D.R. Horton (NYSE: DHI) bought 60-lots at The Pines Phase II in Marana for $2.28 million, or $38,000 per finished lot, as part of an option agreement for 123-lots with Terrazzo Homes of Tucson. The lots are on average 40’x 85’ and the builder has introduced an all-new product line ranging in size from 1,613 to 2,969 sq. ft. that take best advantage.

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[mepr-show rules=”58038″]D.R. Horton, a Texas-based company is one of the largest homebuilders in the United States, operating in 26 states and 77 metropolitan markets.

The Pines is located north of Arizona Pavilions in the shadow of Sombrero Peak, on the 18-hole Quarry Pines Golf Course, with a mix of dramatic elevations  and stunning mountain views.

This gated community with community pool is D.R. Horton’s newest community.

The Pines was developed by Standard Pacific of Tucson in 2007. Phase I has 129-lots on 21 acres with home builders such as D.R. Horton and Maracay Homes committed. Phase II of the Pines is a total of 265-lots on approximately 30 acres, plus 25 acres of open space and common area. D.R. Horton is the first builder commitment in Phase II.

The Pines is open and selling now, with five models. Hours are 9:30 – 5:30 every day, except Wednesday when it opens at noon- 5:30.

Dan Feig and Aaron Mendenhall of Chapman Lindsey in Tucson handled the transaction for seller and builder.

Feig should be reached at (520) 747-4000 ext. 103 and Mendenhall is at (520) 747-4000 ext. 102. The Pines sales office can be contacted at (520) 575-5108.[/mepr-show]

Freddie Mac released its mid-year multifamily outlook for 2013 last Thursday, which included a new Freddie Mac Multifamily Investment Index that measures the attractiveness for investing in apartment properties.

The Index, using data from 2000 through the second quarter of 2013, looks attractive when there are relatively strong cash flows for each dollar of equity invested because multifamily property returns are driven by property cash flows.

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[mepr-show rules=”58038″]The current investment environment is above its historical average nationally, and for the majority of the metro areas it specifically tracks (with the exception of New York which is below average).

In the years leading up to the recession, the Index shows that investing in apartments was becoming less attractive and hit a floor in 2007, with property prices at their peak. The Index rebounded post-recession due to growth in property income and lower rates.

According to the index, apartments are still a good investment in most metropolitan markets Freddie tracks. Tucson is not one of those markets tracked, but we can say multifamily properties of all shapes and sizes are in high demand, especially value-add properties that are selling at low price per unit just waiting for renovation and re-tenanting. Here are three recent sales:

NKJ Investments, LLC and Gregory L Yule of Lakeside, CA bought the Kelso Vista Apartments, a 40-unit apartment complex at 450 West Kelso Street in Central Tucson for $780,000 ($19,500 per unit) in an all-cash deal. The 2-story, 23,730 sq. ft. building (built 1983) on slightly over 1 acre sold as a value-add property, with 25% vacancy and over $60,000 in deferred maintenance. Fort Lowell Realty & Management has been retained by the new owners for property management. The seller, The Bernard Berk Trust and the Cook Family Trust of Pasadena, CA was represented by Bob Kaplan and Allan Mendelsberg, Investment Specialists, with Cushman & Wakefield / Picor. German Pardo with Real Living SJ Fowler Real Estate of Mesa represented the investor.

Russell Moore of Tucson purchased seven casitas at 205-209 E Alturas Street and 2502-2508 N Estrella in Central Tucson for $169,750 ($24,250 per unit). The individual casitas range in size from 420 – 640 sq. ft. and were built from 1923-1953. Moore, an experienced landlord who specializes in renovating multifamily properties told us the property was in fair condition and sold with only one vacancy. Moore was particularly attracted to the property due to the seller carryback terms that were offered. The seller, 7DW, LLC of Flagstaff was represented by Luther Esala of The Negotiators Realty in Tucson. Moore, also a real estate broker with Chase Investment Realty represented himself in the transaction.

Tucson Acquisition and Development Corporation Profit Sharing Plan of Tucson (Jeffrey Utsch) bought 10-units at 427-441 E Delano Street in Central Tucson for $140,000 ($15,555 per unit). The ten 2-bedroom / 1 bath units consists of eight 576 sq. ft. casitas and one 1,434 sq. ft. (built 1976) on .66 acre. The transaction was an Estate Sale and another add-value transaction that had been vacant for several years. The investor estimated the cost to cure to be about $10,000 per unit in order to bring back to leasable. There were no brokers or commissions on this deal, Utsch a broker himself, dealt directly with the estate on the transaction. There were multiple bids for the property Utsch told us. The buyer was able to assume an existing loan with favorable terms on property.

As Victor Pa, Vice President of Multifamily Investments and Advisory at Freddie Mac is quoted as saying in the Multifamily Investment Index report, “As markets move it is important to have an objective measure of current conditions. Although the multifamily market has slowed, it remains an attractive investment across the majority of the metro areas for equity and debt investors.”

