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Vol. XXIII, No. 10 Post Office Box 15216March 17, 2017 Scottsdale, Arizona 85267St. Patrick’s Day (480) 905-0500

web site: brewaz.com

CAPITAL REAL ESTATE BUYS 11 AND 12 VALLEY APARTMENT PROJECT . . . ADDS ANOTHER 349 UNITSth th

Phoenix/Tempe – Capital Real Estate in Denver, Co. (Dan Levin, managing director) has been one of the hottest multi-familyinvestors in the Valley and the privately-held firm shows no sign of cooling off anytime soon. In the past three weeks, the companyhas acquired three multi-family properties, bringing its holdings to 2,618 apartments in 12 Valley projects. It two separate purchasesthis week, Capital Real Estate entities paid a combined $41.35 million ($118,141 per unit blended average) to acquire 349 apartmentsin projects in Phoenix and Tempe. The company paid $25 million ($138,889 per unit) to buy the 180-unit Mandarina apartmentsat 5402 E. Washington Street in Phoenix. The seller was Mandarina Residential LLC in Woodland Hills, Calif. (Norman Spieler,Steven Berkson, principals). Christopher Roach and Matthew Roach of ORION Investment Real Estate in Scottsdale brokeredthe transaction. Maricopa County records show Capital Real Estate – Mandarina LLC (Capital Real Estate entity) acquired the assetwith a $17.27 million Freddie Mac loan issued by Grandbridge Real Estate Capital LLC in Charlotte, N.C. In April 2006, BREWreported the company formed by Spieler and Berkson paying $20.5 million ($113,889 per unit) to purchase Mandarina. The complexwas built in 2002. In the other sale, Capital Real Estate paid $16.35 million ($96,745 per unit) to acquire the 169-unit Sevillaapartments at 1145 W. Baseline Road in Tempe. The sellers were eight tenant-in-common entities headed by Hamilton Zanze & Co. in San Francisco, Calif. (Mark Hamilton, Anthony Zanze, Kurt Houtkooper, principals). The company is listed as manager of threeentities that owned 71.93 percent of the property: Colony Grove Apartments LLC (13.62 percent); Lindell Colony Grove LLC(25.22 percent) and West Baseline Colony Grove LLC (33.09 percent). The deal was negotiated by Mark Forrester, Ric Holway, Dan Cheyne and Tom Wolff of Berkadia in Phoenix. Records show Capital Real Estate – Sevilla LLC (Capital Real Estate entity)acquired the asset with a $12.703 million Freddie Mac loan issued by Grandbridge Real Estate Capital LLC. In June 2007, BREWreported the Hamilton Zanze TIC investors paying $13.757 million ($81,402 per unit) to buy Sevilla (then called Colony Groveapartments). The complex was built in 1982. In the past two years, BREW has reported the privately-held Capital Real Estate investing$258.06 million ($109,255 per unit blended average) to acquire 2,362 apartments in 11 Valley projects. The company is interestedin buying more apartments in the Phoenix area. Two weeks ago, BREW reported Capital Real Estate spending $28.75 million($141,626 per unit) to purchase 203 condominium units within the 221-unit Palm Trails multi-family community at 235 E. Ray Roadin Chandler. At year-end 2016, BREW reported Capital Real Estate paying $20.85 million ($108,031 per unit) to acquire the 193-unitDwell apartments at 1923 N. 70 Street in Scottsdale. Find out more from Jason Wine of Capital Real Estate at (303) 260-4308. Talkth

to the ORION agents at (480) 634-6934. Reach the Berkadia agents at (602) 955-1122.

