Oregon Investor Acquires 441 Units for $22M

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MESA, AZ-Expanding its footprint in the area, a Pacific Northwest buyer pays $21.9 million to acquire 441 units in two separate deals. A Tucson-based seller parted with its class B 313-unit Windscape Apartments in Mesa and Las Palmas Apartments, a 128-unit complex in Tucson.

The acquisition, from seller QSR Inc. of Tucson, brings investor Residential Equity Partners’ Arizona portfolio to 1,613 multifamily units. As it has with other assets, the Portland, OR-based Residential Equity plans renovations to both complexes. Renovation costs for both properties will total close to $3 million.

“We’re doing renovations on a large scope at Windscape, including washer-dryer upgrades and install and renovations on the office and addition of a 24-hour fitness facility,” says David Butler, Residential Equity’s president. He adds that Las Palmas will require minor modifications, but not to the scope of Windscape.

Butler tells GlobeSt.com that the company continues seeking out likely properties in Phoenix and Tucson. He acknowledges that, while he likes the idea of value-add components on acquisitions, such properties are becoming difficult to find in both cities. Residential Equity’s goal is to acquire 1,000 units in Arizona by the end of 2007.

Windscape Apartments was built in 1986 and is 93% occupied. The property at 550 E. Mckellips Rd. was acquired for $15.8 million and the 313 units consist of a mix of efficiencies, one- and two-bedroom units. Rents range between $450 and $640 per month.

Further south, the 128-unit Las Palmas, acquired for $5.9 million, is at 6901 E. Broadway. The 1973-built complex has two-bedroom units with the average rent at $630 per month.

Art Wadlund with Hendricks & Partners’ Tucson office negotiated the transactions. Greg Richardson with the Irvine, CA office of Johnson Capital assisted with financing for Windscape, while Las Palmas was financed through the seller.