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CHANDLER, AZ-Teaming with Rockwood Capital, Bascom Arizona Ventures LLC has acquired the 374-unit Hacienda del Sol Apartments for $11.8 million. The Scottsdale-based investor will sink another $4 million into the class C-minus complex to bring it up to a class B status.
Hacienda del Sol Apartments at 868 S. Arizona Ave. needs significant exterior and interior renovations, says Jerry Finney, a partner with Bascom Arizona. "It's rundown and we see an opportunity to fix it up and provide affordable housing to first-time renters," he tells GlobeSt.com.
Anaheim, CA-based Commercial Services Building Inc. will handle the renovation work. Exterior upgrades will include replacing the stucco, paint and fence. The pool and playground will be updated and a new fitness center added. Inside, Bascom Arizona will replace carpet, cabinets and lighting and update kitchens and bathrooms. Finney says the new owner plans to start renovations in August and complete them by April 2006.
Bascom Arizona acted fast to put the 90%-leased complex under contract, Finney says. "It was about to be listed, but we had worked with the Marcus & Millichap broker on another deal and he thought this property would interest us," he explains. Alon Schnitzer of Marcus & Millichap Real Estate Investment Brokerage Co. represented the seller, Griffith Cos. of Orange, CA.
Bascom Arizona obtained a $13.7-million acquisition and renovation loan from Merrill Lynch Capital to acquire Hacienda del Sol Apartments. Mitch Paskover of Holliday Fenoglio Fowler LP's Los Angeles office arranged the financing.
The 17 garden-style buildings are positioned on 11.1 acres near 800,000 sf of new retail development. The complex, built in the 1980s, has four floor plans ranging from a 325-sf studio unit to a 654-sf, two-bedroom unit.
With the renovation, Bascom Arizona expects to bump rents as much as 33%, Finney says. Current rents range from $450 to $535 per month, but there are "monstrous concessions," he says. Tucson-based Morrison, Ekre & Bart Management Services Inc. was hired to oversee the complex.
To date, Bascom Arizona has invested $112.8 million in the Valley. This month, the investment group expects to close on another 976 units for nearly $60 million, according to Finney.
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