Larsen Baker of Tucson (George Larsen and Don Baker, members) has acquired the industrial flex office building at 4755 – 4775 S Butterfield Drive in Tucson for $7.4 million ($77 PSF).

The 93,913-square-foot building (built 1986) is located on 7.6 acres in the Class A industrial park, Butterfield Business Center.

A call center for Sears occupies 73 percent of the building, or about 70,000-square-feet. Other tenants include a QuikTrip office, and CSL Plasma. There was 5,500-square-feet available for lease at time of sale.

Mark Palmer with Palmer Capital represented the seller, FAEC fbo 3430 Sunrise, LLC of Tucson (Eddy Chernecki, manager) and Andy Seleznov, CCIM, and Melissa Lal, CCIM, represent Larsen Baker in the sale and leasing of the property.

To learn more Palmer can be reached at 916.462.6205 and Seleznov and Lal can be contacted at 520.296.0200.

For additional information see RED Comp #3261.

Nexpa Properties of Sausalito, CA (Kelsey and Jordan Gootnick members) purchased the Desert Atrium Apartments at 8750 E Cooper Street in Tucson for $1.69 million ($45,676 per unit).

Desert Atrium was built in 1972 and consists of a single two-story, garden-style apartment building situated on a 1.31 acre lot. The property has four different floor plans including two studios, (24) one-bedroom/one-bath, (10) two-bedroom/two bath units and one one-bedroom / one bath large deck unit, totaling approximately 28,256 rentable square feet.

The seller had done extensive interior & exterior renovations in 2013 and 2014 including: Major roof repairs including roof drains; Rebuilt second floor balconies Installed new irrigation and landscaping; Replacement of all iron railing bring them up to code; Pool decking, equipment and pool all brought up to code; Complete renovation of laundry room and all new equipment which is owner owned; Replaced 100 gallon water heater; Replaced 11 sliding door with French doors; installed security key card system; rehabbed 32 of 37 units new cabinets, tile and appliances.

The property is on the eastern part of town and situated 0.2 miles south of Broadway Boulevard, a major east-west arterial running through Tucson. The asset is conveniently located near many entertainment, retail and employment hubs including Saguaro Vista Shopping Center, Eastside City Mall, North mall Centre, University of Phoenix, St. Joseph’s Hospital, Cornerstone Hospital, Davis- Monthan Air Force Base, and Tucson International Airport.

Tony Reed of Long Realty represented the seller, Desert Atriums, LLC of Biddeford, ME and Allan Mendelsberg of Cushman & Wakefield | Picor represented the investor in the transaction.

To learn more Reed should be reached at 520.918.5189 and Mendelsberg can be contacted at 520.546.2721.

For more information see RED Comp #3216.

A consortium of private investment groups affiliated with Hall Equities Group of Walnut Creek, CA and Real Estate Investor and Developer Mark Hall have acquired 29 hotels and the corporate assets of Duluth, Minnesota based hotelier ZMC Hotels.

ZMC Hotels is a third generation family business previously owned and operated by the prominent Goldfine Family of Duluth. Employing more than 1,000 people, ZMC Hotels owns and operates both private label boutique hotels, as well as those licensed by many prominent brands, including Hilton, Marriott, IHG, Wyndham, and others.

The hotels are disbursed across the country from Duluth to Phoenix, AZ, to Florida, and many locations in between. Five hotels are clustered in Scottsdale, Arizona and the Hampton Inn at 1375 West Grant Road in Tucson that sold for $4.41 million ($48,425 per room) for the 91 room hotel. Total sale price and other properties were undisclosed.

All of the hotels, along with other select quality properties, will be master leased to and managed by Zenith Asset Company, an affiliate of Hall. Zenith and Hall Equities Group will be headquartered out of Walnut Creek, California, and Mark Hall is the CEO for both companies. Hall intends to retain certain senior ZMC Hotels management staff located in Duluth, Kansas City, and Scottsdale, but will consolidate accounting and construction functions to the Walnut Creek, CA headquarters.

Hall stated, “We are pleased our investor groups have the opportunity to acquire the ZMC operating platform, and all 29 of the company’s hotels, together with several sites for additional hotel expansion projects. We have had a few hotel investments over the last ten years, but with this acquisition, we will now be able to include hospitality product in our portfolio of investment opportunities in a more significant manner.”

Hall Equities Group combined with the ZMC Hotels portfolio now totals nearly 10 million–square-feet of income property in 140 properties in 16 states. Hall Equities Group has investments in multi-family apartments, office buildings, retail centers, industrial space, self-storage, medical and life science real estate, residential subdivisions, and hospitality. It is expected that Zenith will take over management and operation of certain existing hotels controlled by Hall Equities Group. Following this, Zenith’s total hotel portfolio will then consist of some 4,000 rooms in 34 properties.

Hall has plans for more than $40 million in immediate capital investment improvements and upgrades within the ZMC Hotel portfolio. In addition, Zenith also plans to build several new hotels. “We will employ the operational skills and experience of the ZMC team, together with our own homegrown development and construction management experience, to immediately focus on building five new hotels, including two in Scottsdale, AZ, one in the Puget Sound region, one in our hometown of Walnut Creek, CA, and one in Duluth, MN. Additional projects will be pursued in coming years,” stated Hall.

Equity financing for the transaction was derived from a variety of sources, including the sale of three quality properties by the Hall Equities Group sponsored investment groups, cash on hand, and the refinancing of two multi-family apartment buildings. The refinances were handled through Wells Fargo Bank, and JP Morgan/Chase. Hotel purchase money financing was provided by Bank of America. New hotel development projects going forward will have new standalone financing.