Mica Creek-Sagamore Capital Partners has secured a Class-C apartment property with some outside money in anticipation of spiffing it up to a Class-B in an A location, the Camelback Corridor. (Don't ask them about it, though. It's rude to ask if someone is having work done... at least according to our aunt.)
It purchased the 415-unit The Colonade Apartments from Gelt for nearly $26M, or over $61k/unit. Cushman & Wakefield's Jim Crews, who brokered the sale along with colleague Brett Polachek (and is showing off his co-owned thoroughbred Husband's Folly, which won Del Mar last year), tells us MCS plans to push this into a real value-add opportunity given its location. In fact, some investors had the words "knock down" in their vocabulary when looking at the property, he says.
But MCS is going to save the property, putting the Colonade under major renovation so it can up the property to Class-B and subsequently, the rents. This is the latest deal in which a Phoenix-area owner has bought into the local area; last week, we reported how PB Bell made a massive local portfolio buy with the help of some NY money. MCS had some outside capital as well, Jim says.
Jim also says that investors are hungry enough for Phoenix multifamily that they are eyeing properties well outside the metro area. Currently, Jim and Brett have listings with Rio Verde and Sagewood Apartments, two properties in Cottonwood. “If investors can get some type of yield compensation, they're willing to look farther out," he says.
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