Tag Archives: multifamily

Stone Canyon, Courtesy of CBRE

Stone Canyon sells for $47M

CBRE has completed the sale of Stone Canyon, a 392-unit apartment complex located at 5210 E. Hampton Ave. in Mesa. The multifamily asset sold for $47 million and was 95 percent leased at time of sale.

Tyler Anderson, Sean Cunningham, Asher Gunter and Matt Pesch with CBRE’s Phoenix office represented the sellers, a group of tenant-in-common co-owners who were supported throughout their hold period and the sales process by National Asset Services, Inc. (NAS), a Los Angeles-based real estate asset management company. The buyer was Olen Residential Realty Corp. of Newport Beach, Calif.

Karen E. Kennedy, president of NAS commented, “We have worked diligently with the 33 co-owners to drive value on this fantastic investment property, and are delighted to see these co-owners realize their financial objectives at the sale.”

“The Stone Canyon apartments offer an excellent opportunity to purchase an institutional-quality asset well below replacement cost. The asset is located in a submarket that has no new multifamily construction underway with none planned,” said CBRE’s Anderson. “The property has been well maintained and the buyer is in an excellent position to capitalize on a submarket that is expected to post the strongest population growth metro-wide over the next five years.”

Stone Canyon located in the core of Mesa’s employment corridor. The property is surrounded by the largest employers in Mesa, including Banner Gateway Hospital, Banner Baywood Hospital and The Boeing Company, among others. Stone Canyon also offers excellent access to other major local and regional employment corridors throughout the southeast valley with immediate access to the US-60 via Higley Road.

Built in 2000, Stone Canyon features spacious, well-designed floor plans ranging in size from 727 to 1,146 square feet. Units feature nine-foot ceilings, built-in computer desks, walk-in closets, and personal balconies/patios. Community amenities include two resort-style pools, a fitness center, clubhouse and resident lounge, outdoor fire pit with cushioned seating, barbecue grilling stations with entertainment areas, nine-hole putting green, an outdoor water feature, mountain views and gated entrance.


Rents spike as vacancy continues to tighten

Screen shot 2015-05-01 at 10.21.10 AMMarket report supplied by Colliers International


The Greater Phoenix multifamily market continued to ride a wave of momentum to start 2015. Robust renter demand for units fueled another vacancy improvement, rents surged and sales prices posted additional gains. Healthy employment growth is the driving force behind renter demand, and the new units that are being delivered to the market are being leased quickly. The supply side remains the primary uncertainty going forward, particularly as permitting for new units slowed in late-2014 and again in the first few months of this year.


After ending 2014 at a 17-year low, the Greater Phoenix multifamily vacancy rate continued to improve in the first three months of 2015. The rate fell 50 basis points in the first quarter to 5.7 percent, and over the past 12 months, vacancy has dipped 80 basis points. The ongoing vacancy tightening has been dynamic; as recently as the end of 2010, metrowide vacancy was over 10 percent, and the rate peaked at more than 13 percent in 2009.

While the market rate was over 10 percent a few years ago, currently, only one submarket in all of Greater Phoenix currently has a vacancy rate in the double digits. A dozen submarkets in the Valley feature vacancy rates of 5 percent or lower, with some of the tightest vacancies in the Ahwatukee Foothills, Chandler and Gilbert submarkets. Year-over-year vacancy declines have been recorded in more than 70 percent of the submarkets in the metro area, and in the areas where the rate is improving, the average decline is approximately 150 basis points.

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After renters moved into a net of more than 5,800 units in 2014, another surge in demand was recorded in the first quarter. Net absorption hit a five-year high in the first quarter, totaling more than 2,800 units, up nearly 15 percent from the first quarter 2014. While absorption was strongest in Scottsdale and Chandler/Gilbert, it was positive in nearly every submarket in the Valley during the first quarter, with healthy performance in the Glendale, Union Hills/Cave Creek and Ahwatukee Foothills submarkets.

Persistent renter demand for units and tightening vacancy are fueling robust rent growth. Asking rents surged 2.2 percent in the first quarter—the strongest single quarterly increase on record—and have jumped 5.4 percent over the past 12 months.This comes following a 1.5 percent rent gain to close 2014, which at the time was the largest rent spike since 2006. At $837 per month, current asking rents are 9 percent above the post-recession low, and average increases in the 4.0 percent to 6.5 percent range are forecast over the next few years.

Sales velocity in the first three months of 2015 lagged activity levels from the preceding quarter by approximately 20 percent, but declines in the first quarter are common. When compared to other starts to the year, however, activity was quite robust, with more properties changing hands to start 2015 than in any first quarter since 2007. When compared to the same period one year ago, sales activity thus far in 2015 has more than doubled.

Strengthening property performance and favorable market sentiment are pushing prices higher. The median price per unit rose approximately 10 percent in 2014 and continued to gain momentum to start this year. The median price in the first quarter was $73,100 per unit, the highest median price since 2008. Part of the recent rise is explained by activity at the high-end of the market.Sales of properties for more than $100,000 per unit accounted for 38 percent of all transaction volume in the first quarter, up from 30 percent of all sales in 2014. These higher-priced properties are typically newer construction, averaging 10 years old at the time of sale. With developers increasing deliveries in recent years, and investment demand healthy, there could be additional volume among newer properties in the years ahead.

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will bruder

Op-Ed: Blueprint for success in recovering multifamily markets

Flynann Janisse is the executive director of Rainbow Housing Assistance Corporation, a nonprofit organization that provides service-enriched housing programs for residents of rental housing communities throughout the country. With award-winning services available throughout the United States, Rainbow seeks to create and preserve quality, affordable housing for families and individuals of diverse ethnic, social and economic backgrounds.

Flynann Janisse is the executive director of Rainbow Housing Assistance Corporation, a nonprofit organization that provides service-enriched housing programs for residents of rental housing communities throughout the country. With award-winning services available throughout the United States, Rainbow seeks to create and preserve quality, affordable housing for families and individuals of diverse ethnic, social and economic backgrounds.

By Flynann Janisse, Executive Director, Rainbow Housing Assistance Corporation

When the housing market collapsed in 2008, the industry as a whole saw individuals and families quickly scramble to find housing that could accommodate their new financial situations. During the height of the housing crisis, the National Low-Income Housing Coalition noted that in 2011 the lack of available rental housing supply, though expanding, produced an absolute shortage of 4.6 million affordable units (Housing Spotlight, Vol. 3 Issue 2). Yet, in the middle of a recession, funds were difficult to obtain for new construction or rehabilitation projects. Now no longer in a defined recession, the industry is ushering in a new era of development partly fueled by the significant merger and acquisition activity. Additionally, the Department of Housing and Urban Development has made programs such as RAD available to allow for greater conversions to project-based vouchers.

