The 274-unit Desert Sky Apartments at 4620 W. McDowell Rd. sold for $10.1 million and the 216-unit Desert Wind Apartments at 4140-41 W. McDowell Rd. accounted for the $8.6-million balance. The West Phoenix properties are located in a "working class" neighborhood.
"The properties were attractive to buyers because of their price per unit and price per sf," Todd Braun, a senior director in Cushman & Wakefield of Arizona Inc.'s local office, tells GlobeSt.com. Both complexes fell out of escrow early in the marketing process, but Newcastle Properties stepped in with a strong offer and non-refundable earnest money, which minimized the closing risk, he says.
Mandalay Apartments, represented by Braun and C&W's Paul Gross, acquired the complexes in summer 2003. The firm paid $7 million for the Desert Sky Apartments and $5.6 million for the sister development. "When they bought the complexes, they needed to be rehabbed and stabilized because the occupancy was 60%," Braun says. The complexes, with individually metered units, are 90% occupied.
Situated on 13 acres, the 20-year-old Desert Sky Apartments' garden-style buildings have 162 one-bedroom units ranging from 400 sf to 630 sf and 112 two-bedroom apartments ranging from 731 sf to 761 sf. The monthly rent averages $533.
Built in 1987, Desert Wind Apartments has 128 one-bedroom units, with 530 sf to 635 sf apiece, and 88 two-bedroom designs of from 715 sf to 778 sf. Its monthly rent averages $537.
Braun says Newcastle Properties paid off about $9 million of existing debt on the complexes. The deal closed with a loan of nearly $14 million, funded by Columbus, IN-based Irwin Union Bank FSB.
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