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TUCSON-Continuing its swath of activity across Arizona, S-J Management LLC will invest $21.8 million into its first multifamily buy inside the city line. A September closing is planned for the 196-unit Springs at Continental Ranch.
The Seattle-based investor's inroad is a fully leased, class A development at 7901 Cortano Rd. near Oro Valley. According to Steve Koz with Capstone Funding LLC of Phoenix, S-J opted to push into Tucson because of the growing demand for housing. "We're strong in the Phoenix market, but we really like the Tucson market too," says Koz, whose company is partnering with S-J Management for the Springs and upcoming deals as well.
Koz tells GlobeSt.com that capital improvements are planned for Springs once the deal is closed with Scott Communities of Tempe, which developed the complex in 2000. Plans call for S-J to hold the asset long-term, but Koz indicates market conditions could change the strategy.
According to Koz, S-J Management has no immediate plans to buy more assets in Tucson, but it is amenable to the right deal. "If there are other somewhat newer class A assets that are well-located, we'll definitely consider them," he says.
Koz says the deal is being financed with a $20.77-million loan, with $3 million in equity. The financing is an interest-only vehicle with a 7.5% fixed rate.
The Springs has studio, one-, two- and three-bedroom units. The monthly rents go from $843 to $1,174.
Rue Bax, a senior adviser for Sperry Van Ness in Phoenix, is representing S-J Management. Sperry Van Ness senior advisers Neil Sherman and Joe Dietz are running the deal for the seller.
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