PHOENIX-Everest Holdings has partnered with Thackeray Partners to acquire 230 units of San Riva at The Foothills, a 280-unit broken condo project. The joint venture paid $15.8 million, or $68,695 per unit, for the class A rental units.
The seller was San Riva Madison Ownership Company LLC, a joint venture comprised of Centennial, CO-based Madison Development Group and Dallas-based Hunt Realty Investments. The partnership acquired San Riva at The Foothills in 2005 for $32.2 million with plans to convert the complex’s 280 apartments into condominiums.
Only 50 units sold before the downturn in the housing market caused the community’s sales to stall, and Hunt Realty took full control of the property. The company hired Cassidy Turley BRE Commercial to sell the remaining rental units.
The Cassidy Turley BRE Commercial team, which consisted of Steve Nicoluzakis, David Fogler and Dan Dobric, approached a number of potential buyers late last year. Scottsdale, AZ-based Everest Holdings and Dallas-based Thackeray Partners were introduced to the deal by John Cunningham of ARC Southwest, which currently manages San Riva at The Foothills.
“We ended up with about 10 offers,” Nicoluzakis tells GlobeSt., adding that the Everest Holdings partnership not only acquired the 230 rental units remaining in San Riva, but also took over the condo association. “Because of the broken nature of the property, the buyer was able to acquire a class A asset in an A location at a pretty deep discount to what a whole rental project would sell for.”
Built in 1999, San Riva at The Foothills is Everest Holdings’ first multifamily acquisition; the company owns land throughout the Valley, according to Nicoluzakis.
Located at 2155 E. Liberty Lane in the Ahwatukee Foothills submarket, San Riva offers a unit mix of one, two and three bedrooms ranging from 700 square feet to 1400 square feet. Most units feature upgraded condo finishes, and rental rates range from $600 to $1,100 per month. The rental portion of the property is 95% occupied.
Everest Holdings and Thackeray Partners obtained a loan from Chicago-based NXT Capital to acquire San Riva’s rental units. Luke Donahue, a vice president in NorthMarq Capital’s local office, arranged the financing.
Nicoluzakis says the loan is structured to provide proceeds for the partnership to buy back the existing condo units and return them to rental status. “The long-term goal is to put the project back together as a rental community,” he explains.
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