(To read more on the multifamily market, click here.)
SCOTTSDALE, AZ-A local investment partnership has purchased San Mateo, a 348-unit apartment complex, for $61 million from San Mateo Apartments LLC of Seattle. The sales price was the highest paid for an apartment building to date in the city, according to local sources.
Buyer Plaza Residences LLLP, a partnership formed by Mentor Properties Inc. of Canada, will convert the property at 7009 E. Acoma Dr. into condominiums. "The plan is to target move-up buyers, either those who have owned condos in the past and want to upgrade, or those who have a home and want to have a second home as a condo," says Cal DeSouza, managing partner with Mentor Properties. The conversion of the 90%-plus leased complex will get under way soon, he says.
According to Mark Forrester with Hendricks & Partners' Phoenix office, who, with Bob Bruno, represented the seller, the property collected 21 offers during the month it was on the market. The buyer, he tells GlobeSt.com was selected because "they have a track record that we knew. Also, their price, timing, their earnest money, all made them competitive as a package."
The experienced condo converter less than a year ago purchased and converted a former apartment complex into Scottsdale Belleview Condominiums. "The average prices for the units were around $150,000," DeSouza tells GlobeSt.com. "Within eight months, the average price for the same unit was around $240,000." He adds one unit remains for sale in that property.
DeSouza and his partners are hoping lightening strikes again with San Mateo, which will be renamed the Plaza Residences. The cost for conversion and interior and exterior upgrades will be about $7 million. The average price for a one-bedroom unit will be $225,000; two-bedroom, $300,000; and three-bedroom, $370,000. Units range from 680 sf to 1,200 sf.
While DeSouza and his partners convert San Mateo into the Plaza Residences, they are preparing to close on a third property in the area to take advantage of the growing demand for high-quality condo housing. The demand, DeSouza points out, is driven partly by increasing costs of single-family housing. Additionally, the lack of quality multifamily rentals online also is boosting demand for condos. "For the first time," he says, "getting a condo can look better to someone who was renting."
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