This is especially true in Phoenix, where Rainbow is headquartered. Removing the gold rush on foreclosed, single-family homes, many in the Phoenix market have turned to renting, as they are uncomfortable making the large investment in a home whose prices have continued to fluctuate during the recovery. With this knowledge, multifamily developers are turning to markets such as Phoenix, where the housing crisis took the largest toll. However, it is important to not just “build a box”, but fully understand the needs of the residents that it is intended to house.

In 2012, a story came out of a community, which Rainbow services in Florida, of a young family whose only source of income was tied to the father’s job. This family lost that income and was facing the threat of eviction. Rainbow helped secure not only rental assistance, but also new employment, allowing them to stay in their home. With no family in the area, a newborn, and no savings to speak of, had Rainbow not been there to intervene, the alternative would have been homelessness.

This story illustrates that without Rainbow’s involvement this community would have had several expenses related to the eviction process, negatively impacting the asset’s financial performance. Given that Rainbow was able to stabilize that family, there were subsequent savings of real dollars such as legal fees, bad debt write-offs, maintenance personnel turning the unit, marketing, and concessions. None of those line items drew down on the community’s net operating income; instead rent was collected and continues to be regularly.

With a full-time coordinator providing services, Rainbow knows that if it can save one to two residents per month (an attainable goal), that it can pay for itself in as little as one year. However, just as with any value-based product, there is a cost for providing service-enriched housing. Though possible for Rainbow to begin services at an existing community, this budgeting is best done at the financing phase. By starting with the idea of providing supportive services, developers have real cost that they can build into their budgets.

Case Study: Villas at Pasadena

Villas at Pasadena is a perfect example of how developers are leveraging unique approaches to ensure successful deals in recovering markets, thinking critically as to how to best position their communities for success at the onset of a project. In 2012, the Arizona Department of Housing announced $20 million in tax credit awards for the development of several low-income projects across the state. Included in the selected projects was an application for a rehabilitation that Rainbow assisted Arizona-based Hope Development, LLC prepare.

Last November, Hope announced the grand reopening of Villas at Pasadena, its newest affordable housing development in the Phoenix market. This $6 million redevelopment project consists of 18 rehabilitated 1- and 2-bedroom apartments as well as 16 new 3-bedroom townhomes.

With doors open, Rainbow began providing the supportive social services to which it agreed in the application phase. Ultimately, these services were part of the reason that Villas at Pasadena received tax credits from the state. The foundation of Rainbow’s success is explicitly tied to the types of programming it provides. As mentioned above, Rainbow’s goal through the provisioning of these services is to support self-sufficiency in the resident population, thus helping the asset perform better financially and, thereby ensuring that it remains as affordable housing for those who need it most.

The Villas at Pasadena service plan contained six core items to ensure success at this community. Starting with financial literacy, Rainbow implemented a program that provides comprehensive money management and financial independence building skills. Employment readiness courses are offered focusing on job searches, resume writing, interview skills, and professional attire. Residents also have access to Rainbow’s enhanced coordinated services, connecting them to emergency rent, utility, food or clothing assistance. These three pillars of Rainbow’s services help reduce turnover costs and safeguard a resident’s ability to obtain steady income, consequently having a stabilizing influence on the broader community.

Additionally there is access to onsite computer equipment for adult and youth classes directed at improving technological competency. For younger residents, a daily afterschool youth enrichment program is provided concentrating on academic achievement. Lastly, partnerships with local law enforcement entities provide a safe, stable environment n which residents want to live.


Though early in its new lease on life, Villas has already seen some initial successes as a result of this approach. Professional redevelopment combined with service amenities helped the property lease up quickly. Pairing world-class development with proven services that deliver a return on investment protects communities from volatility in any market. According to the National Housing Trust, 45 state housing agencies incentivize affordability in their Qualified Allocation Plans. A handful of these states provide significant weight to projects that are distinctive in their approach to preserving affordability. As the market continues to recover and alternative funding models are leveraged, some lenders are requiring additional safeguards outside of the standard cash-to-debt ratio in order to protect the investment. Explicitly offering a proven service-enriched housing model can set apart a proposed project, giving it a greater chance for success. A boon to funding and a financially stable asset, resident services foster a true win-win situation for all parties involved.

Aspera, Courtesy of Todd & Associates, Inc.

Velaire at Aspera breaks ground in Glendale

The P.B. Bell Companies has begun construction on Velaire at Aspera, an apartment community within the Aspera mixed-use development in Glendale.

Located at 75th Avenue and the Agua Fria Loop 101 Freeway, Velaire at Aspera will offer 286 luxury apartment homes in a resort-like setting, with amenities that include an electric-car charging station, an agility dog park and a state-of-the-art fitness facility with TRX equipment, in addition to other recreational opportunities.

“It is always exciting to break ground on a new project, especially one that will make such an impact on the surrounding area,” Michael Trueman, P.B. Bell’s vice president of development, said. “Aspera has a vision of being an integrated community, and Velaire will only add to its appeal. We are thrilled to be a part of this project.”

P.B. Bell will also oversee construction and long-term management of Velaire at Aspera after the community opens in early 2016.  MT Builders, Inc., owned by Philip Bell and Mike Tarver, will serve as the general contractor on the project. Todd & Associates, Inc. is the architect.

Velaire at Aspera, a nearly 13-acre site cushioned on either side by two lakes, consumes most of the northern portion of the Aspera community’s 75 acres, which will also support retail, healthcare and assisted living components. The Velaire at Aspera apartment complex will neighbor Banner Healthcare offices, a Mountainside Fitness, stores and restaurants, a senior living community, and Treasure House, a first-of-its-kind residential facility for young adults with intellectual and developmental disabilities, co-founded by former Arizona Cardinal Kurt Warner and his wife, Brenda.

“The whole design of the Aspera community lends itself well to a P.B. Bell-developed property, built from the ground up with its purpose and surrounding community in mind,” Trueman said.

Residents at Velaire at Aspera will enjoy access to a pedestrian-friendly retail center filled with neighborhood restaurants, financial institutions, retail shops and fitness clubs.

2015 RED Award logo

RED Awards 2015: Best Multifamily Project

On Feb. 26, AZRE hosted the 10th annual RED Awards reception at the Arizona Grand Resort & Spa in Phoenix to recognize the most notable commercial real estate projects of 2014 and the construction teams involved. RED Award trophies were handed out in 10 project categories, to six brokerage teams and safety, subcontractor, architect, general contractor and developer of the year awards were also presented. AZRE also recognized Sunbelt Holdings President and CEO John Graham with a lifetime achievement award. Click here to view all 2015 RED Awards Winners.