JACKSON-SHAW/LA POUR PARTNERS DEVELOPING SPEC INDUSTRIAL PROJECT IN DEER VALLEYPhoenix – A joint venture formed by Jackson-Shaw Co. in Dallas, Tex. (Lewis W. Shaw, II, chairman) and LaPour Partners inLas Vegas, Nev. (Jeff LaPour, principal) plans to develop 311,840 sq. ft. of spec industrial space within the Deer Valley Airparkin north Phoenix. The three-building project, called Parc Pinnacle, is targeted for a 20-acre site located at the northwest corner ofCentral Avenue and Pinnacle Peak Road. The venture paid $4.619 + million ($5.30 per foot) to purchase the parcel. The seller wasLaPour D.C. One LLC, formed by LaPour and Valley investors Jim Keeley, Barry Zemel and Ira Gaines. Maricopa Countyrecords show Jackson-Shaw/Parc Pinnacle LLC (Jackson-Shaw/LaPour Partners entity) acquired the land in a cash transaction.Design plans from Ware Malcomb show structures of 70,400 sq. ft., 155,040 sq. ft. and 86,400 sq. ft. Construction scheduled to startby June 1, with initial delivery of space slated for year-end 2017. Whiting-Turner to serve as contractor. Development cost (landand buildings) estimated at $27 million. Texas Capital Bank to provide construction financing. Pat Harlan and Kyle Westfall ofJLL in Phoenix have the leasing assignment for Parc Pinnacle, which will have space divisible to 9,600 sq. ft. The site acquired bythe Jackson-Shaw joint venture is part of a 66-acre parcel that LaPour’s investment group purchased more than 11 years ago. In June2005, LaPour D.C. One LLC paid $15.575 million ($5.48 per foot) to acquire the Deer Valley property. LaPour, et al., still own theremaining 45 acres of that tract, which includes the northeast corner of 7 Avenue and Pinnacle Peak Road. LaPour says the jointth

venture is looking for build-to suit opportunities and will sell parcels to end users and developers. Keeley, also a broker at ColliersInternational in Scottsdale, has the marketing assignment. BREW has previously reported Jackson-Shaw and LaPour Partnersdeveloping and selling industrial and office projects in the Valley, both together as partners and in other ventures. In November 2014,

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BREW reported the two companies developing another three-building industrial project in Phoenix. That 11.5-acre site is located justwest of Phoenix Sky Harbor International Airport. The 177,770-square-foot complex, called Parc 17, is at the northwest cornerof 7 Avenue and Interstate 17. That space, comprised of buildings totaling 101,310 sq. ft., 31,871 sq. ft. and 44,589 sq. ft., wasth

completed in 2015. Learn more from Michele Wheeler, pres. of Jackson-Shaw, at (972) 628-7400. Call LaPour at (702) 222-3022.Reach Keeley at (480) 596-9000. Talk to the JLL agents at (602) 282-6300.

TILTON/RYAN/HUNT VENTURE TO DEVELOP MIDTOWN PHOENIX APARTMENTSPhoenix – Tilton Development Co. in Scottsdale (Daniel Tilton, manager) and Ryan Cos. U.S. Inc. in Minneapolis, Minn. haveformed a joint venture company with Hunt Cos. Inc. in El Paso, Tex. (Woody Hunt, chairman) to develop 227 upscale apartmentsand 2,585 sq. ft. of creative office space along Central Avenue in Midtown Phoenix. The project, called The Willa, is being developedon a 1.566-acre site located south of McDowell at northeast corner of Central and Willetta avenues. Phoenix Central Owner LLC(Tilton/Ryan/Hunt venture) paid just under $4.539 million ($66.53 per foot) to purchase the property, which is just south of thePhoenix Art Museum and adjacent to a light-rail station. The seller was SW Central LLC, an entity formed by Soave Enterprisesin Detroit, Mich. (Anthony Soave, CEO). The seller was represented by Dave Headstream and Jason Hyams of CBRE in Phoenix.Studio Meng Strazzara of Seattle, Wash. is designing the 6-story project, which will have four levels of residences over two levelsof parking. The studio, one- and two-bedroom units will range from 530 sq. ft. to 1,115 sq. ft. Monthly rental rates projected to runfrom $1,175 to $2,190. Plans also include 5, two-story townhomes that will total 1,230 sq. ft. and two office suites of 1,219 sq. ft. and1,366 sq. ft. Utility infrastructure work is now underway. Vertical construction to start third quarter 2017, with opening slated for latesummer 2018. Ryan Cos. to serve as contractor. Development cost (land and building) estimated at $46 million. Maricopa Countyrecords show the buyer acquired the property using a $27.385 million construction loan from Johnson Bank. Sources say the jointventure partners are working on an agreement with a mezzanine lender and equity partner that should be finalized in the next 60 days.While BREW has previously reported Tilton developing and selling two apartment communities in the Valley, The Willa will be thefirst multi-family project in the Phoenix area for the Minneapolis-based Ryan Cos. Tyler Wilson, director of real estate developmentfor Ryan Cos. in Phoenix, says the company is looking for additional multi-family development opportunities in the Valley,including senior housing. Over the years, BREW has reported the Phoenix office of Ryan Cos. developing numerous office, retailand industrial buildings in the Phoenix area. Tilton, who is interested in developing more multi-family units in the Valley, previouslydeveloped and sold 440 apartments in projects in Downtown Phoenix and Tempe. Hunt Cos., a private investment firm with extensivereal estate holdings across the country, serves as an owner, investment manager, developer and builder of a variety of property types. In addition to completing infrastructure work on the Central Avenue site, the new owner will have to demolish a two-story, 16,500-

