Obscure, Chinese-backed developer eyes $1.2B project on banks of Tempe Town Lake

Read the story in the Phoenix Business Journal

From Vizzda by Paul Dionne

Monday, August 25, 2014

Fairfield Residential Buys Lakeview at Superstition Springs

By: Paul Dionne | Vizzda

In one of the largest transactions in terms of dollar value thus far this year, Chicago-based investment management firm, Heitman, sold one of the largest apartment complexes in the valley—the 676-unit Lakeview at Superstition Springs for $66.6m. The buyer was San Diego-based multifamily developer Fairfield Residential who paid $19.2m in cash for the property and secured an additional $47.4m in funding from CBRE Multifamily Capital, assigned to Fannie Mae at origination. Fairfield owns or manages ten other properties in the greater Phoenix area.  The $66.6m sales price equates to $98,520 per unit.

Lakeview at Superstition Springs’ 676 units are situated in eighty-nine residential buildings totaling 636,963 ft² in addition to a leasing office and clubhouse that bring the total improved square footage above 640,000. The property was built in two phases: forty-two buildings totaling 287,135 ft² built in 1996 and forty-nine buildings totaling 356,668 ft² built in 1998. The gated complex sits on 42.72 acres net of the lakes complex that runs through the property and features four resort-style pools. The one bedroom floor plans range from 660 ft² to 776 ft², the two bedrooms range from 916 ft² to a 1,314 ft² split-level and three bedroom floor plans range from 1,181 ft² to 1,214 ft².

Heitman previously acquired Lakeview at Superstition Springs in March of 2006 for $59.4m or $87,869 per unit from Nearon Enterprises. At the time of sale, Heitman assumed $38m in existing CMBS debt in care of Lasalle Bank and secured additional funding in two notes with Deutsche Bank Berkshire Mortgage of $8.957m and $29.543m, maturing April 1^st, 2011 and both of which were assigned to Fannie Mae at origination. Those debts were released in May of 2012 and replaced with $36m in new debt with CW Capital. Ignoring financing and carry costs and operational proceeds, Heitman earned a 12.1% absolute rate of return and a 184.6% cash-on-cash return.

To Contact the Author:

Paul Dionne – pdionne@vizzda.com

NO. CALIF. INVESTORS MAKE SECOND VALLEY APARTMENT DEAL . . . $43 MILLION FOR 264 UNITS

Read the story in BREW

Arizona Coyotes sign Gila River Casinos to arena naming rights deal

Read Mike Shunnucks article in the Phoenix Business Journal

COHEN ASSET MANAGEMENT BOLSTERS VALLEY INDUSTRIAL PORTFOLIO

 Read the story here.

Reported in BREW:

Reported in this week's issue ofBREW www.brewaz.com Follow:   August 12, 2014 SO. CALIF.-BASED INVESTOR SPENDS $21.6 MILLION FOR DEER VALLEY PROJECT Phoenix - A company formed by Griffin Opportunities LLC in Los Angeles, Calif. (Charles Cale, Walter Cale, principals) paid $21.6 million ($209.72 per foot) to buy a 102,996-square-foot flex-office showroom project located at 2851 W. Kathleen Road in the Deer Valley area of Phoenix. Maricopa County records show the buyer in the cash sale was 2851 K Mac Go LLC, a subsidiary of Griffin Opportunities. The seller was Intravest 2851 Kathleen LLC, a company formed by Intravest Development LLC in Phoenix (Thomas Roskos, Mason Cave, principals).