Photography by Mark Skalny

by Mark Skalny

Broadstone Lincoln

Developer: Alliance Residential Company
Contractor: Alliance Residential Builders
Architect: ORB Architecture, LLC
Size: 219KSF
Location: Paradise Valley
Completed: June 2014

Apartment living is all about the amenities these days. In an area where home values average $390,000 and household incomes surpass $100,000, Broadstone Lincoln is a 264-unit community on 5.31 acres in Scottsdale/Paradise Valley. It’s intended to attract residents who are 35+ or empty-nesters with its upgraded fixtures and appliances, gas cooktops, hard-surface counters, climate-controlled interior corridors, direct-access elevators, underground parking, private garages, fitness center, common areas for entertaining and a flex studio. The building is also Alliance Residential Company’s second LEED Platinum certified in the country.


Multifamily developers make name brand connection

Rob Lyles

Rob Lyles, Deco Communities

Naming apartment communities has always been an art form. Some community names connect to romantic or exotic locales, others to the landscape and still more simply to location.

“We believe that an apartment is more than just a place to have dinner and go to bed,” says Rob Lyles, partner in Deco Communities. “We see it as a place to live.”

Deco Communities recently opened its seventh Cabana apartment community. It markets to residents in transition from a college apartment on the road to a career.

The Cabana apartments — six in the Phoenix metro, one in Las Vegas — are all new from the walls out rather than from the ground up. With more than 8,000 multifamily entitlements for new units scattered throughout Phoenix, Scottsdale and the East Valley, Deco moves in a different direction.

“There are a lot of properties with good bones,” says partner Patricia A. Watts. “We find ‘C’ apartments in ‘A’ and ‘B’ locations. Our residents want to live in an urban setting and they want to be proud of their place.”

Patricia A. Watts

Patricia A. Watts, Deco Communities

Deco Communities take distressed or declining properties and completely upgrades the interiors and then applies its unique palette to the landscape, exterior and amenities. The palette is literally color. No other multifamily owner has quite captured the unique colorscape of the Cabana apartment communities.

“People see the colors on the building and they know it’s a Cabana,” she explains. “We’re just using different shades, but completely transforms a building. Then we upgrade the pool area to make it a boutique hotel setting. It’s the same flavors at each of our communities.”

Ian Swiergol, Alliance Residential’s managing director for the Southwest Division, says branding is also an assurance of quality.

“There is no question that our residents select Broadstone communities because of the quality of the property. We use the brand to sell consistency in performance, amenities and management. People use the internet and social media in place of a ‘drive by’ when apartment-hunting,” he says. “Having the Broadstone name means we are able to manage expectations from the moment they see the website.”

Alliance closely guards its Broadstone brand. Each property is capitalized differently, and when one sells, the Broadstone name does not transfer to the new owner.

Ian Swiergol

Ian Swiergol, Alliance Residential

“We want to control the property management, professionalism and quality of resident and property,” Swiergol explains. “When we’re managing the community, we know our residents will not be disappointed.”

Cabana and Broadstone communities appeal to different markets. The branding ensures prospective tenants know what to expect.

“The recession changed the market for apartments in Arizona,” says Swiergol. “People lost homes, but still want the luxury of a place to live that feels like home. That’s what the Broadstone brand means.”

Part of the driving force behind the apartment boom — particularly luxury apartments — is that many found that the home investment became a financial burden. While they’re willing to pay more for rent, the expectations are that the apartment is going to offer a ‘home’ setting.

“Life cycles are changing,” he explains. “The boomer generation is walking away from home maintenance and ownership, but not lowering housing expectations. With the Broadstone name, there is an appeal to the discerning renter. They expect absolute luxury in and out of their apartment.”

Alliance is consistent with the Broadstone brand, and when a prospective resident looks at the name, a major portion of the selling opportunity is out of the way. The potential renter comes to the property with a positive impression before walking into the leasing office. Location plays an important role in the branded communities.

“Millennials are returning to the urban cores,” adds Dan Richards, the third partner in Deco Communities. “They don’t want a long commute; they’re already spending long hours at work. We look at proximity to employment and transportation.”

Dan Richards

Dan Richards, Deco Communities

Swiergol lists those two market characteristics as important for its new Broadstone locations. “We want to be at Main and Main,” he says. “That’s why we’re building on the Scottsdale Waterfront and downtown. Same thing with our new Phoenix locations. There are 80 thousand jobs downtown.”

Lyles and Swiergol talk about the move of large prime employers seeking downtown locations. Employees don’t want to be sitting in cars. The success of Valley Metro Light Rail and increased bus ridership in employment corridors back up the investment in the core areas.
“We see our residents come home and come out,” says Watts.

Branding a series of apartment communities doesn’t cost any more than any other remodeling effort. “It just takes more thought,” Watts adds. “We looked at what market needed for places to live and what those renters wanted from their home. Our brand includes graffiti art, bike rooms and models using Ikea furniture. Being cool doesn’t have to cost a lot. You say you’re living at ‘Cabana’ and a person knows what they are going to see when they get to your place.”

The Broadstone brand has another appeal beyond the community. It’s a name recognized by major institutional investors. Alliance Residential partners with Trammell Crow with their ground-up Broadstone communities. In a market looking for capital, the Broadstone name brings a high level of investment confidence.

In the highly competitive market – both for tenants and for capital – the branding of apartment communities places the project at a higher success level than just an apartment community going up on its own. Branding means expectations, promise and high occupancy rates.

Chandler Viridian, CBRE

CBRE to market office space at Chandler Viridian

CBRE has been awarded the marketing assignment for the ±240,000 SF office portion of Chandler Viridian, the $150 million, mixed-used project to be developed by Hines. The multi-faceted development project will be located on the former Elevation Chandler site near Chandler Fashion Center. Construction on the project is slated to begin 1Q 2015 and will include multifamily and hospitality components in addition to the premier, class A office product.

The Offices at Chandler Viridian will benefit from an excellent infill location in the heart of Chandler’s major employment and tech-hub. In addition to the strong corporate employment located to the southwest in the Price Road Corridor, the property will also boast proximity to numerous restaurant, retail and entertainment options within blocks of the project in addition to amenities that will be on-site upon Viridian’s completion.

