TUCSON, AZ-Gaines Investment Trust has entered the Tucson apartment market with the purchase of five foreclosed multifamily communities. The La Jolla, CA-based buyer paid $30 million for the class B portfolio, which consists of 1,347 units.
Gaines Investment Trust purchased the assets using a combination of agency debt and cash proceeds from a 1031 exchange, according to Brad Cooke with Colliers International’s Phoenix office. He brokered the deal along with his team Cindy Cooke, Carrie Burton and Nicholas Eggert.
The portfolio includes: Summit Ridge, a 360-unit property located at 1252 S Craycroft Rd; La Hacienda, a 275-unit property located at 6161 E Pima St.; Pavilions at Pantano, a 314-unit property located at 8110 E Speedway Blvd.; Sienna Ridgea, a 305-unit property located at 5353 E 22nd St.; and Verrano Park, a 93-unit property located at 6850 E Golf Links Rd.
Cooke tells GlobeSt. the portfolio received more than 15 offers. “There was a lot of interest in the portfolio because of the price per unit, which was so far below replacement cost,” he says. “And, the properties show very well because of the renovation by the previous owner.”
Built between 1974 and 1984, the properties were renovated in 2006 and 2007, Cooke notes. They received significant exterior improvements including: remodeled clubhouses, business centers and fitness centers, along with some interior unit upgrades. The total cost of renovations was approximately $12 million, or $8,909 per unit.
The average occupancy of the portfolio was 90% at closing, with the individual properties ranging from 86% to 96% occupied. “The Tucson market is stabilizing – it’s making a rebound,” Cooke says.
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