GLENDALE, AZ-An investor from Hacienda Heights, CA, has made his second investment in the market, buying Sagewood Apartments for $7.9 million.
The buyer, doing business as H.M.G. Properties LLC, acquired the 176-unit, class B community from a joint venture comprised of Sendera Investment Group of Austin, TX, and AEW Capital Management of Boston, MA. The JV acquired Sagewood Apartments in 2005 for $9.4 million.
H.M.G. Properties beat out 15 other investors to take possession of Sagewood Apartments, which is located in the northwest submarket at 15082 N. 59th Ave. “This was a fairly sought after property because of location,” notes Alon Shnitzer, a vice president of investments with Marcus & Millichap’s Phoenix office. “At the time it went into escrow, there weren’t many B properties available in the Phoenix markets. If you were looking in that niche, Sagewood was pretty much the only complex on the market.”
Shnitzer represented H.M.G. Properties in the transaction. Sean Cunningham of CB Richard Ellis’ Phoenix Office represented the seller.
Shnitzer says the buyer was attracted to the complex because it is close to his other property, the 180-unit Rosewood Apartments. He bought that property in 2005 for roughly $43,000 per unit.
“We’ve been looking for about three years for another property, and we finally found the right deal,” Shnitzer tells GlobeSt. “The buyer has a huge comfort level with Sagewood Apartments because he owns its sister property, Rosewood. The two properties will create economies of scale for him, plus he bought Sagewood at a similar price point as what he paid for Rosewood in 2005.”
Built in 1984, Sagewood offers a mix of one and two-bedroom units. Its occupancy rate is in the mid-80% range. “The buyer expects to realize some upside from both increased occupancy and rental rates when the market returns,” Shnitzer explains, adding that Phoenix-based Consolidated Asset Management will handle the leasing and management of the property.
H.M.G. Properties obtained a fixed-rate, 70% LTV loan from the Mutual of Omaha Bank to acquire the property. Luke Donahue in Northmarq Capital’s Phoenix office arranged the financing .
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