CALCAP Acquires 98 Unit "Condo Reversion" Property

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CALCAP Advisors has purchased its seventh apartment community, in metropolitan Phoenix, in the past nineteen months.

CALCAP Advisors is announcing that it has purchased its seventh apartment community in metropolitan Phoenix in the past nineteen months. Maridale Villa, a 98-unit apartment property, was purchased for $1,958,103 ($19,981 per unit/$23.27 per square foot) on July 11, 2012. The sellers were 42 different individuals who had purchased the properties as rental condos over the past 3-4 years.

“Maridale Villa presented a unique investment opportunity for us. It was a distressed ownership structure (rather than distressed real estate) which ultimately forced the sale, and made the opportunity compelling for us”, stated Edward Aloe, Managing Principal of CALCAP Advisors. The project, constructed in 1974, was purchased by a condominium converter in January of 2008 for $4,830,000. They subsequently put a condo map on the property, formed an HOA, and sold the units as condos to individual investors throughout 2008 and 2009. The bulk purchase price of those individual sales totaled almost $10,000,000. “We were only interested in buying the project if we could control all 98 units”, Aloe continued. “The challenge was to convince 42 owners to sell to us, and coordinate all of these moving parts into one sale. You don’t see a lot of ‘condo reversion’ plays where the buyer is able simultaneously close on 100% of the units”. The transaction took almost 6 months to complete, based on the complexities, but was well worth it. “By aggregating the units back to form one apartment project, we’ve immediately created value above our purchase price”, said Aloe. “Based upon the strong current and historical occupancy, we were also able to secure a 65% LTV fixed rate loan at 3.98%”, Aloe stated.

Maridale Villa has a unique mix of 1, 2, 3 and 4 bedroom units spread across a nicely landscaped and low density parcel. The property features a pool, laundry facilities, and ample parking. It is located at the intersection of 67th Avenue and Bethany Home Road, within walking distance to a Fry’s supermarket, Walgreens, several restaurants, and public transportation. Loop 101 and I-17 freeways are close by. The building enjoys drive-by visibility to approximately 29,000 cars per day, greatly enhancing the community’s intrinsic advertising value. The address is 5701 North 67th Avenue, Glendale, AZ.

“Our strategy at Maridale Villa is to make necessary capital improvements to the exterior and major heating/cooling components of the property. Improving the curb appeal and functionality of the community is a priority in order to attract long-term residents. With increased marketing and hands-on management, we expect to boost the occupancy above the existing 90% rate within a relatively short period”, Aloe stated.

CALCAP Advisors is continuing to source multi-family acquisitions. “We’re aggressively seeking further value-add opportunities to grow our Phoenix apartment portfolio”, said Pat Wakeman, Principal of CALCAP Advisors. “This if our seventh acquisition in the nineteen months, and we expect 2012 will bring more buying opportunities from banks, loan servicers and individual owners.”    

California Capital Real Estate Advisors, Inc. is a real estate investment and advisory firm. Partnering with businesses, communities and nonprofits, we reposition distressed real estate, and provide liquidity, adding value for our stakeholders and the communities we serve.

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Elizabeth Romero

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