Northmarq Phoenix’s Investment Sales team of Ryan Boyle, Jesse Hudson, Trevor Koskovich and Logan Baca brokered the $22.3 million ($242,391/unit) sale of the Montecito, a 92-unit, garden-style community located at 1301 East Mountain View Road in Phoenix. Northmarq’s Investment Sales team brokered the transaction for the seller, Scottsdale-based Montecito Apts., LLC.
The Northmarq Debt & Equity team of Griffin Martin, Tyler Woodard, Bryan Mummaw, Brandon Harrington and Brad Burns provided financing for the buyer, Five Doors Plus, LLC from Scottsdale, Arizona. The buyer assumed an existing Freddie Mac loan with a loan balance of $9.8 million and the Northmarq team secured a supplemental loan in the amount of $3,687,000.
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“We were pleased to assist Five Doors Plus with financing their latest acquisition in the Phoenix market,” Managing Director Griffin Martin shared. “The acquisition was funded with the assumption of an attractive existing Freddie Mac loan and the buyer took advantage of the agency benefit and secured a new Freddie Mac supplemental loan as well.”
Built in 1983, the Montecito comprises of eight buildings, single- and two-story, with a total of 75,900 rentable square feet on just over 3-acres. The all two-bedroom complex recently underwent a $1.4 million capital improvement project, with $1.2 million spent on in-unit upgrades and $239,000 on exterior improvements. The interior renovations include refinished cabinets, new countertops and sinks, stainless steel appliances, new lighting fixtures, and hardware, wood-inspired flooring and new paint. Eighty six of the apartments were upgraded with in-unit washers and dryers. Montecito’s exterior improvements included covered parking, solar screens, landscaping and walkway improvements, repaired and replaced HVAC units, a new shade structure on the children’s playground and installation of a community dog park. Existing community amenities include a swimming pool, barbeque and picnic area and spacious courtyard.
“Montecito was a unique opportunity to acquire a renovated community financed via a Freddie Mac loan assumption,” said Associate Vice President Ryan Boyle. “The well-below market interest rate and the opportunity to secure a supplemental loan made for a compelling buy, especially given current market conditions.”
Located in the North Phoenix rental submarket, the Montecito is proximate to several major employers, including Honor Health’s John C. Lincoln Medical Center and the Deer Valley employment corridor, home to American Express, PetSmart, Discover, Microsoft, Dyson, Honeywell, USAA and a short distance from the Taiwan Semiconductor Manufacturing Co. facility that is currently under construction. The first phase of the $12 billion plant is expected to be operational in 2024 and employ more than 2,000 people. The submarket offers ample restaurant and retail options, including the vibrant entertainment district along 7th Street and Bethany Home Road, as well as several nearby recreational parks and trails.
At the end of the third quarter, 2022, the Phoenix multifamily market had a 5.8 percent overall vacancy rate with asking rents up 7.1 percent year-over-year. While recent metrics indicate a change of direction in the market, current conditions remain fairly consistent with the Phoenix region’s long-term supply and demand balance. Click here to read the full third quarter 2022 Phoenix Multifamily Market Insights report.