Hines is a world-class developer with a keen understanding of what modern office users want and CBRE is incredibly excited to be a part of this project,” said CBRE’s Jerry Roberts, who along with Corey Hawley and Pat Boyle will head up the marketing and leasing team for The Offices at Chandler Viridian. “With its corporate friendly environment and diverse, well-educated workforce, Chandler Viridian will be located in the core of one of the Valley’s major employment hubs. Chandler is already well-known for drawing industry leaders from all knowledge-worker sectors including high technology, aerospace,bioscience and financial services. The addition of a premier, live-work-play environment offered by Hines’ Viridian will only serve to further enhance the area’s appeal for major employers.”

The state-of-the-art project is expected to draw the interest of major companies looking to locate or expand in metropolitan Phoenix, and will be a welcome addition to a submarket currently suffering from a dearth of available office product, particularly large blocks of quality contiguous, space. At the end of Q2 2014, the Chandler submarket led the Valley office market with a vacancy rate of 10.1 percent, compared to a 22 percent vacancy Valley-wide. Additionally, class A space in Chandler recorded a vacancy rate of only 3.9 percent at mid-year, compared to 16.9 for the entire metro area.

We expect The Offices at Chandler Viridian will be met with high demand from users. The City of Chandler is as business-friendly as any in the Valley and the community’s strong leadership has created an environment that companies want to locate in,” said Roberts. “Unfortunately, those users are currently faced with a lack of available product to suit their needs. Viridian will help to satisfy some of that demand.”

At build out, the 25.6-acre Chandler Viridian will feature 335 apartments units in a four-story building, ±240,000 square feet of office space in a six-story building, a 10-story, 150,000-square-foot hotel with 180 rooms and two pads for retail/restaurants. The pedestrian friendly project will feature gardens, promenades, courtyards and plazas that would be interconnected with 1.5 miles of paths and trails. The commercial components of office, hotel and retail will be developed on the northern portion of the tract and the multi-family residential units would be situated in the southern part of the site along the west side of the 101 Loop/Price Road Freeway and just north of the 202 Loop/San Tan Freeway.


C:UsersRogerDesktopProjectsHines - Chandler CommonsCADCD

Hines closes on purchase of 25-acre Chandler Viridian

Hines, the international real estate firm, announced today that it has closed on the purchase of the 25.5-acre site for Chandler Viridian, a mixed-use property on the northwest corner of the Loop 101/Loop 202 interchange, adjacent to the Chandler Fashion Center. Hines has been working on Chandler Viridian for nearly two years due to the significant legal complications related to the unfinished Elevation Chandler project. With the legal process regarding the site now complete, Hines expects to demolish and remove the structure in December 2014.

“Chandler Viridian will expand the area’s economic engine by creating a true live, work and play environment. The visibility and walkability of Chandler Viridian exceeds many other mixed-used projects in the area,” said Chris Anderson, Managing Director and local City Leader for Hines. “Hines is excited to develop the last available site adjacent to the Chandler Fashion Center and complete the master plan envisioned by the Chandler City leadership and citizens over 15 years ago.  The support received from the Chandler City Council, city staff and Alliance Bank of Arizona has been instrumental to our success.”

“This is a high-profile site in the midst of the Price Corridor, and the entire community will benefit from having a new project there,” said James Smith, the City of Chandler’s Acting Economic Development Director. “This is the moment our residents have been waiting for – to see that failed structure come down, and new development take its place.”

Alliance Residential is developing the Class A multifamily property at Chandler Viridian. Multifamily construction is expected to begin in the first quarter of 2015. Alliance Residential is headquartered in Phoenix with 33 regional offices nationwide.

“Alliance Residential has served as a partner throughout the entitlement and land-closing process, collaborated on the design and plays an important role in delivering on the promise of Chandler Viridian,” says Anderson.

“We are excited to develop the residential component within the well-designed, mixed-use project led by Hines,” said Ian Swiergol, Managing Director of Development, Southwest for Alliance Residential. “This urban community will meet the ever-growing demands of today’s renter profile and will complement the great mix of employment and entertainment options within the Chandler Fashion Center submarket.”

In addition to the luxury apartments, Chandler Viridian will include a six-story modern brand hotel, a central plaza with 250,000 square feet of Class A office, and retail options along with a pedestrian promenade to the Chandler Fashion Center. Chandler Viridian is located in the heart of the Chandler retail entertainment district.

Construction on the horizontal infrastructure for the commercial properties is expected to begin in the second quarter of 2015. The hotel, office and retail projects will begin construction later in 2015 and into 2016.

RSP Architects of Minneapolis serves as the architect of record for Chandler Viridian. A general contractor has not been selected.

Fiesta Park

The value-add play in Phoenix’s multifamily market

By:  Steve Jaffe, Executive Vice President and General Counsel, BH Properties


Steve Jaffe is the executive vice president and general counsel for BH Properties, a Los Angeles-based commercial real estate investment company that acquires and maximizes the value of under-performing properties located throughout the country. The firm also has regional offices in Dallas, Texas and Salt Lake City, Utah.

Steve Jaffe is the executive vice president and general counsel for BH Properties, a Los Angeles-based commercial real estate investment company that acquires and maximizes the value of under-performing properties located throughout the country. The firm also has regional offices in Dallas, Texas and Salt Lake City, Utah.

During the most recent Great Recession, Phoenix saw property values drastically decrease and apartment owners lose tenants due to lost jobs. The domino effect resulted in owners dropping rents to maintain occupancy, which, in turn, caused them to lose out on money they would have spent to reinvest in and improve their properties, leading to further tenant loses. For many of the multifamily properties in the B- to C classes, this downward cycle was fatal.

In 2010, BH Properties stepped back into the apartment business with Arizona as its target market. The Los Angeles-based company brought its proven strategy of purchasing undermanaged or distressed assets at the appropriate price and turning the properties around in one of the markets that had been hit the hardest by the recession.

Fiesta Park in Mesa, Arizona was one such multifamily property suffering from long-term neglect and in need of BH Properties’ value-add approach. Recognizing its upside potential and believing the Phoenix market was (or would soon be) on the upswing, BH Properties purchased the complex in a short sale, making it the first purchase made by BH Properties after the market crashed almost three years earlier.

After purchasing the complex, BH Properties identified areas that needed to be restored and repaired in order for the asset to function properly and to draw new tenants. The 320-unit complex was 54 percent occupied at the time BH Properties went under contract to purchase the property and required extensive renovations to both the exteriors and interiors. Expenses were then prioritized in order to keep rents within reason to fit within the constraints of the C class property.  

