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Investors Hunt for B & C Apartments

Class-A is nice if you can get it, but investors are increasingly turning to B and C apartments in the Phoenix market, both for straight returns and as value-adds, Colliers International in Greater Phoenix EVP Trevor Koskovich tells us.

Investors Hunt for B & C Apartments

On the lower-quality assets, they typically plan to run them as investments in pursuit of cash flow, he says. On the nicer C quality assets, they'll be looking to add value along the way to improve cash flows. Trevor's snapped with colleagues Bill Hahn and Jeff Sherman.

Investors Hunt for B & C Apartments

Recently Trevor, Bill and Jeff repped the buyer and the selleran L.A. LLC and a Miami Beach LLC, respectivelyin the trade of the 468-unit, Class-C Willow Springs Apartments in Phoenix for more than $13M. Built in 1986, the property consists of 14 three-story buildings on 13 acres. 

Investors Hunt for B & C Apartments

Renovation can make Class-B very competitive with Class-A. Recently ABI Multifamily senior managing partner Alon Shnitzer was one of the lead brokers in the sale of the 144-unit West 35th Apartments in North Phoenix, an '80s vintage property that was significantly renovated in 2011 and '12. "The combination of the renovationwhich totaled about $1Mand the availability of low interest rates made the buyer's purchasing decision easy," he says.

Investors Hunt for B & C Apartments

The property fetched $8.8M in the sale to a private buyer. The renovations involved all of the common areas, as well as 30% of the unit interiors. One new installation to the property is a glass pool fence, which Alon says is a design feature he's never seen even in new Class-A properties in Phoenix.