February 26, 2013 – Source
Goodman Real Estate came south to find a couple of deals and picked two from Sabal Financial Group. The Seattle multifamily developer plunked down $9.8M to acquire 37 units in a pair of distressed Phoenix multifamily projects carrying entitlements for 154 additional units. The new owner plans construction on the additional units in short order.
Sabal, a Newport Beach, Calif., specialist in foreclosed property disposition, is not feeling blue about the deal. Goodman paid $5.6M (aggregate $62.2K/unit for built/entitled units) for Cobalt and $4.2M (aggregate $39K/unit) for Indigo. Jones Lang LaSalle brokered the deal. Executive Vice President John Cunningham said that the rentals are 90 to 100 percent occupied in the two projects.
Cobalt, 32nd St. and Union Hills Dr., Phoenix, has 24 units behind its gate—and entitlements for 66 additional units. Goodman plans starting build-out “within a few months” to put all 90 units into the rental inventory. Todd & Associates is handling the design, and negotiations have narrowed to two contractors. Goodman is not naming either until the deal is signed for the GC.
Indigo, 16160 S. 60th St., Ahwatukee, is a bit more of a challenge—it’s a fractured condominium. The original developer constructed a first phase with 30 units and sold 17 before the project collapsed into receivership. Sabal packaged the 13 unsold units along with entitlements for 78 more. Goodman is proceeding with development of the entitled units while negotiating to buy the sold condos from the individual owners. The Seattle developer would like to market the project as an apartment complex. Todd is designing the new units while discussions to finalize a GC are ongoing.