Investors Reap Rewards of Recession-Era Property Buys

Investors who bought during the recession are still cashing out. One recent example in East Phoenix: the trade of the 224-unit Fountain Oaks Apartments, which fetched nearly $11M.

The seller, LA-based Summit Equity Investments, acquired the property for $8.3M in September '11 from GE Capital Real Estate as an REO. Summit bought a number of bank-owned multifamily properties in Phoenix at that time, ABI Multifamily partner Eddie Chang tells us (he's snapped with colleague Doug Lazovick). The company then executed value-add strategies at those properties and so achieved strong premiums over acquisition cost. Fountain Oaks is the last of its properties to sell in Phoenix.

The buyer was Tempe-based apartment developer Avtar Verma. According to Doug, there's still upside to the property, which the buyer plans to renovate to drive rents. Fountain Oaks, located on 40th Street just south of McDowell Road, was built in 1983. The all two-bedroom, two-story complex, which is individually metered for electricity, is on about seven acres. Eddie and Doug, along with colleagues John Kobierowski, Alon Shnitzer and Rue Bax, repped both the buyer and seller.

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