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square-foot commercial building on the parcel. That property, with an address of 1505 N. Central Avenue, was last used as a charterschool. The structure, which was built in 1954 for Valley National Bank, will be razed to make room for The Willa. In January 2008,the Soave Enterprises affiliate paid $7 million to buy the Central Avenue property. At that time, the Detroit-based firm planned todevelop 700 to 800 residential condominiums in two 46-story towers. The market collapsed soon after Soave acquired the real estateand development plans were shelved. So now the Tilton/Ryan/Hunt venture will take a run at building a much lower density projecton the site. Learn more from Tilton at (480) 275-6913. Reach Wilson at (602) 322-6161. The CBRE agents are at (602) 735-5555.

EMPIRE RESIDENTIAL FUND ACQUIRES CAREFREE SITE TARGETED FOR COMMERCIAL USEPhoenix – Empire Residential Communities Fund III LLC, a company formed by The Empire Group of Cos. in Scottsdale(Richard Felker, Mike Woolf, principals), has acquired a prime parcel of land in the Town of Carefree in the north Valley that isbeing planned for mixed uses, including a retail shopping center. The 23.4-acre site is at the northeast corner of Carefree Highwayand Cave Creek Road. Empire Residential Communities Fund III LLC paid $6.5 million to buy the property. The seller in the cashtransaction was John Lassen in Carefree. The buyer was represented by Steve Parsons of Empire Commercial Real Estate inScottsdale. Sources say the new owner is working on a site plan and likely will file a PAD (Planned Area Development) in Carefreeto develop a mixture of uses. The property is now zoned R1-35, allowing residential development with roughly 1 home to the acre.The new PAD could allow for a grocer, restaurants, shops and possibly assisted living, urgent care or some sort of medical-relateduse. The Empire fund is seeking input in designing the site from LVA Urban Design Studio in Tempe and Nelsen Architects inScottsdale. Upon zoning approval, the Empire Residential Communities fund is expected to sell pads ranging from 1 to 5 acres.Marketing agent still to be selected. Empire Residential Communities Fund III, has now placed all of the $33 million in equity thatit raised and used to complete five property investments in the Phoenix area. The fund has been buying infill parcels from 5 to 40 acresthat are suitable for residential and mixed-use development. Rich Zacher, who oversees the funds managed by The Empire Group,says company is now raising equity for Empire Residential Communities Fund IV LLC. That fund is expected to have $35 millionto $50 million in equity commitments. While the properties acquired for previous Empire Residential Communities funds have beeninfill locations well within the path of development, future acquisitions likely will include properties located further out in the Valley.In December 2015, BREW reported Empire Residential Communities Fund II paying $6.807 + million to acquire 9.967 + acresat 12435 N. 93 Street in Scottsdale. That purchase was the final investment for that fund, which had $35 million in equity capital.rd

That project was expanded when Empire Residential Communities Fund III LLC made its first investment by paying $3.2 million tobuy 4.07 acres at 12475 N. 93 Street. That combined 13.828-acre site is being planned for 60 to 70 single-family lots. Get more fromrd

Zacher at (480) 951-2207. Talk to Parsons at (480) 947-4700.

