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Since third quarter 2012, investors nationally have continued to exhibit a strong appetite for multifamily properties, a fact borne out by the sales in Pima County for first quarter 2013. From Jan 1 – March 29th, almost a third (28%) of all commercial sales in Pima County were for multifamily properties, from duplexes to larger complexes, it seems that investors are preferring Class-B and Class-C multifamily properties over other commercial real estate investments.

The Ranch at Star Pass student housing complex with 1020-beds in 336-units student sold for[mepr-show rules=”58038″]$26 million (25,500 per bed) see full story of March 5th at:
https://realestatedaily-news.com.previewdns.com/national-student-housing-groups-posture-for-ua-students-business/

The 364-units at Raintree Apartments at 6450 E Golf Links sold for $9.25 million, or $25,400 per unit as reported March 13th. See complete story at: https://realestatedaily-news.com.previewdns.com/raintree-apartments-sells-for-9-25-million/

Valencia Hills Apartments LLC of Reno, NV (Ernest Tschannen) transferred the 112-units at Tierra Hills Apartment, 3550 W Valencia, Tucson 85746 to National Safe Harbor of Tempe as part of a 1031 reverse exchange for $2.8 million, or $25,000 per unit. Danny Lee and Neil Sherman of Sperry Van Ness of Phoenix represented the seller.

Desert Atriums LLC of Tucson (Patrick Delaney) purchased the 37-unit Desert Atriums Apartments at 8750 E Cooper Street, Tucson 85710 in an REO sale from Washington Federal for $1.2 million, or $33,800 per unit with new financing. The 28,872 sq. ft. property on one acre was built in 1972. Neil Sherman of Sperry Van Ness in Phoenix represented the bank and Tony Reed of Long Realty in Tucson represented the investor.

JCAZ LLC of Tucson (Stephen & Jon Offerman) paid cash for the 35-unit Anandale Apartment complex at 5601 E 5th Street, Tucson 85711 from Mahalo Commercial Properties 10 LLC of Tucson (Celeschito Sapalo) for $902,424 or about $25,800 per unit. The 34,068 sq. ft. complex on 1.4 acres was constructed n 1970. Bob Kaplan and Allan Mendelsberg with Cushman & Wakefield / Picor Commercial Real Estate of Tucson handled the transaction.

A 4,079 sq. ft. main house and three guest houses with 2,976 additional sq. ft. on 5.25 acres in Casas Adobes at 1685 W Ina Road, Tucson 85704 was purchased by Kelly McGinnis of Tucson for $505,000 from Joseph P Lenihan with seller financing. The 7,055 sq. ft. property was constructed from 1946 to 1960. There were no brokers involved in this transaction.

Tajinder Singh and Inder Preeticaur of Oro Valley sold the 47-unit Primavera Apartments, newly rebranded, Mi Casita, at 252 W Valencia Rd, Tucson 85706 to Valencia Tucson LLC (Megan Saputo) of San Diego for $700,000, or $14,900 per unit. The 2-story complex with 30,104 sq. ft. in 3-buildings is on 1.51 acres, built in 1961. Justin Lanne of Newmark Grubb Knight Frank of Tucson handled the transaction.

Diamondhead Estates LLC (Robert and Henry Balsinger) bought 6-units at 2701-2703 E Copper Street, Tucson 85716 for $475,000, or $79,000 per unit, from John and Grazyna Stanek. The 6,659 sq. ft. was built in 1961 on a 23,000 sq. ft. lot.

A duplex at 245-247 E Blacklidge Dr, Tucson 85705 was sold by the Parcelluzzi Family LLC (Allan and Tina Parcelluzzi) to Preston Phillips, a former renter in the duplex for $475,000, or about $50,000 per unit and new FHA financing. The 1,602 sq. ft. building on a 6,098 sq. ft. lot was built in 1972. Aaron Fisher of Tierra Antigua handled the transaction.

