1031 Exchange Buyer Swings $23M, Class A Sale

PHOENIX-A private investor from San Diego filed away her first deed in the metro area in a high-end handoff of the 214-unit Palazzo Townhomes. Seller Fairfield Residential LLC had eight offers for the two-year-old complex in East Phoenix.

Buyer Carolyn Kutzke turned around 1031 exchange funds from the sale of several smaller commercial properties in San Diego and placed new debt to drum up the $22.6 million for 886 N. Cofco Center Court, positioned across the street from Arizona’s Chinese Cultural Center. Kutzke wasn’t the top offer of the eight on the table, but “it looked like her money was a little more motivated than the other guy because she was in an exchange,” Tyler Anderson with CB Richard Ellis Inc.’s local office tells GlobeSt.com. The 95%-leased complex was on the market 90 days. Kutzke’s financing was arranged by Rocco Mandala of LJ Melody & Co.’s local office.

The San Diego-based Fairfield turned over the management keys to Mark-Taylor Residential Inc. of Phoenix after the closing. The one-, two- and three-bedroom townhomes, each with direct access garages, range from 796 sf to 1,353 sf. The monthly rents range from $905 to $1,480 and a one month free riding on the concession side, according to Anderson. “It’s a long-term investment, that’s definitely what it was. She wanted a quality-grade investment in Phoenix,” he says.

Anderson and Sean Cunningham, also in CBRE’s Phoenix office, represented Fairfield. Dixie Hall with CBRE’s San Diego office brokered for the buy side.