To add value without losing sight of investment goals, the firm focused the majority of the renovations on improving common areas and individual units. The exterior of each building within the complex was painted with a fresh color scheme, the fence around the swimming pool was repaired and new furnishings were added, and outdoor lighting was installed throughout the complex illuminating areas that may not have seemed safe before. An archway was also built in front of the leasing office to increase its visibility and provide a welcoming entrance to the complex. The leasing office interior was updated and made more inviting. Individual apartment units were refurbished with better flooring, upgraded light fixtures and resurfaced countertops. For safety, walkways and staircases were improved.

With more than $1 million in renovations completed over an eight-month-time-period, BH Properties turned the neglected complex into a clean, safe, family-oriented living space. Shortly after the final touches were made to enhance the curb appeal, the complex saw occupancy grow to 90 percent from 54 percent at the time of purchase. Gradually, BH Properties was able to increase rents and improve the overall tenant profile.

The keys to success with value-add plays are patience and a true understanding of the market and not “over improving” an asset. Phoenix, like other major cities in the Sunbelt, held all the fundamentals for a great economy and continues to strengthen along with the recovery. In addition to the area’s unemployment rate coming in at almost one percent lower than the national average, recent reports  indicate a slight uptick in the median asking price per unit in the Phoenix market with an increase of 10.7 percent compared to last year’s prices.

BH Properties recognized the potential this business and family friendly environment had for a strong recovery across all sectors, especially the housing market, and employed its quick closing business model to take advantage of the primed opportunity. Purchasing Fiesta Park at the right price allowed the firm time and capital to make the necessary repairs in order to bring the complex back up to par, while the market gradually made a comeback.



Metro Value Add Portfolio, Colliers, WEB

Colliers’ Cooke Team brokers largest multifamily portfolio in Phoenix

The Cooke Multifamily Investments Team at Colliers International in Greater Phoenix completed the sale of a 2,759 unit-multifamily portfolio for $168.5 million. To date, the largest multifamily portfolio closed in Metro Phoenix and it could hold the record for 2014.

The size of this Class A and Class B Value-Add Metro Phoenix Portfolio attracted attention from investors around the world, but it was a local investor that was awarded the deal.  P.B. Bell of Scottsdale partnered with Stonecutter of New York City to purchase the portfolio from Standard Phoenix Fund of Arcadia, Calif.

Cindy Cooke, senior executive vice president of Colliers International, and Brad Cooke, vice president of Colliers International, served as the brokers for the seller. The buyer was self-represented.

“It was P.B. Bell’s in-depth knowledge of the assets and submarkets that helped separate them from the other buyers.  We were impressed with their upfront due diligence and ability to transfer their local knowledge to their New York equity partner.  They executed the transaction smoothly and even removed contingencies a day early,” Cindy Cooke said.

The Cooke Team provided attentive support to buyer and seller to ensure that they felt well informed and cared for.  Delivery of world-class expertise combined with strategic navigation of skills allowed a team approach between all parties for a seamless transaction.

“Having a local company that has been imbedded in the Valley of the Sun since 1976 step up to make their largest acquisition ever shows the strength of the current Phoenix apartment market.  This portfolio of seven properties represented exactly that.  The properties’ strong locations with stable occupancy of 96% set it up for a perfect position for upgrading the interiors and improving the exterior. P.B. Bell intends to use the transaction as a springboard to acquire more product.”  Brad Cooke said.

The Cooke team was hired by Standard Phoenix Fund due to their strong track record of closing portfolios at or above their target prices.  This is the second time the Cooke team has sold these seven assets; the first time as part of a 12-property portfolio in 2007 for $427.5 million, which is still the largest multifamily deal ever in Phoenix.

Five of the properties are located in the highly sought-after Southeast Valley submarket, one is located in the prestigious Camelback Corridor and one is located across from Arizona State University’s West Campus.  The properties:

Alante at the Islands

2222 N. McQueen Road, Chandler

Class A, 320 Units, Built in 1996


868 S. Arizona Ave., Chandler

Class B, 374 Units, Built in 1985

Laguna Village

102 W. Palomino Drive, Chandler

Class B, 460 Units, Built in 1985

Tuscany Palms

901 S. Country Club Drive, Mesa

Class B, 582 Units, Built in 1986

Whispering Meadows

1050 S. Longmore St., Mesa

Class B, 432 Units, Built in 1979

Sienna Springs

5128 N. 15th St., Phoenix

Class B, 395 Units, Built in 1973

Tela Verde

5020 W. Thunderbird Road, Glendale

Class B, 196 Units, Built in 1984

The Enclave at 32nd

Watt Communities announces multifamily, in-fill projects

Watt Communities of Arizona has doubled its Phoenix project pipeline and brought its total local construction commitment to more than $21 million with the announcement of two new urban infill communities: The Enclave at 32nd Street and 16 Ocotillo. The move grows the company’s local presence and expands its product offerings to include single-family detached homes and urban townhomes in close-in suburban neighborhoods.

“We now have four flags on the map representing two concepts that we are extremely proud of and excited to bring to Phoenix,” said Steve Pritulsky, President and CEO of Watt Communities of Arizona. “They are all decidedly infill locations and will feature innovative indoor-outdoor living styles that today’s buyers are looking for.”

The Enclave at 32nd Street is located on 3.46 acres just south of the southwest corner of 32nd Street and Cactus Road, in the Paradise Valley Mall area of North Phoenix. The community is directly off of the 51/Piestewa Freeway and immediately north of the highly acclaimed Basis Charter School. It is also situated less than one mile from the Phoenix Mountain Preserve recreation area.

Scheduled to break ground in late 2014, The Enclave includes 31 two-story, single-family detached homes ranging from approximately 1,700 to 2,200 square feet. All homes deliver a welcoming front porch concept, creative side patios, builder-installed front yards and common area landscaping, walkable interior courtyards, and private rear-entry, two-car garages.

“This development is based on a private drive design developed by our partners in California, and is a unique concept here in Arizona,” said Paul Timm, COO of Watt Communities of Arizona. “Having just one point of entry for the community adds a level of privacy and allows residents to own a small oasis within a bustling urban corridor. It is innovative housing in and active location, but also peaceful.”



The second community, 16 Ocotillo, sits on 2.8 acres at the southwest corner of 16th Street and Ocotillo Road, between Maryland and Glendale avenues in North Central Phoenix. It is within walking distance to the area’s burgeoning 16th Street “Restaurant Row,” a Sprouts grocery store and diverse retail services. The community is being designed as a gated, single-family detached home community and is located near Piestewa Peak, which sits just one half mile away.

