Failed condo project re-assembled from 57 ownership groups
ABI Multifamily, a multifamily brokerage and advisory services firm, announced the sale of Southern Ridge, an apartment community platted as individual condos, located in Mesa, Ariz. The 113-unit garden-style community was originally built in 1985. Southern Ridge sold for $6,510,000, which reflects a price of $57,610 per unit. The sale is one of three significant multifamily transactions brokered by ABI Multifamily within the last week.
The buyers in the transaction, Los Alamitos, Calif.-based Aleksandar and Brankica Nadazdin, were attracted to the majority Two Bedroom/Two Bathroom unit mix, the in-place condo map, as well as the trending fundamentals in the immediate neighborhood. “This was a very difficult transaction to close as it was sold by 57 separate ownership groups. These groups had originally been investors in Deeds of Trusts through the once very active group, Right Place Properties, a local condominium developer. When Right Place Properties became insolvent, these investors were deeded ownership in the individual condominium units. These were passive investors, who overnight became landlords. When Right Place failed, there were dozens of properties around metro Phoenix like this. Partially sold, fragmented and owned by passive investors, sometimes in trusts and retirement plans. It was very difficult to reassemble them all back into the original 113 unit property. The Buyers were patient and worked through the challenges to end up with a great asset at a good price” stated John Kobierowski, Senior Managing Partner at ABI Multifamily.
The sellers in the transaction included 57 separate ownership groups. Ranging from local investors and investment groups to retirees who had invested in the deeds of trusts through retirement plans, to family trusts. Some of these sellers had been involved in multiple investments with Right Place Properties in 1st and 2nd deeds of trusts. Unfortunately, this was not the only investment project that went bad. The worst part of this particular situation was most of these folks had originally invested in these properties in the early 2000’s for the cash flow. After the fallout they ended up with ownership in multiple fractured condominium properties, which were now active rental units.
Southern Ridge is an apartment community located at 214 N. Gilbert Rd., Mesa, Ariz. The property was built in 1985. All units are platted as individual condominiums, with upgraded, condo-style finishes, washer/dryers in each unit and individually metered for all utilities including water. All apartments include individual HVAC systems. Common area amenities include a swimming pool, leasing office, community center, covered parking, microwave ovens, and private patios/balconies.