Newmark Grubb Knight Frank (NGKF) Capital Markets was selected as the exclusive listing agent for six affordable housing complexes in Arizona. The private, non-profit property owner retained NGKF’s Phoenix Multi-Housing Investment Group to sell the assets to a buyer or buyers that will continue to make the properties available to renters at affordable rates.
“The seller devoted a number of years to establish safe housing and affordable rents in these communities, and has charged our team with finding buyers that are able and motivated to keep these properties affordable to residents,” said Brad Pickering, who, with Sally Schwenn, Karl Abert and Samuel Gillespie, is handling the assignment. The team specializes in affordable housing-including low-income housing tax credits (LITHC), USDA, HUD and HOME financing structures-providing these real estate services nationwide.
“The assets carry assumable loans under a variety of federal, state and local programs,” Ms. Schwenn said. “That creates savings opportunities for buyers, but will require new owners to meet ongoing compliance requirements that vary from loan to loan. Loan assumptions are subject to approval by various agencies as well.
“We expect to draw national interest from the affordable housing investor community,” she added.
Compliance requirements won’t deter potential buyers, who are likely to be experienced affordable-housing investors, Ms. Schwenn predicts.
“All of these assets are in markets where renter demand is strong and growing stronger for both affordable and market-rate housing,” Ms. Schwenn said. “Based on their condition and quality of construction, these complexes could compete with conventional properties nearby even without the advantage of controlled rents.”
The listings include:
• Chandler Terrace Apartments, a community consisting of two- and three-bedroom apartment units located in Chandler, Arizona. The property was acquired and financed using HOME loans issued though Maricopa County and the City of Chandler. The new owner must assume existing loans and rent restrictions associated with the property.
• Esperanza Apartments, including a single-story affordable housing community for seniors and a two-story affordable housing complex for families. These properties are sister communities located in Bisbee, Arizona. Both were built in 1999 and offer one-, two- and three-bedroom units. The properties are located adjacent to a community seniors center that provides many services to the residents.This rural asset is consistently at full occupancy and carries assumable USDA Section 515 loans. The buyer also must comply with low-income housing tax credit (LIHTC) conditions that expire in 2014 on Esperanza seniors.
• Spring Valley Terrace and Spring Valley Manor, both affordable housing communities located in Mayer, Arizona. Developed in 1998 using LIHTC, the compliance period associated with those credits recently ended. The buyer must comply with HUD and Arizona Department of Housing regulations in order to assume existing loans on the property.
• West Hill Apartments, an affordable housing complex in Avondale, Ariz. Built in 1980 in Old Town Avondale, the asset offers assumable financing for a qualifying buyer that meets annual compliance requirements through August 2017.
• Viva Apartments, an affordable housing complex in downtown Glendale, Arizona. The new owner must assume existing rent restrictions under the HUD affordable guidelines through March 2017.
• Bell Mirage Estates, an affordable housing community built in 2009 and financed with LIHTCs and a Housing Trust Fund Loan from the State of Arizona. The Managing Member position is being offered to qualified entity.
NGKF’s Phoenix Multi-Housing Investment Group offers a unique depth of experience in transactions involving affordable housing, as well as conventional multifamily transactions. Team members have collectively closed more than 200 transactions with an aggregate value exceeding $1 billion, including more than 7,000 units of affordable housing sold throughout the southwest.
Among the conventional properties that the team is currently marketing is Vista Ventana Apartments, a conventional REO property in Phoenix.
• Vista Ventana Apartments, a 275-unit multifamily complex at 3221 W. El Camino Drive in Phoenix, Arizona. Built in 1982 and located in a vibrant employment corridor with convenient access to Interstate 17 and to light rail service, the 16-building community covers nine acres with mature landscaping. Amenities include controlled access, two swimming pools and spas, gas barbecues with ramadas, two laundry facilities, ample covered parking and a stand-alone rental office.
Mr. Abert previously served as a vice president at the former Grubb & Ellis and has a diverse background in investment brokerage, investment banking and loan workouts. He has closed sales amounting to more than 8,550 multifamily units, and originated more than $320 million in loans.
Before joining NGKF in September 2012, Mr. Pickering and Ms. Schwenn worked together for more than a decade, having co-founded and owned Crown West Commercial Real Estate, a boutique brokerage focused on conventional and affordable multifamily properties. The two developed a robust niche in affordable housing where they brokered transactions in five states involving nearly 13,000 units with a collective value of more than $500 million.
About Newmark Grubb Knight Frank
Newmark Grubb Knight Frank is one of the world’s leading commercial real estate advisory firms. Together with its affiliates and London-based partner Knight Frank, Newmark Grubb Knight Frank employs more than 11,000 professionals, operating from more than 340 offices in established and emerging property markets on five continents.
With roots dating back to 1929, Newmark Grubb Knight Frank’s strong foundation makes it one of the most trusted names in commercial real estate. Its integrated services platform includes leasing advisory, global corporate services, investment sales and capital markets, consulting, program and project management, property and facilities management, and valuation services. A major force in the real estate marketplace, Newmark Grubb Knight Frank serves the local and global property requirements of tenants, landlords, investors and developers worldwide. For further information, visit www.newmarkkf.com.
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