(To read more on the multifamily market, click here.)
PHOENIX-McDowell Properties and Buchanan Street Partners have acquired the 672-unit Thunderbird Ranch Apartments for $28.9 million. The first-time joint venture plans to spend another $5 million to upgrade the 26-year-old complex.
"For larger transactions, we had been thinking about bringing on a partner," says Patrick McDowell, president of the San Francisco-based McDowell Properties, who picked up 1944 W. Thunderbird Rd. in an off-market transaction. "We've been talking with Buchanan Street since last fall about doing a deal with them." The Newport Beach, CA-based Buchanan Street Partners is backed by CalPERS. The acquisition is McDowell's third in the Valley, taking the portfolio's value to nearly $61 million for 1,332 units.
McDowell Properties bought the 90%-leased complex from MIC Ranch LLC, a subsidiary of Mercury Investments of Duluth, MN. "We were brought together by Bernard/Allison, who manages Thunderbird Ranch and several of our properties," McDowell says. Kim Bernard and Lamont Bawden of Bernard/Allison Investment Services Inc. represented MIC Ranch.
Situated on 31 acres, Thunderbird Ranch Apartments boasts an infill location with access to Interstate 17. "We look at Thunderbird Ranch as a renovation opportunity," McDowell tells GlobeSt.com. "We are going to invest $5 million in exterior and interior improvements." Bernard/Allison, the manager for four years, will be kept in place and will oversee renovations.
"We're going to take it from a C-plus to a B-plus," McDowell says. "We think that with the improvements we can increase rents as much as $100 per unit." Rents now run from $535 to $920 per month for a mix of 368 one-bedroom units, 264 two-bedroom apartments and 40 three-bedroom designs, ranging from 680 sf to 1,444 sf.
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