The Enclave at 32nd Street land acquisition closed escrow on May 13 for $1.275 million. Timm of Trust Realty Advisors represented the buyer, Watt New Leaf-Cactus LLC. John Werstler of CBRE represented the property seller, The Northern Trust Company as Trustee of the Edmund P Mell GST Trust. The 16 Ocotillo land acquisition closed escrow on May 8 for $1.6 million. The buyer was Watt New Leaf-16 Ocotillo LLC. Ray Cashen of Cashen Realty Advisors represented the property seller, The Estate of Mon Jame Lee and The Lee Living Trust.

In late 2013, Scottsdale-based New Leaf Communities and Watt Communities of Santa Monica, Calif. announced their joint venture (Watt Communities of Arizona) and entered the Phoenix market with two inaugural projects: Dorsey Lane, a 51-unit townhome project located in central Tempe (just south of the southwest corner of Broadway Road and Dorsey Lane), and Biltmore Living, a 40-unit townhome project located in the Camelback Corridor (less than a mile south of 24th Street and Camelback Road).

Those communities will provide contemporary, three-story urban townhomes ranging in size from 1,400 to 1,800 square feet. Amenities include gated entry, private two-car garages and common areas with a pool/ramada/sundeck, outdoor poolside kitchen and landscaped paseos.

“These are urban locations within established employment cores,” said Pritulsky. “They match the quality and vibrancy of their neighborhoods, and will allow residents to move from renting to owning without giving up their urban lifestyle.”

Carol Arms, WEB

ORION sells 44-unit Carole Arms apartments

ORION Investment Real Estate announced the sale of Carole Arms Apartments, a 44-unit apartment complex located at 2535 W. Coolidge St. in Phoenix. The property sold for $1,159,500 ($26,352 per unit). Built in 1985, Carole Arms Apartments consists of one & two-bedroom units that feature a wide array of amenities. These include all electric gourmet kitchens equipped with a dishwasher and refrigerator, tile flooring, window coverings, air conditioning and more. Community amenities include a sparkling swimming pool with sun deck, on-site laundry facility, children’s playground, picnic area with barbecue, guest parking, lush landscaping throughout and more.

The Buyer was Maskan, LLC based out of California. This was an All Cash transaction. “They are first time buyers, looking for the best deal in Phoenix,” says Ayala, Vice President at ORION. “Buyer and his brother are actively looking for larger multifamily properties and to expand their portfolio.”

The property was well maintained and 99% occupied at the time of sale. The Seller was Housing Opportunity Center, Carole Arms Apartments, an Arizona nonprofit corporation.

Linda Ayala focuses on investment sales of multifamily properties.

Rendering of Generations at Agritopia (a sister property). Renderings of the Ahwatukee location are not yet completed.

128-Unit Senior Housing Community Comes to Ahwatukee

Investment Property Associates, LLC (IPA) and Retirement Community Specialists (RCS) have partnered for a second time to develop a senior living community in Ahwatukee near the southwest corner of Chandler Boulevard and 50th Street.  The 8-acre site of the planned senior community is part of a 35-acre mixed-use parcel acquired by IPA in 2012.

The senior housing community, called “Generations at Ahwatukee,” is designed to be 160,000 square feet and to provide 128 total units.  The community will be licensed by the State of Arizona as an assisted living and directed care community and will offer independent living, assisted living and memory care.  The community will be operated by Retirement Community Specialists (RCS), a senior living management company based in Ahwatukee since 1998 and in the Phoenix area for over 25 years.

Rendering of Generations at Agritopia (a sister property). Renderings of the Ahwatukee location are not yet completed.

Rendering of Generations at Agritopia (a sister property). Renderings of the Ahwatukee location are not yet completed.

“We are thrilled to bring senior living to Ahwatukee where RCS has been a member of the business community for over 15 years,” said RCS President Eric Johnston.  “As a resident of Ahwatukee for more than 20 years, it is rewarding to be able to provide residents and their family members with quality senior living options, right in the neighborhood.”

The unit mix includes studio, one-bedroom and two-bedroom apartment styles as expansive as 1,150 square feet, and many unit styles will feature private balconies or patios. The community will offer an array of amenities that promote freedom from everyday burdens for residents to enjoy their interests and quality time with friends and family.  Current plans include a theater, fitness center, library, salon/barber shop, pool, community gardens, activity centers and restaurant-style dining rooms.

Generations at Ahwatukee will be situated to the north of the 402-unit, Liv Ahwatukee, one of IPA’s premier multifamily residential communities scheduled to open this summer.  Senior living fits well within IPA’s multigenerational vision of neighborhood.

“Generations at Ahwatukee will be a sister property to Generations at Agritopia, which is a senior living community that IPA and RCS own and operate in the literal center of the thriving community of Agritopia in Gilbert,” says Scott Brooks, a partner at IPA. “We strongly believe in the thoughtful design of multi-generational communities where people of all ages can interact with and enjoy each other. With Generations at Ahwatukee positioned next door to Liv Ahwatukee, our Generations residents can still very much be in the center of life’s action while also enjoying the high-level amenities and services they desire and expect from a premier senior living community.”

The Generations at Ahwatukee site is fully entitled and IPA expects to break ground in the fall. IPA has developed senior care communities in other markets; this will be the company’s second senior living development in Phoenix. MC Clark-Wayland Builders of Scottsdale, Ariz. will serve as the General Contractor.  Architectural services are provided by Todd & Associates of Phoenix and Thoma-Holec of Mesa, Ariz. will provide the interior design.

Lexington Court Apartments, WEB

Marcus & Millichap Sells 32-Unit Multifamily Asset in Phoenix

Marcus & Millichap Real Estate Investment Services has announced the sale of Lexington Court Apartments, a 32-unit apartment community located in downtown Phoenix. The asset commanded a sales price of $1.7M or $53,125 a unit.
Brian Tranetzki and Rich Butler, multifamily investment specialists in Marcus & Millichap’s Phoenix office, had the exclusive listing assignment to market the property and negotiated the transaction on behalf of the seller, a private capital investor out of Southern California. Brock Danielson from KW Commercial Represented the Buyer, a private investor from Vancouver Canada.
“Lexington Court Apartments is within walking distance of Arizona State University’s downtown campus and is close to numerous boutique restaurants and retail shops,” says Tranetzki. “This property is one of the few remaining midcentury un-refurbished apartment communities in the downtown area. It is surrounded by new townhomes and condos; the buyer intends to eventually build a larger class ‘A’ apartment community on the site. The future development will be fitting for the continued growth and redevelopment of the downtown area,” adds Tranetzki.
Built in 1963, Lexington Court consists of block, cement and steel construction and offers patios and covered parking for each unit. Located along 7th Street and Portland, the property has immediate access to Interstate 10 and direct access into the hub of the central business district of Phoenix.
“The location of this asset is superb,” says Butler. “Central Phoenix is home to ASU’s $219 million Downtown Walter Cronkite School of Journalism as well as their College of Nursing; the University of Arizona has also recently opened its medical school on the Phoenix Biomedical Campus. Hospitals in the area include Banner Good Samaritan, St. Luke’s Medical Center, St. Joseph’s Hospital and Phoenix Children’s Hospital.”