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COMMERCIAL TRANSACTIONS

Phoenix – Two vacant office buildings located within the Riverpoint Business Park in Phoenix that were once occupied by theUniversity of Phoenix have sold for a combined $12.6 million ($67.92 per foot blended average), which is $28.875 million less thanthe amount the properties sold for in 2005 before they were foreclosed. The office structures were sold to two real estate investmentfirms by a company formed by the registered holders of a commercial mortgage backed security. The CMBS was marketed throughCitigroup Commercial Mortgage Securities Inc. The special servicer was LNR Partners LLC in Miami Beach, Fla. The sellerin both transactions was represented by Mike Garlick of Newmark Grubb Knight Frank in Phoenix. In the larger of the two sales,a company formed by West Second Street Associates in Flint, Mich. (Troy Farah, founder) paid $8.767 + million ($65.98 per foot)to buy a 132,880-square-foot office located at 4150 S. Riverpoint Parkway. Maricopa County records show WSSA Phoenix LLC(West Second Street Associates entity) acquired the building in a cash transaction. The two-story structure, which sits on 7.84 acres,was developed in 2002. The investment is the first in the Valley for West Second Street Associates. The privately-held firm ownsoffice, multi-family, government and urban properties in 10 states. In the other deal, a company formed by Orsett Properties Ltd.in Phoenix (Curt Feuer, Mike Freret, principals) paid $3.832 + million to acquire a 52,640-square-foot office building located at3125 E. Wood Street. Maricopa County records show Orsett Riverpoint LLC (Orsett Properties entity) acquired the property in acash sale. The 4.93-acre property was developed in 2002. Orsett Properties has been a developer, buyer and seller of numerous office,industrial, retail and multi-family projects in the Valley. The previous owner of the office buildings at Riverpoint Business Park lostthe properties to foreclosure after defaulting on a $27.8 million loan that was secured by the real estate. In July 2005, a companyformed by Spirit Finance Corp. in Scottsdale paid $41.475 million ($223.56 per foot) to buy the offices. Both of the structures werefully leased to Apollo Group Inc. in Phoenix (NASDAQ:APOL), the parent company to University of Phoenix. The tenant vacatedthe space at year-end 2014 and Citigroup Global Markets Realty Corp. foreclosed in January 2016. The seller in the two recentsales was CD 2005-CD1 Spirit Portfolio LLC, on behalf of the registered holders of CD 2005-CD1 Commercial Mortgage Trust,Commercial Mortgage Pass-Through Certificates, Series 2005-CD1.

Phoenix – Flight Center AZ Flex LP in Calgary, Alberta, Canada (Kevin Pshebniski, principal) paid $4.535 million ($159.94 perfoot) to purchase a 33,451-square-foot retail-office building located within the Deer Valley Airpark at 615 W. Deer Valley Roadin Phoenix. The seller was the Smull Family Trust in Irvine, Calif. (Jimmy Smull, Dana Davis, co-trustees). The deal was brokeredby Bob Buckley, Tracy Cartledge, Steve Lindley and Ben Geelan of Cushman & Wakefield in Phoenix. The 4.07-acre property,which was developed by the seller in 2004, is 93 percent occupied. Maricopa County records show the buyer acquired the asset witha $3.401 + million loan from FirstBank. Pshebniski also owns 68,195 sq. ft. of flex industrial space in the Deer Valley area.

