen on hard times and we're going to completely re-position it."
Daiutolo tells GlobeSt.com that Tiburon's net operating income dropped nearly 60% between 1999 and 2004. "The complex was offering as much as three months' free rent," he says. "What is killing multifamily in Arizona is the concessions." He adds Bascom Arizona expects most of the upside to come from increasing rents and burning off concessions.
The partnership, with ties in San Diego and Phoenix, plans to invest about $4 million into renovations of the property, developed in 1987. "It needs a lot of exterior work like painting and the roof is shot," Daiutolo says.
Yet, Daiutolo claims Tiburon offers many positives. "It's in an infill part of Mesa between the Loop 202 and Superstition Freeway so it's accessible to downtown and employment," he says. Moreover, the complex boasts racquetball and tennis counts along with several courtyards.
Situated on 17.8 acres, Tiburon has 120 studios, 402 one-bedroom apartments and 62 two-bedroom units. Units average 546 sf. The average rent is $524 per month.
Bascom Arizona leveraged the acquisition with a three-year, floating-rate loan through Wells Fargo Bank, according to Daiutolo. The loan is Libor-based with interest-only terms, he adds.
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