ORION Multifamily

ORION Expands Multifamily Team

ORION Investment Real Estate expanded its multifamily group with the addition of five industry veterans specializing in acquisitions and dispositions of multifamily properties.

“We believe that after a brief pause over last summer largely caused by an increase in interest rates, multifamily is heating up again throughout the Valley,” stated Ari Spiro, president of ORION.  Though transaction volume has dropped since this summer, Spiro continues, ”quite a few larger, institutional transactions closed in the 4th quarter, which usually gives the entire market confidence and a precursor that B and C caliber properties will begin moving again.  Based on our activity, we project that B and C deals will begin to move with the velocity that we experienced in 2012 and beginning of 2013 as we move in the second quarter.”

To take advantage of this resurgence in multifamily, ORION has grown its multifamily presence in recent months with the hiring of Jackie Allen, Linda Ayala, Jason Campagna, Joseph Dietz and Dennis Hoth; each of whom brings decades of real estate experience and multimillion dollar track records to ORION’s already successful and well-established multifamily platform.  “We are excited to add this type of top-notch talent to our team.  The new additions bring a vast track record with experience closing smaller, privately owned projects all the way up to institutional grade properties,” said ORION Principal Sean Stutzman.

ORION closed nearly $100M in apartment transactions recently and is looking to build upon that sales volume as the economy continues its recovery. ORION’s investment sales brokers have closed over $500M in transactions since the firm’s inception in 2009.  Stutzman adds, “ORION will continue its growth by attracting and maintaining experienced Brokers of the highest ethical and moral standards, who appreciate our team approach.”

Allen, Campagna and Dietz bring nearly a billion dollars inmultifamily business with them to ORION.  Allen and Dietz have worked with Spiro for more than a decade, “I am honored to rekindle a working relationship with Jackie and Joe.  Both were top producers at national firms  And Jason was quite a find.”

Campagna joins ORION most recently from RE/Max, where he was one of the top commercial brokers in the state.  With nearly 50 closings a year for the past several years, Jason brings a tireless work ethic and offers a breadth of real estate knowledge to his diverse client base.

Hoth joins ORION from CBRE in Omaha, Neb., and Ayala has been active in both the brokerage and as an investor.

“With the institutional approach offered by Hoth and Ayala’s vision from an ownership side, we can offer unmatched analysis and perspective in this marketplace,” continued Spiro.

Stutzman concludes, “For the first time in nearly decade, both commercial and multifamily segments are stable and showing clear signs of growth.  We are poised to take advantage of this increase in investment sales volume and continue our expansion.”


Multifamily Vacancies Tighten as Construction Accelerates

Colliers International released the following information in its 4Q multifamily report. See below for highlights:
§  Vacancy in Greater Phoenix ended 2013 at 7.3 percent, down from 8.3 percent at the end of 2012. Vacancy has declined in each of the past four calendar years.

§  The decline in vacancy is particularly encouraging since it occurred despite a surge in the delivery of new units. With absorption outpacing completions, vacancy should continue to trend lower in 2014.

§  Average asking rents ended the year at $787, a 1.5 percent increase from year-end 2012. Tight vacancy conditions and a strengthening local economy should support more significant rent gains in 2014.

§  Multifamily sales velocity slowed somewhat in the fourth quarter, but activity in the second half of the year outpaced levels in the first half. There was an uptick in the number of properties that changed hands priced at more than $25 million during the fourth quarter.

§  Improving fundamentals and a favorable outlook drive prices higher in 2013. The median price reached $63,300 per unit in 2013, up 13 percent from 2012 and 40 percent higher than the 2011 median price.

The Greater Phoenix multifamily market closed 2013 on a positive note, with vacancy ending the year at its lowest point since mid-2006, rent increases gaining momentum and sales prices pushing higher. The strong performance in 2013 is supporting a robust outlook for 2014. In recent years, improvement in the multifamily market was supported by a very low level of inventory growth, but developers ramped up deliveries in 2013, with more than 3,300 units coming online. Despite the delivery of new units, vacancy continued to trend lower due to a surge in net absorption. It is this spike in demand that will fuel property performance in 2014.

The Greater Phoenix multifamily vacancy rate ended the in Greater Phoenix at 7.3 percent, down from 7.4 percent in the third quarter and a full percentage point lower than at the end of 2012. While there have been a few quarters where the rate has ticked higher, the overwhelming trend shows local vacancy on the decline. After peaking at 13.4 percent at the end of 2009, the rate has improved in each of the past four calendar years.
The vacancy improvement in the Greater Phoenix multifamily market has been widespread. More than 80 percent of the submarkets in the Valley have recorded year-over-year vacancy improvements and nearly 60 percent of the submarkets in Greater Phoenix have a vacancy rate at 7 percent or lower. As a comparison, fewer than 35 percent of the Valley’s submarkets had vacancy rates at or below 7 percent at this point a year ago. These trends hold at the high-end of the vacancy spectrum as well. Only three submarkets in Greater Phoenix have vacancy rates above 10 percent; at the same point in 2012, there were nearly three times as many submarkets with vacancies in the double digits.

Asking rents have steadily pushed higher across the Valley, ending the year at $787 per month or $0.93 per square foot. This represents a yearover- year increase of 1.5 percent, following a modest 0.4 percent increase in 2012. Looking ahead, additional vacancy declines should support further acceleration in the pace of rent growth. At the market level, asking rents should increase by approximately 3 percent, but high-demand areas and submarkets that are recovering rapidly could record rent gains of 5 percent or more.
Sales of multifamily properties dipped 15 percent from the third quarter to the fourth quarter, but activity in the second half of the year outpaced velocity in the !rst half by approximately 20 percent. While the total number of transactions lagged the third-quarter pace, there was an acceleration among higher-dollar transactions.
Nearly half of the properties that changed hands in the fourth quarter traded above $25 million; during the third quarter, transactions over $25 million accounted for 32 percent of all activity.
Improving property fundamentals, a favorable outlook and a surge at the high-end of the market drove prices higher in 2013. The median price reached $63,300 per unit for the year, 13 percent higher than the 2012 median. Pricing has made significant gains in the past two years, with the 2013 median price 40 percent higher than the 2011 median. Cap rates averaged 6 percent during the past 12 months, down from the mid-6 percent range in 2011 and 2012. With interest rates likely to rise, cap rates may not compress much further, but price growth could be driven by rising rents and tightening vacancy.

