(To read more on the multifamily market, click here.)
GLENDALE, AZ-20/20 Properties Inc., a development company based in Vancouver, BC, has paid $42.85 million for the 360-unit Springs at Arrowhead Towne Center. The new owner, a condo converter, has secured a $39.45-million loan to close the deal.
David Sotolov, vice president and senior loan originator of Fremont Investment & Loan's Phoenix office, which is funding the deal, says 20/20 is planning the first conversion of its type in the Glendale-Northwest Valley submarket. Principals Ian Mallmann and John Murphy acquired the 37-building complex at 17722 N. 29th St. from Almon Investment Group in Seattle.
To close the deal, 20/20 secured a non-recourse, 30-month loan with a 3.5% interest or 350 points about the six-month Libor. Scott McPherson and Eric Inabinet at Capital Advisory Group in Phoenix were the loan arrangers. The acquisition was brokered by Sean Cunningham and Tyler Anderson with CB Richard Ellis Inc.'s Phoenix team.
Sotolov tells GlobeSt.com that the buyers plan to spend more than $6 million to renovate the class A complex, zeroing in on exterior and common area upgrades as well as improvements to the fitness center, business center and clubhouse. He says another $10,000 per unit will be spent on upgrading unit interiors. When sales begin, the units are projected to cost $125,000 to $275,000.
The 93%-leased asset has 148 one-bedroom units, ranging from 634 sf to 716 sf; 148 two-bedroom apartments, 913 sf to 999 sf; and 64 three-bedroom designs, each 1,252 sf. Rents run from $683 to 1,081 per month.
According to Sotolov, the Springs purchase is the second one that the buyer, lender and loan arranger have closed. Capital and Fremont also teamed on financing the condo conversion of the Greens at Ventana Canyon, a 265-unit asset at 5800 N. Kolb Rd. in Tucson. "The partners are looking at other acquisitions in the Phoenix and Tucson markets to do the same thing," Sotolov says.
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