S-J Management CEO Michael Sauter says the acquisition is the firm's fourth multifamily property acquisition and fifth purchase in the metro area since July 2003. "We're drawn to the Central Phoenix submarket because it has limited apartment inventory and limited land availability for new development," he says.

Sauter tells GlobeSt.com that Monterra Apartments, located at 1333 N. 24th St., appraised for nearly $1 million more than the purchase price. Moreover, the complex had several back-up contracts on it. "We could turn around tomorrow and flip this asset and make a profit," he says. However, S-J Management plans to hold the asset at least three years.

Built in 2001 on eight acres, the 96%-leased Monterra Apartments contains 30 studio apartments, 75 one-bedroom units, 75 two-bedroom floor plans and 78 three-bedroom designs. The average unit is 803 sf; the average rent is $850 per month. "The immediate upside for us is that we can increase rents," Sauter says.