Jerome Hallberg of Tucson bought the 12-unit Coronado Terrace apartments at 2428 N Fontana Ave, Tucson 85705 from Mindy Sonen of San Diego for $450,000, or $37,500 per unit with seller financing. The 9,263 sq. ft. single story building on 35,981 sq. ft. lot, constructed in 1982 was 92% occupied at time of sale. Mike Schulte of the Schulte Company represented the seller and Matt Tennyson of Keller Williams of Southern Arizona represented the buyer.

Roland Johnson of Florida sold two duplexes at 4440-4444 E Pima St, Tucson 85712 for $352,000, or $88,000 per unit to Vijaya Chada of Tucson. For complete story on February 21st, go to:
https://realestatedaily-news.com.previewdns.com/two-central-tucson-duplexes-sell-for-88000-per-unit/

The Gary Lee Fugua Trust of Portland, OR (Gary Fugua) sold a fourplex at 1650 E Adelaide Dr, Tucson 85719 for $325,000, or $81,250 per unit, to Russell and Caroline Duff. The single building with 3,689 sq. ft. is on a 20,038 sq. ft lot was built in 1998.

Justin & Andrea Hafner of Tucson bought 5-units at 2667 N Dodge Blvd, Tucson 85716 the Moghadam Family of Tucson for $190,000, or $38,000 per unit with a seller loan. The 2,749 sq. ft. in three buildings was built from 1945 to 1982 on a 17,898 sq. ft. lot.

Jesus Lopez Zavala bought 8-units in two separate transactions at 1201-1204 E Milton and 1233-1239 E Milton Road, Tucson 85706 for $181,500, or $22,690 per unit in a cash transaction. The two 2-story fourplexes are an aggregate of 6,960 sq. ft. built in 1981. Marsee Wilhems of the Marsee Wilhems Group with Re/Max Majestic of Tucson handled the transaction.

A fourplex at 420-430 E Delano Street, Tucson 85705 was purchased by Justin List of Tucson for $190,000, or $47,500 per unit from Hannelore McAdams of Tucson and private financing. The 2,532 sq. ft. in two buildings was built in 1964 and 1967 on a 15,720 sq. ft. lot. Don Knittel and David Guthrie of Coldwell Banker in Tucson represented the seller and David Aguilar of Keller Williams Southern Arizona represented the investor.

A triplex at 4729 E 2nd Street, Tucson 85711 was purchased by Kelli Alexander LLC (Kelli Alexander) of Tucson in an all-cash deal from Anna Burchard of Tucson for $172,000, or $57,300 per unit. The 2,448 sq. ft. building on a 10,454 sq. ft lot was built in 1959. James Robertson of Realty Executives Tucson Elite handled the transaction.

A duplex at 4055 E Lee St, Tucson 85712 was sold by Beverly Neblett of CA to Michael and Debra Rosko for $113,500, or $56,750 per unit using new conventional financing. The 1,650 sq. ft. building on a 6,282 sq. ft lot was built in 1982.

Ricardo and Christi Bermudez bought a triplex for $69,900, or $23,300 per unit from Deep Canyon LLC (Angus Maughan) with The 1,452 sq. ft. at 405-409 W Columbia, Tucson 85714 was constructed in 1953.

For more information, Sherman can be reached at (480) 425-5500. Reed is at (520) 918-5189. To contact Kaplan call (520) 546-2737 and Mendelsberg at (520) 546-2721. Lanne can be reached at (520) 321-3330. Schulte is at (520) 885-5900 and Tennyson is at (520) 615-8400. Knittel and Guthrie can be contacted at (520) 745-4545 and Aguilar at (520) 615-8400. Robertson should be reached at (520) 877-4940. Wilhems is at (520) 885-9000. Fisher can be reached at (520) 318-5290.