5 International Investing Mistakes To Avoid

5 International Investing Mistakes To Avoid by Jeff Adams
Most buyers looking at property opportunities abroad are full of confidence. The relatively affordability of land, ground floor development deals and  desirable locations provides strong motivation and they feel sure they'll be able to get a good deal. After all, they've bought property successfully in the US. They know how real estate markets work. Trouble is - things are a little different in many international markets. If you apply the same real estate investing strategies as back home, you may inhibit yourself from getting a great property deal. And the likely hood of you knowing your about to make a mistake is pretty slim when dealing with international real estate deals. 5 International Investing Mistakes To Avoid Mistake 1: Buying a Vision; not Reality You stand in awe of the glossy rendering. You count out the 18 holes of the golf course on the master plan in front of you. You imagine having a massage at the planned "Wellness Center" to ease out those golfing-induced knots in your shoulder. You start to schedule monthly visits to your vacation home. After all when the new road gets built it will only take an hour to get to your property from the airport … Hold on a moment. You're about to buy the developers vision of what their project may look like in the future. You've looked past the current reality. Look around. How much of the proposed master plan has actually been completed? Take a worst case scenario and ask yourself how much your vacation property will be worth if the golf course never gets built, the wellness spa never opens and the road from the airport is never paved? The Fix: Buy only what you can actually see and touch. Don't pay the price for what your property may be like in the future, if all goes well. Mistake 2: Catching a Case of Land Fever Land fever … sunshine fever … we've all had it at some point in our international investing careers. I mean how can you not feel that tingle of excitement when you compare the prices with back home? The anticipation of ownership builds, you see other people hunting down the deals, and suddenly you find yourself caught up in a panic fueled land grabbing frenzy. After all they're not making any more beachfront are they? The Fix: Slow down. Realize that you've let your emotions take over. Start to engage your head. Let the facts, hard data and dry mathematics drive your investing strategy, not hype and raw emotion. Mistake 3: Only Viewing Real Estate with One Agent This may work in the US where agents are tapped into the MLS - effectively a giant shared database of properties for sale on the market. But in many international markets, MLS type databases do not exist. Instead, each agent maintains his or her separate, private listing database. So by limiting yourself to one agent you are unlikely to see all there is for sale. It's also important to realize that in many emerging markets anyone can sell real estate. So yes, this means chasing down a listing given to you by your hairdresser or going on a detour to see a property with your taxi driver. The Fix: Book a property viewing with every active real estate agent in your market. Then spread the net even further and tell everyone you meet that you are in the market for a property. Mistake 4: Not Getting Good Legal Advice I've seen buyers purchase property without an attorney. I've seen them agree to use the seller's attorney or the real estate agent's attorney. I've seen them hire attorneys they are unable to communicate with due to a language barrier. These are all big mistakes that can create problems down the line. You must have the title researched by an independent attorney who is representing your interests before you purchase in any international real estate market. Title insurance is not a requirement in many countries, but I'd strongly recommend it. The process of applying for title insurance will force your attorney to dig deeply into the title history of your proposed purchase. Insurance is typically inexpensive at a cost of around 1% of the insured amount. The Fix: Hire a competent independent attorney to conduct your due diligence and back this up by applying for a title insurance. Mistake 5: Not Leveraging the Current Buyers Market The financial crisis has been tough on many international real estate markets. Inventories are high and the gap between asking prices and sales prices has widened considerably since 2008. Use this to your advantage. Remember that many sellers like to keep their 'official' prices firm but will offer incentives on the side. It means they can lower their prices without actually lowering their prices. The Fix: Negotiate hard, especially if you are a cash buyer. The market is advantageous to buyers so use that to your advantage.

Aug 4, 2014, 2:34pm MST

Why Phoenix is in a housing slump (again)

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Michael Orr

Tim Gallen

Reporter-Phoenix Business Journal

Real-estate guru Michael Orr finally has confirmed what I’ve been experiencing all spring and summer: the Phoenix housing market is in a slump.

That’s what Orr lays out in his latest monthly report that shows the housing markets in Maricopa and Pinal counties have slowed dramatically in the past year.

Sales of single-family homes were down 11 percent year-over-year in June, according to the report.

But it isn’t just June. Sales activity has been trending downward since the spring, which is when my wife and I first put our home on the market.

“We’re in an 11-month slump in demand,” said Orr, the director of the Center for Real Estate Theory and Practice at the W.P. Carey School of Business at ASU.

In other words: The Gallens couldn’t have picked a worse time to try to sell.

Even with slow sales activity, the median single-family home price still managed to tick upward, rising to $211,000 in June, according to the report. That’s up 11 percent from $190,000 the previous June.

However, Orr added that there are a few positive signs that demand may begin to recover in the latter half of the year. Still, any help on pricing is unlikely until next year.

“There is always a long delay – typically nine to 15 months — between any change in the market and the resulting change in pricing,” said Orr. “Meantime, we may see a little downward correction, not a bubble bursting, as some have predicted.”

Other encouraging signs for the market in June, according to the report, were an uptick in new-home sales and the highest monthly total of construction permits for new single-family homes in more than two years.

One potentially good sign for people who want to buy a home to, well, actually live in it, is that investors seem to be leaving Phoenix, according to the report.

The percentage of Phoenix-area residential properties purchased by investors fell from a peak of nearly 40 percent in July 2012 to 14.4 percent this June. That’s near the historic norm for Phoenix, according to the report.

The departure of investors is coinciding with an increase in new household formation.

“We are finally seeing a change in the trend of low household formation,” Orr said. “The nation saw some improvement in the second quarter of 2014. This means more people may be moving out and renting or buying their own homes.”

Still, he states in the report, the supply of homes for sale — especially at the less expensive end of the market — remains low.