(To read more on the multifamily market, click here.)
TEMPE, AZ-Following a two-year stint on the market and high-interest debt, San Diego-based Kelly Capital Group has sold Willow Creek Apartments, a 402-unit, class B complex, for $20.1 million to Bronco Real Estate Corp. of San Francisco in an off-market transaction. The property had been originally listed at $20.39 million.
"This had actually been marketed during the past couple of years by various brokers," says Mark Huisken, senior vice president of Grubb & Ellis/BRE Commercial LLC in Phoenix, who represented the buyer of 2020 E. Broadway Rd. Ralph Hemphill, Kelly's in-house broker, handled its side of the negotiations.
Huisken says the reason the property didn't sell when it was first offered in 2003 was due to the loan, which had been issued in September 1996, in the amount of $12.55 million, at 8.39% interest, prepayable on Oct. 1, 2006. "At the time, when this was first offered, the market wasn't as strong and the pre-payment penalty on the original loan was pretty high," Huisken tells GlobeSt.com. However, he continues, by the time of the deal, the penalty on prepayment was less than $300,000. And, he adds, "the occupancy wasn't as strong then as it is today and there were more concessions."
Huisken, who says he's been following the building for awhile, decided to take it on about a year or so ago. "I figured by the time it closed, the prepayment penalty would be miniscule," he says.
Built in 1983, the complex's mix contains 32 studios, each 405 sf and renting for $520 per month; 214 one-bedroom apartments, ranging from 628 sf to 650 sf and monthly rents of $555 to $605; and 156 two-bedroom units, 850 sf to 899 sf for $695 to $748.
Huisken says the buyer plans to make some renovations to the complex, including an installation of washers and dryers in some units as well some extra covered parking. "A million and a half dollars was set aside as part of the new loan," he says, "and they might be using some of that for repairs."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