Microsoft Word - COVER.doc

New to Market: The Residences at Fountainhead Corporate Park

Project Name: The Residences at Fountainhead Corporate Park

Developer: Tilton Development & Goodman Real Estate

General Contractor: Adolfson & Peterson Construction

Architect: Todd & Associates

Location & City: 55th Street & South Plaza Drive, Tempe, Arizona

Size: 389,314 SF

Value: $35M

Estimated start and completion dates (by month or quarter): January 2014 / July 2015

Project Description/Additional Information: The project consists of 322 apartment homes featuring studio, one, two and three bedroom floor plans with flat and loft units contained within four story buildings with six elevators and surface covered parking spaces. The buildings are connected by bridges multiple levels along with balconies and apartments which span over driveway locations at the 3rd and 4th levels creating portico entry ways on both 55th Street and South Plaza Drive. The two story clubhouse anchors the center of the community with top tier amenities including in-door and outdoor fire pit areas, clubroom, fitness area, game room, swimming pool, spa all situated within the secluded and lush landscaped grounds of Fountainhead Corporate Park located in south Tempe.

The Hub, WEB

Big Deals: Multifamily, Aug. to Sept. 2013

There’s no such thing as a “small” deal in this industry, coming out of a recession. However, it’s the big deals, and the brokers who make them, that make the market an interesting one to watch.
In every issue, AZRE publishes the top five notable sales and leases for a period of 60 days (one month out from publication) based on research compiled by Cassidy Turley and Colliers International with CoStar.

1. The Hub on CampusThe Hub
384,098 SF; $103,000,000
Buyer: Inland American Communities Group
Listing Broker: Chris Bancroft, Chris Epp, Meredith Wolff, Brad Goff and David Lord, Apartment Realty Advisors

2. Promontory Pointe Apartments
422,376 SF; $41,500,000
Buyer: Green Leaf Partners
Listing Broker: Cliff David, Marcus & Millichap

3. Gateway on Gilbert Apartments
387,424 SF; $34,000,000
Buyer: Hamilton Zanze & Company
Listing Broker: David Lord, Apartment Realty Advisors

4. Camden Sotelo
164,000 SF; $34,000,000
Buyer: Camden Property Trust
Listing Broker: Mark Forrester, Hendricks & Partners

5. Desert Harbor Apartments
262,295 SF; $26,682,000
Buyer: Murray Hill Developments, Ltd.
Listing Broker: Brad Goff, Apartment Realty Advisors
Buyer’s Broker: Alon Shnitzer, ORION Investment Real Estate

The Colony, Cush Wake

Colony Apartments in Phoenix Sell for $8.6M

Cushman & Wakefield of Arizona, Inc. has completed the $8.6M sale of Colony Apartments, 4337 N. 53rd Lane, in the Maryvale suburb of Metro Phoenix.

The property was purchased by CalCap Properties, Inc. of Pasadena, Calif., and sold by Maryvale Urban Investments, LLC dba Bank of America. Built in 1979, Colony Apartments consists of 236 one and two-bedroom units averaging approximately 900 square feet each. The $8.6M sale price equates to $36,441 per unit and $40.47 per square foot.

“The purchase of the Colony apartments represent an excellent opportunity for the new owner to upgrade the units and take advantage of the general growth in the Phoenix multi-family market, ”said Jim Crews, senior director with C&W. 

Crews and Brett Polacheck of C&W’s Multifamily Advisory Group negotiated the transaction.

Sun West, CBRE-CUT

Nucare Properties Buys Sun West Apartments

Nucare Properties, LLC of Phoenix has purchased Sun West Apartments, a 20-unit multi-family property located at 2501 W. Elm St. in Phoenix, from Northwest Valley Property & Associates LLC. Brian Smuckler and Jeff Seaman of CBRE’s Phoenix office represented the Phoenix-based seller in negotiating the $485,000 sales transaction. 

The Paragon_pic - Smaller

The Paragon at Kierland Sells for $57.75M

The Colliers International in Greater Phoenix Southwest Multifamily Advisors’ team recently completed the sale of The Paragon at Kierland, a 276-unit, Class A luxury apartment complex located on the Westin Kierland Golf Course, for $57.75 million or $209,239 a unit/$200 a square foot.

The transaction is the highest per unit sale to date in 2013 and the highest per unit sale in the last five years for properties without an active condo map in the Phoenix market, according to Colliers International in Greater Phoenix.

Sentinel Real Estate Corporation of New York City acquired the property at 15608 N. 71st Street in Scottsdale. The seller was Sunstone Realty Advisors of Vancouver, Canada.

Colliers’ Southwest Multifamily Advisors’ team of Jerry Tenge, senior vice president of multifamily investments; and Tristan Charlesworth, an associate; served as the exclusive representatives of Sunstone Realty Advisors. The Southwest Multifamily Advisors previously negotiated the acquisition of The Paragon on behalf of Sunstone in November 2009 for $34.2 million ($123,913 a unit/$118.19 a square foot). The Paragon has risen in value by $23.55 million in four years.

In total, more than 65 investors bid on the property and 22 investors placed bids at more than $50 million.

Sunstone selected Sentinel for its ability to close the deal.

“The Paragon is among the most elite investment properties in Arizona. The future opportunities at The Paragon are numerous from converting the complex into condos, running a timesharing program or continuing to operate the complex as apartments,” Tenge said.

Built in 2000 and renovated in 2008, The Paragon consists of 289,233 rentable square feet in 23 three-story buildings, along with a single-story recreation building, set on approximately 10.4 acres. The unit mix includes one-, two- and three-bedroom apartments ranging in size from 924 square feet to 1,323 square feet. Current occupancy is 98 percent.

“The luxury apartment complex has been maintained with meticulous care and is located in a highly desirable resort area of Scottsdale near fine shopping, dining and golfing,” Charlesworth said.

Located just west of the Loop 101 and Scottsdale Road, The Paragon is situated along the Westin Kierland Golf Club at the Westin Kierland Resort & Spa and is within walking distance of 30 prime restaurants and more than 100 specialty shops at Kierland Commons and Scottsdale Quarter.

Unit amenities include gourmet chef’s kitchens, ceramic countertops, custom cabinetry, built-in microwaves, full-size washers and dryers, oversized walk-in closets and large private patios or balconies in select units. The property is designed with many resort-style features including a heated pool with pool bar, fire pit and cabanas.