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A recent version of this article appeared March 27, 2013 on page C6 in The Wall Street Journal, with the headline: Mall Landlords Get a Penney for Thoughts. Penney leases three spaces in Tucson, the El Con Mall (115,900 SF), Tucson Mall (136,864 SF) and Tucson Spectrum (99,956 SF). We encourage readers to comment on this article and make any suggestions for options they would like to see at these sites.

U.S. shopping-mall owners, already hit with store closures by longtime laggard Sears Holding Corp., are now pondering what steps to take if struggling chain J.C. Penney Co. closes some of its 1,104 stores.

The 111-year-old retailer is struggling after it failed to spur sales and attract new clientele with such striking programs as eliminating sale promotions in favor of making low prices the chain’s standard. Penney is pushing ahead, though, with a plan to re-create hundreds of its properties as collections of boutique stores for brands such as Joe Fresh and Jonathan Adler. The changes, however, are expensive. Penney finished its prior fiscal year with $930 million of cash, down significantly from prior years.

Penney hasn’t announced any plans to sell or close stores in the wake of posting a $985 million net loss and a 25% decline in sales for its fiscal year ended Feb. 2. Yet investors and analysts are querying mall owners about their contingency plans in case Penney vacates certain stores – at least 675 of which are in malls.

The retailer’s struggles have some observers thinking it soon will turn to its real estate as a savior by selling some of the 429 stores it owns or the long term contracts on those it leases. “The challenge is that they may need more cash to complete their transformation,” said Cedrik Lachance, an analyst with Green Street Advisors Inc., which tracks real estate investment trusts, including most big mall owners. “To that end, I think that J.C. Penney may look to its real estate as a source of cash.”

Mall owners predict that it wouldn’t be difficult to replace Penney stores in the best U.S. malls, where other large tenants might want to take over space. In other cases, mall owners could restructure the space to house several smaller stores.

Macerich has 36 Penney stores in its U.S. portfolio of 62 malls. Art Coppola, Macerich’s chairman and CEO, said he anticipates that Penney will remain a viable tenant for mall owners. But, “we have a plan for each and every (Penney) location,” Mr. Coppola told investors at a conference in Hollywood, FL, hosted by Citigroup, Inc. on March 5. “Some of them would be terrific. Some of them would be OK. And some of them would be more challenging.”

Possibilities include Penney selling some of its stores and leasing them back, or Penney selling some to mall owners who intend to raze them and rebuild them for other tenants. The latter is most likely to occur in malls with high sales volumes, where demand from other retailers for space is strong.

The trouble for Penney is that its stores are skewed toward average malls. Since the recession, retailers and shoppers have favored strong malls over their average and struggling peers. And the few expanding department stores that might replace Penney tend to choose the best malls in each market.

Mall owners, in turn, are spending most of their time and capital redeveloping proven malls to generate more sales rather than pouring money into struggling properties unlikely to produce a similar return.

According to Green Street, 157 Penney stores are located in so called A-grade malls, which typically generate sales per square foot of $350 or more. Far more of Penney stores (351) are in B-grade malls, which generate annual sales of $325 to $450 per sq. ft. Another 146 of Penney stores are in C-grade malls, which generate annual sales of $200 to $325 per sq. ft., and many of those are struggling to remain malls. The U.S. average for malls is $391 per sq. ft.

What would you suggest for the JC Penney stores in Tucson?

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On 3/27/2013 Two office condos sold as investment sales at Magee Center Office Condominium, 2292 West Magee Road Suites #230 & 270 in Northwest Tucson for

[mepr-show rules=”58038″]$250,000 ($117 PSF). The transaction was a short sale, the seller, Devkey, LLC of North Las Vegas.

Both suites were leased at time of sale, Del Oro Realty in Suite 230 and Executive Pest Control in Suite 270.

With this purchase, the buyer, John Kai of Tucson owns seven suites at Magee Center and reported three currently vacant. The complex was reported to be 85% economically occupied at time of sale and 50% physically vacant.

John Hamner of Keller Williams represented the seller in the transaction.

Hamner can be reached at (520) 907-0030.

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