Kaplan and Mendelsberg can be contacted at (520) 748-7100. Pardo is at (480) 649-3536. Moore should be reached at (520) 349-8442. Utsch is available at (520) 977-7946.

The Real Estate Daily News will publish the July report on Tucson smaller multifamily properties by submarkets on Friday.[/mepr-show]

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[ismember] Sale date on Kelso Apartments was 7/23/2013. Sale date on Alturas & Estrella Ave was 8/1/2013. Sale date on Delano was 7/23/2013. [/ismember]

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Arizona College Prep Academy (ACPA) opened in its new 11,308 sq. ft. location at 3434 E Broadway Blvd in Tucson right on time for the start of the school year. Most of us are unaware however, of the planning, locating and facility challenges that ACPA learned through this experience.

The 11,308 SF commercial property on .95 acre had been repurposed as a charter school facility by BASIS Schools and purchased for[mepr-show rules=”58038″]$1.4 million ($124 PSF).

The school’s prior space was no longer conducive to educational needs – this new space was tailored to the school’s educational needs and specs. Students, parents, teachers, staff and the community are excited. The new building is perfect for the school’s needs and gives them room for continued growth, allowing their enrollment increase to 135 students this school year and a student count up to 160 in the future. With all the interior and exterior modifications that support classroom activities and lunch and pantry programs, the school is now more effectively and efficiently configured to accommodate students, faculty and staff.

Improvements made to the property include adding a new parking lot, upgrading the HVAC system, installation of a new IT closet with separate HVAC system. The facility was completely wired for WIFI.

ACPA first opened in 1997 as an affiliate of AmeriSchools network and became an independent charter school in 2012. Growing and in need of a new facility, school administrators were faced with unexpected challenges. Banks would not provide funding because they viewed ACPA as a new school and therefore a high risk. Likewise, the school was ineligible for start-up school funds because it was a pre-established charter transfer. In an effort to find the resources they desperately needed, school officials contacted several third-party funding organizations. However, none came through. Enter Charter School Capital of Portland, OR, the only organization with both the ability and desire to help Arizona College Prep find financing for this property.

“ACPA is one of only eleven schools in Arizona of its type with an A rating, and the only one in Tucson,” Stuart Ellis, CEO of Charter School Capital told us. “The idea that a quality school such as this could not get funding was simply unacceptable to hear.”

“Charter School Capital looks for quality, sustainability, safety of environment that are financially well-managed, while recognizing the uniqueness of charter school needs,” says Ellis. “Banks on the other hand view charter schools with criteria as for any other business, and see a state license with an expiration date as an obstacle. Banks are not in the business of evaluating the intrinsic values of a charter school.”

Charter School Capital has been in the business of offering specialized services to charter schools since 2007, from facility support, working capital, start-up to stabilization, as well as access to philanthropists and grant funding. Charter School Capital works with more flexibility than traditional lenders, and has placed $500 million into the charter school market in the past 5 years ago, with no defaults. “We leverage our expertise any way we can, with no minimum or maximum dollar amount,” said Ellis. “We have funded as high as $50 million to as small as $18,000.”

Freddy Mendoza, assistant principal at ACPA says, “It was a blessing to find Charter School Capital. Working with them has been great. They have been very responsive, very communicative and very much about the school and the kids.”

“We couldn’t have even looked at a building like this without Charter School Capital,” said Mendoza. “They made deals available to us that wouldn’t have been otherwise. Once the deal was made they were critical in helping us understand what we needed to do. Their team made it easy for us.”

Charter School Capital purchased the property to lease it back to ACPA. Charter School Capital will retain ownership and maintenance of the property, alleviating the need for the school to spend time on building repairs and maintenance.

ACPA has the option to take ownership of the property in the future but for now, they appreciate the time to focus on their staff and students, making everyone comfortable in their new home and letting the community know the school is open for enrollment and growth.

Charter School Capital is in seven states that combined represent 60% of the charter schools in the country. Currently they work with 400 charter schools representing 400,000 students nationally and about 5% of the charter schools in Arizona. This transaction with ACPA is a first of its kind for Charter School Capital to acquire the facility for leaseback to the charter school.

Mendoza agrees with Ellis, “Obviously this is a business deal, we look at the numbers, but we also look at the education of the students provided, and try to help the school stay focused on their mission – educating students.”

Nancy McClure of CBRE in Tucson represented Charter School Capital in the purchase of the new facility for Arizona College Prep Academy that opened August 7, 2013 for the school year.

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[ismember]Charter School Capital also financed furniture and other costs associated to the move for Arizona College Prep Academy in the new facility. Lease rate was reported to be no rent for year one and then $165,000 per year starting in year two.[/ismember]