256-Unit La Mesa Village In Foreclosure

MESA, AZ-An asset acquired by a Los Angeles, CA buyer for its value-add upside five years ago has ended up foreclosure according to Maricopa County records. An area broker familiar with the 256-Unit La Mesa Village Apartments says more class B and class C assets will end up taking the same path to foreclosure over the next several months.

La Mesa Village was bought in 2004 by SRS Properties Inc. Meanwhile, a three-asset portfolio is currently on notice to foreclose. The 272-unit Casa Carranza Apartments in Mesa and the 486-unit Northern Point Apartments and 215-unit Paseo Del Sol Apartments, both in Phoenix, are on notice for foreclosure. The portfolio was bought in 2006 by Teresi Investments.

Alon Shnitzer, associate vice president, investments with Marcus & Millichap Real Estate Services says the main reasons why many of these assets are ending up with lender ownership are because of overleveraging and increasing vacancy. “All of these properties are in similar situations. They were financed with non-recourse notes, and are now overleveraged because the cash flow isn’t supporting them any more,” says Shnitzer, who has no involvement with the troubled assets, but is familiar with them.