"We think Phoenix metro market is attractive," says J.P. Josephson of Montecito. "We'd like to make more investments there." Montecito bought 96%-leased Scottsdale Cove at 9450 E. Becker Ln. from San Francisco-based BRE Properties Inc., which had Tyler Anderson and Sean Cunningham in CB Richard Ellis Inc.'s Phoenix office running the sale.
The North Scottsdale address definitely weighed on the decision to buy. "We think the location is phenomenal," Josephson says.
Industry experts say the property's infill location, amidst upscale single-family homes and the amenity package, creates an opportunity for condominium conversion. There's strong speculation in the marketplace that Montecito will undertake a conversion.
The complex was constructed in phases by Evans Whithycombe, a prominent Valley apartment developer. The first 200 units were built in 1991 and another 116 units followed in 1993. The complex has 94 one-bedroom units, ranging from 673 sf to 718 sf; 117 two-bedroom apartments with 973 sf to 1,021 sf; and 45 three-bedroom units, each 1,220 sf. Monthly rents run from $708 to $1,070.
Montecito is one of the Valley's most active buyers of late. Last week, the investment group shelled out $97 million for two class A complexes, totaling 679 units. In April, it paid $35 million for Pinnacle at Stonecreek, a 226-unit, class A apartment complex. Industry experts say Montecito is planning condo conversions at all three complexes. In today's market, condos are fetching $200 per sf to $240 per sf in the immediate area.
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