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PHOENIX-As part of its aggressive investment strategy, Bascom Arizona Ventures LLC, partnering with Rockwood Capital, has shelled out $36.6 million for two class B apartment complexes with 656 units.
The 460-unit Club Oasis and 196-unit Sunrise Village were acquired in off-market transactions from Barmar Associates, a Los Angeles-based family trust in the midst of selling five other multifamily assets to complete a market exit. "Both of these complexes offer value-added opportunities," says Steven Hovland, Bascom Arizona's director of asset management. He tells GlobeSt.com that the firm will spend an extra $6 million to update the properties.
Club Oasis, located at 102 W. Palomino Dr. in Chandler, will receive $9,000 per unit in exterior and interior renovations. Similarly, Sunrise Village at 5020 W. Thunderbird Rd. in Phoenix has been allocated $9,600 per unit. Anaheim, CA-based Commercial Services Building Inc. is doing the renovation work.
Built in 1985, the 19-acre Club Oasis features 160 one-bedroom units, ranging from 600 sf to 671 sf, and 300 two-bedroom apartments, with 842 sf to 927 sf. Rents range from $550 to $685 per month. At closing, the complex was 88% occupied. "There is occupancy and rental rate upside in Club Oasis," Hovland says, adding the marketwide occupancy is 91%. He predicts Bascom Arizona will be able to increase rents by 15% in the next two years.
Sunrise Village also offers significant rental rate upside, Hovland says, but little leasing upside. The 21-year-old complex, which has a history of strong occupancy, was 95% occupied at closing. It is comprised of 76 one-bedroom units, each 675 sf, and 122 two-bedroom apartments with 940 sf apiece. Monthly rents range from $555 to $680. "These are below-market rents," Hovland says, "so there's upside in bringing them up to market and also from the improvements we're making." Sunrise Village's proximity to Arizona State University's West campus creates a built-in housing demand, he says.
Since May 2004, Bascom Arizona has acquired nearly $150 million of multifamily properties in Arizona, building a portfolio with roughly 4,000 units. Before it's done, the firm plans to spend $400 million in Arizona.
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