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PHOENIX-The Seattle-based S-J Management LLC has placed a $50.5-million contract on the 480-unit MonteViejo in the Desert Ridge area of North Phoenix. A late summer closing is slated for the one-year-old complex.
"The property provides a unique opportunity to acquire an upscale, fully stabilized core asset strategically located within the midst of one of the most vibrant economic submarkets in metro Phoenix," Michael Sauter, CEO of S-J Management, tells GlobeSt.com. "Additionally, the property offers multiple exit strategies, including condominium conversion." He estimates replacement cost at $60 million for the 2220 E. Beardsley Rd. development, which was on the market three months before S-J Management tied it up.
"It was a very competitive deal," says an industry expert familiar with the complex. David Fogler and Steve Nicoluzakis with Grubb & Ellis/BRE Commercial LLC were marketing the holding for Gray Development Group of Phoenix.
The 95%-leased MonteViejo is tucked into the Desert Ridge area, right in the middle of high-end, single-family homes, retail and hotel properties. The neighborhood includes the 1.3-million-sf Desert Ridge Marketplace and 950-room Desert Ridge Marriott Resort & Spa.
According to Sauter, MonteViejo has one of the best locations in the Valley. Not only does it front Loop 101, but it's just a mile west of the 51 Freeway, making it convenient to Scottsdale, Deer Valley, Arrowhead, the Camelback Corridor and Downtown Phoenix. The complex has 102 studios, 180 two-bedroom and 50-50 split of 36 three- and four-bedroom apartments. Units range from 504 sf to 1,151 sf. "Current rents are below market averages and present opportunity for increases as market conditions allow," Sauter says, adding tenants, on average, earn $54,000 annually.
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