Tucson-based, Pima Federal Credit Union bought the 44,855-square-feet garden-style office complex at 6840-6860 N Oracle Road in Tucson for $7.775 million ($173 PSF). Pima Federal Credit Union was already a tenant in 22,000-square-feet and in need of more space when it chose to buy the office complex located south east of Ina Road on Oracle in the Northwest Tucson submarket.

John Yarborough of Romano Real Estate in Tucson who handled the transaction for buyer and seller said, “Buying the Class-A office complex instead of building a new allows for the Credit Union expansion and future tenant mix.” In addition to Pima Federal Credit Union, other tenants in the complex are Senator Jeff Flake, Morgan Stanley, and the Willman Law Firm.

Morgan Stanley is building a new 20,000-square-foot building at Skyline Esplanade II (for full story click here) and will be moving out of the space on Oracle when new building is complete, perfect timing for Pima Federal Credit Union to occupy.

Pima Federal Credit Union started in 1951, when sixteen teachers pooled together $84 in deposits and founded the credit union with the common purpose of helping people.  To this day, that common purpose still exists with seven locations around Tucson.

Casa De Sharon, LLC (Stacey Torchon, manager) of Calabasas, CA was the seller of property built in 2000 on this 4.3 acre site.

Yarborough told us there was 12,234-square-feet available in two spaces at time of sale and Romano Real Estate has been retained by the new owner to continue as leasing representative.

To learn more Yarborough should be reached at (520) 577.1000 ext. 7117.

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[mepr-show rules=”58038″]Sale date: 8/28/2014. Sale price: $7,775,000, all cash deal closed in 30-days. Asking lease rate for 1,847 SF space and 10,387 SF space was $22/SF/ modified gross on a 5-year lease.[/mepr-show]

Gary Connely of Gilbert, AZ purchased the Fresenius Medical Care at 1430 W Valencia Road in Midvale Park, Tucson as an investment for $2.1 million ($221 PSF) from builder, 1400 W Valencia, LLC (Walter Hoge, manager) of Tucson. The 9,500-square-foot building was constructed in 2007 and leased to Fresenius Medical Care, a dialysis center several years later. The property was not on the market when buyer approached seller. Rick Kleiner of Cushman & Wakefield | Picor had leased the building to the tenant 4-5 years earlier.

Investors like the small price point and the fact that kidney dialysis is a growth industry. Investors take security from the tenant’s investment in the build out of the property and the installation of specialty trade fixtures that make it less likely for the tenant to leave at the end of the lease term. The very nature of the business means that a steady and growing routine amongst its clients develops over time providing a reliable income stream tied to an often visited location.

Due to America’s heightened obesity – over 133,000,000 Americans are considered overweight – and aging population, the occurrence of diabetes is increasing. As diabetes leads to roughly 44% of kidney failures, the need for medical facilities offering dialysis will continue to grow. Typically, Patients require three dialysis procedures per week, each procedure taking 3-4 hours. Though a bit morbid, the reality is that dialysis centers can depend upon customers visiting frequently each week and an inelastic demand for their services. The medical industry as a whole is poised for future growth and net lease investors are only logical in recognizing the stability this lends.

Rick Kleiner of Cushman & Wakefield | Picor represented the seller in the transaction and Jeril Benedict with Keller Williams Legacy One of Chandler, AZ represented the investor.

For more information Kleiner can be reached at (520) 546.2745; Benedict should be reached at (480) 444.7200.

Login for more information. [mepr-show rules=”58038″]Sale date: 7/29/2014. Down payment: $1,863,513 with seller financing for the balance. Property was not on the market and closed in 30 days. Property sold at a 7.5% cap rate.[/mepr-show]

Tucson, AZ – Northwest Integrity Housing Company of Boise, Idaho (Thomas Mannschrek, principal) acquired two Section 8 subsidized housing projects in Tucson for an aggregate total of $8.7 million. Both are to undergo major rehab by new owner and were 90% occupied at time of sale.

The 140-unit Mayfair Manor Apartments at 5180 E. 22^nd Street in Tucson sold for $4,768,289 ($34,059 per unit) and the 100-unit Shadow Pines Apartments at 4011 North First Avenue in Tucson sold for $3,931,711 ($39,317 per unit).

Mayfair Manor is to be rebranded Miraflores Apartments and Shadow Pines renamed to Catalunya Apartments. The seller of both properties were affiliates of The BSE Trust of Tucson (Bill and Shirley Estes, Trustees).

Both transactions were brokered by Bob Kaplan, formerly of Cushman & Wakefield | PICOR, now with Marcus & Millichap Real Estate Investment Services.

The acquisition rehabilitation financing involved a 20 year extension of a Housing Assistance Payment Contract from the U.S. Department of Housing, and The City of Tucson also separately providing a $750,000 loan for each property through the HOME Program.

The low-income tax credit investments from Affordable Housing Partners, Inc., and a bridge loan from the Sterling Bank of St. Louis, Missouri for $503,069, and two tax-exempt bonds, $8,229,466 and $7,015487, issued by The Industrial Development Authority of the City of Tucson with the Lotzar Law Firm, P.C. served as Counsel to the Bond Issuer and Bond Counsel. The Bond was sold on a private-placement basis and was purchased by the Sterling Bank of St. Louis, Missouri.

Mannschrek, also President of Thomas Development Company in Boise said, “We were under contract since May 2013 due to all the offices of HUD that had to sign-off on it, from Tucson to Pheonix to Washington, it just took a long time. We greatly appreciated the support we received from HUD and the City of Tucson for these projects, especially City Council members Karen Uhlich and Richard Fimbres who were very supportive.” Mannschrek estimates the rehab cost to be about $38,000 per unit and also emphasized he believes in using local talent and expertise.

Kaplan said, “The properties are both 1971 construction and originally built as Section-8 housing. Both properties had been well-maintained, but are in need of upgrades such as new windows, a new chiller system, common area upgrades all very expensive rehab work.”

Tofel Construction, Inc. will handle the rehab of both communities slated to begin September 8^th, with Miraflores’ expected completion May 2015 and Catalunya scheduled for March 2015. Evan Elgin of Elgin/Cohen Architects will be the lead architect on the project and Paul Ash Management Company has been retained to continue with the property management.

Thomas Development Co. is looking for additional multifamily investments.

To learn more Kaplan should be contacted at (520) 202.2938.