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MULTI-FAMILY TRANSACTIONS

Mesa – Tenant-in-common investors CCW Fiesta Park LLC in Newport Beach, Calif. (Robert Ctvrtlik, manager), as to a 66.66percent undivided interest and WNB Fiesta Park LLC in Cottonwood Heights, Utah (Greg Wiseman, manager), as to a 33.34percent undivided interest, paid $20 million ($62,500 per unit) to buy the 320-unit Fiesta Park apartments at 1033 S. Longmore Streetin Mesa. The seller was B.H. Longmore LLC, formed by B.H. Properties in Los Angeles, Calif. (Arsalan “Steve” Gozini, member).The buyer was represented by Mark Forrester, Ric Holway, Dan Cheyne and Tom Wolff of Berkadia in Phoenix. The seller wasrepresented by Bill Hahn, Trevor Koskovich and Jeff Sherman of Colliers International in Phoenix. Maricopa County recordsshow the buyer acquired the asset with a $16 million Fannie Mae loan issued by CBRE Multi-family Capital Inc. The sale priceequates to more than triple the amount B.H. Properties paid to purchase the apartments more than six years ago. In September 2010,BREW reported B.H. Properties paying $5.5 million ($17,187 per unit) to acquire Fiesta Park. The complex was built in 1979. Withthe acquisition of the Mesa project, Ctvrtlik and various partners now own 2,699 apartments in 10 Valley properties. As Ctvrtlik isexpanding his portfolio of Valley apartments, in the past three months, B.H. Properties has sold 1,366 units in five multi-familycommunities in the Phoenix area (see related story at bottom of the page). The privately-held firm, which grossed $93.35 million fromthose sales, also owns retail and office properties in the Phoenix area.

Phoenix – Rincon Partners LLC in Phoenix (John Pons, Chris Cameron, Jason Ottman, Kirk McCallaster, principals) paid$17.5 million ($126,811 per unit) to acquire the 138-unit Clarendon Park apartments at 222 W. Clarendon Avenue in Phoenix. Theseller was 2506 W. Dunlap LLC in Phoenix (Howard Berger, manager). The deal was brokered by Jim Crews and Brett Polachekof Cushman & Wakefield in Phoenix. Maricopa County records show RP 222 LLC (Rincon Partners entity) acquired the asset witha $14.805 million loan from KeyBank. In June 2007, BREW reported Berger’s company paying $17 million ($123,188 per unit) topurchase Clarendon Park. The complex was built in 2002. In September 2016, BREW reported a venture formed by Rincon Partnerspaying $25.2 million ($79,747 per unit) to buy a fractional interest in the 316-unit Crossroads apartments at 2222 W. Beardsley Roadin Phoenix. The privately-held Rincon Partners also owns a fractional interest in the 101-unit Galeria Del Rio townhomes in Tucson.

Phoenix – A limited partnership formed by Western Wealth Capital in North Vancouver, B.C., Canada (Janet LePage, principal)paid $14.25 million ($66,901 per unit) to purchase the 213-unit Terrace Park apartments at 8130 W. Indian School Road in Phoenix.The seller was B.H. Terrace Park LLC, formed by B.H. Properties in Los Angeles, Calif. (Arsalan “Steve” Gozini, member). Thesale was negotiated by Bill Hahn, Trevor Koskovich and Jeff Sherman of Colliers International in Phoenix. Maricopa Countyrecords show WWC XXIII LP (Western Wealth Capital entity) acquired the asset with a $10.7 million Freddie Mac loan issued byWalker & Dunlop LLC in Bethesda, Md. The loan was arranged by Brandon Harrington and Matt Steffen of Walker & Dunlopin Phoenix. In April 2013, BREW reported B.H. Properties paying $6.2 million ($29,108 per unit) to acquire Terrace Park apartments.The complex was built in 1983. Western Wealth Capital now owns 4,301 apartments in 25 Valley properties. In February, WWC paid$10.8 million ($71,053 per unit) to buy the 152-unit Sunpointe apartments at 7077 W. McDowell Road in Phoenix. B.H. Properties,which was also the seller in that deal, recently sold a 320-unit apartment project in Mesa (see story at the top of this page).

Terry McDonnell Jennifer Rogers Publisher Director of Operations

BUSINESS REAL ESTATE WEEKLYP.O. BOX 15216SCOTTSDALE, AZ 85267

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