PHOENIX, AZ — ABI Multifamily, the Valley’s largest locally operated dedicated multifamily brokerage and advisory services firm, is pleased to announce the $6.045 million ($118,529/Unit) sale of the 18 at Biltmore Apartments, a 51–unit apartment community located in Phoenix, Arizona.

18 at Biltmore is a low density, one and two–story apartment community built from 1957 to 1962 of concrete construction and sits on approximately 3.5 acres of land.  The property consists of an attractive mix of one, two and three bedroom units averaging approximately 893 square feet in size.  Each unit is individually metered for electricity.  Additionally, select units have patios/balconies.   

“18 at Biltmore is located in the heart of the Biltmore Corridor which is one of the most coveted economic corridors in all of the Phoenix Metro,” states John Klocek, Vice President at ABI.  The property is less than one mile from the Biltmore Fashion Park as well as the entrance to the prestigious Biltmore Resort, Golf Course, and the exclusive Biltmore residential neighborhood.  “The area has seen tremendous development activity, but all of the residential development is south of Camelback.  This redevelopment is the only property of its kind north of Camelback Road and east of the 51 freeway in Biltmore proper.”     

18 at Biltmore, located in the North Central Phoenix Submarket, is approximately one mile from both the Camelback/Biltmore Employment Corridors and 7th Street/Central Ave Corridors along Missouri Avenue.   The Submarket and surrounding environs boast some of the highest single family home prices ($1M+) in urban Phoenix.  Since 2013, the Submarket has witnessed in excess of $100M in private development and redevelopment projects which include, but are not limited to: Town & Country redevelopment and expansion, Phoenix Children’s Hospital $15M expansion, Central Ave/Camelback Rd. adaptive reuse and redevelopment restaurant projects, and Missouri/7th Street Restaurant Row developments.  

“The Buyer, a residential developer based in California, was attracted to the property for a whole host of reasons,” states Patrick Burch, Vice President at ABI and co–lead broker on the transaction.  “Primarily, this particular land is the only land available for redevelopment within a half mile in any direction.  The Buyer has plans to redevelop the property into 51 urban townhomes in a for–sale project with final entitlements delivering later this year.”

The Seller was a California–based private investment group.  

The Buyer was a California–based private single family, multifamily–residential developer.  

The Phoenix based ABI Multifamily brokerage team of John Klocek, Patrick Burch, Royce Munroe, Ryan Smith and Nathan Bruer represented the Buyer and Seller in this transaction.

Years have passed since the credit crisis and housing market crash with banks foreclosing on millions of homes nationwide.  In the subsequent years, many of these homes have been purchased by investors.  From major institutions to individual investors, hundreds of billions of dollars of single family residences have ended up as rental properties in the control of investors.  Groups like Blackstone had purchased upwards of 50,000 single family homes since the downturn and are now beginning to look to liquidate blocks of these homes and realize their profits.

Though numerous institutions have built 10,000-plus unit portfolios, many individual investors have likewise stockpiled countless homes in every major market.  Zack Mishkin, Vice President at ORION Investment Real Estate, remarks, “A single home purchased by an individual led to another and another, until countless individuals in our market have amassed substantial portfolios.”

With the benefit of hindsight, the strategy was quite simple:  buy into a depressed market at a discounted price, make necessary repairs, lease to a tenant to create cash flow and buy time while the market to recovers and appreciation to take hold.  “Many of these investors have realized substantial gains, but the day-to-day management and maintenance issues are beginning to take their toll.  These opportunistic investors are ready to convert their potential profit to realized gains,” notes Mishkin.

As an example, Scottsdale-based ORION Investment Real Estate facilitated the sale of a 54 unit single-family residential for $7,050,000 ($130,556/unit).  The properties were located primarily in the Phoenix Metropolitan Area and Tucson and were 98% occupied at close of escrow.

With low interest rates, a recovering economy, consumer confidence and people’s personal balance sheets cleaned up, many are bullish on the housing market going forward, ushering in a new breed of investor that is looking for the stability of cash flow and continued appreciation.  “This portfolio of homes was a great find as the bulk of the properties were in fair condition or better and priced at approximately a 10% discount.  The in-place unleveraged return was over 6% based on overall rents that were below market,” commented Zack Mishkin.

Most investors of these types of transactions are benefitting from purchasing at a discounted bulk price and reasonable cash flow and will methodically sell these properties individually for a profit into a recovering market at market prices.

Mishkin reported that these types of transactions are occurring with more frequency as of late.  “This large single family portfolio sale marks the second of its kind that our firm has completed recently.  It is perfect timing and often times a ‘win-win’ situation with Sellers realizing huge profits yet able to provide a Buyer with upside and opportunity.”

The office condo market in Tucson continues to be “hot” and San Jose Plaza Office / Retail Condominiums is no exception.

Two office/retail condominiums at San Jose Plaza recently sold for $472,902 ($224 PSF). The buyer, a research library, initially leased the property for several months prior to purchasing.  San Jose Plaza Office/ Retail Condominiums are located at 10130-10134 N Oracle Road in Oro Valley.

New Leases, Lease expansions and Lease renewals include BASIS.ed Charter School administrative office taking an additional 2,000-square-feet within a year of its original lease (3,200 SF), a construction consulting firm taking 800 SF, a physical therapist moving into 1,000-square-feet, an insurance company renewing 800-square-feet and a sleep apnea clinic taking 1,200-square-feet. Several of the leases include options to purchase. Only a few suites remain available at San Jose Plaza Office/ Retail Condominiums.

Gary Heinfeld, Advisors in Real Estate, Inc. represented the seller/ landlord. The sleep apnea client was represented by John Scott Hall of JSH Properties.

For more information, Gary Heinfeld can be reached at 520.299.0700.