ABI Multifamily multifamily brokerage and advisory services firm has announced the $10,900,000 sale of the 224 unit Fountain Oaks Apartments located near 40th Street and McDowell Road in Phoenix, AZ. The sale is the 3rd transaction brokered by ABI Multifamily in the first week of June with a cumulative sales volume of over $25 million between the three.
The Seller in the transaction was Los Angeles based Summit Equity Investments. The property was the last multifamily asset the Seller held in Phoenix, AZ. Summit Equity Investments purchased the property in September 2011 from GE Capital Real Estate as a REO purchase for $8,300,000. “Summit Equity Investments was active during the economic downturn in the Phoenix apartment market, having purchased multiple bank-owned properties at that time. As with all their acquisitions here, they were very successful in executing their value add strategy and were able to achieve a strong premium over their acquisition cost,” states Eddie Chang, Partner at ABI Multifamily.
The Buyer was Tempe-based apartment developer, Avtar Verma. The purchase is Mr. Verma’s first acquisition of an existing multifamily property in Phoenix; he previously developed, and currently holds, a 112-unit apartment complex in Chandler, AZ built in two phases – 2003 & 2009 – as well as assets throughout Texas. The Buyer was attracted to Fountain Oaks’ all two bedroom unit mix, the purchase price per unit ($48,661/unit) and its East Phoenix (Papago area) location. In the coming months, the Buyer plans to make improvements to the property, including renovating the interior units with new appliances, cabinets and countertops. “It’s been difficult to find an East Phoenix apartment community that is individually-metered for electricity, has a majority of two bedroom units and is deliverable for under $50,000 per unit. Fountain Oaks Apartments presented the Buyer with such an opportunity. The Buyer will now look to add value to the property and raise rents by renovating the property,” states Doug Lazovick, Partner at ABI Multifamily.
The property, located on 40th Street just south of McDowell Road, was built in 1983. The 224-unit, all two-bedroom, two-story complex is constructed of wood frame with pitched tile roofs and sits on slightly more than 7.3 acres. Ideally situated less than a ¼ mile north of Loop 202’s 40th St entrance, provides residents with quick freeway access to the entire Phoenix Metro. Additional nearby amenities include the Arcadia Crossing Shopping Center with 625,000 square feet of retail shopping with tenants including Target, Costco, OfficeMax, Fry’s Food and Sears. Also approximately one mile north is the Tower Plaza Shopping Center with tenants including Home Depot, Walmart and Harkins Theatres.
The Phoenix based ABI Multifamily brokerage team of Doug Lazovick, Eddie Chang, John Kobierowski, Alon Shnitzer, and Rue Bax, represented both the Buyer and Seller in the transaction.
